HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE February 21, 1995 3:04 p.m. MEMBERS PRESENT Representative Cynthia Toohey, Co-Chair Representative Con Bunde, Co-Chair Representative Gary Davis Representative Norman Rokeberg Representative Caren Robinson Representative Tom Brice MEMBERS ABSENT Representative Al Vezey COMMITTEE CALENDAR BRIEFING:Impact Aid and Local Revenues, by Duane Guiley, Department of Education. HB 28:"An Act relating to the possession of weapons within the grounds of or on the parking lot of preschools, elementary, junior high, and secondary schools or while participating in a school-sponsored event; requiring the expulsion or suspension of students possessing deadly weapons on school grounds; and relating to school lockers and other containers provided in a public or private school by the school or the school district." PASSED OUT OF COMMITTEE HB 94:"An Act relating to the management of public schools by a private agency." HEARD AND HELD WITNESS REGISTER DUANE GUILEY, Director of School Finance Department of Education Goldbelt Building 801 W. 10th Street, Second Floor Juneau, AK 99801 Telephone: (907) 465-8679 POSITION STATEMENT: Briefed HESS Committee members on Impact Aid and Local Revenues. REPRESENTATIVE CON BUNDE Alaska State Legislature State Capitol, Room 108 Juneau, AK 99801 Telephone: (907) 465-4843 POSITION STATEMENT: Testified for and provided sponsor statement for HB 28. HELEN MEHRKENS, Health Education and Health Program Coordinator Department of Education 801 W. 10th Street Juneau, AK 99801 Telephone: (907) 465-8730 POSITION STATEMENT: Testified in support of HB 28. MARGOT KNUTH, Assistant Attorney General Department of Law Court Building, Room 717 Juneau, AK 99801 Telephone: (907) 465-3428 POSITION STATEMENT: Testified in support of HB 28. REPRESENTATIVE JEANNETTE JAMES Alaska State Legislature State Capitol, Room 102 Juneau, AK 99801 Telephone: (907) 465-3743 POSITION STATEMENT: Provided sponsor testimony for HB 94. MIKE FORD, Legislative Legal Counsel Legislative Affairs Agency 130 Seward Street, Suite 404 Juneau, AK 99801 Telephone: (907) 3867 POSITION STATEMENT: Testified in support of HB 94. SHEILA PETERSON, Special Assistant Department of Education 801 West 10th Street, Suite 200 Juneau, AK 99801 Telephone: (907) 465-2803 POSITION STATEMENT: Listen only. CARL ROSE, Executive Director Association of Alaska School Boards 316 W. 11th Street Juneau, AK 99801 Telephone: (907) 586-1083 POSITION STATEMENT: Testified in support of HB 94. PREVIOUS ACTION BILL: HB 28 SHORT TITLE: POSSESSION OF GUNS ON SCHOOL PROPERTY SPONSOR(S): REPRESENTATIVE(S) BUNDE, Rokeberg, Green, Toohey, Kott, Elton JRN-DATE JRN-PG ACTION 01/06/95 28 (H) PREFILE RELEASED 01/16/95 28 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/95 28 (H) HES, JUD, FIN 01/18/95 75 (H) COSPONSOR(S): GREEN 01/20/95 104 (H) COSPONSOR(S): TOOHEY 01/27/95 161 (H) COSPONSOR(S): KOTT, ELTON 02/14/95 (H) HES AT 03:00 PM CAPITOL 106 02/14/95 (H) MINUTE(HES) 02/21/95 (H) HES AT 03:00 PM CAPITOL 106  BILL: HB 94 SHORT TITLE: PRIVATE MANAGEMENT OF PUBLIC SCHOOLS SPONSOR(S): REPRESENTATIVE(S) JAMES JRN-DATE JRN-PG ACTION 01/18/95 69 (H) READ THE FIRST TIME - REFERRAL(S) 01/18/95 70 (H) HES, JUD, FIN 02/09/95 (H) HES AT 03:00 PM CAPITOL 106 02/09/95 (H) MINUTE(HES) 02/21/95 (H) HES AT 03:00 PM CAPITOL 106 ACTION NARRATIVE TAPE 95-8, SIDE A Number 052 CO-CHAIR CON BUNDE called the meeting of the House Health, Education and Social Services (HESS) Standing Committee to order at 3:04 p.m. Present at the call to order were Representatives Bunde, Toohey, Rokeberg and Davis. Co-Chair Bunde announced that a quorum was present and read the calendar. HHES - 02/21/95 BRIEFING ON IMPACT AID AND LOCAL REVENUES Number 098 DUANE GUILEY, Director of School Finance, Department of Education (DOE) introduced fellow staff member Eddie Jeans, Project Administrator, who does the calculations of federal disparity and presents the information to the U.S. Office of Impact Aid annually and negotiates any changes in the DOE's disparity trust calculations with that office. MR. GUILEY had provided the HESS Committee members with two handouts. One handout referred to basic need and the DOE's disparity formula, and the other contained the actual calculations of the DOE's federal disparity for 1993. Mr. Guiley said that basically, under the federal law, disparity is the recognition of difference in either revenue or expense available to support each student at individual school districts within each state. MR. GUILEY continued that the methodologies and procedures had been established in regulation prior to October 1994. When the federal law was reauthorized in October 1994, the definition of disparity and the procedural calculations were moved into federal law. The disparity limit and the year of data to be used to measure disparity was also changed within the federal law. Prior to October 1994, disparity had been set at a maximum of 25 percent, and it used current year data to determine whether or not a state was in compliance. Under the new federal law, the 25 percent applies to fiscal years 1995, 1996 and 1997, and then it is reduced to 20 percent in fiscal years (FY) 98 and 99. The federal law further provides that the data a state will use is from two fiscal years prior. MR. GUILEY explained that the law took effect in October 1994, which was partly into FY 95 and then stated that 1993 data would be used to determine if the DOE was in compliance in 1995. So the 1993 data was used twice, once for FY 93 and once for FY 95. In 1996, that data will be the first data used for a 20 percent year, which is 1998. There is an exception in the federal law, which says that if a state substantially revises its funding formula and submits that revision to the U.S. Secretary along with preliminary or estimated data that shows the state intends to keep disparity to a maximum 20 percent limit, and further provides an assurance that if based on audited data after the year ends the state is not within the 20 percent disparity limit, the state will refund any amounts deducted from districts that received impact aid. MR. GUILEY said that if the state is willing to provide that application to the U.S. Secretary, then the U.S. Secretary can allow the state an exception from the two year data rule and allow current year data to be used under the new formula. Number 350 MR. GUILEY continued that there is the possibility of either maintaining disparity at less than 20 percent during FY 96, or in fact having a new formula in place to be implemented for FY 98 and therefore, disparity can go up as high as 25 percent in FYs 96 and 97 and not be out of compliance in FY 98. Number 379 MR. GUILEY said that disparity is calculated differently in the state of Alaska than in other states because this state's method of distributing revenue to school districts is based on an Instructional Unit (IU), not based on a per-student standard. If the DOE is successful in a reauthorization of the federal impact aid to have a section put into the law to allow the DOE to use the IU formula, Alaska's disparity will be measured based on the IU, which is the relative value of each IU at each of Alaska's 54 districts and Mt. Edgecumbe. DOE is allowed to ignore the top 5 percent of the wealthiest Ius, and the lowest 5 percent of the poorest units. Disparity is therefore measured based on the 90 percent of the units that are left. Disparity is measured based on revenue and not expense because the Alaska law does not control expenditures, it only controls the method of distributing revenue. MR. GUILEY said that unique to the state of Alaska, the actual disparity standard is the difference in revenue available to support each IU at each of the 54 districts and Mt. Edgecumbe within the state based upon local, state and certain federal revenues. Number 470 MR. GUILEY showed HESS Committee members one of the handouts which showed that one adjusted IU is worth $61,000. The potential sources of that $61,000 include state foundation aid, federal impact aid, and in the case of city and borough districts, the required four mill local contribution. Those are the three sources that contribute to the $61,000. Basic need, under the state law, is simply the total number of units multiplied by the area differential unique to that district, multiplied by the unit value. The unit value is set in statute at $61,000. MR. GUILEY said current statute allows city and borough districts that have resource to tax, to contribute an amount in excess of basic need which is not to exceed 23 percent of the basic need calculation. Or, based on