Legislature(2009 - 2010)SENATE FINANCE 532

04/01/2010 09:00 AM FINANCE


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 237 SCHOOL CONSTRUCTION DEBT REIMBURSEMENT TELECONFERENCED
Moved CSSB 237(FIN) Out of Committee
+= SB 174 PROF STUDENT EXCHANGE LOAN FORGIVENESS TELECONFERENCED
Heard & Held
+= SB 235 CHARTER/ALTERNATIVE SCHOOL FUNDING TELECONFERENCED
Heard & Held
+= SB 236 TAX CREDITS FOR EDUCATIONAL CONTRIBUTIONS TELECONFERENCED
Heard & Held
+= SB 224 POSTSECONDARY SCHOLARSHIPS TELECONFERENCED
Heard & Held
+= SB 230 BUDGET: CAPITAL, SUPP. & OTHER APPROPS TELECONFERENCED
<Bill Hearing Canceled>
+ HB 326 SUPPLEMENTAL/CAPITAL/OTHER APPROPRIATIONS TELECONFERENCED
<Bill Hearing Canceled>
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                       April 1, 2010                                                                                            
                         9:07 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:07:40 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  Stedman   called  the  Senate   Finance  Committee                                                                    
meeting to order at 9:07 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Charlie Huggins, Vice-Chair                                                                                             
Senator Johnny Ellis                                                                                                            
Senator Dennis Egan                                                                                                             
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Jay Livey,  Staff, Co-Chair  Hoffman; Eddy  Jeans, Director,                                                                    
School Finances and Facilities,  Department of Education and                                                                    
Early Development; Senator  Menard; Diane Barrans, Executive                                                                    
Director, Postsecondary Education  Commission, Department of                                                                    
Education;  David Logan,  Legislative  Chair, Alaska  Dental                                                                    
Society; Pat Carr, Program Manager  Department of Health and                                                                    
Social Services;  Senator Kevin  Meyer; Jomo  Stuart, Staff,                                                                    
Senator  Meyer;   Sam  Kito,  Facilities   Engineer,  Alaska                                                                    
Education  and Early  Education; Larry  Ledoux Commissioner,                                                                    
Department   of  Education   and  Early   Development;  Mark                                                                    
Hamilton, President, University of Alaska.                                                                                      
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Jim Towle, Executive Director,  Alaska Dental Society; Tracy                                                                    
Oman,  Executive  Director, Alaska  Optometric  Association;                                                                    
Loretta  Nardi, President,  Partnership  for Alaska  Charter                                                                    
Schools;  Barbara  Gerard,   Academy  Charter  School;  Kiki                                                                    
Abrahamson, Fireweed Academy, Homer; Jim Johnsen, Senior                                                                        
Vice President, Doyon Limited; Robynn Wilson, Tax Division.                                                                     
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 237    SCHOOL CONSTRUCTION DEBT REIMBURSEMENT                                                                                
                                                                                                                                
          SB 237  was REPORTED out  of Committee with  a "do                                                                    
          pass"  recommendation and  with new  fiscal impact                                                                    
          note  from  Department   of  Education  and  Early                                                                    
          Development.                                                                                                          
                                                                                                                                
SB 174    PROF STUDENT EXCHANGE LOAN FORGIVENESS                                                                                
                                                                                                                                
          SB  174  was  HEARD  and  HELD  in  Committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
SB 235    CHARTER/ALTERNATIVE SCHOOL FUNDING                                                                                    
                                                                                                                                
          SB  235  was  HEARD  and  HELD  in  Committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
SB 236    TAX CREDITS FOR EDUCATIONAL CONTRIBUTIONS                                                                             
                                                                                                                                
          SB  236  was  HEARD  and  HELD  in  Committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
SB 224    POSTSECONDARY SCHOLARSHIPS                                                                                            
                                                                                                                                
          SB  224  was  HEARD  and  HELD  in  Committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
SB 230    BUDGET: CAPITAL, SUPP. & OTHER APPROPS                                                                                
                                                                                                                                
          SB 230 was SCHEDULED but not HEARD. .                                                                                 
                                                                                                                                
HB 326    SUPPLEMENTAL/OTHER APPROPRIATIONS                                                                                     
                                                                                                                                
          HB 326 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
SENATE BILL NO. 237                                                                                                           
                                                                                                                                
     "An Act extending the deadline for authorizing school                                                                      
     construction debt reimbursed by the state."                                                                                
                                                                                                                                
9:07:51 AM                                                                                                                    
Co-Chair Hoffman  proposed committee substitute,  work draft                                                                    
#26-  LS1342\C, Mischel,  3/31/10 (copy  on file).  Co-Chair                                                                    
Stedman OBJECTED.                                                                                                               
                                                                                                                                
JAY LIVEY, STAFF, CO-CHAIR  HOFFMAN, discussed the Committee                                                                    
Substitute  (CS). He  relayed  that  three proposed  changes                                                                    
exist. First,  the findings section more  closely focuses on                                                                    
the Kasayulie hearing. Secondly,  Section 2, Line 18 changes                                                                    
the  name of  the  fund created  to  the Regional  Education                                                                    
Attendance Area School  Fund, as the previous  title did not                                                                    
relate to  the text. The third  change in Section 4,  Page 8                                                                    
calls for  review of the  impact the legislation has  on the                                                                    
state's bond  rating. The  change calls for  a review  to be                                                                    
conducted five years from the effective date of the bill.                                                                       
                                                                                                                                
