Legislature(2009 - 2010)CAPITOL 106

02/15/2010 08:00 AM EDUCATION


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 297 POSTSECONDARY SCHOLARSHIPS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 206 HIGH SCHOOL ASSESSM'T/POSTSECONDARY CLASS TELECONFERENCED
Heard & Held
               HB 297-POSTSECONDARY SCHOLARSHIPS                                                                            
                                                                                                                                
8:02:39 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON announced that the  first order of business would be                                                               
HOUSE  BILL   NO.  297  "An   Act  establishing   the  governor's                                                               
performance  scholarship program  and  relating  to the  program;                                                               
establishing  the  governor's  performance scholarship  fund  and                                                               
relating  to  the  fund;  relating  to  student  records;  making                                                               
conforming amendments; and providing for an effective date."                                                                    
                                                                                                                                
8:03:36 AM                                                                                                                    
                                                                                                                                
CHAIR    SEATON    offered   condolences    to    ConocoPhillips,                                                               
acknowledging the loss  of their president, Jim  Bowles, who died                                                               
as a result of a snowmobile accident.                                                                                           
                                                                                                                                
CHAIR  SEATON  pointed  out that  several  amendments  have  been                                                               
circulated  to   members  as   well  as   information  previously                                                               
requested from the Department of  Education and Early Development                                                               
(EED).                                                                                                                          
                                                                                                                                
8:04:59 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   KELLER  reported   he   has  received   comments                                                               
indicating  that  HB 297  may  put  the  rural communities  at  a                                                               
disadvantage,  which   he  thought  may   be  the  result   of  a                                                               
misunderstanding,   and  is   causing   some  frustration   among                                                               
constituents at large.  He expressed  his support for HB 297, and                                                               
stated  his understanding  that  this bill  will  provide a  wide                                                               
benefit to K-12 students throughout the state.                                                                                  
                                                                                                                                
8:06:42 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON stressed  that  the commissioner  views  this as  a                                                               
reform bill  to bring  about a statewide  change in  our schools.                                                               
Many  of  the  comments,  regarding disparity  for  rural  Alaska                                                               
surrounds consideration  of small  schools versus  large schools,                                                               
and  whether  the  diversity  of   courses  will  allow  them  to                                                               
implement the waiver  program.  He stressed that the  goal is for                                                               
core courses to be available to all students in Alaska.                                                                         
                                                                                                                                
8:09:10 AM                                                                                                                    
                                                                                                                                
DIANE  BARRANS,   Executive  Director,   Postsecondary  Education                                                               
Commission, Department of Education  and Early Development (EED),                                                               
stated  that passage  of this  bill will  represent "a  huge step                                                               
forward" for  the state, in terms  of the types of  financial aid                                                               
available  for Alaskans  to  pursue  postsecondary education  and                                                               
training.   In  recent  years, the  commission  has developed  an                                                               
outreach, and  early awareness unit.   Having the GPS  program to                                                               
bring to students  and families will be tremendous.   The program                                                               
can be woven  into information presented to students  as early as                                                               
elementary school.   Pupils must have  fundamental preparation in                                                               
elementary and middle  school to benefit from a  program like the                                                               
Governor's Performance Scholarship (GPS).                                                                                       
                                                                                                                                
MS. BARRANS stated  that the department is very  supportive of HB
297  and appreciates  being involved  in the  development of  the                                                               
proposal.   Rather  than  create a  separate  or new  application                                                               
process,  the  application  process   could  "piggyback"  on  the                                                               
existing  free  application  for   federal  student  aid.    Cost                                                               
estimates  to bring  up  the  program and  to  administer it  are                                                               
modest, she  reported.   She described  the process  currently in                                                               
place  as   an  electronic  process  for   the  Alaska  Advantage                                                               
Education  Grant, which  is a  small  needs-based grant  program,                                                               
which  the  division  administers.     The  commission  exchanges                                                               
information   electronically,  with   the   U.S.  Department   of                                                               
Education,  and  the  educational institutions  in  Alaska  where                                                               
grant recipients attend.   She reported that  the current process                                                               
is efficient.   Under  this bill, an  Alaskan student  would only                                                               
need  to submit  the  Free Application  for  Federal Student  Aid                                                               
(FASFA), the  school would provide transcript  information to the                                                               
postsecondary institution, and "we  become co-gatekeepers, ... in                                                               
terms  of ensuring  the aid  is distributed  in an  efficient and                                                               
effective manner."   The other reason to propose  using the FASFA                                                               
as a  single application  is to ensure  that every  student could                                                               
access the  grant aid.   Although improvements have been  made in                                                               
the number  of students  that complete  the FASFA,  some students                                                               
assumed they  will not qualify  so they do  not apply.   Over the                                                               
past  few years  significant improvements  have been  made.   The                                                               
federal  government  is  revising  the  FASFA  and  continues  to                                                               
improve and  streamline the process.   She thought this  would be                                                               
an efficient and effective way to administer the program.                                                                       
                                                                                                                                
8:13:57 AM                                                                                                                    
                                                                                                                                
CHAIR   SEATON  recalled   questions   about  administering   and                                                               
coordinating  the program,  and  the requirement  that the  award                                                               
payment be  directed to the  institution.  He asked  whether this                                                               
is the  normal process and  whether any glitches happen  when the                                                               
award is directed to the institution and not the student.                                                                       
                                                                                                                                
MS.   BARRANS   responded   the  standard   for   financial   aid                                                               
administration to  have the  funds be directed  to the  school to                                                               
ensure  that the  student has  met the  eligibility criteria  and                                                               
qualifications.   She  clarified that  this bill  makes available                                                               
financial aid,  to existing programs certified  by the Department                                                               
of  Labor  &  Workforce  Development  (DLWD),  for  new  training                                                               
programs.    She   opined  that  the  burden  would   be  on  the                                                               
institution  to develop  the appropriate  process to  satisfy the                                                               
administrative requirements.  Under  this bill, the commission is                                                               
granted  regulatory authority  relative to  schools participating                                                               
in  the program.    She envisioned  how a  school  would need  to                                                               
demonstrate its administrative capacity  to be responsible and to                                                               
ensure funds are appropriately disbursed.                                                                                       
                                                                                                                                
8:16:12 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON asked  whether that  process would  be accomplished                                                               
under the regulatory purview and not in statute.                                                                                
                                                                                                                                
MS. BARRANS answered yes.                                                                                                       
                                                                                                                                
8:16:37 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EDGMON questioned  the mechanics  of the  program                                                               
start-up and when the scholarships would be ready.                                                                              
                                                                                                                                
MS.  BARRANS  offered  that  the   first  class  of  high  school                                                               
graduates to qualify would be the  class of 2011.  Those students                                                               
would enter their training program in the  fall of 2011.  It is a                                                               
relatively  aggressive  schedule  to   get  the  program  up  and                                                               
running,  but the  commission will  begin discussions  on program                                                               
implementation, although  funds will  not yet  be expended.   She                                                               
deferred  to  the  Department  of Revenue  (DOR)  to  respond  to                                                               
questions regarding finances.                                                                                                   
                                                                                                                                
8:18:32 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EDGMON asked  what happens  when the  $20 million                                                               
spin off  is not spent; are  the funds rolled into  the principle                                                               
or held separate.                                                                                                               
                                                                                                                                
CHAIR SEATON stated  that a DOR representative will  respond to a                                                               
line of financial questions.                                                                                                    
                                                                                                                                
8:19:11 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P. WILSON asked whether  this is expected to be an                                                               
easy process to administer.                                                                                                     
                                                                                                                                
