Legislature(2017 - 2018)SENATE FINANCE 532

04/10/2018 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 79 OMNIBUS WORKERS' COMPENSATION TELECONFERENCED
<Bill Hearing Rescheduled to 4/12/18 at 9 a.m.>
+ HB 121 OCC. HEALTH AND SAFETY CIVIL PENALTIES TELECONFERENCED
<Bill Hearing Rescheduled to 4/12/18 at 9 a.m.>
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+ SB 157 MICROLOAN REVOLVING FUND & LOANS TELECONFERENCED
Heard & Held
<Bill Hearing Rescheduled from 4/09/18 at 1:30pm>
+ SB 186 VOTER REGISTRATION & PFD APP REGISTRATION TELECONFERENCED
Heard & Held
<Bill Hearing Rescheduled from 4/09/18 at 1:30pm>
+= SB 216 SCHOOL FUNDING FOR CONSOLIDATED SCHOOLS TELECONFERENCED
Moved CSSB 216(FIN) Out of Committee
                 SENATE FINANCE COMMITTEE                                                                                       
                      April 10, 2018                                                                                            
                         9:14 a.m.                                                                                              
                                                                                                                                
9:14:04 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  MacKinnon  called  the  Senate  Finance  Committee                                                                    
meeting to order at 9:14 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Click Bishop, Vice-Chair                                                                                                
Senator Peter Micciche                                                                                                          
Senator Donny Olson                                                                                                             
Senator Gary Stevens                                                                                                            
Senator Natasha von Imhof                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Jonathan  King, Staff,  Senator  Natasha  Von Imhoff;  Heidi                                                                    
Teshner, Director, Finance  and Support Services, Department                                                                    
of Education and Early  Development; Elwin Blackwell, School                                                                    
Finance  Manager,  School  and Finance  Facilities  Section,                                                                    
Department  of  Education  and Early  Development;  Britteny                                                                    
Cioni-Haywood,  Division  Director,   Division  of  Economic                                                                    
Development, Department of  Commerce, Community and Economic                                                                    
Development; Carol Thompson,  Absentee and Petition Manager,                                                                    
Division  of  Elections,  Office   of  the  Governor;  Libby                                                                    
Bakalar,  Assistant  Attorney  General, Department  of  Law;                                                                    
Sara  Race,  Division   Director,  Permanent  Fund  Dividend                                                                    
Division.                                                                                                                       
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 157    MICROLOAN REVOLVING FUND & LOANS                                                                                      
                                                                                                                                
          SB 157 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
SB 186    VOTER REGISTRATION & PFD APP REGISTRATION                                                                             
                                                                                                                                
          SB 186 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
SB 216    SCHOOL FUNDING FOR CONSOLIDATED SCHOOLS                                                                               
                                                                                                                                
          CSSB 216(FIN)  was REPORTED out of  committee with                                                                    
          a  "do  pass"  recommendation  and  with  one  new                                                                    
          fiscal   impact  note   from  the   Department  of                                                                    
          Education and  Early Development and one  new zero                                                                    
          fiscal note  from the Department of  Education and                                                                    
          Early Development.                                                                                                    
                                                                                                                                
SENATE BILL NO. 216                                                                                                           
                                                                                                                                
     "An Act  relating to the  calculation of state  aid for                                                                    
     schools    that    consolidate;   relating    to    the                                                                    
     determination of  the number of schools  in a district;                                                                    
     and providing for an effective date."                                                                                      
                                                                                                                                
9:15:41 AM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon recalled a  question from Senator Stevens                                                                    
regarding the cost to the state.                                                                                                
                                                                                                                                
9:16:04 AM                                                                                                                    
                                                                                                                                
JONATHAN KING, STAFF, SENATOR  NATASHA VON IMHOFF, discussed                                                                    
a  brief  history of  the  reason  for the  legislation.  He                                                                    
stated  that the  purpose of  the  bill was  to promote  the                                                                    
efficient   use   of   Alaska's  existing   K-12   education                                                                    
infrastructure. He highlighted the sections of the bill.                                                                        
                                                                                                                                
Co-Chair MacKinnon wondered whether  the state would pick up                                                                    
the cost for transportation.                                                                                                    
                                                                                                                                
9:18:57 AM                                                                                                                    
                                                                                                                                
HEIDI  TESHNER,  DIRECTOR,  FINANCE  AND  SUPPORT  SERVICES,                                                                    
DEPARTMENT OF EDUCATION  AND EARLY DEVELOPMENT, (DEED)stated                                                                    
that the formula  program in statute was a  block grant. She                                                                    
stated  that there  would be  no increase  to the  state, as                                                                    
long as the  per pupil student amounts  currently in statute                                                                    
remained  unchanged. She  noted  that districts  may see  an                                                                    
increase in transportation costs.                                                                                               
                                                                                                                                
Co-Chair MacKinnon queried additional comments.                                                                                 
                                                                                                                                
