Legislature(1999 - 2000)

02/02/1999 03:00 PM House HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
         HOUSE HEALTH, EDUCATION AND SOCIAL                                                                                     
            SERVICES STANDING COMMITTEE                                                                                         
                  February 2, 1999                                                                                              
                     3:00 p.m.                                                                                                  
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                                 
                                                                                                                                
Representative Fred Dyson, Co-Chair                                                                                             
Representative John Coghill, Co-Chair                                                                                           
Representative Jim Whitaker                                                                                                     
Representative Joe Green                                                                                                        
Representative Carl Morgan                                                                                                      
Representative Tom Brice                                                                                                        
Representative Allen Kemplen                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                  
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
Long-Term Care Task Force Report                                                                                                
                                                                                                                                
Organizational Meeting                                                                                                          
                                                                                                                                
* HOUSE BILL NO. 27                                                                                                             
"An Act relating to graduate student loans; and providing for an                                                                
effective date."                                                                                                                
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
(* First public hearing)                                                                                                        
                                                                                                                                
PREVIOUS ACTION                                                                                                                 
                                                                                                                                
BILL: HB  27                                                                                                                    
SHORT TITLE: GRADUATE STUDENT LOANS                                                                                             
SPONSOR(S): REPRESENTATIVES(S) MULDER                                                                                           
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 1/19/99        25     (H)  PREFILE RELEASED 1/8/99                                                                             
 1/19/99        25     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 1/19/99        25     (H)  HES, FINANCE                                                                                        
 2/02/99               (H)  HES AT  3:00 PM CAPITOL 106                                                                         
                                                                                                                                
WITNESS REGISTER                                                                                                                
                                                                                                                                
REPRESENTATIVE CON BUNDE                                                                                                        
Alaska State Legislature                                                                                                        
Capitol Building, Room 501                                                                                                      
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-4843                                                                                                      
POSITION STATEMENT:  Presented Long-Term Care Task Force Report.                                                                
                                                                                                                                
SENATOR GARY WILKEN                                                                                                             
Alaska State Legislature                                                                                                        
Capitol Building, Room 514                                                                                                      
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-3709                                                                                                      
POSITION STATEMENT:  Presented Long-Term Care Task Force Report                                                                 
                                                                                                                                
REPRESENTATIVE ELDON MULDER                                                                                                     
Alaska State Legislature                                                                                                        
Capitol Building, Room 507                                                                                                      
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-2647                                                                                                      
POSITION STATEMENT:  Testified as sponsor of HB 27.                                                                             
                                                                                                                                
DIANE BARRANS, Executive Director                                                                                               
Postsecondary Education Commission                                                                                              
Department of Education                                                                                                         
3030 Vintage Boulevard                                                                                                          
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-6740                                                                                                      
POSITION STATEMENT:  Testified on HB 27.                                                                                        
                                                                                                                                
TERESA WILLIAMS, Assistant Attorney General                                                                                     
Fair Business Practices                                                                                                         
Civil Division (Anchorage)                                                                                                      
Department of Law                                                                                                               
1031 West 4th Avenue                                                                                                            
Anchorage, Alaska  99501-1994                                                                                                   
Telephone:  (907) 269-5100                                                                                                      
POSITION STATEMENT:  Testified on HB 27.                                                                                        
                                                                                                                                
ACTION NARRATIVE                                                                                                                
                                                                                                                                
TAPE 99-1, SIDE A                                                                                                               
Number 0001                                                                                                                     
                                                                                                                                
CO-CHAIRMAN DYSON called the House Health, Education and Social                                                                 
Services Standing Committee meeting to order at 3:00 p.m.                                                                       
Members present at the call to order were Representatives Dyson,                                                                
Coghill, Whitaker, Green,  Morgan, Brice and Kemplen.                                                                           
                                                                                                                                
LONG-TERM CARE TASK FORCE REPORT                                                                                                
                                                                                                                                
SUMMARY OF INFORMATION                                                                                                          
                                                                                                                                
REPRESENTATIVE CON BUNDE, Alaska State Legislature, Co-Chair,                                                                   
Long-Term Care Task Force, presented the Long-Term Care Task                                                                    
Force Final Report January 1999.  He stated that this issue                                                                     
concerns not only senior citizens but the disabled.  He is not                                                                  
sure of the role of the state.  This task force has completed its                                                               
work, but Representative Bunde would like to see someone follow                                                                 
up on this issue.                                                                                                               
                                                                                                                                
