Legislature(2009 - 2010)CAPITOL 106

03/15/2010 08:00 AM House EDUCATION

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Moved Out of Committee
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Heard & Held
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Moved Out of Committee
           HB 393-CHARTER/ALTERNATIVE SCHOOL FUNDING                                                                        
8:47:37 AM                                                                                                                    
CHAIR SEATON announced that the  final order of business would be                                                               
HOUSE BILL NO.  393, "An Act relating to  charter school approval                                                               
and funding."                                                                                                                   
8:48:16 AM                                                                                                                    
JIM  POUND,  Staff,  Representative   Wes  Keller,  Alaska  State                                                               
Legislature,  paraphrasing  from  a prepared  sponsor  statement,                                                               
which read as follows [original punctuation provided]:                                                                          
     Over  the  years,   this  legislature  has  continually                                                                    
     searched  for answers  to improve  the  quality of  the                                                                    
     education our  children receive. We have  promoted both                                                                    
     verbally  and financially  many  ideas.  Some of  those                                                                    
     have worked while others have failed.                                                                                      
     One  area   that  continues  to   show  promise   in  a                                                                    
     traditional  classroom  scenario are  charter  schools.                                                                    
     Charter  Schools  succeed  because of  efforts  by  the                                                                    
     school district,  principals, teachers,  and especially                                                                    
     parents. This  team effort has  proven to  be extremely                                                                    
     House Bill  393 will continue  to show our  support for                                                                    
     these  successful  education  programs  by  creating  a                                                                    
     grant program  within the  Department of  Education for                                                                    
     charter   school   construction,    leases   or   major                                                                    
     maintenance.  The Department  will create  a five  year                                                                    
     program  of   grants  based   on  existing   per  pupil                                                                    
     formulas.  The legislature  will  be able  to gage  the                                                                    
     success  of  the  program  annually  by  reviewing  and                                                                    
     providing the necessary funding.                                                                                           
     HB 393 rewards  the success of the  program by allowing                                                                    
     more  school districts  to  open  and maintain  charter                                                                    
     schools.  Your  support will  ensure  that  one of  the                                                                    
     successful education  programs we  have approved  of in                                                                    
     the past will continue to prosper.                                                                                         
MR.  POUND  indicated  that  HB  393  would  assist  charter                                                                    
schools  in   obtaining  federal   grants,  by   ending  the                                                                    
restriction  on the  number of  charter schools.   It  would                                                                    
provide  for   a  Supplemental  Charter   School  Facilities                                                                    
Program, through a combination  of federal and state grants,                                                                    
charter schools would be able to apply for state grants.                                                                        
8:50:04 AM                                                                                                                    
REPRESENTATIVE MUNOZ asked for clarification.   She asked for the                                                               
specific cite in  HB 393 that removes the limit  on the number of                                                               
charter schools.                                                                                                                
MR. POUND referred to page 1, lines 6-9, of Section 1 of HB 393.                                                                
8:50:32 AM                                                                                                                    
REPRESENTATIVE  MUNOZ  referred  to  the  percentage  of  funding                                                               
allowances for  federal funding and  asked if the intent  is that                                                               
the local district be required to fund the balance.                                                                             
MR. POUND  related that HB  393 would set  up a program  in which                                                               
the Department  of Education and  Early Development  (DEED) would                                                               
apply to  the federal grant  program, which would  be cultivated,                                                               
and the local district would apply for grant funds.                                                                             
8:51:23 AM                                                                                                                    
REPRESENTATIVE MUNOZ  noted the  school would  be eligible  for a                                                               
percentage of allowable costs.   She asked which entity would pay                                                               
the additional percentage of costs to make the project viable.                                                                  
MR.  POUND  related  his  understanding  that  the  local  school                                                               
district would pick up the additional costs.                                                                                    
8:51:52 AM                                                                                                                    
REPRESENTATIVE KELLER remarked that the  intent is to establish a                                                               
policy  that demonstrates  the  state has  a  vested interest  in                                                               
obtaining  facilities  for  charter   schools.    The  cap  seems                                                               
insignificant  to him,  he  stated.   The  Alaska Charter  School                                                               
Association  (ACSA) asked  the state  to make  a contribution  of                                                               
state funds  to charter  schools in order  to meet  federal grant                                                               
eligibility requirements.   If the charter  schools receive $1.00                                                               
per  student per  year, it  would cost  approximately $1,000  per                                                               
year.   That  amount represents  minimal state  funding with  the                                                               
balance to be picked up by the local school district.                                                                           
REPRESENTATIVE  MUNOZ expressed  concern that  there would  be no                                                               
guarantee that a charter school would receive local support.                                                                    
REPRESENTATIVE  KELLER agreed.    He commented  that  there is  a                                                               
companion bill in the other  body.  Additionally, charter schools                                                               
are public schools  with an option for local bonding.   He agreed                                                               
that funding is difficult in some districts.                                                                                    
8:54:21 AM                                                                                                                    