ELWIN BLACKWELL, SCHOOL FINANCE  MANAGER, SCHOOL AND FINANCE                                                                    
FACILITIES  SECTION,  DEPARTMENT   OF  EDUCATION  AND  EARLY                                                                    
DEVELOPMENT, replied in the negative.                                                                                           
                                                                                                                                
Co-Chair    MacKinnon    wondered    whether    the    total                                                                    
transportation  program  would  not  increase.  Ms.  Teshner                                                                    
replied in the affirmative                                                                                                      
                                                                                                                                
Co-Chair  MacKinnon surmised  that  the state  would not  be                                                                    
responsible  for any  decisions  or  financing required  for                                                                    
increased transportation  costs for individual  schools. Ms.                                                                    
Teshner agreed.                                                                                                                 
                                                                                                                                
Senator Micciche wondered why the  bill would save the state                                                                    
some  level  of  funding  after   year  four,  but  was  not                                                                    
adequately  reflected  in  the   fiscal  note.  Ms.  Teshner                                                                    
agreed.  She looked  at page  3  of the  fiscal note,  which                                                                    
explained the reason for the  lack of reflection. She stated                                                                    
that  it was  because  it was  unknown  which schools  would                                                                    
consolidate, in order to determine the state savings.                                                                           
                                                                                                                                
Co-Chair  MacKinnon agreed  that  the fiscal  note had  some                                                                    
cost,  but  another  that  did   not  reflect  the  intended                                                                    
savings. She  stressed that there  was no  increased funding                                                                    
from the state level.                                                                                                           
                                                                                                                                
Vice-Chair  Bishop  MOVED to  REPORT  CSSB  216(FIN) out  of                                                                    
committee with  individual recommendations  and accompanying                                                                    
fiscal notes. There being NO OBJECTION, it was so ordered.                                                                      
                                                                                                                                
CSSB  216(FIN) was  REPORTED  out of  committee  with a  "do                                                                    
pass"  recommendation and  with one  new fiscal  impact note                                                                    
from the  Department of Education and  Early Development and                                                                    
one new  zero fiscal note  from the Department  of Education                                                                    
and Early Development.                                                                                                          
                                                                                                                                
9:23:45 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:26:15 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 157                                                                                                           
                                                                                                                                
     "An Act relating to the Alaska microloan revolving                                                                         
     loan fund and loans from the fund."                                                                                        
                                                                                                                                
9:26:58 AM                                                                                                                    
                                                                                                                                
BRITTENY  CIONI-HAYWOOD,  DIVISION   DIRECTOR,  DIVISION  OF                                                                    
ECONOMIC DEVELOPMENT, DEPARTMENT  OF COMMERCE, COMMUNITY AND                                                                    
ECONOMIC DEVELOPMENT,  shared the  purpose of  the microloan                                                                    
fund  was  to  promote  economic development  in  Alaska  by                                                                    
assisting small and micro business  that may not have access                                                                    
to  traditional financing.  She  stated that  the access  to                                                                    
badly  needed capital  would facilitate  startup, expansion,                                                                    
and job creation in the  state with specific policy emphasis                                                                    
on rural  communities. She stated  that new  businesses were                                                                    
responsible for  80 percent of  all new jobs created  in the                                                                    
U.S.  She   asserted  that  finding  ways   to  support  and                                                                    
incentivize new  business growth  would result in  the state                                                                    
filling some of the economic  gap created in the downturn in                                                                    
the  economy.  She  stated that  small  scale  startups  and                                                                    
businesses had difficulty  securing funding, especially when                                                                    
they  may not  fit the  profile of  a high-growth  potential                                                                    
business.                                                                                                                       
                                                                                                                                
9:30:25 AM                                                                                                                    
                                                                                                                                
Senator Stevens queried the  default rate. Ms. Cioni-Haywood                                                                    
replied that there  was currently one loan in  default, at a                                                                    
6  percent rate.  She noted  that there  were only  14 loans                                                                    
from the fund.                                                                                                                  
                                                                                                                                
Co-Chair Hoffman queried the reason  for listing a fix rate,                                                                    
instead  of points  above prime.  Ms. Cioni-Haywood  replied                                                                    
that it was two percentage points above prime.                                                                                  
                                                                                                                                
Senator  Micciche surmised  that  there was  a  drop of  the                                                                    
interest rate,  because interest rates were  lower than when                                                                    
the  bill was  enacted. Ms.  Cioni-Haywood replied  that the                                                                    
floor amounts had  been changed to 4 percent  and 8 percent.                                                                    
The  interest  rate  calculation  was  2  percentage  points                                                                    
versus  1 percentage  point on  prime. It  allowed for  some                                                                    
additional risk with the longer  term. She furthered that it                                                                    
would also bring the rates in line with the other programs.                                                                     
                                                                                                                                