unit value, that is another $14,030. This is on top of the minimum state aid, the federal impact aid and that four mills minimum local contribution. He said that some people have come to think of local caps as being four mills plus two mills equals six mills, but they are confusing two issues. MR. GUILEY explained that the four mills comprises the minimum local contribution, the 23 percent of basic need accounts for the allowable excess. Also included in state law is for those districts that have extreme tax wealth, if they first reach 35 percent of basic need before they reach four mills, they will contribute 35 percent, as a minimum, and then they are allowed a two mill excess. So it is a combination of the two ideas that brings people to the six mills figure, but the six is not set forth in statute. MR. GUILEY continued that therefore, 23 percent is the allowable excess that he was speaking of. Twenty-three percent correlates closely with disparity but does not mean that is what the state's disparity is. Over the last several years the state's disparity has ranged from about 23.4 percent to 19.25 percent. Throughout the life of this current formula, which came into effect for FY 98, the excess local contribution allowed began at 21 percent. Then it increased to 23 percent based on pressure to want to contribute more at the local level. So while the local contribution cap has been at 23 percent, the actual disparity has exceeded 23 percent. MR. GUILEY said that part of the reason for this is that the local cap does not control, or, as an example, transfers into the general fund from other funds. It only controls the amount of excess local contributions that can happen. So there are other activities that take place at the school district level that are outside of this cap. MR. GUILEY presented the final page of his handout. It showed that the total value, including the excess local on the unit basis of $75,030, is what is controlled within state statute. So the DOE simply makes a comparison of the top end unit value with the low end unit value. The difference is calculated and then the disparity is calculated from that figure. The low end unit value is normally set by the Regional Education Attendance Area (REAA) districts, or those districts that do not have access to local taxes. The high end value traditionally is set by one of the city and borough districts that has access to local contributions. Number 697 MR. GUILEY presented one more document which was a copy of the actual disparity calculation for FY 93. CO-CHAIR BUNDE asked for examples of top and bottom end districts. MR. GUILEY answered that in 1993, the top end was Ketchikan, at $75,025. The low end district was the lower Kuskokwim school district at $ 62,621. CO-CHAIR BUNDE asked if there were any school districts that actually made the $61,000 figure. MR. GUILEY answered no, all districts are above the $61,000 figure because of local interest earnings and other revenues outside of basic need. Number 745 MR. GUILEY said that the final two-page document containing the actual disparity calculations that are presented to the federal government along with several pages of backup material shows that the DOE accounts for the actual foundation payments, any adjustments that come from the audit, and other state revenues. The calculations also account for each of the local revenues including in-kind contributions or the valuation of services that are not purchased but are provided by the city and borough to the school district. These figures help in the calculation of the subtotal of the local revenue. MR. GUILEY continued that also looked at are federal revenues, including the deductible portion of the impact aid and other federal revenues. These figures are used to get a total which includes transfers into the general fund from other funds. MR. GUILEY showed HESS Committee members a column on his documents which showed the FY 93 audited total revenues. Another column showed the adjusted units. Under the federal law, the DOE is allowed to exclude any costs that are associated with unique geographic factors, with special needs students, or with any other factor that relates to the state's unique profile of students. MR. GUILEY said that in the state of Alaska the unit formula is such that if those things such as area differentials and special needs students are ignored, the actual disparity tends to increase because the urban districts then have less units over which to spread their local dollars. Mr. Guiley reminded the HESS Committee members that the relative value of a unit was being measured. Therefore, if a fixed pool of local dollars is used, as the number of units goes down, the relative value of each unit goes up. Because the state law controls basic need, the local municipality controls the excess local contribution. MR. GUILEY explained that in the REAAs where they have no access to tax, there is access to certain things such as interest earnings, facility rentals, disposal of assets, etc., which potentially transfer in from other funds which increases their unit value above the $61,000. MR. GUILEY referred back to his handout. He said the DOE is allowed, under federal law, to exclude the wealthiest five percent. In 1993, the calculations showed there were 11,806.51 Ius. Five percent of that number allows the DOE to exclude 590.33 at the top and the bottom. The units are ranked in value sequence from the most wealthiest or expensive unit to the poorest unit. The DOE then subtracts from the top until they hit the number of 590. Number 900 MR. GUILEY continued that when the calculations reach the district of Ketchikan, all of Ketchikan's Ius cannot be excluded because the 590 figure would be exceeded. Therefore, Ketchikan sets the high value figure in 1993. The same process is repeated from the bottom. In rank order, Ius are subtracted until 590 is reached. They reached Lower Kuskokwim, which has 565 units by itself. Of course, all of their Ius cannot be eliminated. Thus, Lower Kuskokwim set the bottom figure in 1993. MR. GUILEY explained that the top and bottom figures are compared, the difference is calculated, and that difference is set in a percentage. In 1993, this number cannot exceed 25 percent. This particular year's figure was 19.81 percent. A preliminary figure has been calculated for 1994, which is 20.15 percent. The preliminary number for 1995 is 20.66 and is based upon projections because the fiscal year is not yet over. MR. GUILEY said that once again, there is a general trend toward rising disparity because of the push for more local dollars due to the IU value being held at $61,000. With no increase in state aid, and with loss of buying power, there is more pressure on the local government to contribute more to schools. As those local dollars come in, it increases disparity. At the same time, interest earnings and other earnings in the REAAs are being held at lower levels as compared to other years. Therefore, disparity is generally on the incline. Number 985 MR. GUILEY said the DOE must submit by March 1 to the federal government, the state's 1994 preliminary data to be used for the state's new disparity. The federal government is presently trying to draft regulations on how the new law is implemented. The federal government is building regulations while the state is trying to decide how the state's data is submitted. Therefore, Mr. Guiley said the HESS Committee members may have some questions he cannot answer because federal regulations are not even out for public comment. MR. GUILEY concluded by saying that a memo was sent out to all school districts in November 1994 indicating that possibly the DOE would be going forward with regulations that would restrict local contributions in order to stay in compliance with the federal disparity standard. Alaska Statute 14.17.025 provides for the DOE to promulgate such regulations if necessary to stay in compliance with disparity standards. At the present time, the DOE is not recommending to the state's Board of Education that the state go forward with such regulations. Rather, the Administration is going to rewrite a formula and have it in place by FY 98 that would in fact be in compliance with the 20 percent disparity standard. Therefore, the DOE would not have to restrict districts' ability to contribute now at the 23 percent limit, which is set forth in statute. Number 1060 MR. GUILEY said that districts had been put on notice in November by memo in the event that those regulations were available for public comment. At the present time, they are not recommending that to the Board of Education. This