03/30/2012 09:00 AM Senate FINANCE

CS FOR HOUSE BILL NO. 104(RLS)                                                                                                
                                                                                                                                
     "An  Act renaming  the  Alaska performance  scholarship                                                                    
     and  relating  to  the   scholarship  and  tax  credits                                                                    
     applicable   to  contributions   to  the   scholarship;                                                                    
     relating to AlaskAdvantage  education grant funding and                                                                    
     to    Alaska     performance    scholarship    funding;                                                                    
     establishing an  account and  fund for  those purposes;                                                                    
     making  conforming  amendments;  and providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
Co-Chair  Hoffman  MOVED  to ADOPT  the  proposed  committee                                                                    
substitute  for  CS HB  104  (RLS),  Work Draft  27-GH1893\S                                                                    
(Mischel  3/28/12).   Co-Chair  Stedman  OBJECTED   for  the                                                                    
purpose of discussion.                                                                                                          
                                                                                                                                
9:25:31 AM                                                                                                                    
                                                                                                                                
DARWIN PETERSON, STAFF,  SENATE FINANCE COMMITTEE, explained                                                                    
the  changes in  the Work  Draft. He  explained the  changes                                                                    
between  committee substitute  versions R  and S.  He stated                                                                    
that page 2  of the work draft, lines 9  and 10 inserted the                                                                    
words, "an institutional accrediting  body recognized by the                                                                    
United States Secretary of Education."  He looked at page 2,                                                                    
lines 23 and 24 that  added the words, "Alaska residents who                                                                    
have attained  an Alaska high school  diploma by examination                                                                    
after January 1,  2011." He explained that  the phrase "high                                                                    
school diploma by  examination" was the proper  way to refer                                                                    
to  students  who  had   received  their  General  Education                                                                    
Development (GED).  Page 3, line  7 added the  exception for                                                                    
provisions of subsection  C, which were the  new high school                                                                    
diploma by  examination component.  Page 3,  line 9  made an                                                                    
exception  for subsection  D, which  was the  waiver of  the                                                                    
core academic requirements.  Page 4, lines 3  through 30 was                                                                    
the new grace period language.  He stated that the new grace                                                                    
period  language was  taken directly  from the  regulations,                                                                    
and was  only slightly modified.  The grace period  that was                                                                    
in regulation expired with the  graduating class of 2012, so                                                                    
the  new  language  continued  the   grace  period,  so  the                                                                    
Commissioner  can  waive  the requirements.  He  quoted  the                                                                    
grace period language:                                                                                                          
                                                                                                                                
     The   Commissioner  shall   waive  the   core  academic                                                                    
     requirements  for  a  high   school  graduate,  if  the                                                                    
     student  submits and  application  providing proof  the                                                                    
     student  was unable  the academic  requirements because                                                                    
     of illness or disability  or because those courses were                                                                    
     not  available in  the student's  school district.  The                                                                    
     Commissioner  has thirty  days  to approve  or deny  an                                                                    
     application  for  waiver.  High  school  graduates  who                                                                    
     receive  the waiver  will then  have  twelve months  to                                                                    
     finish  the  core  academic requirements  in  a  school                                                                    
     district that sponsors that student.                                                                                       
                                                                                                                                
Mr. Peterson stated that GED  graduates would have 24 months                                                                    
to complete the core academic requirements.                                                                                     
                                                                                                                                
Mr. Peterson  stated that page  5, lines  5, 11, and  17 had                                                                    
deleted  the  word,  "diploma", because  it  was  considered                                                                    
incorrect terminology. He  looked at page 7,  line 19, which                                                                    
changed  the date  from October  1  to September  1 of  each                                                                    
fiscal  year.  Page 7,  lines  21  through 25  inserted  new                                                                    
language:                                                                                                                       
                                                                                                                                
     If an  insufficient number of qualified  applicants are                                                                    
     awarded grants before  the end of the  fiscal year, the                                                                    
     commissioner shall  redeposit the remaining  funds into                                                                    
     the Alaska Higher Education Investment Fund.                                                                               
                                                                                                                                
Mr.  Peterson  explained  that, of  the  earnings  from  the                                                                    
principal  of the  $400 million  fund,  two-thirds would  go                                                                    
into  scholarships, and  one-third  would go  to grants.  If                                                                    
there were  not enough  students that could  use all  of the                                                                    
scholarship  funding  that   was  available,  the  remaining                                                                    
balance of  the funding  will go into  the grants.  If there                                                                    
were  not enough  students to  use all  the available  grant                                                                    
funding, whatever was  leftover at the end of  the year will                                                                    
be deposited  into the  overall Higher  Education Investment                                                                    
Fund to be used in the subsequent fiscal year.                                                                                  
                                                                                                                                
