HB 104-ALASKA PERFORMANCE SCHOLARSHIPS  4:48:48 PM CHAIR JOHNSON announced that the final 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." [Before the committee is CSHB 104(FIN).] 4:48:57 PM REPRESENTATIVE CHENAULT moved to adopt Amendment 1, labeled 27- GH1893\E.1, Mischel, 4/14/11, which read: Page 3, lines 9 - 23: Delete all material. Renumber the following bill sections accordingly. Page 4, lines 9 - 13: Delete all material. Renumber the following bill sections accordingly. Page 9, line 10: Delete "Section 17" Insert "Section 15" Page 9, line 11: Delete "sec. 8" Insert "sec. 6" Page 9, line 12: Delete "sec. 8" Insert "sec. 6" Page 9, line 13: Delete "Section 14" Insert "Section 12" Page 9, line 14: Delete "secs. 19 - 21" Insert "secs. 17 - 19" CHAIR JOHNSON objected for discussion purposes. 4:49:27 PM DIANE BARRANS, Executive Director, Postsecondary Education Commission (PSEC), Department of Education and Early Development, explained that Amendment 1 would remove language added to HB 104 to provide an alternative avenue for eligibility for the scholarship program. Amendment 1 provides an avenue for individuals who have received a general equivalency diploma (GED) and not remained in high school or received a diploma from an Alaska high school. The avenue requires that EED provide alternative standardized tests for these individuals and allows EED to require some or all of the otherwise required curriculum be completed by these individuals. Amendment 1 also removes language that would allow, in perpetuity, individuals who attended a school in Alaska but did not complete the required core curriculum to apply for a waiver or additional time to complete that program. In each case, EED believes by leaving these changes in the bill there is a dilutive effect. She reminded the committee that the objective of the Alaska Performance Scholarship was to incent students to follow the most direct route to postsecondary education and career readiness, which is taking a core curriculum in high school and completing high school with a degree as well as scoring well on preparatory entrance tests for college. The concern is that having an alternative route, particularly one that is generally less successful, dilutes the program. Therefore, she requested that language be removed from CSHB 104(FIN). With regard to the language about schools not providing the required curriculum, she said it's unnecessary. Current regulations provide an opportunity for students who attend a school in Alaska that don't offer the required curriculum to have the next two years to complete the curriculum. The concern with a permanent allowance is that it reduces the sense of urgency by schools. In fact, EED is committed to ensuring that all schools in Alaska, within a two-year period, are able to offer the critical courses necessary for students' success in postsecondary education and eligibility for the scholarship. 4:52:59 PM CHAIR JOHNSON asked if there could be a situation in which a student moves out of state, obtains a GED, returns to Alaska, and obtains the Alaska Performance Scholarship. MS. BARRANS replied yes, as the legislation is currently written. In further response to Chair Johnson, Ms. Barrans confirmed that CSHB 104(FIN) would open the scholarship up to out-of-state students as well as students from another country. 4:53:55 PM REPRESENTATIVE TUCK surmised then that the GED process has no residency requirement, and thus there would be no residency requirement in the legislation if the GED portions [remained]. MS. BARRANS explained that the residency requirement in place is twofold in that one must have received a diploma from an Alaska high school and meet the residency requirement in AS 01.10.055, which requires 30 days residency. Although the aforementioned is a fairly modest residency requirement, it's the nexus between having a high school diploma from an Alaska high school as well as residency. She recalled that last year the discussion revolved around ensuring that a qualifying student who graduates and meets all the scholarship qualification, but then travels for a period doesn't face a delay in accessing the scholarship once that student returns to the state. Students who qualify for the scholarship only have six years from the date of graduation to utilize the scholarship, and therefore it creates a sense of urgency to move quickly from high school to postsecondary education in order to heighten the likelihood of success at the postsecondary level. 4:55:49 PM REPRESENTATIVE GATTO asked if an individual who [qualified for the scholarship] was deployed for four years would have those four years count toward the six-year limitation. MS. BARRANS pointed out that there is a provision for those in military service to extend the time limitation by the period of military service. 