You asked for a brief summary of bills the Higher Education and Employment Advancement Committee favorably reported to the Finance Committee.

SB 125, AAC INCOME TAX DEDUCTIONS FOR COLLEGE SAVINGS PROGRAMS

The bill allows Connecticut taxpayers to deduct up to $ 5,000 (for single filers) or $ 10,000 (for joint filers) in annual contributions to any qualified college savings plan, not just CHET.

SB 1074, AAC THE CONNECTICUT HIGHER EDUCATION SUPPLEMENTAL LOAN AUTHORITY

The bill makes several changes to the Connecticut Higher Education Supplemental Loan Authority's (CHESLA) authority and operations. It requires the state to withhold the state income tax refund of anyone who has defaulted on a student loan made or guaranteed by CHESLA. It also authorizes CHESLA, with approval of the state treasurer, to enter into interest rate swap agreements in connection with issuing bonds or notes.

The bill allows CHESLA to develop and require the use of a master promissory note for education loans. And it allows more than one of the three members of CHESLA's board of directors representing Connecticut higher education institutions to be from a constituent unit of higher education.

SB 1075, AAC THE CONNECTICUT STUDENT LOAN FOUNDATION

The bill authorizes the Connecticut Student Loan Foundation (CSLF) to issue tax-exempt bonds, notes, or other obligations, subject to the private activity bond cap. Current law allocates up to 25% of private activity bonds to municipalities and political subdivisions, departments, agencies, authorities, other bodies of municipalities, and the Connecticut Higher Education Supplemental Loan Authority. This bill includes the CSLF, or any nonprofit subsidiary of the CSLF, under this cap.

The bill also authorizes the CSLF to issue alternative loans, in addition to the federally subsidized loans they are currently authorized to issue. And it allows the CSLF to create a nonprofit subsidiary with the same powers as the parent corporation.

HB 6812 AA ESTABLISHING A HIGHER EDUCATION PERPETUAL TRUST FUND

The bill establishes the Higher Education Perpetual Trust Fund within the Short Term Investment Fund, to be administered by the treasurer. It requires that the interest earned on the Budget Reserve Fund be credited to the Higher Education Perpetual Trust Fund.

The bill also authorizes the treasurer, when investing the Short Term Investment Fund, to consider investments yielding the highest earnings that are consistent with her investment strategy.

Under the bill, beginning in fiscal year 2009, 62. 5% of the fund's investment earnings are credited to the Connecticut Aid to Public College Students Grant Program. For any fiscal year in which no investment earnings are credited to the fund, or the earnings are not sufficient to cover the amount of the of the appropriation requested by the Board of Governors of Higher Education, the General Assembly may appropriate investment earnings that were credited to the fund in any previous fiscal year.

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