Vice-Chair   Bishop  queried   the  balance   of  the   fund                                                                    
capitalization,  and  the  typical annual  loan  application                                                                    
number. Ms.  Cioni-Haywood replied  that the  cash available                                                                    
to lend was just under  $2.3 million, with 14 current loans,                                                                    
33 applications, and  14 approved loans. She  shared that it                                                                    
averaged about 2  loans a year over the last  six years. She                                                                    
stated that  the borrowers  were unwilling  to take  on that                                                                    
debt  risk,  so  extending  the term  will  allow  for  more                                                                    
flexibility with the payments.                                                                                                  
                                                                                                                                
Senator von  Imhof wanted permission  to list  her questions                                                                    
via email.                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon felt that putting  those questions on the                                                                    
record may be helpful.                                                                                                          
                                                                                                                                
Senator von Imhof listed her questions.                                                                                         
                                                                                                                                
9:36:20 AM                                                                                                                    
                                                                                                                                
Senator  Micciche wondered  whether there  was consideration                                                                    
of a slotted rate. He noted  that there was a socializing of                                                                    
the risk.  Ms. Cioni-Haywood replied that  she would provide                                                                    
that information.                                                                                                               
                                                                                                                                
Senator  Micciche  stated  that  he was  aware  of  how  the                                                                    
program functions, but wanted  to understand the change. Ms.                                                                    
Cioni-Haywood replied  that there was an  examination of the                                                                    
effectiveness of the program. She  noted that the demand for                                                                    
the program was  lower than expected. She  asserted that the                                                                    
change might increase the program.                                                                                              
                                                                                                                                
9:42:27 AM                                                                                                                    
                                                                                                                                
Senator Stevens  spoke in favor  of the program.  He queried                                                                    
the success of the program.                                                                                                     
                                                                                                                                
Senator  Olson  understood  that  it  was  important  for  a                                                                    
business  to have  capital. He  noted that  the program  was                                                                    
created in 2012  at a time of state surplus.  He queried the                                                                    
cost benefit  ratio of  the program. He  assumed it  was not                                                                    
operating in the black. He  wondered whether the state could                                                                    
continue with  the program.  Ms. Cioni-Haywood  replied that                                                                    
it was  a smaller revolving fund,  and most of the  work was                                                                    
from the commercial fishing revolving  loan fund. She stated                                                                    
that the  division was self-sufficient through  the interest                                                                    
and fees.                                                                                                                       
                                                                                                                                
9:45:37 AM                                                                                                                    
                                                                                                                                
Senator Olson clarified that the  state operated somewhat in                                                                    
the  black  with the  oversight  of  the state.  Ms.  Cioni-                                                                    
Haywood replied that  she needed to do more  analysis of the                                                                    
microloan fund, but the other funds had grown over time.                                                                        
                                                                                                                                
Senator von Imhof wondered whether  there was further effort                                                                    
after  a bank  decline letter,  and why  the bank  would not                                                                    
lend the  money. Ms. Cioni-Haywood  replied the  bank denial                                                                    
letters must list a valid  reason. She noted that lending to                                                                    
individuals who  may not be  eligible increased the  risk of                                                                    
the portfolio,  but the division  often lent  to nonstandard                                                                    
borrowers.                                                                                                                      
                                                                                                                                
Senator  von  Imhof   queried  existing  organizations  that                                                                    
catered  to  the  higher risk  borrower.  Ms.  Cioni-Haywood                                                                    
agreed to provide that information.                                                                                             
                                                                                                                                
Co-Chair  MacKinnon  queried  a  sheet  that  addressed  the                                                                    
questions. She  wondered how  many loan  agents were  in the                                                                    
program.  Ms.  Cioni-Haywood  replied   that  there  were  9                                                                    
officers to service all ten revolving loan funds                                                                                
                                                                                                                                
9:50:34 AM                                                                                                                    
                                                                                                                                
Senator von  Imhof surmised that  it was basically  one loan                                                                    
officer per loan.                                                                                                               
                                                                                                                                
Co-Chair  MacKinnon  stated  that  there  were  other  loans                                                                    
inside of  the other programs.  She stressed that  this loan                                                                    
program had 14  loans over its life, which was  valued at 2.                                                                    
She noted  that some of  the other loans had  more activity.                                                                    
She requested a larger fact sheet about all the loans.                                                                          
                                                                                                                                
Senator  Micciche  stressed  that  there were  a  number  of                                                                    
revolving loan programs with higher value.                                                                                      
                                                                                                                                
Vice-Chair Bishop  remarked that the loans  could have great                                                                    
benefit to small businesses.                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  queried  Ms. Cioni-Haywood's  place  of                                                                    
residence.  Ms.  Cioni-Haywood  replied  that  she  live  in                                                                    
Juneau.                                                                                                                         
                                                                                                                                
Co-Chair MacKinnon asked for work  to develop a presentation                                                                    
to examine the investments.  She wanted a simple explanation                                                                    
of the programs. Ms. Cioni-Haywood agreed.                                                                                      
                                                                                                                                
