Legislature(2017 - 2018)SENATE FINANCE 532

04/14/2017 09:00 AM Senate FINANCE

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Audio Topic
09:04:43 AM Start
09:05:22 AM SB103
09:11:16 AM Presentation: Spring Revenue Forecast Update
10:36:33 AM SB102
10:51:00 AM SB103
11:02:50 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Spring Revenue Forecast Update TELECONFERENCED
Commissioner Randy Hoffbeck, Department of
+ Bills Previously Heard/Scheduled: TELECONFERENCED
Moved SB 102 Out of Committee
Moved CSSB 103(FIN) Out of Committee
Scheduled but Not Heard
SENATE BILL NO. 102                                                                                                           
     "An Act relating to funding for Internet services for                                                                      
     school districts; and relating to the Alaska higher                                                                        
     education investment fund."                                                                                                
10:36:33 AM                                                                                                                   
Co-Chair  MacKinnon discussed  SB  102. She  noted that  the                                                                    
public hearing  had been  opened and closed  on the  bill on                                                                    
April  10,  2017. The  bill  changed  the baseline  download                                                                    
speed  from 10  megabits per  second (Mbps)  to 25  Mbps for                                                                    
schools in Alaska.                                                                                                              
HEIDI    TESHNER,    DIRECTOR,   ADMINISTRATIVE    SERVICES,                                                                    
DEPARTMENT   OF  EDUCATION   AND   EARLY  DEVELOPMENT   (via                                                                    
teleconference), discussed a new  fiscal note (OMB component                                                                    
208). She  detailed that  within the  fiscal note  there was                                                                    
$34,000  requested for  FY 18.  The amount  included $30,000                                                                    
for  additional contract  houses and  technical support  for                                                                    
reviewing  applications.  In   addition,  there  was  $4,000                                                                    
related  to  legal  services  costs  related  to  regulation                                                                    
changes. It was projected that  the increase from 10 Mbps to                                                                    
25 Mbps would signify an  approximately $16 million grant to                                                                    
the additional qualifying school districts.                                                                                     
Co-Chair   MacKinnon  asked   why  a   contractor  with   an                                                                    
additional  fee  of  $30,000  was  needed  to  maintain  the                                                                    
current program  when existing schools  already had  10 Mbps                                                                    
of connectivity.                                                                                                                
Ms.  Teshner understood  that currently  the contractor  was                                                                    
part-time,  and  the  additional  funding  would  go  toward                                                                    
processing   additional  applications   after  more   school                                                                    
districts qualified for funding.                                                                                                
Co-Chair  MacKinnon was  not  sure of  the  accuracy of  the                                                                    
fiscal  note. She  wondered about  the  connection of  other                                                                    
projects.  She reminded  that  the  bill addressed  existing                                                                    
schools,  and did  not include  new construction  that would                                                                    
require additional confirmation to qualify for funds.                                                                           
Ms.  Teshner stated  that  the $30,000  on  the fiscal  note                                                                    
would  be   split;  with   $15,000  to   approve  additional                                                                    
applications,  and  $15,000   for  the  expected  additional                                                                    
technical support to districts to help with applications.                                                                       
10:40:37 AM                                                                                                                   
Co-Chair Hoffman  stated that  the Unalaska  School District                                                                    
had informed that it could not  go to 25 Mbps because of the                                                                    
capacity of satellites.                                                                                                         
PATIENCE  FREDERIKSEN,  DIRECTOR,   LIBRARIES  ARCHIVES  AND                                                                    
MUSEUMS (via  teleconference), stated  that if  Unalaska was                                                                    
already receiving 25 Mbps, it  would not be eligible for the                                                                    
enhanced  grant   that  was  proposed  in   the  bill.  Only                                                                    
districts with under 25 Mbps would  be able to apply for the                                                                    
Co-Chair Hoffman  restated that  the district  currently had                                                                    
20 Mbps of download, which  it shared between the school and                                                                    
the  library. He  continued that  because  the district  was                                                                    
receiving  the services  through  the  satellite system,  it                                                                    
could not expand the connectivity.                                                                                              
Ms.  Frederiksen   understood  that  the   Alaska  Telephone                                                                    
Association had authored  a letter of support  for the bill,                                                                    
and had guaranteed that every  school district could receive                                                                    
up  to  25 Mbps  with  the  networking  that was  in  place.                                                                    
Additionally, schools  that were receiving  internet through                                                                    
satellite would  be able to  take advantage of the  25 Mbps.                                                                    
She emphasized  that she  was speaking  outside her  area of                                                                    
