Legislature(2011 - 2012)CAPITOL 106
03/21/2011 08:00 AM House EDUCATION
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Northwest Arctic School District Superintendent | |
| HB104 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 104 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 104-ALASKA PERFORMANCE SCHOLARSHIPS
8:34:25 AM
CHAIR DICK announced that the final order of business would be
HOUSE BILL NO. 104, "An Act renaming the Alaska performance
scholarship and relating to the scholarship and tax credits
applicable to contributions to the scholarship; establishing the
Alaska performance scholarship investment fund and the Alaska
performance scholarship award fund and relating to the funds;
making conforming amendments; and providing for an effective
date." [In front of the committee was Version I of the bill.]
8:35:23 AM
CHAIR DICK closed public testimony.
8:35:49 AM
CHAIR DICK stated his understanding that the bill had been
fashioned around the recommendations of the scholarship task
force. He directed attention to the five amendments to be
proposed, and noted that each of these suggested removal of a
portion of the proposed committee substitute. He stated that
each proposed amendment would be discussed individually.
8:38:32 AM
REPRESENTATIVE PRUITT moved to adopt Amendment 1, labeled 27-
GH1893\I.4, Mischel, 3/17/11, which read:
Page 6, line 16:
Delete "AS 37.14.750(d)"
Insert "AS 37.14.750(c)"
Page 6, line 18, following "scholarships":
Insert "and grants"
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Reletter the following subsections accordingly.
Page 8, line 28:
Delete "(d)"
Insert "(c)"
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Delete "AS 37.14.750(d)"
Insert "AS 37.14.750(c)"
REPRESENTATIVE P. WILSON objected for discussion.
The committee took a brief at-ease.
REPRESENTATIVE P. WILSON stated her support for proposed
Amendment 1.
8:41:11 AM
REPRESENTATIVE SEATON explained that the revenue sharing model
in the bill had been adopted because there was no consensus for
a large, separate, defined endowment fund. He noted that the
municipal revenue sharing model used "20 percent of
progressivity as a mechanism for funding, so that's the only
reason why it's in here." He reported that some task force
members had desired to tie state oil revenue to the scholarship,
so that scholarship recipients would understand that the
scholarship was tied to the state's non-renewable resources. If
the legislature could appropriate funding each year, then this
would not be necessary.
8:43:07 AM
REPRESENTATIVE CISSNA offered her belief that this was a finance
issue, and expressed her concern for a source of funding.
8:44:11 AM
REPRESENTATIVE PRUITT, referring to Version I, page 8, lines 11-
13, pointed out that there were other means for funding.
8:44:59 AM
CHAIR DICK opined that progressivity as a mechanism for funding
could hinder passage of the bill, and he offered his support for
proposed Amendment 1.
8:45:42 AM
REPRESENTATIVE P. WILSON removed her objection.
8:45:48 AM
REPRESENTATIVE FEIGE objected, and then upon consideration,
removed his objection. There being no further objection,
Amendment 1 was adopted.
8:47:03 AM
REPRESENTATIVE PRUITT moved to adopt Amendment 2, labeled 27-
GH1893\I.2, Mischel, 3/17/11, which read:
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(a)(1)(C) and (D) of this section and that"
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Delete ", AS 14.43.830(a)(1)(C) and (D), added by
sec. 7 of this Act, and the amendment to
AS 14.43.830(a)(2) made by sec. 7 of this Act take "
Insert "takes"
8:47:08 AM
REPRESENTATIVE P. WILSON objected for discussion.
8:47:20 AM
REPRESENTATIVE SEATON, directing attention to Version I, page 5,
lines 8-13, said that the task force had agreed that the
advisory program at participating schools ensured that students
had every opportunity to complete a timely course of study and
that the schools would offer the courses appropriately.
8:51:02 AM
DIANE BARRANS, Executive Director, Postsecondary Education
Commission, Department of Education and Early Development (EED),
stated her agreement with Representative Seaton.
8:51:14 AM
REPRESENTATIVE SEATON advised that the committee not adopt
proposed Amendment 2 as completion of a degree was the goal.
8:51:43 AM
REPRESENTATIVE P. WILSON opined that the university should offer
the necessary courses in a timely manner.
8:52:37 AM
REPRESENTATIVE SEATON asked to clarify that Representative P.
Wilson supported the requirements in the bill, and objected to
proposed Amendment 2.
8:53:06 AM
A roll call vote was taken. Representatives Cissna, P. Wilson,
Seaton, Feige, Pruitt, and Dick voted against Amendment 2.
Therefore, Amendment 2 failed by a vote of 0-6.