does not mean they will not have to make an emergency regulation at a later date, after there has been a discussion with the board. The board's first meeting is February 27 and 28. CO-CHAIR BUNDE announced that Representative Brice joined the meeting at 3:08 p.m., and Representative Robinson joined the meeting at 3:18 p.m. Number 1097 CO-CHAIR BUNDE stated for the general public's information that the highest cost per adjusted unit school district in the state of Alaska is the North Slope at $133,056, and the least expensive is the Denali district at $61,581. Obviously, this is why there is a disparity formula. In other states in the U.S., this formula was used, Co-Chair Bunde thought, to punish some school districts who lived in various parts of the state. CO-CHAIR BUNDE asked Mr. Guiley how single-site schools impact the disparity problem. MR. GUILEY answered that the second wealthiest unit in the state -- St. Mary's was used as an example at $91,833 -- was partially the result of St. Mary's receiving a single-site supplement which is outside of the foundation formula. The federal definition is a very simple one of which revenue must be included. The definition is any state aid, no repayment of which is required, that is available for current operations, must be included. So because the single-site supplement is coming outside of the foundation law, and does not carry Ius with it, it again raises the relative value of IU in the single-site districts. So a number of the single sites, in a relative basis for a unit value, are up toward the top of the list. This includes such districts as St. Mary's, Hoonah, Galena, Yakutat, Klawock, Kake, Wrangell, Petersburg, etc. They tend to be higher because other state revenues must be included in the calculation. MR. GUILEY continued that when the 1993 disparity was run, assuming those single-site supplements were not there, the disparity was actually lowered about .25 percent. When the 1994 preliminary data was run without the single-site supplement, there was no change in the actual disparity. It did make a difference in the relative placement in the units on the list. But the actual disparity was unchanged. The DOE has not yet run the 1995 preliminary figures without single-site factors. It has only been run based on people's budgets which includes the single-site supplement. Mr. Guiley is not sure whether it would affect the 1995 figure or not. CO-CHAIR BUNDE announced that the meeting was on listen-only teleconference with Anchorage. Number 1250 CO-CHAIR CYNTHIA TOOHEY asked what was being done with the money for Adak. Was it simply not being counted in the 1993 figures? She also asked if she was correct that there is no funding for Adak. MR. GUILEY answered that Adak school district is in a unique situation in that they have projected about 150 students this year. Under the current state law, they are allowed to receive 75 percent of the state aid they received last year based on the number of students enrolled. When the Adak military base was closed and the district realized it would have no students, the superintendent wrote a letter to the commissioner asking the commissioner to withhold all state aid. Presently, the Adak district is existing solely on federal impact aid. Whether or not the amount of state aid which the district is eligible for is included in calculations which the disparity figures are calculated, will depend on the final outcome of the year. Number 1309 CO-CHAIR BUNDE admired Mr. Guiley's ability to have such a command of the disparity process. He recalled the difficulty a previous Administration encountered when it tried to rewrite the formula. He asked Mr. Guiley how, if changes are not made, impact funding would affect the funding for schools in the HESS Committee members' districts. MR. GUILEY said that basically, one of a number of different scenarios will be realized if a new formula is not in place for FY 98. One option is to go to the U.S. Congress and request some relief from the new 20 percent disparity standard, and hope to extend the 25 percent. Meanwhile, the state would continue to move forward working on a formula that might be in place in 1999, if not in 1998. MR. GUILEY continued that under the current state law, if there is not a new formula in place and the state is obligated to continue using the existing formula, the DOE would ask the legislature for an increment in general fund revenue to support the foundation program. Based upon FY 95, that amount would be about $43 million. Based on their FY 95 projection, that amount would be about $35 million. Therefore, using the budget amount for FY 96 as an example, if that were the number in 1998, the DOE would be asking the legislature for a general fund increment of $35 million to take the place of the loss of impact aid in the formula. MR. GUILEY said that if the legislature did not grant that amount, under the current state law the IU value would be prorated. That would result in a proration of the unit value of just less than $3,000, or about $2,850. Number 1400 CO-CHAIR BUNDE asked if the original $61,000 amount would be deducted $2,850. MR. GUILEY answered that Co-Chair Bunde was correct. The figure would drop to about $58,250. That would be the new estimated prorated value for FY 98 if there is no new formula in place, or if the state does not get relief from U.S. Congress, and if the legislature decides not to fund the increment. Of course, there are a number of unknowns, including the value of impact aid in 1998. Under the current law, the entitlement value, or the reauthorized law, for the state of Alaska is about $44 million. Currently budgeted for FY 96 is $35 million, because the U.S. Congress has chosen to short-fund the program. MR. GUILEY continued that the DOE recognizes the impact aid one year after it is received by its districts, so the DOE knows in advance the amount of money available. Mr. Guiley wondered what the amount would be in 1997. There are already estimates that in President Clinton's new budget, the impact aid is reduced another 26 percent. The state's deduct rate on impact aid is about 60 percent of total receipt. Therefore, with a 26 percent reduction a the federal level, 60 percent of that would be a general fund increment again. At the same time, the DOE would be asking for an increment of growth in student population, which averages two to two and one-half percent per year. Number 1477 MR. GUILEY summarized that the unknowns are what will the value of the impact aid deduct be, whether or not the state can get any relief from congress, and whether or not a formula can get through the legislature next year. If a formula does not go through next year, there is some doubt whether or not the DOE could actually submit by March 1, 1997, this substantially revised formula that would meet the approval of the U.S. Secretary based on the preliminary data, to allow the state to move forward to current year data and not use the two-year-old data. MR. GUILEY said that right now, it appears the state will be over the 20 percent disparity standard in 1996 if something does not occur. Mr. Guiley reiterated that currently, the figure is 19.81 percent, 20.15 percent was calculated for 1994, and the preliminary figure for 1995 is 20.66 percent. The percentage is going up. MR. GUILEY added that is not to say the legislature could not step in, in the middle of the year in 1996, and say something needs to be done now to control disparity. The legislature could do something through the foundation law. If something is done through the law, it will be subject to less challenge in the federal court and in the federal arena as far as impact aid appeals. If changes are done outside the law, such as through a supplemental such as a single-site supplemental, there is more occurrence of challenges. Currently the DOE is defending those at the federal level. Number 1541 CO-CHAIR BUNDE summarized for the HESS Committee members. There are three options. The state can expect a miracle from Congress, that it rushes to provide Alaska with special considerations. Co- Chair Bunde felt that the possibility of this was pretty low. Or the state could come up with an increment of $40 million in the face of declining budgets and budget cuts. Or the foundation formula can be changed. CO-CHAIR BUNDE said a big job is cut out for the state, because there is really only one option. He thanked Mr. Guiley for the briefing. HHES - 02/21/95 HB 28 - POSSESSION OF GUNS ON SCHOOL PROPERTY Number 1640 CO-CHAIR BUNDE said this bill addresses a problem which unfortunately has not gone away since the bill was last