Legislature(2015 - 2016)BUTROVICH 205

02/10/2015 09:00 AM STATE AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 6 ELIMINATE DAYLIGHT SAVING TIME TELECONFERENCED
Moved SB 6 Out of Committee
-- Public Testimony --
*+ SJR 2 CONST. AM: G.O. BONDS FOR STUDENT LOANS TELECONFERENCED
Moved SJR 2 Out of Committee
-- Public Testimony --
+ "Continuing Discussion of the Implementation of TELECONFERENCED
Ballot Measure No. 2 (13PSUM) - An Act to Tax
and Regulate the Production, Sale, and Use of
Marijuana"
Bills or Topics Previously Heard/Scheduled
**Streamed live on AKL.tv**
         SJR 2-CONST. AM: G.O. BONDS FOR STUDENT LOANS                                                                      
                                                                                                                                
9:50:49 AM                                                                                                                    
CHAIR STOLTZE announced that SJR  2 is the committee's next order                                                               
of business.                                                                                                                    
                                                                                                                                
9:51:29 AM                                                                                                                    
SENATOR  ANNA   MACKINNON,  Alaska  State   Legislature,  Juneau,                                                               
Alaska, SJR  2 sponsor,  explained that SJR  2 proposes  to amend                                                               
Alaska's  Constitution, a  process that  is an  extremely serious                                                               
issue.  She referred  to page  30, Article  9, Section  8 in  the                                                               
Constitution regarding state debt as follows:                                                                                   
                                                                                                                                
     No state debt shall  be contracted unless authorized by                                                                    
     law for  capital improvements  or unless  authorized by                                                                    
     law for  housing loans for  veterans and ratified  by a                                                                    
     majority of the qualified voters  of the state who vote                                                                    
     on the question; Mr. Chairman,  what that means is that                                                                    
     we can't  right now use  the full faith and  credit for                                                                    
     student loans, so our corporation  goes out into a bond                                                                    
     market   and  uses   a   revenue   stream  to   provide                                                                    
     opportunities for Alaskans to borrow.                                                                                      
                                                                                                                                
     Currently the  state interest  rates for  student loans                                                                    
     is 6.7  percent and the  federal rate is  4.66 percent;                                                                    
     should this be  passed into law, the  question would go                                                                    
     before voters in  the 2016 election and  the first time                                                                    
     we can  try to  reduce student loan  debt, or  at least                                                                    
     the interest rate we charge,  would be in 2018 where we                                                                    
     would offer a  bond and the first time  a student could                                                                    
     benefit from this is 2019.                                                                                                 
                                                                                                                                
CHAIR  STOLTZE pointed  out that  voting does  not have  to occur                                                               
during the general election.                                                                                                    
                                                                                                                                
SENATOR MACKINNON  answered correct  and noted that  voting could                                                               
occur in a special election.                                                                                                    
                                                                                                                                
She declared  that SJR 2,  should it be  passed by the  people of                                                               
Alaska, would provide an opportunity  to reduce student loan debt                                                               
through refinancing or lowered interest rates.                                                                                  
                                                                                                                                
9:53:38 AM                                                                                                                    
KRISTEN   PRATT,   Staff,   Senator   MacKinnon,   Alaska   State                                                               
Legislature,  Juneau, Alaska,  confirmed  that Senator  MacKinnon                                                               
had addressed the resolution's main points.                                                                                     
                                                                                                                                
CHAIR STOLTZE asked to verify  that there were similar mechanisms                                                               
for veterans'  bonds in 1982 and  2002. He inquired if  there are                                                               
any other bond authorization mechanisms.                                                                                        
                                                                                                                                
SENATOR MACKINNON  replied that bonding mechanisms  have been for                                                               
capital improvements  that were  originally in  the Constitution.                                                               
She noted  that Chair Stoltze  pointed out that  the Constitution                                                               
was amended  in 1982 to  include veteran housing.  She reiterated                                                               
that SJR 2  specifically allows an opening for  something that is                                                               
not capital.  She noted  that there  has been  conversation about                                                               
trying  to broaden  the resolution  to give  the Legislature  the                                                               
full  power and  authority  to use  the  state's Triple-A  credit                                                               
rating.  She summarized  that SJR  2 addresses  Alaska's students                                                               
who are  adversely effected by  the revenue bond stream  and that                                                               
the people of Alaska support the change.                                                                                        
                                                                                                                                
