Legislature(2017 - 2018)SENATE FINANCE 532

05/03/2018 02:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Meeting Postponed to 3:00 p.m. --
+= HB 106 CIVIL LEGAL SERVICES FUND TELECONFERENCED
Moved SCS HB 106(FIN) Out of Committee
+= HB 76 MARICULTURE REVOLVING LOAN FUND TELECONFERENCED
Moved SCS CSHB 76(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 304 MICROLOAN REVOLVING FUND & LOANS; REPORT TELECONFERENCED
Moved SCS CSHB 304(FIN) Out of Committee
                 SENATE FINANCE COMMITTEE                                                                                       
                        May 3, 2018                                                                                             
                         3:06 p.m.                                                                                              
                                                                                                                                
3:06:24 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  MacKinnon  called  the  Senate  Finance  Committee                                                                    
meeting to order at 3:06 p.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                                                                                                                  
                                                                                                                                
Juli Lucky,  Staff, Senator  Anna MacKinnon;  Lizzie Kubitz,                                                                    
Staff,  Representative  Matt  Claman;  Liz  Harpold,  Staff,                                                                    
Representative Dan Ortiz;  Britteny Cioni-Haywood, Director,                                                                    
Division  of Economic  Development, Department  of Commerce,                                                                    
Community and Economic Development.                                                                                             
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Nicole  Nelson,   Alaska  Legal  Services,   Anchorage;  Art                                                                    
Delaune,  Governor's  Council  on Disabilities  and  Special                                                                    
Education.                                                                                                                      
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
CSHB 76(FSH)                                                                                                                    
          MARICULTURE REVOLVING LOAN FUND                                                                                       
                                                                                                                                
     SCS CSHB 76(FIN)  was REPORTED out of  committee with a                                                                    
     "do  pass"  recommendation  and  with  one  new  fiscal                                                                    
     impact note from the  Department of Commerce, Community                                                                    
     and Economic Development, and one  new zero fiscal note                                                                    
     from Department of Fish and Game.                                                                                          
                                                                                                                                
HB 106    CIVIL LEGAL SERVICES FUND                                                                                             
                                                                                                                                
     SCS HB  106(FIN) was REPORTED  out of committee  with a                                                                    
     "do pass"  recommendation and with a  new fiscal impact                                                                    
     note  from the  Department of  Commerce, Community  and                                                                    
     Economic  Development, and  a  new  fiscal impact  note                                                                    
    from the Office of the Governor for Fund Transfers.                                                                         
                                                                                                                                
CSHB 304(FIN)                                                                                                                   
          MICROLOAN REVOLVING FUND & LOANS; REPORT                                                                              
                                                                                                                                
     SCS CSHB 304(FIN) was REPORTED  out of committee with a                                                                    
     "do  pass"  recommendation   and  with  one  previously                                                                    
     published zero fiscal note: FN 1(CED).                                                                                     
                                                                                                                                
HOUSE BILL NO. 106                                                                                                            
                                                                                                                                
     "An  Act allowing  appropriations  to  the civil  legal                                                                    
     services fund from court filing fees."                                                                                     
                                                                                                                                
3:07:38 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  relayed that the committee  had heard HB                                                                    
106 on April  3, 2018; at which time the  public hearing was                                                                    
opened and closed.                                                                                                              
                                                                                                                                
Vice-Chair   Bishop  MOVED   to  ADOPT   proposed  committee                                                                    
substitute   for  HB   106(FIN),   Work  Draft   30-LS0397\J                                                                    
(Radford, 4/30/18).                                                                                                             
                                                                                                                                
