Legislature(2021 - 2022)ADAMS 519
03/10/2022 09:00 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB229 | |
| SB9 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 229 | TELECONFERENCED | |
| + | SB 9 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 229
"An Act relating to the Alaska higher education
investment fund; and relating to the Alaska Student
Loan Corporation."
9:01:37 AM
Co-Chair Merrick invited the bill sponsor to the table.
9:01:52 AM
REPRESENTATIVE ANDY JOSEPHSON, SPONSOR, explained that in
2012 the legislature created a higher education investment
fund and populated it with Alaska Scholarship Fund. Since
then, the legislature had taken out about $25 million per
year. More recently the state funded Washington, Wyoming,
Alaska, Montana, and Idaho (WWAMI) with dollars from the
fund.
9:11:46 AM
Representative Carpenter wondered how the constitutional
requirement that stated that the legislature could not
designate funds for a specific purpose integrated with the
legislation.
Representative Josephson indicated the protection of the
armor would be applied to the reverse sweep. The funds
would not be dedicated.
Representative Josephson turned the meeting to his staff.
9:14:27 AM
ELISE SORUM-BIRK, STAFF, REPRESENTATIVE ANDY JOSEPHSON,
introduced the PowerPoint Presentation: "HB 229 -
Protecting the Alaska Higher Education Investment Fund."
She began with reviewing the sectional analysis on slide 2:
Section 1- Allows the Alaska Student Loan Corporation
powers needed to manage the HEIF.
Section 2- Allows the Alaska Student Loan Corporation
to create a subsidiary for the express purpose of
administering the HEIF and related programs.
Section 3- Moves the Alaska education grant account
into the Alaska Student Loan Corporation.
Section 4- Moves the Alaska performance scholarship
award account
Section 6- Establishes the Alaska Higher Education
Investment Fund as a separate fund in the Alaska
Student Loan Corporation.
Section 8- Relates to Powers and Duties of the
Commissioner of Revenue
Sections 5, 7, 9, 10, 11, 12, 13 and 14- Rename the
fund- Adding the word "trust."
9:16:26 AM
Ms. Sorum-Birk continued to slide 3 to review the warnings
and market value of the Higher Education Investment Fund.
She thought everyone was aware of the performance of the
fund and why it was valuable. She would not elaborate, as
it was self-explanatory. She discussed the timeline of
events related to the Higher education Investment Fund on
slide 4.
Ms. Sorum-Birk continued to slide 5. She reviewed a summary
of principles from the Hickel V. Cowper case:
.notdef Two main parameters:
.notdef "available for appropriation"
.notdef In the General Fund
.notdef Relating to "available for appropriation"- "must
include all funds over which the legislature has
retained power to appropriate" AND "which are not
available to pay expenditures without further
legislative appropriation"
.notdef For trust receipts the amount appropriated by the
legislature IS the amount available for appropriation
.notdef This category includes federal funds, funds
given to the state for specific purposes by
private entities AND appropriations from trust
account
.notdef Notably "amounts appropriated by the
legislature out of other funds within executive
agencies for the purpose of administering these
funds, under explicit statutory authority may
also be treated as a type of trust receipt"
(revolving loan funds)
.notdef Monies of public corporations are treated similarly
to trust receipts
.notdef Excludes illiquid assets, funds expendable without
further legislative appropriation, or funds validly
appropriate
Ms. Sorum-Birk presented the notable changes that would
result from the passage of the bill on slide 6:
The HEIF, the Alaska Education Grant account and
Alaska
Performance Scholarship account are relocated out of
the general
fund and into the Alaska Student Loan Corporation.
Allows the Alaska Student Loan Corporation to create a
subsidiary
specifically for managing HEIF and associated funds.
Language is added to clarify that these are all
"separate funds"
For the scholarship and grant funds, language is added
to clarify that
these funds are available without further
appropriation.
Medical education (WWAMI) is added to the statutory
uses of the
HEIF.
9:22:03 AM
Ms. Sorum-Birk reviewed what HB 229 would not change and
offered what adjustments could be made to the legislation
on slide 7:
Overall structure of how the fund is currently
administered under statute including the:
? 7 percent draw annually
? The division of the 7 percent draw- 1/3 to grant
fund and 2/3 to the scholarship fund
? The annual draw requiring appropriation by the
legislature from the HEIF to the scholarship and grant
funds.
