CS FOR HOUSE BILL NO. 104(RLS) "An Act renaming the Alaska performance scholarship and relating to the scholarship and tax credits applicable to contributions to the scholarship; relating to AlaskAdvantage education grant funding and to Alaska performance scholarship funding; establishing an account and fund for those purposes; making conforming amendments; and providing for an effective date." Co-Chair Hoffman MOVED to ADOPT the proposed committee substitute for CS HB 104 (RLS), Work Draft 27-GH1893\S (Mischel 3/28/12). Co-Chair Stedman OBJECTED for the purpose of discussion. 9:25:31 AM DARWIN PETERSON, STAFF, SENATE FINANCE COMMITTEE, explained the changes in the Work Draft. He explained the changes between committee substitute versions R and S. He stated that page 2 of the work draft, lines 9 and 10 inserted the words, "an institutional accrediting body recognized by the United States Secretary of Education." He looked at page 2, lines 23 and 24 that added the words, "Alaska residents who have attained an Alaska high school diploma by examination after January 1, 2011." He explained that the phrase "high school diploma by examination" was the proper way to refer to students who had received their General Education Development (GED). Page 3, line 7 added the exception for provisions of subsection C, which were the new high school diploma by examination component. Page 3, line 9 made an exception for subsection D, which was the waiver of the core academic requirements. Page 4, lines 3 through 30 was the new grace period language. He stated that the new grace period language was taken directly from the regulations, and was only slightly modified. The grace period that was in regulation expired with the graduating class of 2012, so the new language continued the grace period, so the Commissioner can waive the requirements. He quoted the grace period language: The Commissioner shall waive the core academic requirements for a high school graduate, if the student submits and application providing proof the student was unable the academic requirements because of illness or disability or because those courses were not available in the student's school district. The Commissioner has thirty days to approve or deny an application for waiver. High school graduates who receive the waiver will then have twelve months to finish the core academic requirements in a school district that sponsors that student. Mr. Peterson stated that GED graduates would have 24 months to complete the core academic requirements. Mr. Peterson stated that page 5, lines 5, 11, and 17 had deleted the word, "diploma", because it was considered incorrect terminology. He looked at page 7, line 19, which changed the date from October 1 to September 1 of each fiscal year. Page 7, lines 21 through 25 inserted new language: If an insufficient number of qualified applicants are awarded grants before the end of the fiscal year, the commissioner shall redeposit the remaining funds into the Alaska Higher Education Investment Fund. Mr. Peterson explained that, of the earnings from the principal of the $400 million fund, two-thirds would go into scholarships, and one-third would go to grants. If there were not enough students that could use all of the scholarship funding that was available, the remaining balance of the funding will go into the grants. If there were not enough students to use all the available grant funding, whatever was leftover at the end of the year will be deposited into the overall Higher Education Investment Fund to be used in the subsequent fiscal year. Mr. Peterson looked at page 7, line 26. He stated that it was not a change, but was the small school carve-out provision that was staying in the bill. Page 8, lines 6 and 7 was a change that stated, "the commission shall redeposit the remaining amount back into the fund from which it originated." Mr. Peterson looked at page 16, lines 24 through 26, which displayed transition language that identified that the $400 million that was appropriated to the AHFC in the year prior, and would be used to capitalize the new Alaska Higher Education Investment Fund. Page 17, at the request of the department, made changes to the effective dates in order to make the program easier to manage. Mr. Peterson looked at page 9, lines 2 through 5, which was the payout mechanism in the legislation. Co-Chair Hoffman wondered if there was a consideration to accommodate the grant portion by adding additional funds, in order for the fund to be more stable. Mr. Peterson replied that Legislative Finance applied that consideration of a block for additional deposits. Co-Chair Stedman felt that the principle would not be considered until 20 years had passed. He felt that over time, it may be seen that performance may be substantially different than what was anticipated. Co-Chair Hoffman commented that he did not want to work on the problem in 20 years. Senator Thomas wondered if the GED examination was the only acceptable alternative to the high school diploma. Mr. Peterson deferred that question to the Department of Education and Early Development. Co-Chair Stedman WITHDREW his OBJECTION. Seeing NO further OBJECTION Work Draft 27-GH1893\S was ADOPTED. 9:36:46 AM DIANE BARRANS, EXECUTIVE DIRECTOR, POSTSECONDARY EDUCATION COMMISSION, DEPARTMENT OF EDUCATION, expressed concern regarding some additions and changes to the committee substitute. She stressed that the governor remained committed to the program, and that the program needed to be strong without a dilution of the message behind the Alaska Performance Scholarship. Co-Chair Stedman pointed out one zero fiscal note from Department of Revenue (DOR), one zero fiscal note from Department of Education and Early Development (DEED), one fiscal impact note from the Alaska Commission on Post- Secondary Education for the Alaska Advantage Education Grants, and one fiscal impact note from the Senate Finance Committee. Co-Chair Hoffman MOVED to report CS HB 104(RLS) out of committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTION it was SO ORDERED. CS HB 104(RLS) was REPORTED out of Committee with a "do pass" recommendation and with a new fiscal impact note from the Senate Finance Committee for the Department of Education and Early Development, a new fiscal impact note from the Department of Education and Early Development, a new zero fiscal note from the Department of Education and Early Development, and an indeterminate fiscal note from the Department of Revenue. 9:38:42 AM AT EASE 9:49:18 AM RECONVENED