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
                                                                                                                                
JULI  LUCKY, STAFF,  SENATOR ANNA  MACKINNON, discussed  the                                                                    
changes to  the bill. She  noted that the previous  time the                                                                    
bill  was heard,  there had  been  discussion regarding  the                                                                    
percentage of  the filing  fees that should  be sent  to the                                                                    
Alaska  Legal Services  Corporation (ALSC).  She noted  that                                                                    
the Committee  Substitute (CS) increased  the percent  to 10                                                                    
percent of court  filing fees and had also  made a technical                                                                    
change that  referenced the  previously closed  fiscal year.                                                                    
The technical change  had been at the  recommendation of the                                                                    
Legislative Finance  Division, in order to  make clear which                                                                    
fiscal year filing fees were coming from.                                                                                       
                                                                                                                                
Ms.   Lucky  informed   that  the   changes   to  the   bill                                                                    
necessitated two new fiscal notes.                                                                                              
                                                                                                                                
Ms.  Lucky addressed  a  new  fiscal note  (FN  5) from  the                                                                    
Office of the  Governor for Fund Transfers,  with a transfer                                                                    
to the  Civil Legal Services  Fund. The FY  19 appropriation                                                                    
was for  $300,300; with  the same  amount estimated  for the                                                                    
out years.                                                                                                                      
                                                                                                                                
Ms.  Lucky  addressed   a  new  fiscal  note   (FN  4)  from                                                                    
Department of Commerce,  Community and Economic Development;                                                                    
which  showed a  one-time appropriation  of $300,300  for FY                                                                    
19. The  amount would go  into the  base budget for  the out                                                                    
years.                                                                                                                          
                                                                                                                                
Co-Chair MacKinnon  WITHDREW her  OJBECTION. There  being NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
3:10:51 PM                                                                                                                    
                                                                                                                                
LIZZIE  KUBITZ, STAFF,  REPRESENTATIVE  MATT CLAMAN,  stated                                                                    
that the sponsor was supportive  of the changes to the bill.                                                                    
She reiterated  that the CS  would allow the  legislature to                                                                    
appropriate up to 10 percent  of filing fees received by the                                                                    
Court System (for the previously  closed fiscal year) to the                                                                    
Civil   Legal  Services   Fund.  The   sponsor  viewed   the                                                                    
legislation  as  a  possible mechanism  for  providing  more                                                                    
funds to ALSC.                                                                                                                  
                                                                                                                                
Co-Chair MacKinnon recalled that the  original bill had a 25                                                                    
percent fee  associated with it.  The committee  had doubled                                                                    
the fee in order to  increase access in designating a larger                                                                    
share of the  Court System receipts. She  understood that 25                                                                    
percent  was   closer  to  a  number   that  was  previously                                                                    
allocated in  General Fund (GF)  dollars to the  Civil Legal                                                                    
Services Fund.                                                                                                                  
                                                                                                                                
Ms. Kubitz deferred the question  to staff from Alaska Legal                                                                    
Services.  She relayed  that the  sponsor was  supportive of                                                                    
the 10 percent compromise as proposed in the CS.                                                                                
                                                                                                                                
NICOLE  NELSON,   ALASKA  LEGAL  SERVICES,   ANCHORAGE  (via                                                                    
teleconference),  relayed  that   ALSC  received  a  general                                                                    
appropriation of $450,000 per  year that came through DCCED.                                                                    
Originally ALSC  had thought the  25 percent of  filing fees                                                                    
would  replace the  appropriation and  allow ALSC  to expand                                                                    
its  services   to  more   Alaskans.  She   appreciated  the                                                                    
compromise of  10 percent of  the Court System  filing fees;                                                                    
but  emphasized the  original intent  was not  to lower  the                                                                    
amount of funding from $450,000.                                                                                                
                                                                                                                                
3:14:33 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon referenced  an additional  appropriation                                                                    
of $300,000 listed in the fiscal note.                                                                                          
                                                                                                                                
Co-Chair MacKinnon explained that  the fiscal note reflected                                                                    
an effort to  stabilize funding. She thought  it was unusual                                                                    
to allocate  state revenue to an  individual non-profit. She                                                                    
thought the  extenuating factor was  the need  for Alaskan's                                                                    
access  to legal  services considering  the  abrupt rise  of                                                                    
crime in  the state.  She recalled that  similar legislation                                                                    
had not  been successful  in the past  due to  opposition to                                                                    
designating funds for an individual non-profit.                                                                                 
                                                                                                                                