Potentially friendly amendments could include
? Reassessing the amount of the draw- a smaller draw
with smoothing
? Adjusting the division of the draw to ensure a
portion goes to WWAM
9:23:16 AM
Representative Josephson commented that friendly amendments
on the slide were doable. He thought time was of the
essence concerning passing the legislation. He thought it
offered a road map for going forward.
Vice-Chair Ortiz asked if the armor Representative
Josephson described protect the appropriations made in
2015. /He thought the legislature might readdress needs in
the future looking to the fund for assistance.
Representative Josephson thought programs he had mentioned
were good and fell under the umbrella of education.
Ms. Sorum-Birk added that there were two different ways of
structuring the funds. The bill would allow the legislature
to maintain its control over how the monies were spent.
Vice-Chair Ortiz asked why the money would need to
specifically assigned.
Representative Josephson indicated that the other body had
a bill that indicated the HEIF was a separate account.
However, he did not think it was enough of a step. By
moving the fund outside of the general fund, it would not
be subject to the reverse sweep provision.
9:28:33 AM
Representative Edgmon noted that the state would soon be in
a position where the state would be coming into additional
revenues from oil. He wanted to contemplate capitalizing
the fund more.
Representative Josephson noted 5 percent was more
sustainable. The fund had done well at 7 percent. He
suggested there was no reason the bill should not be moved
to the governor by Monday.
9:32:04 AM
Representative LeBon asked if there was invited testimony
of the bill in the current meeting.
9:32:48 AM
CHAD HUTCHISON, STATE DIRECTOR, UNIVERSITY OF ALASKA,
indicated the University was very supportive of the
legislation. He noted President Parnell was one of the
supporters. The university thought the creation of a
separate fund would create stability.
Mr. Hutchison relayed some statistics having to do with
WWAMI and certain other grants. He noted that WWAMI was
particular to the University.
9:36:49 AM
Representative LeBon noted the Superior court ruled against
the three students. He wondered if there was an appeal to
the ruling.
Mr. Hutchison replied in the affirmative.
Representative LeBon wondered if the court decision would
be decided in time to be reflected in the budget under
consideration.
Mr. Hutchison responded that the ruling would probably be
too late for the current budget cycle.
Representative LeBon asked if the $25 million would be the
correct figure.
Mr. Hutchison concurred with Representative LeBon's figure.
Representative LeBon offered that a plan B could be to
fund that figure and wait out the court ruling.
Mr. Hutchison responded that it could be a plan B.
9:38:55 AM
Representative Edgmon s wondered how the University would
be impacted in terms of recruitment and retention of
students at the University. He thought the legislation was
a move towards stability.
Representative Carpenter noted that the drafters of the
state constitution felt it was important that the state not
set up pools of money that would be dedicated to a specific
purpose.
9:42:12 AM
Representative Josephson remarked that dedicated funds had
been created since statehood.
Representative Edgmon appreciated the comments by
Representative Carpenter. He thought it was interesting
about hearing about the history of the legislature actions.
Co-Chair Merrick thanked the presenters for bringing the
bill forward.
HB 229 was HEARD and HELD in committee for further
consideration.
9:44:26 AM
AT EASE
9:50:09 AM
RECONVENED
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 9_Title4Pres_HouseFinance_3-10-2022 (002).pdf |
HFIN 3/10/2022 9:00:00 AM |
SB 9 |
| SB 9 Letters of Support combined 2.22.22.pdf |
HFIN 3/10/2022 9:00:00 AM |
SB 9 |
| SB 9 Sectional Analysis version W 2-22-22.pdf |
HFIN 3/10/2022 9:00:00 AM |
SB 9 |
| SB 9 Summary of Changes ver G to ver W 2.22.22docx.pdf |
HFIN 3/10/2022 9:00:00 AM |
SB 9 |
| HB 229 Presentation updated 3.4.22.pdf |
HFIN 3/10/2022 9:00:00 AM |
HB 229 |
| HB 229 Sectional Anaylsis ver B 2.24.22.pdf |
HFIN 3/10/2022 9:00:00 AM |
HB 229 |
| HB 229 Summary of Changes- Version A to B 2.24.22.pdf |
HFIN 3/10/2022 9:00:00 AM |
HB 229 |
| SB 9 ltr Fin Com final 3-7-22.pdf |
HFIN 3/10/2022 9:00:00 AM |
SB 9 |