Legislature(2009 - 2010)HOUSE FINANCE 519

04/13/2009 08:30 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 162 SOUTHEAST STATE FOREST TELECONFERENCED
Moved Out of Committee
+= HB 212 UNEMPLOYMENT AMENDMENTS: FED STIMULUS TELECONFERENCED
Scheduled But Not Heard
+ HB 221 MORTGAGE LENDING REGULATION TELECONFERENCED
Moved CSHB 221(L&C) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 13, 2009                                                                                           
                         8:40 a.m.                                                                                              
                                                                                                                                
8:40:49 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze  called the House Finance  Committee meeting                                                                   
to order at 8:40 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Hawker, Co-Chair                                                                                            
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Bill Thomas, Jr., Vice-Chair                                                                                     
Representative Allan Austerman                                                                                                  
Representative Harry Crawford                                                                                                   
Representative Anna Fairclough                                                                                                  
Representative Richard Foster                                                                                                   
Representative Les Gara                                                                                                         
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Woodie Salmon                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Conrad  Jackson,  Staff,  Representative  Kurt  Olson;  Tyson                                                                   
Fick, Legislative Liaison, Department  of Commerce, Community                                                                   
and Economic Development; Melanie  Lesh, Legislative Liaison,                                                                   
Department of Natural Resources (DNR)                                                                                           
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Lorie Hovanec,  Director, Divisions of Banking  & Securities,                                                                   
Department of  Commerce, Community and Economic  Development;                                                                   
Patrice Walsh, Consumer Finance  Chief, Division of Banking &                                                                   
Securities,  Department of Commerce,  Community and  Economic                                                                   
Development;  Chris Maisch, Director,  Division of  Forestry,                                                                   
Department of Natural Resources                                                                                                 
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 221    "An  Act relating to  the state's participation  in                                                                   
          the  federal Nationwide  Mortgage Licensing  System                                                                   
          and  Registry, and to  mortgage lending  regulation                                                                   
          and  licensing;  and  providing  for  an  effective                                                                   
          date."                                                                                                                
                                                                                                                                
          CSHB 221  (L&C) was REPORTED out of  Committee with                                                                   
          "no recommendation"  and with fiscal note #1 by the                                                                   
          Department  of  Commerce,  Community  and  Economic                                                                   
          Development.                                                                                                          
                                                                                                                                
HB 162    "An  Act establishing  the  Southeast State  Forest                                                                   
          and  relating to  the Southeast  State Forest;  and                                                                   
          providing for an effective date."                                                                                     
                                                                                                                                
          HB  162  was REPORTED  out  of Committee  with  "no                                                                   
          recommendation"  and with  zero fiscal  note #1  by                                                                   
          the Department of Natural Resources.                                                                                  
                                                                                                                                
HB 212    "An   Act   modifying   the   Alaska   unemployment                                                                   
          insurance statutes to  comply with the requirements                                                                   
          of   the   federal   economic  stimulus   bill   by                                                                   
          redefining   the   base  period   for   determining                                                                   
          eligibility   for    unemployment   benefits;   and                                                                   
          providing for an effective date."                                                                                     
                                                                                                                                
          HB 212 was scheduled but not heard.                                                                                   
                                                                                                                                
8:42:10 AM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 221                                                                                                            
                                                                                                                                
     "An  Act relating  to the state's  participation  in the                                                                   
     federal   Nationwide  Mortgage   Licensing  System   and                                                                   
     Registry,  and   to  mortgage  lending   regulation  and                                                                   
     licensing; and providing for an effective date."                                                                           
                                                                                                                                
CONRAD JACKSON,  STAFF, REPRESENTATIVE  KURT OLSON,  SPONSOR,                                                                   
introduced HB 221.  He reported  that the bill is a quick fix                                                                   
at the request  of the Department of Commerce,  Community and                                                                   
Economic Development  so that  Alaska can participate  in the                                                                   
National Mortgage Licensing System (NMLS).                                                                                      
                                                                                                                                
