Legislature(2007 - 2008)CAPITOL 106
01/24/2008 03:00 PM House HEALTH, EDUCATION & SOCIAL SERVICES
| Audio | Topic |
|---|---|
| Start | |
| HB234 | |
| HB337 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 234 | TELECONFERENCED | |
| *+ | HB 337 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 234-EDUCATION LOAN REPAYMENT PROGRAM 3:06:27 PM CHAIR WILSON announced that the first order of business would be HOUSE BILL NO. 234, "An Act relating to the education loan repayment program and establishing the education loan repayment fund." 3:06:52 PM JEANNE OSTNES, Staff to Representative Craig Johnson, Alaska State Legislature, informed the committee that concerns about the bill have been reviewed by Tam Cook, Director, Legislative Legal and Research Services, Legislative Affairs Agency (LLA), and that she has allowed an amendment that pertains to the 32 hour work week. CHAIR WILSON requested that Ms. Ostnes present an overview of the bill. MS. OSTNES explained that the bill addresses two areas of concern for the state: work force needs and the high cost of education. She noted that the state is experiencing serious work force shortages and college students are graduating with high debt due to student loans. House Bill 234 provides a solution by the creation of a loan repayment program that will provide relief to college graduates and will fulfill the work force shortage by attracting qualified people to jobs in Alaska. The bill offers qualified individuals the repayment, up to $7,500 per year, of an outstanding student loan debt, not to exceed five years, or 50 percent of the total. Qualified individuals are people working in professions that have been identified by the Department of Labor & Workforce Development (DLWD) as careers with severe worker shortages. Ms. Ostnes further explained that the bill will entice students into high demand programs and attract already qualified people into professions with a critical workforce shortage to Alaska. In addition, there is the added benefit of reversing the "brain drain." The program is open to out-of state workers and will encourage them to relocate in Alaska. 3:10:33 PM MS. OSTNES stated that the Department of Administration (DOA) issued Administration Order No. 237, that formed a work group to address recruitment and retention issues in the state. She recalled that Representative Fairclough requested the identification of the meaning of "full time" and presented an amendment that read: Page 2, following line 31: Insert a new subsection to read: "(d) For purposes of (c) of this section, "full time" means working on a regular basis for a normal work period that averages at least 32 hours a week." REPRESENTATIVE SEATON asked who determines which occupations suffer a severe shortage. MS. OSTNES explained that those occupations are already defined in AS Sec. 14.43.415(b) (2). 3:13:36 PM RICK CALCOTE, Mental Health Clinician, Division of Behavioral Health, Department of Health & Social Services (DHSS), encouraged the committee to support HB 234. He stated that the Division of Behavioral Health, Department of Health & Social Services (DHSS), believes the bill will be a great benefit to the behavioral health workforce in Alaska. He pointed out that there are severe shortages in the behavioral health workforce, in fact, behavioral health vacancies account for 29 percent of all vacancies in state positions. Further, the cost of education and subsequent low salaries make the repayment of college loans difficult, especially for those living in rural areas. 3:15:47 PM REPRESENTATIVE FAIRCLOUGH moved Amendment 1. There being no objection, Amendment 1 passed. 3:16:54 PM DIANE BARRANS, Executive Director, Postsecondary Education Commission, Department of Education and Early Development (EED), informed the committee that there are technical issues regarding the administration of the program created by HB 234. She explained that the Postsecondary Education Commission (commission) is concerned about using the term "grant." In financial aid terminology, the term grant usually means free aid delivered as a result of an individual's demonstrated financial need. However, in HB 234, the term is used as an award for service in a particular capacity. Ms. Barrans opined that this issue should be addressed to maintain conformity in statute and to prevent confusion by the public. CHAIR WILSON asked for a specific change. MS. BARRANS suggested making a change from "grant" to "benefit" on page 2, line 8, and additional