SB 127-UNIVERSITY OF ALASKA SCHOLARSHIPS ANN RINGSTAD, Government Relations Director for the Statewide Office of University Relations, University of Alaska (UA), stated support for SB 127 and made the following comments. This legislation came before the committee in a different form last year. It allowed the UA to get from high schools the names and addresses of students who qualify for the Alaska Scholars Program. SB 127 will put the Alaska Scholars Program into statute and it repeal statutory language about other scholarship programs that may or may not be in effect right now. CHAIRMAN MILLER noted the committee has a work draft before it labelled "Ford 2/16/00 - GS 1029/D." He asked Ms. Ringstad to address that version (Version D) of the bill. MS. RINGSTAD said Version D aligns the legislation with the program that is in place today. SENATOR WILKEN asked if Version D funds the Alaska Scholars Program out of the Alaska Student Loan Corporation (ASLC) profits. MR. JIM LYNCH, Vice President of Finance for the University of Alaska, replied he does not think this bill does that. MS. RINGSTAD clarified that the Governor has submitted legislation to use proceeds from the ASLC. That legislation does not necessarily state that those funds will be applied to SB 127 but the bill's fiscal note could lead one to believe that some of that money will be used to fund it. The UA plans to fund the program out of its own pocket in FY00 and FY01 and is not asking for general funds until next year. CHAIRMAN MILLER asked if Version D merely sets the scholarship eligibility criteria in statute. MS. RINGSTAD said that is correct. Number 2229 SENATOR WILKEN asked whether there is any connection between Version D and the ASLC proceeds. MS. RINGSTAD replied, "There could be, that could be part of the funds to be used in the future to be paid in the future to pay for a portion of it." CHAIRMAN MILLER asked if anything attaches those funds to this bill. MS. RINGSTAD said there is not. Number 2258 CARL ROSE, Association of Alaska School Boards, stated support for this legislation because it addresses the AASB's concern that education be viewed as a kindergarten through university level experience rather than a K-12 experience. CHAIRMAN MILLER asked Mr. Lynch to come back to the table. SENATOR WILKEN indicated that the fiscal note for Version D (CSSB 127(HES) clearly states that the fiscal note assumes the return of capital payments from the ASLC to partially fund the Alaska Scholars Program. He maintained that language creates a very clear connection between Version D and the Alaska Scholars Program. MR. LYNCH said he has not seen that fiscal note. CHAIRMAN MILLER noted that Mr. Lynch's signature is on the fiscal note. SENATOR WILKEN asked Mr. Lynch when he found out about this scheme. MR. LYNCH replied February 11. SENATOR WILKEN asked Mr. Lynch if he is aware of the debt that the ASLC owes the debt to the State of Alaska. MR. LYNCH replied that he is aware that there is a debt but he does not know the amount. SENATOR WILKEN noted that debt is about $42 million. He asked Chairman Miller if he has received any comments from Diane Barrans of the ASLP about this legislation. CHAIRMAN MILLER said he has not. SENATOR WILKEN made the following comment. I am not particularly concerned about the bill itself - I have great concern about the fact that someone, somewhere decided that they were going to take $6 million that the student loan corporation has worked hard to become profitable and this Legislature and Administration's helped them do that - and as soon as we get $6 million into the plus, we ignore the promises made in the past and we come trumped up with some political deal to fund the Scholars Program because some one person happened to think it's a great idea, and I suggest that we just take this bill and put it in our pockets and leave until all the people can be on board." TAPE 00-05, SIDE B SENATOR WILKEN pointed out that he sits on the ASLC Board and that Board members had a cursory discussion at the August and December meeting about using the $6 million to pay the debt. Suddenly, in February, this has been rolled out to the public as if the entire Board believes this is a good idea. He repeated that he is totally supportive of the Scholars Program but he does not support taking money that should be paying back the people of Alaska without taking the proper steps to get the ASLC on board, as well as its managers and the Legislature. He expressed frustration that Version D short-circuits the entire process. He repeated that he supports making changes to fix the Scholars Program in general, but if legislation is connected to the student loan proceeds, and prior commitments to that money are ignored, he is opposed to it. SENATOR ELTON asked Mr. Lynch and Ms. Ringstad whether the UA could operate the Alaska Scholars Program if it is not enshrined in statute. MR. LYNCH said it is his opinion that the UA could continue to run the program. SENATOR ELTON asked if Senator Wilken's concerns are extant in the legislative body, whether the UA could continue the program until a resolution to the funding source is found. MR. LYNCH noted the bill also contains a few repealers for other programs. SENATOR ELTON asked if those provisions need to be repealed this session. MR. LYNCH said there is a cost associated with those provisions. SENATOR ELTON suggested that Mr. Lynch get back to the committee with those costs and provide information on why the provisions need to be repealed. He agreed with Senator Wilken that the committee should hold on to the bill for awhile. There being no further testimony on SB 127, CHAIRMAN MILLER asked Mr. Lynch and Ms. Ringstad to contact the ASLC and Senator Wilken to discuss the concerns expressed today.