seen. There is an added complication and incentive to address the bill this year. This year, the state of Alaska is required to address this issue or the state stands to lose federal funding. In light of the previous briefing, the state cannot stand to threaten any more federal educational funding. CO-CHAIR BUNDE said that the Federal Gun-Free Schools Act was passed by Congress. It requires that certain conditions be met before the state receives federal education funds. The purpose of HB 28 is to put the state of Alaska into compliance with the federal mandate and to address a growing problem in Alaska. This problem is students who bring guns to school. CO-CHAIR BUNDE summarized the bill. He said the possession of a deadly weapon on school grounds, in the parking lots adjacent to schools or while participating in a school-sponsored event will be prohibited. However, a person can obtain permission from a chief administrative officer of a school to carry a prohibited weapon on school grounds to make allowances for school rifle teams and that sort of thing. The restrictions do not apply to sworn law enforcement officers of course. CO-CHAIR BUNDE said this bill requires a one-year expulsion or suspension of a student that possesses a weapon on school grounds and that is to bring the state into compliance with the federal mandate. In addition, the bill requires an annual report to the DOE regarding the number of students expelled and the types of weapons involved. Number 1728 CO-CHAIR BUNDE said that in researching this bill, it was found that schools are not always interested in providing accurate information about such incidents because it makes the school look bad. To Co-Chair Bunde, this is an attempt to sweep the problem under the rug in some cases. CO-CHAIR BUNDE continued that the legislation also allows school lockers to be searched to determine compliance with school regulations and state and federal laws. The policy on locker searches must be posted prominently throughout the school. These are random searches. The school is not allowed to target a particular student or group of students. The lockers are public property and the students are using them. In many schools the students share lockers so this is not necessarily a personal issue. Number 1800 CO-CHAIR BUNDE also said that he found out, through research, that lockers were the center of criminal activity in many Lower 48 schools. Lockers were where many dangerous and deadly weapons were kept, as well as contraband. It was also where law abiding students were being robbed. Some school districts have removed all lockers, resulting in considerable drops in theft and violence. Other schools require see-through back packs. Fortunately, Co- Chair Bunde did not think Alaska was at that level. But there are problems that must be addressed regarding guns in schools, and this bill will go a long way toward solving Alaska's problems. Number 1837 REPRESENTATIVE TOM BRICE asked if HB 28 was exactly the same bill which passed the HESS committee last year. CO-CHAIR BUNDE answered no, not exactly, because the requirements of the federal law were now addressed. CO-CHAIR TOOHEY asked for a motion to adopt the Committee Substitute (CS) for HB 28. REPRESENTATIVE GARY DAVIS so motioned. There were no objections and the CS was adopted. Number 1890 HELEN MEHRKENS, Health Education and Health Program Coordinator for the Department of Education, said that part of her duties is to coordinate the Safe and Gun-Free Schools Act which is a federal Act which comes to the DOE and to the schools in Alaska. Related to that is the Gun-Free Schools Act mentioned by Co-Chair Bunde. She has been working with districts for several months in an attempt to get the districts in compliance with that Act. MS. MEHRKENS continued that Co-Chair Bunde has already identified the major components of the federal bill. One is that if the state is going to continue to receive $90 million in elementary and secondary education act funds, which are the primary grant funds to school districts in this state, districts must come into compliance with the federal Act which requires school districts to expel students who bring weapons to schools. This uses the federal definition of a deadly weapon. Number 1930 MS. MEHRKENS said there is an opportunity for schools, on a case by case basis, to waive that expulsion after the case has been looked at using a hearing process. The DOE wants to state that it is in favor of compliance with the federal mandate and the DOE hopes HB 28 will be passed. This is not only because of the threat of federal funding, but also because many schools are already in compliance with the expulsion mandate, and the DOE finds that everyone is in favor of whatever it takes to make schools a safe place for students. MS. MEHRKENS offered to answer questions. The DOE has been in constant contact with Co-Chair Bunde's staff as well as the staff at the federal DOE for the most recent interpretations. The federal DOE staff has a list of Alaska DOE's questions that they will be answering soon. Number 1976 REPRESENTATIVE DAVIS remembered that last year, when the bill was discussed, there was a question in the villages of what exactly was school property. In a lot of villages, there are no boundaries from surveys. A lot of children will run their snowmobiles, etc. down the streets. If they have rifles and are going hunting, there is a possibility the children will cross school grounds. He asked Ms. Mehrkens if that issue had been addressed. MS. MEHRKENS answered that question has been already asked by two districts, but has not yet been addressed. CO-CHAIR BUNDE recalled that discussion from last year. His original bill required the gun to be unloaded and in a case. The current federal law simply states that person will not have a gun on school property. HB 28 was amended previously to make exceptions for rural schools; however, upon reflection Co-Chair Bunde feels that people pretty much know where school property is. There is no free lunch, and if the districts want federal aid, a person must find out where school property is and keep guns off of it. Number 2039 REPRESENTATIVE CAREN ROBINSON asked how the bill would affect a school like Juneau in which there is a shooting range in the bottom of the school. MS. MEHRKENS answered that was one of the biggest questions across the state. In fact, the DOE built many of those ranges. CO-CHAIR BUNDE interjected that HB 28 does allow for the school administrator to grant permission for such activities. This is also through the federal policy. MS. MEHRKENS said the federal requirements are concerned about students bringing guns to school. It is not particularly concerned about adults, although that is important to people also. Actually, the federal definition of "weapon" has an exclusion in it for sporting, recreation and cultural purposes. Those are reasons why a school administrator can allow students to bring guns onto school property. That is understood to mean rifle and gun safety classes, the Junior ROTC programs, etc. Number 2085 REPRESENTATIVE BRICE remembered that during last session's discussion, there was great concern about rural schools where there are wolves, bear, etc., and a weapon is carried for protection. He remembered that issue was addressed, but those factors are no longer in the current bill. He asked if those allowances had been taken out, and if so, is there no leniency with the federal program for those considerations. CO-CHAIR BUNDE said that he attempted to address this issue in Section 1 (A) and (C) which allows for rural exceptions, however, he did not know if this is a question that needs to be addressed by the federal government. Co-Chair Bunde, at this point, interpreted the mandate to say that the school administrator has the power to grant such exceptions. It will probably be a formal process, however. There will probably be some procedures involved in the exception process. In reference to the question concerning school boundaries, there is going to be an awareness of those boundaries. Number 2181 REPRESENTATIVE ROBINSON said that in Juneau there is already a gun policy in place. She does not know what the penalty is for violating that policy. HB 28 sounds like there would be automatic expulsion until there was a review. MS. MEHRKENS answered that the requirement is that the penalty for bringing a deadly weapon to school is expulsion. There will always be a hearing and an appeal process. After that year, the student may go through a type of rehabilitation program which allows them to be placed back in some sort of alternative setting or else