                                                                                                                                
Co-Chair MacKinnon  noted that there were  audits about some                                                                    
of the loan programs.                                                                                                           
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
Vice-Chair Bishop discussed the fiscal note.                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  requested   that  program  concerns  be                                                                    
submitted by noon the following day.                                                                                            
                                                                                                                                
SB  157  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SENATE BILL NO. 186                                                                                                           
                                                                                                                                
     "An Act relating to voter registration; and providing                                                                      
     for an effective date."                                                                                                    
                                                                                                                                
9:58:38 AM                                                                                                                    
                                                                                                                                
CAROL THOMPSON,  ABSENTEE AND PETITION MANAGER,  DIVISION OF                                                                    
ELECTIONS,  OFFICE   OF  THE  GOVERNOR,  provided   a  brief                                                                    
overview of the bill. She  stated that Division of Elections                                                                    
put forth  legislation to harmonize the  interaction between                                                                    
the  permanent  fund  dividend (PFD)  and  the  Division  of                                                                    
Elections in  relation to  the automated  voter registration                                                                    
law  passed  by  ballet  initiative   in  2016.  The  ballot                                                                    
initiative required  the Permanent Fund Division  to provide                                                                    
the Division  of Elections with  the PFD electronic  data of                                                                    
applicants  who  met  the  eligible  requirements  of  voter                                                                    
registration.  She  explained  that   upon  receipt  of  the                                                                    
electronic  data, the  division compared  it with  the voter                                                                    
registration  database to  target  applicants considered  as                                                                    
newly  registered  voters and  those  with  update to  their                                                                    
registration record.  She stated that under  current law the                                                                    
division  was required  to send  by mail  a notification  to                                                                    
allow  applicants  an  opportunity   to  opt  out  of  voter                                                                    
registration. She  stated that  applicants had up  to thirty                                                                    
days to notify  the division of their intention  to opt out.                                                                    
She stated that if the opt  out notice was not received; the                                                                    
division  would process  the  applications for  registration                                                                    
accordingly.  She stated  that the  goal of  the legislation                                                                    
was to  improve the experience of  applicants registering to                                                                    
vote,  or  updating  their  registration  by  providing  the                                                                    
opportunity to opt out of  voter registration at the time of                                                                    
PFD  application.  She  stated  that  with  the  change  the                                                                    
division  could  leverage   existing  tools  and  procedures                                                                    
already in use for  processing automatic voter registrations                                                                    
between the Division of Elections  and the Division of Motor                                                                    
Vehicles. The legislation would  also allow for the division                                                                    
to   efficiently   manage   the   program,   process   voter                                                                    
registrations  in  a  timelier   manner,  and  reduce  state                                                                    
expenditures  by   eliminating  the   cost  of   sending  an                                                                    
expensive mailer during the 30-day opt out requirement.                                                                         
                                                                                                                                
Co-Chair MacKinnon  felt that  there were  multiple problems                                                                    
with implementation of  the initiative. The bill  had an opt                                                                    
in provision. Ms. Thompson agreed.                                                                                              
                                                                                                                                
10:00:50 AM                                                                                                                   
                                                                                                                                
LIBBY  BAKALAR, ASSISTANT  ATTORNEY  GENERAL, DEPARTMENT  OF                                                                    
LAW, introduced herself.                                                                                                        
                                                                                                                                
Co-Chair MacKinnon  wondered whether the bill  met the voter                                                                    
intent of  the ballot  initiative. Ms. Bakalar  replied that                                                                    
it did not.                                                                                                                     
                                                                                                                                
Co-Chair MacKinnon queried the  reason for that perspective.                                                                    
Ms.  Bakalar  replied that  Article  11,  Section 6  of  the                                                                    
Alaska Constitution  provided that  an initiated law  may be                                                                    
amended  at  any  time,  but  may not  be  repealed  by  the                                                                    
legislature  within two  years  of its  effective date.  She                                                                    
stated  that the  difference between  an amendment  versus a                                                                    
repeal was a  factual question that had  been litigated over                                                                    
the  years.  She stated  that  the  case  law said  that  an                                                                    
amendment that  vitiates the intent  of an  initiative would                                                                    
constitute an  effective repeal of that  measure. She stated                                                                    
that it was the Department  of Law opinion that changing the                                                                    
initiative  to be  "opt in"  versus  "opt out"  would be  an                                                                    
unconstitutional  overreach  to  undo what  the  people,  by                                                                    
initiative,  had enacted  in 2016.  She  furthered that  the                                                                    
legislature could change  to an opt in or  repeal after that                                                                    
two year time period.                                                                                                           
                                                                                                                                
