Legislature(2009 - 2010)SENATE FINANCE 532

04/11/2010 11:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSSB 139(FIN) Out of Committee
Heard & Held
Moved CSSB 234(FIN) Out of Committee
Moved HB 292 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 174                                                                                                           
     "An Act relating to professional student exchange                                                                          
     program   availability   and    conditions   for   loan                                                                    
11:16:45 AM                                                                                                                   
Co-Chair  Hoffman  MOVED  TO   ADOPT  WORK  DRAFT  LS0764\U,                                                                    
Mischel,  4/10/10  AS  THE  COMMITTEE  SUBSTITUTE.  Co-Chair                                                                    
Stedman OBJECTED.                                                                                                               
DARWIN PETERSON, STAFF, SENATOR  BERT STEDMAN, explained the                                                                    
legislation.  He  explained  that   the  CS  contains  three                                                                    
different post secondary education  proposals; a merit based                                                                    
scholarship program, a needs  based scholarship program, and                                                                    
an expansion of eligible  students in the Western Interstate                                                                    
Commission for  Higher Education (WICHE) program.  Section 1                                                                    
creates the Alaska Scholars program  in statute. The program                                                                    
currently  exists   as  a  University  of   Alaska  scholars                                                                    
program,  but   the  state  has  yet   to  participate.  The                                                                    
university  currently contributes  $3.8  million from  their                                                                    
land  grant  trust fund  to  provide  scholarships to  those                                                                    
students who  graduate in the  top 10 percent of  their high                                                                    
school  class.  The  CS  acknowledges  the  success  of  the                                                                    
program by  bolstering with state participation.  The Alaska                                                                    
Scholars  program will  continue to  be administered  by the                                                                    
Board of  Regents. Alaskan high  school students  ranking in                                                                    
the top 15 percent of their  class are eligible for a tiered                                                                    
scholarship.  Students  in the  top  five  percent of  their                                                                    
class will receive a 100  percent tuition scholarship at the                                                                    
University  of Alaska.  The next  tier  comprises those  who                                                                    
rank in  the top six to  ten percent of their  class and are                                                                    
eligible  for a  75 percent  tuition scholarship.  The third                                                                    
tier is comprised of those students  who rank in the top 11-                                                                    
15  percent of  their class  and  are eligible  for a  fifty                                                                    
percent  scholarship. Students  who  rank below  the top  15                                                                    
percent  are  not  eligible for  a  scholarship  under  this                                                                    
Mr.   Peterson   explained   that  the   funding   for   the                                                                    
scholarships  will  include  the continued  contribution  of                                                                    
$3.8  million dollars  annually from  the university's  land                                                                    
grant  trust  fund and  the  remainder  will come  from  the                                                                    
general fund.  The anticipated cost  of the  scholarships in                                                                    
the first  year is $11.5  million dollars with  $3.8 million                                                                    
from the  university and  $7.7 million  from the  state. The                                                                    
amount  increases  each  year as  new  classes  of  students                                                                    
enroll  until  all  four classes  are  filled  leveling  the                                                                    
annual cost  to approximately $9.2 million  in general funds                                                                    
and $3.8 million  in university funds. The  board of regents                                                                    
may adjust the  amount of scholarships awarded  in the event                                                                    
the  state does  not  appropriate its  share  of the  funds.                                                                    
Sections  8 and  9 of  the CS  are housecleaning  amendments                                                                    
conforming  to the  new Alaska  Scholars program.  Section 8                                                                    
amends  AS  1443930  which  identify  the  information  made                                                                    
available to the  board of regents. Section 9  makes a cross                                                                    
reference to the new definition  of a qualified high school.                                                                    
Section 12  repeals the sections  of statute that  refers to                                                                    
scholarships    for   high    school   graduates    offering                                                                    
scholarships   for  dormitory   rent.  Section   13  is   an                                                                    
applicability  section which  states that  only high  school                                                                    
students  graduating  in the  class  of  2010 or  later  are                                                                    
eligible  for  the  new   scholarship  program.  Section  14                                                                    
instructs the  replacement of the name  University of Alaska                                                                    
scholarships  for  high  school graduates  with  the  Alaska                                                                    
Scholars program.                                                                                                               
Mr.  Peterson  commented  that  Sections  2-7  of  the  bill                                                                    
includes the needs-based  scholarship component which amends                                                                    
the existing Alaska Advantage  education grant program which                                                                    
closely  resembles  Senator  Ellis'   SB  33  heard  by  the                                                                    
committee on March  31, 2010. In order to be  eligible for a                                                                    
scholarship, the  applicant must demonstrate  financial need                                                                    
in accordance  with standards  established in  federal code.                                                                    
