SB 84-TEACHER LOAN REPAYMENT PROGRAM  CHAIR FRED DYSON announced SB 84 to be up for consideration. SENATOR GARY STEVENS, sponsor, said the teacher shortage will be even more of a problem with passage of the federal No Child Left Behind laws. SB 84 will set up the Alaska teacher recruitment loan repayment program, which is designed to help school districts recruit and retain teachers. It includes repayment of education loans when the teachers are hired by Alaskan public elementary or secondary schools. It limits the lifetime financial award to $10,000 for an individual teacher. The funding would come from the dividend, which would normally be returned to the state through the Commission on Postsecondary Education. The intent is that the program would operate when the funds are available and if no funding is appropriated by the Legislature, then no money would be spent. If an individual leaves a teaching position, they would not receive the loan repayment that would be made at the end of the school year. SENATOR STEVENS explained that the proposed amendment is from the Alaska Postsecondary Commission and clarifies some of the language and expands the scope of funding sources to include federal funds and other receipts. He said he didn't know of anyone who was against this bill. SENATOR GRETCHEN GUESS asked if this program could be used by professionals in other shortage areas, like speech pathologists who don't have teaching certificates. SENATOR STEVENS replied that it's meant for certificated teachers in elementary or high school. SENATOR GUESS asked if they are only going to repay loans in areas of shortage or is this for all teachers. SENATOR STEVENS replied that the specifics would be developed by the Postsecondary Commission. His intent is that it's for any position. SENATOR GARY WILKEN said he had some reservations with this bill, as well as SB 154. He understands the financial burden of going to school, but he was concerned that this is slippery slope legislation. He came to the Legislature just as the student loan program was starting to dig itself out of the problems of the 80s and 90s when it was a give-away program. The program is now robust and has brought money back to the state. They have brought back about $5 million for the fourth year in a row. SENATOR STEVENS shared his concerns, but said this would not make the fund any less healthy than it is now, but it would simply reduce the dividend that the state receives. Every year the Legislature would have to fund the program. MS. DIANE BARRANS, Executive Director, Alaska Commission on Postsecondary Education, explained the amendments and noted that the sponsor was very proactive on getting the commission's input on this bill. One of the amendments insures that the criteria is efficient to administer and does not require costly activity. The second amendment is on page 3, line 14, after "AS 14.42.295" to insert "or any federal or other funds", the objective being to capture any funding that is available for a program of this kind. The others are technical changes. SENATOR WILKEN moved to adopt Amendment 1. There were no objections and it was so ordered. MS. BARRANS responded to Senator Wilken's concerns saying that this bill, rather than requiring additional funds to be expended from the Student Loan Corporation to pay benefits under this program, it would simply be an earmarking in statute that when the dividend is calculated and goes back to the state, the Legislature would use those funds to endow the fund from which benefits are paid. SENATOR WILKEN said that the fiscal note shows 807 new hires would participate in the program each year. MS. BARRAN responded that was correct and added that a recent study of openings each year showed about 1,600 teacher vacancies and about half of those are estimated to be new teachers who would still have educational debt. They did not build in any growth estimate and the details of the payments would have to be worked out in regulation. How I would recommend that it be structured is that when someone agrees to participate in this program, we identify what their total debt is at that time. We actually set aside the amount of funds that we would need to pay to meet its obligation to this participant so we would essentially encumber funds on their behalf. What I don't want to be in the position of doing is telling someone there is going to be a benefit for them and then not have the funds available. I don't' want to come back to the legislature...One of the things I see the commission being charged with is to monitor the amount in the fund and to monitor the amount that's been obligated to current participants and only enroll new participants when funding is available. SENATOR WILKEN said that was where his concern lay - if one year they needed all of the $5 million of the dividend, they would not fund that particular year. There would be a clamor to continue the funding over and above the $5 million. He asked if they were funding at the $500,000 level, would she prorate that through the debt or through the number of participants. MS. BARRANS replied that she could see either scenario occurring depending on a number of variables. The amount of controls put in place will affect whether or not that can occur. Her objective would be for it not to occur. Since the board is given some latitude to set the criteria for the program, they might define critical shortage areas and target the money to those areas. SENATOR WILKEN asked her if she saw any problems with trying this for five years. MS. BARRANS answered that was more of a political question than a financial question and, if it was structured correctly at the outset, they would not be in a financial hole in terms of being obligated to pay benefits. SENATOR WILKEN complimented Ms. Barrans on running a great show. MS. MARY FRANCIS, Executive Director, Alaska Association of School Administrators, supported SB 84. TAPE 03-19, SIDE A    MS. FRANCIS said that last year only about 300 educators came in to look for Alaskan jobs. MR. JOHN ALCANTRA, Government Relations Director, National Education Association, supported SB 84 for all the reasons stated previously. SENATOR WILKEN moved to report SB 84 from committee with individual recommendations and attached fiscal note. There were no objections and it was so ordered.