CS FOR SENATE BILL NO. 221(EDC) "An Act establishing an advisory task force on higher education and career readiness in the legislative branch of government; and providing for an effective date." 5:20:35 PM Co-Chair Hawker MOVED to ADOPT HCS CS SB 221, work draft 26-LS1309\M, Mischel, 4/16/10 as a working document. Co-Chair Stoltze OBJECTED for the purpose of discussion. BEN MULLIGAN, STAFF, HOUSE FINANCE COMMITTEE, provided a sectional analysis of the bill. The program had been renamed "The Alaska Merit Scholarship Program". Section 1 established district determination of student eligibility. Section 2 gave the Alaska Commission on Postsecondary Education (ACPE) the ability to adopt regulations pertaining to the merit program. Section 3, which was part of the Alaska Advantage Grant Program, raised the amount of needs based funding per school year from $2,000 to $3,000. Section 4 states that a student may not receive more than a total of $12,000 (formerly $8,000) in awarded grants. Section 5 established the eligibility and awards structure of the Alaskan Merit Scholarship program. Section 5 details the award structure and the requirements to qualify as a postsecondary institution. Section 5 also contained agreed upon defined terms. Section 6 had been amended to establish that the commission would provide adequate funding for not fewer than 5 students to attend four-year programs in each of the following fields: dentistry, optometry, and pharmacy. 5:24:42 PM Mr. Mulligan continued. Sections 8 and 9 contained transitional language to allow the Department of Education (DOE) to permit the implementation of regulations. The Merit Scholarship program would not be implemented until July 2011. Section 10 contained provisions for the Joint Legislative Higher Education Scholarship Funding Taskforce, which was defined in Senate Concurrent Resolution (SCR) 19. Section 11 established an advisory taskforce on higher education and career readiness, which was found in the original version of SB 221. Two members from each body, appointed by the presiding officer, would be appointed to the taskforce. Mr. Mulligan stated that all section pertaining to the Alaska Merit scholarship program would be delayed a full year in order to give DOE a chance to examine how the program would need to be structured. The delay would also allow the various taskforces the ability research the programs more comprehensively. Representative Austerman asked if any of the regulations in the bill would be implemented before the effective date of 2011. DIANE BARRANS, EXECUTIVE DIRECTOR, POSTSECONDARY EDUCATION COMMISSION, DEPARTMENT OF EDUCATION, replied that the DOE and the commission were prepared to move forward with the regulations immediately. She stated that the plan was to put regulations out by summer 2010, for public comment. The hope was to have regulations that reasonably reflected what schools and students would need to know by fall 2011, to participate in the programs. 5:31:02 PM Mr. Mulligan added that the transition language directly stated that the regulations would be available for study, but would not take effect until the effective date. This would allow for the chance begin promulgating regulations in order to get a head start on the regulatory process. Co-Chair Hawker offered several points of clarification regarding the bill. Page 7, Section 6 discussed the extension of the Western Interstate Commission for Higher Education (WICHE) program. He relayed that it had been unclear whether the program would be comprised of 5 students or 60 students. He also asked bill drafters to examine Page 4, Section 5, which discussed maximum awards under the Alaska merit scholarship program. He wondered if the awards would be distributed per year or per semester. SHARON KELLY, STAFF, REPRESENTATIVE MIKE CHENAULT, cited Page 5, Item c, which stated that a student receiving a scholarship could remain eligible for up to 8 semesters. She agreed that the language could be clarified. 5:36:07 PM Representative Joule wondered if students could raise their eligibility levels by achieving high grade point averages during the first year of college. Ms. Barrans replied no. Representative Gara stated that he had not seen a fiscal note funding the increase the ACPE grant cap from $2,000 to $3,000. He requested a fiscal estimate of the cost to the state if the full $3,000 was given to all who qualified. Ms. Barrans replied that the fiscal note in the bill packet provided for an additional $400,000 to fund the program for the FY11 year. The commission had $620,000 left over from the FY09 appropriation to fund grants in FY11. The average funding for the program for the last 4 years has been $1 million per year. $1.1 million had been added in continuation years for the needs based grant program. She anticipated that after implementation the annual base grant would rise from $1,000 to $1,500, priority grants from $2,000 to $3,000, for the FY11 year. The out years after that would be influence by the legislative recommendations from the taskforce. Representative Gara asked if the numbers could be more easily provided by removing the regulation that offered only half of the capped amount. Ms. Barrans replied that she could get back to the committee with the numbers. Representative Gara expressed concern for students living in districts without access to the courses required to qualify for the merit scholarship. He thought that Section 3 could resolve the problem. 