8:42:49 AM                                                                                                                    
                                                                                                                                
TYSON  FICK,  LEGISLATIVE LIAISON,  DEPARTMENT  OF  COMMERCE,                                                                   
COMMUNITY  AND  ECONOMIC DEVELOPMENT,  related  that  shortly                                                                   
after the  state passed its  own mortgage licensing  law, the                                                                   
federal  government  passed  their  own  version  called  the                                                                   
Secure  and Fair  Enforcement  of Mortgage  Licensing Act  of                                                                   
2008 (SAFE).   This  Act sets  a floor  level for  compliance                                                                   
made  up  of  database,  registry,  and  national  background                                                                   
check, as well  as statutory changes.  He explained  that the                                                                   
time sensitive  piece of  the bill  is joining the  database.                                                                   
He  drew  attention  to  the fiscal  note  for  $98,000  from                                                                   
receipt  supported services  to  pay for  a $50,000  one-time                                                                   
fee,  $20,000   to  update  the  computer  system,   and  the                                                                   
remainder for travel for training.                                                                                              
                                                                                                                                
8:44:08 AM                                                                                                                    
                                                                                                                                
Representative   Austerman   noticed   that  the   bill   was                                                                   
introduced on April 8.  He wondered  when the federal act was                                                                   
passed.  Mr. Fick thought it was  last July.  He related that                                                                   
HB 221  is part  of a  larger bill  and deals  only with  the                                                                   
time-sensitive piece.                                                                                                           
                                                                                                                                
Representative  Austerman requested  the bill  number of  the                                                                   
larger bill.  Mr. Fick said it was HB 145 and SB 149.                                                                           
                                                                                                                                
8:45:23 AM                                                                                                                    
                                                                                                                                
Representative  Fairclough asked how  much research  had been                                                                   
done  regarding  the  exchange  of  information  when  Alaska                                                                   
provides information to a national database.                                                                                    
                                                                                                                                
LORIE HOVANEC,  DIRECTOR, DIVISIONS OF BANKING  & SECURITIES,                                                                   
DEPARTMENT  OF COMMERCE, COMMUNITY  AND ECONOMIC  DEVELOPMENT                                                                   
testifying  via teleconference,  requested  clarification  of                                                                   
the question.                                                                                                                   
                                                                                                                                
Representative  Fairclough restated the  question to  ask how                                                                   
data is shared with the rest of  the nation.  She was looking                                                                   
for "strings attached".                                                                                                         
                                                                                                                                
Ms. Hovanek explained  the purpose of the national  data base                                                                   
is  to share  information  about mortgage  professionals  and                                                                   
companies  nationally, provide  transparency, and  streamline                                                                   
the licensing process.                                                                                                          
                                                                                                                                
Representative Fairclough  asked if the information  would be                                                                   
shared  with  other  national  organizations.    Ms.  Hovanek                                                                   
assured that it was a closed, secure system.                                                                                    
                                                                                                                                
8:47:42 AM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze asked if there  were any questions of policy                                                                   
concern.                                                                                                                        
                                                                                                                                
Representative Fairclough pointed  out a letter of good faith                                                                   
from the Alaska  Association of Mortgage Brokers  which noted                                                                   
that  HUD has  the authority  to  grant an  extension to  the                                                                   
states.  She wondered where the bill was held up.                                                                               
                                                                                                                                
Representative Olson  related that HB 145, a  thirty-six page                                                                   
bill,  was in  Labor  and Commerce.   It  was  felt that  the                                                                   
smaller bill  would have  an easier  time moving through  the                                                                   
system  and would  show a good  faith effort  to the  federal                                                                   
government.                                                                                                                     
                                                                                                                                
Representative  Fairclough wondered if  there was a  back out                                                                   
clause.  Mr. Fick did not know.                                                                                                 
                                                                                                                                
8:50:29 AM                                                                                                                    
                                                                                                                                
Ms. Hovanec  stated that there  is no choice whether  to join                                                                   
or not.  Alaska  is scheduled to join the  national licensing                                                                   
system  on August  1,  which is  very close  to  the July  30                                                                   
deadline.                                                                                                                       
                                                                                                                                