CHAIR STOLTZE noted that SJR  2 is a constitutional amendment and                                                               
that  he  intends  to  have the  Department  of  Revenue  address                                                               
questions. He asked if  there was a time limit or  if there was a                                                               
substantive change  on the veteran's housing  bonds authorization                                                               
that  required  the  Legislature   to  do  a  new  constitutional                                                               
amendment.                                                                                                                      
                                                                                                                                
9:54:27 AM                                                                                                                    
JERRY  BURNETT, Deputy  Commissioner,  Treasury Division,  Alaska                                                               
Department  of  Revenue,  Juneau,   Alaska,  explained  that  the                                                               
constitutional amendment  in 1982 allowed for  veterans' mortgage                                                               
bonds and  additional veterans' mortgage bonds  was authorized in                                                               
2002. He stated  that he assumed the change in  2002 was strictly                                                               
an authorization and not a constitutional change.                                                                               
                                                                                                                                
CHAIR  STOLTZE  asked  to  verify   that  2002  was  not  another                                                               
constitutional amendment.                                                                                                       
                                                                                                                                
MR.  BURNETT answered  correct.  He remarked  that using  general                                                               
obligation bonds for  student loans would have  no adverse effect                                                               
on the state's  credit rating. He noted that  student bonds would                                                               
not be  included in  the state's  calculation of  state supported                                                               
debt due  to the secured  revenue from the student  loan program.                                                               
He  revealed that  he  sits  on the  board  of  the Student  Loan                                                               
Corporation and  the Department of  Revenue is familiar  with the                                                               
bonding  issue.  He  pointed  out  that  due  to  adverse  market                                                               
conditions,  legislation  was passed  in  2009  to allow  student                                                               
loans to be financed directly out of the general fund.                                                                          
                                                                                                                                
CHAIR  STOLTZE asked  if  the difficulty  was  linked to  federal                                                               
laws.                                                                                                                           
                                                                                                                                
MR.  BURNETT answered  no. He  explained that  the change  was in                                                               
response  to  the  financial crisis  where  direct  student  loan                                                               
lending was locked-up.                                                                                                          
                                                                                                                                
9:58:02 AM                                                                                                                    
CHAIR STOLTZE recalled that  Postsecondary Education prompted the                                                               
Legislature to pass some statutory changes on requirements.                                                                     
                                                                                                                                
MR.  BURNETT  replied  correct. He  specified  that  the  changes                                                               
improved the  program with additional credit  standards. He added                                                               
that legislation was  passed to allow the state to  have a letter                                                               
of credit  to support  the Student  Loan Program's  borrowing and                                                               
finance student loans directly from the general fund.                                                                           
                                                                                                                                
CHAIR  STOLTZE noted  that enhanced  levels of  securitization by                                                               
the borrower was added.                                                                                                         
                                                                                                                                
SENATOR MACKINNON  noted that the  rating for student  credit was                                                               
changed  where  students were  required  to  either use  parents'                                                               
credit ratings or have parents co-sign for loans.                                                                               
                                                                                                                                
SENATOR  WIELECHOWSKI  noted  that  there  are  very  interesting                                                               
provisions  in  the  Constitution's original  section  about  the                                                               
state being able  to contract debt for the  purpose of "Repelling                                                               
invasion, suppressing  insurrection, and  defending the  state in                                                               
war." He asked  what the current student loan rates  were and how                                                               
much the interest rates could possibly be lowered.                                                                              
                                                                                                                                
MR. BURNETT  answered that Diane Barrans  could address questions                                                               
regarding  interest  rates. He  stated  that  borrowing from  the                                                               
Triple-A  rated  general  obligation  debt  will  result  in  low                                                               
interest rate  loans when the  current money market  is sub-three                                                               
percent.                                                                                                                        
                                                                                                                                
10:00:26 AM                                                                                                                   
SENATOR HUGGINS asked  what the default rates  were for veterans'                                                               
mortgages and student loans.                                                                                                    
                                                                                                                                
MR. BURNETT answered  that he was not certain.  He explained that                                                               
the  programs are  structured in  a way  that there's  additional                                                               
security beyond the  borrowing to allow a default  rate that does                                                               
not directly hit the lending.                                                                                                   
                                                                                                                                
