SCS/HS/HB 1694 - ADVANTAGE MISSOURI PROGRAM - This act establishes the "Advantage Missouri Program", a higher education loan and loan forgiveness program to encourage students to become employed in occupational areas of high demand in the state. "Occupational areas of high demand" refers to specific professions or skill areas for which the state is experiencing a shortage of qualified employees. Each year, the Coordinating Board for Higher Education (CBHE) is to designate occupational areas of high demand, the professions and skill areas directly related to these areas, and the degree programs or certifications leading to employment in these areas. In making these designations, the CBHE is to consult with the Department of Labor and Industrial Relations, the Department of Economic Development and private sector business and labor groups. The Board is also to consult with individuals with expertise related to labor markets, geographic and demographic analysis, and is to solicit input from interested parties throughout the state, in order to insure that the long-term needs of the state and the policy interests of the state in both the public and private sectors are considered.

The Advantage Missouri Trust Fund is created by this act and will consist of appropriations, contributions and other funds provided to the CBHE for the program. In addition, loan repayments and moneys from any penalties assessed will also be deposited into the fund.

To eligible for the Advantage Missouri Program, students must be enrolled full-time, or less than full-time with the approval of the CBHE, in an approved public or private institution of postsecondary education which grants a one-year or two-year certificate, associate or baccalaureate degrees, or graduate or professional degrees. In addition, a student must be a Missouri resident, must have received a high school diploma or general education development certificate (GED), may not have defaulted on the repayment of any previously granted higher education loan and must maintain satisfactory academic progress as determined by the educational institution he or she attends. An eligible student may participate in the program for up to 10 semesters and may be awarded a loan of up to $2,500 each academic year, not to exceed a maximum of $10,000. Students may not participate in the program for more than 7 years.

The CBHE is to enter into a contract with each student qualifying for participation in the program at the time he or she declares a major or decides on a course of study. The required provisions to be contained in the contract are outlined, including the stipulation that program loans are interest-free while the student is enrolled full-time or enrolled part-time with CBHE approval and meets the eligibility requirements. Eligible students may qualify for loan forgiveness by agreeing to be employed in an approved occupational area of high demand within one calendar year of graduation. Each year of such employment can result in the forgiveness of one year's loans. Students who choose not to comply with or who fail to meet the employment requirements are required to repay with interest all loans received through this program.

Income tax credits of up to 50% for contributions to the Advantage Missouri Trust Fund are authorized. Individuals or entities may receive the tax credit for contributions of up to $100,000 per taxpayer, effective January 1, 1999. If the amount of tax credit exceeds the amount of tax liability, the difference may be carried forward for the succeeding 10 years or until the full credit is used. The Department of Revenue is to administer these tax credits, which are limited to $5 million each year.

MOSTARS SAVINGS PROGRAM - This act creates the "MOSTARS Higher Education Savings Program". The program shall be administered by the MOSTARS Higher Education Savings Board which is established in this act. Powers and duties of the Board are granted to develop and implement the program.

The Board may enter into a savings program agreement with a contributor person on behalf of beneficiary who intends to attend a college or university. An agreement shall not guarantee that the beneficiary will be admitted to, allowed to continue to attend or graduate from a college or university. A participation agreement shall clearly disclose any risk associated with depositing moneys with the Board. No more than eight thousand dollars may be contributed annually pursuant to a participation agreement.

Any participant may cancel a participation agreement at will. Return of funds may be subject to penalties established by the Board.

The assets of the savings program and any income therefrom shall be exempt from all taxation by the state or any of its political subdivisions. Income earned or received from the fund by any participant or beneficiary shall not be subject to state income tax. Contributions made to the savings plan shall not be counted towards the calculation of gross income for state income tax purposes. The tax exemption shall be for tax years beginning on or after Jan. 1, 1999.

Rules promulgated by the Board shall be subject to review by the Joint Committee on Administrative Rules.

The Director of Investment of the State Treasurer's office shall review the financial status and investment policy of the program as well as the participation rate in the program and report the findings annually to the Board.

Money accruing to and deposited in individual accounts shall not be part of "total state revenues" as defined in sections 17 and 18 of Article X of the Missouri Constitution and the expenditure of such revenues shall not be an expense of state government under section 20 of Article X of the Missouri Constitution.

This portion of the act is similar to SB 862.
OTTO FAJEN