Legislature(1993 - 1994)
03/22/1993 01:33 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE March 22, 1993 1:33 p.m. MEMBERS PRESENT Senator Steve Rieger, Chairman Senator Bert Sharp, Vice-Chairman Senator Loren Leman Senator Jim Duncan Senator Johnny Ellis Senator Judy Salo MEMBERS ABSENT Senator Mike Miller COMMITTEE CALENDAR SENATE BILL NO. 70 "An Act establishing a loan guarantee and interest rate subsidy program for assistive technology." HOUSE CONCURRENT RESOLUTION NO. 7 Relating to Alcohol-Related Birth Defects Awareness Week. PREVIOUS SENATE COMMITTEE ACTION SB 70 - See HESS minutes dated 3/22/93. HCR 7 - See HESS minutes dated 3/22/93. WITNESS REGISTER Gary Roth, President Denali State Bank - Fairbanks 119 North Cushman Fairbanks, Alaska 99701 POSITION STATEMENT: Testified in support of SB 70. Carolyn Morris, Administrative Coordinator Governor's Committee on Employment of People With Disabilities 3301 Eagle, #203 Anchorage, Alaska 99503 POSITION STATEMENT: Testified in support of SB 70. Stan Ridgeway, Deputy Director Vocational Rehabilitation Department of Education 801 West Tenth Street, Suite 200 Juneau, Alaska 99801-1894 POSITION STATEMENT: Testified in support of SB 70. Lynne Koral Southeast Alaska Independent Living 8800 Glacier Highway, Suite 236 Juneau, Alaska 99801 POSITION STATEMENT: Testified in support of SB 70. Pat Jackson, Legislative Staff to Representative Irene Nicholia Alaska State Legislature State Capitol Building Juneau, Alaska 99801-1182 POSITION STATEMENT: Gave sponsor statement for HCR 7. Suzanne Perry Division of Alcoholism and Drug Abuse Department of Health and Social Services P.O. Box 110607 Juneau, Alaska 99811-0607 POSITION STATEMENT: Testified in support of HCR 7. ACTION NARRATIVE TAPE 93-29, SIDE A Number 001 CHAIRMAN RIEGER called the Senate Health, Education and Social Services (HESS) Committee to order at 1:33 p.m. The first order of business was SB 70 (ASSISTIVE TECHNOLOGY LOAN GUARANTEES). SENATOR DUNCAN, sponsor of SB 70, explained the bill would establish the assistive technology loan guarantee program to assist people with disabilities. Equipment would be purchased to enhance employment possibilities and independent living for people with disabilities. Number 028 GARY ROTH, President, Denali State Bank - Fairbanks, testified in support of SB 70 and its companion bill HB 139. He asked the legislature to approve the program. As a long time banker and past president of the Fairbanks Resource Agency, he feels that the loan guarantee and interest subsidy program will assist many of the handicapped and developmentally disabled people to lead a productive life. Mr. Roth said the amount of pride and well being that is displayed by these people when they can contribute to society, rather than being a ward of society, is tremendous. Many of these people have completed training programs which have given them the necessary skills to become independent. Unfortunately, because of their past disabilities or handicaps, they have been unable to establish credit of any kind. SB 70 will assist financial institutions in making credit available to them. Additionally, the families of some of the disabled people may have had undue hardships in supporting this family member and this may have had a derogatory effect on their credit. With proper counseling and direction of the agency or department, funds could be made available through the guarantee program for personal computers, home workshops, handicapped accessible vehicles, and other adaptive or assistive devices. The program will also enable financial institutions to extend longer loan terms over what normally would be considered a maximum term allowable for personal loans. Mr. Roth noted the term is usually no longer than eighteen months. He explained the interest subsidy may or may not always be necessary. This will depend on the individual circumstances of each case in that it will have an effect in the amount of the proposed monthly installments on any given loan. He said it may mean the difference between qualifying under the bank's debt income ratios for such credits. Mr. Roth urged the legislation be passed. Number 083 CAROLYN MORRIS, Administrative Coordinator, Governor's Committee on Employment of People With Disabilities, testified in support of SB 70. She said there are important things that assistive technology can do for individuals who experience disabilities. She explained that through Assistive Technologies of Alaska and the Division of Vocational Rehabilitation, there is an assistive technology loan program so that individuals can come and try different types of adaptive equipment to see what will work for them before they make an investment in actually purchasing something for themselves. With the passage of the bill as well as the assistance of the agencies, this goes a long way for a lot of people in Alaska. Number 113 STAN RIDGEWAY, Deputy Director, Vocational Rehabilitation, Department of Education, said the department supports SB 70. There are approximately 4,000 Alaskans who are in need of technology to assist them with work, play, and living independently. Many of the people qualify for technology in some way through various