MS.  BARRANS  related  that most  career  and  training  programs                                                               
currently administer  some form  of aid.   She  did not  think it                                                               
would  be a  stretch  for most  programs to  have  some means  of                                                               
meeting the  administrative needs  involved in carrying  out this                                                               
program.                                                                                                                        
                                                                                                                                
8:20:16 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KELLER  asked whether  the committee  is satisfied                                                               
that it  can identify the  different tiers in WorkKeys,  and with                                                               
the process necessary to implement the program components.                                                                      
                                                                                                                                
CHAIR  SEATON said  the department  representative will  speak to                                                               
that topic today.                                                                                                               
                                                                                                                                
8:21:18 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON referred  to page 9, lines 2-16.   He related that a                                                               
question arose  about how students seeking  apprenticeships would                                                               
qualify for the certificated training.                                                                                          
                                                                                                                                
MS. BARRANS said  she anticipated that the Department  of Labor &                                                               
Workforce Development  (DLWD) will determine its  own criteria to                                                               
determine  which  programs  will  qualify under  the  career  and                                                               
technical trade component.  She  referred to page 8, lines 23-24,                                                               
which   read:      "Sec.   14.43.835.   Qualified   postsecondary                                                               
institutions.   (a)  The  following  institutions  are  qualified                                                             
postsecondary institutions."  She  then referred to paragraph (2)                                                               
which read:   "a career  and technical school  program physically                                                               
located  in  the state  that  has  been  included  on a  list  of                                                               
certified  career  and  technical  school  programs  ...."    She                                                               
anticipated that  DLWD will promulgate regulations  and designate                                                               
certain programs  as qualifying  or not-qualifying;  factors that                                                               
could  be  considered will  include  whether  or not  tuition  is                                                               
charged, and other  educational costs, which could  be covered by                                                               
the  GPS award.   She  related  that some  apprenticeships pay  a                                                             
stipend, while others do not.                                                                                                   
                                                                                                                                
8:23:36 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON remarked  that the  onus would  be on  the DLWD  to                                                               
designate the programs  which meet the criteria.   Other stipends                                                               
or self-pay programs would be identified  in the FAFSA.  He asked                                                               
whether this could be handled through regulations.                                                                              
                                                                                                                                
MS.  BARRANS  stated  that  it  is  unusual  for  a  student  not                                                               
participating in  a federal  aid program to  file the  FAFSA, but                                                               
nothing prevents them  from doing so.  The  department would need                                                               
to communicate  the process  for application.   She  related that                                                               
the commission  also receives copies  of the FAFSA's filed.   The                                                               
FAFSA document will  handle this hurdle, or  the department could                                                               
create an alternative application process via regulation.                                                                       
                                                                                                                                
8:25:05 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MUNOZ asked  whether the  merit-based career  and                                                               
technical scholarship requirements are  the same for academic and                                                               
technical career paths.                                                                                                         
                                                                                                                                
MS. BARRANS said they are not the same requirements.                                                                            
                                                                                                                                
REPRESENTATIVE  MUNOZ  requested  a  review  of  the  differences                                                               
between them.                                                                                                                   
                                                                                                                                
MS.  BARRANS suggested  Mr.  Jeans would  cover  this during  his                                                               
testimony today.                                                                                                                
                                                                                                                                
CHAIR SEATON  elaborated that  the committee  would like  to know                                                               
how  scholarships awarded  will vary  or coincide  between career                                                               
paths.   He  asked  how the  program will  apply  to someone  who                                                               
qualifies for  the academic  scholarship, but  chooses to  take a                                                               
career technical path.   The committee's understanding  is that a                                                               
student choosing  a career technical  program will be  limited to                                                               
$3,000, even if they qualify for the highest academic award.                                                                    
                                                                                                                                
MS. BARRANS agreed that is correct.                                                                                             
                                                                                                                                
CHAIR SEATON suggested that the  committee may make a request for                                                               
the  commission to  work  with the  department  on aligning  this                                                               
aspect of the bill.                                                                                                             
                                                                                                                                
8:27:39 AM                                                                                                                    
                                                                                                                                
EDDY  JEANS, Director,  School  Finance  and Facilities  Section,                                                               
Department  of Education  and Early  Development (EED),  directed                                                               
attention to  the bill,  page 9,  and said  he would  continue to                                                               
present the sectional analysis of the bill.                                                                                     
                                                                                                                                
CHAIR  SEATON related  an issue  regarding  non appropriation  of                                                               
funds, by the legislature, to cover  the program.  He referred to                                                               
page  9, line  30, which  indicates distribution  on a  pro-rated                                                               
basis.   He  asked how  this would  be administered  and how  the                                                               
qualification determination would be handled.                                                                                   
                                                                                                                                
MR.  JEANS envisioned  that  anyone who  qualifies  for an  award                                                               
would receive some award on a pro-rated basis.                                                                                  
                                                                                                                                
8:29:01 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EDGMON asked  what occurs  with accrued  interest                                                               
that is not expended.                                                                                                           
                                                                                                                                
MR. JEANS  responded the first  step is the appropriation  to the                                                               
Governor's  Scholarship Fund  (GSF);  $400 million.   The  income                                                               
from the GSF  requires an appropriation by the  legislature on an                                                               
annual basis  into an income fund.   The income fund  is what the                                                               
Postsecondary  Education Commission  will draw  from for  awards.                                                               
The  unexpended  funds  remain  in   the  income  fund,  and  are                                                               
available  in  subsequent  years  without  the  need  of  further                                                               
appropriation  by   the  legislature.     He  related   from  his                                                               
conversations with  the DOR,  that any  money generated  from the                                                               
income  fund  is subject  to  appropriation.   The  principal  is                                                               
available  in  subsequent  years without  further  authorization.                                                               
The  process would  be similar  to the  way the  public education                                                               
fund currently operates in regards  to the foundation formula, he                                                               
stated.                                                                                                                         
                                                                                                                                
8:30:21 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EDGMON envisioned  that,  as the  demand for  the                                                               
program grows,  more schools  and students  will be  motivated to                                                               
participate  in  the  program.   The  program  participation  may                                                               
initially  be low,  but  would  likely increase  over  time.   He                                                               
stated he would like to see the projected figures.                                                                              
                                                                                                                                
MR. JEANS  directed attention  to the  schedule in  the committee                                                               
packet, which  indicates the  annual drawdown.   He  estimated it                                                               
would take  four years before  the fund would  be up to  the full                                                               
$20 million.   He  offered his  belief that  it would  be earning                                                               
close to  the $20 million  in the  first couple years  assuming a                                                               
five percent interest on the  full $400 million.  The legislature                                                               
would  have the  option to  appropriate  the full  amount of  the                                                               
income, or leave  it in with the principal and  appropriate it at                                                               
a future date.                                                                                                                  
                                                                                                                                
REPRESENTATIVE EDGMON identified this  as an important process to                                                               
discuss, as the committee may  need to address provisions such as                                                               
the needs-based aspect of the bill.                                                                                             
                                                                                                                                
8:32:38 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON asked whether the  statutory percent of market value                                                               
(POMV) is established, based on  an average return on investments                                                               
allowing  for  a three  percent  inflation-proofing  on the  $400                                                               
million, or if another structure would be put in place.                                                                         
                                                                                                                                
MR. JEANS deferred  to DOR.  He explained that  EED used the five                                                               
percent, as available for appropriation  based money, on a multi-                                                               
year average of the Permanent Fund.                                                                                             
                                                                                                                                