8:54:46 AM
REPRESENTATIVE PRUITT moved to adopt Amendment 3, labeled 27-
GH1893\I.1, Mischel, 3/17/11, which read:
Page 1, lines 4 - 5:
Delete "relating to an unmet need scholarship
supplement for Alaska performance scholarship
recipients;"
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Renumber the following bill sections accordingly.
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"* Sec. 21. AS 14.43.830(a)(1)(C) and (D), added by
sec. 6 of this Act, and the amendment to
AS 14.43.830(a)(2) made by sec. 6 of this Act take
effect July 1, 2012."
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REPRESENTATIVE P. WILSON objected for discussion.
The committee took a brief at-ease.
8:55:51 AM
REPRESENTATIVE SEATON explained that proposed Amendment 3
referred to the dedicated needs based component of the
scholarship program. He reported that should a student qualify
for the Alaska Performance Scholarship, but has unmet financial
needs after the $2000 work component, the state would pay 50
percent of the remaining unmet financial needs. He noted that
this was based on the 2010 cap on tuition costs. He emphasized
that Alaska offered the lowest financial support to lower income
students of any state.
8:58:26 AM
MS. BARRANS declared that EED endorsed a simpler method to
ensure that the existing needs based program, in combination
with federal aid, would make "a meaningful difference to those
students and is the best approach going forward."
8:59:43 AM
REPRESENTATIVE PRUITT concurred with Ms. Barrans, and stated
that the intent of the bill was to focus on the performance
aspect. He opined that the amendment did not negate the fact
that financial needs existed, but that combining the performance
base and the financial need tended to muddy the waters. He
pointed to the AlaskAdvantage program as one of the programs
which offered financial aid.
9:00:44 AM
REPRESENTATIVE SEATON explained his concern for support of the
amendment, emphasizing that the AlaskAdvantage program currently
targeted non-traditional students. He observed that targeting
both non-traditional students and students just graduating from
high school using the same criteria would be "extremely
difficult [and] this is why we weren't able to do non-
traditional students when we devised the program in the last
legislature." He stated that combining the programs offered no
assurance to new graduates who had achieved the scholarship
award but required financial assistance to meet their
educational goals, as the financial aid was first offered to the
neediest, who were usually the non-traditional students with
families. He opined that the AlaskAdvantage program would be
stretched in two different directions and it did not seem
plausible that it could cover the needs. He stated his
opposition to proposed Amendment 3.
9:04:17 AM
REPRESENTATIVE P. WILSON offered her belief that Version I would
take financial aid away from the non-traditional students. She
asked if students that qualified for the performance scholarship
would also qualify for financial aid, dependent on the funding.
9:05:03 AM
REPRESENTATIVE SEATON, in response, said that it would be
possible, but that the qualifications and funding to the
AlaskAdvantage program were specified in the bill. He pointed
out that proposed Amendment 3 would place all the needs based
funding "in one pot," with no assurance to the merit scholarship
recipients for any funding. He noted that the AlaskAdvantage
program had been traditionally underfunded.
9:06:13 AM
REPRESENTATIVE PRUITT stated his concern for keeping the
scholarship and financial aid grouped together as it would be
the same pool of money for both.
9:07:33 AM
REPRESENTATIVE FEIGE stated that there were two issues: award
students for performing at a high level in a rigorous
curriculum, and provide educational financial aid to those who
could not afford it. He opined that these were separate issues
that should be kept in separate programs, and he expressed his
support for proposed Amendment 3.
9:08:10 AM
CHAIR DICK reflected on the message of the original bill, to
encourage educational excellence. He opined that having recent
high school graduates compete for financial aid with non-
traditional students was a problem, as those criteria had not
yet been defined. He stated his confidence in the guidance
received from Ms. Barrans.
MS. BARRANS stated that the AlaskAdvantage grant program had an
existing priority consideration for two areas, high academic
achievement and student enrollment in identified workforce
shortage areas. She reported that historic annual funding for
the program had ranged from $600,000 to $1.9 million. At this
high funding point, 26 percent of the recipients were 22 years
of age or younger, which, she stated, better reflected the
student body. She offered her belief that the two programs
could work successfully together, but that separation of the
merits and needs based programs provided greater clarity.
9:11:55 AM
REPRESENTATIVE SEATON, pointing to the fiscal note for Version
I, indicated that the $10 million budgeted for the
AlaskAdvantage program would not cover the need or the proposed
goals. He asked which students would have reduced benefit.
9:14:16 AM
MS. BARRANS reported that Version I allowed a 25 percent greater
award under the supplemental needs program than the existing
grant program, an increase to $4,000 per year.
9:15:06 AM
REPRESENTATIVE P. WILSON asked for an explanation to the
proposed fiscal note.
MS. BARRANS, in response to Representative P. Wilson, explained
that AEG signified AlaskAdvantage Education Grant. She
explained that the fiscal analysis was for the component cost of
the new supplemental aid program and for the estimated cost of
full funding for AEG.
