HCS HB 538 -- CHALLENGE SCHOLARSHIPS (Scheve)

This substitute establishes the Challenge Scholarship Program,
to provide reimbursement for the expenses of post-secondary
education.  Beginning in calendar year 1998, scholarship moneys
may be claimed by eligible students, or persons on behalf of
eligible students, on individual income tax returns.  To be
eligible, students must be enrolled in certain post-secondary
educational institutions, be a citizen or permanent resident of
the U.S., and a resident of Missouri.  Persons incarcerated in
any correctional facility or jail are ineligible to apply for
the scholarships.  Additional eligibility criteria for students
are outlined.   Excepting students enrolled in the A+ Schools
Program, only students who have not yet completed 60 semester
hours are eligible to participate in the program.  Students
enrolled in the A+ Schools Program may use the Challenge
Scholarships for the 60 semester hours after they have exhausted
the financial benefits available under the A+ Schools Program.
"Eligible institution" is defined, and includes most public and
private, accredited post-secondary institutions.

Only expenses for post-secondary credit hours earned after the
completion of a high school diploma, or its equivalent, may be
claimed under the Challenge Scholarship program.  The amount of
the scholarship is determined by the lesser of the annual
maximum allowed, or a formula using the number of credit hours
completed in that calendar year multiplied by a per credit hour
allowance.  For calendar year 1998, the maximum scholarship
amount is $500, and the per credit hour allowance is $17; in
calendar year 1999, the maximum scholarship amount is increased
to $1,000, and the per credit hour allowance is $33; for
calendar year 2000 and each year thereafter, the maximum
scholarship amount is $1,500 and the per credit hour allowance
is $50.  While  the annual scholarship amount is not limited to
the amount of a claimant's income tax liability, individual
claimants may not receive an annual reimbursement that is more
than the yearly allowable maximum nor more than $3,000 in total
scholarship moneys.

The Coordinating Board for Higher Education, in conjunction with
the Department of Revenue, is to prescribe rules and regulations
to implement the Challenge Scholarship Program.  The
Coordinating Board of Higher Education is required to provide to
the Department of Revenue a list of eligible institutions for
each calendar year.  The Department of Revenue is required to
annually submit a report to the Coordinating Board of Higher
Education, showing the number of students participating in the
program, the dollar amount of scholarships claimed, and other
information which may be requested by the Coordinating Board of
Higher Education.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of
$2,010,327 in FY 1998, $41,985,359 in FY 1999, & $60,643,411 in
FY 2000.

HCS HB 538 -- CHALLENGE SCHOLARSHIPS

SPONSOR:  Scheve

COMMITTEE ACTION:  Voted "do pass" by the Committee on Higher
Education by a vote of 17 to 1.

This bill establishes the Challenge Scholarship Program, to
provide reimbursement for the expenses of post-secondary
education.  Beginning in calendar year 1998, scholarship moneys
may be claimed by eligible students, or persons on behalf of
eligible students, on individual income tax returns.  To be
eligible, students must be enrolled in certain post-secondary
educational institutions, be a citizen or permanent resident of
the U.S., and a resident of Missouri.  Persons incarcerated in
any correctional facility or jail are ineligible to apply for
the scholarships.  Additional eligibility criteria for students
are outlined.   Excepting students enrolled in the A+ Schools
Program, only students who have not yet completed 60 semester
hours are eligible to participate in the program.  Students
enrolled in the A+ Schools Program may use the Challenge
Scholarships for the 60 semester hours after they have exhausted
the financial benefits available under the A+ Schools Program.
"Eligible institution" is defined, and includes most public and
private, accredited post-secondary institutions.