SENATOR HUGGINS  noted that student  loans have  some forgiveness                                                               
provisions and pointed out that  mortgages cannot be forgiven. He                                                               
asked what the student loan default rate was.                                                                                   
                                                                                                                                
10:02:06 AM                                                                                                                   
DIANE  BARRANS,  Executive   Officer/Executive  Director,  Alaska                                                               
Student    Loan   Corporation    (ASLC)/Alaska   Commission    on                                                               
Postsecondary  Education (ACPE),  Juneau, Alaska,  explained that                                                               
the current default rate for student  loans is 6.6 percent on the                                                               
overall  portfolio.  She conceded  that  the  default rate  would                                                               
appear high when compared against commercial loans.                                                                             
                                                                                                                                
She  explained  that  funding  for student  loan  debt  is  over-                                                               
collaterized to ensure that the debt to loan ratio is never one-                                                                
to-one. She specified that the  loan program always has excess in                                                               
order to offset any impacts to  the program's ability to pay debt                                                               
service or outstanding loans.                                                                                                   
                                                                                                                                
She added  that there  have been  no loan  forgiveness provisions                                                               
for  some  years. She  noted  that  forgiveness for  the  Teacher                                                               
Education Loan  is being phased out  due to an inability  to fund                                                               
the program with debt.                                                                                                          
                                                                                                                                
CHAIR STOLTZE asked to verify  that there is a medical provider's                                                               
loan forgiveness program.                                                                                                       
                                                                                                                                
MS.  BARRANS answered  correct.  She explained  that  there is  a                                                               
Washington, Wyoming, Alaska, Montana,  and Idaho (WWAMI) Graduate                                                               
Medical Program  where the state directly  funds Alaska students'                                                               
participation with general funds.  She specified that students in                                                               
the WWAMI  Program have  an obligation  to work  in the  state in                                                               
order to receive  loan forgiveness. Students that  fail to comply                                                               
with loan  requirements have to  repay the support the  state has                                                               
provided.                                                                                                                       
                                                                                                                                
10:04:17 AM                                                                                                                   
CHAIR STOLTZE  asked to verify  that there is a  medical provider                                                               
forgiveness program  that is paid  for with general  funds rather                                                               
than the student loan program.                                                                                                  
                                                                                                                                
MS.  BARRANS  noted  that  Chair   Stoltze  was  referencing  the                                                               
Providing  Support-for-Service   to  Health   Care  Practitioners                                                               
(SHARP) Program  which the Legislature has  funded. She explained                                                               
that the  SHARP Program pays for  a percentage of a  student loan                                                               
if  an individual  works in  eight different  medical specialties                                                               
and works in certain underserved areas.                                                                                         
                                                                                                                                
SENATOR  WIELECHOWSKI   asked  what  the  current   student  loan                                                               
interest  rate is  and  what  the percentage  will  be  if SJR  2                                                               
passes.                                                                                                                         
                                                                                                                                
MS. BARRANS answered that the  current student loan interest rate                                                               
is  6.7  percent. She  explained  that  the ASLC  Board  annually                                                               
approves borrower  benefits and noted that  individuals attending                                                               
school in  Alaska receive a  0.50 percent discount,  resulting in                                                               
an interest rate of 6.2 percent.                                                                                                
                                                                                                                                
She  noted that  financial advisors  have indicated  that passing                                                               
SJR 2 could result in interest  rates being lowered by 1.0 to 1.3                                                               
percent.                                                                                                                        
                                                                                                                                
SENATOR HUGGINS  noted that the  University of Alaska  is looking                                                               
at homegrown-teachers  that target Alaska's  bush-communities and                                                               
asked if  a loan  forgiveness will be  instituted to  support the                                                               
program.                                                                                                                        
                                                                                                                                
MS. BARRANS  answered that  supporting homegrown-teachers  with a                                                               
loan  forgiveness  program  similar  to SHARP  is  a  possibility                                                               
rather than  the Teacher Education  Loan that is  currently being                                                               
phased   out.  She   explained   that  the   SHARP  program   has                                                               
successfully  targeted   underserved  areas  where   the  Teacher                                                               
Education Loan  resulted in  a small  percentage actually  in the                                                               
field teaching where the program ideally targeted them.                                                                         
                                                                                                                                