9:16:17 AM
REPRESENTATIVE P. WILSON asked for a definition of full funding.
MS. BARRANS, in response to Representative P. Wilson, explained
that full funding was an estimate of money available to award
every student the maximum allowed. She pointed out that she had
not been informed to the intent for percentage of funding,
whether it would be 50 percent or 100 percent. She reported
that she used the rate calculations from the prior year's fiscal
note, which presumed that 29 percent of high school graduates
would be eligible for and use the performance scholarship. To
arrive at an average supplemental award, she based the
calculation on the number of 2010 high school graduates who went
on to post secondary education at the University of Alaska and
their average unmet need, and she used the formula in the
proposed committee substitute, Version I. This formula utilized
the cost of education, less the family contribution and the
$2000 work/self help contribution, with the State of Alaska
contributing 50 percent of the remaining cost. She pointed out
that a segment of Version I would not be implemented until
FY2013 in order to allow the development of regulations and
calculations for the needs based supplement. She noted that the
current estimate of $6.9 million for full funding was used in
the fiscal note.
9:19:51 AM
REPRESENTATIVE P. WILSON asked if it would take EED two years to
develop the regulations.
MS. BARRANS, in response, said the regulations would be in place
in July, 2012, but that "the bigger picture issue for us is
putting the programming in place." She reflected that, upon
passage of the bill in the prior year, EED aggressively begun
work on very sophisticated, complex scholarship management
software, in lieu of hiring more staff, and that it was very
close to implementation. She opined that any changes to the
software would take time to implement.
9:21:43 AM
REPRESENTATIVE P. WILSON asked if students could qualify this
year.
MS. BARRANS replied that this delay only applied to the
supplemental needs aspect, as required in Version I. She stated
that the merit scholarship would be available.
9:22:07 AM
The committee took an at-ease from 9:22 a.m. to 9:24 a.m.
9:24:41 AM
REPRESENTATIVE P. WILSON removed her objection.
REPRESENTATIVE SEATON objected.
9:25:35 AM
A roll call vote was taken. Representatives Pruitt, P. Wilson,
Feige, and Dick voted in favor of Amendment 3. Representatives
Cissna and Seaton voted against it. Therefore, Amendment 3 was
adopted by a vote of 4-2.
9:26:36 AM
REPRESENTATIVE PRUITT moved to adopt Amendment 4, labeled 27-
GH1893\I.3, which read:
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9:28:24 AM
REPRESENTATIVE P. WILSON objected for discussion.
9:28:27 AM
REPRESENTATIVE SEATON relayed that the task force had reviewed
funding sources, as general funds were determined not to be an
effective source. He identified the Amerada Hess fund as a long
term potential source for at least half the necessary funding,
which would reduce the amount required to be appropriated from
the general fund. He reported that the $52 million in the
Amerada Hess fund would also allow for initial funding.
9:31:05 AM
MS. BARRANS observed that this was one of the four final
recommendations from the task force. She expressed concern for
the predictability of funding from the Amerada Hess account.
She shared that the task force had searched for a sustainable
and predictable funding source, as requested by the governor.
9:32:29 AM
JERRY BURNETT, Deputy Commissioner, Treasury Division,
Department of Revenue, explained that the Amerada Hess fund
payout was based on realized earnings of the permanent fund,
which had a "tremendous variability." He established that the
funding source should have a steady stream to allow for a
percent of market value (POMV) payout every year. He reported
that the Amerada Hess fund was subject to market whims and
investment decisions.
9:34:35 AM
REPRESENTATIVE SEATON reported that the task force had attempted
to identify a diversity of funding for the scholarship program.
He pointed to the progressivity funding and the Amerada Hess
funding as two examples. He explained that a designated fund of
$600 million would provide a stable source, but that the
legislature had not been willing to appropriate for this
purpose. He agreed that the Amerada Hess fund was not necessary
as a revenue source, as long as the legislature was willing to
address other funding sources. Given the reluctance, he agreed
that it could be removed from the proposed bill.
9:38:07 AM
REPRESENTATIVE P. WILSON, recalling her work on the task force,
stated that a specific fund had not been identified. She
expressed her concern, should a specific fund be designated but
not provide adequate funding, that legislators may overlook
additional funding, and she announced her support of proposed
Amendment 4.
9:39:28 AM
MR. BURNETT, in response to Chair Dick, declared that a funding
source would need to be identified. He declared that the
Amerada Hess fund would not necessarily be stable, but he
declined to offer an alternative.
9:40:23 AM
CHAIR DICK expressed the difficulty for determining a steady
funding source.