Mr. Peterson  looked at page 7,  line 26. He stated  that it                                                                    
was  not  a  change,  but was  the  small  school  carve-out                                                                    
provision that was staying in the  bill. Page 8, lines 6 and                                                                    
7 was a change that  stated, "the commission shall redeposit                                                                    
the  remaining  amount back  into  the  fund from  which  it                                                                    
originated."                                                                                                                    
                                                                                                                                
Mr. Peterson looked  at page 16, lines 24  through 26, which                                                                    
displayed transition language that  identified that the $400                                                                    
million  that  was appropriated  to  the  AHFC in  the  year                                                                    
prior,  and  would be  used  to  capitalize the  new  Alaska                                                                    
Higher Education  Investment Fund.  Page 17, at  the request                                                                    
of the  department, made changes  to the effective  dates in                                                                    
order to make the program easier to manage.                                                                                     
                                                                                                                                
Mr. Peterson looked at page 9,  lines 2 through 5, which was                                                                    
the payout mechanism in the legislation.                                                                                        
                                                                                                                                
Co-Chair Hoffman  wondered if there  was a  consideration to                                                                    
accommodate the  grant portion  by adding  additional funds,                                                                    
in  order for  the  fund  to be  more  stable. Mr.  Peterson                                                                    
replied that Legislative  Finance applied that consideration                                                                    
of a block for additional deposits.                                                                                             
                                                                                                                                
Co-Chair  Stedman  felt  that the  principle  would  not  be                                                                    
considered  until 20  years had  passed. He  felt that  over                                                                    
time, it may  be seen that performance  may be substantially                                                                    
different than what was anticipated.                                                                                            
                                                                                                                                
Co-Chair Hoffman commented  that he did not want  to work on                                                                    
the problem in 20 years.                                                                                                        
                                                                                                                                
Senator Thomas wondered if the  GED examination was the only                                                                    
acceptable  alternative  to  the high  school  diploma.  Mr.                                                                    
Peterson  deferred  that  question   to  the  Department  of                                                                    
Education and Early Development.                                                                                                
                                                                                                                                
Co-Chair Stedman  WITHDREW his OBJECTION. Seeing  NO further                                                                    
OBJECTION Work Draft 27-GH1893\S was ADOPTED.                                                                                   
                                                                                                                                
9:36:46 AM                                                                                                                    
                                                                                                                                
DIANE BARRANS,  EXECUTIVE DIRECTOR,  POSTSECONDARY EDUCATION                                                                    
COMMISSION,  DEPARTMENT  OF   EDUCATION,  expressed  concern                                                                    
regarding  some  additions  and  changes  to  the  committee                                                                    
substitute.   She  stressed   that  the   governor  remained                                                                    
committed to the program, and  that the program needed to be                                                                    
strong without a  dilution of the message  behind the Alaska                                                                    
Performance Scholarship.                                                                                                        
                                                                                                                                
Co-Chair  Stedman  pointed out  one  zero  fiscal note  from                                                                    
Department  of  Revenue (DOR),  one  zero  fiscal note  from                                                                    
Department of  Education and  Early Development  (DEED), one                                                                    
fiscal  impact  note from  the  Alaska  Commission on  Post-                                                                    
Secondary  Education  for  the  Alaska  Advantage  Education                                                                    
Grants, and one  fiscal impact note from  the Senate Finance                                                                    
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Hoffman MOVED  to  report CS  HB  104(RLS) out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  notes. There being NO  OBJECTION it was                                                                    
SO ORDERED.                                                                                                                     
                                                                                                                                
CS  HB 104(RLS)  was REPORTED  out of  Committee with  a "do                                                                    
pass" recommendation and with a  new fiscal impact note from                                                                    
the  Senate   Finance  Committee   for  the   Department  of                                                                    
Education and  Early Development,  a new fiscal  impact note                                                                    
from the  Department of Education  and Early  Development, a                                                                    
new zero  fiscal note from  the Department of  Education and                                                                    
Early  Development, and  an indeterminate  fiscal note  from                                                                    
the Department of Revenue.                                                                                                      
                                                                                                                                
9:38:42 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:49:18 AM                                                                                                                    
RECONVENED