agency's insurance. He noted some private individuals also help pay for devices. Mr. Ridgeway explained the loan subsidy and guarantee will enable individuals to have the ability to get a loan so that they can purchase the devices themselves. He referred to the fiscal note and said it shows that Assistive Technologies of Alaska, through their federal funding, has requested $100 thousand of seed money for the loan program. Mr. Ridgeway said by using the subsidy, guarantee, and the $100 thousand, it could possibly leverage about $750 thousand from the banking industry for loans. SENATOR LEMAN referred to the seed money and asked if he meant that the money can be used to leverage other money from private lenders or if there is going to be an ongoing requirement for the program to request money from the state. MR. RIDGEWAY said it is his understanding that other states that have similar programs have an excellent repayment rate and there have been very few defaults. He said it is his understanding the $100 thousand of initial seed money would probably be the only money that would be needed to keep the loan program going, even with the buy down interest rates. CHAIRMAN RIEGER said he assumes that it would be the Division of Vocational Rehabilitation who would determine whether it could do a guarantee or an interest buy down. He asked Mr. Ridgeway if the division has a draft plan of how this would be implemented. MR. RIDGEWAY explained the Division of Vocational Rehabilitation oversees the Assistive Technology Program which is a federal grant program that has a five year life span. Their staff has been working with some of their consumer committees to establish the plan. He said he thinks that what the Assistive Technology Program is really interested in doing is putting together a package that would assist the bank that is helping the individual apply for a loan, to determine if there is another source or place to obtain equipment without applying for a loan. CHAIRMAN RIEGER asked Mr. Roth how the interest buy down would work. He said if the rate you want to get to is, for example, 5 percent, how would the Division of Vocational Rehabilitation and a bank work out whether it is a 9 percent loan that is bought down to 5 percent or a 13 percent loan bought down to 5 percent. MR. ROTH said it would have to be established through negotiations. He said he doesn't think that the banks would want to get involved in the program if they were going to make it part of their high earning portfolio. He said they want to assist the people and assumes that they would try to arrive at a normal competitive rate. He noted that today's market rate for consumer lending is between 7.5 percent and 10.5 percent. Number 222 LYNNE KORAL, employed by Southeast Alaska Independent Living, explained she is a consumer of services. She showed committee members a talking clock and indicated it is part of her organization's lending library that is currently being developed. She showed committee members a small item called `Braille and Speak' which is a computer that has a memory computer chip. Ms. Koral referred to the loan guarantee fund and said it would help people with disabilities to be able to purchase and maintain or attain employment. She informed the committee that she purchased an IBM compatible computer, at a cost of $1,300, which speaks to her. Ms. Koral urged the committee to pass SB 70. SENATOR LEMAN asked Ms. Koral how much the talking clock cost. Ms. Koral indicated the cost is about $20. Senator Leman asked how much it costs to train a seeing eye dog. Ms. Koral said approximately $25 thousand. She explained that most dogs are trained with private foundation donations and donations from concerned citizens. MS. MORRIS asked if a parameter has been established as to what might be the minimum or maximum loan that may be obtained. MR. RIDGEWAY said he isn't sure of how much a person may borrow but said initially $10 thousand had been mentioned. SENATOR DUNCAN said the legislation doesn't specify a specific amount. It would be up to the department to help determine an amount depending on what type of equipment will be purchased. He noted page 2 sets out the term of the loan. Mr. Ridgeway noted a fully equipped accessible van for a person who uses a wheelchair would run from $30 thousand to $40 thousand. He noted that a big factor is the person's ability to repay a loan which would also govern how large the loan can be. CHAIRMAN RIEGER said before the bill goes to the Senate Finance Committee he would like a letter from the department saying what the parameters of the loan will be and how the department will determine whether they will do a guarantee or an interest buy down, and what the guidelines are. Number 332 There being no further testimony, SENATOR DUNCAN moved to pass SB 70 out of the Senate HESS Committee with individual recommendations. Hearing no objection, the motion carried. Number 336 The next order of business was HCR 7 (ALCOHOL-RELATED BIRTH DEFECTS AWARENESS WEEK), sponsored by Representative Nicholia. PAT JACKSON, legislative staff to Representative Irene Nicholia, said many years have been spent working on the issues of alcohol-related birth defects. