Legislature(1995 - 1996)
04/26/1996 01:50 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 301
"An Act relating to postsecondary education."
DIANE BARRANS, EXECUTIVE DIRECTOR, POSTSECONDARY EDUCATION
discussed SB 301. Senate Bill 301 would move the Alaska
Student Loan Corporation from the Department of Education to
the Department of Revenue and transfer the administrative
functions of the Alaska Commission on Postsecondary
Education to the Alaska Student Loan Corporation. She
stressed that the Commission is committed to making changes
necessary for the financial success and long term viability
of the loan program. She observed that SB 301 would
consolidate some agency functions under one board with the
clear and distinct focus on the welfare of the program. She
noted that there would be some positive changes from the
removal of institutional authorization or regulation of
postsecondary institutions and the move of loan fund
administration to the Corporation in the Department of
Revenue. She questioned why two boards would be necessary
in the future. She suggested that the regulation function
could be transferred as a function of the Department with
oversight from the State Board of Education. She noted that
the legislation leaves inefficiencies and expenses of a
state agency having to administer two separate boards.
Ms. Barrans discussed potential benefits from SB 301. The
Board membership is reduced from 17 to 10. Quorums will be
easier to achieve and there will be some reduction in cost.
The legislation will clean up unnecessary language. She
noted that Ken Vassar, Bond Counsel wrote a memorandum to
her on April 4, 1996, articulating concerns regarding the
constitutional existence of the public Corporation Board in
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SB 301 (copy on file).
Ms. Barrans noted that the Legislature wishes to keep close
ties to the Program. She stressed that if the Commission is
eliminated that legislative ties would remain through the
budget and loan terms.
MIKE TIBBLES, STAFF, SENATOR GREEN noted that the Sponsor
worked with the Legislative Legal Services Agency to address
the constitutional question raised by the Department of Law.
In response to a question by Representative Mulder, Mr.
Tibbles noted that many of the provisions of Executive Order
97 were adopted. He observed that EO 97 had some out dated
federal laws that needed to be cleaned up. The are repealed
in SB 301. He added that legislative involvement and
confirmation were retained in SB 301.
In response to a question by Representative Kohring, Ms.
Barrans discussed the fiscal note accompanying SB 301. She
observed that the only new cost that is not currently being
born, is the cost to the Department of Education to
administer the functions of AS 14.48. The cost of this
function is currently being absorbed by the Student Loan
Corporation. There is a provision in SB 301 that would
allow the assessment of fees on institutions that are
regulated. She noted that the fiscal notes are the same as
for EO 97 with the exception that the institutional
authorization was not moved.
KATHLEEN STRASBAUGH, ASSISTANT ATTORNEY GENERAL, DEPARTMENT
OF LAW spoke regarding constitutional problems with SB 301.
She referred to a memorandum she sent to Senator Judy Salo
on April 23, 1996 (copy on file). She noted that the Board
of the Alaska Commission on Postsecondary Education has
never been subject to legislative confirmation. She argued
that the Board's functions have not changed sufficient to
warrant the need for confirmation. She discussed the
position of legislators on the Board. She noted that non-
voting legislative members remain on the Board. She stated
that under the legislation, legislative members are not
needed for a quorum. The Corporation would no longer pay
per diem to legislative members. She noted that Bond
Counsel has expressed concern that legislators are closer to
the bond issuance process than they were previously.
Members of the Postsecondary Education Commission become the
members of the Corporation under the legislation. She noted
that corporations are not subject to confirmation.
(Tape Change, HFC 96-143, Side 2)
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Ms. Strasbaugh noted that legislators will not vote under
the legislation. They currently vote and are part of a
quorum. She reiterated that legislators will not receive
per diem or be part of the quorum.
Ms. Strasbaugh maintained that the whole Board is being kept
on in order to require legislative confirmation for the
Corporation. She asserted that this is expensive and
unnecessary. She added that the regulatory function
predominates. She stressed that the argument against
confirmation remains.
Mr. Tibbles noted that under SB 301 legislators will not
serve on the Commission, but they will serve on the
Corporation as non-voting members.
Ms. Strasbaugh acknowledged that legislators are not on the
Commission. She emphasize that concern remains that the
presences of non-voting legislative members on the
Corporation would be closer to the bonding process.
Ms. Strasbaugh noted that by itself, the Alaska Student Loan
Corporation is not subject to confirmation under the
Constitution. The only way the Legislature can require
confirmation is to claim that the Postsecondary Commission
is subject to confirmation and then have the members of the
Student Loan Corporation the same as the Commission through
statute.
KAREN REHFELD, DIRECTOR, ADMINISTRATIVE SERVICES, DEPARTMENT
OF EDUCATION expressed concern with SB 301. She noted that
the Department would receive another responsibility at a
time when the Department is trying to focus energy on the
quality education initiative. She observed that the
Department of Education does not have staffing or expertise
in these areas. She observed that the Department of
Education has requested a part time position to assist in
coordinating and scheduling meetings. The authorization
function would be new to the Department. The legislation
also contemplates implementation of regulations for a fee
structure. She emphasized that the Department's limited
resources would be diluted.
Representative Brown questioned the need for two separate
entities.
REPRESENTATIVE CON BUNDE responded that the Alaska
Commission on Postsecondary Education's function is as a
quasi judicial board, warranting legislative confirmation.
The Commission used to decide appeals on student loans.
Currently, staff decides appeals. He maintained that
appeals should go to the Commission. He stressed that the
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Commission can preside over appeals by schools.
Ms. Barrans clarified that under the legislation all loan
related issues are moved away from the Commission. The only
appeals the Commission could hear, under SB 301, would be an
appeal of withdrawal or termination of authorization to
operate an institution in Alaska. She could not recall such
an appeal before the Commission in the past 14 years.
Ms. Barrans noted that the Commission administers the Alaska
Student Loan Program and student aid programs. The
Commission also regulates postsecondary education in Alaska
under AS 14.48. This function would move to the Department
of Education under SB 301.
Ms. Strasbaugh maintained that the basic function of the
Corporation would not be changed. She stressed that the
only function that could be used to base arguments for
confirmation would be the adjudication of institutional
authorization that has been rarely invoked.
SB 301 was HELD in Committee for further consideration.
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