9:11:33 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman added  that his office is  working with the                                                                    
administration to  wordsmith the legislation. He  planned to                                                                    
discuss his concerns in the  other body. He commented on the                                                                    
Kasayulie versus  State case. He  explained that  his office                                                                    
has  worked with  the plaintiffs  and school  districts with                                                                    
much headway in the right direction.                                                                                            
                                                                                                                                
Co-Chair  Stedman WITHDREW  his  OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
Co-Chair Stedman stated  that a new updated  fiscal note was                                                                    
released.                                                                                                                       
                                                                                                                                
EDDY  JEANS,  DIRECTOR,   SCHOOL  FINANCES  AND  FACILITIES,                                                                    
DEPARTMENT  OF  EDUCATION  AND EARLY  DEVELOPMENT,  informed                                                                    
that the two  fiscal notes were combined. The  first part of                                                                    
the  fiscal note  estimates the  amount  of state  liability                                                                    
under the  debt reimbursement  program. He  anticipated that                                                                    
the first  year of  liability would occur  in FY13.  A three                                                                    
year average of projects  approved under the program yielded                                                                    
the  $3.7 million  estimated  state  liability beginning  in                                                                    
FY13  under the  debt reimbursement  program. He  elaborated                                                                    
that the  second portion  of the  fiscal note  addresses the                                                                    
new  funding  formula   for  regional  education  attendance                                                                    
areas.   The  estimation   is   an   annual  allocation   of                                                                    
approximately $40 million dollars.                                                                                              
                                                                                                                                
Co-Chair Stedman stated that public testimony is closed.                                                                        
                                                                                                                                
Co-Chair Hoffman MOVED to report  CS SB 237 out of Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
SB  237 was  REPORTED  out  of Committee  with  a "do  pass"                                                                    
recommendation  and   with  new  fiscal  impact   note  from                                                                    
Department of Education and Early Development.                                                                                  
                                                                                                                                
9:15:00 AM                                                                                                                    
                                                                                                                                
SENATE BILL NO. 174                                                                                                           
                                                                                                                                
     "An Act relating to professional student exchange                                                                          
     program   availability   and    conditions   for   loan                                                                    
     forgiveness."                                                                                                              
                                                                                                                                
9:15:47 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  MOVED  to   ADOPT  work  draft  LS0764\T,                                                                    
Mischel, 2/1/10. Co-Chair Stedman OBJECTED.                                                                                     
                                                                                                                                
MICHAEL ROVITO, STAFF, SENATOR MENARD,  discussed the CS. He                                                                    
explained the  differences. Page 1,  Section 2 was  added to                                                                    
clarify   that  the   Alaska  Commission   on  Postsecondary                                                                    
Education  shall administer  Alaska's  participation in  the                                                                    
Western Regional  Higher Education Compact. Page  2, Section                                                                    
3  was  modified  to  address   the  loan  repayment  terms.                                                                    
Initially the  bill set the  annual repayment  interest rate                                                                    
at five percent, but concern  was raised that locking a rate                                                                    
in statute was  bad policy. The current  language in version                                                                    
T  uses  existing  statute  AS  14 435  10  to  dictate  the                                                                    
interest payment  of the loans.  The third change  occurs on                                                                    
Section 4,  Page 2. The  scope of the section  describes how                                                                    
an  individual   can  receive   loan  forgiveness   and  the                                                                    
parameters that must be met to receive that forgiveness.                                                                        
                                                                                                                                
9:18:57 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman WITHDREW  his  OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
Senator Menard delivered the sponsor statement.                                                                                 
                                                                                                                                
     Senate Bill 174 will boost the number of Alaska's                                                                          
     health care providers by making it more financially                                                                        
     feasible and  attractive for a recent  graduate to come                                                                    
     back to the state.                                                                                                         
                                                                                                                                
     We   now  have   the  WAMI   program,  which   provides                                                                    
     educational  opportunities  for medical  students.  But                                                                    
     for  dentists, there  is a  massive gap  in educational                                                                    
     opportunities.                                                                                                             
                                                                                                                                
     This is where Senate Bill 174 comes in.                                                                                    
                                                                                                                                
     There's no  doubt about Alaska's shortage  of dentists.                                                                    
     This has been  a long-time problem in  rural Alaska. In                                                                    
     other areas of  the state there are  an extremely small                                                                    
     percentage of providers taking  Medicaid. As the exodus                                                                    
     of  retiring dentists  continues, and  recent graduates                                                                    
     are  wooed by  Lower  48 medical  clinics, the  problem                                                                    
     worsens and Alaska loses.                                                                                                  
                                                                                                                                
     A  well crafted  loan forgiveness  program will  entice                                                                    
     Alaskans   graduating   in  dentistry,   pharmacy   and                                                                    
     optometry to come home for their careers.                                                                                  
                                                                                                                                
     Senate   Bill   174   accomplishes  this   by   setting                                                                    
     requirements for loan forgiveness.                                                                                         
                                                                                                                                
     Working  with the  Western  Interstate Commissions  for                                                                    
     Higher   Education,  also   known   as  WICHE,   Alaska                                                                    
     residents will  be able  to attend  professional health                                                                    
     care  programs not  offered  in  the Alaska  university                                                                    
     system.  WICHE is  a regional  organization adopted  in                                                                    
     the 1950s.  Its purpose  is to create  resource sharing                                                                    
     among higher education systems in the American west.                                                                       
                                                                                                                                
