CHAIRMAN RIEGER called the Senate Health, Education and Social                
 Services (HESS) Committee to order at 1:40 p.m.  He noted that they           
 were trying to get John Hotzfield, the Board of Education                     
 confirmation nominee, on-line for questions.  He introduced  SB 301           
 (REVISE FOUNDATION FORMULA, SMALL SCHOOLS) as the first order of              
 business before the committee.  The CS for SB 301 amends the "hold            
 harmless" provisions of the education formula by lowering the                 
 triggering point of "hold harmless" from 10 percent to 5 percent.             
 He also noted that the CS changes the threshold of extreme ADM                
 student enrollment decreases from year to year.                               
                                                                               
 SENATOR MILLER moved to adopt the CS, the 8-LS1716\J version, for             
 SB 301 in lieu of the original bill.  SENATOR ELLIS objected.                 
                                                                               
 SENATOR ELLIS opposed the elimination of the rewrite of the formula           
 for the single sites.                                                         
                                                                               
 SENATOR SALO inquired as to the difference between a drop in                  
 students versus a tremendous drop in students.  She supported                 
 funding going where the students are, not where they are not.                 
                                                                               
 CHAIRMAN RIEGER explained that under existing law there is a single           
 "hold harmless" which drops 25 percent a year to the new level.               
 The CS would decrease the trigger points to 5 percent which is a              
 smaller drop; extreme drops in enrollment have an accelerated rate            
 of adjustment, the "hold harmless" is less.                                   
                                                                               
 SENATOR SALO used Adak as an example.  If Adak has 130 students               
 next year from the approximately 400 or 500 students currently                
 enrolled, then the CS would decrease their unit funding by one-               
 third.  CHAIRMAN RIEGER said that the entitlement for instructional           
 units is not directly proportional to the number of students.  If             
 Adak lost more than 50 percent of their entitlement, it would                 
 decrease by half way between what they were entitled to and what              
 they started with.  By the second year, they would be at their                
 entitlement.                                                                  
                                                                               
 Number 104                                                                    
                                                                               
 SENATOR ELLIS said that he would not have opposed this if he felt             
 that they were going to handle the comprehensive rewrite of the               
 school foundation formula.  He felt that without that opportunity,            
 the issue would not be resolved for another year or two.                      
                                                                               
 Upon a hand vote, Senators Leman, Miller, Rieger, and Sharp voted             
 "Yea" and Senators Salo and Ellis voted "Nay."  The CS was adopted.           
                                                                               
 SENATOR MILLER moved the CS for SB 301 out of committee with                  
 individual recommendations.  Hearing no objections, it was so                 
 ordered.