EDUCATION FUNDING

SB0046B -1- SSSB 46
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SPONSOR SUBSTITUTE FOR SENATE BILL NO. 46

IN THE LEGISLATURE OF THE STATE OF ALASKA

THIRTY-FOURTH LEGISLATURE - FIRST SESSION

BY SENATOR CLAMAN

Introduced: 2/28/25
Referred: Education, Finance

A BILL

FOR AN ACT ENTITLED

"An Act relating to education funding; relating to the public education fund; relating to 1
the base student allocation; and providing for an effective date." 2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 3
* Section 1. AS 14.03.150(c) is amended to read: 4
(c) The department may not award a school construction or majo r 5
maintenance grant under AS 14.11 to a municipality that is a sc hool district or a 6
regional educational attendance area that is not in compliance with (a) of this section. 7
The department shall reduce the amount of state aid under AS 14.17.410 8
[AS 14.17.400] for which a school district may qualify by the a mount, if any, paid by 9
the department under (b) of this section. 10
* Sec. 2. AS 14.17.410(b) is amended to read: 11
(b) Public school funding consists of state aid, a required lo cal contribution, 12
and eligible federal impact aid determined as follows: 13
(1) state aid equals the amount appropriated b y the legislature for 14
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public school funding; except as otherwise provided in this sec tion, a district's 1
basic need equals the amount of the district's state aid calculated under (g) of this 2
section plus the district's [MINUS A] required local contribution and 90 percent of 3
the district's eligible federal impact aid for that fiscal year; [BASIC NEED EQUALS 4
THE SUM OBTAINED UNDER (D) OF THIS PARAGRAPH, MULTIPLIED BY 5
THE BASE STUDENT ALLOCATION SET OUT IN AS 14.17.470;] district 6
adjusted ADM is calculated as follows: 7
(A) the ADM of each school in the district is calculated by 8
applying the school size factor to the student count as set out in AS 14.17.450; 9
(B) the number obtained under (A) of this paragraph is 10
multiplied by the district cost factor described in AS 14.17.460; 11
(C) the ADMs of each school i n a district, as adjusted 12
according to (A) and (B) of this paragraph, are added; the sum is then 13
multiplied by the special needs factor set out in AS 14.17.420( a)(1) and the 14
secondary school vocational and technical instruction funding f actor set out in 15
AS 14.17.420(a)(3); 16
(D) the number obtained for intensive services under 17
AS 14.17.420(a)(2) and the number obt ained for correspondence s tudy under 18
AS 14.17.430 are added to the numbe r obtained under (C) of this paragraph or 19
under (H) and (I) of this paragraph; 20
(E) notwithstanding (A) - (C) of this paragraph, if a school 21
district's ADM adjusted for sc hool size under (A) of this parag raph decreases 22
by five percent or more from one fiscal year to the next fiscal year, the school 23
district may use the last fiscal year before the decrease as a base fiscal year to 24
offset the decrease, according to the following method: 25
( i ) f o r t h e f i r s t f i s c a l y e a r a f t e r t h e b a s e f i s c a l y e a r 26
determined under this subparagraph, the school district's ADM adjusted 27
for school size determined under (A) of this paragraph is calcu lated as 28
the district's ADM adjusted for school size, plus 75 percent of the 29
difference in the district's ADM adjusted for school size betwe en the 30
base fiscal year and the first fiscal year after the base fiscal year; 31
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(ii) for the second fiscal year after the base fiscal year 1
determined under this subparagraph, the school district's ADM adjusted 2
for school size determined under (A) of this paragraph is calcu lated as 3
the district's ADM adjusted for school size, plus 50 percent of the 4
difference in the district's ADM adjusted for school size betwe en the 5
base fiscal year and the second fiscal year after the base fiscal year; 6
(iii) for the third fiscal year after the base fiscal year 7
determined under this subparagraph, the school district's ADM adjusted 8
for school size determined under (A) of this paragraph is calcu lated as 9
the district's ADM adjusted for school size, plus 25 percent of the 10
difference in the district's ADM adjusted for school size betwe en the 11
base fiscal year and the third fiscal year after the base fiscal year; 12
(F) the method established in (E) of this paragraph is availab le 13
to a school district for the three fiscal years following the b ase fiscal year 14
determined under (E) of this para graph only if the district's A DM adjusted for 15
school size determined under (A) of this paragraph for each fis cal year is less 16
than the district's ADM adjusted for school size in the base fiscal year; 17
(G) the method established in ( E) of this paragraph does not 18
apply to a decrease in the district's ADM adjusted for school s ize resulting 19
from a loss of enrollment that occurs as a result of a boundary change under 20
AS 29; 21
(H) notwithstanding (A) - (C) of this paragraph, if one or mor e 22
schools close and consolidate with one or more other schools in t h e s a m e 23
community and district and, as a result of the consolidation, b asic need 24
generated by the district's ADM of the consolidated schools as adjusted under 25
(A) - (C) of this paragraph decr eases, the district may use the last fiscal y ear 26
before the consolidation as the b ase fiscal year to offset that decrease for the 27
first four fiscal years following consolidation according to th e following 28
method: 29
(i) for the first two fiscal years after the base fiscal year, 30
the district's ADM of the cons olidated schools as adjusted unde r (A) - 31
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(C) of this paragraph is calcula ted by dividing the sum of the district's 1
ADM of the consolidated schools as adjusted under (A) - (C) of this 2
paragraph for the base fiscal yea r by the sum of the district's ADM of 3
the consolidated schools for th e base fiscal year without adjus tment, 4
and subtracting the quotient obtai ned by dividing the district' s ADM of 5
the consolidated schools for the current fiscal year as adjuste d under 6
(A) - (C) of this paragraph by t h e s u m o f t h e d i s t r i c t ' s A D M o f t h e 7
consolidated schools for the cu rrent fiscal year without adjust ment, 8
multiplying that number by the sum of the district's ADM of the 9
consolidated schools for the current fiscal year without adjustment, and 10
adding that number to the sum of the district's ADM of the consolidated 11
schools for the current fiscal y ear as adjusted under (A) - (C) of this 12
paragraph; 13
(ii) for the third fiscal year after the base fiscal year, the 14
district's ADM of the consolid ated schools as adjusted under (A ) - (C) 15
of this paragraph is calculated by dividing the sum of the dist rict's 16
ADM of the consolidated schools as adjusted under (A) - (C) of this 17
paragraph for the base fiscal yea r by the sum of the district's ADM of 18
the consolidated schools for th e base fiscal year without adjus tment, 19
and subtracting the quotient obtained by dividing the sum of th e 20
district's ADM of the consolidated schools for the current fisc al year as 21
adjusted under (A) - (C) of this paragraph by the sum of the di strict's 22
ADM of the consolidated schools for the current fiscal year, 23
multiplying that number by the sum of the district's ADM of the 24
consolidated schools for the cu rrent fiscal year without adjust ment, 25
multiplying that number by 66 percent, and adding that number t o the 26
sum of the district's ADM of the consolidated schools for the c urrent 27
fiscal year as adjusted under (A) - (C) of this paragraph; 28
(iii) for the fourth fiscal year after the base fiscal year, 29
the district's ADM of the cons olidated schools as adjusted unde r (A) - 30
(C) of this paragraph is calcula ted by dividing the sum of the district's 31
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ADM of the consolidated schools as adjusted under (A) - (C) of this 1
paragraph for the base fiscal yea r by the sum of the district's ADM of 2
the consolidated schools for th e base fiscal year without adjus tment, 3
and subtracting the quotient obtained by dividing the sum of th e 4
district's ADM of the consolidated schools for the current fisc al year as 5
adjusted under (A) - (C) of this paragraph by the sum of the di strict's 6
ADM of the consolidated schools for the current fiscal year, 7
multiplying that number by the sum of the district's ADM of the 8
consolidated schools for the cu rrent fiscal year without adjust ment, 9
multiplying that number by 33 percent, and adding that number t o the 10
sum of the district's ADM of the consolidated schools for the c urrent 11
fiscal year as adjusted under (A) - (C) of this paragraph; 12
(iv) to calculate the district's basic need for each fiscal 13
year, the number obtained through the calculation in (i), (ii), or (iii) of 14
this subparagraph is added to the number obtained under (C) of this 15
paragraph for the remainder of the district; 16
(I) if the basic need calculated under (H)(i) - (iii) of this 17