conforming changes throughout the bill. 3:19:43 PM CHAIR WILSON stated that Tam Cook recommended that there not be a change and asked Ms. Barrans to discuss it with her before the bill comes before the next committee. MS. BARRANS opined that there is understanding, but not agreement, with Tam Cook. She offered that there must be a clear communication to the public that this is different than other grants. CHAIR WILSON observed that, if [the recipient] does not fulfill their obligation they will have to... MS. BARRANS said, "They receive no benefits." REPRESENTATIVE FAIRCLOUGH offered the substitution of "grant benefit" for "a grant" or "a benefit" thereby allowing the language in the document to remain consistent. 3:21:35 PM MS. BARRANS then pointed out that on page 2, line 23, there is a concern about the term "otherwise engaged." CHAIR WILSON explained that, elsewhere in statute, "otherwise engaged" stands for self-employed people. MS. OSTNES said that "otherwise engaged" also includes those working under a contract. MS. BARRANS stated that the last issue is with respect to Sec. 14.43.438, on page 3, line 11. She explained that, administratively, the concept of making a predetermination about someone's future qualification for an award is concerning. A predetermination could be considered binding, and make the commission, or the fund, liable for some future action if a person does not receive an award due to changes in the program or the applicant's circumstances. In response to a question, she opined that attempts to avoid similar problems in regulation, or by contract, often lead to disputes. Ms. Barrans offered to work with the sponsors and the DLWD; however, she maintained her concern about the responsibility to predetermine an individual. 3:25:08 PM MS. OSTNES informed the committee that Tam Cook indicated that this problem could be handled in regulation. Furthermore, by the time the program is available, the DLWD would have the jobs with shortages for the next 12 months identified, and thus the program administrator would be in a position to obligate the funds for distribution in 12 months. 3:25:08 PM CHAIR WILSON observed that the award is not granted until the end of 12 months. 3:25:56 PM REPRESENTATIVE SEATON gave an example of an applicant engaged in a six year course of study, who wants to know whether they will qualify and how to ensure eligibility. CHAIR WILSON pointed out that the applicant needs to be employed full-time for one year in an occupation or profession with a severe shortage. REPRESENTATIVE SEATON stated his confusion with the pre- eligibility determination section, Sec. 14.43.438. He noted that the section commits the commission to make a pre- eligibility assurance that an applicant will qualify for a grant, whether the funds have been appropriated or not. REPRESENTATIVE FAIRCLOUGH inquired as to the sponsor's intent of pre-qualifying a person. 3:29:02 PM MS. OSTNES explained that the intent is that the person is already a college graduate and contacts the commission to see if their occupation is applicable to the program. If so, the applicant would need to work in the state for one year, and then submit the request for payment of the student loan. 3:30:46 PM REPRESENTATIVE FAIRCLOUGH moved Amendment 2, as follows: Page 3, line 1; Delete "Continuing" Page 3, line 13; Delete "the individual engaged in" REPRESENTATIVE FAIRCLOUGH explained that the aforementioned changes would address qualifying the jobs instead of the individual. REPRESENTATIVE ROSES objected for discussion purposes. REPRESENTATIVE FAIRCLOUGH re-stated Amendment 2. CHAIR WILSON suggested that "future eligibility" on page 3, line 15, be deleted. REPRESENTATIVE FAIRCLOUGH explained that she did not delete that because if an applicant enters a five year education program, they want to know whether the loan program will continue. REPRESENTATIVE ROSES opined that this is not a solution for Representative Seaton's concern. He suggested the removal of the pre-eligibility section and to focus on the bill's purpose to attract and retain qualified people to jobs in Alaska. CHAIR WILSON offered an amendment to Amendment 2, as follows: Page 3, line 14; Delete "will become" Insert "is." 3:34:33 PM REPRESENTATIVE FAIRCLOUGH accepted the amendment to Amendment 2. She then stated that her purpose in keeping this section is to allow applicants to determine whether their jobs will remain eligible; this qualification is not found in the bill, otherwise. 