Co-Chair  MacKinnon   wondered  what  would   occur  without                                                                    
consensus to  appropriately change state statute  to reflect                                                                    
the  voter  intent.  She  asked  what  would  occur  without                                                                    
garnering  the  support  to  do what  the  people  had  done                                                                    
through initiative.  She felt that  there was a flaw  in the                                                                    
initiative.  Ms. Bakalar  replied that  the legislature  had                                                                    
discretion  to amend  the initiative  in the  ways that  the                                                                    
division had  proposed. She noted  that a drastic  change to                                                                    
opt in  from opt  out would  be exceeding  the legislature's                                                                    
constitutional authority.                                                                                                       
                                                                                                                                
10:05:24 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon  stated  that   she  would  not  have  a                                                                    
sectional analysis  in the current  meeting. She  wanted the                                                                    
committee  to  consider the  voters  who  had supported  the                                                                    
initiative to register everyone  through the PFD application                                                                    
process.  She  noted  that  all  applicants  data  would  be                                                                    
automatically  registered based  on the  division's work  to                                                                    
support the voter initiative. She  asserted that all the raw                                                                    
data would  be available  to the  public. She  stressed that                                                                    
the  data   had  mailing  addresses,  and   sometimes  email                                                                    
addresses  and  phone  numbers.  She  stated  that  she  had                                                                    
another bill related to the issue.                                                                                              
                                                                                                                                
Senator Micciche wondered  whether the department challenged                                                                    
the constitutionality of forcing  people to register to vote                                                                    
through the initiative  process. He felt that  there must be                                                                    
a constitutional  issue. Ms. Bakalar responded  that Article                                                                    
11, Section  7 of the  Alaska Constitution sets  four limits                                                                    
on the use of the  initiative: 1) the dedication of revenue;                                                                    
2) the making  and repealing of appropriations;  3) rules of                                                                    
court;  and 4)  local  and special  legislation. She  stated                                                                    
that the  administration must honor  the case  law precedent                                                                    
of  the  Alaska  Supreme  Court and  the  Constitution.  She                                                                    
furthered  that  they  were   not  permitted  prior  to  the                                                                    
election  to  keep measures  off  the  ballot that  did  not                                                                    
violate the four restrictions.                                                                                                  
                                                                                                                                
Senator Micciche  surmised that  the privacy section  of the                                                                    
constitution  could  be violated,  as  long  as it  did  not                                                                    
violate  the four  restrictions.  Ms.  Bakalar replied  that                                                                    
there was a  difference between a pre-election  review and a                                                                    
post-election   review.   She    noted   that   there   were                                                                    
constitutional challenges  to an  initiated law may  be made                                                                    
after it's enacted.                                                                                                             
                                                                                                                                
Co-Chair  MacKinnon  wondered whether  statutory  foundation                                                                    
must be made before the  challenge. Ms. Bakalar replied that                                                                    
regulations  could  be  challenged. She  remarked  that  the                                                                    
division's intent of  the bill could not  be accomplished by                                                                    
regulation.                                                                                                                     
                                                                                                                                
Senator von  Imhof remarked  that an  unintended consequence                                                                    
of the ballot initiative was  the public display of personal                                                                    
data. She wondered  whether it was known at the  time of the                                                                    
election. She  did not  recall in  her PFD  application that                                                                    
there  was  a notification  that  the  information would  be                                                                    
shared with the division of elections.                                                                                          
                                                                                                                                
10:11:12 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon  remarked that  her other  bill addressed                                                                    
privacy. She  stated that the bill  currently discussed. Ms.                                                                    
Thompson stated that  the current version of the  bill was a                                                                    
change from "opt out" to "opt in."                                                                                              
                                                                                                                                
Ms. Bakalar furthered that there  was an amendment proffered                                                                    
by Senator Coghill in the Senate State Affairs Committee.                                                                       
                                                                                                                                
Co-Chair  MacKinnon noted  that it  was her  job to  measure                                                                    
actions by  the law after  voter initiatives were  passed by                                                                    
voters.  She asserted  that there  was another  conversation                                                                    
about voter privacy.                                                                                                            
                                                                                                                                
Senator von  Imhof noted that  the 2018 PFD  application was                                                                    
closed, and  there was also  an election in 2018.  She noted                                                                    
that   all   applicants   for   the   current   year's   PFD                                                                    
automatically registered  to vote  with the  application for                                                                    
the PFD. Ms. Bakalar deferred to Ms. Thompson.                                                                                  
                                                                                                                                
Ms. Thompson replied in the affirmative.                                                                                        
                                                                                                                                
Senator von  Imhof shared  that a  letter from  the governor                                                                    
stated  that  the  bill would  make  harmonizing  amendments                                                                    
governing  record sharing  procedures from  the commissioner                                                                    
of the  Department of Revenue  (DOR) to the director  of the                                                                    
Division of  Elections. She queried the  current harmonizing                                                                    
record  exchange. Ms.  Thompson  replied that  "harmonizing"                                                                    
meant that  the data  could be  accessed form  the Permanent                                                                    
Fund.  She  shared   that  there  was  a   hope  to  provide                                                                    
information to the applicants to the PFD.                                                                                       
                                                                                                                                