10:07:41 AM                                                                                                                   
SENATOR COGHILL asked  how the bonding process would  work if SJR                                                               
2 passed.                                                                                                                       
                                                                                                                                
SENATOR  MACKINNON  answered  that  the revenue  source  for  the                                                               
bonding service  will change where  a lower interest  is attained                                                               
through the full faith and credit of the State of Alaska.                                                                       
                                                                                                                                
MS.  BARRANS explained  that general  obligation bonds  addresses                                                               
the amount of  debt beyond an authorized cap.  She specified that                                                               
the ASLC  Program goes into  the market  in February or  March in                                                               
order to  coincide with the  academic year.  She said one  of the                                                               
advantages of having general obligation  authority is the process                                                               
will be  more expedited  because there  will not  be the  kind of                                                               
labor intensive  work involve with  rating agencies  that examine                                                               
student loan cash flow portfolios.                                                                                              
                                                                                                                                
10:09:57 AM                                                                                                                   
SENATOR COGHILL  asked to verify that  general obligation bonding                                                               
will smooth  out some of the  cyclical issues by having  a ready-                                                               
bondable system.                                                                                                                
                                                                                                                                
MS. BARRANS answered yes.                                                                                                       
                                                                                                                                
SENATOR  COGHILL  asked  if   the  definition  for  postsecondary                                                               
education  being  inserted  into  the Constitution  needs  to  be                                                               
flexible.                                                                                                                       
                                                                                                                                
MS. BARRANS  answered that the  use of the funding  is controlled                                                               
by the  Legislature through the  student loan statutes  that very                                                               
explicitly set  out what  the loans  can be  used for.  She noted                                                               
that  student  loans  include   vocational  training  that  meets                                                               
certain criteria.                                                                                                               
                                                                                                                                
10:12:01 AM                                                                                                                   
SENATOR WIELECHOWSKI  asked what the  formula is to come  up with                                                               
the current 6.7 percent interest rate.                                                                                          
                                                                                                                                
MS. BARRANS  answered that the  fairly complicated  formula looks                                                               
at the  cost of issuance, the  cost of debt which  ASLC pays, and                                                               
the cost of servicing.                                                                                                          
                                                                                                                                
SENATOR WIELECHOWSKI  noted that  the federal interest  rates are                                                               
much lower,  4.6 percent for  2014-2015. He pointed out  that the                                                               
state's  interest rate  for students  is over  two points  higher                                                               
than the federal interest rate,  a significant difference for the                                                               
tens of thousands  of dollars that students take on.  He asked if                                                               
Ms. Barrans had a component breakdown the student interest rate.                                                                
                                                                                                                                
MS. BARRANS answered  that Congress sets the  rate. She explained                                                               
that because  the federal government  is not financing  the loans                                                               
through  the  financial  markets,   the  federal  government  can                                                               
essentially  choose to  subsidize  the loans  to whatever  extent                                                               
they choose to  and that is a matter of  federal policy. She said                                                               
an  analogy would  be  if the  State of  Alaska  funded the  ASLC                                                               
Program with cash  and the State of Alaska could  set the rate at                                                               
whatever rate they chose to.                                                                                                    
                                                                                                                                
SENATOR MACKINNON pointed out that  most students are referred to                                                               
the federal  program to  access lower  interest rates  first, the                                                               
state's program second,  and the private sector  third. She noted                                                               
that  the   private  sector's  interest  rates   depend  on  what                                                               
educational career the student is pursuing.                                                                                     
                                                                                                                                
MS. BARRANS agreed  with Senator MacKinnon. She  pointed out that                                                               
the Federal  Stafford Loan  is also  available for  students, but                                                               
the interest  rate is 0.50  percent higher than the  state's rate                                                               
at  7.21 percent.  She added  that  the ASLC  Program also  makes                                                               
students and parents  aware of the Family Education  Loan as well                                                               
as the  Supplemental Education Loan.  She revealed that  when the                                                               
instate discount  is factored  in, the  state's loan  options are                                                               
1.0 percent below the federal rate.                                                                                             
                                                                                                                                
10:15:58 AM                                                                                                                   
SENATOR HUGGINS  asked Ms. Barrans  to explain  President Obama's                                                               
proposal to offer education at community colleges.                                                                              
                                                                                                                                