CHAIR SEATON read from page 2, line 2, which read as follows:                                                                   
     (b) The department shall apply for available federal                                                                       
     funding and award federal funding made available under                                                                     
     the grant program established under (a) of this                                                                            
     section for not more than five years for approved                                                                          
     projects for charter school facilities construction,                                                                       
     lease, or major maintenance as follows:                                                                                    
CHAIR SEATON also referred to page 2, line 10, which read,                                                                      
"(3) 60 percent of the allowable costs for the third fiscal                                                                     
year for the approved project;."  He said that in the third                                                                     
year, 60 percent of the allowable costs would be absorbed                                                                       
by the community.  He then referred to page 2, lines 19-22,                                                                     
which read:                                                                                                                     
     (d)  A school  district or  regional educational  attendance                                                               
     area  that submits  an application  for  a proposed  project                                                               
     under AS  14.11.011 for funding  under this section  that is                                                               
     approved  for  funding by  the  department  shall provide  a                                                               
     participating share that is equal to the difference between                                                                
     available federal funding and the state aid provided under                                                                 
     AS 14.11.126.                                                                                                              
CHAIR SEATON interpreted  that to mean the  school district would                                                               
absorb 40 percent  of the cost and the next  year would absorb 60                                                               
percent of  the cost.   He  clarified that  the funds  would come                                                               
from the  school district for  construction project,  which would                                                               
"bypass  the vote  of  the  people in  the  district."   Thus,  a                                                               
municipality could  take on a  significant funding  liability for                                                               
building  new schools  and the  voters would  not decide  if they                                                               
want  to  assume  the  bonding   authority.    He  asked  for  an                                                               
8:56:21 AM                                                                                                                    
REPRESENTATIVE  KELLER   stated  that  the  assumption   is  that                                                               
construction project would  be happening.  The link  to the local                                                               
voters  is "very  real." He  pointed  out that  the school  board                                                               
would approve any construction project.   He interpreted that the                                                               
intent of the language is  not to obligate a district, community,                                                               
or a borough  to pay for a construction project.   He stated that                                                               
if the  community decides  to build a  charter school,  this bill                                                               
would provide the  structure.  The intent is to  "leave the state                                                               
harmless:  and ensure  that the  state  general fund  is not  the                                                               
funding source,  unless the  legislature decides to  do so."   He                                                               
related that in  every district the participation will  vary.  He                                                               
offered his  view that his  district would be very  supportive of                                                               
building charter schools; in fact,  his district has already done                                                               
so since as a "nice facility" exists in Palmer.                                                                                 
8:57:58 AM                                                                                                                    
CHAIR  SEATON  said  he  understood the  bill's  intent,  but  in                                                               
reviewing  page 2,  lines 19-23,  he related  that it  stipulates                                                               
that   the  school   district  or   the  REAA   will  provide   a                                                               
participating  share  that is  equal  to  the difference  between                                                               
available federal funding and the  state aid provided.  Under the                                                               
bill, the  school district  would be 100  percent liable  for the                                                               
project and in  the third year would be liable  for 60 percent of                                                               
the cost; and  in the fourth year would be  liable for 80 percent                                                               
of the cost.   He stated that this bill  provides a mechanism for                                                               
the school district  to circumvent the will of  the people, since                                                               
it will  not require a  vote.  He remarked  that this may  not be                                                               
the sponsor's intent.                                                                                                           
REPRESENTATIVE  KELLER offered  that  HB 393  applies to  charter                                                               
schools,  which  operate on  a  contract  with the  local  school                                                               
district, but are also public  schools.  Charter schools exist in                                                               
the "good graces" of the school district, he stated.                                                                            
MR. POUND  offered that  essentially the intent  is to  "get them                                                               
8:59:58 AM                                                                                                                    
CHAIR  SEATON  emphasized  that  he is  not  speaking  about  the                                                               
intention, which  is understood.   However, the bill  may require                                                               
amendments  to clarify  who will  own  the building  and will  be                                                               
responsible  for the  funding to  build the  charter school.   He                                                               
underscored that the bill's language must support the intent.                                                                   
REPRESENTATIVE  KELLER  responded  that the  community  would  be                                                               
liable for a building that it agrees to build.                                                                                  
CHAIR SEATON  maintained that under  the structure of HB  393 the                                                               
municipality is  not required to vote  to adopt bonds to  build a                                                               
school  facility.    He  referred   to  page  2,  line  2,  which                                                               
stipulates  that  the  department  "shall"  apply  for  available                                                               
federal funding.   He  surmised that the  district is  liable for                                                               
the funds, but  the building would be owned  by the municipality.                                                               
He suggested  that perhaps there  is another way to  analyze this                                                               
REPRESENTATIVE  KELLER offered  to  examine  the provisions  more                                                               