5:42:52 PM Co-Chair Hawker reminded the committee that only committee chairs had the power to order fiscal notes for distribution. Representative Fairclough queried the language on Page 5, Line 8. She hoped that student would not be precluded based on taking classes during the summer semester. Ms. Barrans replied that the scholarship could be spread out over three semesters in an academic year. The six year timeline was intended to allow for students who do not proceed immediately from high school to postsecondary education. Representative Fairclough expressed concern that a student taking three semesters in years one and two, might end up not qualifying for aid in their third year. Ms. Barrans replied that the student would remain eligible for 8 semesters. If the student chose to accelerate their program, the scholarship would be exhausted by the end of the 8 semesters. Representative Fairclough cited Page 4, Lines 10-12. She asked if there had been a reduction in the governor's original proposal for academic excellence. Mr. Mulligan referred the question to the DOE commissioner. Representative Joule wondered how long after high school graduation could a student be eligible for the program. Ms. Barrans replied that under the terms of the bill, the student would be eligible for 6 years, following high school graduation. Representative Gara asked where the funds discussed in Section 3 could be used. Ms. Barrans said that the funds could be used at credited traditional or vocational institutions. Currently, the program operated as a federal and state partnership and the state received a small amount of federal dollars. The terms upon which the grants were issued must comply with federal requirements. Representative Gara queried further examples of credited institutions. Ms. Barrans replied that charter colleges and career academies would qualify. 5:48:18 PM Representative Gara expressed discomfort with Page 5, Line 1. He wondered if the state would save money by not rewarding merit grants to students with less than a B average. Ms. Barrans responded that that scenario had not been calculated. Representative Gara communicated reservation as to how the program would apply to districts without access to the courses required to qualify for the scholarships. Representative Joule advocated for awarding scholarships to students with a 2.5 grade point average (B average). He shared his experience working with students who were at the B average. He argued that the B average students were hard and steady workers, and should not be denied the opportunity for college scholarships. Representative Doogan asked how many college credits the first award level of $4,755, would pay for. Ms. Barrans answered that the sum was the equivalent value of 15 credits at the University of Alaska based on the approved tuition rate for 2010. The funds could be used for any allowable cost for attendance. Representative Gara expressed the desire to assist all students in going onto postsecondary education, regardless of their grade point average. He asked if there was assistance under the bill for students who acquired a general education diploma (GED). Ms. Kelly believed that the intent of the bill was to move the governor's merit scholarship forward. She added that any changes that needed to be made to the bill could be made during the next legislative session. Representative Gara clarified that there was no provision in the merit scholarship language for GED recipients to receive assistance. Ms. Kelly said that was correct. 5:53:23 PM TIM LAMKIN, STAFF, SENATOR GARY STEVENS, testified that the CS had full support from the sponsor. He said that the $4,755 figure specifically referred to the average tuition at University of Alaska Anchorage (UAA). Tuition varied around the state between the campuses. The University of Alaska Anchorage tuition was slightly higher than the University of Alaska Fairbanks, and the average of upper and lower division classes for one year was the equation used to establish the $4,755 figure. Vice-Chair Thomas asked if a waiver would be used for rural students that did not have access to the courses required to qualify for the program. Mr. Lamkin understood that there was transition language in the regulations. He referred to Page 7, Lines 20-31. The student may be eligible for the program even though the student did not fully meet the required core academic curriculum for the school years beginning July1, 2010, through June 30, 2014. He stated that the effort was to reform the education system and to encourage students to work harder and perform better in school. Vice-Chair Thomas asked whether the student or the university received the money. Mr. Lamkin stated that the issue would be clarified in the regulations. Mr. Lamkin assured the committee that the taskforce would be working during the interim to craft comprehensive regulations. 