paragraph for one of the first four fiscal years after consolid ation is less than 18
the basic need calculated under (A ) - (C) of this paragraph for that fiscal year, 19
the basic need may not be adjust ed under (H) of this paragraph for that fiscal 20
year; 21
( J ) a d i s t r i c t m a y n o t o f f s e t a d e c r e a s e u n d e r ( H ) o f t h i s 22
paragraph if 23
(i) a new facility is constructed in the district for the 24
consolidation; or 25
(ii) the district offset a decrease under (E) of this 26
paragraph in the same fiscal year; 27
(K) a district that offsets a decrease under (H) of this paragraph 28
may not reopen a school that was closed for consolidation in the district until 29
(i) seven or more years have passed since the school 30
closure; and 31
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(ii) the district provides evidence satisfactory to the 1
department that the sc hools affected by the consolidation are o ver 2
capacity; 3
(L) a district may not reopen and reconsolidate a school that 4
was consolidated in the district more than once every seven yea rs for purposes 5
of the calculations made under (H) of this paragraph; 6
(M) a district offsetting a decr ease under (H) of this paragra ph 7
shall provide the department with the list of sc hools participa ting in the 8
consolidation and the corresponding ADM; 9
(2) the required local contribution of a city or borough school district is 10
the equivalent of a 2.65 mill tax levy on the full and true val ue of the taxable real and 11
personal property in the distric t as of January 1 of the second preceding fiscal year, as 12
determined by the Department o f Commerce, Community, and Econom ic 13
Development under AS 14.17.510 and AS 29.45.110, not to exceed 45 percent of a 14
district's basic need for the preceding fiscal year as determin ed under (1) of this 15
subsection. 16
* Sec. 3. AS 14.17.410 is amended by adding a new subsection to read: 17
(g) The department shall distribute state aid to each district . The department 18
shall determine the amount of a district's state aid by 19
(1) dividing the district adjusted ADM of the district by the combined 20
total of the district adjusted ADMs of all districts in the state; 21
(2) multiplying the number obtained under (1) of this subsection by the 22
combined total of 23
(A) state aid appropriated by the legislature; 24
(B) the total required local c ontributions for all districts i n the 25
state; and 26
(C) 90 percent of eligible federal impact aid received by all 27
districts in the state for that fiscal year; and 28
(3) subtracting the district's required local contribution and 90 percent 29
of the district's eligible federal impact aid for that fiscal y ear from the number 30
obtained under (2) of this subsection. 31
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* Sec. 4. AS 14.17.430 is amended to read: 1
Sec. 14.17.430. State funding for correspondence study. Funding [EXCEPT 2
AS PROVIDED IN AS 14.17.400(b), FUNDING] for the state centrali zed 3
correspondence study program or a district correspondence progr am, including a 4
district that offers a statewide correspondence study program, includes [AN 5
ALLOCATION FROM THE PUBLIC EDUCATION FUND IN] an amount 6
calculated by multiplying the ADM of the correspondence program by 90 percent. 7
* Sec. 5. AS 14.17.440(a) is amended to read: 8
(a) Funding [EXCEPT AS PROVIDED IN AS 14.17.400(b), FUNDING] for 9
state boarding schools established under AS 14.16.010 includes [AN ALLOCATION 10
FROM THE PUBLIC EDUCATION FUND IN] an amount appropriated by the 11
legislature [CALCULATED BY 12
(1) DETERMINING THE ADM OF STATE BOARDING SCHOOLS 13
BY APPLYING THE SCHOOL SIZE FACTOR TO THE STUDENT COUNT AS 14
DESCRIBED IN AS 14.17.450; 15
(2) MULTIPLYING THE NUMBER OBTAINED UNDER (1) OF 16
THIS SUBSECTION BY THE SPECIAL NEEDS FACTOR IN AS 14.17.420(a)( 1) 17
AND THE SECONDARY SCHOOL VOCATIONAL AND TECHNICAL 18
INSTRUCTION FUNDING FACTOR SET OUT IN AS 14.17.420(a)(3) AND 19
MULTIPLYING THAT PRODUCT BY THE BASE STUDENT ALLOCATION; 20
AND 21
(3) MULTIPLYING THE PRODUCT DETERMINED UNDER (2) 22
OF THIS SUBSECTION BY THE DISTRICT COST FACTOR THAT IS 23
APPLICABLE TO CALCULATION OF THE STATE AID FOR THE ADJACENT 24
SCHOOL DISTRICT UNDER AS 14.17.460]. 25
* Sec. 6. AS 14.17.500(a) is amended to read: 26
(a) A district shall prepare and submit to the department by N ovember 5 of 27
each fiscal year, in the manner and on forms prescribed by the department, an estimate 28
of its ADM and other student count data, including per school s tudent count data, for 29
the succeeding fiscal year upon whic h computations can be made to estimate the 30