CHAIR SEATON related that this  was not apparent in the committee                                                               
packet or in  the bill.  He surmised there  is an assumption that                                                               
the five percent will be available for appropriation.                                                                           
                                                                                                                                
MR. JEANS concurred with the assumption.                                                                                        
                                                                                                                                
8:34:06 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KELLER  pointed out  that this  legislature cannot                                                               
commit future  legislatures, as each legislature  may appropriate                                                               
funds they find prudent.                                                                                                        
                                                                                                                                
8:34:45 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON  stipulated  that   questions  about  the  interest                                                               
generated will be directed to the representative from DOR.                                                                      
                                                                                                                                
MR.  JEANS  referred  to proposed  AS  14.43.850,  regarding  the                                                               
report  to the  legislature.   The  program administrators,  EED,                                                               
DOR, DLWD,  and UA, will  report within 10  days of the  start of                                                               
each  legislative   session,  information   on  the  GPS.     The                                                               
information is  to include  the number  of applicants  and awards                                                               
for  each type  of scholarship,  in current  and past  years, and                                                               
offer projections for the coming  year.  Additionally, the report                                                               
will include  trends in data  reflecting the goals  stipulated in                                                               
proposed AS 14.43.810.                                                                                                          
                                                                                                                                
8:36:02 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  asked whether  the report  would be  a consolidated                                                               
report.                                                                                                                         
                                                                                                                                
MR. JEANS replied yes.                                                                                                          
                                                                                                                                
MR.  JEANS turned  to page  10, line  23, proposed  AS 14.43.890,                                                               
which  specifies  the  definitions of  commission,  commissioner,                                                               
department,   grade-point   average  (GPA),   military   service,                                                               
program, and school district.                                                                                                   
                                                                                                                                
8:36:38 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON asked whether a  definition will need to be inserted                                                               
to include  letter grades as  well as  letter grades one  for the                                                               
GPA.                                                                                                                            
                                                                                                                                
MR. JEANS answered no.  He referred to page 5, line 28 of HB
297, which read, "the minimum grade-point average that the                                                                      
student must have achieved in high school to be eligible for                                                                    
each of the three tiers of academic ...."                                                                                       
                                                                                                                                
CHAIR  SEATON  related  that  the   GPA  can  be  handled  in  an                                                               
amendment.                                                                                                                      
                                                                                                                                
8:37:42 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   GARDNER  returned   to  page   8,  proposed   AS                                                               
14.43.835, and  asked the  rationale for  reducing the  award for                                                               
vocational  education.   Some of  the  career-based programs  are                                                               
just as  expensive as academic paths.   She asked the  reason the                                                               
award would be limited to only $3,000 for a career path.                                                                        
                                                                                                                                
MR.  JEANS said  it is  up to  the legislature.   The  department                                                               
chose a "middle of the road" amount to insert.                                                                                  
                                                                                                                                
8:39:09 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON  directed attention  to  the  handout, titled  "GPS                                                               
Scholarship HB 297/SB 224 handout, dated 2/12/2010."                                                                            
                                                                                                                                
MR.  JEANS  explained that  there  are  two parallel  scholarship                                                               
programs.   One  is the  academic scholarship,  which allows  the                                                               
three-tiered  academic scholarship.   He  referred to  the middle                                                               
section  of the  handout, to  AS 14.43.820,  and explained  under                                                               
this  track  the  intent  is  that the  student  would  attend  a                                                               
university  or college  that leads  to a  certificate or  degree.                                                               
The University  of Alaska  System offers  certificate as  well as                                                               
degree programs.  He stated  that reading across the chart, under                                                               
the career  and technical path,  a student would attend  a career                                                               
or technical  school that has been  approved by DLWD, which  is a                                                               
different track.                                                                                                                
                                                                                                                                
REPRESENTATIVE  GARDNER  offered  her  belief  that  a  top-level                                                               
academic scholarship  qualifying student  could choose to  take a                                                               
vocational career path.   She questioned why  students who choose                                                               
the  vocational path  would receive  a  lesser award,  especially                                                               
given  that the  programs  may  cost as  much  or  more than  the                                                               
university career path programs.                                                                                                
                                                                                                                                
MR. JEANS  responded that the department  did not set a  range of                                                               
awards.  He related that if  the program level was set at $10,000                                                               
and the program  cost was $3,000, the student  would only receive                                                               
$3,000.  He stated  that it is up to the  legislature to make the                                                               
decision on  the amount  of the  award level  for the  career and                                                               
technical award.                                                                                                                
                                                                                                                                
8:41:56 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER  asked whether  an argument could  be made                                                               
to make the award less and if it was a cost-savings measure.                                                                    
                                                                                                                                
MR. JEANS assured  the committee that this is  not a cost-savings                                                               
measure.   The department  just reviewed  the academic  award and                                                               
decided $3,000 represented the mid-range level.                                                                                 
                                                                                                                                
8:42:31 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  asked whether this  program is patterned  after the                                                               
Hathaway  Plan, which  identifies different  cost structures  for                                                               
university and community colleges.                                                                                              
                                                                                                                                
MR. JEANS  concurred that the  Hathaway Plan was the  model used,                                                               
but he did not recall the award levels in the model.                                                                            
                                                                                                                                
8:43:14 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P. WILSON  lamented that a student  on an academic                                                               
path could  have 100 percent  of his/her tuition paid,  and asked                                                               
why a student in the career  and technical program would not also                                                               
receive  that  level  of  assistance if  he/she  has  earned  the                                                               
appropriate grade point average.                                                                                                
                                                                                                                                
CHAIR  SEATON  asked  whether  this  is a  policy  call  for  the                                                               
committee to determine.                                                                                                         
                                                                                                                                
MR.  JEANS said  that it  is a  policy decision  and stressed  it                                                               
would be difficult to identify the appropriate rate.                                                                            
                                                                                                                                
REPRESENTATIVE  P.  WILSON expressed  her  interest  in having  a                                                               
policy set that will serve both paths in the same way.                                                                          
                                                                                                                                
8:46:14 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON clarified that HB  297 contains qualifications which                                                               
are  different for  career and  technical programs  than for  the                                                               
academic core principles.  The  question is whether a student who                                                               
qualifies for  a high-level academic  award can apply  that award                                                               
to whatever  Alaska institution or  program the  student desires.                                                               
He cautioned that the programs are not the same.                                                                                
                                                                                                                                
REPRESENTATIVE  KELLER  agreed.     He  noted  the  criteria  for                                                               
qualification differs  [between the career and  technical program                                                               
and the academic program].  There may  be a value in having a cap                                                               
in terms of controlling the cost.                                                                                               
                                                                                                                                
8:48:27 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON  clarified  that  the  aforementioned  is  why  the                                                               
program is not  set up to pay the full  tuition, but this program                                                               
is  a monetary  award to  an individual.   An  amendment will  be                                                               
considered to this section, he noted.                                                                                           
                                                                                                                                
8:49:59 AM                                                                                                                    
                                                                                                                                
MR.  JEANS turned  to page  11, line  9-14, to  Section 5,  which                                                               
refers to  the administration  of the  program by  the ACPE.   He                                                               
then referred to  page 11, line 31, to Section  6, which provides                                                               
DLWD the  authority to  carry out  its tasks  for the  career and                                                               
technical aspects of the program.                                                                                               
                                                                                                                                
REPRESENTATIVE  BUCH,  in  response   to  Chair  Seaton,  related                                                               
Section 6 begins on line 15.                                                                                                    
                                                                                                                                