be placed back in school more quickly. Anchorage currently has such a program. They have a referral program that puts the student through behavior and anger management. When the student is judged to be rehabilitated and safe, they are allowed back into the school. However, it is quite a long program and it is not an easy thing to go through. REPRESENTATIVE ROBINSON said she recognizes and supports the fact that guns should not be brought onto school grounds. There also needs to be serious penalties for that. But she has a fear that there will be no rehabilitation program present after expulsion and that society will simply lose these children. Representative Robinson asked if such allowances for rehabilitation programs are in the bill. Number 2253 CO-CHAIR BUNDE answered that the bill does not address the requirement for alternative programs. That would be up to the district. Representative Robinson asked if the bill prohibits such a program, and Co-Chair Bunde answered no. MS. MEHRKENS said the bill says the school administrator may, on a case by case basis, reduce or otherwise modify the expulsion or suspension of the student. CO-CHAIR BUNDE said that not all districts in the state have followed the expulsion policy throughout the Lower 48. This is one reason why the federal mandate requires the expulsion or suspension. There have been cases where a student in one district is expelled, moves down the road to another district, and the problem is passed on. TAPE 95-8, SIDE B Number 000 REPRESENTATIVE DAVIS asked if the federal law addresses this problem, and Ms. Mehrkens answered yes. MARGOT KNUTH, Assistant Attorney General in the Criminal Division, Department of Law, stated that Alaska Governor Tony Knowles will be introducing a bill on youth and firearms. This is an issue of concern to him. This bill is consistent with the Governor's approach to the general problem and will be coming out later this week. She noted that the federal Act specifically requires a case by case analysis of student's expulsion. The federal government fully realizes there may be cases where a full year's expulsion may not be appropriate. This realization is built into the provision of HB 28. MS. KNUTH said that in the past there has been concern about the constitutionality of the locker search provision. She said she would answer questions concerning this. Number 113 REPRESENTATIVE NORMAN ROKEBERG asked Ms. Knuth what the problems were revolving around such provisions and also if she would comment on the problems with the definitions of firearms. MS. KNUTH answered that the Constitution of the United States has a provision that protects people from unreasonable searches and seizures. The question, therefore, is what is reasonable and what is unreasonable. In this case, school lockers are the property of the school which is made available to students. Although there is some uncertainty whether Alaska would follow the federal interpretation, it is likely that Alaska will. The way that provision has been interpreted federally is that if a school provides notices that the locker is subject to searches for weapons or contraband, the lockers can be searched. The students do not have a reasonable expectation of privacy in regards to weapons or firearms in their lockers. MS. KNUTH continued by saying the school is prohibited from using any other items that may be found in the locker as a basis for any action against a student. A fear has been the discovery of birth control in a locker, and whether a student could be expelled for that if they went to a school which disapproved of such a thing. The answer is no. Birth control is not a contraband item. MS. KNUTH said that in respect to searching a student, either in a pat down search or in the desire to search a back pack or day pack, there is nothing similar to the consent that you can impute to students who are using a school locker. The Constitution applies fully to students for being safe from unreasonable search and seizures of their persons or possessions. Therefore, it is possible for a person to bring a gun in their purse or back pack and the school does not have any more authority than a police officer would to search a student for no reason at all. At the same time, if there is any reason to believe that the student does have a firearm, then there exists the basis for a reasonable search and seizure. What the government is precluded from doing is acting randomly and like "Big Brother," and intruding anytime and in any place. Number 314 MS. KNUTH said however, when you have information that suggests the possession of a weapon that is illegal under state law, then there is a basis for the search to be made. REPRESENTATIVE ROKEBERG asked if the administrators of the schools will now have to take classes in legal evidence, search and seizure, and constitutional law provisions to define probable cause and pat down a student. MS. KNUTH said that in fact, in the Lower 48 there are schools that have metal detectors at their entries because that is a constitutional way of finding guns. It is a difficult thing to become an expert on what is illegal and what is legal. It would take some efforts to provide that information. However, when there is a genuine problem, a person must rise to it and see what can be done. Ms. Knuth feels that in Alaska, particularly in Anchorage, a point has been reached in which everyone is motivated to try and deal with this problem. Number 326 REPRESENTATIVE ROKEBERG asked if a school administrator would have to abide by the same probable cause standards as a police officer. MS. KNUTH answered yes. REPRESENTATIVE ROKEBERG asked if there were provisions in the state statute which allowed for contraband items. MS. KNUTH answered that there was nothing pertaining to contraband items in the statutes. It is a part of the common law in Alaska. HB 28 is codifying existing law. It is comforting to have it in the statute. People will feel more secure in what the limits on the searches are, and the provision concerning notice for searches is a good one. REPRESENTATIVE ROKEBERG asked if there was a need for the statutory provision for contraband to be included in this bill. MS. KNUTH answered that it was not necessary. Number 455 CO-CHAIR BUNDE said that as someone who has some personal experience with what goes on in schools, he assured the HESS Committee members that not only administrators but each teacher is aware of their legal limitations when it comes to disciplining or physically touching a child. REPRESENTATIVE BRICE said that a question had been raised about what a school administrator can and cannot do as far as allowing for a special circumstance. He could not find that wording in the bill and he wondered if there was a specific section that could point to that. MS. KNUTH said that she does not have the CS, but she has HB 28 in front of her. She read page 4, lines 23 to 25: The administrative officer of a school district may, on a case by case basis, reduce or otherwise modify the expulsion or suspension of a student under (A) of this section. Number 549 REPRESENTATIVE BRICE said that the student still has to be expelled or suspended. This does not allow for legitimate reasons for having the firearm on campus, or for the circumstance in which a rifle is on a three wheeler for hunting and wildlife protection purposes and the person crosses school grounds. REPRESENTATIVE ROBINSON said that the provision Ms. Knuth just read does not cover these circumstances. The student must still be suspended or expelled. This then puts the burden on the student. MS. KNUTH said that the federal definition of a firearm is very unusual. It excludes rifles for purposes of competition. Firearm does not mean any gun. It means the type of gun the federal government believes should not be on school grounds. In that manner, they have addressed Representative Brice's concerns. If a person has a gun he or she is using for the shooting range, he or she will not be expelled or suspended. Ms. Knuth does not know if the federal mandate takes into account guns brought for personal safety from wildlife. That may be something the federal government may want to address for Alaska. But they dealt with the problem using their peculiar definition of firearm. Number 694 REPRESENTATIVE ROKEBERG asked what happens if students share lockers, and also if there was a type of due process or hearing procedure before expulsion or suspension. MS. KNUTH answered that a hearing process is in place for a student who possesses a weapon and should be expelled. There are due process provisions. Ms. Knuth did not have any information