Representative   Fairclough   voiced   concerns   about   the                                                                   
consequences  of  not  thoroughly  understanding  the  issues                                                                   
related to mortgage  lending.  Ms. Hovanec opined  that it is                                                                   
a  great system.    The intent  is  to handle  all  licensing                                                                   
through  the national  data  base, but  the  state can  still                                                                   
issue the license.  The mortgage  companies and professionals                                                                   
will submit  their license information and  their fingerprint                                                                   
cards  to  the  national  database.   The  FBI  will  do  the                                                                   
background check, and then the  information is passed back to                                                                   
the  state.   Current state  statutes apply  until the  state                                                                   
comes into  compliance with  the SAFE Act.   It is  a federal                                                                   
requirement   that   the   applicant   submit   the   license                                                                   
information to the national database.                                                                                           
                                                                                                                                
8:53:11 AM                                                                                                                    
                                                                                                                                
Representative  Kelly asked  what happens  if the state  does                                                                   
not join.  Ms.  Hovanec explained that if the  state does not                                                                   
join,  the US  Department of  Housing  and Urban  Development                                                                   
(HUD) will  set up its own  requirements, which would  not be                                                                   
good for the industry.                                                                                                          
                                                                                                                                
8:53:57 AM                                                                                                                    
                                                                                                                                
Representative Austerman  spoke of the issue  of dealing with                                                                   
rogue companies.   He wondered what options the  state has to                                                                   
turn a company down.                                                                                                            
                                                                                                                                
8:54:29 AM                                                                                                                    
                                                                                                                                
PATRICE WALSH, CONSUMER FINANCE  CHIEF, DIVISION OF BANKING &                                                                   
SECURITIES,  DEPARTMENT OF COMMERCE,  COMMUNITY AND  ECONOMIC                                                                   
DEVELOPMENT, testified via teleconference,  and explained the                                                                   
way suitability  for licensing  is determined.   She  related                                                                   
that the  same criteria  found in  current mortgage  statutes                                                                   
would be used to screen applicants.   If an applicant has had                                                                   
a  banking-related  felony  the   license  is  denied.    The                                                                   
national database will provide  information about problems an                                                                   
applicant may have had in another state.                                                                                        
                                                                                                                                
Representative  Fairclough  noted that  Representative  Olson                                                                   
agrees with the bill.                                                                                                           
                                                                                                                                
8:56:24 AM                                                                                                                    
                                                                                                                                
Representative Fairclough MOVED  to report CSHB 221 (L&C) out                                                                   
of  Committee   with  individual   recommendations   and  the                                                                   
accompanying fiscal note.                                                                                                       
                                                                                                                                
Representative  Austerman  OBJECTED  to  comment.   He  spoke                                                                   
against the idea of "nationalization one step at a time".                                                                       
                                                                                                                                
Representative Austerman WITHDREW his objection.                                                                                
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
CSHB  221  (L&C)  was REPORTED  out  of  Committee  with  "no                                                                   
recommendation" and with fiscal  note #1 by the Department of                                                                   
Commerce, Community and Economic Development.                                                                                   
                                                                                                                                
AT-EASE:       8:57:53 AM                                                                                                     
                                                                                                                                
RECONVENED:    8:59:27 AM                                                                                                     
                                                                                                                                
HOUSE BILL NO. 162                                                                                                            
                                                                                                                                
     "An Act establishing the Southeast State Forest and                                                                        
     relating to the Southeast State Forest; and providing                                                                      
     for an effective date."                                                                                                    
                                                                                                                                
MELANIE  LESH,  LEGISLATIVE LIAISON,  DEPARTMENT  OF  NATURAL                                                                   
RESOURCES (DNR),  introduced HB 162, which would  establish a                                                                   
new Southeast State  Forest (SESF).  The bill  is the state's                                                                   
effort to ensure that timber processing  continues to be part                                                                   
of the economy in Southeast Alaska.   She noted a zero fiscal                                                                   
note by DNR.   There was a very thorough hearing  of the bill                                                                   
previously  in  the  House Resources  Committee  and  in  the                                                                   
Senate Community and Regional Affairs Committee.                                                                                
                                                                                                                                