closely and try to provide a more definitive answer.                                                                            
9:02:35 AM                                                                                                                    
REPRESENTATIVE MUNOZ asked  what would happen if  a federal grant                                                               
covered  100 per  cent  of the  cost.   She  thought the  current                                                               
language seems to be limiting.                                                                                                  
REPRESENTATIVE KELLER  offered his belief  that the program  is a                                                               
statewide  program, so  if  one charter  school  is fortunate  to                                                               
receive 100  percent federal funding, funds  would be distributed                                                               
among other districts.                                                                                                          
REPRESENTATIVE MUNOZ  suggested insertion  of "pursuant  to local                                                               
support"  somewhere  in  the paragraphs  that  pertain  to  local                                                               
9:03:32 AM                                                                                                                    
REPRESENTATIVE GARDNER referred to page 2, line 4, and read:                                                                    
     (b) The  department shall  apply for  available federal                                                                    
     funding and award federal  funding made available under                                                                    
     the  grant  program  established   under  (a)  of  this                                                                    
     section  for  not more  than  five  years for  approved                                                                    
     projects  for charter  school facilities  construction,                                                                    
     lease, or major maintenance ..."                                                                                           
REPRESENTATIVE  GARDNER asked  what  mechanism would  be used  to                                                               
approve the projects.                                                                                                           
9:04:04 AM                                                                                                                    
MR.  POUND answered  that "approved  projects" would  be a  local                                                               
decision.    However,  a  local school  district  or  REAA  would                                                               
determine the  approval requirements for  a charter school.   The                                                               
state does  not normally establish  the requirements  for charter                                                               
schools, he stated.                                                                                                             
REPRESENTATIVE  GARDNER asked  whether  an automatic  application                                                               
would be  made for a building  to house a charter  school that is                                                               
approved by the local district.                                                                                                 
MR.  POUND  responded  that  there   is  no  requirement  for  an                                                               
automatic  application   from  the   district,  since   only  the                                                               
department is required to apply for  federal funding.  He said it                                                               
is  up to  the  school  district to  decide  whether  to make  an                                                               
application.  He said, "We're  not forcing the districts to apply                                                               
for this."                                                                                                                      
9:04:50 AM                                                                                                                    
REPRESENTATIVE  GARDNER  asked for  the  mechanism  that a  local                                                               
community  or a  school  district would  use  to determine  which                                                               
charter schools would apply for the funding.                                                                                    
MR.  POUND  answered  that  no   rules  would  apply  as  to  the                                                               
disbursement of  funds.  He  surmised that  it may be  covered in                                                               
the grant.  It said, "It's  strictly up to the local district how                                                               
and which charter schools they want to apply money to."                                                                         
REPRESENTATIVE  GARDNER related  that some  charter schools  have                                                               
satisfactory  buildings,  some  do  not,  and  there  must  be  a                                                               
mechanism to make that decision.                                                                                                
REPRESENTATIVE  KELLER related  that typically  a charter  school                                                               
operates  under  a  contract  with  the  local  school  district,                                                               
including  for   its  facilities.    Many   charter  schools  may                                                               
experience minimal space issues.   The decision would be made via                                                               
the local  decisions in the  community at the local  school board                                                               
9:07:27 AM                                                                                                                    
REPRESENTATIVE  MUNOZ  recalled  having  helped  form  a  charter                                                               
school and  said it is  an arduous process.   She agreed it  is a                                                               
contract between the  charter school and the  school district and                                                               
must also be  approved by the Board of Education.   She said that                                                               
the  federal  awards are  not  limited  by  a percentage  of  the                                                               
project.   Thus, she asked  why the  bill limits the  granting of                                                               
the awards.                                                                                                                     
REPRESENTATIVE  KELLER   replied  that  he  has   had  a  similar                                                               
question.   He related  that he  has been  working to  mirror the                                                               
language in  the companion bill.   He  also had questions  on the                                                               
fiscal  note  since  the bill  requires  $1.00  contribution  per                                                               
student per  year, yet  it translates to  $150,000 in  the fiscal                                                               
note.  He deferred to the department to answer her question.                                                                    
REPRESENTATIVE MUNOZ stated  that based on her  experience in the                                                               
past, the  charter schools' facilities  have been paid  for using                                                               
the BSA.   She pointed  out the  difficulty it poses  for charter                                                               
schools to  pay for  the facility in  addition to  the curriculum                                                               
strictly  using  the BSA.    She  said,  "I really  support  this                                                               
legislation.  I think you are on  the right track, but I do think                                                               
there are some opportunities to make it even better."                                                                           
9:09:24 AM                                                                                                                    
CHAIR SEATON referred to page 2,  line 21.  The language on lines                                                               
19-25 read, as follows:                                                                                                         
     (d)  A school  district or  regional educational  attendance                                                               
     area  that submits  an application  for  a proposed  project                                                               