3:35:54 PM REPRESENTATIVE ROSES re-stated his choice to eliminate Section 14.43.438. He then suggested that the committee could add the requirement to post all qualified jobs on a web site. REPRESENTATIVE SEATON observed that one part of the bill is meant to offer re-payment of a student loan to qualified workers who come to Alaska and work for one year. The other part is encouraging people to begin a course of study for a job in a pre-qualified field with a promise of re-payment. He stated his intention to vote against the amendment and pointed out that the bill defines that the DLWD will make determinations on the eligibility of jobs. CHAIR WILSON agreed. 3:38:25 PM REPRESENTATIVE GARDNER shared her concerns over the goal of the bill. She then opined that the real question has to do with changing behavior. She expressed hope that the students who graduate from the [University of Alaska] nursing program already fully intend to stay in the state, work in their home communities, and thus, qualify for the program. She asked, "So, what have we done with this money?" 3:39:33 PM CHAIR WILSON commented that, if workers go to areas with severe worker shortages, the program has changed their behavior. REPRESENTATIVE GARDNER asked whether state money should go to a student whose home is in an area of severe shortage, and who is going to return there, anyway. REPRESENTATIVE FAIRCLOUGH withdrew Amendment 2. 3:41:22 PM CHAIR WILSON announced that HB 234 was held in committee. 3:41:42 PM REPRESENTATIVE SEATON stressed that the bill does not identify specific areas in the state with shortages. If that is the intention, he encouraged further clarification by the DLWD. REPRESENTATIVE FAIRCLOUGH re-stated, for the sponsor, that the committee, with other departments, is interested in the "grant benefit" versus "award" language on page 2, line 8. 3:43:02 PM TAMARA COOK, Director, Legislative Legal and Research Services, Legislative Affairs Agency, informed the committee that "grant" is a word already used in the statutes that are being amended, and in similar programs that are administered by the commission. However, she stated that the committee can choose a different word. 3:44:47 PM REPRESENTATIVE FAIRCLOUGH asked Ms. Barrans to explain her preference that "grant" not be used. MS. BARRANS clarified that her concern is that the program is being nested into traditional student financial aid statute, however, it is a workforce recruitment program that the commission is being asked to administer. To use the term "grant", that is traditionally thought of as a needs-based grant, is confusing to someone who does not understand the distinction. 3:46:04 PM CHAIR WILSON re-stated Ms. Barran's objection. MS. COOK stated that the distinction has no significance as a matter of law and either word may be used. REPRESENTATIVE FAIRCLOUGH expressed the intent to establish for the legislative record that "grant" and "benefits" are interchangeable in this case. She also asked for confirmation that the definition of "otherwise engaged" is "self-employed" or "on contract." MS. COOK said that she had no request on that issue. In response to a question, she said that she used "otherwise engaged" as preliminary tracking to whatever structure might exist. 3:48:22 PM REPRESENTATIVE FAIRCLOUGH further asked Ms. Cook for her opinion on liability for the state created by Sec. 14.43.438, on page 3, line 11. MS. COOK opined that pre-determination could trigger liability depending on what the commission chooses to tell applicants. The bill is drafted so that the commission is not required to establish this procedure. One public policy question is that if a pre-eligibility determination is made, one may have led applicants along a path of a moral promise that can not be fulfilled. Further, if the committee has concerns about these issues, she recommended deletion of this provision as the proposed amendments failed to serve a purpose. REPRESENTATIVE FAIRCLOUGH asked whether the maker will concur with the deletion of the paragraph. MS. OSTNES concurred, representing Representative Johnson. REPRESENTATIVE FAIRCLOUGH moved [Conceptual Amendment 3] which would delete Section 14.43.438 on page 3. 3:51:16 PM CHAIR WILSON announced that Conceptual Amendment 3 passed with no objection. 