Ms. Lesh  reported that  the majority  of timber in  southern                                                                   
Southeast is on  federal land, but federal timber  sales have                                                                   
been in  decline.   Local mills now  depend heavily  on state                                                                   
timber for  survival.  Demand  for Southeast timber  for wood                                                                   
energy  is also  increasing,  further  raising  the need  for                                                                   
securing a timber base for this region.                                                                                         
                                                                                                                                
Ms.  Lesh explained  that the  proposed bill  consists of  20                                                                   
parcels that  are currently classified  as general  use state                                                                   
land.   She referred  to maps of  those parcels contained  in                                                                   
the  members'  packets.   Regarding  this proposal,  DNR  has                                                                   
briefed many statewide  groups.  Letters of  support are also                                                                   
included in the packet.                                                                                                         
                                                                                                                                
9:01:55 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze inquired  about  the major  harvesting  and                                                                   
processing  forestry  projects.   Ms.  Lesh  deferred to  Mr.                                                                   
Maisch.                                                                                                                         
                                                                                                                                
CHRIS MAISCH,  DIRECTOR, DIVISION OF FORESTRY,  DEPARTMENT OF                                                                   
NATURAL   RESOURCES,   testified  via   teleconference,   and                                                                   
reported  that  about  50,000   acres  of  forestry  land  in                                                                   
Southeast are currently managed  by the state.  This proposal                                                                   
would designate  about 25,000 acres  as state forest.   There                                                                   
are three  midsize or larger mills  in Southeast, as  well as                                                                   
numerous small mills.                                                                                                           
                                                                                                                                
Mr. Maisch  shared that the legislation  is part of  a multi-                                                                   
faceted strategy.   He  related the  process used to  discuss                                                                   
the  proposal.   He  explained  communities'  concerns  about                                                                   
municipal  entitlement.   The  bill will  grandfather in  any                                                                   
communities for municipal entitlement  selection.  He pointed                                                                   
out that Wrangell  was currently going through  the selection                                                                   
process.  He noted a zero fiscal  note accompanying the bill.                                                                   
                                                                                                                                
Mr.  Maisch emphasized  the importance  of transferring  from                                                                   
old  growth to  second growth  management in  Southeast.   He                                                                   
discussed pre-commercial thinning.                                                                                              
                                                                                                                                
9:07:33 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Thomas  asked why  all  the  state land  was  not                                                                   
included in the proposed state  forest.  Mr. Maisch discussed                                                                   
how the land was assigned to become state forest.                                                                               
                                                                                                                                
Vice-Chair Thomas pointed out  that recently a bill giving up                                                                   
41,000  acres of  state land  was  passed.   He wondered  why                                                                   
university lands were  not included.   Mr.  Maisch thought it                                                                   
was due  to a recent Supreme  Court ruling and lack  of time.                                                                   
He suggested that lands could be added in the future.                                                                           
                                                                                                                                
Vice-Chair Thomas  asked what  the sustained yield  would be.                                                                   
Mr. Maisch thought  there would be 13 million  board feet per                                                                   
year.                                                                                                                           
                                                                                                                                
Mr.  Maisch added  that all  50,000 acres  would be  managed,                                                                   
including the 25,000 not within the state forest.                                                                               
                                                                                                                                
9:10:17 AM                                                                                                                    
                                                                                                                                
Vice-Chair Thomas  pointed out  that a lot  of land  was left                                                                   
out.  He suggested that all lands  should be included now, in                                                                   
order to prevent future battles.                                                                                                
                                                                                                                                
Representative  Kelly asked  if  the land  is  still open  to                                                                   
mining  once it goes  into the  state forest  category.   Mr.                                                                   
Maisch said it was.                                                                                                             
                                                                                                                                