MS.  BARRANS answered  that the  proposal is  in the  President's                                                               
budget.  She  detailed that  the  proposal  comes with  "strings"                                                               
attached  so the  entire concept  is not  free, but  the proposal                                                               
would reduce cost.                                                                                                              
                                                                                                                                
SENATOR HUGGINS  asked for  an explanation  of how  the "strings"                                                               
attached to the program will affect Alaska's students.                                                                          
                                                                                                                                
MS. BARRANS answered  that she has not done the  analysis nor has                                                               
she spoken with the University of Alaska.                                                                                       
                                                                                                                                
SENATOR  HUGGINS  stated  that  he   is  not  supportive  of  the                                                               
President's  concept with  the attached  "strings."  He asked  if                                                               
Alaska  has  a  community  college  campus  that  will  meet  the                                                               
concept's definition.                                                                                                           
                                                                                                                                
MS.  BARRANS   answered  yes.  She  said   Prince  William  Sound                                                               
Community College  and most other  campuses that  primarily offer                                                               
associates  or lower  credentials would  qualify. She  noted that                                                               
there  are   income  contingent   provisions  that  are   in  the                                                               
President's proposal  where students  would not qualify  if their                                                               
family incomes reach certain levels.                                                                                            
                                                                                                                                
10:18:23 AM                                                                                                                   
SENATOR MACKINNON  noted that she has  a son with a  student loan                                                               
debt  in Alaska.  She said  she did  not think  that she  will be                                                               
positively  impacted  because her  son  intends  to pay  off  his                                                               
student loan debt by 2019.                                                                                                      
                                                                                                                                
CHAIR  STOLTZE  inquired if  a  student's  degree is  taken  into                                                               
account when assessing a student loan.                                                                                          
                                                                                                                                
SENATOR MACKINNON  replied that  there is an  education component                                                               
of  the   student  loan  program   where  monthly   payments  are                                                               
calculated based upon a student's career choice.                                                                                
                                                                                                                                
CHAIR STOLTZE noted  that the data provided  from the calculation                                                               
was strictly informational.                                                                                                     
                                                                                                                                
SENATOR MACKINNON replied yes.                                                                                                  
                                                                                                                                
SENATOR WIELECHOWSKI  asked what the  cost breakdown was  for the                                                               
6.7 percent  rate. He  asked what the  three components  are that                                                               
make up the percentage.                                                                                                         
                                                                                                                                
MS. BARRANS explained  that the board annually  sets the interest                                                               
rate that is derived from the three components.                                                                                 
                                                                                                                                
SENATOR WIELECHOWSKI  asked if ASLC  is a breakeven  operation or                                                               
if money is returned to the general fund.                                                                                       
                                                                                                                                
MS. BARRANS  answered that  there have  been dividends  that ASLC                                                               
has  paid to  the  state. She  noted  that ASCL  has  not paid  a                                                               
dividend to the state since  2009. She explained that ASLC's goal                                                               
is  to do  just  enough better  than breaking  even  to keep  the                                                               
organization in the black.                                                                                                      
                                                                                                                                
10:21:26 AM                                                                                                                   
SENATOR WIELECHOWSKI  asked if Ms.  Barrans had any sense  of how                                                               
the state's interest rate compares with other states.                                                                           
                                                                                                                                
MS. BARRANS  answered that the  state's interest rates  are quite                                                               
comparable  to  other  states,  but   noted  that  Texas  is  the                                                               
exception  with   a  program  that  is   funded  through  general                                                               
obligation bonds. She  pointed out that Texas  actually has loans                                                               
that range from a 0.0 percent to 5.5 percent.                                                                                   
                                                                                                                                
SENATOR  WIELECHOWSKI  asked  if  the Texas  model  is  something                                                               
Alaska could replicate.                                                                                                         
                                                                                                                                
MS. BARRANS answered that replicating  a program similar to Texas                                                               
would  seem  unlikely  due  to   the  state's  current  financial                                                               
climate.  She explained  that Texas  has built  their large  fund                                                               
source over a  40 year period. She noted that  Texas is seriously                                                               
looking at ending their 0.0 interest rate.                                                                                      
                                                                                                                                
SENATOR COGHILL asked what the cost of debt is for ASLC.                                                                        
                                                                                                                                
