04/18/1996 03:05 PM Senate FIN

                                                                               
  SENATE BILL NO. 301                                                          
                                                                               
       An Act relating to postsecondary education.                             
                                                                               
  Co-chairman  Halford directed that SB 301  be brought on for                 
  discussion.    SENATOR  LYDA  GREEN  came  before  committee                 
  accompanied by her  aide, MIKE TIBBLES.   She referenced  an                 
  Executive Order  relating  to  postsecondary  education  and                 
  noted   a   preference   for   effecting   changes   through                 
  legislation.    The  Senator  pointed  to  outdated  federal                 
  requirements "that were being transferred from one agency to                 
  another."    Legislation   will  effectively  repeal  those.                 
  Further,  if  changes  within postsecondary  were  made  via                 
  Executive Order,  the legislature would  lose oversight  and                 
  ability to confirm  board members.   The legislature  should                 
                                                                               
                                                                               
  maintain  some  control  over  individuals making  financial                 
  decisions which ultimately impact many Alaskan students.                     
                                                                               
  The  proposed  bill  would  move  the  Alaska  Student  Loan                 
  Corporation from  the Dept.  of Education  to  the Dept.  of                 
  Revenue and  transfer the functions of the Alaska Commission                 
  on  Postsecondary  Education  to  the  Alaska  Student  Loan                 
  Corporation.    It  attempts to  change  composition  of the                 
  corporate board to eliminate special  interests and create a                 
  majority of public members and  a minority of commissioners.                 
  The legislative  confirmation  process  would  be  continued                 
  under the bill.   There  is a further  requirement that  the                 
  corporation establish  separate accounts  for the  teachers'                 
  scholarship  revolving  loan  fund  account and  the  family                 
  education loan account.                                                      
                                                                               
  The bill also  includes a correction  to SB 123 wherein  the                 
  prorata  shares  for  half-time graduate  and  undergraduate                 
  students was reversed.   SB  123 also established  full-time                 
  career educations as six weeks in length.  The proposed bill                 
  establishes  the  shortest   half-time  career   educational                 
  programs as at least twelve weeks in length.                                 
                                                                               
  The  loan origination  fee will  be used  to offset  default                 
  loses in the memorial  scholarship loan program.  And  a new                 
  provision  is  added  to allow  those  participating  in the                 
  family education  program  to  make  payments  earlier  than                 
  required by law.  WAMI is  moved to the University of Alaska                 
  to simplify the budget process.                                              
                                                                               
  Senator  Rieger expressed  concern that  the corporation  is                 
  "getting into deeper and  deeper trouble ever since we  went                 
  to bonding  back in  1986 .  . .  ."   He voiced  additional                 
  concern  over  proposed transfer  of WICHE  and WAMI  to the                 
  University.                                                                  
                                                                               
  Senator Rieger also raised concern regarding public interest                 
  language within Section 6 at page 4.                                         
                                                                               
  Mike Tibbles advised that  WICHE would remain in place.   It                 
  is  merely  being  transferred from  the  commission  to the                 
  corporation.    It  is  the   WAMI  program  that  would  be                 
  transferred to  the University.   Senator  Green noted  that                 
  display of WAMI  funding as a  single item would provided  a                 
  better indication of what is actually being spent.                           
                                                                               
  Speaking  to  concern  regarding   Section  6,  Mr.  Tibbles                 
  explained   that  AS   14.42.050  (legal  counsel   for  the                 
  commission) is deleted  in the repealing section.   Language                 
  within Section 6 appears to be the same as that removed.  It                 
  is merely being taken from the  commission and placed in the                 
  corporation.  Senator Green concurred that a great amount of                 
  the proposed bill involves renaming what previously  related                 
  to the commission to make it apply to the corporation.                       
                                                                               
                                                                               
  Co-chairman Halford raised a question concerning  past legal                 
  opinions   that  corporate   boards  are   not  subject   to                 
  legislative  confirmation  because  they  do  not  fit under                 
  current confirmation law.   Mr. Tibbles said  statutes spell                 
  out the members of  the commission and hold them  subject to                 
  confirmation.  The  corporation consists  of the members  of                 
  the commission.                                                              
                                                                               
  Senator  Rieger  MOVED  to  delete   Section  2  and  effect                 
  necessary  conforming  amendments  associated with  removal.                 
  WAMI would thus  remain as it  is.  Senator Green  expressed                 
  interest in examining the WAMI program.  She suggested  that                 
  it is not doing as intended in terms of luring students back                 
  to  Alaska once  they have  completed their  education.   No                 
  objection  having  been raised,  Amendment  No. 1  to remove                 
  Section 2 was ADOPTED.                                                       
                                                                               
  Senator Rieger MOVED that CSSB 301 (Fin) pass from committee                 
  with  individual  recommendations  and  accompanying  fiscal                 
  notes.  No objection having been  raised, CSSB 301 (Fin) was                 
  REPORTED OUT of committee with the following fiscal notes:                   
                                                                               
       Dept. of Revenue                        $45.0                           
       Dept. of Education/Student Loans          6.0                           
       Dept. of Education/Inst.Auth.           125.0                           
       DOE/Postsecondary/Boards and Comm.       64.2                           
       DOE/Postsecondary/Administration        (22.0)                          
                                                                               
  Co-chairmen  Halford and Frank  signed the  committee report                 
  with a "do pass" recommendation.  Senators Phillips, Rieger,                 
  Sharp, and Zharoff signed "no recommendation."                               
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at approximately 7:05 p.m.