9:40:39 AM
REPRESENTATIVE CISSNA established that funding must be
identified in order for this to pass the legislature. She
opined that the fluctuations in oil and gas prices always had an
effect on finances. She suggested that funding for the
scholarships could always be found through budgeting, and that
the Amerada Hess fund could provide a financial base.
9:42:16 AM
REPRESENTATIVE P. WILSON removed her objection. There being no
further objection, Amendment 4 was adopted.
9:42:52 AM
REPRESENTATIVE PRUITT moved to adopt Amendment 5, labeled 27-
GH1893\I.5, Mischel, 3/17/11, which read:
Page 6, lines 16 - 18:
Delete "The amount determined under
AS 37.14.750(d) each year and deposited into the
account is the maximum amount that may be used to pay
scholarships for the immediately succeeding fiscal
year."
Page 8, line 19, through page 9, line 2:
Delete all material.
Page 10, lines 20 - 24:
Delete "(a) Notwithstanding the $40,000,000 limit
in AS 37.14.750(d), the following amounts may be
substituted for that amount as follows for
(1) fiscal year 2012, $20,000,000;
(2) fiscal year 2013, $30,000,000."
Reletter the following subsection accordingly.
9:43:08 AM
The committee took a brief at-ease.
9:44:27 AM
REPRESENTATIVE SEATON objected for discussion.
9:44:40 AM
REPRESENTATIVE SEATON pointed to Version I, page 8, line 19, and
explained that this defined the revenue sharing model for $40
million or $160 million. He stated that this provided the
security that students who had qualified for the program would
receive funding for the length of their contract, even in the
event that the program was no longer funded by the legislature.
He stated his opposition for proposed Amendment 5, which would
remove this guarantee from Version I.
9:46:57 AM
MS. BARRANS informed the committee that EED was opposed to
proposed Amendment 5.
9:47:56 AM
The committee took a brief at-ease.
REPRESENTATIVE SEATON declared that Version I established a
revolving fund for payment to students, and even if the
legislature decided to not appropriate funds, the scholarships
which had been committed to would still be funded. He pointed
out that proposed Amendment 5 would remove the funding, and that
ongoing scholarships would be dependent on annual legislative
appropriation.
9:50:54 AM
REPRESENTATIVE PRUITT asked if passage of proposed HB 104 would
increase pressure on the legislature to provide funding. He
stated his understanding that annual fund appropriations could
be to any level. He surmised that, as it was not a dedicated
fund, the legislature could draw from it if necessary. He
suggested that additional projected revenues for the upcoming
year could be deposited in a dedicated fund, pending a
constitutional change allowing dedicated funds.
9:53:38 AM
REPRESENTATIVE CISSNA emphasized her belief that education was
one of the most important expenditures that the state could
allocate. She declared that proposed HB 104 was essential "to
change the future to one that's sustainable." She said that she
would not support proposed Amendment 5.
9:55:00 AM
REPRESENTATIVE SEATON pointed to other funds, including power
cost equalization (PCE) and municipal revenue sharing which were
established with a revolving aspect, and had been committed to
as a legislative priority. He stated his opposition to proposed
Amendment 5.
9:56:29 AM
CHAIR DICK pointed to a letter of support from the State Board
of Education and Early Development. [Included in members'
packets]
9:56:42 AM
REPRESENTATIVE P. WILSON, indicating her opposition to proposed
Amendment 5, suggested that the next committee of referral,
House Finance Committee, should discuss the funding.
9:56:59 AM
REPRESENTATIVE SEATON stated that passage of proposed Amendment
5 would negate proposed HB 104, as the entire focus of the task
force had been to identify a funding mechanism.
9:57:20 AM
REPRESENTATIVE SEATON maintained his objection.
9:57:46 AM
A roll call vote was taken. Representatives Seaton, P. Wilson,
Cissna, Pruitt, Feige, and Dick voted against it. Therefore,
Amendment 5 failed by a vote of 0-6.
9:58:36 AM
REPRESENTATIVE PRUITT moved to report CSHB 104, Version 27-
GH1893\I, Mischel, 2/8/11, as amended, out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, CSHB104(EDC) was reported from the
House Education Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| New Needs Based Grant Program.pdf |
HEDC 3/21/2011 8:00:00 AM |
HB 104 |
| Funds under Revenue Sharing Model.pdf |
HEDC 3/21/2011 8:00:00 AM |
HB 104 |
| Advisory Program & On-time Course Offerings.pdf |
HEDC 3/21/2011 8:00:00 AM |
HB 104 |
| Use of Progressivity Funds.pdf |
HEDC 3/21/2011 8:00:00 AM |
HB 104 |
| Amerada Hess Funding Source.pdf |
HEDC 3/21/2011 8:00:00 AM |
HB 104 |
| CS HB104 ( ), Version I.pdf |
HEDC 3/21/2011 8:00:00 AM |
HB 104 |