5:58:27 PM Co-Chair Hawker opened public testimony. Representative Austerman requested clarification on Page 4, Lines 6 & 10 of the bill. LARRY LEDOUX, COMMISSIONER, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, responded that two sets of criteria were offered in order to qualify for the scholarships. The first was 4 years of mathematics, 4 years of language arts, 4 years of science, and 4 years of social studies, one year of a foreign language, which may include an Alaska Native language, fine arts, or cultural heritage. The second option was 3 years of mathematics, 4 years of language arts, 3 years of science, 4 years of social studies, and 2 years of foreign language or an Alaska Native language. The student would have the choice between the two options. The language had been included by the Senate Education Committee. Representative Austerman wondered if the two options lowered the standards for qualifying to the level of vocational education. Commissioner Ledoux responded that the second option was intended for students who were not oriented toward mathematics or the hard sciences. According to the American College and Testing Board, both options represented a college preparatory curriculum. The original proposal was 4 years of science, 4 years of mathematics, 4 years of language arts, and 3 years of social studies, and had been modified through the process, resulting in the 2 options. 6:02:43 PM Representative Joule thought that the conversation about education in the state could be broader than the bill allowed. He expressed the desire to support a bill that addressed real education reform so that GPAs would not be an issue. He emphasized that the conversation should be about students being able to read, comprehend, and retain information by the 3rd grade. He stressed the need to expand the conversation, and to work for a reformation of the entire educational system. Representative Doogan wondered how the fiscal impact could begin at $9 million and increase to 21.5 million over 5 years. Ms. Barrans stated that the expected fiscal impact for FY2010 was $9,321.9 million; and had two components. One was $1.1 million, which was continuation level funding for the needs based grant, the other $8.2 million represented the average award amount for the number of students that were expected to participate in the programs the first group. The increase in the three years after that provided for each of the new cohorts entering the program. An attrition factor was built into each student group based on the attrition rate that was typically experienced at the University of Alaska. Representative Gara queried the problem of schools that did not have the coursework required to qualify for the scholarships. He understood the department intended to suggest the schools use on-line courses. 6:07:26 PM Commissioner Ledoux informed the committee that across the state, for many years, there had been independent courses utilizing different methods of distance delivery. The alternative courses had been used in 60 schools that had between 20 and 11 students, ranging in ages K-12. Some districts operated learning centers where students could work on distance courses. Some districts were utilizing e- learning blackboard illuminate, which were interactive distance courses using the internet. Others had purchased special independent study curriculum that was facilitated by teachers. Many districts were using online, two way video in real time. Aside from state sponsored correspondence schools, some districts were utilizing national correspondence schools. Many states across the country, Alaska included, were coordinating activities into a virtual school to make it easier for districts to offer the required coursework. He emphasized the importance of rigorous study; the department intended to be careful to uphold high academic expectations. Commissioner Ledoux regarded the proposal as a contract rather than as a scholarship. The students in the states smaller schools were aware of the challenges faced by their districts, and they work harder because of it. Representative Gara reiterated concerns about students who graduate with a GED. Commissioner Ledoux replied that some states had GED pathways. The House Education Committee elected not to include GED recipients in the program. Representative Gara asked if the department supported a GED pathway. Commissioner Ledoux responded that merit scholarship programs evolve. He thought that as the program evolved from year to year, an alternative pathway could be established. 