     under AS  14.11.011 for funding  under this section  that is                                                               
     approved  for  funding by  the  department  shall provide  a                                                               
     participating share that is equal  to the difference between                                                               
     available federal  funding and the state  aid provided under                                                               
     AS 14.11.126.  Allowable costs for a  project approved under                                                               
     this section  shall be based  on the adjusted  student count                                                               
     for a  charter school  calculated under AS  14.17.450(a) and                                                               
     (c), as determined by the commissioner.                                                                                    
REPRESENTATIVE  KELLER  again deferred  to  the  department.   He                                                               
interpreted that the  department makes its decisions  on where to                                                               
distribute the  funds in the  program, but  that the DEED  is not                                                               
providing  approval  for  a construction  project.    The  DEED's                                                               
decision is whether the department  is "sending the money" to the                                                               
9:10:44 AM                                                                                                                    
REPRESENTATIVE P. WILSON referred to  page 2, line 30, which read                                                               
as follows, "...amount that is not  less than one dollar for each                                                               
pupil  enrolled  in the  charter  school."    She asked  if  that                                                               
language is to obtain the federal grant.                                                                                        
REPRESENTATIVE  KELLER   answered  yes.    He   stated  that  the                                                               
eligibility  requires  that  the  local school  district  have  a                                                               
specific statute that establishes a  charter school program.  The                                                               
intent of this  bill is to provide access to  federal funds.  The                                                               
Alaska  Charter School  Association determined  that its  charter                                                               
schools are not  eligible for federal funds since  the program is                                                               
not  established  by  statute.   This  bill  would  address  that                                                               
9:12:05 AM                                                                                                                    
CHAIR  SEATON asked  whether  the state  needs to  set  up a  BSA                                                               
formula for  charter school students  or if the  school districts                                                               
are  allowed to  have a  separate allocation  for charter  school                                                               
students within their districts.                                                                                                
REPRESENTATIVE KELLER related his  understanding that the federal                                                               
requirement is  for a state  program to support  charter schools,                                                               
in statute,  but is not connected  to the BSA.   He restated that                                                               
the  state statute  must  have a  program  for assisting  charter                                                               
schools to obtain facilities.                                                                                                   
CHAIR SEATON  said that  this would establish  a new  per student                                                               
allocation specifically  for every charter school  student, which                                                               
is basically a BSA.  He pointed  out the amount could be $500 per                                                               
student or  any amount.   He offered his  view that the  $1.00 is                                                               
merely a place holder.  The  intent of the federal requirement is                                                               
to direct more funding to charter school students, he stated.                                                                   
REPRESENTATIVE KELLER  responded that is  it is "per  student" in                                                               
the sense  of what  the state contributes,  and not  a guarantee.                                                               
The  funding  is  designated  to a  program  that  would  provide                                                               
facilities  for  charter  schools.   The  dollar  figure  is  per                                                               
student, but is a merely a means  to achieve the funding.  He was                                                               
not certain if the requirement is based on federal regulations.                                                                 
CHAIR SEATON  suggested the  questions are  merely placed  on the                                                               
table for  consideration.   He understood this  bill is  based on                                                               
language contained in a companion bill.                                                                                         
REPRESENTATIVE KELLER said he appreciated the questions.                                                                        
9:15:02 AM                                                                                                                    
REPRESENTATIVE  GARDNER related  her  understanding that  charter                                                               
schools  often struggle  to  stay  open.   She  asked what  would                                                               
happen if  a charter school  received funding, built  a building,                                                               
and then  the charter school  was dismantled.  In  that scenario,                                                               
the respective school district would  have a building that it may                                                               
not have be able to use since the charter school was dissolved.                                                                 
REPRESENTATIVE KELLER  offered his  belief those issues  would be                                                               
part of the  contract and the district would own  the building as                                                               
an asset.                                                                                                                       
9:16:19 AM                                                                                                                    
SAM  KITO,   III,  Engineer,  School,  Finance,   and  Facilities                                                               
Section, Department  of Education  and Early  Development, stated                                                               
that  the EED  has done  some research  on charter  schools.   He                                                               
reported that that federal legislation  passed several years ago,                                                               
which was funded  at a small level for charter  schools.  Indiana                                                               
and California applied and received  funding.  The past two years                                                               
the program was  not funded, but there has  been renewed interest                                                               
with  the  American  Recovery  and  Reinvestment  Act  (ARRA)  to                                                               
encourage development  of facilities  for charter  schools, which                                                               
has resulted in renewed interest in  the program.  The process is                                                               
that  states apply  to the  federal government  for participation                                                               
and based on  the competitive responses, the  schools are granted                                                               
funding.    The  Congress  has  not  currently  appropriated  any                                                               
additional funding  for this program.   However, the applications                                                               
are handled  in a  competitive manner.   One scoring  criteria is                                                               
the level  of per student  funding related to facilities.   While                                                               