Scholarships are awarded  in the amount not  less than $1000                                                                    
and not more  than $5000 per year and not  more than a total                                                                    
of  $20,000 per  student. The  program will  continue to  be                                                                    
administered  by the  Alaska  Commission  on Post  Secondary                                                                    
Education. The  commission is  instructed to  distribute $10                                                                    
million   annually  in   scholarships  to   needy  students.                                                                    
Sections 10 and 11 include  the original language in SB 174,                                                                    
expanding  the  eligibility  of   Alaskan  students  in  the                                                                    
western  interstate  commission   for  higher  education  to                                                                    
include not fewer  than five students in each  of the fields                                                                    
of dentistry, optometry, and pharmacy.                                                                                          
11:22:41 AM                                                                                                                   
Co-Chair  Stedman  Removed  his OBJECTION.  There  being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
SENATOR  LINDA  MENARD  expressed  support  of  the  CS  and                                                                    
appreciation for the hearing.                                                                                                   
11:23:48 AM                                                                                                                   
DIANE BARRANS,  EXECUTIVE DIRECTOR,  POSTSECONDARY EDUCATION                                                                    
COMMISSION,  DEPARTMENT   OF  EDUCATION,  stated   that  the                                                                    
proposed  changes were  straightforward, but  in respect  to                                                                    
the Professional  Student Exchange  Program (PSEP)  loan she                                                                    
was  not  sure if  the  drafting  accomplished the  expected                                                                    
outcome.  She understood  that rather  than eliminating  the                                                                    
loan repayment  benefits, the bill instead  superimposes the                                                                    
service  obligation and  work discharge  of WAMI  onto these                                                                    
PSEP loans.                                                                                                                     
Co-Chair  Stedman requested  a  page  reference. Ms  Barrans                                                                    
responded  Page  6, Lines  22-24.  She  added that  the  new                                                                    
version   establishes  a   minimum  number   of  seats   for                                                                    
dentistry, optometry and pharmacy; it  does not speak to the                                                                    
other fields  of study currently supported  through the PSEP                                                                    
loan program.  She did not  understand if the intent  was to                                                                    
set the minimum number.                                                                                                         
11:27:04 AM                                                                                                                   
WENDY   REDMAN,   VICE    PRESIDENT,   STATEWIDE   PROGRAMS,                                                                    
UNIVERSITY  OF  ALASKA,  noted  continued  interest  in  the                                                                    
incorporation of the strict merit  based program included in                                                                    
the  Governor's  Performance  Scholarship  (GPS)  bill.  She                                                                    
believed  that  the merit  based  program  would change  the                                                                    
goals of the current high  school curriculum and get schools                                                                    
and  communities  much more  involved  in  the process.  She                                                                    
appreciated  the accommodation  of university  concerns. The                                                                    
bill provides access  to information previously inaccessible                                                                    
such as names and addresses of students.                                                                                        
11:29:06 AM                                                                                                                   
Senator Thomas asked if  homeschooled children are currently                                                                    
eligible  for   the  Alaska   Scholars  grant.   Ms.  Redman                                                                    
responded  no,  only  licensed  schools  in  the  state  are                                                                    
Senator  Thomas   asked  how  much  money   the  land  trust                                                                    
generates on an annual basis.  Ms. Redman responded that the                                                                    
university is contributing $3.8  million to the program. She                                                                    
explained that  the trust may  generate $4 million  and does                                                                    
not generate much income.                                                                                                       
Senator  Olson asked  about  the  effect of  the  CS on  the                                                                    
forgiveness  of  retention   and  recruitment.  Ms.  Barrans                                                                    
responded  that  the CS  would  prove  helpful in  terms  of                                                                    
having  a  higher rate  of  return  of participants  to  the                                                                    
program  to  the  state.  The   return  rate  for  WICHE  is                                                                    
11:31:56 AM                                                                                                                   
Senator  Thomas  asked  about Page  2  and  the  scholarship                                                                    
award.  He  requested  an  explanation of  Page  3  and  the                                                                    
transmission of  the bulk  amount awarded.  Co-Chair Stedman                                                                    
stated that  the questions  would be answered  in a  24 hour                                                                    
Co-Chair  Stedman   noted  one   fiscal  impact   note  from                                                                    
Department  of Education  and Early  Development (DEED)  for                                                                    
$230,500  in  general  funds with  the  cost  increasing  in                                                                    
subsequent years.                                                                                                               
SB  174  was  HEARD  and   HELD  in  Committee  for  further                                                                    

Document Name Date/Time Subjects
SB 174 2010 0411 Proposed CS SFIN Version U.pdf SFIN 4/11/2010 11:00:00 AM
SB 174
SB 139 2010 0411 Proposed CS FIN Version U.pdf SFIN 4/11/2010 11:00:00 AM
SB 139