Legislature(1995 - 1996)

02/08/1995 09:01 AM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 SHES - 2/8/95                                                                 
               SB  36 BRINDLE SCHOLARSHIP LOANS                              
 Number 186                                                                    
 CHAIRMAN GREEN introduced  SB 36  as the next order of business               
 before the committee.                                                         
 SENATOR ZHAROFF, Prime Sponsor, noted that this loan program came             
 about after receiving a letter from Mr. Alec Brindle.  He explained           
 that SB 36 intended to make loans to Alaskan students pursuing                
 degrees in fields beneficial to the fishing industry.  Fish                   
 processing industry contributions fund this program.  He pointed              
 out that the committee packets included the 1994-1995 Winn Brindle            
 Memorial Scholarship Loan Status Report.                                      
 Senator Zharoff informed the committee that the program has                   
 received $1.8 million in contributions since 1987; however,                   
 approximately $1.4 million remains in the fund.  Students are not             
 utilizing the program to its potential.  SB 36 specifies a 50                 
 percent forgiveness of the loan and a cap of 5 percent on the                 
 loan's interest rate in order to stimulate more use of this loan              
 program.  He referred to the two proposed amendments dealing with             
 this legislation.                                                             
 CHAIRMAN GREEN pointed out that the first deletion cited in Senator           
 Zharoff's amendment should be on page 2, line 2 not page 2, line 4.           
 Number 284                                                                    
 SENATOR ELLIS moved to adopt Senator Zharoff's corrected amendment,           
 Amendment 1.  Without objection, Amendment 1 was adopted.                     
                          AMENDMENT 1                                          
            Page 2, line 2, after the first "loan":                            
                      Delete:  "indebtedness"                                  
                      Insert:  "principal"                                     
            Page 2, line 4, after the second "loan":                           
                     Delete:  "indebtedness"                                   
                     Insert:  "principal"                                      
             Page 2, line 6, after "principal"                                 
                     Delete:  "and interest"                                   
 CHAIRMAN GREEN asked if Senator Zharoff could give an example of an           
 individual who is employed full-time in Alaska, but resides outside           
 the state in order to support the language suggested in his other             
 amendment, Amendment 2.  SENATOR ZHAROFF explained that Amendment             
 2 addresses situations such as an individual working for Trident              
 Seafoods while keeping a residence in Seattle.  The individual                
 would be supporting the fishing industry of Alaska even while                 
 maintaining a residence in another state.                                     
 SENATOR ZHAROFF stated that Amendment 2 would expand the use of the           
 program.  He did not have a problem with the language as long as              
 the fishing industry was supported.  He preferred that only                   
 Alaskans be able to utilize this program, however, the fishing                
 industry does not operate completely out of Alaska.                           
 SENATOR MILLER expressed concern with encouraging individuals                 
 living outside of Alaska to use Alaska's resources.  SENATOR                  
 ZHAROFF agreed.                                                               
 Number 337                                                                    
 JOE McCORMICK, Executive Director of the Alaska Commission on                 
 Postsecondary Education, clarified that a student must be a                   
 resident of Alaska in order to be eligible to apply for and receive           
 funds from this program.  In the past, these individuals have                 
 tended to change their state of residence while continuing full-              
 time employment in the fishing industry.  This creates                        
 complications in administering the forgiveness provisions of the              
 Alaska student loan program model used for this loan.                         
 SENATOR ELLIS asked if Amendment 2 means that an individual would             
 have to work in the fishing industry for five years in order to               
 receive forgiveness if he no longer resides in Alaska.  Mr.                   
 McCormick said that was correct.  SENATOR SALO specified that the             
 work would have to be in the Alaska Fisheries.                                
 Number 361                                                                    
 SENATOR SALO moved Amendment 2 for purposes of further discussion.            
 SENATOR MILLER objected.  Senator Miller reiterated his concern               
 with encouraging individuals to take advantage of Alaska's                    
 resources and then allow them to move out of the state and continue           
 to receive benefits such as loan forgiveness.                                 
 JOE McCORMICK maintained that these individuals still generate and            
 contribute to Alaska's economy because they work in the Alaska                
 Fishing Industry.  He emphasized that this loan's incentive                   
 attempts to attract individuals to the Alaska Fishing Industry.               
 Tracking the movement of these individuals is an administrative               
 nightmare when dealing with the forgiveness portion of the loan.              
 SENATOR MILLER maintained his objection.                                      
 CHAIRMAN GREEN asked if other comparable loan programs with                   
 forgiveness provisions allowed their recipients to receive                    
 forgiveness without being Alaska residents.  JOE McCORMICK                    
 specified that the only forgiveness program he knew of required the           
 recipients to return to live in Alaska for five years no matter the           
 profession.  SB 36 emphasizes a specific vocation, the fishing                
 industry.  The forgiveness can been binded to the vocation rather             
 than the place of residency.                                                  
 Number 401                                                                    
 SENATOR MILLER suggested dividing Amendment 2.  He moved to divide            
 Amendment 2 into Amendment 2A, lines 1 and 2 of the amendment, and            
 Amendment 2B, lines 3 through 6 of the amendment.                             
 SENATOR ZHAROFF proposed an example in which Amendment 2 would be             
 needed.  After an individual receives the loan and training, the              
 industry may want to place the person in the industry's                       
 headquarters which happen to be located in another state.  SENATOR            
 MILLER understood this rare case and reiterated his concerns.  Such           
 individuals should be encouraged to stay in Alaska even in the off            
 season in order to contribute to local communities not just the               
 seasonal industry.                                                            
 SENATOR SALO stated that she was almost convinced by Mr.                      
 McCormick's administrative nightmare scenario, however, another               
 administrative nightmare could occur when tracking which fishery              
 the individual is working for if they move around so much.                    
 CHAIRMAN GREEN reminded the committee that the motion to split                
 Amendment 2 was still before them.  Without objection, Amendment 2            
 was split into Amendment 2A and Amendment 2B.                                 
 SENATOR MILLER moved to adopt Amendment 2A.  Without objection,               
 Amendment 2A was adopted.                                                     
                          AMENDMENT 2A                                         
                 Page 2, line 4, after "time":                                 
                         Insert "in the state"¶                                
 SENATOR SALO removed her motion to adopt Amendment 2.                         
 Number 470                                                                    
 SENATOR SALO moved that SB 36 as amended be moved out of committee            
 with individual recommendations.  Hearing no objection, it was so             

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