SENATOR GARY WILKEN, Alaska State Legislature, Co-Chair, Long                                                                   
Term Care Task Force, pointed out this issue is not going to go                                                                 
away and the state needs to address it.  He referred to the 31                                                                  
recommendations to be carried out.                                                                                              
                                                                                                                                
COMMITTEE ACTION                                                                                                                
                                                                                                                                
CO-CHAIRMAN DYSON appointed Representatives Green, Brice and                                                                    
Kemplen to a task force to draft legislation recommended by the                                                                 
Long Term Care Task Force.                                                                                                      
                                                                                                                                
The committee took a brief at-ease at 3:32 p.m.                                                                                 
                                                                                                                                
Number 1879                                                                                                                     
                                                                                                                                
ORGANIZATIONAL MEETING                                                                                                          
                                                                                                                                
CO-CHAIRMAN DYSON reconvened the committee at 3:35 p.m. and urged                                                               
the committee to do their business with a great deal of dispatch.                                                               
He reviewed procedures and expectations of the committee                                                                        
emphasizing the need to be respectful of members of the public                                                                  
who testify.  He also promised to intervene if testifiers attack                                                                
committee members.  There have been been suggestions that this                                                                  
committee should be responsible for committee oversight of some                                                                 
departments. It was noted that committee work for Representative                                                                
Coghill should go through Wes Keller, Representative Dyson's                                                                    
aide.                                                                                                                           
                                                                                                                                
HB  27-GRADUATE STUDENT LOANS                                                                                                   
                                                                                                                                
Number 2079                                                                                                                     
                                                                                                                                
CO-CHAIRMAN DYSON introduced the next order of business as HOUSE                                                                
BILL NO. 27, "An Act relating to graduate student loans; and                                                                    
providing for an effective date."                                                                                               
                                                                                                                                
REPRESENTATIVE ELDON MULDER, Alaska State Legislature, sponsor of                                                               
HB 27, explained a constituent raised a concern regarding Western                                                               
Interstate Commission on Higher Education (WICHE) which allows                                                                  
students in participating states to receive a tuition break;                                                                    
basically 1.5 times the resident rate. In the past a flat grant                                                                 
was given to participate in the WICHE program, but with budget                                                                  
constraints that became cost prohibitive.  Last year repayment                                                                  
constrictions were put on Washington, Alaska, Montana, Idaho                                                                    
Medical Education Program (WAMI).                                                                                               
                                                                                                                                
REPRESENTATIVE MULDER noted as the opportunity of utilizing the                                                                 
student loan program was explored, it became attractive to WICHE                                                                
because they want more Alaskans to participate while Alaskan                                                                    
students would benefit through a price break.  HB 27 allows                                                                     
Alaska's students to participate in the WICHE program utilizing                                                                 
the student loan program and get a tremendous price break on                                                                    
tuition from those out-of-state institutions.  The Postsecondary                                                                
Commission has some small technical changes on this bill, and the                                                               
Commission needs regulatory authority to implement this bill.                                                                   
                                                                                                                                
Number 2185                                                                                                                     
                                                                                                                                
REPRESENTATIVE GREEN indicated WICHE would only apply to those                                                                  
students wanting to take something that wasn't offered in-state.                                                                
"Do you know what the WICHE repayment percentage has been                                                                       
compared to non-WICHE students?"                                                                                                
                                                                                                                                
REPRESENTATIVE MULDER responded that this program is not                                                                        
available now, therefore, he didn't know.  He guessed a graduate                                                                
students may be more sincere about repayment than an                                                                            
undergraduate student who may or may not make it and have huge                                                                  
financial debt several years later.                                                                                             
                                                                                                                                
REPRESENTATIVE GREEN referred to the fiscal note that states                                                                    
"Program funds disbursed as student loans are not subject to the                                                                
Executive Budget Act, therefore an appropriation is not                                                                         
required."  He asked, "if we supply x number of dollars to look                                                                 
for schools not available here, do we have any idea how much                                                                    
money the state would have out in perpetuity?"                                                                                  
                                                                                                                                