10:15:28 AM                                                                                                                   
                                                                                                                                
Senator von Imhof  surmised that the data would  be given to                                                                    
the  Division  of Elections.  She  wondered  when that  data                                                                    
would be made public. Ms.  Thompson replied that it would be                                                                    
available when data entry was  complete. She stated that the                                                                    
division was  currently in the  process of the  2018 period,                                                                    
and the  first letters  would be sent.  There would  then be                                                                    
thirty days  to respond to  that mailer. She  explained that                                                                    
after  that  thirty  days,  data entry  would  begin  to  be                                                                    
entered into  the database. She  stressed that  anyone could                                                                    
call and receive that information to request voter lists.                                                                       
                                                                                                                                
Senator  von  Imhof  wondered   whether  the  letters  would                                                                    
provide an option  to "opt out." She asked  whether they had                                                                    
thirty days to determine how  the data would be shared after                                                                    
the  PFD application.  She queried  the current  options for                                                                    
someone  to opt  out.  Ms. Thompson  replied  that a  person                                                                    
could  complete the  mailer, call,  or send  an email.  Once                                                                    
that occurs,  the person would  be removed from the  list to                                                                    
be included in the voter registration.                                                                                          
                                                                                                                                
Co-Chair MacKinnon wanted  to know what was  included in the                                                                    
letter. Ms.  Thompson replied that  it stated that  it would                                                                    
be a notice of automatic voter registration.                                                                                    
                                                                                                                                
                                                                                                                                
Co-Chair  MacKinnon  expressed  concern  about  the  privacy                                                                    
issue. She  remarked that there may  or may not be  a reason                                                                    
for a person  to not be registered to vote.  She shared that                                                                    
someone in her community had chosen  not to vote in order to                                                                    
avoid  harassment from  a family  member. She  stressed that                                                                    
there  were  people  who  did  not  want  their  information                                                                    
public,  and  the  initiative  bypassed  that  process.  She                                                                    
remarked that it violated their  rights to privacy. She felt                                                                    
that  the  state  had  not   adequately  responded  to  that                                                                    
concern. She wondered  how people would be able  to see that                                                                    
mailer. Ms. Thompson agreed.                                                                                                    
                                                                                                                                
10:20:01 AM                                                                                                                   
                                                                                                                                
Vice-Chair  Bishop wondered  whether the  administration had                                                                    
considered another  way of informing  the public of  the opt                                                                    
out  option. Ms.  Thompson replied  that she  would consider                                                                    
that idea.                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon shared that  the letter form the division                                                                    
stated that someone  did not need to be  a registered voter,                                                                    
so one  could opt  out of  voter registration.  Ms. Thompson                                                                    
agreed.                                                                                                                         
                                                                                                                                
Co-Chair  MacKinnon shared  that  her bill  would allow  for                                                                    
voter registration, but would blind the data.                                                                                   
                                                                                                                                
Senator Micciche  fundamentally disagreed  with a  paper opt                                                                    
out going to  the people of Alaska. He felt  that people may                                                                    
have the lowest  voter turnout in the history  of the United                                                                    
States. He remarked that there  were still many Alaskans who                                                                    
preferred to respond through the mail.                                                                                          
                                                                                                                                
Co-Chair  MacKinnon recalled  that the  division was  in the                                                                    
process  of  data  entry  from   the  PFD  application.  Ms.                                                                    
Thompson  replied that  it  had not  begun,  but the  mailer                                                                    
would be sent out in the current week.                                                                                          
                                                                                                                                
Co-Chair  MacKinnon surmised  that the  state would  get the                                                                    
address  from  somewhere.  Ms.   Thompson  agreed.  The  PFD                                                                    
application  raw  data  would  be compared  with  the  voter                                                                    
registration data to develop the pool of targeted people.                                                                       
                                                                                                                                
10:25:05 AM                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon  stated that the  people would not  be in                                                                    
the Division of Election database  until the thirty days had                                                                    
elapsed.  Ms. Thompson  replied that  it would  range around                                                                    
forty days.                                                                                                                     
                                                                                                                                
Co-Chair  MacKinnon  wondered  whether the  names  would  be                                                                    
deleted from the PFD application.  Ms. Thompson replied that                                                                    
the names would be removed as  soon as the notice to opt out                                                                    
was received.                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon wondered  whether a  person had  to file                                                                    
the  paperwork  every  year. Ms.  Thompson  replied  in  the                                                                    
affirmative.                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon felt  that it was another  problem for an                                                                    
individual.                                                                                                                     
                                                                                                                                
Vice-Chair  Bishop  queried  efforts with  the  Division  of                                                                    
Elections to enhance security. Ms.  Thompson could not speak                                                                    
to that question.                                                                                                               
                                                                                                                                
