HB 104-ALASKA PERFORMANCE SCHOLARSHIPS  CHAIR DICK announced that the next order of business would be HOUSE BILL NO. 104, "An Act renaming the Alaska performance scholarship and relating to the scholarship and tax credits applicable to contributions to the scholarship; establishing the Alaska performance scholarship investment fund and the Alaska performance scholarship award fund and relating to the funds; making conforming amendments; and providing for an effective date." [In front of the committee was the proposed committee substitute (CS) for HB 104, Version I, adopted as the work draft on February 9, 2011] 8:51:20 AM CHAIR DICK stated that discussion needed to focus on the needs based component, mentoring, university capacity, funding sources, and qualification by students from smaller schools. 8:52:02 AM DIANE BARRANS, Executive Director, Postsecondary Education Commission, Department of Education and Early Development (EED), specified that she had participated on the task force for higher education funding. She reported that a lot of discussion prior to the task force questioned the adequacy of the level of funding for the needs based program, the AlaskAdvantage Education Grant. She pointed out that this grant was available to any resident attending an in-state educational institution, but that funding had only been sufficient for a small percentage of those eligible. She noted that the task force had recommended a supplemental component, but she opined that this was not necessary, as sufficient funding for the needs based grant program would provide the opportunity to fund non- traditional students. She pointed out that the Senate had recommended sufficient funding for the AlaskAdvantage Education Grant program, instead of the creation of a supplemental component to the scholarship program. She opined that this maintained clarity and consistency between the merit based and needs based programs. 8:55:58 AM REPRESENTATIVE P. WILSON asked which program served the top 10 percent of each school. 8:56:25 AM MS. BARRANS replied that it was the University of Alaska (UA) scholars program, funded through the UA resources. 8:56:50 AM REPRESENTATIVE P. WILSON asked what percentage of those who applied for the AlaskAdvantage [Education Grant] program received funds. 8:57:10 AM MS. BARRANS replied that funding was available for 15-20 percent of those eligible. 8:57:25 AM REPRESENTATIVE P. WILSON remarked that this was pathetic. 8:57:29 AM REPRESENTATIVE KAWASAKI, stating that the federal PELL Grants had been severely cut back, asked which students would be most affected. 8:57:54 AM MS. BARRANS clarified that although a reduction in the PELL Grant program had been proposed in Congress, it had not yet occurred. She stated that students from families of four with an income less than $40,000 were eligible for PELL grants. She declared that the ripple effect of these reductions would affect the AlaskAdvantage Education Grant program. In response to Representative Kawasaki, she stated that the need by the applicants would be greater. 8:59:30 AM REPRESENTATIVE FEIGE asked if all of the AlaskAdvantage Education Grant funds were being expended. He asked what criteria were used for the allocation of the funds. 8:59:55 AM MS. BARRANS said that the fund allocation was strictly needs based. She explained that the entire eligible pool was ranked highest need to lowest need. She declared that priority was given to full time students. She added that a student who had shown higher academic achievement through ACT/SAT test scores and students enrolled in career areas designated as "a workforce shortage area" were eligible for larger grants. She listed some of the shortage areas to be education, health, social protective services, and resource process extraction. She announced a growth in the number of students eligible in workforce shortage areas. 9:02:10 AM REPRESENTATIVE FEIGE asked if students would be eligible while attending institutions included in the Western Undergraduate Exchange program agreement. MS. BARRANS replied that eligibility was limited to students attending school in Alaska, as the idea was to retain a trained workforce. 9:04:02 AM REPRESENTATIVE P. WILSON asked how many student grant applications were not accepted, and of these, how many were unable to attend school as a result. 9:04:38 AM MS. BARRANS replied that there was not any data for the students who did not attend school. She offered her belief that there were 4,200 eligible students while fewer than 1,000 had received grants. She added that these students were already enrolled in school, and that generally the grant was not a determiner for enrollment, but was used for the management of their other school expenses. 9:07:11 AM REPRESENTATIVE P. WILSON asked how much money would be required to fund all the eligible grant applications. 9:07:28 AM MS. BARRANS offered an estimate of $4.5 million to fund the current base allocations. 9:08:15 AM REPRESENTATIVE SEATON asked if there was a fiscal note for Version I. 9:08:26 AM MS. BARRANS replied that there was not a fiscal note for the needs based component. 9:08:29 AM REPRESENTATIVE SEATON emphasized the need for a fiscal note. He pointed out that the prior proposed legislation with a needs based component, which did not include the non-traditional students, had an estimated fiscal note of $17-$20 million. He directed attention to the current cap of $4,000 in the proposed committee substitute, clarifying that there had not been a cap for the needs based component in previous legislation. He reflected that the needs based component and the merit based component had required similar funding. He asked how the addition of the non-traditional students within the needs based component could now result in an estimated cost that was half the merit based component. 9:11:22 AM MS. BARRANS noted that a key difference for the cost of each program was the current cap on the needs based aid. She pointed out that the prior legislation had included escalating costs tied to the cost of education. She stated that it was unknown how many qualifying students would come from low income families. She pointed out that the demographics of scholarship recipients in many other states reflected a disproportionate scholarship distribution to families with a history of going to college. She noted that these families often had a higher socio-economic standing. She emphasized the importance of having two programs which worked well together, needs based and merit based. She agreed that it was important to have an estimate for cost, but that an exact fiscal note would be more difficult until there was a history to draw from. She stated that the AlaskAdvantage Education Grant program cost was based on the last three years of program cost. She said that this history would reflect both traditional and non-traditional age students in coming years. 9:14:17 AM MS. BARRANS, in response to Representative Seaton, stated that only students scoring in the top tier of test takers would qualify for the priority level. She shared that one suggested modification proposed by the task force had been to review the academic priority for the needs based grant, and make the scholarship eligible students equate to the academic trigger to allow them grant priority. She opined that the programs would still work well in conjunction, and still maintain distinct scholarship and needs based programs. 9:15:40 AM REPRESENTATIVE P. WILSON asked if this could be best accomplished in statute or in regulation. 9:15:52 AM MS. BARRANS replied that currently this could be accomplished through regulation, but that the legislature could make a statutory change. [HB 104 was held over.]