REPRESENTATIVE MULDER suggested Diane Barrans, Executive                                                                        
Director, Postsecondary Education Commission, could answer that                                                                 
question.                                                                                                                       
                                                                                                                                
Number 2280                                                                                                                     
                                                                                                                                
REPRESENTATIVE BRICE asked for clarification of the language on                                                                 
lines 12 and 13 of HB 27 which states, "WICHE graduate education                                                                
program."  He wanted to be sure it applies to all programs, not                                                                 
just a graduate program in Education.                                                                                           
                                                                                                                                
REPRESENTATIVE MULDER said the Postsecondary Education Commission                                                               
would have to make that interpretation.                                                                                         
                                                                                                                                
REPRESENTATIVE GREEN commented "I think if that had been the                                                                    
desire, it would have been capitalized."                                                                                        
                                                                                                                                
REPRESENTATIVE KEMPLEN referred to lines 6 and 7 of HB 27 and                                                                   
suggested the word "program" be changed to "degree".                                                                            
                                                                                                                                
TAPE 1, SIDE B                                                                                                                  
                                                                                                                                
Number 0001                                                                                                                     
                                                                                                                                
REPRESENTATIVE MULDER explained getting a degree isn't required                                                                 
when financial assistance is offered.  The student can be in a                                                                  
program but it can't be stipulated that the student is going to                                                                 
get a degree.                                                                                                                   
                                                                                                                                
REPRESENTATIVE GREEN asked about the word "pursuing".  Could                                                                    
someone qualify for this to just take some courses, or does it                                                                  
need to be a degree program?                                                                                                    
                                                                                                                                
Number 0041                                                                                                                     
                                                                                                                                
DIANE BARRANS, Executive Director, Postsecondary Education                                                                      
Commission, explained that it's inherent in the program to be                                                                   
admitted into a degree program.  The term "program" here is not                                                                 
problematic.                                                                                                                    
                                                                                                                                
REPRESENTATIVE WHITAKER made a point of clarification: "Medical"                                                                
was deleted, "graduate program" was inserted on lines 6 and 7.                                                                  
                                                                                                                                
REPRESENTATIVE MULDER responded "It is, as well as lines 12                                                                     
through 14 which state 'Western Interstate Commission on Higher                                                                 
Education graduate education program to agree to repay to the                                                                   
state the financial support provided to that person by the state'                                                               
which within those lines it stipulates you can get a student loan                                                               
to go to graduate school."                                                                                                      
                                                                                                                                
Number 0098                                                                                                                     
                                                                                                                                
REPRESENTATIVE KEMPLEN felt when you're pursuing something, that                                                                
indicates you want to eventually attain it.  He suggested using                                                                 
"participating" rather than "pursuing".  "Pursuing" doesn't                                                                     
logically link with the intent.                                                                                                 
                                                                                                                                
Number 0195                                                                                                                     
                                                                                                                                
MS. BARRANS explained residents in this category are pursuing                                                                   
admission into eligible programs.  Once accepted, he/she would be                                                               
participating.  The Commission could work with either word.                                                                     
                                                                                                                                
MS. BARRANS informed the committee she contacted the WICHE                                                                      
Compact office in Boulder and copied them with HB 27. The memo                                                                  
from the Director of the Professional Student Exchange Programs                                                                 
(PSEP) supported this effort to revitalize the program. She noted                                                               
that if Alaska revises its participation in this format, Alaska                                                                 
would be the only state in the compact that requires a repayment                                                                
without some service obligation as an alternative to repayment.                                                                 
Other states that support students in graduate education programs                                                               
allow them to return to the state and serve to receive some                                                                     
reduction, in part or in whole, in their obligation to the state.                                                               
This would be a philosophical change for a state participating in                                                               
the WICHE Compact.  The Compact office acknowledges there are                                                                   
economic constraints and they would invite Alaska's participation                                                               
in the program even under these circumstances.  The memo will be                                                                
made available to the committee.                                                                                                
                                                                                                                                