     This  bill establishes  a minimum  number of  supported                                                                    
     Alaska   participants   in  dentistry,   pharmacy   and                                                                    
     optometry. The  bill also sets  the loan  interest rate                                                                    
     for the PSE  loan in statute at 5  percent and provides                                                                    
     zero  percent  interest  during  the  participants'  in                                                                    
     school period.                                                                                                             
                                                                                                                                
     Senate Bill  174 will  establish a  forgiveness program                                                                    
     entitlement of  up to 25  percent loan  forgiveness for                                                                    
     the  participants who  meet these  criteria: They  must                                                                    
     accept Medicaid  for not less  than 5 percent  of their                                                                    
     total average gross billings for the year.                                                                                 
                                                                                                                                
     Participants in the program could get an additional 25                                                                     
     percent loan forgiveness if they maintain a practice                                                                       
     in rural areas.                                                                                                            
                                                                                                                                
     Please help me support retaining new dentists and                                                                          
     other medical professionals in Alaska, for the entire                                                                      
     state's benefit.                                                                                                           
                                                                                                                                
9:24:21 AM                                                                                                                    
                                                                                                                                
Senator Thomas asked about Page 2,  Line 17. He asked if the                                                                    
loan forgiveness  was for the  initial year, or  annually as                                                                    
the loan takes place.                                                                                                           
                                                                                                                                
DIANE BARRANS,  EXECUTIVE DIRECTOR,  POSTSECONDARY EDUCATION                                                                    
COMMISSION,  DEPARTMENT  OF   EDUCATION  answered  that  the                                                                    
certification process  would occur annually. She  noted that                                                                    
the department would work with  the Department of Health and                                                                    
Social Services (DHSS) to ensure the certification.                                                                             
                                                                                                                                
Senator  Thomas  asked if  the  certification  would be  750                                                                    
hours minimum, or a six  month requirement. He asked to know                                                                    
the percentages forgiven. Ms. Barrans  referred to Page 3 of                                                                    
the bill where a governing cap is discussed.                                                                                    
                                                                                                                                
Senator Thomas  clarified that the 50  percent referenced on                                                                    
Page 3, Line 5 is the defining factor.                                                                                          
                                                                                                                                
9:26:46 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  noted the fiscal note  from the Department                                                                    
of Education  and Early Development  (DEED) for  $230,500 in                                                                    
FY11 to fund the loans.  The cost is increased in subsequent                                                                    
years. The committee will request  an updated fiscal note to                                                                    
reflect the changes in the CS.                                                                                                  
                                                                                                                                
9:27:26 AM                                                                                                                    
                                                                                                                                
JIM TOWLE,  EXECUTIVE DIRECTOR,  ALASKA DENTAL  SOCIETY (via                                                                    
teleconference),  testified in  support of  the legislation.                                                                    
He stressed that  the bill provides an excellent  tool for a                                                                    
long term  and sustainable source of  professional education                                                                    
currently unavailable in Alaska.                                                                                                
                                                                                                                                
                                                                                                                                
TRACY   OMAN,   EXECUTIVE    DIRECTOR,   ALASKA   OPTOMETRIC                                                                    
ASSOCIATION  (via teleconference),  testified in  support of                                                                    
the  legislation.  She noted  that  Alaska  is home  to  119                                                                    
practicing optometrists with  22 percent reaching retirement                                                                    
age. The  bill offers an  incentive for people to  return to                                                                    
Alaska.                                                                                                                         
                                                                                                                                
9:31:22 AM                                                                                                                    
                                                                                                                                
DAVID  LOGAN,  LEGISLATIVE  CHAIR,  ALASKA  DENTAL  SOCIETY,                                                                    
testified  in support  of the  legislation. Students  in the                                                                    
fields  of   dentistry,  optometry,  and  pharmacy   face  a                                                                    
challenge of high  out of state tuition as  programs for the                                                                    
fields  do not  exist in  Alaska.  The cost  of health  care                                                                    
education  has  risen   dramatically.  Students  can  finish                                                                    
school with $200 to $350 thousand dollars worth of debt.                                                                        
                                                                                                                                
9:34:10 AM                                                                                                                    
                                                                                                                                
PAT CARR,  PROGRAM MANAGER DEPARTMENT  OF HEALTH  AND SOCIAL                                                                    
SERVICES  informed  that  she  was  present  for  questions.                                                                    
Senator Olson asked  if the department was opposed  to or in                                                                    
favor  of  the  legislation.  Ms. Carr  responded  that  the                                                                    
administration has  not taken  a position  on the  bill. Ms.                                                                    
Barrans echoed the testimony of Ms. Carr.                                                                                       
                                                                                                                                
9:35:51 AM                                                                                                                    
                                                                                                                                
Senator  Olson agreed  that the  shortages of  the discussed                                                                    
professions have become critical.  He revealed that dentists                                                                    
require  additional investment  in the  equipment that  they                                                                    
require  to practice  their profession.  He elucidated  that                                                                    
optometrists often discover disease  in the early stages and                                                                    
are trained to perform  specialized procedures that a family                                                                    
practice  doctor may  not have  experience with.  He pointed                                                                    
out the importance of pharmacy school.                                                                                          
                                                                                                                                