CHAIR SEATON agreed,  noting the new language begins  on page 11,                                                               
line 31.                                                                                                                        
                                                                                                                                
8:51:04 AM                                                                                                                    
                                                                                                                                
MR.   JEANS  directed   attention  to   Article  8A.   Governor's                                                               
Performance Scholarship Fund, which begins  on page 12, line 4 of                                                               
HB 297.  This is the establishment  of the GPS fund.  He recalled                                                               
that  $400  million  appears  in  the  language  section  of  the                                                               
governor's operating  budget.  He  related that Section  17 would                                                               
provide the DOR the authority to manage and invest the funds.                                                                   
                                                                                                                                
8:52:12 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON related it appears  that this represents a month-end                                                               
market value of  the preceding three fiscal years,  making this a                                                               
statutory percent  of market value  (PMOV) method.   He commented                                                               
that the DOR will address this later.                                                                                           
                                                                                                                                
8:53:00 AM                                                                                                                    
                                                                                                                                
MR. JEANS referred  to page 13 of the bill  which establishes the                                                               
transition provisions.                                                                                                          
                                                                                                                                
REPRESENTATIVE  P.  WILSON  asked   for  the  difference  in  the                                                               
definitions presented  on page  13, line 2,  and those  listed on                                                               
page 10.                                                                                                                        
                                                                                                                                
MR. JEANS  answered that the  definitions on page 13  would apply                                                               
to the DOR.                                                                                                                     
                                                                                                                                
8:53:54 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EDGMON recalled  that not-for-profit organizations                                                               
are only  allowed to spend up  to 5 percent of  the earnings each                                                               
year.  He asked whether this would apply to the GPS.                                                                            
                                                                                                                                
CHAIR SEATON answered that question would be posed to the DOR.                                                                  
                                                                                                                                
8:54:31 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON said  that the  question of  donations to  the fund                                                               
will be  forwarded to DOR.   He then reminded the  committee that                                                               
another  bill  before  the  legislature   would  change  the  cap                                                               
regarding  [corporate] donations  to the  university and  the tax                                                               
credit received for  those donations.  The  question, he related,                                                               
will be whether that would  apply to this [scholarship].  Current                                                               
corporate tax laws  allow a donation up to  $100,000 in corporate                                                               
taxes  and receive  a  50  percent tax  credit  and donations  of                                                               
$100,000-$200,000 in  corporate taxes receive  a 100  percent tax                                                               
credit.                                                                                                                         
                                                                                                                                
MR.  JEANS agreed  the  question  would apply  to  the  DOR.   He                                                               
explained that  the transition  section provides  the departments                                                               
involved  the authority  to implement  regulations to  govern the                                                               
program.   He referred to  page 13,  line 16, which  provides the                                                               
transition  for the  first  three  years of  the  program.   This                                                               
provision  would allow  the department  to  develop a  transition                                                               
model for  those students.   He provided  the example in  which a                                                               
student may graduate  in 2011, but may not have  taken four years                                                               
of math.  A regulation will  be adopted to address these types of                                                               
situations, he said.                                                                                                            
                                                                                                                                
8:56:54 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON  clarified that  current  high  school seniors  who                                                               
could  otherwise  qualify  would  need to  meet  core  curriculum                                                               
requirements.                                                                                                                   
                                                                                                                                
MR. JEANS said  it is not the intent of  the department to reduce                                                               
the  curriculum requirements,  but there  may be  current seniors                                                               
who did not  meet the curriculum requirements since  they may not                                                               
have been aware of the GPS requirements.                                                                                        
                                                                                                                                
REPRESENTATIVE  KELLER asked  whether on-line  curriculum courses                                                               
have been  considered as a  means to  meet the requirements.   He                                                               
provided  an  anecdote  to  illustrate  this  possibility.    The                                                               
current  technology should  be implemented  where applicable,  he                                                               
stressed.                                                                                                                       
                                                                                                                                
8:58:47 AM                                                                                                                    
                                                                                                                                
MR.  JEANS  expressed  his understanding  that  the  grade  point                                                               
averages as  well as the  assessment scores will not  be lowered.                                                               
However, some  students in their  junior year of high  school may                                                               
have only taken two years of  math.  Those students would need to                                                               
take an  additional year  of math in  their senior  year, without                                                               
requiring the student to go  outside his/her normal school day to                                                               
accomplish two years of math in one year.                                                                                       
                                                                                                                                
8:59:22 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER  asked whether the  transition regulations                                                               
are   realistic  for   implementation   within  this   aggressive                                                               
timeline.                                                                                                                       
                                                                                                                                
MR. JEANS  answered yes.   He mentioned  that the  department has                                                               
started  work on  draft regulations.   He  offered to  share them                                                               
with  the  legislature at  some  point.    He related  a  similar                                                               
process  was  used  to implement  regulations  on  another  bill.                                                               
While the regulation process has  begun the regulation process is                                                               
a public process, so this  effort will represent the department's                                                               
first cut at the regulations.                                                                                                   
                                                                                                                                
9:01:01 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON related  that if  the timeline  does not  allow for                                                               
regulatory  process,  since this  is  the  transition period  the                                                               
committee  could   also  work   to  ensure   that  the   bill  is                                                               
appropriately adjusted.                                                                                                         
                                                                                                                                
MR.  JEANS  related  that  the  department  has  several  avenues                                                               
available  to address  the critical  sections,  such as  adopting                                                               
emergency regulations.                                                                                                          
                                                                                                                                
9:01:50 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER theorized  about a  student who  does not                                                               
meet  the  rigorous  qualifications  and has  missed  a  required                                                               
course.  She  asked how this instance will be  addressed once the                                                               
student  has   already  graduated.    She   asked  if  graduation                                                               
represents  the   "drop-dead  date"  or  whether   students  have                                                               
alternatives   to   make-up   the   course,   such   as   through                                                               
correspondence courses.                                                                                                         
                                                                                                                                
MR.  JEANS agreed  that an  alternative pathway  would exist  for                                                               
students.   He  related  that the  commissioner  has allowed  for                                                               
these pathways,  such as taking  correspondence over  the summer,                                                               
classes at  their first year  at the university, or  other means.                                                               
The State Board  of Education and Early  Development (BOEED) will                                                               
be  developing  the  process  by which  these  students  will  be                                                               
considered.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GARDNER  asked  whether that  process  works  for                                                               
someone who did  not take courses as a high  school sophomore but                                                               
awakens  as a  senior to  the reality  of their  situation.   She                                                               
asked  if he/she  would be  treated as  someone on  track for  an                                                               
alternative pathway or  if it would be too late  once the student                                                               
has graduated.                                                                                                                  
                                                                                                                                
MR. JEANS  offered to scrutinize  that section, and said  at some                                                               
point it is considered a "drop-dead" situation.                                                                                 
                                                                                                                                
9:03:32 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   KELLER  related   that  the   validity  of   the                                                               
curriculum is  determined by the  local school district,  not the                                                               
EED.  He  asked whether the local district would  have the option                                                               
of providing  a virtual  school as an  alternative pathway  for a                                                               
student  who perhaps  began  focusing  on the  GPS  late in  high                                                               
school.                                                                                                                         
                                                                                                                                
MR. JEANS answered yes.                                                                                                         
                                                                                                                                
