Legislature(1993 - 1994)
04/06/1994 03:00 PM House HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 160 - MEMORIAL SCHOLARSHIP LOANS TERRY OTNESS, Legislative Aide to Sen. Robin Taylor, Prime Sponsor of SB 160, stated that legislation would modify eligibility requirements for the Alaska State Trooper's Michael Murphy Scholarship to include certificate programs. He said the scholarship revolving loan fund established by the legislature includes a provision allowing the forgiveness of one-fifth of the loan indebtedness for each one year period of full time employment in law enforcement in Alaska. Department of Labor statistics show that 63% of Sitka program graduates are currently employed in the state as law enforcement personnel. MR. OTNESS further stated that SB 160 has a zero fiscal note and received unanimous support in the Senate. He asserted that the bill would encourage Alaska students to seek employment in Alaska. He urged support of the legislation. Number 100 REP. BUNDE referred to the forgiveness program and the zero fiscal note and asked if there could be forgiveness and a zero fiscal note. Number 105 MR. OTNESS said it did not sound logical to him and he did not understand the discrepancy. Number 117 REP. G. DAVIS indicated that zero fiscal notes are put forth when there is no impact other than what has been funded in the past. He said the legislation is not asking for additional funding. REP. BUNDE said that was not his understanding. Number 149 CHAIR TOOHEY asked if the memorial scholarship program is new. REP. G. DAVIS said it is not a new program and it has been funded in the past. REP. OLBERG referred to the position paper from the Department of Public Safety and indicated that the Michael Murphy Scholarship is supported entirely by state employees donating a day or more of annual leave per year to the fund. MR. OTNESS added that private donations are also given. Number 181 REP. BUNDE said his comments do not indicate that he is opposed to the scholarship. CHAIR TOOHEY asked for further testimony. Number 185 DIANE BARRANS, Director, Student Financial Aid Programs, Alaska Commission on Postsecondary Education, testified in support of SB 160. She stated that the scholarship program is primarily funded by donations from state troopers, which explains the zero fiscal note. She indicated that there is a set amount of money that is made available to students each year. She said the bill would expand the eligibility pool to include the certificated students at the police academy in Sitka. Number 226 REP. G. DAVIS asked Ms. Barrans if there has been any problems expending the money and indicated that the academy is not a degree program. MS. BARRANS said it is not a degree program. She indicated that there are currently 30 borrowers in the history of the program. She explained that there are up to four new scholarship loans per year. REP. BUNDE asked if the scholarship would be limited to the Sitka program only. MS. BARRANS said the legislation would include Sitka. REP. BUNDE explained that he is a member of the Postsecondary Education Commission and indicated that an appeal was put forth on a student loan by a police officer in Juneau. Rep. Bunde said the officer was in a certificate program in another state and was unable to get the student loan. He felt the legislation would address that situation. Number 278 (Chair Toohey indicated that Reps. B. Davis, Kott, and Brice arrived at 3:10 p.m.) REP. VEZEY asked if the loan fund is capitalized by the Department of Public Safety. Number 280 MS. BARRANS replied that it can be funded by any state employee. She indicated that the Department of Public Safety tends to donate most often. REP. VEZEY asked if the scholarship program is funded by the Department of Administration (DOA). MS. BARRANS explained that the DOA is the mechanism through which the leave time becomes dollars. She said by donating leave, money goes into the scholarship loan fund. Number 313 REP. VEZEY said if the program is really funded through the DOA, leave time cannot be converted into dollars, citing that either employees use leave time or lose it. MS. BARRANS said to her knowledge leave time can be cashed in depending on how much leave time has been accrued. She explained that if a person has six weeks of leave, they are allowed to cash in a certain amount of days of leave time per year and receive it in a check. REP. VEZEY said he thought leave time could only be cashed in when an employee leaves their job. MS. BARRANS said his interpretation was correct also. REP. VEZEY asked if donating a day of leave time actually means the employee worked a day and did not get paid. MS. BARRANS said that was possible. REP. VEZEY asked what other possibilities there were to donate a day of leave time. He asserted that the employees work but donate their leave. MS. BARRANS said, "Or they would not have that leave available to cash out when they either separate from the state or choose to cash in leave." REP. VEZEY asked how an employee would be entitled to a tax deduction. MS. BARRANS said she was unsure. REP. BRICE indicated that staff can and legislators cannot donate leave time. Number 386 CHAIR TOOHEY said she also would like that answer and indicated that she wanted to hold the bill. REP. BRICE maintained that the bill is one of the most uncomplicated bills that has come through the committee. He said all the bill does is include certificated programs. He indicated that the program is a very well established funding mechanism that the state has been using for years. He said, "It would be like me taking a day's salary and writing the check for it and passing it out." He encouraged the committee to pass the bill out. Number 432 REP. VEZEY disagreed and said the employee never received the money. He said that they are getting a tax deductible contribution for donation of their time which clearly, under IRS regulations, is not tax deductible. He further explained that he would like an answer before passing the bill out of committee. REP. B. DAVIS asked where in the bill it states that the leave time donation is tax deductible. REP. OLBERG indicated that the a document in the bill packet titled "Michael Murphy Memorial Scholarship Loan Fund" addresses the concern. REP. BRICE said, "It might be to write off the forgiveness. I don't know." Number 490 REP. VEZEY said he believed the DOA is not mandated to pay employees for unused leave. He felt there was flexibility for the DOA. He asked for clarification. CHAIR TOOHEY asked Rep. Vezey if he would like to work with the committee aide in a subcommittee to address the problem. REP. OLBERG commended Chair Toohey's recommendation of a subcommittee comprised of one staff member and one committee member, citing the excellent use of time and energy. CHAIR TOOHEY asked for further testimony. There was none. REP. BRICE made a motion to pass SB 160 out of committee with individual recommendations. CHAIR TOOHEY indicated that it was her intent to hear further testimony and table the bill until the aforementioned concerns have been addressed. Number 547 REP. B. DAVIS asked the origin of the document titled "Michael Murphy Memorial Scholarship Loan Fund." MR. OTNESS said he was unsure and would check into it. REP. B. DAVIS indicated that the document says that the statement "may" be used for income tax purposes. She asserted that there is a difference between shall and may. She further indicated that there are some donations that are tax deductible and some that are not. She felt that Rep. Vezey's concerns were irrelevant to the bill. CHAIR TOOHEY said Rep. Vezey's concerns would be addressed at a later date. She then brought SB 266 to the table.
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