HB 229-ALASKA HIGHER EDUCATION INVESTMENT FUND  9:07:21 AM CO-CHAIR DRUMMOND announced that the first order of business would be HOUSE BILL NO. 229, "An Act relating to the Alaska higher education investment fund; and relating to the Alaska Student Loan Corporation." [Because of their length, some amendments discussed or adopted during the meeting are found at the end of the minutes for HB 91. Shorter amendments are included in the main text.] 9:07:59 AM CO-CHAIR STORY moved to adopt Amendment 1 to HB 229, labeled 32- LS1063\B.2, Marx, 2/8/22. [Amendment 1 is provided at the end of the minutes on HB 229.] 9:08:02 AM CO-CHAIR DRUMMOND objected for the purpose of discussion, then spoke to Amendment 1. She said the amendment was recommended by the bill sponsor. She gave a definition of "trust fund." She said the higher education investment fund provides grants and scholarships to thousands of Alaska students, and she opined that the fund needs to be put back into active earning status, which Amendment 1 would do by adding "trust" into the name of the fund. 9:10:10 AM CO-CHAIR DRUMMOND removed her objection. There being no further objection, Amendment 1 was adopted. 9:10:29 AM CO-CHAIR STORY moved to adopt Amendment 2 to HB 229, labeled 32- LS1063\B.3, Marx, 2/8/22, which read as follows: Page 5, lines 15 - 26: Delete all material and insert: "* Sec. 6. AS 37.14.750 is amended by adding new subsections to read: (e) The commissioner of revenue is a fiduciary of the Alaska higher education investment fund. In managing the fund, the commissioner shall (1) have the powers and duties set out in AS 37.10.071; and (2) invest money in the fund so as to yield competitive market rates as provided in AS 37.10.071. (f) In addition to the appropriations under (c) of this section, money in the fund may be appropriated to reimburse (1) the Department of Revenue for the costs of managing the fund; and (2) other costs of administering the fund." 9:10:32 AM CO-CHAIR DRUMMOND objected for the purpose of discussion. CO-CHAIR STORY spoke to Amendment 2, the intent of which is that the Department of Revenue (DOR) continue to manage the fund. She said the statute relating to the calculation of the annual draw would remain unchanged. Further, the commissioner of DOR would continue to be responsible for the calculation. She named other funds that have similar language. She said the following support Amendment 2: the bill sponsor, the University of Alaska, and the Alaska Commission on Postsecondary Education. She reminded committee members that the fund is managed more aggressively than other state savings accounts and yielded a 27.21 percent return in fiscal year 2021 (FY 21); the average annual return from FY 13 to FY 21 was 8.82 percent. 9:13:18 AM REPRESENTATIVE PRAX suggested there could be an advantage to having the Alaska Permanent Fund Corporation manage all the funds. He said he was not certain Amendment 2 was necessary, and further said he did not know whether it was good to add restrictive language. CO-CHAIR DRUMMOND pointed out that this fund outperformed the permanent fund, and she offered her understanding that the purpose of Amendment 2 was to ensure the fund continue to be managed by DOR. 9:15:22 AM CO-CHAIR STORY confirmed that is correct. REPRESENTATIVE PRAX cautioned that it is a mistake to base evaluation of a fund on one year's performance. 9:16:33 AM CO-CHAIR DRUMMOND stated her understanding that Representative Prax clearly was objecting to Amendment 2. REPRESENTATIVE PRAX said, "Yep." 9:16:45 AM CO-CHAIR STORY proffered that the returns over the last eight years have been higher than that of most investment accounts. 9:17:42 AM REPRESENTATIVE HOPKINS suggested a bill could be introduced to initiate a discussion regarding the benefits of having one entity manage all funds; however, he said at this time he supports Amendment 2 to maintain the current structure. 9:19:11 AM CO-CHAIR DRUMMOND removed her objection to the motion to adopt Amendment 2. She asked if there was any further objection. [None were stated, and the previous confirmation of objection by Representative Prax was treated as withdrawn.] Co-Chair Drummond announced that there being no further objection, Amendment 2 was adopted. 9:19:27 AM CO-CHAIR STORY moved to report HB 229, as amended, out of committee with individual recommendations and the accompanying fiscal notes. [No objection was audible.] 9:19:42 AM CO-CHAIR DRUMMOND asked if there was any objection. She then asked Representative Prax if he would like to maintain his objection. 9:19:47 AM REPRESENTATIVE PRAX said, "The objection is to moving it out of committee. Sorry, I'm not, thank you." CO-CHAIR DRUMMOND asked if there were "any additional objections." [None were stated.] She then asked Representative Prax if he maintained his objection. REPRESENTATIVE PRAX said, "Of moving it out of committee, no." CO-CHAIR DRUMMOND asked, "You're objecting to moving it out of committee?" REPRESENTATIVE PRAX replied, "Correct. No, I'm not. I'm removing that objection." 9:20:11 AM CO-CHAIR DRUMMOND announced there being no further objection, CSHB 229(EDC) was reported out of the House Education Standing Committee. 