Senator  Hughes  stated  that there  was  rapidly  advancing                                                                    
technology  that  might  be  able   to  help  with  internet                                                                    
connectivity. She  understood that a new  satellite had been                                                                    
launched recently  over the State  of Texas, and  was giving                                                                    
speeds  of  75 Mbps  in  a  spot  in Southeast  Alaska.  She                                                                    
thought the technology was being tested.                                                                                        
10:44:11 AM                                                                                                                   
Co-Chair MacKinnon referred to the  new fiscal note, and was                                                                    
uncertain   why  $30,000   was  needed   to  process   grant                                                                    
applications.  She thought  the  expenditure  should be  for                                                                    
one-time contact rather than recurring contact.                                                                                 
Ms. Frederiksen  stated that the e-rate  contractor in place                                                                    
reviewed grant applications closely.  She specified that the                                                                    
application  was a  spreadsheet, and  the law  needed to  be                                                                    
followed.  She discussed  certifying  school districts  that                                                                    
were  receiving less  than 10  Mbps. There  had been  school                                                                    
districts  that  had  sent   quotes  from  internet  service                                                                    
providers that  showed purchase  of 50  Mbps that  was split                                                                    
between  schools,  and  the  arrangement  had  not  fit  the                                                                    
criteria for  the law. She  discussed the complexity  of the                                                                    
extensive  e-rate   application  as  it  pertained   to  the                                                                    
criteria   of  the   program.  It   had  taken   the  e-rate                                                                    
coordinator two  full weeks of  work to  review applications                                                                    
the previous  fall. The applications changed  each year. She                                                                    
added that  the process was intensive  and required numerous                                                                    
phone  calls,  ergo the  need  for  additional funding.  She                                                                    
added that the  state was going from a  $2.7 million program                                                                    
to a $16 million program, and the stakes were much higher.                                                                      
10:47:35 AM                                                                                                                   
Ms. Hutchison clarified  that the purpose of SB  102 was for                                                                    
every individual  school to  have the  ability to  apply for                                                                    
and  receive   broadband  assistance  grant   funding.  Each                                                                    
eligible school could be brought  up to an internet download                                                                    
speed  of 25  Mbps. The  amount would  not be  divided in  a                                                                    
district, but would be for each individual school.                                                                              
Senator Olson thought  there were some schools  that did not                                                                    
have the  infrastructure to take  advantage of  the program.                                                                    
He asked how many schools would  not be able to take part in                                                                    
the program.                                                                                                                    
Ms.  Hutchison  did  not  have  the  numbers  Senator  Olson                                                                    
requested. She referred to a  support letter from the Alaska                                                                    
Telephone Association  (the umbrella group for  all internet                                                                    
service companies),  which iterated that  current technology                                                                    
and  infrastructure  was able  to  deliver  25 Mbps  to  all                                                                    
schools in Alaska.                                                                                                              
Co-Chair  MacKinnon commented  that  infrastructure was  not                                                                    
covered in the bill.                                                                                                            
Senator Olson  asked if  there were  schools that  could not                                                                    
take advantage of the grant funds.                                                                                              
Co-Chair  MacKinnon  stated that  there  was  no funding  to                                                                    
connect  schools  that  were   not  already  connected.  She                                                                    
continued that there was another  project that was trying to                                                                    
provide services  to other communities.  She did not  have a                                                                    
list of schools that did  not qualify, but offered to obtain                                                                    
the information for Senator Olson.                                                                                              
Co-Chair Hoffman  MOVED to  report SB  102 out  of Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
SB  102 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation and with one new  fiscal impact note from the                                                                    
Department of Education and Early Development.                                                                                  

Document Name Date/Time Subjects
041417 DOR Spring 2017 Revenue Forecast Presentation - FINAL.pdf SFIN 4/14/2017 9:00:00 AM
Spring Revenue Forecast
SB 103 Alaska Performance Scholarship Walsh.pdf SFIN 4/14/2017 9:00:00 AM
SB 103
SB 103 CS FIN Work Draft v.U.pdf SFIN 4/14/2017 9:00:00 AM
SB 103
SB 103 Testimony Sallee.pdf SFIN 4/14/2017 9:00:00 AM
SB 103
SB 103 2017 04 13 UA Board of Regents Opposition Letter.pdf SFIN 4/14/2017 9:00:00 AM
SB 103
SB 103 Sectional Analysis (002).pdf SFIN 4/14/2017 9:00:00 AM
SB 103
SB 103 2017 04 13 Ltr UA BOR Regent O'Neill Higher Invest Fund APS AEG.pdf SFIN 4/14/2017 9:00:00 AM
SB 103
SB 103 Juneau Students Against SB102 and SB103.pdf SFIN 4/14/2017 9:00:00 AM
SB 102
SB 103
SB 102 ATA Letter of Support.pdf SFIN 4/14/2017 9:00:00 AM
SB 102