Senator   Egan  asked   if  a   shortage  of   dentists  and                                                                    
optometrists exists in Alaska.  Senator Menard believed that                                                                    
there will  be a  shortage in  the future  with many  of the                                                                    
dentists nearing retirement age.                                                                                                
                                                                                                                                
Senator  Huggins echoed  the comments  of Senator  Olson. He                                                                    
identified  the necessary  responsibility  taken by  Senator                                                                    
Menard.                                                                                                                         
                                                                                                                                
Senator Menard  added that  prior to SB  174 she  received a                                                                    
proposal  from Oregon  State  University  offering a  dental                                                                    
seat in perpetuity for any  dental student that would attend                                                                    
their school.  The mentioned professions enjoy  low risk for                                                                    
a chance of loan default.                                                                                                       
                                                                                                                                
9:41:23 AM                                                                                                                    
                                                                                                                                
SB 174 was HEARD and HELD in Committee for further                                                                              
consideration.                                                                                                                  
                                                                                                                                
9:41:35 AM     AT EASE                                                                                                        
9:44:15 AM     RECONVENED                                                                                                     
                                                                                                                                
SENATE BILL NO. 235                                                                                                           
                                                                                                                                
     "An Act relating to charter school approval and                                                                            
     funding."                                                                                                                  
                                                                                                                                
9:44:27 AM                                                                                                                    
                                                                                                                                
SENATOR KEVIN MEYER requested his staff present the                                                                             
legislation.                                                                                                                    
                                                                                                                                
JOMO STUART, STAFF, SENATOR MEYER,                                                                                              
                                                                                                                                
     Senate Bill 235 amends existing state statute to allow                                                                     
    the Department of Education & Early Development to                                                                          
     compete on behalf of Alaska charter schools for                                                                            
     facility maintenance & start-up grant funds nationally                                                                     
    available through the U.S. Department of Education.                                                                         
     Alaska and its charter schools are currently                                                                               
     ineligible.                                                                                                                
                                                                                                                                
     Senate Bill 235 addresses this inequity in two ways:                                                                       
                                                                                                                                
     First, Senate Bill 235 removes the statutory cap which                                                                     
     limits the number of charter schools, on a statewide                                                                       
    basis to sixty.  As the only authorizer of charter                                                                          
    schools, local school boards thoroughly examine and                                                                         
    evaluate charter applications prior to agreeing to                                                                          
     accept a charter for their district. In this way,                                                                          
     local school boards act as a check on charter school                                                                       
     over-proliferation and growth - today, there are only                                                                      
     26 charter schools in existence across Alaska - making                                                                     
     a state mandated cap unnecessary.                                                                                          
                                                                                                                                
     Second, Senate Bill 235 creates in statute the                                                                             
     programmatically required state funding mechanism                                                                          
     necessary to comply under the federal grant program.                                                                       
     It amends current law to establish in Alaska the per-                                                                    
     pupil facilities aid program required under the U.S.                                                                       
     Department of Education's applicant eligibility                                                                            
     requirements.  Senate Bill 235 then seeds the in-state                                                                     
    aid program with a nominal $1 dollar per pupil per                                                                          
     year.  However, it is communities and school districts                                                                     
     which must arrange for themselves the means to provide                                                                     
    the 10% local contribution necessary to achieve the                                                                         
     initial 90% federal match and subsequent, escalating                                                                       
     match proportions.                                                                                                         
                                                                                                                                
     With minimal State involvement, but maximized local                                                                        
     initiative & control, Senate Bill 235:                                                                                     
                                                                                                                                
        · Improves the State of Alaska's ability to secure                                                                      
          the Federal Start Up Funds for Alaskan Charter                                                                        
          Schools.                                                                                                              
        · Makes charter schools eligible to compete for                                                                         
          federal grants for facilities.                                                                                        
        · Is strongly supported statewide by school boards,                                                                     
          school districts, and charter schools.                                                                                
        · Reduces a major barrier to the development of                                                                         
          charter schools.                                                                                                      
        · Benefits Alaska's children.                                                                                           
        · Will increase educational choices for parents &                                                                       
          opportunities for students.                                                                                           
                                                                                                                                
Co-Chair  Stedman mentioned  one fiscal  note from  DEED for                                                                    
$301 thousand  in general  funds of  which $150  thousand is                                                                    
requested for adoption of the  regulations and the remainder                                                                    
is  for  one  and  one  half  positions  to  administer  the                                                                    
program.                                                                                                                        
                                                                                                                                
9:48:12 AM                                                                                                                    
                                                                                                                                
LORETTA  NARDI, PRESIDENT,  PARTNERSHIP  FOR ALASKA  CHARTER                                                                    
SCHOOLS (via  teleconference), testified  in support  of the                                                                    
legislation. She stressed the  importance of charter schools                                                                    
as  public  schools.  Alaska  charter  schools  often  lease                                                                    
facilities with funds slated for student use.                                                                                   
                                                                                                                                
9:51:02 AM                                                                                                                    
                                                                                                                                
BARBARA  GERARD,  PRINCIPAL,  ACADEMY  CHARTER  SCHOOL  (via                                                                    
teleconference)  testified in  support  of the  legislation.                                                                    
She  stressed  her  support  for  charter  schools.  SB  235                                                                    
strengthens Alaska's charter school law.                                                                                        
                                                                                                                                
9:53:52 AM                                                                                                                    
                                                                                                                                
KIKI    ABRAHAMSON,    FIREWEED    ACADEMY,    HOMER    (via                                                                    
teleconference), testified in support  of SB 235. She stated                                                                    
that the facility equity allows access.                                                                                         
                                                                                                                                