Senator Micciche  expressed concern with  the constitutional                                                                    
changes  in the  bill.  He felt  that  changing the  contact                                                                    
methods  could be  regarded as  a  constitutional issue.  He                                                                    
wanted every  Alaskan to participate in  the voting process,                                                                    
but knew that some people  did not participate. He felt that                                                                    
there should be  many opportunities, and stated  that he had                                                                    
concerns with the bill.                                                                                                         
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
Vice-Chair Bishop addressed the fiscal note.                                                                                    
                                                                                                                                
Co-Chair MacKinnon  queried perspective  on the  most recent                                                                    
version F the bill.                                                                                                             
                                                                                                                                
10:30:24 AM                                                                                                                   
                                                                                                                                
SARA  RACE,  DIVISION   DIRECTOR,  PERMANENT  FUND  DIVIDEND                                                                    
DIVISION, noted that there would  be an updated fiscal note.                                                                    
She stated that  there would be a zero  fiscal note, because                                                                    
funds would be used from  a capital project. She stated that                                                                    
the division was an information  data center that would pass                                                                    
information in administering the PFD.                                                                                           
                                                                                                                                
Senator  Micciche wondered  how one  enjoyed volunteering  a                                                                    
person who  issues PFDs to  working for the Division  of the                                                                    
Elections. Ms.  Race replied that  the role of  the division                                                                    
was  to  help  people  understood  that  they  could  answer                                                                    
questions  about   the  PFD,   but  questions   about  voter                                                                    
registration  should   be  directed   at  the   Division  of                                                                    
Elections.                                                                                                                      
                                                                                                                                
Co-Chair  MacKinnon   wondered  whether  there   were  other                                                                    
provisions that had  an opt out within  the PFD application.                                                                    
Ms. Race replied that it  was the only automatic option that                                                                    
would be part of the PFD application.                                                                                           
                                                                                                                                
Co-Chair MacKinnon recalled  that there was an  issue of the                                                                    
data  being  accessible  to  the  general  public,  and  the                                                                    
legislature  had   provided  an  opportunity   for  peoples'                                                                    
information being blocked,  or was there was  a specific for                                                                    
vulnerable people. Ms. Race replied  that PFD was considered                                                                    
confidential  information in  statute. The  only information                                                                    
that could  be released is  the individual's first  and last                                                                    
name.  She  furthered that  a  yes  or  no answer  could  be                                                                    
provided when inquired whether an  individual had applied or                                                                    
not.                                                                                                                            
                                                                                                                                
Co-Chair MacKinnon  felt that there  would be a  quandary in                                                                    
state  statute, because  there was  an initiative  to expose                                                                    
data of  those who  had originally  petitioned the  state to                                                                    
protect them.  She wondered  whether there  was recollection                                                                    
of  that conversation.  Ms. Race  replied that  she was  not                                                                    
part  of that  conversation.  She furthered  that there  had                                                                    
been individuals who approached  the division asking similar                                                                    
questions.                                                                                                                      
                                                                                                                                
10:35:42 AM                                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon  remarked that  all  that  data was  now                                                                    
exposed because of the initiative  process. Ms. Race replied                                                                    
that  the  division  provided seven  data  elements  to  the                                                                    
Division  of Elections:  the applicant's  name and  sex; the                                                                    
applicant's Alaska driver's license  or social security; the                                                                    
applicant's  date   of  birth;  the   applicant's  residence                                                                    
address; whether the applicant was  a U.S. citizen; the date                                                                    
of application; and the applicant's marker signature.                                                                           
                                                                                                                                
Co-Chair  MacKinnon  wondered  whether the  social  security                                                                    
number was protected as it  travelled between the divisions.                                                                    
Ms.   Race  replied   in   the   affirmative,  because   the                                                                    
information was through the state's secured system.                                                                             
                                                                                                                                
Co-Chair MacKinnon  asked whether both the  driver's license                                                                    
and  social   security  number  would  travel   between  the                                                                    
divisions. Ms.  Race replied that  she believed that  it was                                                                    
either one or the other.                                                                                                        
                                                                                                                                
Senator  Micciche  asked how  many  PFDs  were paid  in  the                                                                    
previous  year.  Ms. Race  replied  that  she believed  that                                                                    
there were 630,000.                                                                                                             
                                                                                                                                
Senator  Micciche  wondered  how  many of  those  PFDs  were                                                                    
mailed  out  of  state.  Ms. Race  agreed  to  provide  that                                                                    
information.                                                                                                                    
                                                                                                                                
Senator Micciche  understood that  there were  some military                                                                    
members who  had not lived in  the state for many  years. He                                                                    
wondered how often  and for how long  those military members                                                                    
had  to return  to the  state. Ms.  Race replied  that there                                                                    
were  several  different   eligibility  requirements,  which                                                                    
depended  on how  long an  individual  had been  out of  the                                                                    
state.  She  stated  that  it   could  be  72  hours  or  an                                                                    
accumulation of 30 days.                                                                                                        
                                                                                                                                