9:20:23 AM The committee took an at-ease from 9:20 a.m. to 9:21 a.m. 9:21:45 AM CO-CHAIR DRUMMOND restated that CSHB 229(EDC) had been reported out of committee. AMENDMENTS The following amendment to HB 229 was moved for adoption during the hearing. [Shorter amendments are provided in the main text only.] Amendment 1 [32-LS1063\B.2, Marx, 2/8/22] (adopted): Page 1, line 1, following "investment": Insert "trust" Page 4, line 21, following "investment": Insert "trust" Page 4, line 29, following "investment": Insert "trust" Page 5, following line 1: Insert a new bill section to read:  "* Sec. 5. AS 14.43.915(c) is amended to read: (c) Of the total amount available annually to the commission for payment of grants under AS 14.43.400 - 14.43.420 and for payment of scholarships under AS 14.43.810 - 14.43.849, one-third of the combined amount in the accounts established under (a) and (b) of this section shall be available solely for payment of grants awarded under AS 14.43.400 - 14.43.420. The commission shall annually allocate to all qualified applicants for scholarships awarded under AS 14.43.810 - 14.43.849 two-thirds of the combined amount in the accounts. If an insufficient number of qualified applicants are awarded grants under AS 14.43.400 - 14.43.420 or scholarships under AS 14.43.810 - 14.43.849, or both, before the end of that fiscal year, the commissioner shall redeposit the remaining funds into the Alaska higher education investment trust fund established under AS 37.14.750." Renumber the following bill sections accordingly. Page 5, line 3, following "investment": Insert "trust" Page 5, following line 26: Insert new bill sections to read:  "* Sec. 8. AS 37.14.750(d) is amended to read: (d) In this section, unless the context requires otherwise, "fund" means the Alaska higher education investment trust fund established in (a) of this section.  * Sec. 9. AS 43.20.014(a) is amended to read: (a) A taxpayer is allowed a credit against the tax due under this chapter for contributions of cash or equipment accepted for (1) direct instruction, research, and educational support purposes, including library and museum acquisitions, and contributions to endowment, by an Alaska university foundation, by a nonprofit, public or private, Alaska two-year or four-year college accredited by a national or regional accreditation association, or by a public or private nonprofit elementary or secondary school in the state; (2) secondary school level vocational education courses, programs, and facilities by a school district in the state; (3) vocational education courses, programs, equipment, and facilities by a state-operated vocational technical education and training school, a nonprofit regional training center recognized by the Department of Labor and Workforce Development, and an apprenticeship program in the state that is registered with the United States Department of Labor under 29 U.S.C. 50 - 50b (National Apprenticeship Act); (4) a facility by a nonprofit, public or private, Alaska two-year or four-year college accredited by a national or regional accreditation association or by a public or private nonprofit elementary or secondary school in the state; (5) Alaska Native cultural or heritage programs and educational support, including mentoring and tutoring, provided by a nonprofit agency for public school staff and for students who are in grades kindergarten through 12 in the state; (6) education, research, rehabilitation, and facilities by an institution that is located in the state and that qualifies as a coastal ecosystem learning center under the Coastal America Partnership established by the federal government; (7) the Alaska higher education investment trust fund under AS 37.14.750; (8) funding a scholarship awarded by a nonprofit organization to a dual-credit student to defray the cost of a dual-credit course, including the cost of (A) tuition and textbooks; (B) registration, course, and programmatic student fees; (C) on-campus room and board at the postsecondary institution in the state that provides the dual-credit course; (D) transportation costs to and from a residential school approved by the Department of Education and Early Development under AS 14.16.200 or the postsecondary school in the state that provides the dual-credit course; and (E) other related educational and programmatic costs; (9) constructing, operating, or maintaining a residential housing facility by a residential school in the state approved by the Department of Education and Early Development under AS 14.16.200; (10) childhood early learning and development programs and educational support to childhood early learning and development programs provided by a nonprofit corporation organized under AS 10.20, a tribal entity, or a school district in the state, by the Department of Education and Early Development, or through a state grant; (11) science, technology, engineering, and math programs provided by a nonprofit agency or a school district for school staff and for students in grades kindergarten through 12 in the state; and (12) the operation of a nonprofit organization dedicated to providing educational opportunities that promote the legacy of public service contributions to the state and perpetuate ongoing educational programs that foster public service leadership for future generations of residents of the state.  * Sec. 10. AS 43.55.019(a) is amended to read: (a) A producer of oil or gas is allowed a credit against the tax levied by AS 43.55.011(e) for contributions of cash or equipment accepted for (1) direct instruction, research, and educational support purposes, including library and museum acquisitions, and contributions to endowment, by an Alaska university foundation or by a nonprofit, public or private, Alaska two-year or four-year college accredited by a national or regional accreditation association; (2) secondary school level vocational education courses, programs, and facilities by a school district in the state; (3) vocational education courses, programs, equipment, and facilities by a state-operated vocational technical education and training school, a nonprofit regional training center recognized by the Department of Labor and Workforce Development, and an apprenticeship program in the state that is registered with the United States Department of Labor under 29 U.S.C. 50 - 50b (National Apprenticeship Act); (4) a facility by a nonprofit, public or private, Alaska two-year or four-year college accredited by a national or regional accreditation association; (5) Alaska Native cultural or heritage programs and educational support, including mentoring and tutoring, provided by a nonprofit agency for public school staff and for students who are in grades kindergarten through 12 in the state; (6) education, research, rehabilitation, and facilities by an institution that is located in the state and that qualifies as a coastal ecosystem learning center under the Coastal America Partnership established by the federal government; and (7) the Alaska higher education investment trust fund under AS 37.14.750.  * Sec. 11. AS 43.56.018(a) is amended to read: (a) The owner of property taxable under this chapter is allowed a credit against the tax due under this chapter for contributions of cash or equipment accepted for (1) direct instruction, research, and educational support purposes, including library and museum acquisitions, and contributions to endowment, by an Alaska university foundation or by a nonprofit, public or private, Alaska two-year or four-year college accredited by a national or regional accreditation association; (2) secondary school level vocational education courses, programs, and facilities by a school district in the state; (3) vocational education courses, programs, and facilities by a state-operated vocational technical education and training school; (4) a facility by a nonprofit, public or private, Alaska two-year or four-year college accredited by a national or regional accreditation association; (5) Alaska Native cultural or heritage programs and educational support, including mentoring and tutoring, provided by a nonprofit agency for public school staff and for students who are in grades kindergarten through 12 in the state; (6) education, research, rehabilitation, and facilities by an institution that is located in the state and that qualifies as a coastal ecosystem learning center under the Coastal America Partnership established by the federal government; and (7) the Alaska higher education investment trust fund under AS 37.14.750.  * Sec. 12. AS 43.65.018(a) is amended to read: (a) A person engaged in the business of mining in the state is allowed a credit against the tax due under this chapter for contributions of cash or equipment accepted for (1) direct instruction, research, and educational support purposes, including library and museum acquisitions, and contributions to endowment, by an Alaska university foundation, by a nonprofit, public or private, Alaska two-year or four-year college accredited by a national or regional accreditation association, or by a public or private nonprofit elementary or secondary school in the state; (2) secondary school level vocational education courses, programs, and facilities by a school district in the state; (3) vocational education courses, programs, and facilities by a state- operated vocational technical education and training school; (4) a facility by a nonprofit, public or private, Alaska two-year or four-year college accredited by a national or regional accreditation association or by a public or private nonprofit elementary or secondary school in the state; (5) Alaska Native cultural or heritage programs and educational support, including mentoring and tutoring, provided by a nonprofit agency for public school staff and for students who are in grades kindergarten through 12 in the state; (6) education, research, rehabilitation, and facilities by an institution that is located in the state and that qualifies as a coastal ecosystem learning center under the Coastal America Partnership established by the federal government; (7) the Alaska higher education investment trust fund under AS 37.14.750; (8) funding a scholarship awarded by a nonprofit organization to a dual-credit student to defray the cost of a dual-credit course, including the cost of (A) tuition and textbooks; (B) registration, course, and programmatic student fees; (C) on-campus room and board at the postsecondary institution in the state that provides the dual-credit course; (D) transportation costs to and from a residential school approved by the Department of Education and Early Development under AS 14.16.200 or the postsecondary school in the state that provides the dual-credit course; and (E) other related educational and programmatic costs; (9) constructing, operating, or maintaining a residential housing facility by a residential school approved by the Department of Education and Early Development under AS 14.16.200; (10) childhood early learning and development programs and educational support to childhood early learning and development programs provided by a nonprofit corporation organized under AS 10.20, a tribal entity, or a school district in the state, by the Department of Education and Early Development, or through a state grant; (11) science, technology, engineering, and math programs provided by a nonprofit agency or a school district for school staff and for students in grades kindergarten through 12 in the state; and (12) the operation of a nonprofit organization dedicated to providing educational opportunities that promote the legacy of public service contributions to the state and perpetuate ongoing educational programs that foster public service leadership for future generations of residents of the state.  * Sec. 13. AS 43.75.018(a) is amended to read: (a) A person engaged in a fisheries business is allowed a credit against the tax due under this chapter for contributions of cash or equipment accepted for (1) direct instruction, research, and educational support purposes, including library and museum acquisitions, and contributions to endowment, by an Alaska university foundation, by a nonprofit, public or private, Alaska two-year or four-year college accredited by a national or regional accreditation association, or by a public or private nonprofit elementary or secondary school in the state; (2) secondary school level vocational education courses, programs, and facilities by a school district in the state; (3) vocational education courses, programs, and facilities by a state-operated vocational technical education and training school; (4) a facility by a nonprofit, public or private, Alaska two-year or four-year college accredited by a national or regional accreditation association or by a public or private nonprofit elementary or secondary school in the state; (5) Alaska Native cultural or heritage programs and educational support, including mentoring and tutoring, provided by a nonprofit agency for public school staff and for students who are in grades kindergarten through 12 in the state; (6) education, research, rehabilitation, and facilities by an institution that is located in the state and that qualifies as a coastal ecosystem learning center under the Coastal America Partnership established by the federal government; (7) the Alaska higher education investment trust fund under AS 37.14.750; (8) funding a scholarship awarded by a nonprofit organization to a dual-credit student to defray the cost of a dual-credit course, including the cost of (A) tuition and textbooks; (B) registration, course, and programmatic student fees; (C) on-campus room and board at the postsecondary institution in the state that provides the dual-credit course; (D) transportation costs to and from a residential school approved by the Department of Education and Early Development under AS 14.16.200 or the postsecondary school in the state that provides the dual-credit course; and (E) other related educational and programmatic costs; (9) constructing, operating, or maintaining a residential housing facility by a residential school approved by the Department of Education and Early Development under AS 14.16.200; (10) childhood early learning and development programs and educational support to childhood early learning and development programs provided by a nonprofit corporation organized under AS 10.20, a tribal entity, or a school district in the state, by the Department of Education and Early Development, or through a state grant; (11) science, technology, engineering, and math programs provided by a nonprofit agency or a school district for school staff and for students in grades kindergarten through 12 in the state; and (12) the operation of a nonprofit organization dedicated to providing educational opportunities that promote the legacy of public service contributions to the state and perpetuate ongoing educational programs that foster public service leadership for future generations of residents of the state.  * Sec. 14. AS 43.77.045(a) is amended to read: (a) A person engaged in a floating fisheries business is allowed a credit against the tax due under this chapter for contributions of cash or equipment accepted for (1) direct instruction, research, and educational support purposes, including library and museum acquisitions, and contributions to endowment, by an Alaska university foundation, by a nonprofit, public or private, Alaska two-year or four-year college accredited by a regional accreditation association, or by a public or private nonprofit elementary or secondary school in the state; (2) secondary school level vocational education courses, programs, and facilities by a school district in the state; (3) vocational education courses, programs, and facilities by a state-operated vocational technical education and training school; (4) a facility by a nonprofit, public or private, Alaska two-year or four-year college accredited by a regional accreditation association or by a public or private nonprofit elementary or secondary school in the state; (5) Alaska Native cultural or heritage programs and educational support, including mentoring and tutoring, provided by a nonprofit agency for public school staff and for students who are in grades kindergarten through 12 in the state; (6) education, research, rehabilitation, and facilities by an institution that is located in the state and that qualifies as a coastal ecosystem learning center under the Coastal America Partnership established by the federal government; (7) the Alaska higher education investment trust fund under AS 37.14.750; (8) funding a scholarship awarded by a nonprofit organization to a dual-credit student to defray the cost of a dual-credit course, including the cost of (A) tuition and textbooks; (B) registration, course, and programmatic student fees; (C) on-campus room and board at the postsecondary institution in the state that provides the dual-credit course; (D) transportation costs to and from a residential school approved by the Department of Education and Early Development under AS 14.16.200 or the postsecondary school in the state that provides the dual-credit course; and (E) other related educational and programmatic costs; (9) constructing, operating, or maintaining a residential housing facility by a residential school approved by the Department of Education and Early Development under AS 14.16.200; (10) childhood early learning and development programs and educational support to childhood early learning and development programs provided by a nonprofit corporation organized under AS 10.20, a tribal entity, or a school district in the state, by the Department of Education and Early Development, or through a state grant; (11) science, technology, engineering, and math programs provided by a nonprofit agency or a school district for school staff and for students in grades kindergarten through 12 in the state; and (12) the operation of a nonprofit organization dedicated to providing educational opportunities that promote the legacy of public service contributions to the state and perpetuate ongoing educational programs that foster public service leadership for future generations of residents of the state." [End of amendment - CSHB 229(EDC) was reported out of the House Education Standing Committee.]