03/29/2016 01:00 PM Senate FINANCE

SENATE BILL NO. 208                                                                                                           
                                                                                                                                
     "An Act  eliminating the Alaska education  grant program                                                                   
     and  the  Alaska performance  scholarship  program;  and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
1:33:12 PM                                                                                                                    
                                                                                                                                
BRETT HUBER, STAFF SENATOR PETE KELLY, introduced the bill:                                                                     
                                                                                                                                
     Senate Bill  208 sunsets the direct State  aid for post-                                                                   
     secondary scholarships  and grants provided  through the                                                                   
     Alaska  performance scholarship  (APS)  program and  the                                                                   
     Alaska education  grant (AEG) program.  This legislation                                                                   
     proposes  a  wind  down  period  to  allow  current  APS                                                                   
     participants,   and   high   school   seniors   in   the                                                                   
     preparatory  process  for  this application  period,  to                                                                   
     finish  their course  of study.  The APS  will close  to                                                                   
     new  entrants following  the  application deadline  this                                                                   
     July and the  program will be repealed in  July of 2022.                                                                   
     Although  students  must  qualify  annually  for  grants                                                                   
     under the  AEG program, the  sunset coincides  with that                                                                   
     of the APS in this legislation.                                                                                            
                                                                                                                                
     These  state  scholarship  programs  were adopted  at  a                                                                   
     time when oil  value was setting not only  record price,                                                                   
     but record  state revenue. Under SB 208  the State would                                                                   
     still  continue to  fund the  APS the  program, and  the                                                                   
     corresponding   AEGs  during   the   wind  down   phase,                                                                   
     providing an  orderly closure of these programs  as well                                                                   
     as a glide path for the transition.                                                                                        
                                                                                                                                
Co-Chair MacKinnon  requested a  history of the  program. Mr.                                                                   
Huber  replied   that  in  2010,   SB  221  was   passed.  It                                                                   
established the  original direct state-funded  post-secondary                                                                   
scholarship   program,   "The    Alaska   Merit   Scholarship                                                                   
Program."  A task  force was  established  to examine  higher                                                                   
education,  and the appropriate  funding  for the future.  He                                                                   
furthered  that in  2012, HB  104 passed,  which renamed  the                                                                   
program  to   "The  Alaska   Performance  Scholarship",   and                                                                   
created the  direct state-funded  grant program,  "The Alaska                                                                   
Education   Grant."  The   bill  also   created  the   Higher                                                                   
Education  Fund,  which  was  capitalized  to  fund  the  two                                                                   
programs.  It  provided a  formula  of  7 percent  of  market                                                                   
value and  a split  of two-thirds  and one-third between  the                                                                   
performance  scholarships and  the education grant  programs.                                                                   
There were  other needs  based and  performance based  grants                                                                   
and  scholarships  that  had  existed  since  the  1970s.  He                                                                   
remarked  that,  in  2009, there  was  a  multi-year  capital                                                                   
budget  appropriation   of  $2.5   million  as   the  funding                                                                   
mechanism that ran through 2012.                                                                                                
                                                                                                                                
Co-Chair MacKinnon requested a Sectional Analysis.                                                                              
                                                                                                                                
Co-Chair  Kelly remarked  that there  was a  hope to have  an                                                                   
overall savings,  in combination with the passage  of current                                                                   
bills, of hundreds of millions of dollars.                                                                                      
                                                                                                                                
1:39:04 PM                                                                                                                    
                                                                                                                                
Mr. Huber discussed the Sectional Analysis (copy on file):                                                                      
                                                                                                                                
     Section  1:  Removes  references  to statutes  that  are                                                                   
     repealed in later sections of the act.                                                                                     
                                                                                                                                
     Section  2:  Amends AS  14.43.810  (a) to  limit  Alaska                                                                   
     performance   scholarships  to   Alaska  residents   who                                                                   
     graduate from high school in or before July 15, 2016.                                                                      
                                                                                                                                
     Section 3:  Provides that, to be eligible  for an Alaska                                                                   
     performance  scholarship  a student  must  apply to  the                                                                   
     commission on or before July 15, 2016.                                                                                     
                                                                                                                                