6:12:43 PM Commissioner Ledoux said that the program was not about what student were doing right now; it was about what they were going to do. He reference Representative Gara'a concern for scholarships for students with a GPA of 2.5. He reiterated that the program was a contract; if the student worked hard, if the student took the rigorous curriculum, if good grades were received, the student would have a help to go to college. Representative Gara clarified that he wanted to help people with a 2.5 GPA get into college. Representative Salmon asked about the $400 million dollar endowment written into the original bill. He wondered why the fiscal note showed most of the funding coming from the general fund. Commissioner Ledoux answered that the version of the bill before the committee did not say how the program would be funded. That task had been assigned to a committee that would meet within the next two years. Representative Salmon wondered what happened with the endowment process. Commissioner Ledoux replied that the endowment was not currently in the bill, but could be reconsidered. Vice-Chair Thomas asked if funding had been written into the fiscal note to pay for the implementation of the program into districts, such as adding more teachers. Commissioner Ledoux replied no. He furthered that the cost to districts would vary depending on how the program was implemented, Larger schools could modify class schedules and offerings, according to what the students needed under the program requirements. Small schools could do the same; however, the state would help to develop the necessary programs in smaller districts. He said that more teachers would not be needed because the number of students would not be increasing. 6:17:33 PM Vice-Chair Thomas countered that the several of the 15 school districts that he represented reported that they would need new teachers in order to offer the classes required by the program. He expressed concern that certain districts would be left behind. He thought more research was needed to be sure that the legislation was fair and equitable. Commissioner Ledoux assured the committee that the department would be reporting back to the legislature every year into the future with regard to which schools in the district were participating in the program. Every superintendent in the state had been contacted and asked if the program could be delivered in their districts. He said that every superintendent in the district replied that the program could be supported. He added that it would be more difficult for some districts, and that the department would work to assist those schools. Vice-Chair Thomas cautioned the passing of the $3 million fiscal note without assurances that all students in the state would benefit, particularly the students in the districts he represented. He felt he could not support a bill that would leave the students he represented behind. 6:20:13 PM Representative Fairclough thought it would be wise to let the task force move forward with improvements in the program. Co-Chair Hawker any more public testimony. CHRIS WILSON, JUNEAU, shared that he was a recipient of an honors scholarship through the old scholarship program. He expressed dismay that the program had disappeared. He was currently employed by state because due to his two degrees. Co-Chair Hawker closed public testimony. SB 221 was set aside until later in the meeting. 6:26:22 PM AT EASE 7:25:55 PM RECONVENE CS FOR SENATE BILL NO. 221(EDC) "An Act establishing an advisory task force on higher education and career readiness in the legislative branch of government; and providing for an effective date." 9:14:15 PM Representative Gara MOVED to ADOPT Amendment 4, 26- LS1309\M.4, Mischel, 4/16/10: Page 3, line 13: Delete "$3,000" Insert "$4,000" Page 3, following line 10: Insert a new bill section to read:  "* Sec. 3. AS 14.43.415(b) is amended to read: (b) The commission may, if sufficient funding is  available, [SHALL] give an applicant eligible under (a) of this section priority for a grant award if that applicant is, or is about to be, enrolled in a program of study that is preparatory for employment in an occupation or profession for which the Department of Labor and Workforce Development, or another workforce data source selected as reliable by the commission, indicates there is a severe shortage of trained individuals in this state. Additionally, the commission may give an applicant priority for a grant award if that applicant has participated in a secondary education program of study that can be demonstrated to the commission to be a predictor for success at the postsecondary education level for a program of study described in this subsection. For purposes of this subsection, (1) "occupation or profession" means a job for which specific postsecondary certification is a prerequisite for entry-level placement; (2) "severe shortage" means a current or recurring job vacancy rate of 15 percent or greater, as determined by the Department of Labor and Workforce Development or by another workforce data source determined reliable by the commission." Renumber the following bill sections accordingly. Page 7, line 28: Delete "sec. 5" Insert "sec. 6" Page 8, line 10: Delete "secs. 1, 2, 5, 7, and 8" Insert "secs. 1, 2, 6, 8, and 9" Page 13, line 3: Delete "Section 11" Insert "Section 12" Page 13, line 4: Delete "Sections 3, 4, 6, and 8 - 11" Insert "Sections 4, 5, 7, and 9 - 12" Page 13, line 6: Delete "sec. 13" Insert "sec. 14" Co-Chair Stoltze OBJECTED for the purpose of discussion. Representative Gara explained that the amendment would make 2 changes in Section 3 of the bill. The cap for needs based grants for vocational technical schools and state higher education would increase from $3,000 to $4,000. The second change changes "shall" to "may" in Section 3, Line 8. A fiscal note would need to be created to support the fiscal impact of the amendment. TIM LAMKIN, STAFF, SENATOR GARY STEVENS, noted that between the two bodies a worthy compromise had been established concerning the legislation. He warned that the amendment could impede the progress of the bill. 9:18:52 PM Representative Fairclough questioned Page 3, line 15. She wondered if a change in the cap would limit the time a student could participate in the program. DIANE BARRANS, EXECUTIVE DIRECTOR, POSTSECONDARY EDUCATION COMMISSION, DEPARTMENT OF EDUCATION, thought the concern was a valid. Representative Doogan noted that the house had not weighed in on any form of the bill, so there could be no existing compromise between bodies on the legislation. Vice-Chair Thomas asked if the grant was limited to trade schools. Mr. Lamkin understood that the funds could be applied to qualifying postsecondary educational facilities. Ms. Barrans added qualifying schools were Pell grant eligible schools; which included both vocational and collegiate schools, but was not all encompassing in Alaska. Vice-Chair Thomas commented that the money awarded by the program was a small help, but that it was not significant when considering the full cost of postsecondary education. 9:22:55 PM Representative Fairclough asked if, based on the funds currently available for the program, the program would be adversely affected by the number of students receiving funding. Ms. Barrans replied yes. Section 2 of the bill would go into effect immediately and the pool of grant applicants for the 2010-2011 year was already set. A rise in the cap would limit the amount of students who could receive funding. Representative Fairclough thought that the raising of the cap could be re-examined at another time after the task force had the chance to analyze the bill more closely. Representative Gara did not think that the change would adversely affect students who had already applied for the 2010-2011 year. He said a fiscal note would be written to fund the change. He urged against delaying the cap raise. Co-Chair Stoltze MAINTAINED his OBJECTION. A roll call vote was taken on the motion. IN FAVOR: Doogan, Foster, Gara, Salmon, OPPOSED: Austerman, Fairclough, Joule, Kelly, Thomas, Stoltze, Hawker The MOTION FAILED (4-7). 9:29:18 PM Representative Gara MOVED to ADOPT Amendment 2, 26- LS1309\M.2, Mischel, 4/16/10: Page 4, following line 25: Insert a new subsection to read: "(c) Notwithstanding the requirements under (a)(3) and (4) of this section, the department shall adopt, in regulation, alternative standards to the curriculum and grade point average requirements that demonstrate preparedness for attendance at a qualified postsecondary institution for an otherwise eligible student. The standards may include minimum scores for a general education diploma and alternative curriculum standards for vocational or other courses relating to a postsecondary course of study." Page 5, line 6, following "regulation.": Insert "The regulations must allow for an extension of time for a student who meets alternative eligibility standards adopted under AS 14.43.820(c). Co-Chair Stoltze OBJECTED for the purpose of discussion. Mr. Lamkin reminded the committee that the reform effort was a contract with students to perform a more rigorous curriculum. He believed that Representative Gara had a valid point, but stressed that the issue would be best taken up by the task force. Co-Chair Hawker voiced support for the department to resolve the issue addressed by the amendment and that the amendment was unnecessary. Co-Chair Stoltze MAINTAINED his OBJECTION. A roll call vote was taken on the motion. IN FAVOR: Doogan, Foster, Gara, Salmon OPPOSED: Fairclough, Joule, Kelly, Thomas, Austerman, Hawker, Stoltze The MOTION FAILED (4-7). 