Vice-Chair  Bishop   thought  the  committee's   action  was                                                                    
recognizing the needs of Alaskans. He supported the bill.                                                                       
                                                                                                                                
3:16:20 PM                                                                                                                    
                                                                                                                                
ART DELAUNE, GOVERNOR'S COUNCIL  ON DISABILITIES AND SPECIAL                                                                    
EDUCATION  (via teleconference),  spoke  in  support of  the                                                                    
bill,  which he  felt  would positively  impact the  state's                                                                    
most  vulnerable  constituencies.  He  thought  the  without                                                                    
vital legal services,  low-income Alaskans with disabilities                                                                    
would  be at  risk for  unfair treatment.  He discussed  his                                                                    
work as  an independent living advocate  and emphasized that                                                                    
often  individuals   with  disabilities  were  at   risk  of                                                                    
unscrupulous parties.  He commented on the  increased number                                                                    
of individuals below the poverty line.                                                                                          
                                                                                                                                
Senator  Micciche commented  on the  volunteer service  that                                                                    
went into ALSC. He  believed the underprivileged should have                                                                    
access to medical care. He supported the bill.                                                                                  
                                                                                                                                
Co-Chair  MacKinnon stated  that the  bill was  a compromise                                                                    
between the two bodies. It was  her hope that the bill would                                                                    
pass the Senate.                                                                                                                
                                                                                                                                
Vice-Chair Bishop  MOVED to  report SCS  HB 106(FIN)  out of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
SCS HB  106(FIN) was  REPORTED out of  committee with  a "do                                                                    
pass" recommendation and with a  new fiscal impact note from                                                                    
the   Department  of   Commerce,   Community  and   Economic                                                                    
Development; and  a new fiscal  impact note from  the Office                                                                    
of the Governor for Fund Transfers.                                                                                             
                                                                                                                                
3:20:22 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:21:57 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
CS FOR HOUSE BILL NO. 76(FSH)                                                                                                 
                                                                                                                                
     "An Act relating to the mariculture revolving loan                                                                         
     fund and loans and grants from the fund; and providing                                                                     
     for an effective date."                                                                                                    
                                                                                                                                
3:21:57 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon discussed  the  history of  the bill  in                                                                    
committee.   The  committee   had  considered   a  Sectional                                                                    
Analysis and had reviewed the fiscal notes.                                                                                     
                                                                                                                                
Vice-Chair   Bishop  MOVED   to  ADOPT   proposed  committee                                                                    
substitute  for CSHB  76, Work  Draft 30-LS0343\M  (Bullard,                                                                    
4/25/18).                                                                                                                       
                                                                                                                                
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
                                                                                                                                
Ms. Lucky discussed  the changes to the  bill. She explained                                                                    
that the first  time the committee heard the  bill there had                                                                    
been confusion  regarding loan  terms, which  was previously                                                                    
in Section  13 of  the bill.  She had  worked with  the bill                                                                    
drafter and  Sponsor, to clarify  the intent, which  was now                                                                    
in Section 12 of the bill.                                                                                                      
                                                                                                                                
Ms.  Lucky  discussed  an Explanation  of  Changes  document                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     The Senate Finance CS clarifies when payments and                                                                          
     interest accrual is required  see section 12 on page                                                                       
     5, lines 15-28.                                                                                                            
                                                                                                                                
         For the existing farm loans, the statute                                                                            
          is unchanged: the department cannot                                                                                   
         require payments for the first six years                                                                               
          of the loan. The department has the                                                                                   
          option of providing that interest                                                                                     
          not accrue during that period.                                                                                        
                                                                                                                                