     Section  4: Prohibits  the Department  of Education  and                                                                   
     Early   Development    from   extending    a   student's                                                                   
     eligibility  for  Alaska  performance  scholarship  past                                                                   
     July 15, 2022.                                                                                                             
                                                                                                                                
     Section  5: Amends  AS  14.45.130(a),  which relates  to                                                                   
     the  duties of religious  or private  schools to  remove                                                                   
     references to the Alaska performance scholarship.                                                                          
                                                                                                                                
     Section  6: Amends AS  37.14.750 (a), which  establishes                                                                   
     thee  Alaska   higher  education  investment   fund,  to                                                                   
     remove   references  to   the  Alaska  education   grant                                                                   
     program   and   the   Alaska   performance   scholarship                                                                   
     program.                                                                                                                   
                                                                                                                                
     Section  7:  Repeals  AS  14. 03.  113,  which  requires                                                                   
     school   districts  to   determine  whether   graduating                                                                   
     students   are    eligible   for   Alaska    performance                                                                   
     scholarships, on July 2016.                                                                                                
                                                                                                                                
     Section  8: Repeals sections  that establish  the Alaska                                                                   
     Advantage  education  grant  program  and  the  Alaska's                                                                   
     performance scholarship program on July 16, 2022.                                                                          
                                                                                                                                
     Section  9:  Provides  that  the  Alaska  Commission  of                                                                   
     Postsecondary   Education  may   not  award   an  Alaska                                                                   
     performance  scholarship to  a new  applicant who  first                                                                   
     applies for a scholarship after July 15, 2016.                                                                             
                                                                                                                                
     Section  10:  Allows  the Department  of  Education  and                                                                   
     Early   Development,  the   Department   of  Labor   and                                                                   
     Workforce  Development,  and  the Alaska  Commission  on                                                                   
     Postsecondary  Education to adopt regulations  necessary                                                                   
     to  implement  the act.  The  regulations  may not  take                                                                   
     effect  before  the  effective  date of  the  law  being                                                                   
     implemented.                                                                                                               
                                                                                                                                
     Section 11:  Makes sections 2- 4 of the  act retroactive                                                                   
     to July 15, 2016.                                                                                                          
                                                                                                                                
     Section 12: Provides  that sections 1, 5, and  6, of the                                                                   
     act take effect July 16, 2022.                                                                                             
                                                                                                                                
     Section 13:  Provides that  sections 2 -  4, and 7  - 10                                                                   
     of the act take effect immediately.                                                                                        
                                                                                                                                
Co-Chair MacKinnon queried a resource for additional                                                                            
information.                                                                                                                    
                                                                                                                                
1:43:37 PM                                                                                                                    
                                                                                                                                
Senator  Dunleavy requested  numbers  from  the inception  of                                                                   
the program and the completion rate.                                                                                            
                                                                                                                                
Vice-Chair  Micciche requested  a full  set of numbers  since                                                                   
the inception  of the program;  and the results  and benefits                                                                   
to Alaskans.                                                                                                                    
                                                                                                                                
Mr.   Huber   looked   at  the   document   titled,   "Alaska                                                                   
Performance  Scholarship and Education  Grant History"  (copy                                                                   
on file). The  document provided numbers on  awards, dollars,                                                                   
recipients, etc.  He noted  that the Postsecondary  Education                                                                   
Commission  also  had  a  website;  and  provided  an  annual                                                                   
report to  the legislature of  the participation  and results                                                                   
in the program.                                                                                                                 
                                                                                                                                
Co-Chair MacKinnon  stated that the commission  at university                                                                   
would comment on the program.                                                                                                   
                                                                                                                                
Vice-Chair  Micciche  remarked that  he  wanted  to know  how                                                                   
many students  were kept  in the  state through the  program.                                                                   
Mr. Huber remarked that there was information available.                                                                        
                                                                                                                                
Senator  Bishop commented  that there  was a program  through                                                                   
the PickClickGive that captured all students.                                                                                   
                                                                                                                                
Co-Chair  Kelly  queried  more information  for  the  state's                                                                   
ability to provide an education to the gifted students.                                                                         
                                                                                                                                
SB  208  was   HEARD  and  HELD  in  committee   for  further                                                                   
consideration.