Representative  Kelly asked  what would  happen if this  bill                                                                   
does not  pass.  Mr.  Maisch explained  that the  bill allows                                                                   
for  the start  of  commercial  thinning.   A  percentage  of                                                                   
timber receipts  are prioritized for reforestation  work.  It                                                                   
would  allow DNR  to  be able  to harvest  the  trees in  the                                                                   
future.                                                                                                                         
                                                                                                                                
Representative  Kelly asked what  happens if the  state wants                                                                   
to do a remote cabin release.   He wondered if the bill would                                                                   
prevent that.   Mr. Maisch believed it would.   It would take                                                                   
legislative  change.  He  pointed out  that many other  lands                                                                   
are  set  aside  for  that  purpose.    Representative  Kelly                                                                   
commented on problems with access to those areas.                                                                               
                                                                                                                                
9:15:26 AM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze echoed those sentiments.                                                                                       
                                                                                                                                
Representative  Gara asked  about a parcel  near Thorne  Bay.                                                                   
He wondered  if it  was in  the Thorne  River drainage.   Mr.                                                                   
Maisch said  it does not appear  to be.  Representative  Gara                                                                   
pointed out that  the Thorne River is a Steelhead  and Salmon                                                                   
drainage.   He wondered if  the 70-foot clear-cut  buffer was                                                                   
in place.   Mr.  Maisch reported  that all regulations  would                                                                   
apply.                                                                                                                          
                                                                                                                                
9:17:43 AM                                                                                                                    
                                                                                                                                
Representative Gara asked about  rules that say other options                                                                   
have to  be looked  at before  cutting the  old growth.   Mr.                                                                   
Maisch  reported  on  regulations relating  to  managing  old                                                                   
growth.    The Alaska Department  of Fish and Game  looked at                                                                   
water quality issues and supports this legislation.                                                                             
                                                                                                                                
Representative  Gara  asked  about  replanting  requirements.                                                                   
Mr. Maisch shared the restoration  regulations.  He commented                                                                   
that in Southeast, forests reforest well on their own.                                                                          
                                                                                                                                
Representative  Gara  voiced  concern about  care  needed  in                                                                   
dealing with drainage.                                                                                                          
                                                                                                                                
Co-Chair Stoltze noted  who was in support of the  bill.  Mr.                                                                   
Maisch listed others who have endorsed the bill.                                                                                
                                                                                                                                
9:21:00 AM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze  noted a zero fiscal note  by the Department                                                                   
of  Natural Resources.    He  requested assurance  that  more                                                                   
money  would not  be requested  in  the future.   Mr.  Maisch                                                                   
reviewed  the funding  sources, which  require no  additional                                                                   
funding.                                                                                                                        
                                                                                                                                
9:21:53 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Thomas MOVED to  report HB  162 out of  Committee                                                                   
with individual  recommendations and the  accompanying fiscal                                                                   
note.  There being NO OBJECTION, it was so ordered.                                                                             
                                                                                                                                
HB 162 was REPORTED out of Committee with "no                                                                                   
recommendation" and with zero fiscal note #1 by the                                                                             
Department of Natural Resources.                                                                                                
                                                                                                                                
HB 212 was scheduled but not heard.                                                                                             
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 9:22 AM.                                                                                           

Document Name Date/Time Subjects
02 HB221 Sponsor Statement.pdf HFIN 4/13/2009 8:30:00 AM
HB 221
04 HB221 NMLS overview.pdf HFIN 4/13/2009 8:30:00 AM
HB 221
04 HB221 NMLS overview.pdf HFIN 4/13/2009 8:30:00 AM
HB 221
06 HB221 Letter of support-opposition_ JMartin 4-10-09.pdf HFIN 4/13/2009 8:30:00 AM
HB 221
Referral Summary.doc HFIN 4/13/2009 8:30:00 AM
HB 221
HB 162 DOF Background Paper.pdf HFIN 4/13/2009 8:30:00 AM
HB 162
HB 162 Sectional Analysis.pdf HFIN 4/13/2009 8:30:00 AM
HB 162
Maps DOF SE Multi per pg.pdf HFIN 4/13/2009 8:30:00 AM
HB 162
DNR Letters.pdf HFIN 4/13/2009 8:30:00 AM
HB 162