4:56:20 PM REPRESENTATIVE AUSTERMAN posed a scenario in which Amendment 1 is not adopted and Section 4 remains in the legislation. In such a scenario, should the language "from an Alaska school" be inserted on page 3, line 13, following "certificate". MS. BARRANS answered that if Amendment 1 isn't adopted, a number of changes would be necessary in order to make it a parallel condition to those who receive their high school diploma from an Alaska high school. For example, [CSHB 104(FIN)] doesn't specify a timeframe within which an individual would have to obtain a GED and there's no trigger specifying the time period in which an individual can use the scholarship. 4:57:38 PM REPRESENTATIVE TUCK posed a scenario in which an individual leaves the Alaska school system for a few months, obtains a GED, but then decides to return to an Alaska school to obtain a diploma. He asked whether the aforementioned scenario would currently be allowed. MS. BARRANS replied yes, adding that under existing statutes so long as a student has left the system without a diploma, he/she is entitled until the age of 20 to return to the public education system and complete the requirements for a diploma and receive it free of charge. In further response to Representative Tuck, Ms. Barrans clarified that beyond the public school system, there are private institutions and home school programs from which one can obtain a diploma. She noted that those other avenues are provided for in the Alaska performance scholarship. 4:59:18 PM REPRESENTATIVE GRUENBERG opined that it seems that folks are addressing the legislation rather than Amendment 1. CHAIR JOHNSON said that he wasn't sure the two can be separated. He said that Amendment 1 changes the substantive nature of the legislation, and therefore he felt it would be appropriate to address that. 4:59:50 PM REPRESENTATIVE GRUENBERG related his belief that Section 4 along with EED's regulatory authority would provide the authority to flesh this out. MS. BARRANS disagreed, and opined that she's not sure there is enough explicit detail in the legislation. [Section 4] changes the nature of the program and broadens it beyond the scholarship program, with the intent to deliver certain results through the education system. Ms. Barrans said that she couldn't speak to whether, in the totality of the statutes, there's enough authority to add the additional requirement in regulation. In further response to Representative Gruenberg, Ms. Barrans confirmed that she's not able to state to the contrary either. REPRESENTATIVE GRUENBERG then recalled that Title 14 gives EED and the PSEC broad regulatory authority. He asked if [EED] has broad regulatory enabling statutes. 5:01:22 PM MIKE HANLEY, Commissioner, Department of Education and Early Development, replied yes. 5:01:29 PM CHAIR JOHNSON withdrew his objection to Amendment 1. 5:01:33 PM REPRESENTATIVE GRUENBERG then objected to Amendment 1. The committee took a brief at-ease. 5:02:40 PM REPRESENTATIVE LES GARA, Alaska State Legislature, opined that [the adoption of] Amendment 1 would cause a number of problems with HB 104. For those in a rural district or a district without the required courses, EED has promised a two-year waiver. However, if the schools don't have the proper courses after those two years, students in those schools won't have a chance to get this scholarship. There is no provision in current law that allows a student who attends a rural school without the required courses, graduates, and returns to take the required courses later. The aforementioned is why Amendment 1 is necessary. Although there is a provision [in current law] that allows an individual to have until age 20 to graduate from a public school, one who has graduated from a rural school that didn't have the required courses can't come back to another school with the required courses. Therefore, those who are concerned that the many school districts that don't have the required courses won't have them within two years should adopt Amendment 1. Otherwise, [without the adoption of Amendment 1] the legislation discriminates against students who are high academic achievers, but attend schools that don't have the required courses. Representative Gara acknowledged that for those individuals who obtain a GED or don't have the required courses available to them, the EED commissioner has been granted broad authority. The commissioner can provide that minimum test scores be achieved in order to illustrate that students are of high academic achievement or require that some or all of the core curriculum be taken after graduation or obtaining a GED. Currently, the law doesn't allow such. The EED commissioner could adopt other criteria the commissioner determines will demonstrate high academic achievement. REPRESENTATIVE GARA, regarding whether this would allow students from other states to come to Alaska and grab the scholarship, opined that language could be added to refer to an "Alaska GED" and an "Alaska school". However, the U.S. Supreme Court doesn't allow a state to discriminate against out-of-state residents for more than a year. He questioned how big of a problem it would even be for out-of-state students with a GED to come to Alaska to take the core courses [prior to getting the scholarship]. Representative Gara opined that the legislation is flawed because very bright individuals obtain GEDs and very bright individuals attend rural schools that don't have the required courses available to them. He told the committee that the testimony regarding whether these rural schools will be able to offer the courses under the merit scholarship is conflicting. Furthermore, it's likely that those rural schools who hire teachers to teach the core curriculum will have to fire a teacher that teaches something else. Therefore, he opined that [CSHB 104(FIN)] works [without Amendment 1]. He concluded by noting that the changes encompassed in CSHB 104(FIN) had substantial support in the House Finance Committee. 