per  student   funding  in   HB  393   would  meet   the  federal                                                               
requirement,  it does  not necessarily  meet the  intent.   Thus,                                                               
since  Alaska would  compete  with other  states,  the $1.00  per                                                               
student  may not  help the  application score  particularly high.                                                               
Once the  federal application is granted,  a "stair-step" process                                                               
is used,  beginning with a  90 percent  level of funding  for the                                                               
first year.   The intent  is for  the federal government  to help                                                               
stair-step a facilities funding  program for charter schools, but                                                               
funding is uncertain, he stated.                                                                                                
9:20:15 AM                                                                                                                    
CHAIR SEATON  related the intended  purpose of the  federal funds                                                               
is  to "ramp  up"  a state  facilities program  based  on a  "per                                                               
student" cost and other factors,  including a per student funding                                                               
for charter schools.  It  is likely that the administration would                                                               
need  to  demonstrate  the  state is  initiating  a  program  for                                                               
charter school  facilities.  The  state needs federal  funding to                                                               
establish the state's program.                                                                                                  
MR. KITO agreed.                                                                                                                
REPRESENTATIVE  KELLER clarified  that the  federal intent  is to                                                               
"ramp up"  a facilities program for  the states.  He  related his                                                               
understanding  of  the federal  intent  was  to provide  start-up                                                               
costs for schools.                                                                                                              
9:21:46 AM                                                                                                                    
MR.  KITO  responded  that  it   is  for  "ramping  up"  a  state                                                               
facilities program.   He explained that the state  has not scored                                                               
well on  the two  components the state  uses to  obtain operating                                                               
funds for  charter schools.  This  is not addressed in  the bill.                                                               
The department  expresses concern on  whether these items  can be                                                               
effectively  implemented  in  the  state.    First,  the  charter                                                               
schools  are administered  under  the  local education  agencies.                                                               
The competitive process requires that  the charter schools have a                                                               
statewide  appeals  process  if  the local  education  agency  is                                                               
responsible  for  establishing  charter   schools;  or  that  the                                                               
charter schools are administered  through a statewide program and                                                               
not through the local education agencies.                                                                                       
9:23:19 AM                                                                                                                    
CHAIR SEATON  asked whether the  reason that some states  are not                                                               
eligible for  operating costs is  that their charter  schools are                                                               
administered by the local school district.                                                                                      
MR. KITO answered that is correct.   He explained that Alaska has                                                               
been  applying for  federal funding  through the  federal charter                                                               
school program  for operational funding.   Alaska has  not scored                                                               
well  enough to  receive those  funds, but  the state  does apply                                                               
each year.                                                                                                                      
CHAIR SEATON stated that the  federal government is attempting to                                                               
leverage state regulation and state  operation of charter schools                                                               
via  grant qualifications  as opposed  to having  charter schools                                                               
under local control.                                                                                                            
MR. KITO agreed.                                                                                                                
9:24:17 AM                                                                                                                    
CHAIR SEATON recapped  that the federal program  requires a state                                                               
appeals process be in place to  conduct appeals in the event that                                                               
a local district turns down a local charter school application.                                                                 
MR. KITO replied  that is correct.  In further  response to Chair                                                               
Seaton, he  agreed to  provide the  application criteria  for the                                                               
committee to review.                                                                                                            
MR.  JEANS  responded that  the  specific  criteria will  not  be                                                               
outlined  in  the  scoring  rubric.    However,  in  the  federal                                                               
comments it  is quite apparent that  a state will score  very low                                                               
unless it has  a separate appeals board to  allow charter schools                                                               
to appeal  the local education  agency decisions.   Additionally,                                                               
this  is  not  limited  to state  charter  schools,  but  charter                                                               
schools could operate independent of  local school districts.  He                                                               
reported that  Alaska has a  cap of 60 in  our state, and  due to                                                               
that cap, the  state scores low.  These three  areas are ways the                                                               
federal  government  asserts  its   agenda  via  the  application                                                               
process  for charter  school  funding.   In  further response  to                                                               
Chair Seaton, he offered to provide copies to the committee.                                                                    
9:27:06 AM                                                                                                                    
REPRESENTATIVE  KELLER  offered his  belief  that  there is  some                                                               
confusion.   He explained that  the criteria that "we  don't live                                                               
up to"  in our charter  school statutes does not  relate directly                                                               
to the  facilities being  built.  The  operating grants  have not                                                               
been  granted  to Alaska  and  the  applications are  scored  low                                                               
because the  federal government  does not  view the  structure as                                                               
appropriate  for "a  good charter  school."   He  viewed this  as                                                               
"mixing  apples and  oranges".   He  said he  supports having  an                                                               
appeal process for  approval for initiating a  charter school but                                                               
