An Arkansas legislative committee Tuesday sent a bill to the Arkansas House of Representatives that would reduce the size of Arkansas Academic Challenge Scholarships for future recipients starting in the 2016-17 school year.
The House Rules Committee passed Senate Bill 5 in a split voice vote after Sen. Jimmy Hickey, R-Texarkana, agreed to delay the start of the legislation so it would affect college freshmen starting in the fall of 2016. The bill would change the payout amounts of the scholarship and the eligibility requirements starting with that class.
The committee also approved a bill that would change how lottery ticket sellers are bonded and a bill aimed at attracting a Dave & Buster's restaurant and gaming arcade to Little Rock.
Senate Bill 5 has been sitting on the House Rules Committee's calendar for two weeks. Hickey said Tuesday that he hoped the amendment would clear the gridlock.
"The lottery as you know is in deficit spending and is rapidly approaching not being able to fund all of the incoming students who are currently eligible under current law," he said. "The situation is also magnified by the structure of the lottery scholarship program."
Under SB5, starting in the 2016-17 academic year, the scholarship would be reduced from $2,000 to $1,000 for the freshman year at two- and four-year colleges. The scholarships would increase from $3,000 to $4,000 for the sophomore year at four-year colleges, and from $2,000 to $3,000 for the sophomore year at two-year colleges.
Scholarship recipients would receive $4,000 as juniors and $5,000 as seniors at four-year universities.
SB5 also would change the scholarship's eligibility requirements. Future high school graduates would be required to have ACT scores of at least 19, or the equivalent on comparable college entrance exams.
Under current state law, high school graduates are required to have successfully completed the Smart Core curriculum and achieved either a high school grade-point average of at least 2.5 or a minimum score of 19 on the ACT or the equivalent.
In addition to changing the start date, the amendment also adds language regarding the Scholarship Shortfall Reserve Trust Account. Ticket sales and the amount raised for scholarships have declined over the past two fiscal years.
The amendment specifies that any loan from the General Improvement Fund to keep the scholarship program solvent between now and when the changes go into effect should not exceed $1.5 million. It also prioritizes payback of those loans after the changes were to start.
Members of the Rules Committee did not raise many concerns about the amendment, but did have questions about the changes to the scholarship requirements, including whether GPA was a better indicator of college success than ACT scores and whether the bill would do anything to help nontraditional students who apply for the scholarships.
Rep. Deborah Ferguson, D-West Memphis, asked whether -- to address those questions and because of the new start date -- the Arkansas Legislature needed to pass the bill now or could wait until the fiscal session.
Shane Broadway, former director of the Arkansas Department of Higher Education, said the Legislature would have time to make changes before the effective date of the legislation. He said there was a "gentlemen's agreement" in previous sessions that the lottery scholarship could be discussed in the fiscal session if necessary.
Revenue in February increased by $2.8 million from a year ago to $41.7 million and the amount raised for scholarships increased by about $200,000 from a year ago to $6.1 million, according to the lottery reports to the Legislature's lottery oversight committee.
It's the second-consecutive month that lottery revenue has exceeded year-ago figures.
Under Act 218 passed earlier in this session, the lottery is now part of Gov. Asa Hutchinson's administration in the state Department of Finance and Administration. The law is aimed at stabilizing the lottery's finances.
Also Tuesday, the committee approved Senate Bill 745, by Sen. Jeremy Hutchinson, R-Little Rock, which had zipped through the Senate in a 33-0 vote Monday. The bill changes state law covering amusement device operators.
Currently, prizes in arcades can't be worth more than $12.50. SB745 would raise that limit to $500.
Jeremy Hutchinson told the Senate on Monday that a Dave & Buster's would employ about 140 people and amount to a $6 million construction project. The company has expressed interest in locating near the Bass Pro Shop in Little Rock.
The higher limit would be permitted only at an operation that has more than 25,000 square feet, offers a full-service restaurant menu during all hours of operation, has at least 100 amusement devices and is in a county that has a population exceeding 350,000 and is traversed by a navigable river. Only Pulaski County qualifies under that definition.
The bill states that it doesn't authorize draw games, slot machines, roulette wheels, craps, video poker and "casino-gambling style games of any other type in which the outcome is determined substantially by chance."
The bill would have no effect on state tax revenue, according to the Finance and Administration Department.
Dave & Buster's had origins in Little Rock and has locations across the nation, but it no longer operates in Arkansas.
The committee Tuesday also passed House Bill 1279 by Rep. Chris Richey, D-West Helena, which would change the bonding system for lottery retailers. Instead of requiring a new vendor to pay an initial bonding fee, the vendor would pay a smaller amount that would go into an insurance pool to cover theft or other losses.