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." 4:06:42 PM Vice-chair Fairclough listed the four fiscal notes: FN (REV) (3/29/11); zero fiscal impact, FN (REV) (3/21/11); zero fiscal impact, FN (EED) (3/23/11); indeterminate fiscal impact, FN 3 (EED) indeterminate fiscal impact. She noted a previous hearing (4/7/11) on the bill that allowed public testimony. 4:09:56 PM Vice-chair Fairclough MOVED to report CSHB 104(EDC) out of Committee with individual recommendations and the accompanying fiscal notes. Representative Gara OBJECTED. Co-Chair Stoltze WITHDREW the motion. Representative Gara MOVED Amendment 1 (27-GH1893\D.5, Mischel, 4/7/11): Page 3, following line 8: Insert a new bill section to read: "* Sec. 4. AS 14.43.820, as enacted by sec. 5, ch. 14, SLA 2010, is amended by adding a new subsection to read: (c) Notwithstanding the eligibility requirements in (a)(2) - (4) of this section, the department shall adopt regulations to provide for the eligibility of a student who has attained a general education development certificate, and for waiver or delay of a portion of the core academic curriculum requirements in (a)(3) of this section if that portion of the curriculum is not available to a student at a public school in the district in which the student resides. To demonstrate high academic performance for eligibility under this section, the department may require a student to (1) provide alternative minimum standardized test scores established under this section; (2) complete some or all of the core curriculum requirements in (a)(3) of this section after graduation; or (3) provide a measure of academic achievement equivalent to (2) of this subsection." Renumber the following bill sections accordingly. Page 3, following line 24: Insert a new bill section to read: "* Sec. 7. AS 14.43.825, as enacted by sec. 5, ch. 14, SLA 2010, is amended by adding a new subsection to read: (g) Notwithstanding the grade-point average requirements in (a) of this section, the department shall adopt regulations to provide for the eligibility of a student who has attained a general education development certificate." Renumber the following bill sections accordingly. Page 8, line 21: Delete "Section 15" Insert "Section 17" Page 8, line 22: Delete "sec. 6" Insert "sec. 8" Page 8, line 23: Delete "sec. 6" Insert "sec. 8" Page 8, line 24: Delete "Section 12" Insert "Section 14" Page 8, line 25: Delete "secs. 17 - 19" Insert "secs. 19 - 21" Vice-chair Fairclough OBJECTED. Representative Gara explained the amendment. He identified the provisions as an "Alternative Pathway" to eligibility for the merit scholarship. He elaborated that GED recipients, including some home school students, were not eligible to participate, and some schools did not offer the courses required for qualification. He noted that other states with a merit scholarship program offered an "alternative pathway"; scholarship eligibility for students unable to meet the traditional requirements. Representative Gara cited page 1, line 16 of the amendment. He informed that the language provided the Department of Education and Early Development (DEED) the discretion to impose alternative academic achievement measures equivalent to core classes to ensure that the student can catch up or has met the merit level of academic standards. MIKE HANLEY, COMMISSIONER, DEPARTMENT OF EDUCATION AND EARLY CHILDHOOD DEVELOPMENT, responded to the amendment. He noted that the department already allowed exceptions to traditional diplomas. Diplomas were not required of homeschool students; course requirements, SAT or ACT scores were sufficient. WorkKeys scores for technical education students were accepted and GED without requirements or restrictions. 4:14:19 PM Commissioner Hanley continued that only three schools in the state did not offer the core classes required of the merit scholarship. The department did not want to punish students because the courses were not available. The department had a two year grace period for the students in the schools. He concluded that an alternative pathway existed. Representative Neuman reported that 10 percent of students in Alaska were home schooled. He asked whether they had the same ability as public school students to qualify for the scholarship program. Commissioner Hanley affirmed. Home school students can verify that they completed the required courses or use SAT, ACT, or WorkKeys scores as the sole qualifier. Representative Neuman asked if high school students acquired credit for taking college level classes. Commissioner Hanley replied that courses with higher standards than set for performance scholarships were accepted. 4:18:05 PM Representative Wilson spoke against the amendment. She agreed with the intent but did not want to make exceptions at this point. She was willing to closely monitor the results over the years and make allowances as needed. She trusted the department would provide the information. Commissioner Hanley noted that regular reporting was a requirement of the legislation. Representative Gara responded to testimony by the commissioner that students were currently allowed to take required courses during a two-year grace period after graduation. He argued that the amendment put the same option into statute and allowed the department to set the standards. For example, the department could decide to use standardized test scores, allow for classes after graduation, or come up with something else. He did not understand why the department opposed the amendment. Commissioner Hanley clarified that the mentioned grace period was built in as the scholarship was implemented over the next two years; it was not a true grace period. 4:21:03 PM AT EASE 4:21:16 PM RECONVENED A roll call vote was taken on the motion. IN FAVOR: Guttenberg, Neuman, Costello, Doogan, Edgmon, Gara, Joule OPPOSED: Wilson, Fairclough, Stoltze, Thomas The MOTION PASSED (7/4). Amendment 1 was ADOPTED. Representative Doogan asked for clarification of the funding estimate in FN (EED) (3/23/11). DIANE BARRANS, EXECUTIVE DIRECTOR, POSTSECONDARY EDUCATION COMMISSION, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, explained that the Education Committee added a provision to fund the Alaska Advantage Education Grant (AEG) but did not stipulate a level of funding for the program. The analysis section described what full funding would look like based on the current year applicant pool [$6,969.6 million in FY 12]. She referred to the chart on page 2, of the fiscal note. She explained that the estimates used were the same used to fund FY 11 Alaska Performance Scholarship program (APS). Representative Doogan wanted an actual number in order to evaluate the program costs. Ms. Barrans stated that $1.1 million was appropriated for FY 2012. The program existed for five years and was funded from a variety of sources but never as a general fund operating expense. She added that the legislature would determine the level of funding. Representative Doogan confirmed that full funding was estimated in the fiscal notes. Ms. Barrans affirmed. 4:25:27 PM Vice-chair Fairclough recapped that the fiscal notes were zero or indeterminate. Other legislation was needed to capitalize the fund. Representative Doogan replied that he still wanted accurate costs. He thought that whether the funding mechanism was split off or attached to HB 106 there was a cost. Vice-chair Fairclough MOVED to report CSHB 104(FIN) out of Committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CSHB 104(FIN) was REPORTED out of Committee with a "no recommendation" and with two zero notes by the Department of Revenue, one indeterminate note by the Department of Education and Early Development, and previously published fiscal note: FN3 (EED). 4:27:35 PM AT EASE 4:31:03 PM RECONVENED