9:55:31 AM                                                                                                                    
                                                                                                                                
SAM KITO,  FACILITIES ENGINEER,  ALASKA EDUCATION  AND EARLY                                                                    
EDUCATION, stated  that the administration  does not  have a                                                                    
position  on the  legislation. He  reported that  the fiscal                                                                    
note was  prepared based on  the best interpretation  of the                                                                    
legislative language  and intent.  The fiscal  note includes                                                                    
funding to implement regulations  to administer the program.                                                                    
The  program  allows start  up  or  enhancement funding  for                                                                    
charter  school  facility  programs. The  grant  funding  is                                                                    
stepped  so  that  the federal  government  receives  larger                                                                    
amounts  in  the  first  year   with  declining  amounts  in                                                                    
subsequent years.  The department believes  that regulations                                                                    
are  necessary for  the implementation  of a  new facilities                                                                    
funding  program. The  department estimates  the need  for a                                                                    
single full  time staff person  dedicated to  the management                                                                    
of the funding.                                                                                                                 
                                                                                                                                
9:58:04 AM                                                                                                                    
                                                                                                                                
Senator Thomas  commented that the  bill addresses  the long                                                                    
term problem of financing for charter school facilities.                                                                        
                                                                                                                                
Senator Huggins noted  that there are 26  charter schools in                                                                    
the state.  He opined that  SB 235 represents a  solution to                                                                    
part   of  the   problem.  He   expressed  support   of  the                                                                    
legislation.  Charter  schools  are  part  of  the  national                                                                    
strategy to move the education system forward.                                                                                  
                                                                                                                                
Senator  Meyer explained  that he  and  Senator Huggins  met                                                                    
with  a group  of  concerned parents  who see  SB  235 as  a                                                                    
mechanism to help charter schools  whose largest obstacle is                                                                    
facility funding.                                                                                                               
                                                                                                                                
10:01:29 AM                                                                                                                   
                                                                                                                                
SB  235  was  HEARD  and   HELD  in  Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SENATE BILL NO. 236                                                                                                           
                                                                                                                                
     "An Act relating to tax  credits for cash contributions                                                                    
     by taxpayers that are  accepted for certain educational                                                                    
     purposes or  for a college facility;  and providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
10:01:43 AM                                                                                                                   
                                                                                                                                
Senator Meyer discussed SB 236.                                                                                                 
                                                                                                                              
     CS  for SB  236 amends  the current  statutes regarding                                                                    
     higher education tax credits  by expanding the range of                                                                    
     the "second tier" of tax  credits and by adding a third                                                                    
     tier.                                                                                                                      
                                                                                                                                
    Under current law, state income tax payers who make                                                                         
     cash contributions to an Alaskan educational or                                                                            
     vocational institution receive a tax credit of 50                                                                          
     percent for contributions up to $100,000 and 100                                                                           
     percent for contributions between $100,000 and                                                                             
     $200,000. Therefore, maximum tax credit allowable in                                                                       
     any given year is $150,000.  This limit appears to be                                                                      
     having a constraining effect on corporate donations to                                                                     
     & investments in educational and vocational                                                                                
     institutions in Alaska.                                                                                                    
                                                                                                                                
     Under CS for  SB 236, cash contributions  to an Alaskan                                                                  
     educational  or vocational  institution  receive a  tax                                                                    
     credit of 50 percent  for contributions up to $100,000,                                                                    
     a  100 percent  tax  credit  for contributions  between                                                                    
     $100,000 and $300,000  and a 50 percent  tax credit for                                                                    
     contributions  over $300,000,  for a  maximum allowable                                                                    
     credit accrual of $25 Million per year.                                                                                    
                                                                                                                                
     Many  major employers  in  Alaska  understand that  the                                                                    
     future success  of their  businesses requires  a highly                                                                    
     skilled  workforce.  These   businesses  want  to  hire                                                                    
     Alaskans  from  Alaska's vocational  schools,  colleges                                                                    
     and  universities.  In  addition, many  businesses  are                                                                    
     interested    in,    through    commercialization    of                                                                    
     university-generated   information  and   technologies,                                                                    
     helping  Alaska's  universities expand  their  existing                                                                    
     scientific  research  &   development  capacities  -  a                                                                    
     process  that has  become a  major source  for economic                                                                    
     development and diversification in other states.                                                                           
                                                                                                                                
     By  facilitating greater  cooperation between  Alaska's                                                                    
     business   and  education   sectors,  and   encouraging                                                                    
     greater  financial  support  from  the  former  to  the                                                                    
     latter, SB  236 hopes important workforce  and economic                                                                    
     development  goals   such  as  the  following   can  be                                                                    
     achieved:                                                                                                                  
                                                                                                                                
       · Strengthening workforce development and job                                                                            
          opportunities for Alaskans                                                                                            
        · Increasing collaboration between Alaska's                                                                             
          employers and its higher education institutions                                                                       
        · Diversifying funding sources for Alaska's higher                                                                      
          education institutions                                                                                                
        · Enhancing student success through internships, K-                                                                     
          12 outreach, camps, and other developmental                                                                           
          programs                                                                                                              
        · Developing research programs that contribute to                                                                       
          economic development in Alaska                                                                                        
                                                                                                                                
