Legislature(1995 - 1996)
03/21/1995 02:08 PM House HES
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HHES - 03/21/95 HB 65 - ASSISTIVE TECHNOLOGY LOAN GUARANTEES Number 050 DANIELLA LOPER, Administrative Assistant for bill sponsor Representative Brian Porter, presented the sponsor statement on his behalf. She said HB 65 is a bill that will help people with disabilities. It refers to people with disabilities, not people who are on Medicaid or Medicare, and not very wealthy people with disabilities. Of those, it affects those who want to work. Therefore, the bill will affect about 60 percent of the people with disabilities in this state. Those are people who need assistive technology in order to work. MS. LOPER explained the program creates a tie between the banks and people with disabilities. A communication is established whereby a person with a disability can go to the bank and apply for a loan. This person is usually in the middle-class socioeconomic range, although they may not necessarily have enough money to guarantee the loan. Therefore, the person would go to the Division of Vocational Rehabilitation (DVR) and explain they are applying for a loan for, for example, a lift that can be attached to a car. MS. LOPER continued that the person with a disability will explain to the DVR that they can pay off the loan, but they need a guarantee. The DVR would, therefore, guarantee 90 percent of the loan. Number 210 MS. LOPER said a study was conducted in 1993 and the default rate was found to be 5.2 percent on this type of loan. That is about the best rate possible. The banking association also is complimented by this bill because banks have to meet the provisions of the Community Reinvestment Act (CRA). Banks must reinvest into the community. Each bank is rated on that. MS. LOPER said therefore, HB 65 helps the banks and people with disabilities who want to work. She had various people waiting to testify on the attributes of this bill. Number 319 CO-CHAIR BUNDE asked if Ms. Loper wanted HESS Committee members to entertain the amendments to the bill so there would be a complete working document. He numbered the amendments. REPRESENTATIVE TOM BRICE moved amendment number one. CO-CHAIR BUNDE objected for discussion purposes. MS. LOPER explained that amendment one contains the wording for the descriptive term used for people with disabilities. "Handicapped people" and "handicapped individuals" are terms that are outdated and offensive. The term that is used today and is supported by the Americans with Disabilities Act (ADA) is "a person with a disability." It is important that the word "person" is used before the word "disability." MS. LOPER said the amendment has changed the verbiage in the bill to reflect those terms. Number 412 CO-CHAIR CYNTHIA TOOHEY asked if she was saying that on page 1, line 13, after the word "enabling," on line 14, item (1), the words "handicapped individual" will be replaced with "a person with a disability." REPRESENTATIVE NORMAN ROKEBERG inquired about page 2, line 30. He said the word "handicapped" is used to describe a disability. MS. LOPER said the reason is because by statute, that must be done in order to comply with the statute. An entire chapter would have to be changed in the statutes. REPRESENTATIVE ROKEBERG asked if a particular title or chapter in the Alaska State Statutes was being referred to. MS. LOPER said a particular title was not being referred to, but there are other words and sections in the statute books that use the word "handicapped." Therefore, in order to reflect the change in this particular bill, a definition had to be given. Number 490 REPRESENTATIVE ROKEBERG expressed surprise that the word "handicapped" even exists in the body of statutes at this late date. CO-CHAIR BUNDE said perhaps political correctness is late coming to Alaska. CO-CHAIR TOOHEY said there is a wording problem. On page 1, line 14, the amendment deletes what has just been added. She said that on line 14, the words "handicapped individual" are being replaced with "a person with a disability...to obtain or maintain employment." CO-CHAIR BUNDE said the sentence on line 13 will continue to read, "best suited for a person with a disability to (1) a person with a disability to obtain or maintain employment." Number 567 REPRESENTATIVE BRICE asked if that was a redundancy that was necessary in statute. CO-CHAIR TOOHEY said perhaps it would be changed in the regulations. REPRESENTATIVE BRICE said the words are being stated in Section (b), but then to go under subsection (1), it sounds redundant. CO-CHAIR BUNDE said "appropriate assistive technology that is best suited for (1) a person with a disability." Co-Chair Bunde read the whole section: "(b) Subject to (c) and (d) of this section, the agency may use money in the fund established under this section to guarantee 90 percent of the principal amount of a loan or to subsidize the interest rate of a loan guaranteed by the agency for appropriate assistive technology that is best suited for..." Co- Chair Bunde now added "a person with a disability." CO-CHAIR BUNDE said while it sounds redundant, if the whole section is read, it is appropriate. REPRESENTATIVE BRICE said it still sounds redundant when one continues to read. Number 664 REPRESENTATIVE ROKEBERG said the term of art in the disabled community is a "disabled person." However, in this bill the term "person with a disability" is used. He asked if the bill was attempting to form a word of art for statutory language. MS. LOPER said the term of art, and even the term used through the ADA is "a person with a disability." REPRESENTATIVE ROKEBERG said "disabled person" is proper