3:52:37 PM REPRESENTATIVE ROSES observed that the last issue is down to the choice of the word grant or benefit, which the sponsor can do prior to the hearing before the House Finance Committee. REPRESENTATIVE ROSES then moved to report HB 234 out of committee with individual recommendations and the accompanying fiscal notes. CHAIR WILSON objected and pointed out that the question of whether areas of labor shortages should be defined still remains. REPRESENTATIVE KELLER noted that the definition of severe shortage must also be addressed; a 15 percent shortage could be claimed using regional criteria. REPRESENTATIVE ROSES expressed his concern about making this a regional issue. If regional shortages are established and applicants qualify for a job in Fairbanks, and then move to Anchorage, they may jeopardize their qualification. He stressed that the objective of the bill was to attract and retain employees in the state; adding regional definitions will make it difficult to implement, monitor, and qualify for the program. CHAIR WILSON asked whether the level of workforce shortage, established by DLWD, is 15 percent. MS. OSTNES responded that the level written in statute is 15 percent statewide. She gave the example of recruitment for an engineer that demonstrated a failure of 15 percent. 3:56:13 PM MS. BARRANS stated that what has been incorporated in the needs- based grant statute illustrates the difference between trying to encourage people into a field of study, and trying to encourage them into the workforce. She explained that the needs-based grant program selected 15 percent as a minimum vacancy rate, but the commission has the discretion to update and publish a partial list of occupations. Ms. Barrans continued to explain that the definition is unique to the needs-based grant program and she questioned whether it was appropriate to apply to this program. REPRESENTATIVE CISSNA opined that a financial incentive is important to filling jobs. With a limited amount of funding, the commission needs to have the flexibility and freedom to decide how to fill the most crucial jobs. CHAIR WILSON asked Ms. Ostnes and Ms. Barrans to work on two areas before the bill is before the next committee: the wording on page 1, line 8, regarding the severe shortage of labor; and the wording on page 2, line 8, regarding "grant", "benefit", or "award." MS. BARRANS stated that, as the bill currently reads, an applicant that is employed in a job of severe workforce shortage, for at least one year, can submit an application and qualify for benefits. This is a simply a reward for people who are already in those jobs. REPRESENTATIVE GARDNER said that that is her point exactly. The legislation gives applicants money without changing their behavior. She asked whether the Department of Education and Early Development has taken a position on the bill. 4:02:07 PM MS. BARRANS said no. REPRESENTATIVE ROSES withdrew his motion to report HB 234 from committee. 4:02:49 PM REPRESENTATIVE SEATON gave an example of teachers being recruited, due to the teacher shortage in the Bush, but instead the teachers go to work in Anchorage and get $7,500 to repay their loans. He questioned whether this situation would accomplish the purpose of the bill and asked for this possibility to be addressed by the sponsor. 4:04:08 PM REPRESENTATIVE CISSNA asked whether an applicant qualifies "after the fact" and for information on job turn-over rates. She referred to an anticipated report on job turn-over rates. MS. OSTNES said that the Department of Administration (DOA) is producing a report on the Alaska workforce that is due out in February. REPRESENTATIVE CISSNA observed that the key thing is data so that the committee can makes its determination based on fact. REPRESENTATIVE GARDNER opined that merit scholarships can address shortages across the state as they encourage kids to obtain their schooling in Alaska, and then stay here to work. Regarding state employment, she said that she felt that increasing pay scales for state workers is more effective than paying people from out of state to come here to work. CHAIR WILSON pointed out that some of the [workforce] areas can not be trained in Alaska. REPRESENTATIVE ROSES recalled that there has been emergency certification legislation in the past that dealt with areas of critical need in the field of education. The determination of critical need in the field of education is reported by individual school boards to the EED. Therefore, if the DOL obtains its information from the EED, the source of the information on shortages is actually the local school boards. 4:07:37 PM CHAIR WILSON closed testimony on HB 234. [HB 234 was held over.]
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