10:03:46 AM                                                                                                                   
                                                                                                                                
JIM  JOHNSEN,  SENIOR  VICE PRESIDENT,  DOYON  LIMITED  (via                                                                    
teleconference),  testified in  support of  the legislation.                                                                    
He  stated  that  values from  shareholders  are  encouraged                                                                    
through private  development. The 50 percent  tax credit for                                                                    
natural gas  exploration effectively encourages  the current                                                                    
exploration for gas  in the Nanana Basin and for  oil in the                                                                    
Yukon  Flats. He  opined that  the state's  encouragement of                                                                    
private   investment  in   human  resource   development  in                                                                    
colleges  and universities  is  not as  effective  as it  is                                                                    
capped  at $150  thousand per  year. He  agreed that  SB 236                                                                    
addresses the shortcoming.                                                                                                      
                                                                                                                                
10:06:34 AM                                                                                                                   
                                                                                                                                
ROBYNN  WILSON, TAX  DIVISION  (via teleconference),  stated                                                                    
that she is unaware of  the administration's position on the                                                                    
bill. She  offered to present  the committee with a  list of                                                                    
technical  suggestions, but  stated no  known concerns  from                                                                    
the administration.                                                                                                             
                                                                                                                                
Senator Huggins inquired about the  sunset date. He recalled                                                                    
from  his  work on  the  Education  Committee that  industry                                                                    
provided  a case  for  elimination of  the  sunset date.  He                                                                    
requested the consideration of the industry's perspective.                                                                      
                                                                                                                                
10:08:47 AM                                                                                                                   
                                                                                                                                
Senator  Olson stated  that  the  contributor's receive  tax                                                                    
relief under  federal income tax  so a state tax  credit may                                                                    
be seen as  "double dipping." Senator Meyer  deferred to Ms.                                                                    
Wilson. Ms. Wilson  responded that the statute  reads that a                                                                    
taxpayer cannot  claim both a charitable  contribution and a                                                                    
credit  for   the  same   contribution  to   an  educational                                                                    
facility.                                                                                                                       
                                                                                                                                
SB  236  was  HEARD  and   HELD  in  Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SENATE BILL NO. 224                                                                                                           
                                                                                                                                
     "An   Act  establishing   the  governor's   performance                                                                    
     scholarship  program  and   relating  to  the  program;                                                                    
     establishing  the  governor's  performance  scholarship                                                                    
     fund  and relating  to the  fund;  relating to  student                                                                    
     records;  making conforming  amendments; and  providing                                                                    
     for an effective date."                                                                                                    
                                                                                                                                
10:10:44 AM                                                                                                                   
                                                                                                                                
LARRY  LEDOUX  COMMISSIONER,  DEPARTMENT  OF  EDUCATION  AND                                                                    
EARLY  DEVELOPMENT opined  that  the bill  emerged from  the                                                                    
Senate  Education  Committee  a stronger  and  more  focused                                                                    
piece   of  legislation.   He  explained   that  the   Merit                                                                    
Scholarship  was a  contract inviting  students to  choose a                                                                    
rigorous  curriculum  and  to  validate  good  grades  by  a                                                                    
standardized  assessment. He  believed that  the legislation                                                                    
was transformative  and would change the  mindset of Alaskan                                                                    
students.  Alaska must  create  a culture  of success.  Many                                                                    
students  dream of  attending college  or technical  school.                                                                    
The  Alaska commission  on post  secondary education  quoted                                                                    
statistics  that in  ten years  among 50  of today's  Alaska                                                                    
ninth graders,  three will  have a  college degree,  19 will                                                                    
not  graduate  from  high  school,  eleven  will  have  some                                                                    
college and  17 will  only have a  high school  diploma. The                                                                    
goals of  the Merit Scholarship  are to improve  high school                                                                    
graduation rates  and to  improve the  rigor of  high school                                                                    
courses. He explained that he  wants to create a college and                                                                    
post secondary culture in Alaska.                                                                                               
                                                                                                                                
Mr.  LeDoux  described  the  specifics  of  the  scholarship                                                                    
program. He noted  that the program is open  to graduates of                                                                    
Alaska  high schools  whether they  are home  school, public                                                                    
school, or  private school students. The  scholarship can be                                                                    
used at  any Alaska  post secondary  private or  public tech                                                                    
school or  college and is  not restricted to  the University                                                                    
of   Alaska.  He   mentioned   three   levels  of   academic                                                                    
scholarships.  The   academic  scholarships   provide  eight                                                                    
semesters of  funding over a  six year period. The  six year                                                                    
time period  is important because many  of Alaska's students                                                                    
are nontraditional. The criteria  to achieve the scholarship                                                                    
are  based  on  a   student's  grades,  an  assessment  that                                                                    
validates  the   grades  and  a  rigorous   curriculum  that                                                                    
predicts  students'  success in  college.  If  a student  is                                                                    
unable  to   complete  the  curriculum  due   to  geographic                                                                    
location   or   availability,   they  can   apply   to   the                                                                    
commissioner's  office  that  will  devise  and  develop  an                                                                    
individualized alternative  program for the student  to meet                                                                    
the same  standard. The other criterion  for the alternative                                                                    
pathway is  a situation beyond  the control of  the student.                                                                    
The  criteria is  an  A  average for  the  highest level  of                                                                    
academic  scholarship,  a  B average  for  middle  level  of                                                                    
academic scholarship, and  a C+ average for  the lower level                                                                    
of academic scholarship.                                                                                                        
                                                                                                                                
