03/08/1995 09:00 AM Senate FIN

                                                                               
       SENATE BILL NO. 39                                                      
       "An Act relating to memorial scholarship loans."                        
                                                                               
  Co-chair Halford asked Senator Taylor to join the committee.                 
  Senator Taylor expressed his appreciation in addressing this                 
  bill.  He stated that the  bill passed the House unanimously                 
  last  year,  it  carries zero  fiscal  notes.    The primary                 
  purpose of the bill is to allow a slight modification in the                 
  law which would permit the memorial scholarship, named after                 
  Trooper  Michael  Murphy,   to  be   utilized  in   two-year                 
  certification programs instead of just four-year programs.                   
                                                                               
  Co-chair Halford asked Senator  Zharoff for an understanding                 
  of                                                                           
  SB  36.  Senator  Zharoff stated that SB  36 would allow for                 
  50% forgiveness and cap the interest rate.  Co-chair Halford                 
  asked  the commission  to  join the  table.   Mr.  McCormick                 
  responded that the commission recommended in SB 36 to change                 
  the law  insofar  as  the  manner in  which  forgiveness  is                 
  calculated from 1/5th  loan indebtedness and ask that  it be                 
  changed to 1/5th principal on the loan.  When cancelling the                 
  principal and  interest, it  is a  more complex  calculation                 
  administratively.    The cancelling  to  the principal  only                 
  makes it much easier to calculate. The conflict arises in SB
 as there is not an  amendment to change this feature. The                 
  term "total loan indebtedness" remains in SB 39.                             
  However, SB 36 contains a new statement to "principal only".                 
  He recommended it be changed to read the same in both bills.                 
                                                                               
                                                                               
  Co-chair  Halford asked how many  loans exist in the special                 
  scholarship programs?   Mr. McCormick  stated not many,  the                 
  numbers  are  small  and  a half-time  clerk  is  devoted to                 
  administering the  loan programs. Co-chair  Halford asked if                 
  the change of law costs the  borrower more money in payback?                 
  Mr. McCormick  stated it would  represent a payback  of more                 
  money.   The result  being in  the hundreds  of dollars  not                 
  thousands.                                                                   
                                                                               
  Co-chair Frank joined the committee.                                         
                                                                               
  Co-chair Halford asked the will  of the committee.   Senator                 
  Phillips MOVED to  amend page 2  line 13, changing the  word                 
  "indebtedness" to  "principal."  No  objection  having  been                 
  raised, the Amendment was ADOPTED.                                           
                                                                               
  After some  discussion regarding SB  36 and SB  39, Co-chair                 
  Halford indicated that  what was needed was an  amendment to                 
  roll in the provisions of SB 36  (HES) into SB 39 with three                 
  zero fiscal notes.                                                           
  Senator Zharoff MOVED to adopt a CS for SB 39 which includes                 
  SB 36 with three zero fiscal notes. No objection being made,                 
  the CS for SB 39 is ADOPTED and a Work Draft will before the                 
  committee tomorrow.