         For the new hatchery loans: there are (1) no                                                                        
          payments and (2) no interest accrual for the                                                                          
          first six years of the loan. The department can                                                                       
          extend both for the first 11 years.                                                                                   
                                                                                                                                
     The  Senate Finance  CS also  removes the  authority to                                                                    
     make  grants from  the  revolving  loan fund.  Language                                                                    
     pertaining to  grants was located  on page 3,  lines 8-                                                                    
     13, of the previous bill.                                                                                                  
                                                                                                                                
Ms. Lucky  understood that  the CS would  have no  effect on                                                                    
the fiscal notes previously reviewed.                                                                                           
                                                                                                                                
3:25:24 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  WITHDREW her  OBJECTION. There  being NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
LIZ HARPOLD,  STAFF, REPRESENTATIVE DAN ORTIZ,  relayed that                                                                    
the sponsor was supportive of the changes to the bill.                                                                          
                                                                                                                                
Co-Chair MacKinnon asked for discussion of the fiscal note.                                                                     
                                                                                                                                
BRITTENY  CIONI-HAYWOOD,  DIRECTOR,   DIVISION  OF  ECONOMIC                                                                    
DEVELOPMENT, DEPARTMENT OF  COMMERCE, COMMUNITY AND ECONOMIC                                                                    
DEVELOPMENT,   stated  that   the  fiscal   note  from   her                                                                    
department was  unchanged from the  previous version  of the                                                                    
bill.                                                                                                                           
                                                                                                                                
Co-Chair MacKinnon asked  if the bill as proposed  in the CS                                                                    
would work for those looking for economic opportunities.                                                                        
                                                                                                                                
Ms.   Cioni-Haywood  answered   in   the  affirmative.   She                                                                    
explained  that the  CS would  allow for  hatchery loans  to                                                                    
take place, which was the request of the industry.                                                                              
                                                                                                                                
Senator  Stevens  observed  that  the  fund  was  small.  He                                                                    
wondered how  long the fund  could continue  without grants.                                                                    
He  was concerned  about continuation  of  the grants  would                                                                    
reduce the years to make use of loan funds.                                                                                     
                                                                                                                                
Ms. Cioni-Haywood  agreed that the loan  fund was relatively                                                                    
small and would need time  for repayment from hatchery loans                                                                    
for  the fund  to replenish  and revolve.  If the  money was                                                                    
taken  out in  the form  of grants,  the funds  did not  get                                                                    
returned and  the fund would  be reduced by $4.5  million to                                                                    
$5 million.                                                                                                                     
                                                                                                                                
Senator Stevens assumed that the  sponsor was in accord with                                                                    
removing the grant portion of the bill.                                                                                         
                                                                                                                                
Ms. Harpold answered in the affirmative.                                                                                        
                                                                                                                                
3:29:50 PM                                                                                                                    
                                                                                                                                
Vice-Chair Bishop  MOVED to report  SCS CSHB 76(FIN)  out of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
SCS CSHB  76(FIN) was REPORTED  out of committee with  a "do                                                                    
pass"  recommendation and  with one  new fiscal  impact note                                                                    
from  the Department  of  Commerce,  Community and  Economic                                                                    
Development, and  one new zero  fiscal note  from Department                                                                    
of Fish and Game.                                                                                                               
                                                                                                                                
3:30:23 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:31:51 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
CS FOR HOUSE BILL NO. 304(FIN)                                                                                                
                                                                                                                                
     "An Act relating to the Alaska microloan revolving                                                                         
     loan fund and loans from the fund."                                                                                        
                                                                                                                                
3:31:51 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon conveyed  that the  committee had  heard                                                                    
the  Senate version  of  the  bill on  April  10, 2018.  The                                                                    
committee  had heard  a  presentation on  the  bill and  had                                                                    
opened and  closed the public  hearing and had  reviewed the                                                                    
fiscal notes.                                                                                                                   
                                                                                                                                