9:04:13 AM                                                                                                                    
                                                                                                                                
MR. JEANS  referred to page 13,  line 19, and explained  that the                                                               
first class to be eligible will  be the class graduating from the                                                               
school year  June 30, 2010,  through July 1, 2011.   Scholarships                                                               
will  be available  to them  after July  1, 2011.   The  students                                                               
graduating early  in 2011 will  be eligible for the  program, but                                                               
the funding will not be available until after July 1, 2011.                                                                     
                                                                                                                                
CHAIR SEATON surmised  then that students who  graduate this year                                                               
won't be included  in this program; the program  will start after                                                               
June 30, 2010.                                                                                                                  
                                                                                                                                
MR. JEANS agreed.  He stated the sectional review is complete.                                                                  
                                                                                                                                
CHAIR  SEATON   noted  the  immediate  effective   date  for  the                                                               
regulation component and for the transitional provision.                                                                        
                                                                                                                                
9:05:53 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P.  WILSON inquired about this  year's high school                                                               
graduates  who will  not  qualify  for the  program.   She  asked                                                               
whether any way exists for them to qualify.                                                                                     
                                                                                                                                
MR. JEANS  answered no.   He related  that the law  specifies the                                                               
dates  and it  does not  include the  students who  are currently                                                               
high school seniors.  In  further response, he confirmed that the                                                               
date  covers the  transition period  as well  as the  scholarship                                                               
program implementation.                                                                                                         
                                                                                                                                
9:07:50 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON  directed  attention  to  the  spreadsheet  titled,                                                               
"Governor's Scholarship  Program, updated  1/7/10."   He recalled                                                               
discussing  home  school students,  which  are  reflected in  the                                                               
spreadsheet.   He  asked for  the  number of  students who  would                                                               
qualify if they attained a GED through the University of Alaska.                                                                
                                                                                                                                
MR. JEANS answered that the UA does not issue GEDs.                                                                             
                                                                                                                                
CHAIR  SEATON  maintained  his  understanding  that  the  UA  has                                                               
provided  GEDs and  suggested further  response  may be  received                                                               
from the university system.                                                                                                     
                                                                                                                                
9:09:47 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EDGMON asked  whether a  definition is  needed on                                                               
page  6, line  8,  to  indicate "equivalent  to  the high  school                                                               
diploma."                                                                                                                       
                                                                                                                                
MR. JEANS  indicated that provision  was intended to  address the                                                               
private and home school programs.   He did not think a definition                                                               
is  necessary,  but it  will  be  determined via  the  regulatory                                                               
process, he said.                                                                                                               
                                                                                                                                
9:11:17 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON  indicated it  may  be  assumed that  students  who                                                               
choose to take a GED could be considered home school graduates.                                                                 
                                                                                                                                
MR. JEANS  stressed that it is  not the intent of  the department                                                               
to  allow applicants  to enter  the  program under  this type  of                                                               
premise.   The  commissioner envisions  that home  school parents                                                               
will  demonstrate  how  their  student  has  met  the  curriculum                                                               
requirements and will  provide documentation to that  effect.  It                                                               
is not the  intent of the department for students  to drop out of                                                               
high school, obtain a GED, and  have the parents declare that the                                                               
student has been in a home school program.                                                                                      
                                                                                                                                
9:12:32 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KELLER  pointed out that this  emphasizes the need                                                               
for  a  qualifying  test  to   measure  abilities.    Grades  are                                                               
subjective, he opined, and achievement  testing is crucial to the                                                               
program.                                                                                                                        
                                                                                                                                
CHAIR SEATON offered his belief  that under consideration are the                                                               
students who  achieve, but  do not  complete the  other criteria,                                                               
such as  obtain high scores.   Waivers are available  for certain                                                               
aspects of the criteria but not all, he stated.                                                                                 
                                                                                                                                
REPRESENTATIVE  GARDNER said  that there  does not  appear to  be                                                               
waivers for students who take alternative pathways.                                                                             
                                                                                                                                
CHAIR   SEATON  agreed   that  waivers   are  not   allowed,  but                                                               
alternative pathways are established for the program.                                                                           
                                                                                                                                
9:14:04 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KELLER  reiterated that  every district  will have                                                               
different standards  for how they approve  curriculum and grades.                                                               
He did not think that  the committee should address curriculum or                                                               
grades since this will be left  up to the individual districts to                                                               
decide.  He stressed that  the measurement of achievement is very                                                               
important to consider.                                                                                                          
                                                                                                                                
9:14:49 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MUNOZ  asked whether  this program would  apply to                                                               
an  older student,  who  returns to  school  or meets  comparable                                                               
requirements, such as  a GED or a university program.   She asked                                                               
whether those students  would have an opportunity  to qualify for                                                               
the program.                                                                                                                    
                                                                                                                                
MR. JEANS  explained that individuals  who have achieved  the age                                                               
of 16 are  no longer compulsory school-age students.   He further                                                               
explained that holding  a GED does not translate to  being a high                                                               
school graduate.  Students must  meet the course requirements and                                                               
must pass the high school qualifying  exam.  Thus, a student with                                                               
a GED could re-enroll in public  school, so long as they meet the                                                               
school  age  of up  to  19  years,  and complete  the  curriculum                                                               
requirements  to  qualify  for  this program.    There  are  many                                                               
avenues  for  students to  take  advantage  of this  program,  he                                                               
stated.                                                                                                                         
                                                                                                                                
9:16:40 AM                                                                                                                    
                                                                                                                                
JERRY BURNETT,  Deputy Commissioner,  Office of  the Commissioner                                                               
Department of Revenue (DOR), introduced himself.                                                                                
                                                                                                                                
CHAIR  SEATON  asked  Mr.  Burnett  to  begin  by  reviewing  the                                                               
mechanism for establishing the fund.                                                                                            
                                                                                                                                
9:17:22 AM                                                                                                                    
                                                                                                                                
MR. BURNETT  related that the  fund would be established  with an                                                               
appropriation of  $400 million as well  from potential donations.                                                               
The earnings  on the fund will  remain in the fund.   The closest                                                               
analogue  to  this  is  the  Children's  Trust  Fund,  which  was                                                               
established  by donation,  although the  earnings are  different.                                                               
The first  year the money will  be invested and will  be based on                                                               
the need  for a 5 percent  real rate of return,  which would work                                                               
to establish  an asset allocation  of fixed income  and equities.                                                               
He  related the  target would  be to  obtain between  7.5 to  8.5                                                               
percent rate of return, depending  on inflation, similar to how a                                                               
pension fund  is managed.   This would  be a  long-term endowment                                                               
approach for  investments.   The value would  be calculated  on a                                                               
monthly basis, and the 5 POMV  would be reported as available for                                                               
appropriation.   The legislature would then  have the opportunity                                                               
to appropriate the money to  the "spendable account," which would                                                               
be the  funds used.  This  proposed fund is not  a dedicated fund                                                               
so  the legislature  could appropriate  more or  less than  the 5                                                               
POMV  on an  annual  basis.   The assumption  would  be that  the                                                               
governor's budget  document would  contain the 5  percent figure.                                                               
However,  the  market  varies  and fluctuations  do  occur.    He                                                               
related  an  anecdotal scenario  to  illustrate  his point.    He                                                               
offered that  over a long  period of time  the 5 percent  will be                                                               
achieved.   Currently,  tax credits  are available  for donations                                                               
for qualified  postsecondary education  institutions such  as the                                                               
UA or Alaska  Pacific University.  The bill as  written would not                                                               
allow for a corporate tax credit  on donations into this fund, he                                                               
opined.                                                                                                                         
                                                                                                                                
9:21:30 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KELLER  asked  whether   the  language  could  be                                                               
amended to allow corporate donations.                                                                                           
                                                                                                                                