MS. BARRANS  answered that ACPS  actually services the  loans for                                                               
the  ASLC and  there  are costs  associated  with servicing.  She                                                               
revealed that other  than servicing, the other  costs include the                                                               
interest paid  on the debt and  the onetime cost of  issuance for                                                               
the bond council rating agency fees.                                                                                            
                                                                                                                                
CHAIR  STOLTZE  announced that  the  committee  will hear  public                                                               
testimony.                                                                                                                      
                                                                                                                                
10:24:29 AM                                                                                                                   
LANCE  STEVENS, President,  Juneau Chamber  of Commerce,  Juneau,                                                               
Alaska, Supports  SJR 2. He  said the Juneau Chamber  of Commerce                                                               
feels  that  any opportunity  to  increase  the participation  in                                                               
continuing education increases the ability  to hire and recruit a                                                               
qualified workforce.  He asserted that driving  down student debt                                                               
servicing costs  increases the opportunity for  repayment, lowers                                                               
default rates, and sets individuals up for long term success.                                                                   
                                                                                                                                
SENATOR  HUGGINS noted  that some  states  with large  industrial                                                               
bases  have companies  that  buyout student  loans.  He asked  if                                                               
Alaska has programs that buyout student loans.                                                                                  
                                                                                                                                
MR.  STEVENS noted  that the  Juneau Chamber  of Commerce  offers                                                               
class reimbursement within its organization  for classes that are                                                               
business  oriented. He  specified that  students pay  upfront and                                                               
reimbursement is based on achieving  a certain qualifications. He                                                               
said what Senator Huggins referred to is more industry specific.                                                                
                                                                                                                                
10:28:04 AM                                                                                                                   
MIKE  COONS, representing  himself, Palmer,  Alaska, stated  that                                                               
student  loans negatively  impact taxpayers  and harms  students'                                                               
and parents'  credit ratings.  He opined that  there needs  to be                                                               
more  encouragement  for  Alaska's  parents to  save  more  money                                                               
rather than  borrowing. He inquired  if the Alaska  student loans                                                               
can  be used  at colleges  outside of  the state.  He added  that                                                               
students  who  attend colleges  outside  of  Alaska tend  not  to                                                               
return.  He  noted   that  the  6.6  percent   default  rate  was                                                               
substantial  and asked  what the  specific default  rate was  for                                                               
veterans.                                                                                                                       
                                                                                                                                
10:32:57 AM                                                                                                                   
CHAIR STOLTZE  noted that he  shares a  lot of the  same personal                                                               
values  with Mr.  Coons about  personal responsibility  and being                                                               
debt free.                                                                                                                      
                                                                                                                                
He  noted  that  Ms.  Barrans  had testified  in  the  past  that                                                               
Alaskans who  did not return to  the state actually had  a higher                                                               
repayment rate than students who remained in Alaska.                                                                            
                                                                                                                                
MS. BARRANS acknowledged that Chair Stoltze was correct.                                                                        
                                                                                                                                
CHAIR STOLTZE  added that  the state needs  to strive  to correct                                                               
the default percentage for instate students.                                                                                    
                                                                                                                                
10:34:23 AM                                                                                                                   
DAVID NEES,  representing himself, Anchorage, Alaska,  noted that                                                               
he  is concerned  about  amending the  Constitution  to bond  for                                                               
something  that  is not  real  property.  He  stated that  he  is                                                               
worried that  additional programs might be  considered to receive                                                               
lower interest  rates from the  state. He asked what  the current                                                               
default rate  was. He pointed  out that the current  loan program                                                               
pays  for 90  percent or  100 percent  of the  ACPE's budget.  He                                                               
inquired if a  lowered loan rate program will  ultimately be paid                                                               
for from the state's general fund.                                                                                              
                                                                                                                                
10:36:48 AM                                                                                                                   
MS. BARRANS reiterated  that the current student  default rate is                                                               
6.6 percent  on the outstanding  portfolio. She pointed  out that                                                               
the  default  rate will  continue  to  decline because  a  higher                                                               
credit requirement has been in  place for the last several years.                                                               
She  said the  structure from  the proposed  bill should  have no                                                               
effect in the  way ACPE's activities are funded.  She stated that                                                               
ACPE does  not expect to shift  any of its supported  cost to the                                                               
general  fund and  costs will  continue  to be  paid from  ASLC's                                                               
receipts.                                                                                                                       
                                                                                                                                