Only expenses for post-secondary credit hours earned after the
completion of a high school diploma, or its equivalent, may be
claimed under the Challenge Scholarship program.  The amount of
the scholarship is determined by the lesser of the annual
maximum allowed, or a formula using the number of credit hours
completed in that calendar year multiplied by a per credit hour
allowance.  For calendar year 1998, the maximum scholarship
amount is $500, and the per credit hour allowance is $17; in
calendar year 1999, the maximum scholarship amount is increased
to $1,000, and the per credit hour allowance is $33; for
calendar year 2000 and each year thereafter, the maximum
scholarship amount is $1,500 and the per credit hour allowance
is $50.  While  the annual scholarship amount is not limited to
the amount of a claimant's income tax liability, individual
claimants may not receive an annual reimbursement that is more
than the yearly allowable maximum nor more than $3,000 in total
scholarship moneys.

The Coordinating Board for Higher Education, in conjunction with
the Department of Revenue, is to prescribe rules and regulations
to implement the Challenge Scholarship Program.  The
Coordinating Board of Higher Education is required to provide to
the Department of Revenue a list of eligible institutions for
each calendar year.  The Department of Revenue is required to
annually submit a report to the Coordinating Board of Higher
Education, showing the number of students participating in the
program, the dollar amount of scholarships claimed, and other
information which may be requested by the Coordinating Board of
Higher Education.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of
$2,010,327 for FY 1998, $41,985,359 for FY 1999, and $60,643,411
for FY 2000.

PROPONENTS:  Supporters say that these scholarships will help
enable those wanting to go to college to do so, and will ensure
that the state has a well-trained, skilled work force.

Testifying for the bill were Representative Scheve; Governor's
Office; Kayla Stroup, Commissioner Coordinating Board for Higher
Education; Department of Revenue; Independent Colleges and
Universities of Missouri; Missouri Community College Association;

Department of Elementary and Secondary Education; National
Education Association; Don Fancher, Vice-Provost for Extension,
University of Missouri; Associated Students of the University of
Missouri; Associated Industries of Missouri; University of
Missouri; Missouri State Teachers Association; and Missouri
Federation of Teachers.

OPPONENTS:  There was no opposition voiced to the committee.

Debra Cheshier, Research Analyst

HB 538 -- Challenge Scholarship Program

Sponsor:  Scheve

This bill establishes the Challenge Scholarship Program, to
provide reimbursement for the expenses of post-secondary
education.  Beginning in calendar year 1998, scholarship moneys
may be claimed by eligible students, or persons on behalf of
eligible students, on individual income tax returns.  To be
eligible, students must be enrolled in certain post-secondary
educational institutions, be a citizen or permanent resident of
the U.S., and a resident of Missouri.  Additional eligibility
criteria for students are outlined.   Excepting students
enrolled in the "A+ Schools Program", only students who have not
yet completed 60 semester hours are eligible to participate in
the program.  Students enrolled in the "A+ Schools Program" may
use the Challenge Scholarships for the 60 semester hours after
they have exhausted the financial benefits available under the
"A+ Schools Program".  "Eligible institution" is defined, and
includes most public and private, accredited post-secondary
institutions.

The amount of the scholarship is determined by the lesser of the
annual maximum allowed, or a formula using the number of credit
hours completed in that calendar year multiplied by a per credit
hour allowance.  For calendar year 1998, the maximum scholarship
amount is $500, and the per credit hour allowance is $17; in
calendar year 1999, the maximum scholarship amount is increased
to $1,000, and the per credit hour allowance is $33; for
calendar year 2000 and each year thereafter, the maximum
scholarship amount is $1,500 and the per credit hour allowance
is $50.  While  the annual scholarship amount is not limited to
the amount of a claimant's income tax liability, individual
claimants may not receive an annual reimbursement that is more
than the yearly allowable maximum nor more than $3,000 in total
scholarship moneys.

The Coordinating Board for Higher Education, in conjunction with
the Department of Revenue, is to prescribe rules and regulations
to implement the Challenge Scholarship Program.  The board is
required to provide to the department a list of eligible
institutions for each calendar year.  The department is required
to annually submit a report to the board, showing the number of
students participating in the program, the dollar amount of
scholarships claimed, and other information which may be
requested by the board.