9:31:52 PM Co-Chair Hawker MOVED to ADOPT Amendment 3, 26-LS1309\M.3, Mischel, 4/16/10): Page 4, line 26: Delete "Maximum awards. (a)The maximum" Insert "Maximum annual awards. (a)The maximum annual" Page 7, line 9, following "students": Insert "each year" Co-Chair Stoltze OBJECTED for the purpose of discussion. Co-Chair Hawker explained that the amendment clarifies that the award amount was an annual award, which was accomplished by changing the preface to the section from "maximum awards" to "maximum annual awards". The second change clarified that the total number of students that would receive awards was 20. Co-Chair Stoltze WITHDREW his OBJECTION. There being no further OBJECTION, it was so ordered. Co-Chair Hawker asked if any of the amendments that had passed had changed the fiscal notes. Ms. Barrans replied no. Co-Chair Hawker stated that the most significant fiscal note was for the Alaska Commission on Postsecondary Education (ACPE). He wondered if the cost leading into 2015 was too high to be maintained. He felt that within two budget cycles, the state could be back in a deficit. Ms. Barrans replied that the state would be paying for success. Co-Chair Hawker warned that the passage of large fiscal notes during the session could lead to future deficits. Representative Gara expressed frustration that the state could spend $20 million on a college aid program that was not going to help student attend college. He believed that for half the amount a program could have been developed that would help those willing to go to college of job training. He stressed that he had never seen a bill that cost so much money that was so incomplete and poorly crafted. He opined that the state was one of 2 in the nation that had refused to sign on to a national policy towards bettering schools. 9:38:28 PM Representative Joule asked about the establishment of the advisory taskforce discussed in Section 11 of the bill. Mr. Lamkin replied that the task force was intentionally set up to include members with a background in education. The list of members included a number of institutions and agencies within the state that were directly involved in the K-12 and postsecondary educational system. Representative Joule asked about the involvement of the Alaska Federation of Natives (AFN). He shared that there were many native corporations that gave millions of dollars annually for scholarships. He asked if the president of the task force would reach out to the native corporations, or if the only native representation would be from AFN. Mr. Lamkin responded that concern for rural capacity on the task force had been discussed in education committees. In the interest of minimizing controversy, AFN seemed to be the natural choice as the rural voice on the task force. He believed that, given the scholarships and vocational training offered by native organizations in the state, AFN would seek out a representative from one of those organizations. Representative Fairclough wondered if the organizations listed for the task force had already agreed to participate. Mr. Lamkin said yes. Representative Doogan questioned the effectiveness of a task force comprised of members who were part of a system that was already failing. He wondered if there was better pool to draw from. He thought the legislation had been poorly crafted. He felt that under the legislation money would not be given to students who really needed it. He suggested that the problems faced by students in Alaska were substantially different than in the lower 48. He felt that the legislature had embarked on a course that was irreversible and redundant. 9:45:14 PM Vice-Chair Thomas pointed out to the committee that charter schools, which were proving to be successful in the education of students in the state, were not represented on the advisory board list. He shared that as a young person growing up in the state receiving a higher education had been encouraged. He lamented that children in rural Alaska could be denied the chance to apply for the scholarship because of curriculum limitations in smaller village schools. He questioned the sincerity of the bill to help students from all parts of the state and declared strong opposition to the legislation. Representative Fairclough reiterated the concern that the scholars program at UAS would be eliminated because of diminished general fund dollars as a result of the legislation. She thought that changes needed to be examined within DOE in order for the legislation to be successful. Representative Gara acknowledged the hard work done on the legislation. He reiterated his frustration regarding the legislative policy in the bill. Co-Chair Stoltze acknowledged that more time and information would be needed to craft a bill that pleased all parties, and that the K-12 system in the state needed improvement. He applauded the hard work that had been done to craft the legislation. 9:51:14 PM Representative Kelly hoped the once a task force was established, the members would be made aware of the committee's concerns about an already failing education system in the state. Co-Chair Stoltze WITHDREW his OBJECTION to adopting work draft 26-LS1309\M, as the working document. There being NO OBJECTION, it was so ordered. Co-Chair Hawker MOVED to report HCS CS SB 221(FIN), amended, out of Committee with individual recommendations and the accompanying fiscal notes. HCS CS SB 221(FIN) was REPORTED out of Committee with "no recommendation" and two new attached fiscal impact note by the Department of Education and Early Development and one new fiscal impact note by the Legislative Affairs Agency.