terminology. CO-CHAIR BUNDE said there is a semantic problem. "Disabled person" has connotations that "person with a disability" does not have. The person has a disability, as opposed to the entire person being described as "disabled." It is putting a very fine point on the term. Number 720 REPRESENTATIVE ROKEBERG said he is familiar with dealing with these issues as the former chairman of the ADA Commission in Anchorage for three years. There is no stigma in being a disabled person. There is about a "handicapped person," and that is the issue here. He was simply wondering if there was a reason for all this, because he can see that the language changes would be more economic if they were done differently. However, he would not belabor the point. MS. LOPER said in the committee packet, there is a letter from the Disability Law Center of Alaska. Both this letter and the director of the DVR said the term "disabled person" was never to be used again. The desired term is "person with a disability." CO-CHAIR BUNDE asked if the committee felt the amendment as proposed was redundant. REPRESENTATIVE BRICE said the committee was comfortable with the amendment, and expressed the desire to move on. CO-CHAIR BUNDE removed his objection to the movement of amendment one. It was therefore passed. Number 813 REPRESENTATIVE BRICE moved amendment two, and Co-Chair Bunde objected for discussion purposes. MS. LOPER said she was reviewing the legislation and found a loophole on page 2, line 6. This is the part of the bill regarding who is able to receive the loan. Page 2, line 5, says, "the loan is made to a person with a disability or a member of the person's family." Ms. Loper felt that may be a loophole. Therefore, she worked with Legislative Legal to close that loophole to make sure that if a child needs a parent to drive them somewhere and assistive technology is needed, the parent can receive the loan. MS. LOPER said the amendment inserts, "to obtain assistive technology for the handicapped or disabled person within the limitations of (b) of this section." She was wary of the bill saying that a member of the person's family could receive a loan. She feared it would be a 16-year-old boy getting loans for a new car instead of for his grandmother's assistive technology. CO-CHAIR BUNDE said the word "handicapped" is used in the section just discussed. MS. LOPER said that will be changed to reflect the passage of amendment one. Number 914 CO-CHAIR BUNDE removed his objection, and amendment two passed. Before the HESS Committee was a Committee Substitute (CS) for HB 65. EARL CLARK, Staff member, Southeast Alaska Independent Living (SAIL), and former client of Vocational Rehabilitation, spoke in support of HB 65 for very personal reasons. After Mr. Clark left the university, he thought it would be relatively easy for him to get a job. He found out the real world is more cruel than the university. He found it was very difficult to get a position, and he felt it was because of his disability. MR. CLARK said after three years he went to the DVR. He was assessed and it was determined that a piece of assistive technology and training in that technology would be very helpful. This technology was a computer and it was determined that he needed skills in this area. The DVR bought Mr. Clark a computer, he was trained in the use of that computer, and he was subsequently successful in obtaining a job. MR. CLARK thought his experience in using assistive technology through the DVR probably changed his life. Assistive technology was there for him when he really needed help. It has been very valuable for him. Number 1060 MR. CLARK thinks HB 65 is a bill that is concerned with loans. It is not a handout. It is for people who can work and perhaps need assistive technology to work--to get a job or to continue working. This bill will be very helpful to people who are disabled. He asked that the committee pass the bill. MR. CLARK added he is familiar with semantics and the nature of language due to his previous position. There is a disabled person, meaning the total person, and a person with a disability. One could have a disability that is a very small part of the person. However, a disabled person implies that the total person is disabled. CO-CHAIR TOOHEY said a disabled car and a car with a disability are two different things. Number 1154 STAN RIDGEWAY, Deputy Director, Division of Vocational Rehabilitation, said the assistive technology loan program would be funded strictly by federal funds. No state general funds would be used to capitalize the loan fund. There are roughly 4,000 individuals with disabilities in the state who could benefit from these types of loans. Fifty-eight percent of people who are employed who need technology cannot get it because they need a loan to get technology. MR. RIDGEWAY said of these people, many people who are experiencing new disabilities are pretty much tapped out. If they go to a bank to apply for a loan, they are usually turned down. Therefore, in cooperation with the banking institutions, this legislation would allow banks to loan money to people who would otherwise qualify except for the fact that they have no money. MR. RIDGEWAY said the interest rate could be bought down, or the loan can be guaranteed up to 90 percent. The funding would come over the next three or four years at $100,000 per year through the federal technology grant program. Number 1226 CO-CHAIR TOOHEY noted there is a $5,000 cap on the loan. She asked who is going to approve the loans. MR. RIDGEWAY said he envisions the program working in the following way. A person would go to bank. This would usually be a person who