10:18:17 AM                                                                                                                   
                                                                                                                                
Mr.   LeDoux  highlighted   the   assessment  criteria.   He                                                                    
explained the importance of the  grades achieved by students                                                                    
in rigorous  courses. Another criterion is  validated by the                                                                    
standardized assessment  test. It is  not the intent  of the                                                                    
program to  create a rigorous  assessment test  for students                                                                    
to  qualify.  The  rigorous  curriculum  demanded  from  the                                                                    
Senate Education  Committee was four years  of English, four                                                                    
years  of math,  four years  of science,  and four  years of                                                                    
social studies,  of which one  year can be an  Alaska native                                                                    
language, a  foreign language, or  an arts  program. Another                                                                    
option includes four  years of language arts,  four years of                                                                    
social  studies,  three years  of  science,  three years  of                                                                    
math, and two years of foreign language.                                                                                        
                                                                                                                                
Mr. LeDoux  informed that  the highest  academic scholarship                                                                    
is 100 percent  tuition at the University of  Alaska for the                                                                    
2010-2011 school  year for 15 credits.  The gold scholarship                                                                    
is 75 percent tuition at  the University of Alaska for eight                                                                    
semesters. The silver academic is  50 percent of the tuition                                                                    
using  the University  of Alaska  over eight  semesters. The                                                                    
current technical scholarship awards $3000  a year for a two                                                                    
year  period.  Both  the  House  and  the  Senate  Education                                                                    
committee added  a needs-based component to  the scholarship                                                                    
following the achievement of  the academic program. Students                                                                    
apply through  the Free Application for  Federal Student Aid                                                                    
(FAFSA) based on their criterion  which would be determined.                                                                    
The minimum expected cost for any student would be $2000.                                                                       
                                                                                                                                
Mr. LeDoux stated that the  cost of implementing the program                                                                    
is approximately  $417 thousand. The legislature  could fund                                                                    
the  operating   cost  this  year  which   would  allow  the                                                                    
Department   of  Labor   and   Workforce  Development,   the                                                                    
commission of  post secondary education, and  the Department                                                                    
of  Education   and  Early  Development  to   institute  the                                                                    
regulations necessary for funding in 2010.                                                                                      
                                                                                                                                
10:24:02 AM                                                                                                                   
                                                                                                                                
MARK  HAMILTON, PRESIDENT,  UNIVERSITY OF  ALAKSA, testified                                                                    
in support  of the  legislation. He  explained the  needs of                                                                    
preparation  and access.  The instrument  of addressing  the                                                                    
needs is  the responsibility  of the legislature.  He stated                                                                    
that  scholarships  work.  Most  scholarships  address  high                                                                    
school  students  moving  directly to  college.  Alaska  has                                                                    
nontraditional students who are  not eligible for the Alaska                                                                    
Scholars. These nontraditional  students comprise 50 percent                                                                    
of University  of Alaska students.  He recommended  that the                                                                    
legislature  seek  a  needs-based  requirement  that  exists                                                                    
outside of the traditional high school student.                                                                                 
                                                                                                                                
10:26:31 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman   commented  that  the   Alaska  Scholar's                                                                    
Program has been  as successful with an increase  from 42 to                                                                    
60  percent. He  recalled a  request from  the President  to                                                                    
expand the  Alaska Scholars Program. Mr.  Hamilton advocated                                                                    
for an  expansion of the  Alaska Scholar's Program by  15 or                                                                    
20 percent.  He noted  that the  program has  an inexpensive                                                                    
method of administration.                                                                                                       
                                                                                                                                
10:28:49 AM                                                                                                                   
                                                                                                                                
Senator   Thomas  asked   about  the   existing  scholarship                                                                    
programs. Ms.  Barrans responded  that the  Alaska Advantage                                                                    
Education Grant is the only  other non-loan aid program. The                                                                    
Alaska  Advantage Education  Grant  is  a needs-based  grant                                                                    
that  has  been funded  with  a  blend of  federal  dollars,                                                                    
student loan corporation interest  income on an unencumbered                                                                    
account,  and  with  a general  fund  appropriation  in  the                                                                    
capital budget in  2009. She noted that the  funding for the                                                                    
program  is modest  and lacks  the components  cited in  the                                                                    
proposal today regarding academic  criterion. The grant is a                                                                    
$2000 per year maximum grant.                                                                                                   
                                                                                                                                
Senator Thomas requested information  on the concept of loan                                                                    
forgiveness versus  scholarship. Ms. Barrans  responded that                                                                    
from the late 1960s through  1986, the state funded its loan                                                                    
program  with general  funds. The  loan forgiveness  program                                                                    
allowed   for  entitlements   for   up   to  fifty   percent                                                                    
forgiveness. She  observed that the aggregate  impact of the                                                                    
program  was  unsuccessful  as  only  one  in  five  of  the                                                                    
borrowers  returned to  the state.  The  overall impact  was                                                                    
that  the state  continues  to collect  from  some of  those                                                                    
borrowers today  and default rates approach  28 percent. The                                                                    
cost  of  the  investment was  substantial  with  relatively                                                                    
indifferent returns.                                                                                                            
                                                                                                                                
10:33:26 AM                                                                                                                   
                                                                                                                                
Senator Thomas noted that the  proposed program is broad and                                                                    
would cost less than the previous one. Ms. Barrans agreed.                                                                      
                                                                                                                                