MS. BARRANS said this legislation will be before the Commission                                                                 
and the Alaska Student Loan Corporation at the February and March                                                               
meetings.  Ms. Barrans expected the Commission and Alaska Student                                                               
Loan Corporation to support the concept of the bill.  Most of the                                                               
public institutions in the west only admit residents to their                                                                   
graduate education programs.  The subsidy on the part of the                                                                    
state is substantial and the only exceptions are students                                                                       
accepted under the Compact, under the philosophy of regional                                                                    
resource sharing.  This program will allow Alaskans access into                                                                 
certain graduate fields.                                                                                                        
                                                                                                                                
MS. BARRANS identified two structural concerns with this bill:                                                                  
1) The Commission would need to have explicit authority to adopt                                                                
regulations to implement the program;                                                                                           
2) WAMI loan provisions would need to be placed into Section                                                                    
14:43, Scholarships, Loans and Grants, which is not administered                                                                
by WICHE, in order to remove any questions about forgiveness                                                                    
benefits.                                                                                                                       
                                                                                                                                
Number 0353                                                                                                                     
                                                                                                                                
REPRESENTATIVE DYSON asked if Ms. Barrans had language to amend                                                                 
this bill and would it be done by Thursday.                                                                                     
                                                                                                                                
MS. BARRANS agreed that it could be done.  In response to a                                                                     
question from Representative Brice that even though the state                                                                   
participated in WICHE before, under HB 27 the loan will be                                                                      
repaid.  It is important to develop conditions and terms that                                                                   
reduce risk through this program.  A separate Professional                                                                      
Student Exchange Program  will loan students amounts which exceed                                                               
what is currently available under the Alaska Student Loan                                                                       
Program.                                                                                                                        
                                                                                                                                
REPRESENTATIVE BRICE asked if there is current authority to                                                                     
participate in the WICHE program.  He questioned if the financial                                                               
aid to that is not through the student loan program, it stands to                                                               
reason that the Commission does not need explicit authority to                                                                  
adopt regulations to do this, but that you already have that                                                                    
authority under general provisions.                                                                                             
                                                                                                                                
MS. BARRANS explained in the past, the program utilized pass                                                                    
through dollars.  Money was passed along to the WICHE Compact                                                                   
staff in Boulder who then dispersed it directly to institutions.                                                                
None of the money went directly to the students.  Ms. Barrans                                                                   
referred to Alaska Statutes, Section 14.44.025 which explicitly                                                                 
speaks to services under that Compact:  "State participation                                                                    
under Articles VIII and XIII of the Western Regional Higher                                                                     
Education Compact shall be limited to the provision of adequate                                                                 
services and facilities in the professional fields of study                                                                     
available through the Professional Student Exchange Program                                                                     
administered by the Western Interstate Commission on Higher                                                                     
Education."  Under Section 14.44.035. Administration.  "The ACPE                                                                
shall administer the state's participation in the Western                                                                       
Regional Higher Education Compact" but according to the Attorney                                                                
General's office, we need to have explicit authority if we're                                                                   
going to promulgate regulations.                                                                                                
                                                                                                                                
Number 0550                                                                                                                     
                                                                                                                                
MS. BARRANS responded to a question from Representative Green                                                                   
regarding reciprocity.  The Professional Student Exchange Program                                                               
identified those programs as ones having a high cost to establish                                                               
and for which there is a need to share resources in the west.                                                                   
Those programs are identified by WICHE staff and ratified by the                                                                
representatives to the Commission.  Currently there are only 14                                                                 
fields available through the PSEP.  There are two other exchange                                                                
programs that are administered under the WICHE Compact:  Western                                                                
Regional Graduate Exchange Program (WGRP) and Western                                                                           
Undergraduate Program (WUE).  Residents from other states                                                                       
participate in Alaskan education programs under those other two                                                                 
programs.  We are a receiving state but not in the Professional                                                                 
Student Exchange Program.                                                                                                       
                                                                                                                                
REPRESENTATIVE GREEN asked would the state be subsidizing those                                                                 
outside students in expensive programs to some degree.                                                                          
                                                                                                                                