with respect to the sharing of lockers. Generally, in other search and seizure areas, if two people have control over an area, if one person consents to a search, that is binding for the other person. In this case, all students will be consenting to the search of a locker because they are using it on that understanding and on that condition. REPRESENTATIVE ROKEBERG was concerned about the possibility of two students denying a weapon belonged to either of them, and if there was a procedure in which they could defend themselves. CO-CHAIR BUNDE said that each school has a disciplinary policy which involves the rights of the students. This is not addressed in HB 28. Number 794 REPRESENTATIVE ROKEBERG noticed that there was a provision for the referral to law enforcement authorities, and he was concerned that on page 1, line 10 it talks of misconduct involving a fourth degree. Representative Rokeberg asked if these were degrees of misdemeanors. CO-CHAIR BUNDE said it was a misdemeanor. REPRESENTATIVE ROKEBERG said that on page 2, line 22, the word premises is used. Representative Rokeberg understood the definition of premises to be an improved property or building, not necessarily land. MS. KNUTH explained that the word premises, for the purposes of this statute, would mean property, improved or unimproved, and boundaries of that property that is owned by or associated with the school. The word premises is not limited to the building portion of the property. Number 860 REPRESENTATIVE ROKEBERG asked if the word "premises" was being defined in HB 28 for that interpretation. MS. KNUTH said that there is a common law definition of "premises," and she offered to look at Title 11 to see if there was a statutory definition, as well. It would be very unusual for the statutory definition to differ from the common law definition. REPRESENTATIVE ROKEBERG said that his use of the word "premises" in real property law is different, and this caused him concern. CO-CHAIR TOOHEY asked for the pleasure of the HESS Committee. Co- Chair Bunde motioned that CSHB 28 be moved from the Committee with the accompanying fiscal notes and with individual recommendations. There were no objections and the bill was moved. HHES - 02/21/69 HB 94 - PRIVATE MANAGEMENT OF PUBLIC SCHOOLS Number 955 REPRESENTATIVE JEANNETTE JAMES explained that her bill authorizes school districts to contract with private agencies to manage schools. She has spoken with many teachers. One of the biggest problems teachers have is that they are not allowed to teach as they know is best for their students. They may spend much of their time writing reports and performing other administrative duties, and often very little time is spent on teaching. REPRESENTATIVE JAMES has also heard from teachers that they would like a Reduction In Force (RIF) program, because there are some that are ready to retire and they are just burned out. She feels that there is a pool of intelligence in Alaska that might be spirited into doing other things, providing the legislature were to allow private contracting of the management of Alaska schools. REPRESENTATIVE JAMES is not exactly sure whether this law is necessary. She thinks that such a decision is probably not prohibited in the current statutes, and she will have to ask someone about that. However, by putting together HB 94, someone may be inspired to contract management to schools. REPRESENTATIVE JAMES said that the public wants to make our schools more efficient. They want to make it more effective, they want the students to have higher academic achievements, they want better behavior from students. Additionally, people are interested in better education for less money. It appears that in our efforts to determine how we can make the government and education better, the opportunity to contract with private agencies to provide services is an option we ought to consider. REPRESENTATIVE JAMES continued that all of the protections that are in place shall remain. The school board will be the body which still determines what can or cannot happen in the schools. That would all be in the contract process. There are some management companies in the Lower 48 which have provided school districts with both good and bad experiences. However, Representative James feels that we have the human resources here in Alaska to solve problems. REPRESENTATIVE JAMES stated this bill will not change anything if school districts do not want to contract out. School districts probably would not want to do this unless someone presented a sufficient plan. School boards will have the ability to contract to a private agency as opposed to a nonprofit group, and "private agency" indicates that people want to make some money and they know they must work within the confines of the district and the state budget processes. This is a good step and might open up some good ideas for education in the state. Number 1136 CO-CHAIR TOOHEY said there is a fear this bill will be a vehicle for religious schools, and there is a fine line between what people believe is a religious school and a private school which teaches religion. She asked how this can be prevented. REPRESENTATIVE JAMES said that all laws currently on the books which prevent public schools from being religious would still apply. No existing rules are being modified. The only thing this bill allows for is permitting the school district to hire a private agency, as opposed to hiring the administration and teachers by an administrative procedure. This means a group of people may come forward and offer a contract to run such services for a set amount of money. That contract would have to apply and support all the existing rules and regulations in place for our education system. CO-CHAIR TOOHEY asked if schools could then be run without union teachers. REPRESENTATIVE JAMES answered yes, this would be the only change because the private agencies would not be required to have union teachers. The teachers could be union, but it would not be required. This would be part of the contract. Number 1240 REPRESENTATIVE BRICE asked if the private agency could hire teachers who are not part of the teacher's union, and what collective bargaining unit teachers would be under considering they are still public teachers and they fall under Title 14. REPRESENTATIVE JAMES invited Mr. Ford, who helped draft the bill, to testify with her. She then responded that it would be a public school managed by a private industry. She believes the private industry would be insulated from the requirement of the teacher's union. REPRESENTATIVE BRICE understood the people within the administrative organization would not necessarily be union, but wondered if the teachers in the classroom, considering they are still public employees, would maintain their collective bargaining status. Number 1314 REPRESENTATIVE JAMES said that teachers would not be public employees. They would be employees of the private agency which has a contract to maintain a public school. REPRESENTATIVE BRICE clarified that the private agency would not merely be administrative, it would run everything below the school board level. REPRESENTATIVE JAMES agreed and noted that the private agency could also only run any portion of the district, depending on the contract. HB 94 simply makes it an option for school boards. The boards would be the creative ones to figure out what would work. MIKE FORD, Division of Legal Services, agreed with Representative James. He said there is flexibility attached to the provision at this time. A private agency could contract at any level. There is no requirement that union teachers be hired. Non-union teachers can be hired as long as they meet the requirements of law. REPRESENTATIVE BRICE said that Mr. Ford just made him very nervous when he said the agency may contract to run the school board on down. Representative Brice wanted to know if the school board could be controlled. MR. FORD said the school board would not be replaced, only the management and the administration of the education system if that was the will of the school board. CO-CHAIR BUNDE asked for clarification. Teachers would not be public employees, therefore they would not qualify for the public benefits, health insurance, retirement, etc. Representative James suspected that the private agency would have to take care of that. Those things could be bargained for. Number 1418 REPRESENTATIVE ROKEBERG asked if it was being suggested that this could give a school board union-busting power. REPRESENTATIVE JAMES said that is not the goal of the bill, but it is a possibility. The goal should be for better schools. The