it is not a requirement for the facilities grant.                                                                               
MR. KITO offered his understanding  that some overlap exists, but                                                               
to be  competitive the state  must meet the criteria  for charter                                                               
school operations.                                                                                                              
CHAIR SEATON suggested that it  will be helpful for the committee                                                               
to receive the information.                                                                                                     
9:29:59 AM                                                                                                                    
MR. KITO, in response to P.  Wilson, answered that it is not that                                                               
the charter schools  must be stand alone  facilities, but charter                                                               
schools must  exercise financial  independence and  control their                                                               
own curriculum.                                                                                                                 
9:30:29 AM                                                                                                                    
REPRESENTATIVE  MUNOZ  offered  her  belief  that  the  topic  is                                                               
broader  since  the  federal  law touches  on  hiring  and  other                                                               
MR. JEANS  cautioned the committee  that these  requirements will                                                               
not be  indicated in the  federal regulations or law,  but rather                                                               
it  is a  policy  issue.   These  policy  requests  come via  the                                                               
evaluation  of  the  state  applications  of  the  federal  grant                                                               
program for  charter schools.   Thus, these  items appear  in the                                                               
evaluator's scoring  sheets and  Alaska receives very  low scores                                                               
due to the  lack of components the federal  government would like                                                               
to  see in  charter  school  legislation.   This  equates to  the                                                               
federal policy asserted via the grant process, he stated.                                                                       
9:31:56 AM                                                                                                                    
CHAIR SEATON  asked if  the process  is similar  to "Race  to the                                                             
MR. JEANS agreed the process is similar.                                                                                        
9:32:09 AM                                                                                                                    
REPRESENTATIVE KELLER commented that  the issues on evaluation of                                                               
charter  schools  began  some  time  ago.   The  reason  for  the                                                               
requirements is the  success of the charter school  students.  He                                                               
acknowledged that Alaska does score  low in the federal review of                                                               
states'  charter  school governance.    However,  he offered  his                                                               
belief that  the standards  arise from  the associations  and not                                                               
the federal  government.  He  asked for further  clarification of                                                               
the $150,000 appropriation request.                                                                                             
9:33:53 AM                                                                                                                    
CHAIR SEATON clarified that a fiscal  note does not appear in the                                                               
REPRESENTATIVE KELLER asked  why there is not a  fiscal note from                                                               
the DEED.                                                                                                                       
MR.  KITO  responded  that  a  fiscal note  was  prepared  as  an                                                               
identical  fiscal note  to  the one  provided  for the  companion                                                               
CHAIR SEATON related the fiscal note will be distributed.                                                                       
MR. KITO explained  that the fiscal note for HB  393 is identical                                                               
to the  one prepared for the  companion bill.  The  fiscal impact                                                               
is based  on the actual cost  of administering the program.   The                                                               
federal funding is  based on the state's  program being approved.                                                               
The state's program would need  to take into consideration all of                                                               
the  items   in  the  bill,   but  would   also  need  to   be  a                                                               
prioritization program.   Thus, currently  the state has  a grant                                                               
program and  a funding program for  debt.  If the  state receives                                                               
applications from charter schools  for facilities the state would                                                               
need to establish a program  for prioritizing those projects.  He                                                               
said it  is not  anticipated that the  state will  receive enough                                                               
federal, state,  or local  funding for all  the projects.   Thus,                                                               
the  state  would  need  to   develop  a  program  to  prioritize                                                               
applications for facilities projects.                                                                                           
9:36:07 AM                                                                                                                    
REPRESENTATIVE KELLER pointed out  that the fiscal note indicates                                                               
$150,000 but  the Charter School Association  is not anticipating                                                               
receiving  this much.   He  said  he thought  that 1.5  employees                                                               
seemed  high.     When  the  original   charter  school  enabling                                                               
legislation  passed, there  was a  fulltime position  approved to                                                               
work in EED as an advocate  for charter schools.  That person has                                                               
had performed duties beyond the charter school responsibilities.                                                                
MR.  KITO  explained that  he  reviewed  the current  program  to                                                               
manage debt projects,  which he thought was over  $100 million in                                                               
grant  projects annually.    This grant  program  and grant  debt                                                               
function  is administered  by 3  of 4  of the  DEED's staff.   He                                                               
anticipated  that  based on  the  anticipated  number of  charter                                                               
school  applications by  the DEED,  the cost  would be  about $20                                                               
million for one  project.  He discussed  the prior administration                                                               
of  federal grants  with other  staff and  determined at  least a                                                               
fulltime person would  be needed to administer  the program, plus                                                               
clerical work, and arrived at 1.5  positions.  He pointed out the                                                               
necessity  to   meet  reporting   requirements  to   the  federal                                                               
government.  He wanted to  ensure appropriate staff was available                                                               
to   administer   the   state's   grant   program,   he   stated.                                                               