Senator Ellis  asked about the Alaska  Advantage Program and                                                                    
targeted  nature of  the program  toward workforce  needs of                                                                    
the state. Ms. Barrans answered  that the statute allows the                                                                    
commission to  create priorities in high  achieving students                                                                    
and to provide  larger grants to those  students enrolled in                                                                    
career  programs leading  to workforce  shortage areas.  The                                                                    
three  areas  of study  that  qualify  are process  industry                                                                    
extraction, education, and health  and public safety related                                                                    
careers.                                                                                                                        
                                                                                                                                
Senator Ellis  commented that  the Alaska  Advantage Program                                                                    
has   promise   in   targeting   students   with   workforce                                                                    
development needs,  high achieving  students, and  those who                                                                    
simply need the help.                                                                                                           
                                                                                                                                
Co-Chair Stedman mentioned one fiscal  note from DOL for $25                                                                    
thousand  in general  funds to  contract  services to  adopt                                                                    
regulations, one fiscal  note from DOR for  $115 thousand in                                                                    
interagency  receipts  to cover  the  cost  of managing  the                                                                    
endowment fund, and  one fiscal note from  DEED for $376.300                                                                    
in  general  funds   to  cover  the  cost   of  the  program                                                                    
implementation.  The  fiscal  note   reflects  the  cost  of                                                                    
funding the scholarship in the amount of $25,341 in general                                                                     
funds which increases in the out years.                                                                                         
                                                                                                                                
SB 224 was HEARD and HELD in Committee for further                                                                              
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:37 AM.                                                                                          

Document Name Date/Time Subjects
Support letter from Kim Hort.doc SFIN 4/1/2010 9:00:00 AM
SB 174
Staffer assigned to SB.doc SFIN 4/1/2010 9:00:00 AM
SB 174
Sponsor Statement.doc SFIN 4/1/2010 9:00:00 AM
SB 174
SB 174 RFH.doc SFIN 4/1/2010 9:00:00 AM
SB 174
SB 174 most recent.pdf SFIN 4/1/2010 9:00:00 AM
SB 174
SB 174 AK Dental Soc. lttr[1].pdf SFIN 4/1/2010 9:00:00 AM
SB 174
SB 174 AK Dental Soc. lttr 2[1].pdf SFIN 4/1/2010 9:00:00 AM
SB 174
List of witnesses.doc SFIN 4/1/2010 9:00:00 AM
SB 174
HB235 SB174- Letter of Support (2).doc SFIN 4/1/2010 9:00:00 AM
HB 235
SB 174
Changes to Bill.doc SFIN 4/1/2010 9:00:00 AM
SB 174
SB 235 - Sponsor Statement[1].pdf SFIN 4/1/2010 9:00:00 AM
SB 235
SB 235 - Sectional Analysis[1].pdf SFIN 4/1/2010 9:00:00 AM
SB 235
SB 235 - PowerPoint[1].pdf SFIN 4/1/2010 9:00:00 AM
SB 235
SB 235 - National Ranking[1].pdf SFIN 4/1/2010 9:00:00 AM
SB 235
SB 235 - National Charter Alliance CSP Fact Sheet[1].pdf SFIN 4/1/2010 9:00:00 AM
SB 235
SB 235 - Mat-Su Support Resolution[1].pdf SFIN 4/1/2010 9:00:00 AM
SB 235
SB 235 - Letters of Support[1].pdf SFIN 4/1/2010 9:00:00 AM
SB 235
SB 235 - Kern - Fed Dept Ed - Letter[1].pdf SFIN 4/1/2010 9:00:00 AM
SB 235
SB 235 - DED Charter Grant Program[1].pdf SFIN 4/1/2010 9:00:00 AM
SB 235
SB 235 - Comeau Article[1].pdf SFIN 4/1/2010 9:00:00 AM
SB 235
SB 235 - Alaska Charter Law Fact Sheet[1].pdf SFIN 4/1/2010 9:00:00 AM
SB 235
SB 236 2010 SEDA ltter of support.pdf SFIN 4/1/2010 9:00:00 AM
SB 236
GPS Sectional CSSB224.doc SFIN 4/1/2010 9:00:00 AM
SB 224
GPS MathScience Course Offerings.doc SFIN 4/1/2010 9:00:00 AM
SB 224
SB 139 Written Testimony Myers.doc SFIN 3/31/2010 9:00:00 AM
SFIN 4/1/2010 9:00:00 AM
SB 139
SB224 Award Amounts[1].pdf SFIN 4/1/2010 9:00:00 AM
SB 224
SB 174 Proposed CS SFIN Version T.pdf SFIN 4/1/2010 9:00:00 AM
SB 174
SB 237 Proposed CS SFIN Version C.pdf SFIN 4/1/2010 9:00:00 AM
SB 237
CSSB224(EDC)-EED-ACPE-03-26-10.pdf SFIN 4/1/2010 9:00:00 AM
SB 224
CSSB237-New FN EED-ESS-3-31-10 Section 3.pdf SFIN 4/1/2010 9:00:00 AM
SB 237
SB 237 Amendment 1 Hoffman SFIN 040110.pdf SFIN 4/1/2010 9:00:00 AM
SB 237
CSSB237 NEW FN -EED-ESS-3-30-10.pdf SFIN 4/1/2010 9:00:00 AM
SB 237
SB 174 Proposed CS SFIN Version T.pdf SFIN 4/1/2010 9:00:00 AM
SB 174