HB 48-AK PERFORMANCE SCHOLARSHIP; ELIGIBILITY  [Contains discussion of HB 108.] 9:02:15 AM CO-CHAIR STORY announced that the next order of business would be SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 48, "An Act relating to the Alaska performance scholarship program." CO-CHAIR STORY passed the gavel to Co-Chair Drummond. 9:02:38 AM CO-CHAIR DRUMMOND noted that public testimony had been left open from a previous hearing, and, after ascertaining there was no one who wished to testify, she closed public testimony on SSHB 48. 9:03:34 AM CO-CHAIR STORY, as prime sponsor of SSHB 48, provided a review of the legislation. She stated that the legislation would make the Alaska Performance Scholarship (APS) available to more high school students, helping to meet the state's goal of retaining young talent in its workforce. She stated that the amendment before the committee is the result of recommendations from a program review which occurs every ten years by the McKinley Research Group. She stated that the suggested changes are as follows: create courses for career and technical education; remove college entry exams; increase award amounts; extend the scholarship to eight years; and give juniors access to information to keep them on track to receive scholarships. CO-CHAIR DRUMMOND noted that the Higher Education Investment Fund does not exist at this time. She stated that this is difficult for students, as this fund's investments have generated the money for their scholarships. She stated that the committee needs to move forward and be prepared, as there is another bill in another process which seeks to recapitalize that fund. 9:06:26 AM REPRESENTATIVE HOPKINS moved to adopt Amendment 1, labeled 32- LS0315\G.1, Marx, 3/9/2022, which read as follows: Page 1, line 7: Delete "six" Insert "12 [SIX]" Page 1, line 9, following "completed": Insert "or is enrolled in" Page 2, line 9, following "language;": Insert "and" Page 2, lines 10 - 20: Delete all material and insert: "(4) has a minimum grade-point average in high school of 2.5 or higher; the department shall set by regulation minimum requirements based on a substantially similar standard for districts that do not assign grades [; (5) HAS ACHIEVED A MINIMUM SCORE ON A (A) COLLEGE ENTRANCE EXAMINATION; OR (B) STANDARDIZED EXAMINATION DESIGNED TO MEASURE A STUDENT'S LEVEL OF PREPAREDNESS TO MAKE THE TRANSITION TO WORK, AS SELECTED BY THE DEPARTMENT; AND (6) IS ENROLLED IN GOOD STANDING IN A COURSE OF STUDY AT A QUALIFIED POSTSECONDARY INSTITUTION IN THIS STATE THAT IS INTENDED TO RESULT IN THE AWARD OF A CERTIFICATE OR DEGREE]." Page 2, line 26: Delete "a new subsection" Insert "new subsections" Page 2, following line 30: Insert new subsections to read: "(i) Not later than September 30 of each year, the commission shall notify each applicant awarded a scholarship under (a) of this section that the applicant has been awarded an Alaska performance scholarship. The notice must (1) identify the Alaska performance scholarship level awarded as described in AS 14.43.825(a); and (2) inform the applicant that (A) the commission may disburse the award only if the applicant meets the requirements described in (k) of this section; and (B) the commission will adjust the applicant's award under the circumstances described in (j) of this section. (j) If, at the time an applicant awarded an Alaska performance scholarship graduates from high school, the applicant's grade-point average differs from the grade-point average on which the commission based the applicant's award, the commission shall adjust the applicant's award in accordance with the applicable Alaska performance scholarship level described in AS 14.43.825(a). (k) Notwithstanding (a) of this section, and except as provided in (c) of this section, the commission may disburse an Alaska performance scholarship awarded to an applicant under this section only if the applicant (1) has, at the time of the applicant's graduation from high school, (A) completed the core academic curriculum of high school level coursework described in (a)(3) of this section; and (B) met the minimum grade-point average in high school described in (a)(4) of this section; and (2) is enrolled in good standing in a course of study at a qualified postsecondary institution in this state that is intended to result in the award of a certificate or degree." 9:06:30 AM CO-CHAIR DRUMMOND objected for the purpose of discussion. REPRESENTATIVE HOPKINS stated that the amendment is by request of the bill sponsor and the result of recommendations from the McKinley Research Group. He stated that the amendment would move up the date of issuance of APS and would inform students sooner of their qualification status for the scholarship. This would allow the students to know which financial package would be available to them before choosing postsecondary education. CO-CHAIR STORY added that currently students would not know until the end of their senior year if they would receive the scholarship. She stated that this change would also prevent students from discovering, after the fact, they had not taken the correct curriculum to receive the award. With this change students would be able to adjust their classes in their senior year and maintain their grade point average (GPA) to meet the criteria. She stated that this would allow students to make decisions earlier about postsecondary education. 9:10:42 AM REPRESENTATIVE GILLHAM, reflecting on HB 108, suggested that the APS issuance date could be moved up even more, so then the funding would be put towards CTE in high school. The students' records could be reviewed in the sixth to eighth grades to see if they qualify for the scholarship. He conjectured that making the scholarship program eligibly even sooner, the fiscal notes for HB 108 could be dropped. 9:11:39 AM CO-CHAIR STORY indicated that APS requires a strict curriculum, so this would require a discussion to determine how [HB 108 and SSHB 48] would fit together. She stated that the APS program is very prescriptive, but it does allow students to take some CTE classes. She said that students could use the scholarship to go towards technical programs, and, as HB 108 adds the work experience with the training, [the two pieces of legislation] could complement each other. 