Legislature(2003 - 2004)
2004-01-28 House Journal
Full Journal pdf2004-01-28 House Journal Page 2417 HB 404 HOUSE BILL NO. 404 by the House Rules Committee by request of the Governor, entitled: "An Act relating to the Alaska Commission on Postsecondary Education; relating to the Alaska Student Loan Corporation; relating to bonds of the corporation; relating to loan and grant programs of the commission; relating to an exemption from the State Procurement Code regarding certain contracts of the commission or corporation; making conforming changes; and providing for an effective date." was read the first time and referred to the House Special Committee on Education and the Health, Education & Social Services and Finance Committees. The following fiscal note(s) apply: 1. Zero, Dept. of Administration 2. Zero, Dept. of Community & Economic Development 3. Fiscal, Dept. of Education & Early Development 2004-01-28 House Journal Page 2418 The Governor's transmittal letter dated January 22, 2004, follows: "Dear Speaker Kott: Under the authority of article III, section 18, of the Alaska Constitution, I am transmitting a bill relating to the Alaska Commission on Post-secondary Education (ACPE) and the Alaska Student Loan Corporation (ASLC). This bill is a result of ASLC board members and management, in consultation with financial advisors, proposing a mechanism where (1) the state could optimize the use of its financial assets and deliver a greater return to Alaskans for its initial investment in ASLC and ACPE; and (2) continue to effectively administer ACPE/ASLC financial aid programs. The bill would allow ASLC to issue bonds utilizing future cash flow that is in excess of that needed for effective and efficient operation of corporation programs. ASLC predicts it can return $260 million to the state over a three-year period beginning in 2004; the proceeds from which would be available to finance capital projects. The ASLC's primary mission is to support, promote, and provide access to postsecondary education for Alaskans. The objective of this legislation is to continue to serve that mission, but to do so in a way that permits ASLC to serve broader state interests through the efficient allocation of financial resources. As part of the development process, cash flow models were developed to ensure the corporation has and will continue to have the financial capacity to discount loan interest rates and deliver outstanding borrower benefits to its primary customers -- Alaska students and their families. The bill establishes a "needs-based" grant program to be funded from corporate receipts and federal matching dollars. Grants must be used for qualified Alaska education programs focused on meeting Alaska's labor shortage needs. A priority is placed on students enrolled in programs of study (such as health care and education) where there is a severe shortage of trained individuals in Alaska. The bill also creates an "administrative collection order" and a process for establishment and use of such an order by ACPE. An administrative collection order would allow ACPE to establish a lien 2004-01-28 House Journal Page 2419 on borrower's property when that person has broken their promise to re-pay an education loan. Finally, the bill exempts ACPE and ASLC contracts for disbursing and guaranteeing financial aid money from Alaska's procurement code. This creates efficiencies in the internal operations of ACPE and ASLC and meets the needs of participating post-secondary institutions (ACPE contracts with a guaranty agency and disbursing agents to electronically guarantee and/or disburse financial aid money for students to colleges and universities). I urge your prompt and favorable action on this measure. Sincerely yours, /s/ Frank H. Murkowski Governor"