MR. BURNETT  stated that he  was not aware of  any constitutional                                                               
prohibition to make this type of tax credit available.                                                                          
                                                                                                                                
9:21:53 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  agreed that the tax  credit is not contained  in HB
297, which allows for donations.                                                                                                
                                                                                                                                
MR. BURNETT  related that  this would  refer to  a tax  credit or                                                               
contribution to education or to an institution.                                                                                 
                                                                                                                                
REPRESENTATIVE KELLER offered that the bill could be amended.                                                                   
                                                                                                                                
REPRESENTATIVE  GARDNER remarked  this  bill  indicates that  the                                                               
fund  is not  a  dedicated  fund so  the  legislature would  have                                                               
access  to  the  funds  to  use for  other  purposes.    Thus,  a                                                               
corporation may  choose not  to make a  donation to  the proposed                                                               
GPS fund.                                                                                                                       
                                                                                                                                
MR. BURNETT agreed one of  the criticisms of the Children's Trust                                                               
Fund,  which allows  for donations,  is that  the fund  is not  a                                                               
dedicated  fund.   Thus, the  legislature can  use the  funds for                                                               
another  purpose.    He  responded  to  an  earlier  question  by                                                               
Representative Edgmon about tax deductions  on federal taxes.  He                                                               
related  that he  could not  specifically answer  this, but  they                                                               
likely are  deductible so long as  the criterion is met.   He did                                                               
not know  if this  would qualify  and people  would need  to seek                                                               
advice.                                                                                                                         
                                                                                                                                
9:24:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P. WILSON  requested  a final  answer on  whether                                                               
this could be altered.                                                                                                          
                                                                                                                                
REPRESENTATIVE  MUNOZ   asked  how   the  UA   currently  accepts                                                               
donations of this type.                                                                                                         
                                                                                                                                
MR.  BURNETT  related  he  could  not  specifically  answer  that                                                               
question, but  recalled the UA  solicits donations and  funds are                                                               
directed to a foundation or the UA directly.                                                                                    
                                                                                                                                
REPRESENTATIVE MUNOZ  inquired as  to the  flexibility UA  has to                                                               
manage the funds.                                                                                                               
                                                                                                                                
MR.  BURNETT answered  that  the  UA owns  its  own  assets so  a                                                               
donation  to the  UA is  not  something the  legislature has  the                                                               
authority to appropriate.                                                                                                       
                                                                                                                                
9:26:19 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BUCH referred  to page  12, line  24, and  to the                                                               
average  month-end market  value of  the fund  for the  immediate                                                               
preceding three fiscal years.                                                                                                   
                                                                                                                                
MR. BURNETT  answered that  it is based  on monthly  asset values                                                               
averaged over the past three years.                                                                                             
                                                                                                                                
9:27:11 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BUCH  asked  him  to describe  how  the  fund  is                                                               
overseen  and how  it would  be managed  in relation  to how  the                                                               
Alaska Permanent Fund is managed.                                                                                               
                                                                                                                                
MR. BURNETT responded this proposed  GPS fund would be managed by                                                               
the  DOR  through  a  combination  of  fixed  income  and  equity                                                               
investments.  He  related that the DOR manages  about $16 billion                                                               
internally  for the  pension funds,  the general  fund (GF),  the                                                               
constitutional budget reserve fund, and  other funds.  He related                                                               
that a  manager or managers would  be hired to manage  the equity                                                               
securities and  to oversee the  daily reports that  are received.                                                               
Market securities would be followed to determine monthly values.                                                                
                                                                                                                                
9:29:30 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BUCH recalled  the  past market  volatility.   He                                                               
related that  the Permanent  Fund Corporation  lost money  in its                                                               
investments.  He  questioned if this is managed in  the same way,                                                               
whether this  fund will be subject  to the same frailties  of the                                                               
market.                                                                                                                         
                                                                                                                                
MR.  BURNETT  responded  that  every   fund  is  subject  to  the                                                               
frailties  of  the market.    The  assets are  formally  reviewed                                                               
quarterly.    The DOR  made  positive  decisions to  leave  asset                                                               
allocations as  they were  during the market.   Thus,  the market                                                               
losses were not  due to an accident, but given  the situation the                                                               
DOR made a determination on how  to proceed.  In further response                                                               
to  Representative Buch,  he  offered the  DOR  made a  conscious                                                               
decision at  each juncture that  a better choice of  managing the                                                               
investments was not available.                                                                                                  
                                                                                                                                
9:31:40 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P. WILSON recalled  that the Alaska Permanent Fund                                                               
is managed over a five-year  period while this proposed fund will                                                               
be managed  over a three-year  period.   She inquired as  to what                                                               
the difference will be.                                                                                                         
                                                                                                                                
MR.  BURNETT  related that  the  longer  period tends  to  smooth                                                               
payments  more  and   shows  less  change  from   year  to  year.                                                               
Potentially,  the  growth  is  also  more  rapid.    The  biggest                                                               
difference is that  the calculation used to  determine the amount                                                               
of the  Permanent Fund  Dividend is  based on  realized earnings.                                                               
Realized earnings  are capital  gains from  the sale  of equities                                                               
and other  investments, dividends,  and interest received.   That                                                               
can be considerably  different than changes in market  value.  He                                                               
related a  scenario in which a  set of stocks is  owned that does                                                               
not  pay  dividends, so  when  the  stocks  double in  value  the                                                               
investor has no  realized income.  If the state  were to have the                                                               
same set  of investments but  uses a POMV calculation,  the state                                                               
would  have income  to appropriate.   The  Alaska Permanent  Fund                                                               
would have  no income  for calculating  the amount  available for                                                               
appropriation.     This  is  a  significant   difference  and  is                                                               
particularly  important to  note  because  the calculation  under                                                               
generally accepted  accounting principles  of income is  based on                                                               
market value and not on realized earnings.                                                                                      
                                                                                                                                
9:34:22 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON presumed  that the  smoothing  over the  three-year                                                               
period is used since the DOR  is doing a monthly value instead of                                                               
a year-end value.                                                                                                               
                                                                                                                                
MR. BURNETT  agreed that  it would tend  to have  less volatility                                                               
using monthly averages and smoothing over the three-year period.                                                                
                                                                                                                                
9:34:59 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P.  WILSON related  that money would  be deposited                                                               
to the  proposed GPS fund  and any unexpended funds  would remain                                                               
in the  proposed GPS  fund.   She asked if  this method  offers a                                                               
better  protection of  the funds  than returning  [any unexpended                                                               
funds] to the principal.                                                                                                        
                                                                                                                                
MR. BURNETT explained  that the way the proposed GPS  fund is set                                                               
up that if the legislature  appropriated 5 percent of the average                                                               
market value  from the fund  to the "spendable account"  it would                                                               
stay  in  the "spendable  account"  and  would be  available  for                                                               
expenditures.   The funds  would be invested  in a  less volatile                                                               
investment, would be  part of the GF investment  as fixed income.                                                               
Thus, the funds are less likely  to lose value in the short term.                                                               
So, in some  sense it is better protected, but  funds also remain                                                               
available.                                                                                                                      
                                                                                                                                
9:36:37 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON  related  that  some  students  would  qualify  for                                                               
scholarships  midway through  the year.    He opined  that it  is                                                               
important to avoid a pro-rated  situation or a situation in which                                                               
the scholarships  would not be  available unless  the legislature                                                               
meets to  appropriate more funds.   [The  aforementioned account]                                                               
would allow  funds to  be available  for those  scholarships that                                                               
were already  appropriated.  He  asked if  that is what  is being                                                               
considered.                                                                                                                     
                                                                                                                                