is working with an independent living center or another state agency. If there were no other way for a person to get assistive technology through another source, then he or she would apply for a loan. The person would then be directed to any financial institution. They would go through the loan process and apply for a loan. If the bank would approve the loan, it would then contact the DVR office. The office would keep a running total of the amount and the guarantee. MR. RIDGEWAY said the loan would then be applied to the guarantee, and the bank could make the loan. If there were a circumstance where the loan could not quite be paid back because of the interest rate, the office could then do an interest buy-down. Number 1286 JOE SHEARHORN, representative, Alaska Banker's Association (ABA), testified via teleconference that the ABA would be in favor of this legislation because it would help banks make loans to people who need this type of lending facility. The ABA does feel the 90 percent guarantee would be important in this case. MR. SHEARHORN added that the ABA is available to help draft regulation for the implementation of this legislation if necessary. The ABA and representative banks have a lot of experience working with similar loan guarantee programs such as the Small Business Administration Loan Guarantee Program, which is a very active program in Alaska. Any extent the regulations for this legislation could be patterned after this type of loan guarantee program would be helpful in that the system for the Small Business Administration Loan Guarantee program is already in place and working. Number 1359 JANIE LEASKE, Vice-president of Community Development and Community Reinvestment Act Officer, National Bank of Alaska, testified via teleconference on behalf of the Executive Vice President of the National Bank of Alaska. She provided some of the background information on the CRA. This is federal legislation passed in the late 1970s that encourages financial institutions to meet the credit needs of their communities with special emphasis on low and moderate income individuals in communities. MS. LEASKE said this federal legislation pertains to banks but not credit unions. On behalf of the National Bank of Alaska, Ms. Leaske voiced support of HB 65. It is her understanding that similar programs have already been implemented in 42 other states. In a brief review of the materials provided by the DVR and the Department of Education (DOE), a 1991 study estimated that there were about 20,000 persons with disabilities in Alaska. MS. LEASKE continued that of this number, as Mr. Ridgeway previously discussed, about 3,500 would meet the loan criteria in Anchorage and Southeast Alaska. An additional 800 reside in rural communities. Number 1435 MS. LEASKE said lending representatives from her bank have reviewed the draft legislation summary and the material provided by the DVR and DOE, and feel that the legislation fills an unmet need. She volunteered her organization's assistance to HESS Committee members for the passage and successful implementation of this program. Her bank has a network of 51 branches serving 28 communities, and it has an existing system to assist in public funding and programs in the rural areas of the state which are often more difficult to reach. MS. LEASKE offered her assistance to HESS Committee members in reaching other financial institutions as well. In the Anchorage area, the National Bank of Alaska has established an informal CRA officers group composed of representatives of the six local banks. These are Bank of America, First Interstate, First National, Key Bank, Northrim and National Bank of Alaska. Several of those banks have branches across the state, and Ms. Leaske would be happy to coordinate a meeting to help draft regulations once the legislation is enacted. Number 1484 CO-CHAIR BUNDE said he would pass her offer to volunteer on to Mr. Ridgeway, who may be intimately involved in the drafting of regulations to this effect. REPRESENTATIVE GARY DAVIS said he was approached by a person with a disability this summer. She was concerned about insurance to make repairs on a wheelchair. Representative Davis said apparently there is not much of a problem obtaining insurance for this type of equipment. He asked if there were any protections available to persons with disabilities from people peddling poor assistive technology. MR. RIDGEWAY said he is not aware of any such protections. However, there are a series of independent living centers throughout the state, and there is a lot of assistance for people with disabilities to insure they are receiving quality equipment. If the persons with disabilities are aware that programs are in place to help them, some of those problems may be alleviated. REPRESENTATIVE DAVIS said he wanted to bring that up in case it was a problem. From the research he has done, however, it does not seem to be a large problem. He thought if it was a problem, perhaps it was something that should be addressed. Number 1587 CO-CHAIR TOOHEY said there was a "lemon law" for liability for assistive technology. She thinks there is some kind of list of the better equipment. If someone has a defective piece of equipment, they can get their money back. CO-CHAIR BUNDE assumed that one of the goals for the centers for independent living is to help people buy appropriate assistance. He closed public testimony. REPRESENTATIVE BRICE moved CSHB 65 with individual recommendations and accompanying fiscal notes. There were no objections, and the bill was passed from the HESS Committee to the next committee of referral.
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