04/04/1995 02:05 PM House HES

 SB 39 - MEMORIAL SCHOLARSHIP LOANS                                          
                                                                               
 CO-CHAIR BUNDE chaired this portion of the meeting.                           
                                                                               
 Number 856                                                                    
                                                                               
 JOE AMBROSE, Legislative Assistant to Senator Robin Taylor,                   
 presented the sponsor statement on Senator Taylor's behalf.  He               
 said this bill was introduced at the suggestion of the Admissions             
 Clerk at the University of Alaska Southeast, Sitka Campus.  The               
 bill would modify the eligibility requirements for the Alaska State           
 Troopers Michael Murphy scholarship program to include certificate            
 programs.  The wording of AS 14.43.300 currently limits the                   
 awarding of Murphy scholarship loans to students who pursue a                 
 degree program in law enforcement, law, probation, and parole, and            
 closely related fields.                                                       
                                                                               
 MR. AMBROSE said the language prevents students in a certificate              
 program such as the law enforcement certificate program offered at            
 the Sitka campus from eligibility.  The scholarship revolving loan            
 fund established by the legislature includes a provision allowing             
 forgiveness of one-fifth of the loan indebtedness for each year of            
 full employment in Alaska in law enforcement.  Department of Labor            
 statistics show that 63 percent of Sitka program graduates are                
 currently employed in the state as law enforcement personnel.                 
                                                                               
 Number 920                                                                    
                                                                               
 MR. AMBROSE noted the bill carries a zero fiscal note, and received           
 unanimous "do-pass" recommendations from both the Senate HESS and             
 Finance Committees last year before receiving a unanimous vote in             
 the full Senate.  SB 39 will potentially benefit Alaskan students             
 attending an Alaskan school with an eye toward employment in                  
 Alaska.  Mr. Ambrose said a representative from Senator Zharoff's             
 office was present to explain Sections 3 through 5 of the CS from             
 the Finance Committee.  These amendments were offered by Senator              
 Zharoff.                                                                      
                                                                               
 CO-CHAIR TOOHEY said the only program with forgiveness is the                 
 trooper memorial.  She asked if that was correct.                             
                                                                               
 MR. AMBROSE said there is a forgiveness provision that applies to             
 most of the scholarship loans that are covered by AS 14.43.300.               
 This specific bill only changes the requirement from a graduate or            
 degree program to a certificate program under the Michael Murphy              
 scholarship.  The provision that was amended by Senator Zharoff               
 makes a change in the Winn Brindle memorial scholarship.                      
                                                                               
 CO-CHAIR BUNDE added that as a member of the Postsecondary                    
 Education Commission, he was involved in hearing an appeal where a            
 very deserving applicant was not covered because he/she was in a              
 certificate program, and not a degree program.  Co-Chair Bunde                
 doubted it was the original intent of the program to exclude those            
 applicants.  He certainly supports the goal of this legislation.              
                                                                               
 Number 1040                                                                   
                                                                               
 THOMAS PANAMAROFF, Legislative Assistant to Senator Zharoff,                  
 explained that Sections 3, 4 and 5 of CSSB 39(FIN) apply to the               
 Winn Brindle Memorial Scholarship Loan.  Senator Zharoff had a                
 bill, SB 36, that dealt with the Winn Brindle Memorial Scholarship            
 Loan.  It was up before Senate Finance at the same time as Senator            
 Taylor's bill.  The committee decided to meld the two bills                   
 together.                                                                     
                                                                               
 MR. PANAMAROFF said several years ago the legislature established             
 the Winn Brindle Memorial Scholarship Loan.  The program's intent             
 is to make loans to Alaskan students who are seeking degrees in               
 fields that relate to the fishing industry, food technology, fish             
 biology, and related fields.  The program is funded by                        
 contributions from the fish processing industry.  Since 1987,                 
 processors have contributed over $1.8 million to the program.                 
                                                                               
 MR. PANAMAROFF reported that currently, there is a balance of about           
 $1.4 million in the Winn Brindle fund.  He believes the reason for            
 the large balance in the fund is because there has not been many              
 students accessing the program.  The reason they have not been                
 accessing the program is because the payback provisions on the                
 program are exactly the same as the regular student loan program.             
 Therefore, there is no incentive for a student to access the Winn             
 Brindle funds because they would have to be pursuing a fisheries-             
 related field.  This fund restricts their ability to change majors            
 if they ever wanted to.                                                       
                                                                               
 MR. PANAMAROFF said in order to try to get more access to the                 
 program, Senator Zharoff introduced SB 36.  The bill provides for             
 a loan forgiveness provision similar to the old student loan                  
 program, where over a course of five years, a student can get                 
 forgiveness of up to 50 percent.  It also fixes the rate of                   
 interest on the loan at 5 percent.                                            
                                                                               
 MR. PANAMAROFF said basically the bill does not have any general              
 fund impact.  The program is funded by processors.                            
                                                                               
 CO-CHAIR BUNDE thinks the interest in this fund will grow,                    
 considering the new student loan interest without a payback                   
 provision will be about 9 percent.  Therefore, Senator Zharoff may            
 soon encounter more interest in fisheries.  He closed public                  
 testimony, and asked for the wish of the committee.                           
                                                                               
 Number 1170                                                                   
                                                                               
 CO-CHAIR TOOHEY motioned to move CSSB 39(FIN) from the HESS                   
 Committee with its two zero fiscal notes and individual                       
 recommendations.  There were no objections, and the bill passed.              
 Co-Chair Toohey chaired the next bill.