Additionally,  after the  program terminates  in five  years, the                                                               
grants are active and the length  of time included "the wind down                                                               
process"  to close  out  the  grants.   However,  staff would  be                                                               
required for one to two years beyond the program completion.                                                                    
REPRESENTATIVE KELLER  requested a report on  the fulltime person                                                               
that has  been functioning  as the charter  school advocate.   He                                                               
recalled  the person  had other  duties.   An  accounting of  the                                                               
positions  function  would be  helpful  for  the committee.    He                                                               
expressed  disappointment that  the  position  may be  performing                                                               
other projects.                                                                                                                 
CHAIR SEATON appreciated  his comments.  He  clarified the intent                                                               
of the  new grant  program delineated  in HB  393.   He suggested                                                               
that this relates back to the  fiscal note, but he wanted to stay                                                               
on track.                                                                                                                       
REPRESENTATIVE KELLER related  his intent is to  "reason with the                                                               
department" and negotiate a smaller fiscal impact.                                                                              
9:42:29 AM                                                                                                                    
CHAIR SEATON  stated it  is a  reasonable and  relevant question.                                                               
It is  useful to know  the time  the DEED spends  on prioritizing                                                               
maintenance  of  its  grants.    Additionally,  this  bill  would                                                               
require a  priority list for  statewide grant applicants  and for                                                               
leasing, which  would need to  be discussed.   He did  not recall                                                               
the DEED currently  having a grant leasing program in  place.  He                                                               
suggested that  the duties of  the new position might  be "rolled                                                               
into"  the  existing  position,   although  he  acknowledged  the                                                               
position might be totally different.                                                                                            
MR.  KITO offered  to  provide  a report  on  the charter  school                                                               
9:44:12 AM                                                                                                                    
REPRESENTATIVE  P.  WILSON referred  to  an  article in  members'                                                               
packets  that  indicated some  objections  from  the home  school                                                               
community.  She asked for input from that segment.                                                                              
REPRESENTATIVE EDGMON  asked for  a position from  the Department                                                               
of Education and Early Development (DEED).                                                                                      
MR. KITO  stated the DEED does  not currently have a  position on                                                               
the bill.                                                                                                                       
9:45:18 AM                                                                                                                    
MR.  KITO  explained that  if  the  legislature decides  to  move                                                               
forward with  this bill,  the goal  would be  to craft  a program                                                               
that will work  throughout the state.   Additionally, the program                                                               
should be stable,  since this program is only  effective for five                                                               
years and is contingent on the federal program participation.                                                                   
9:45:54 AM                                                                                                                    
REPRESENTATIVE EDGMON  asked how  many students are  being served                                                               
in  the 25  charter  schools in  Alaska  and whether  introducing                                                               
additional  schools  to  compete for  scare  educational  dollars                                                               
would result.                                                                                                                   
MR. KITO  answered at  this time there  are 2,500  charter school                                                               
students and are housed in 24 independent facilities.                                                                           
CHAIR SEATON suggested  a summary report on  the existing charter                                                               
MR. KITO agreed.                                                                                                                
REPRESENTATIVE  GARDNER  asked the  report  to  also include  the                                                               
number of  charter schools that  were created but are  not longer                                                               
9:47:23 AM                                                                                                                    
CHAIR  SEATON  asked  how  the   facilities  will  be  owned  and                                                               
operated, such as  by the school district  or the municipalities.                                                               
He asked  whether this  would establish  a new  classification of                                                               
9:48:18 AM                                                                                                                    
MR.  KITO  answered  that the  charter  school  facilities  would                                                               
operate  in  a fashion  similar  to  the current  charter  school                                                               
operation.   The DEED currently  requires that a  school district                                                               
must  have adequate  interest  in a  facility  to receive  public                                                               
funding.   He  described a  scenario in  which a  leased facility                                                               
would be improved by public dollars  and the lease lapsed.  Thus,                                                               
a  greatly improved  building  would be  returned  to the  owner.                                                               
Additionally, use of federal funds  could require an agreement to                                                               
grant assurances, which require the  facility be operated for the                                                               
public's interest  for a  certain period of  time.   He expressed                                                               
concern that  if a charter school  was built and no  longer used,                                                               
that the  facility would  need to  be used  or maintained  by the                                                               
school district until  the grant assurance expired.   He recalled                                                               
a similar experience in rural Alaska on a school facility.                                                                      
MR.  KITO, in  response to  Chair Seaton,  explained that  twenty                                                               
years has been the norm for grant assurances.                                                                                   
CHAIR  SEATON related  that in  the Homer  district, the  charter                                                               
school is  not in a school  facility.  He asked  whether it would                                                               
be the  school district  and not the  municipality that  would be                                                               
MR.  KITO explained  that the  school district  receives adequate                                                               
title  interest, but  it can  be a  facility that  is owned  by a                                                               