people that Representative James visualizes could best run the schools is the teachers who are already on retirement. REPRESENTATIVE ROKEBERG asked if she meant that those teachers could simply form an organization to manage the schools. REPRESENTATIVE JAMES said, yes. Number 1455 REPRESENTATIVE ROKEBERG asked if Representative James was aware of any special education requirements that a school district may have, and if it would be beneficial to a school district to contract out to a private supplier for such special services. REPRESENTATIVE JAMES said that such a contract would be allowed under this legislation. Her intent is to make possible any kind of contracting with a public agency that would achieve the goals that the school district would be reaching for, i.e., better education, more efficiency, etc., within the confines of the available funds. REPRESENTATIVE ROKEBERG asked if currently the state law allows the majority of a school board to make a decision about private management, instead of going to the voters. REPRESENTATIVE JAMES said she does not know of any law that would prohibit a school board from making such a decision, however she cannot visualize this happening. She also cannot imagine the school board organizing the management. She imagines the people would bring this option to the school board's attention. She feels that most likely, the private agency would approach the school board as opposed to the school board looking for a union-busting organization. Number 1538 REPRESENTATIVE ROKEBERG asked if legally a majority of a school board in this state could make any decision they wanted to. REPRESENTATIVE JAMES said that as of right now, the answer was yes. REPRESENTATIVE ROBINSON said that she has received many Public Opinion Messages against this bill. She asked Representative James about her basic feelings about this and why there is so much negative feedback about this bill. REPRESENTATIVE JAMES answered that she has also received those negative messages, and she has been responding to them. The opinions are somewhat slanted. She is not proposing that private industry should come in and take over the schools. She is proposing that should be an option for the school board, if in fact the private agency could meet the challenges in a better way. She is not saying that as soon as this legislation is passed such a thing will happen. But particularly, in some smaller schools, this could be an option. REPRESENTATIVE JAMES said that one of the problems that exists currently is that teachers have to do a lot of administrative work. A flatter organization could be made out of the school district, in which the teachers at the bottom have more authority about what and how they teach. This will never happen in the existing system. This legislation is simply to provide an opportunity to make education less expensive and more efficient and achieve better academic and behavior standards. Representative James reminded the HESS Committee members that the private agency would have to follow all laws that are currently in place. Number 1616 CO-CHAIR TOOHEY said this is a new concept, and that people should not be afraid of new concepts. Maybe 20 years from now all schools will be privately run. She commended the bill. REPRESENTATIVE JAMES said that private management is occurring everywhere. The nation is in a financial crunch, and so is the state. The government has to figure out how to meet the needs of the public less expensively and more effectively. Children cannot graduate without knowing how to read and write. There used to be a better system. This has been complicated so now teachers are actually teaching for less time every day. This is obvious. CO-CHAIR BUNDE asked if any agencies were waiting in the wings to take advantage of this, or if this legislation was requested by a private agency. REPRESENTATIVE JAMES said the bill was her idea. Number 1693 REPRESENTATIVE DAVIS reminded Representative James that she said we need to meet the needs of our communities. Representative Davis felt that we need to provide the opportunity for the community to meet their own needs. He also asked if such allowances for private management is necessary and if it is currently allowed. REPRESENTATIVE JAMES said there is nothing that precludes this management from happening, but deferred the question to Mr. Ford. She also said that if it is not outlawed, she assumed that it is "lawed." MR. FORD said the problems with regional school boards, REAAs, is that their powers are set in statute. The language being added by the bill simply makes clear they have the power to contract management. There are always discussions when there is a list, concerning whether the list limits action to the confines of the list. In this case, the language gives school districts the authority to contract out. This is to avoid argument, if nothing else. MR. FORD said that for municipal school districts, there is simply not a statute that prohibits them from doing contracting with a private agency. They could contract management now. However, to be consistent, Mr. Ford added language to HB 94 that clearly gives school boards authority. REPRESENTATIVE DAVIS said that some language in the bill refers to regional school boards. MR. FORD said Section 2 refers to municipal school districts. Number 1774 REPRESENTATIVE JAMES said some of the smaller schools in the bush communities are having problems because there are just as many problems that arise when there are too few students as arise when there are too many. Students learn from each other. There might be some interest in some of the regional districts to band together to create some sort of boarding school which could be managed on a private basis. This could take in the students from a number of small schools and offer more educational opportunities to those students. This just another possibility of how this legislation could be used. Number 1809 REPRESENTATIVE BRICE asked how this would affect state standards, safer teaching certificates, etc., and if the State Board of Education will have the ability to establish standards for the private agencies before they could take over a school district. He was concerned with unqualified people running the schools. REPRESENTATIVE JAMES said the existing laws which apply currently would still apply. If a group wants the contract, they would have to comply with those standards of a public school. The teachers would have to be certified in the same way. REPRESENTATIVE BRICE asked if there was a section in statute which related to administrative standards as well. Number 1864 CO-CHAIR BUNDE answered there are requirements for being a principal. REPRESENTATIVE BRICE said there are more positions than just principal, such as information officers and funding officers. He wanted to make sure that those types of people have some type of knowledge or background. REPRESENTATIVE JAMES said she did not think it was necessary, but maybe that is something that should also be fixed. REPRESENTATIVE BRICE said there is no certification process for the private agency, and HB 94 was not going to look at such a process. REPRESENTATIVE JAMES said that would have to be established by the local school board, in addition to bonding and other concerns. This legislation is being introduced to open up possibilities. She thinks that such factors and caveats may come to light in the future, but she just wants to provide an option. This legislation is a tool that could be used if the opportunity arose. Number 1928 CO-CHAIR BUNDE observed that there are credentials for administrators, but credentials for positions such as school secretary are determined by district. REPRESENTATIVE BRICE said there has been a lot of talk about statewide performance standards lately. He assumes that these agencies will have to maintain high standards. He asked about consistency throughout administrations throughout the state, not that there is a whole lot of consistency at the present time. REPRESENTATIVE JAMES said that whatever the school district could do in the hiring and firing of their existing system, they could still do after contracting with a private agency. The same rules that apply to their hiring and firing would still apply in contracting. Number 1972 REPRESENTATIVE DAVIS felt that students are after a state certification. There are plenty of rules and regulations in place. Teachers are certified and would need to be under additional state law, administrators probably also. There are administrative certifications, but whether it is required under state law for a private agency, he didn't know. The