MR. BURNETT  replied yes,  and recalled that  a similar  fund was                                                               
established to pay  tax credits on production taxes.   The intent                                                               
was to deposit  money based on a formula and  the monies would be                                                               
available  when the  tax credits  needed to  be paid  rather than                                                               
having a  situation in which  people are  waiting to be  paid and                                                               
the department has to request an appropriation.                                                                                 
                                                                                                                                
9:38:32 AM                                                                                                                    
                                                                                                                                
RYAN  BUCHHOLDT,  Speaker of  the  Assembly,  Union of  Students,                                                               
University   of  Alaska   (UAA),  stated   that  the   Governor's                                                               
Performance  Scholarship Program  falls short  since it  does not                                                               
contain  a  needs-based component.    He  researched the  "Taylor                                                               
plan" states  and of  the 22  states cited  most plans  contain a                                                               
needs-based   component,  and   some   have  strong   needs-based                                                               
components  such  as  family  income  ceilings  as  part  of  the                                                               
eligibility  requirements.    He  related  his  pleasure  of  the                                                               
earlier  mention that  there is  a draft  amendment for  a needs-                                                               
based component.  He said he  thought it is important to consider                                                               
adding the needs-based component since it is difficult for low-                                                                 
income students to bridge academic  barriers and achieve success.                                                               
He closed  with a  quote from  the Western  Interstate Commission                                                               
for Higher  Education (WICHE) representative  at the  Joint House                                                               
and  Senate  Education Committee  meeting  in  November when  the                                                               
governor's  plan was  first  discussed.   He  read  the quote  as                                                               
follows:  "Hybrid plans are really  the best plan if your goal is                                                               
access to success."   Thus, the thought is that  what is good for                                                               
the state  is not only getting  the best "bang for  the buck" for                                                               
its money,  but also better access  for the success of  the State                                                               
of Alaska through  its future leaders.  These  future leaders are                                                               
our current students, he stated.                                                                                                
                                                                                                                                
9:41:26 AM                                                                                                                    
                                                                                                                                
NICK  MOE,   Political  Science  Student;   Government  Relations                                                               
Director, University  of Alaska Anchorage, explained  that as the                                                               
Government Relations Director  at UAA, his job is  to harness all                                                               
the  excitement  for  this  scholarship   plan.    Students  have                                                               
gathered  over  1,500  signatures  in support  of  a  needs-based                                                               
option for the  GPS.  Additionally, five  individual letters from                                                               
students were  published in the  Anchorage Daily News  in support                                                               
of  a needs-based  option.    He pointed  out  that although  the                                                               
students  advocating  for  the proposal  will  not  benefit,  the                                                               
students see  it as  a means to  provide access  to postsecondary                                                               
education.  College costs are rising  and it is more difficult to                                                               
obtain  lending from  private and  state sources.   He  offered a                                                               
personal anecdotal  situation in  which he  was denied  a student                                                               
loan  because he  missed  the  credit score  by  20 points,  even                                                               
though  he  had  previously  received the  student  loan.    Some                                                               
student  leaders will  soon  travel to  Juneau  to present  their                                                               
support and  research to  the legislature.   He urged  members to                                                               
amend the bill to include a needs-based option.                                                                                 
                                                                                                                                
9:43:41 AM                                                                                                                    
                                                                                                                                
AMY  VOSS,  Representative,  Student  Government,  University  of                                                               
Alaska  Anchorage, stated  that she  is recent  college graduate,                                                               
with a double major in German  and International Studies.  She is                                                               
currently  taking courses  in German  and Spanish  and substitute                                                               
teaches  German  in  the  Anchorage School  District.    She  had                                                               
opportunities  to attend  other  colleges and  while her  friends                                                               
went to  the Lower 48  to attend school,  she chose to  remain in                                                               
Alaska, primarily  since she  received a  scholarship.   She said                                                               
she did not regret her decision and  her plan is to remain in the                                                               
state and work.  She  commended the governor for introducing GPS,                                                               
but she  also emphasized the  importance of adding  a needs-based                                                               
component to the  program, which she thought  will also encourage                                                               
students  to  remain  in  Alaska to  attend  college  and  become                                                               
leaders in Alaska.                                                                                                              
                                                                                                                                
9:46:12 AM                                                                                                                    
                                                                                                                                
SAICHI OBA, Associate Vice President  for Students, University of                                                               
Alaska Anchorage,  stated that students  support the GPS  as well                                                               
as  a   needs-based  component,  which  the   president  [of  the                                                               
university] supports also.   With regard to  the earlier question                                                               
about GEDs  being awarded  by the University  of Alaska,  Mr. Oba                                                               
explained that although currently the  main campuses do not award                                                               
GEDs,  community  campuses  facilitate the  preparation  and  the                                                               
testing of  GEDs throughout  Alaska.  He  offered to  provide the                                                               
information  regarding GEDs  to the  committee via  Diane Barrans                                                               
and  Commissioner  LeDoux.    In response  to  Chair  Seaton,  he                                                               
offered to provide the information to the committee, as well.                                                                   
                                                                                                                                
9:47:27 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON, after  first  determining no  one  else wished  to                                                               
testify, closed public testimony on HB 297.                                                                                     
                                                                                                                                
CHAIR SEATON  then called attention  to the  amendments submitted                                                               
by  members.   He  stated  his desire  to  have these  amendments                                                               
posted on the web site or moved by the committee.                                                                               
                                                                                                                                
9:48:37 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P.  WILSON made  a motion  to have  the amendments                                                               
before the  committee for consideration, and  asked for unanimous                                                               
consent.                                                                                                                        
                                                                                                                                
REPRESENTATIVE KELLER objected.                                                                                                 
                                                                                                                                
REPRESENTATIVE GARDNER also objected.                                                                                           
                                                                                                                                
9:48:59 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EDGMON   asked  whether  the  amendments   to  be                                                               
considered are limited in number.                                                                                               
                                                                                                                                
CHAIR SEATON  answered no.   He  said he would  like to  at least                                                               
have the amendments presented even  if they are tabled and posted                                                               
as pending  amendments on  the web  site for  the public  to also                                                               
review.                                                                                                                         
                                                                                                                                
[The committee treated Representative  P. Wilson's earlier motion                                                               
as withdrawn.]                                                                                                                  
                                                                                                                                
9:49:50 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  P. WILSON  made a  motion to  adopt Amendment  1,                                                               
labeled  Version 26G-2,  (2/12/2010), (12:42  pm), which  read as                                                               
follows [original punctuation provided]:                                                                                        
                                                                                                                                
     Page 1, line 9, following "award of a":                                                                                    
          Insert "merit-based"                                                                                                  
                                                                                                                                
     Page 3, line 17, following "academic scholarship":                                                                         
          Delete "and"                                                                                                          
          Insert ","                                                                                                            
                                                                                                                                
     Page 3, line 17, following "school scholarship":                                                                           
          Insert "and a needs-based scholarship"                                                                                
                                                                                                                                
     Page 7, line 5, following "awards for the":                                                                                
          Delete "program"                                                                                                      
          Insert "merit-based programs"                                                                                         
                                                                                                                                
