2004-01-23                     Senate Journal                      Page 1991
SB 277                                                                                            
SENATE BILL NO. 277 BY THE SENATE RULES COMMITTEE                                                   
BY REQUEST OF THE GOVERNOR, entitled:                                                               
                                                                                                    
           "An Act relating to the Alaska Commission on                                             
           Postsecondary Education; relating to the Alaska                                          
           Student Loan Corporation; relating to bonds of the                                       
           corporation; relating to loan and grant programs of                                      
           the commission; relating to an exemption from the                                        
           State Procurement Code regarding certain contracts                                       
           of the commission or corporation; making                                                 
           conforming changes; and providing for an effective                                       
           date."                                                                                   
                                                                                                    
was read the first time and referred to the Health, Education and Social                            
Services and Finance Committees.                                                                    
                                                                                                    
The following fiscal information was published today:                                               
 Fiscal Note No. 1, zero, Department of Administration                                              
     Fiscal Note No. 2, zero, Department of Community and Economic                                  
           Development                                                                              
     Fiscal Note No. 3, Department of Education and Early                                           
           Development                                                                              
                                                                                                    
Governor's transmittal letter dated January 22:                                                     
                                                                                                    
Dear President Therriault:                                                                          
                                                                                                    
Under the authority of article III, section 18, of the Alaska                                       
Constitution, I am transmitting a bill relating to the Alaska                                       
Commission on Post-secondary Education (ACPE) and the Alaska                                        
Student Loan Corporation (ASLC). This bill is a result of ASLC board                                
members and management, in consultation with financial advisors,                                    
proposing a mechanism where (1) the state could optimize the use of                                 
its financial assets and deliver a greater return to Alaskans for its                               
initial investment in ASLC and ACPE; and (2) continue to effectively                                
administer ACPE/ASLC financial aid programs.                                                        
                                                                                                    
                                                                                                    
                                                                                                    

2004-01-23                     Senate Journal                      Page 1992
The bill would allow ASLC to issue bonds utilizing future cash flow                                 
that is in excess of that needed for effective and efficient operation of                           
corporation programs. ASLC predicts it can return $260 million to the                               
state over a three-year period beginning in 2004; the proceeds from                                 
which would be available to finance capital projects.                                               
                                                                                                    
The ASLC's primary mission is to support, promote, and provide                                      
access to postsecondary education for Alaskans. The objective of this                               
legislation is to continue to serve that mission, but to do so in a way                             
that permits ASLC to serve broader state interests through the efficient                            
allocation of financial resources. As part of the development process,                              
cash flow models were developed to ensure the corporation has and                                   
will continue to have the financial capacity to discount loan interest                              
rates and deliver outstanding borrower benefits to its primary                                      
customers -- Alaska students and their families.                                                    
                                                                                                    
The bill establishes a "needs-based" grant program to be funded from                                
corporate receipts and federal matching dollars. Grants must be used                                
for qualified Alaska education programs focused on meeting Alaska's                                 
labor shortage needs. A priority is placed on students enrolled in                                  
programs of study (such as health care and education) where there is a                              
severe shortage of trained individuals in Alaska.                                                   
                                                                                                    
The bill also creates an "administrative collection order" and a process                            
for establishment and use of such an order by ACPE. An                                              
administrative collection order would allow ACPE to establish a lien                                
on borrower's property when that person has broken their promise to                                 
re-pay an education loan.                                                                           
                                                                                                    
Finally, the bill exempts ACPE and ASLC contracts for disbursing and                                
guaranteeing financial aid money from Alaska's procurement code.                                    
This creates efficiencies in the internal operations of ACPE and ASLC                               
and meets the needs of participating post-secondary institutions                                    
(ACPE contracts with a guaranty agency and disbursing agents to                                     
electronically guarantee and/or disburse financial aid money for                                    
students to colleges and universities).                                                             
                                                                                                    
                                                                                                    
                                                                                                    
                                                                                                    

2004-01-23                     Senate Journal                      Page 1993
I urge your prompt and favorable action on this measure.                                            
                                                                                                    
Sincerely yours,                                                                                    
/s/                                                                                                 
Frank H. Murkowski                                                                                  
Governor