5:06:06 PM CHAIR JOHNSON reminded everyone that the House Rules Standing Committee is an independent committee. 5:06:42 PM REPRESENTATIVE PAUL SEATON, Alaska State Legislature, reminded the committee that he was the chair of the House Education Standing Committee when the Alaska Performance Scholarship was developed. He recalled that 11-14 hearings were held on the scholarship, of which at least three went into detail regarding incorporating GEDs and whether it was consistent with the program being developed. The scholarship program was primarily developed to reward students and change the school districts and the programs they offer. Representative Seaton opined that providing a waiver for those schools that don't offer the rigorous core curriculum defeats the purpose of the Merit Scholarship, which was to change the K-12 education system. The legislation introduced this year, wasn't establishing the program but instead tried to reach funding, including through Alaska Advantage and the Merit Scholarship. The Alaska Advantage Program is to provide access to the nontraditional student, a student that obtains a GED. The Merit Scholarship Program is for those students taking the rigorous core curriculum as well as scoring high on the ACT test. The aforementioned, taking a rigorous curriculum in high school, leads to completion of college. The House Education Standing Committee worked for many hours trying to incorporate the GED and found it couldn't without diluting the Merit Scholarship Program. Therefore, this legislation has two separate mechanisms: the Alaska Advantage Program for nontraditional students and the Merit Scholarship Program through the diploma- only system. 5:09:50 PM REPRESENTATIVE ANNA FAIRCLOUGH, Alaska State Legislature, began by associating herself with Representative Seaton's comments. She then related her belief that the Merit Scholarship was about keeping kids in school. The proposal was that students would stay in school and take the more rigorous curriculum, which would improve graduation rates and success in college. Section 4 is a duplication, which is the allowance for the EED commissioner to make changes if curriculum isn't offered in some communities or schools but provides an opportunity for that curriculum to be developed and provided for students. The curriculum, she charged, doesn't have to be provided in a classroom as it's known today, but could be provided in a distance education classroom. Furthermore, Section 4 alters the merit portion of the scholarship, which she believes was the intent of the original legislation. With regard to GEDs, Representative Fairclough informed the committee that GEDs can be obtained from entities beyond the high school, such as the Department of Labor & Workforce Development. Therefore, Representative Fairclough opined that CSHB 104(FIN) creates conflict in the current code as well as with the intent of the original legislation. In conclusion, Representative Fairclough requested that the committee remove Section 4 from CSHB 104(FIN). 5:12:09 PM CHAIR JOHNSON, in response to Representative Gatto, provided clarification regarding Section 4 in CSHB 104(FIN) and Amendment 1. 5:12:52 PM CHAIR JOHNSON, upon determining no one else wished to testify, closed public testimony. 5:13:16 PM REPRESENTATIVE GRUENBERG maintained his objection to Amendment 1. 5:13:23 PM REPRESENTATIVE TUCK pointed out that Amendment 1 requires an individual to have a diploma to qualify for the scholarship; simply having a GED doesn't qualify an individual for the scholarship. He related his understanding that HB 104 has the twofold purpose of rewarding those who take rigorous classes, meet the grade, receive a diploma, and obtain the scholarship while the other purpose is raising the education system to a standard that has more of a concentration on math, technology, and science. He reminded the committee of the Moore v. State case in which the state is having difficulties meeting educational needs, even without the science and math requirement. He also reminded the committee that the concern of the sponsor of the amendment [that inserted Section 4] in the House Finance Committee was that some schools in rural Alaska may not even meet the curriculum requirements and standards in the two years allowed. Therefore, he expressed concern that there will be another case like the aforementioned. Representative Tuck, upon further review of Section 4 and the earlier mentioned leeway EED has in terms of its regulation, said that he would like for EED to find a way to make it work. The desire, he opined, is to reward those students who are following the governor's vision by taking more math and science courses while also raising school standards. 