SHES - 2/8/95 SB 36 BRINDLE SCHOLARSHIP LOANS  Number 186 CHAIRMAN GREEN introduced SB 36 as the next order of business before the committee. SENATOR ZHAROFF, Prime Sponsor, noted that this loan program came about after receiving a letter from Mr. Alec Brindle. He explained that SB 36 intended to make loans to Alaskan students pursuing degrees in fields beneficial to the fishing industry. Fish processing industry contributions fund this program. He pointed out that the committee packets included the 1994-1995 Winn Brindle Memorial Scholarship Loan Status Report. Senator Zharoff informed the committee that the program has received $1.8 million in contributions since 1987; however, approximately $1.4 million remains in the fund. Students are not utilizing the program to its potential. SB 36 specifies a 50 percent forgiveness of the loan and a cap of 5 percent on the loan's interest rate in order to stimulate more use of this loan program. He referred to the two proposed amendments dealing with this legislation. CHAIRMAN GREEN pointed out that the first deletion cited in Senator Zharoff's amendment should be on page 2, line 2 not page 2, line 4. Number 284 SENATOR ELLIS moved to adopt Senator Zharoff's corrected amendment, Amendment 1. Without objection, Amendment 1 was adopted. AMENDMENT 1 Page 2, line 2, after the first "loan": Delete: "indebtedness" Insert: "principal" Page 2, line 4, after the second "loan": Delete: "indebtedness" Insert: "principal" Page 2, line 6, after "principal" Delete: "and interest" CHAIRMAN GREEN asked if Senator Zharoff could give an example of an individual who is employed full-time in Alaska, but resides outside the state in order to support the language suggested in his other amendment, Amendment 2. SENATOR ZHAROFF explained that Amendment 2 addresses situations such as an individual working for Trident Seafoods while keeping a residence in Seattle. The individual would be supporting the fishing industry of Alaska even while maintaining a residence in another state. SENATOR ZHAROFF stated that Amendment 2 would expand the use of the program. He did not have a problem with the language as long as the fishing industry was supported. He preferred that only Alaskans be able to utilize this program, however, the fishing industry does not operate completely out of Alaska. SENATOR MILLER expressed concern with encouraging individuals living outside of Alaska to use Alaska's resources. SENATOR ZHAROFF agreed. Number 337 JOE McCORMICK, Executive Director of the Alaska Commission on Postsecondary Education, clarified that a student must be a resident of Alaska in order to be eligible to apply for and receive funds from this program. In the past, these individuals have tended to change their state of residence while continuing full- time employment in the fishing industry. This creates complications in administering the forgiveness provisions of the Alaska student loan program model used for this loan. SENATOR ELLIS asked if Amendment 2 means that an individual would have to work in the fishing industry for five years in order to receive forgiveness if he no longer resides in Alaska. Mr. McCormick said that was correct. SENATOR SALO specified that the work would have to be in the Alaska Fisheries. Number 361 SENATOR SALO moved Amendment 2 for purposes of further discussion. SENATOR MILLER objected. Senator Miller reiterated his concern with encouraging individuals to take advantage of Alaska's resources and then allow them to move out of the state and continue to receive benefits such as loan forgiveness. JOE McCORMICK maintained that these individuals still generate and contribute to Alaska's economy because they work in the Alaska Fishing Industry. He emphasized that this loan's incentive attempts to attract individuals to the Alaska Fishing Industry. Tracking the movement of these individuals is an administrative nightmare when dealing with the forgiveness portion of the loan. SENATOR MILLER maintained his objection. CHAIRMAN GREEN asked if other comparable loan programs with forgiveness provisions allowed their recipients to receive forgiveness without being Alaska residents. JOE McCORMICK specified that the only forgiveness program he knew of required the recipients to return to live in Alaska for five years no matter the profession. SB 36 emphasizes a specific vocation, the fishing industry. The forgiveness can been binded to the vocation rather than the place of residency. Number 401 SENATOR MILLER suggested dividing Amendment 2. He moved to divide Amendment 2 into Amendment 2A, lines 1 and 2 of the amendment, and Amendment 2B, lines 3 through 6 of the amendment. SENATOR ZHAROFF proposed an example in which Amendment 2 would be needed. After an individual receives the loan and training, the industry may want to place the person in the industry's headquarters which happen to be located in another state. SENATOR MILLER understood this rare case and reiterated his concerns. Such individuals should be encouraged to stay in Alaska even in the off season in order to contribute to local communities not just the seasonal industry. SENATOR SALO stated that she was almost convinced by Mr. McCormick's administrative nightmare scenario, however, another administrative nightmare could occur when tracking which fishery the individual is working for if they move around so much. CHAIRMAN GREEN reminded the committee that the motion to split Amendment 2 was still before them. Without objection, Amendment 2 was split into Amendment 2A and Amendment 2B. SENATOR MILLER moved to adopt Amendment 2A. Without objection, Amendment 2A was adopted. AMENDMENT 2A Page 2, line 4, after "time": Insert "in the state"ΒΆ SENATOR SALO removed her motion to adopt Amendment 2. Number 470 SENATOR SALO moved that SB 36 as amended be moved out of committee with individual recommendations. Hearing no objection, it was so ordered.