Legislature(2015 - 2016)SENATE FINANCE 532
03/29/2016 01:00 PM FINANCE
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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 The APS will close to new entrants following the application deadline this July and the program will be repealed in July of 2022.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.