     Page 8, following line 3:                                                                                                  
          Insert:                                                                                                               
         "Sec. 14.43.828. Eligibility for a needs-based                                                                       
         scholarship and maximum awards. (a) Subject to                                                                       
       appropriation, the commission shall award a needs-                                                                       
          based scholarship to a student who meets the                                                                          
     eligibility criteria for the award.                                                                                        
      (b)  A student is eligible to receive a needs-based                                                                       
     scholarship if the student                                                                                                 
          (1)  is eligible for a merit-based academic                                                                           
       scholarship or a merit-based career and technical                                                                        
     school scholarship; and                                                                                                    
     (2)   can demonstrate  in a year  in which  the student                                                                    
     receives  a  scholarship  that the  student  has  unmet                                                                    
     financial need greater than $2,000.                                                                                        
     (c)   The maximum amount  for the needs-based  award is                                                                    
     50  percent  of  unmet   financial  need  greater  than                                                                    
     $2,000.                                                                                                                    
     (d)   The qualified postsecondary  institution attended                                                                    
     by the student shall  determine unmet financial need by                                                                    
     subtracting  from  the   student's  allowable  standard                                                                    
     costs  of attendance  at the  institution all  non-loan                                                                    
     sources  of financial  support,  including an  expected                                                                    
     family  contribution   and  all  federal,   state,  and                                                                    
     private   scholarships  or   grants  received   by  the                                                                    
     student.                                                                                                                   
     (e)  In this section,                                                                                                      
     (1)  "allowable standard costs of attendance" means                                                                        
     (A)  for a student  who receives a merit-based academic                                                                    
     scholarship, the lesser of the                                                                                             
     (i)  standard costs of  attendance at the University of                                                                    
     Alaska, as determined by the commission; or                                                                                
     (ii)    actual costs  of  attendance  at the  qualified                                                                    
     postsecondary institution  that the student  attends or                                                                    
     plans to attend, as determined by the commission;                                                                          
     (B)   for a student  who receives a  merit-based career                                                                    
     and   technical  school   scholarship,  the   costs  of                                                                    
     attendance at  the qualified  postsecondary institution                                                                    
     that  the  student  attends  or  plans  to  attend,  as                                                                    
     determined by  the commission based  on room  and board                                                                    
     costs that  do not exceed  the standard room  and board                                                                    
     costs at the University of  Alaska as determined by the                                                                    
     commission;                                                                                                                
     (2)  "expected family  contribution" means the amount a                                                                    
     student  or the  student's  family is  expected to  pay                                                                    
     towards   the  student's   costs   of  attendance,   as                                                                    
     determined  by  use of  the  most  recent federal  Free                                                                    
     Application for Federal Student Aid."                                                                                      
                                                                                                                                
CHAIR SEATON objected for the purpose of discussion.                                                                            
                                                                                                                                
REPRESENTATIVE GARDNER made a motion to table proposed Amendment                                                                
1.  There being no objection, proposed Amendment 1 was tabled.                                                                  
                                                                                                                                
9:51:03 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P. WILSON made a motion to adopt Amendment 2,                                                                    
labeled which read as follows [original punctuation provided]:                                                                  
                                                                                                                                
     Page 5, line 28:                                                                                                           
          Delete "grade-point"                                                                                                  
          Insert "grade"                                                                                                        
                                                                                                                                
     Page 5, line 30, following "scholarship;":                                                                                 
     Insert "the top tier is  the A average tier, the second                                                                    
     tier is the  B average tier, and the third  tier is the                                                                    
     C plus average tier; the  grade-point average for the A                                                                    
     average tier is  3.5 or higher, for the  B average tier                                                                    
     is less  than 3.5 but no  less than 3.0, and  for the C                                                                    
     plus average  tier is  less than 3.0  but no  less than                                                                    
     2.5;  the   board  shall  set  by   regulation  minimum                                                                    
     requirements based on  a substantially similar standard                                                                    
     for districts that do not assign grades;                                                                                   
                                                                                                                                
     Page 6, following line 2:                                                                                                  
          Insert "(4)  a process by which a student who                                                                         
     meets  the grade  standards in  (2) of  this subsection                                                                    
     for a  particular tier, but  does not meet  the minimum                                                                    
     scores  established under  (3) of  this subsection  for                                                                    
     that tier, may apply for a lower tier scholarship;"                                                                        
                                                                                                                                
     Page 6, line 3:                                                                                                            
          Delete "(4)"                                                                                                          
          Insert "(5)"                                                                                                          
                                                                                                                                
     Page 6, line 5:                                                                                                            
          Delete "(5)"                                                                                                          
          Insert "(6)"                                                                                                          
                                                                                                                                
     Page 6, line 7:                                                                                                            
          Delete "(6)"                                                                                                          
          Insert "(7)"                                                                                                          
                                                                                                                                
     Page 6, line 23:                                                                                                           
          Delete "grade-point"                                                                                                  
          Insert "grade"                                                                                                        
                                                                                                                                
     Page 6, line 24, following "school;":                                                                                      
          Insert "the minimum is C plus average; the C plus                                                                     
     average requirement is a grade-point  average of 2.5 or                                                                    
     higher;  the  board  shall set  by  regulation  minimum                                                                    
     requirements based on  a substantially similar standard                                                                    
     for districts that do not assign grades;"                                                                                  
                                                                                                                                
CHAIR SEATON objected for the purpose of discussion.                                                                            
                                                                                                                                
9:51:30 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER made a motion  to table proposed Amendment                                                               
2.  There being no objection, proposed Amendment 2 was tabled.                                                                  
                                                                                                                                
9:52:02 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER  asked to pose  a question.   She referred                                                               
to proposed Amendment  2, which was just tabled,  and pointed out                                                               
that  an   adjusted  grade  point  average   (GPA)  for  advanced                                                               
placement classes are scored differently  and are counted as five                                                               
points.   Thus,  the advanced  placement courses  are a  means to                                                               
affect a student's GPA.                                                                                                         
                                                                                                                                
CHAIR SEATON related that the  department will provide additional                                                               
information.   He  asked whether  the GPA  is based  on the  core                                                               
curriculum classes or for all classes.                                                                                          
                                                                                                                                
[HB 297 was taken up again later in this meeting.]                                                                              
                                                                                                                                
               HB 297-POSTSECONDARY SCHOLARSHIPS                                                                            
                                                                                                                                
10:06:14 AM                                                                                                                   
                                                                                                                                
[The committee returned its attention to HB 297.]                                                                               
                                                                                                                                
REPRESENTATIVE  MUNOZ asked  to  verify that  the committee  will                                                               
work  on an  amendment to  allow the  vocational education  to be                                                               
funded similar to the academic levels.                                                                                          
                                                                                                                                
CHAIR SEATON agreed that such an amendment would be prepared.                                                                   
                                                                                                                                
10:06:52 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  EDGMON  asked  whether  an  invitation  has  been                                                               
extended to  the postsecondary institutions throughout  the state                                                               
to allow them to weigh in on this legislation.                                                                                  
                                                                                                                                
CHAIR  SEATON  answered  yes, noting  that  today  testimony  was                                                               
received from the  university.  He then offered  an invitation to                                                               
university administrations to participate in this discussion.                                                                   
                                                                                                                                
[HB 297 was held over.]                                                                                                         

Document Name Date/Time Subjects
HB 297 Amendment #1.pdf HEDC 2/15/2010 8:00:00 AM
HEDC 3/1/2010 8:00:00 AM
HB 297
HB 297 Amendment #2.pdf HEDC 2/15/2010 8:00:00 AM
HEDC 3/1/2010 8:00:00 AM
HB 297
HB 297 material from EED.pdf HEDC 2/15/2010 8:00:00 AM
HB 297