Co-Chair MacKinnon wondered whether  that was a timeframe to                                                                    
return to the state. Ms. Race agreed.                                                                                           
                                                                                                                                
Senator  Micciche asked  whether  people were  automatically                                                                    
signing people  to register to  vote who had been  gone from                                                                    
the  state   for  many  years   due  to   those  eligibility                                                                    
requirements. Ms.  Race replied  that there  was a  focus on                                                                    
those with a physical address  in the state. She stated that                                                                    
there  was  a  potential  for  individuals  who  were  still                                                                    
reporting a physical address.                                                                                                   
                                                                                                                                
Co-Chair  MacKinnon queried  challenges in  implementing the                                                                    
voter  initiative.  Ms. Race  replied  that  it stepped  the                                                                    
focus outside of eligibility and  focusing on dividends. She                                                                    
noted that  there was  extensive work  with the  Division of                                                                    
Elections to develop a successful data transfer.                                                                                
                                                                                                                                
Co-Chair MacKinnon  wondered whether people who  had applied                                                                    
for  a  dividend may  be  in  "limbo"  until they  could  be                                                                    
finalized. Ms. Race replied in the affirmative.                                                                                 
                                                                                                                                
Co-Chair  MacKinnon asked  whether the  initiative specified                                                                    
"receive  a  dividend",   "apply  for  a dividend",  broader                                                                    
language.  Ms.  Race  replied that  she  believed  that  the                                                                    
initiative said, "apply  for a dividend", and  did not speak                                                                    
to the eligibility process.                                                                                                     
                                                                                                                                
Co-Chair MacKinnon stressed that the  intent of the bill was                                                                    
to  increase voter  turnout. She  remarked  that there  were                                                                    
some challenges in implementing the voter initiative.                                                                           
                                                                                                                                
Co-Chair   MacKinnon  discussed   the  afternoon   meeting's                                                                    
agenda.                                                                                                                         
                                                                                                                                
SB  186  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
10:42:37 AM                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:42 a.m.                                                                                         

Document Name Date/Time Subjects
SB 186 SF Sponsor Statement.pdf SFIN 4/10/2018 9:00:00 AM
SB 186
SB 186 SF Supporting Document - Election Policy Work Group Report.pdf SFIN 4/10/2018 9:00:00 AM
SB 186
SB 186 SF Supporting Document - DOE bullets points.pdf SFIN 4/10/2018 9:00:00 AM
SB 186
SB 186 SF Supporting Document - Excerpt from 2017 DOE Fiscal & Policy Challenges Report.pdf SFIN 4/10/2018 9:00:00 AM
SB 186
SB 157 - Transmittal Letter.pdf SFIN 4/10/2018 9:00:00 AM
SB 157
SB 157 - Sectional Analysis.pdf SFIN 4/10/2018 9:00:00 AM
SB 157
SB 157 - Letter of Support.pdf SFIN 4/10/2018 9:00:00 AM
SB 157
SB 186 SF Supporting Document - Excerpt from 2017 DOE Fiscal & Policy Challenges Report.pdf SFIN 4/10/2018 9:00:00 AM
SB 186
SB 186 Sectional Analysis v. J.pdf SFIN 4/10/2018 9:00:00 AM
SB 186
SB 216 MSBSD Letter of Support re SB216.pdf SFIN 4/10/2018 9:00:00 AM
SB 216
SB 186 Opt-Out Form C20-U.pdf SFIN 4/10/2018 9:00:00 AM
SB 186
SB 186 Opt-Out Form C20-N.pdf SFIN 4/10/2018 9:00:00 AM
SB 186
SB 186 04.10.2018 SF follow-up letter.pdf SFIN 4/10/2018 9:00:00 AM
SB 186
SB 186_ Automatic Voter Registration Initiative--Support for the Opt-Out version in the original.pdf SFIN 4/10/2018 9:00:00 AM
SB 186
SB 186 Public Testimony Brown.pdf SFIN 4/10/2018 9:00:00 AM
SB 186
SB 186 DOR-PFD letter to S FIN 4-12-18.pdf SFIN 4/10/2018 9:00:00 AM
SB 186
SB 157 Public Testimony Ayers.pdf SFIN 4/10/2018 9:00:00 AM
SB 157
SB 157 Finance Response LTR 4-11-18.docx.pdf SFIN 4/10/2018 9:00:00 AM
SB 157
SB 157 DED Loan Portfolios brief.pdf SFIN 4/10/2018 9:00:00 AM
SB 157
SB 157 Microloan Brief.pdf SFIN 4/10/2018 9:00:00 AM
SB 157
HB 304 SKMBT_C45218041614350.pdf SFIN 4/10/2018 9:00:00 AM
HB 304
HB 304-SB 157 Microloan support 2018 Senate SEC.pdf SFIN 4/10/2018 9:00:00 AM
HB 304
SB 157