Co-Chair MacKinnon  relayed that her office  heard a concern                                                                    
regarding  the   time-frame  of   whether  the   loans  were                                                                    
revolving  or not  based on  the  length of  the loan  being                                                                    
proposed  on page  2 of  the bill.  She asked  for committee                                                                    
discussion  before amendments  were  considered. There  were                                                                    
members  who wanted  a time  frame of  10 years,  and others                                                                    
that proposed 12 years.                                                                                                         
                                                                                                                                
3:33:33 PM                                                                                                                    
                                                                                                                                
Senator  von  Imhof  recalled previous  discussions  on  the                                                                    
bill. She  understood the state's perspective  of wanting to                                                                    
increase the  term from six  years to  15 years in  order to                                                                    
allow for cash  flow to develop in the industry;  as well as                                                                    
provide time for the borrower  to afford to make payments on                                                                    
the loan. She  referenced a lack of loan  applicants and the                                                                    
idea  that   increasing  the  amortization   schedule  would                                                                    
increase the affordability of the  loan. She considered that                                                                    
the longer the term, the higher  the risk was for the state.                                                                    
She thought  there could be  a compromise between 10  and 15                                                                    
years.                                                                                                                          
                                                                                                                                
Senator Micciche  stated that he  was in accord with  a term                                                                    
of twelve  years. He  observed that  other state  loan funds                                                                    
had significantly longer terms. He  hoped to see more use of                                                                    
the loan fund and more economic development from the fund.                                                                      
                                                                                                                                
Senator von Imhof MOVED to ADOPT Amendment 1:                                                                                   
                                                                                                                                
     Page 2, line 2, following "term of"                                                                                        
          DELETE "15"                                                                                                         
          INSERT "12"                                                                                                         
                                                                                                                                
There being  NO OBJECTION,  it was  so ordered.  Amendment 1                                                                    
was ADOPTED.                                                                                                                    
                                                                                                                                
Ms.   Cioni-Haywood  expressed   that  the   department  was                                                                    
supportive   of   the   amendment,   which   still   allowed                                                                    
flexibility   within  the   program.  There   would  be   no                                                                    
associated changes to the fiscal note.                                                                                          
                                                                                                                                
3:36:40 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:37:02 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair Bishop  discussed FN 1,  which was a  zero fiscal                                                                    
note  from Department  of Commerce,  Community and  Economic                                                                    
Development.  He read  from the  Analysis on  page 2  of the                                                                    
fiscal note:                                                                                                                    
                                                                                                                                
     If this legislation were to  pass a regulations project                                                                    
     would be required; the minimal  costs associated can be                                                                    
     absorbed by  current budgetary authorization.  There is                                                                    
     no  anticipated  fiscal  impact   to  the  Division  of                                                                    
     Economic Development from this bill.                                                                                       
                                                                                                                                
Vice-Chair Bishop  MOVED to ADOPT  MOVED to report  SCS CSHB                                                                    
304(FIN)  out of  Committee with  individual recommendations                                                                    
and the accompanying fiscal note.  There being NO OBJECTION,                                                                    
it was so ordered.                                                                                                              
                                                                                                                                
SCS CSHB 304(FIN)  was REPORTED out of committee  with a "do                                                                    
pass" recommendation and with  one previously published zero                                                                    
fiscal note: FN 1(CED).                                                                                                         
                                                                                                                                
3:38:14 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:40:55 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon  discussed the  agenda for  the following                                                                    
day.                                                                                                                            
                                                                                                                                
ADJOURNMENT                                                                                                                   
3:41:39 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:41 p.m.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
HB 304 Amendment 1 von Imhof.pdf SFIN 5/3/2018 2:30:00 PM
HB 304
HB 76 SCS FIN v. M Explanation.pdf SFIN 5/3/2018 2:30:00 PM
HB 76
HB 76 SCS FIN work draft version. M.pdf SFIN 5/3/2018 2:30:00 PM
HB 76
HB 106 SCS FIN work draft version. J.pdf SFIN 5/3/2018 2:30:00 PM
HB 106