5:16:44 PM REPRESENTATIVE AUSTERMAN clarified that he, over the last few years, has not supported the scholarship program as he felt that it doesn't address rural areas as well as it should. Amendment 1 removes the language inserted in the House Finance Committee that actually helps some of the students. He agreed with Representative Tuck that the language in Section 4 of CSHB 104(FIN) clearly relates that EED has the ability to make regulations. Furthermore, the legislation is written such that it lays out some of the standards the department can refer to in the regulations. Representative Austerman related that he is going to oppose Amendment 1. 5:18:02 PM REPRESENTATIVE GRUENBERG remarked that he respects Representative Seaton's testimony, which was similar to Commissioner Hanley's private remarks he related earlier regarding the twofold purpose of the scholarship: to encourage students by providing money and to encourage schools to provide better curriculum. Unfortunately, the twin goals appear to be conflicted. "This is one way of attempting to resolve the conflict," he acknowledged. With all the resources available to the state, the department should be able to find a way within its broad regulatory authority to encourage school districts to provide more educational opportunities for their students. The remedy isn't to make it more difficult for students. Although it's a laudable goal to encourage school districts to improve their curriculum, he didn't believe [adoption of Amendment 1] is the way to do it. There aforementioned is why the language inserted in the House Finance Committee is so equitable, doesn't punish the students, and provides the regulatory authority to EED to find another way to encourage schools to improve their curriculum. Representative Gruenberg related his strong support for the funding and whatever is necessary for the department and the school districts to help improve the situation. 5:20:25 PM REPRESENTATIVE CHENAULT asked if an individual with a GED can apply for an Alaska Advantage Scholarship. MS. BARRANS replied yes. REPRESENTATIVE CHENAULT expressed concern that there isn't a way for students with GEDs to help fund their scholarships. 5:21:21 PM REPRESENTATIVE CHENAULT recalled when he was a member of the House Finance Committee when it discussed the Advantage program and putting more funds in it. He recalled that more Alaska Advantage program funds went to individuals age 25-35 than to students coming out of high school. Representative Chenault opined that by continuing to cram [all these programs] together, it muddies the water. Originally, this was set up to be a scholars program. Although he agreed that rural Alaska has difficulties with offering the required curriculum, the program has to strive to get kids educated at a higher level. He questioned the incentive being given to kids when they are allowed to apply for a grant when the student didn't do well in school. MS. BARRANS said that Representative Chenault isn't misremembering. The Alaska Advantage Education Grant is needs- based and a large portion of its recipients are nontraditional, that is over the age of 22. The average age of an Alaska Advantage Education Grant recipient has varied between 28 to 31 years of age. She noted that the more funds going to the Alaska Advantage Education Grant, the deeper into the list of eligible students it reaches and thus would reach younger students. 5:24:40 PM A roll call vote was taken. Representatives Chenault, Gatto, Olson, and Johnson voted in favor of adopting Amendment 1. Representatives Gruenberg, Tuck, and Austerman voted against it. Therefore, Amendment 1 was adopted by a vote of 4-3. 5:25:31 PM REPRESENTATIVE TUCK related that the Merit Scholarship allows two career paths: college or career and vocational education. He posed a scenario in which a high school student pursues a career path, say to be an electrician, and takes construction and electrical classes at a vocational education center. Unfortunately, those construction and electrical classes won't apply toward science and math because they have to have been taught by highly qualified instructors. Therefore, he expressed hope to find ways to overcome the aforementioned dilemma. He related his understanding that the legislation before the committee allows students to apply the scholarships to the career paths. 5:28:19 PM REPRESENTATIVE CHENAULT moved to report CSHB 104(FIN), as amended, out of committee with individual recommendations and the accompanying fiscal notes. 5:28:48 PM REPRESENTATIVE GRUENBERG stated a point of order and related that on the bill report he will recommend amend and note that CSHB 104(FIN) should be adopted. 5:29:16 PM There being no objection, CSHB 104(RLS) was reported out of the House Rules Standing Committee.