municipality, although  an agreement must exist  between the two.                                                               
The  DEED considers  ownership by  the  municipality as  adequate                                                               
title interest, he stated.                                                                                                      
CHAIR  SEATON   asked  whether  HB   393  would  allow   for  the                                                               
construction of  a school, including assuming  liability, without                                                               
a  vote of  the people.   He  inquired as  to whether  this would                                                               
violate the requirements for incurring general obligation bonds.                                                                
MR.  KITO said  he was  unsure.   He offered  his belief  that by                                                               
submitting  an application,  the  school  district is  obligating                                                               
itself to  the future  expense.   However, he  further understood                                                               
that  subject to  the regulation  process, the  application would                                                               
need to  indicate the  support of the  local Board  of Education.                                                               
This is  similar to how the  Board of Education approves  the six                                                               
year  plan for  the DEED's  grant program.   Thus,  the Board  of                                                               
Education  would acknowledge  it is  applying for  charter school                                                               
funding.  He  stated the application would be  clear and indicate                                                               
the  potential  school  district's  liability in  regard  to  the                                                               
9:52:55 AM                                                                                                                    
CHAIR  SEATON   asked  if  the   facilities  are  owned   by  the                                                               
municipality, does HB  393 allow for the school  district to make                                                               
application, without being  subject to voter approval.   He asked                                                               
whether the DEED has considered this issue.                                                                                     
MR. KITO  stated that  he has  not evaluated  that issue  and was                                                               
unsure of  how to  approach that  issue.  He  said that  he would                                                               
"take a look" at it.                                                                                                            
CHAIR  SEATON pointed  out  that  is an  area  of  the bill  that                                                               
requires clarification  from the  Legislative Legal  Services, or                                                               
Department of  Law.   He said  he knew it  was not  the sponsor's                                                               
intention to disenfranchise  voters.  He said he did  not want to                                                               
have  an   unintended  consequence.    He   related  that  school                                                               
districts want bonds  but the voters do not  always approve them.                                                               
He stated  that the application  would initiate  several "shalls"                                                               
on the DEED and indicate an obligation that is unclear.                                                                         
9:54:58 AM                                                                                                                    
REPRESENTATIVE KELLER  asked for clarification on  the $1,000 per                                                               
year, based on the 2,500 students in charter schools.                                                                           
MR.  KITO  estimated  that  40   percent  of  the  schools  would                                                               
participate in the program based on his own intuition.                                                                          
9:56:02 AM                                                                                                                    
REPRESENTATIVE KELLER  highlighted that the advocates  for HB 393                                                               
consider this to be a modest request.                                                                                           
9:56:35 AM                                                                                                                    
KIKI ABRAHAMSON,  Lead Teacher, Fireweed Academy  Charter School,                                                               
stated  she is  also a  former  president of  the Alaska  Charter                                                               
School Association.   She indicated  her understanding  that only                                                               
three  charter schools  have closed  their doors  in the  past 14                                                               
years.  She said  she did not think that more  than 40 percent of                                                               
schools  would apply  for this  funding.   Many existing  schools                                                               
have already established support  in their communities, including                                                               
adequate facilities,  through their  school boards.   She thought                                                               
that  the Matanuska-Susitna  Borough and  Anchorage may  not have                                                               
adequate facilities  and would likely  apply for the funds.   She                                                               
recalled  an  evaluation  of charter  school  law  that  outlined                                                               
criteria.  She reported that Alaska  has been "at the bottom" but                                                               
she disagreed that  the federal government is  pushing its agenda                                                               
via the  grant program.   However, she  did think that  the state                                                               
scores  so low  that  it  indicates the  state  does not  support                                                               
charter schools at a level  acceptable to the federal government.                                                               
She related  that charter  schools must meet  or exceed  the test                                                               
scores and  academic progress  of all schools  in the  state, but                                                               
have the handicap of lacking funding and access to facilities.                                                                  
She offered to provide further information to the committee.                                                                    
10:00:28 AM                                                                                                                   
CHAIR SEATON welcomed further submission of information.  [HB
393 was held over.]                                                                                                             

Document Name Date/Time Subjects
HB 393 Sponsor Statement.pdf HEDC 3/12/2010 8:00:00 AM
HEDC 3/15/2010 8:00:00 AM
HEDC 3/24/2010 8:00:00 AM
HEDC 3/29/2010 8:00:00 AM
HEDC 3/31/2010 8:00:00 AM
HB 393
HB 393 Charter School statutes.pdf HEDC 3/12/2010 8:00:00 AM
HEDC 3/15/2010 8:00:00 AM
HEDC 3/24/2010 8:00:00 AM
HB 393
back up AMYA.pdf HEDC 3/12/2010 8:00:00 AM
HEDC 3/15/2010 8:00:00 AM
HB 413
HB413-EED-ESS-3-10-10.pdf HEDC 3/12/2010 8:00:00 AM
HEDC 3/15/2010 8:00:00 AM
HB 413
sponsor statment HB413.docx HEDC 3/12/2010 8:00:00 AM
HEDC 3/15/2010 8:00:00 AM
HB 413
HB 393 Charter School Background.pdf HEDC 3/12/2010 8:00:00 AM
HEDC 3/15/2010 8:00:00 AM
HEDC 3/24/2010 8:00:00 AM
HB 393
Support ltr fed dir.pdf HEDC 3/12/2010 8:00:00 AM
HEDC 3/15/2010 8:00:00 AM
HB 393
Per pupil fac aid.pdf HEDC 3/12/2010 8:00:00 AM
HEDC 3/15/2010 8:00:00 AM
HB 393
Fed Funding.pdf HEDC 3/15/2010 8:00:00 AM
HB 393
Discret Grants.pdf HEDC 3/12/2010 8:00:00 AM
HEDC 3/15/2010 8:00:00 AM
HB 393
AK Grade 10.pdf HEDC 3/12/2010 8:00:00 AM
HEDC 3/15/2010 8:00:00 AM
HEDC 3/29/2010 8:00:00 AM
HB 393
Support public.pdf HEDC 3/12/2010 8:00:00 AM
HEDC 3/15/2010 8:00:00 AM
HEDC 3/31/2010 8:00:00 AM
HB 393
FY02-11LocalEffortAssessed&educationWithMills-2Pager_10-22-09.xlsx HEDC 2/19/2010 8:00:00 AM
HEDC 3/3/2010 8:00:00 AM
HEDC 3/10/2010 8:00:00 AM
HEDC 3/12/2010 8:00:00 AM
HEDC 3/15/2010 8:00:00 AM
HB 350
HB350-EED-ESS-2-18-10.pdf HEDC 2/19/2010 8:00:00 AM
HEDC 3/3/2010 8:00:00 AM
HEDC 3/10/2010 8:00:00 AM
HEDC 3/15/2010 8:00:00 AM
HB 350
current program flow chart.docx HEDC 3/3/2010 8:00:00 AM
HEDC 3/10/2010 8:00:00 AM
HEDC 3/12/2010 8:00:00 AM
HEDC 3/15/2010 8:00:00 AM
HB 350
Sponsor Statement HB 350.doc HEDC 3/12/2010 8:00:00 AM
HEDC 3/15/2010 8:00:00 AM
HB 350