curriculum is directed to a large degree by the local school board. That is the beauty of this bill, it provides an option, whether it is good or bad. Number 2044 SHEILA PETERSON, Special Assistant to the Department of Education, said that as a representative of the DOE she was here to observe and listen to dialogue to learn about the possibilities available under this legislation. CARL ROSE, Executive Director, Association of Alaska School Boards, said his organization supports HB 94. However, he was not privy to all the discussion that just took place. That discussion has opened some broad parameters that he would like to clear up. School boards are political subdivisions of the state. The parameters under which a school board operates are set in statutes, regulations, funding constraints set by the legislature, local policies and negotiated agreements. They operate in an oversight capacity. He appreciates HB 94 because it provides some options. MR. ROSE continued that he didn't think the options will be interpreted near as broadly as the sponsor hopes or thinks it might be, simply because the school boards are a political subdivision of the state. As such, a school board is required to meet the requirements of the state. As everyone is aware, four years ago the legislature adopted Title 23, Public Employees Relations Act (PERA), which moved labor relations in under PERA. At that point, there was a lengthy discussion over the ability of school districts to opt out of PERA, the way many of the municipalities were allowed to do back in the 1970s. It was decided that the policy of this state would be that all school districts would fall under the confines of PERA and move from Title 14, where labor relations was addressed, into Title 23, PERA. MR. ROSE thought that when it comes down to the interpretation of what we will be able to do with the employees in the state, the rules are already set. MR. ROSE said he did not interpret the bill as allowing for a private group to come in and hire new employees. TAPE 95-9, SIDE A Number 000 MR. ROSE said that in some particular areas, this bill will help because the law is not clear. There are two areas, one of interim superintendencies, and the other is the area which attempts to consolidate administrative services. First Mr. Rose discussed interim superintendencies. MR. ROSE said when there is a separation between a school board and its superintendent, and it comes in an untimely manner (perhaps mid-year), the school board must find an interim superintendent. Any superintendent must be certified. They must have a Type A teaching certificate, a Type B administration certificate, and a superintendent endorsement. Number 066 At 4:35 p.m. Co-Chair Bunde announced that he had to leave the meeting to make a quorum elsewhere. Because there were some questions which remained unanswered, he asked Co-Chair Toohey to appoint a subcommittee to explore the bill. He requested to be on the subcommittee and suggested that Co-Chair Toohey be on it also. Number 099 MR. ROSE continued that the position of interim superintendent requires a certificate with an endorsement for superintendent. Normally, you cannot find someone who is available mid-year. If they are available, you may want to question why they are not employed and why you would want to hire them. On the other hand, there happens to be a number of people who are available, and they are retired superintendents. MR. ROSE said this is where interpretation comes into play. When a person is utilizing the Teachers Retirement System (TRS) and receiving benefits, he or she cannot be serving in a position that requires a certificate as a condition of employment. There is a conflict there. Mr. Rose thinks this bill would allow someone to come in and contract for a period of time. The school board will then have the expertise present while it searches for another permanent superintendent. MR. ROSE said the second area this legislation would assist is the area of contracting services. Pelican, for example, has contracted services with the Southeast Regional Resource Center. They have contracted their superintendent services for $30,000. This is considerably less than the cost of a full-time employee. With the remainder of that money, they employed a full-time principal on- site. The principal's duties are to be responsible for the operation of the school. The functions and operations of the district and operating the school board are left to the executive director of the Southeast Regional Resource Center, which for the record is John Anttonen. Number 219 MR. ROSE said that relationship is working so well that Skagway is looking to do the same thing. The problem arose when the commissioner of the DOE raised the concern that since John Anttonen had a certificate and was already using it in Pelican, he should not be allowed to use that same certificate in Skagway. The Regional Resource Center is a pretty large organization. They have a lot of talent in there and they also have other people who have certificates. But the point is that they are providing a service that allows school districts to exercise their right under the authority of this bill. This is to hire and contract the services and allow them to put their money into principalships and dollars that go back into the classroom. MR. ROSE continued that the question has to be if it is not just the Regional Resource Center, who else might be able to provide that service. These factors must be looked at. Mr. Rose cannot imagine a school district deciding to go private with all the constraints he just mentioned. Mr. Rose thinks that someone would have to come up with a very good plan to suggest that something like this could work. He looks at these good plans and proposals as very little more than a campaign. Many things can be promised on the campaign trail. Many things can be promised when a person is proposing that they will run a business. MR. ROSE explained the problem is that at some point there is a "leaping off point." When a person signs into a multi-year contract, it is no different than any superintendency. That person is responsible for that contract for the duration of that contract. There are a lot of protections already in state law that provide us with the protections that we need. But this bill does clarify, and it gives us another option to take a look at private agencies. MR. ROSE added the Regional Resource Center is kind of a hybrid in terms of an agency. It is mentioned in statute; therefore, it is kind of a political subdivision of the state; therefore, many of their employees qualify for TRS benefits. On the other hand, they are also a 501-C(3), which is a private nonprofit agency, thereby allowing them some proprietary interests to competitively bid for grants from the DOE. Number 387 MR. ROSE questioned if the bill is clear whether the Regional Resource Center qualifies as a private agency, however, Mr. Rose thinks it does, one way or the other. For the points Mr. Rose just enumerated, he feels that the bill gives some options. He also thinks the current statutes provide all the protections that HESS Committee members had concerns about. Lastly, Mr. Rose thinks that the school board is the one that is probably best qualified to make determinations as to what is most effective for the operation of the schools. Number 437 MR. FORD said the discussion has covered both ends of the spectrum. The existing law allows one to contract with an agency, and the current bill just says, "a private agency." Whether it is public or private, the school board is covered. Number 461 REPRESENTATIVE ROKEBERG commented that the most recent testimony should be taken into consideration by the subcommittee. Co-Chair Toohey said she would take that under consideration. REPRESENTATIVE BRICE asked how many private agency management options are currently working in the U.S., how long have they been working, and have they been working long enough to have any type of fairly definitive outcome. REPRESENTATIVE JAMES answered that legislative research was working on that information right now. CO-CHAIR TOOHEY said if you take away the words "private management" and think about the type of education, the bill becomes clearer. REPRESENTATIVE BRICE clarified by saying "Privately managed, publicly funded." CO-CHAIR TOOHEY held the bill for further consideration. Number 571 REPRESENTATIVE DAVIS asked about Co-Chair Bunde's request to be on the subcommittee. Co-Chair Toohey said that she and Co-Chair Bunde would comprise the subcommittee until further notice. ADJOURNMENT CO-CHAIR TOOHEY adjourned the meeting at 4:43 p.m.