00                      CS FOR HOUSE BILL NO. 54(EDU)                                                                     
01 "An Act relating to the rate of interest applicable to student loans; and providing for an                              
02 effective date."                                                                                                        
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1.  AS 14.43.120(f) is amended to read:                                                                  
05            (f)  Except as provided under (v) and (w) of this section, interest                                      
06       [INTEREST] on a loan made under AS 14.43.090 - 14.43.160 is equal to the interest                                 
07       rate                                                                                                              
08                 (1)  paid in each year on bonds issued by the Alaska Student Loan                                       
09       Corporation under AS 14.42.220; and                                                                               
10                 (2)  necessary to pay the administrative cost of the student loan                                       
11       program that is represented by the loan.                                                                          
12    * Sec. 2.  AS 14.43.120(t) is amended to read:                                                                     
13            (t)  Payment of interest under (l) of this section, [AND] forgiveness under (s)                          
14       of this section, and a reduction of interest under (w) of this section are subject to                         

01       appropriation by the legislature.  Money obtained from the sale of bonds by the                                   
02       Student Loan Corporation under AS 14.42.220 may not be appropriated for the                                       
03       payment of interest or the forgiveness of loans.                                                                  
04    * Sec. 3.  AS 14.43.120 is amended by adding a new subsection to read:                                             
05            (w)  If a borrower has graduated from a career education program or received                                 
06       an undergraduate degree from a college or university, is employed within the state,                               
07       and has complied with this section, the rate of interest calculated under (f) of this                             
08       section for a loan to that borrower shall be reduced by at least 50 basis points (one-half                        
09       of one percent) but not more than 100 basis points (one percent).  The interest rate                              
10       reduction required under this subsection applicable to a loan shall be determined by                              
11       the commission.  The commission may not grant an interest rate reduction under this                               
12       subsection if the reduced rate of interest would preclude the commission from                                     
13       administering loans under AS 14.43.090 - 14.43.160.                                                               
14    * Sec. 4.  The uncodified law of the State of Alaska is amended by adding a new section to                         
15 read:                                                                                                                   
16       APPLICABILITY.  This Act applies to loans entered into on or after July 1, 2001, and                              
17 to a person's employment that occurs on or after July 1, 2001.                                                          
18    * Sec. 5.  This Act takes effect July 1, 2001.