10:38:00 AM                                                                                                                   
CHAIR STOLTZE stated that he  suspects the bill will receive more                                                               
scrutiny in the Senate Finance Committee.                                                                                       
                                                                                                                                
SENATOR HUGGINS asked if ACPE has wage garnishment authority.                                                                   
                                                                                                                                
MS.  BARRANS answered  yes. She  said the  Legislature has  given                                                               
ACPE  the  authority  by statute  to  issue  administrative  wage                                                               
garnishments. She  stated that wage  garnishment is  another tool                                                               
that  ACPE uses  on a  regular basis.  She added  that ACPE  also                                                               
garnishes Permanent Fund Dividends  (PFD). She revealed that ACPE                                                               
is  third in  line for  PFD garnishment  after child  support and                                                               
court ordered restitution.                                                                                                      
                                                                                                                                
CHAIR  STOLTZE  announced  that seeing  no  additional  requests,                                                               
public testimony is closed.                                                                                                     
                                                                                                                                
SENATOR  WIELECHOWSKI asked  after  garnishment procedures,  what                                                               
default percentage is actually not recovered.                                                                                   
                                                                                                                                
MS. BARRANS  replied that she can  provide write-off information.                                                               
She  noted that  some write-offs  occurs  due to  death or  total                                                               
disability.                                                                                                                     
                                                                                                                                
CHAIR   STOLTZE  asked   if  the   ASLC   oversees  its   default                                                               
collections.                                                                                                                    
                                                                                                                                
MS. BARRANS  answered that  ACPE does  instate collections  and a                                                               
third party collection agency is  used to pursue some instate and                                                               
out of state collections.                                                                                                       
                                                                                                                                
CHAIR  STOLTZE  asked  what percentage  ACPE  collects  from  its                                                               
defaulters.                                                                                                                     
                                                                                                                                
MS. BARRANS  answered that 15  percent is considered a  good rate                                                               
for badly-aged debt.                                                                                                            
                                                                                                                                
10:41:59 AM                                                                                                                   
SENATOR COGHILL moved to report SJR 2, [29-LS0010\W], from                                                                      
committee with individual recommendations and attached fiscal                                                                   
note(s).                                                                                                                        
                                                                                                                                
10:42:19 AM                                                                                                                   
CHAIR STOLTZE announced that seeing no objection, SJR 2 moved                                                                   
out of committee.                                                                                                               

Document Name Date/Time Subjects
SB6 ver H.pdf SSTA 2/10/2015 9:00:00 AM
SB 6
SB6 Sponsor Statement.pdf SSTA 2/10/2015 9:00:00 AM
SB 6
SB6 Fiscal Note - DOA-FAC-02-06-2015.pdf SSTA 2/10/2015 9:00:00 AM
SB 6
SB6 Supporting Documents - Letters and Emails of Support 2-9-2015.pdf SSTA 2/10/2015 9:00:00 AM
SB 6
SB6 Supporting Document - Alaska Time Zones History.pdf SSTA 2/10/2015 9:00:00 AM
SB 6
SB6 Supporting Document - Daylight Gains by City.pdf SSTA 2/10/2015 9:00:00 AM
SB 6
SB6 Supporting Documents - Journal Articles.pdf SSTA 2/10/2015 9:00:00 AM
SB 6
SJR2 ver W.pdf SSTA 2/10/2015 9:00:00 AM
SJR 2
SJR2 Sponsor Statement.pdf SSTA 2/10/2015 9:00:00 AM
SJR 2
SJR2 Sectional Analysis.pdf SSTA 2/10/2015 9:00:00 AM
SJR 2
SJR2 Letter of Support - University of Alaska.pdf SSTA 2/10/2015 9:00:00 AM
SJR 2
SJR2 Fiscal Note OOG-DOE 2-9-15.pdf SSTA 2/10/2015 9:00:00 AM
SJR 2
SB6 Support Document - Email Janet Boylan 1-28-2015.pdf SSTA 2/10/2015 9:00:00 AM
SB 6
SJR2 ACPE Follow-Up from 2-10-15 SSTA.pdf SSTA 2/10/2015 9:00:00 AM
SJR 2
SJR2 Support Document - Letter Juneau Chamber of Commerce 2-10-15.pdf SSTA 2/10/2015 9:00:00 AM
SJR 2