amount of state aid for which th e district may be eligible unde r AS 14.17.410 31
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[AS 14.17.400] in the succeeding fiscal year. In making its rep ort, the district shall 1
consider its ADM, other student count data, the pattern of grow th or decline of the 2
student population in preceding years, and other pertinent info rmation available to the 3
district. 4
* Sec. 7. AS 14.17.610(b) is amended to read: 5
(b) Distribution of state aid under (a) of this section shall be made as required 6
under AS 14.17.410(g) [AS 14.17.410]. If a district recei ves more state aid than it is 7
entitled to receive under this chapter, the district shall imme diately remit the amount 8
of overpayment to the commissi oner, to be returned to the general [ P U B L I C 9
EDUCATION] fund. The department may make adjustments to a distr ict's state aid to 10
correct underpayments made in previous fiscal years. 11
* Sec. 8. AS 14.17.900(b) is amended to read: 12
(b) Money to carry out the provisions of this chapter may be a ppropriated 13
annually by the legislature [INTO THE PUBLIC EDUCATION FUND. IF T H E 14
AMOUNT APPROPRIATED TO THE FUND FOR THE PURPOSES OF THIS 15
CHAPTER IS INSUFFICIENT TO MEET THE ALLOCATIONS AUTHORIZED 16
UNDER AS 14.17.400 - 14.17.470 FOR A FISCAL YEAR, STATE AID SHA LL BE 17
REDUCED ACCORDING TO AS 14.17.400(b)]. 18
* Sec. 9. AS 37.07.020(b) is amended to read: 19
(b) In addition to the budget and bills submitted under (a) of this section, the 20
governor shall submit a capital improvements program covering t he succeeding six 21
fiscal years. The governor shall also submit a fiscal plan with estimates of significant 22
sources and uses of funds for the succeeding 10 fiscal years. The fiscal plan 23
(1) must include sufficient details to identify 24
(A) significant sources of funds; 25
(B) significant uses of funds, including lump sum projections 26
of 27
(i) operating expenditures; 28
(ii) capital expenditures; 29
(iii) debt service expenditures; 30
(iv) fund capitalizations; 31
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(v) appropriations of income of the Alaska permanent 1
fund (art. IX, sec. 15, Constitution of the State of Alaska), if any; 2
(2) must balance sources and us es of funds held while providin g for 3
essential state services and protecting the economic stability of the state; 4
(3) must include projected bal ances of significant funds held in 5
separate accounts, including the budget reserve fund (art. IX, sec. 17, Constitution of 6
the State of Alaska) [, THE PUBLIC EDUCATION FUND (AS 14.17.300 ),] and the 7
Alaska capital income fund (AS 37.05.565); 8
(4) must set out significant assumptions used in the projectio ns with 9
sufficient detail to enable the legislature to rely on the fisc al plan in understanding, 10
evaluating, and resolving issues of state budgeting, including information that supports 11
major areas of operating increa ses, such as population demograp hics that affect the 12
need for particular government services. 13
* Sec. 10. AS 37.07.020 is amended by adding a new subsection to read: 14
(h) On December 15 and March 15 of each year, the governor shall 15
(1) for information purposes only, adjust the total amount of 16
appropriations enacted for public school education in the state for the current fiscal 17
year in proportion to changes in the Consumer Price Index for a ll urban consumers for 18
urban Alaska during the previous calendar year, as determined b y the United States 19
Department of Labor, Bureau of Labor Statistics; the March 15 c alculation must 20
include supplemental appropriations enacted for the current fis cal year on or before 21
February 28; in this paragraph, "public school" does not includ e the University of 22
Alaska or another postsecondary institution; 23
(2) publish the amount adjusted for inflation in (1) of this s ubsection 24
on the Internet website of the Office of the Governor; and 25
(3) report the amount adjusted for inflation in (1) of this su bsection to 26
the senate secretary and the chief clerk of the house of repres entatives and notify the 27
legislature that the amount is available. 28
* Sec. 11. AS 14.17.300, 14.17.400, 14.17.410(a), 14.17.470, 14.17.480(b), and 29
14.17.490(c) are repealed. 30
* Sec. 12. The uncodified law of the State of Alaska is amended by adding a new section to 31
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read: 1
APPLICABILITY. This Act applies to a contract that becomes lega lly binding on or 2
after the effective date of this Act. 3
* Sec. 13. This Act takes effect July 1, 2025. 4