MS. BARRANS responded the rates vary depending on which exchange                                                                
program is used:  graduate students pay resident tuition;                                                                       
undergraduate students pay 150% of the resident tuition.  The                                                                   
reason a support fee is paid by a participating state in the PSEP                                                               
is to offset the cost of subsidizing the graduate education                                                                     
program.  A state can choose to subsidize their own residents,                                                                  
but usually doesn't choose to subsidize the education of non-                                                                   
residents.  When 10 Alaskans attend a physical therapy program in                                                               
North Dakota through this program, a support fee is paid that's                                                                 
associated with each student. The fee goes to the institution                                                                   
receiving those students.  The student pays a resident rate of                                                                  
tuition out-of-pocket but the state sends a support fee.  In HB
27 the participants will incur the support fee as an additional                                                                 
debt.  Those are the terms and conditions that the Commission                                                                   
needs to establish by regulation.                                                                                               
                                                                                                                                
REPRESENTATIVE GREEN asked if it would be desirable to include                                                                  
provisions for a resident to work off some of their indebtedness                                                                
by returning to Alaska.                                                                                                         
                                                                                                                                
MS. BARRANS replied, "It has always been the Commission's                                                                       
position that if the public policy objective of the program is                                                                  
not only to gain access but to provide a source of a work force                                                                 
to the state of Alaska, that there has to be an incentive for                                                                   
folks to return if in fact they're incurring all this debt.  We                                                                 
have always supported a  forgiveness benefit in the past."  It                                                                  
couldn't be funded through corporation receipts because they are                                                                
obligated funds under the Alaska Student Loan Corporation.  The                                                                 
amount eligible for forgiveness would have to be funded from the                                                                
general fund.                                                                                                                   
                                                                                                                                
MS. BARRANS responded to questions by Representative Brice about                                                                
the student indebtedness to the state and what loan program is                                                                  
being used.  The support fees vary depending on the field of                                                                    
study.  HB 27 establishes a new loan program in addition to the                                                                 
regular student loan program the state now provides.                                                                            
                                                                                                                                
Number 874                                                                                                                      
                                                                                                                                
TERESA WILLIAMS, Assistant Attorney General, Fair Business                                                                      
Practices, Civil Division (Anchorage), Department of Law,                                                                       
testified via teleconference from Anchorage.  There needs to be                                                                 
explicit authority in HB 27 for the Commission to draft                                                                         
regulations to implement the loan program.  The language of HB 27                                                               
merely states that there will be a repayment obligation and it                                                                  
would be necessary to set up how that loan program works which                                                                  
the Commission would need to do through regulation.  "I also                                                                    
agree that the WAMI program needs to be pulled out of WICHE                                                                     
program.  Under the current language the forgiveness provisions                                                                 
apply to the WICHE program because that particular statute which                                                                
was enacted last year allows  for receipt of financial aid under                                                                
the WICHE section.  If it remains where it is, there will be                                                                    
confusion that there would be forgiveness of all the WICHE                                                                      
programs."  Ms. Williams agreed with Representative Dyson that                                                                  
new wording for HB 27 would be ready on Thursday for action.                                                                    
                                                                                                                                
Number 953                                                                                                                      
                                                                                                                                
MS. WILLIAMS agreed the word "degree" could be substituted for                                                                  
"program" and that would be more appropriate.                                                                                   
                                                                                                                                
REPRESENTATIVE MULDER reported he will work with the staff to                                                                   
prepare a committee substitute to incorporate changes and                                                                       
recommendations of the attorney general's office which should be                                                                
ready for the committee Thursday morning.                                                                                       
                                                                                                                                
Number 1059                                                                                                                     
                                                                                                                                
REPRESENTATIVE GREEN asked if there was any merit to trying to                                                                  
pursue a forgiveness benefit if a student returned to the state                                                                 
and worked.                                                                                                                     
                                                                                                                                
REPRESENTATIVE MULDER responded he would love to see that happen                                                                
again but considering the fiscal restraints we have, we can't                                                                   
afford it right now.                                                                                                            
                                                                                                                                
REPRESENTATIVE DYSON said the hearing on HB 27 would be continued                                                               
on Thursday.  [HB 27 was held over.]                                                                                            
                                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
Number 1214                                                                                                                     
                                                                                                                                
CO-CHAIRMAN DYSON adjourned the House Health, Education and                                                                     
Social Services Standing Committee meeting at 4:18 p.m.                                                                         

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