9:12:47 AM CO-CHAIR DRUMMOND expressed the opinion that Representative Gillham's idea is "brilliant." She added that APS is designed for high school, but to begin in middle school would be a great idea. She expressed the belief that students tend to decide what they want to do around third grade. She referenced the Alaska Native Science and Engineering Program at the University of Alaska. She stated that the [accelerated] program brings in high school students from rural communities, who often graduate as engineers with dual credits and more. She stated that the professor working with the program learned that, to excite students and start them in the right classes, they would need to begin in the sixth grade. She stated that this type of program could be adapted for career technology. She noted that, at the governor's request, the bill would have a substantial fiscal note of $7.15 million. She stated that now APS is coming out of the general fund, and it is not earning interest. She asserted that, because there was no reverse sweep, the fund now earns around 1 to 2 percent compared with historical earnings of 8 to 12 percent. Referencing the fiscal note and the Office of Management and Budget component 2990, she stated that the legislation would call for $15.2 million per year in scholarships in the out years. This amount reflects an increase in the size of the award to match tuition rates in state schools. She stated that [Representative Gillham's idea] is worth discussing, but it would require restructuring middle schools around the state. 9:15:45 AM CO-CHAIR STORY interjected that, as of mid-January, the Higher Education Investment Fund had not been liquidated and is still earning higher interest rates. She expressed hope that the legislature would keep the fund intact and put the estimated $400 million back. She stated that the Department of Revenue has delayed the liquidation of the fund because the fund's return was around 38 percent last year. She stated that the fund would pay for the entire fiscal note that is in front of the committee and has been self-supporting APS. Based on recommendations of the Alaska Commission on Postsecondary Education, a $7,000 scholarship award [per student, per year] would be a self-sustaining amount. She said, if the Higher Education Investment Fund has not been swept yet, funding for several programs would not have to come out of the general fund. She stated that Representative Josephson is sponsoring a bill to clarify that the House of Representatives and the Senate would both be in support of retaining the fund. 9:17:40 AM REPRESENTATIVE GILLHAM, alluding to Co-Chair Drummond's earlier comment, stated that the state has an excess to spend this year, but he is more interested in funding the state's workforce 10 years from now. He suggested that creating interest in middle school would lead students to be involved with a CTE program by the ninth grade. He stated that a constituent has expressed to him that CTE is needed because youth are learning computers but cannot build an outhouse. CO-CHAIR STORY stated that students would get credit for CTE classes as part of APS. She added that a study by the Alaska Commission on Postsecondary Education shows that students who receive APS have higher completion rates and tend to stay in the state for careers, of which is the goal of the program. She expressed hope that the Higher Education Investment Fund would be put into law, retaining a future funding mechanism for the program. CO-CHAIR DRUMMOND stated that, in addition to APS, the Higher Education Investment Fund has provided about $8 million a year for the Alaska Education Grant program. She explained that APS is a performance-based [scholarship], while the Alaska Education Grant program is a needs-based [grant]. She added that the grant can be used anywhere in the state for postsecondary instruction in any field, including hair technology, carpentry, and university courses. She said that the Alaska Education Grant program now pulls from the general fund. 9:21:56 AM CO-CHAIR STORY responded to Representative Prax that the [University of Alaska] would receive the scholarship money as long as the student was enrolled in classes. She stated that the scholarship's availability for students would be increased to eight years because the McKinley Research Group's study related that nontraditional students in Alaska tend to take a gap year to work and then resume classes. It was conveyed that Representative Prax's comments were not speaking to the amendment and would be deferred. 9:23:37 AM CO-CHAIR DRUMMOND withdrew her objection to the motion to adopt Amendment 1. There being no further objection, Amendment 1 was adopted. 9:24:12 AM REPRESENTATIVE PRAX expressed the understanding that the legislation would extend the scholarship eligibility eight years. He voiced the concern that this would create a greater risk for students to change their mind and not graduate. CO-CHAIR STORY responded that the extension would not be eight years, but eight total semesters, and the student would have to be on track to use the award. She offered that there would be safeguards in the bill, and a student would have to maintain a certain GPA and take a required number of credits per semester. REPRESENTATIVE PRAX suggested that if a student enrolled in the university with no career direction and did not finish, the scholarship would have been wasted. He questioned whether a student would have to pay back the money if the student dropped out after two years. CO-CHAIR STORY responded that scholarship money would not be paid back. She stated the belief that whatever education people receive serves them well. 9:27:38 AM REPRESENTATIVE CRONK expressed appreciation for the extension. He commented that there are "bumps" in life, so the eight-year extension is understandable. He questioned whether, if a student waits five years before attending university, he/she would have only three years to use the scholarship. CO-CHAIR STORY stated that the student would have eight years, and if his/her education extended to one more year, the student may have to pay more of the tuition. 9:28:34 AM The committee took an at-ease from 9:28 a.m. to 9:32 a.m. 9:32:11 AM REPRESENTATIVE ZULKOSKY moved to report SSHB 48, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSSSHB 48(EDC) was reported out of the House Education Standing Committee.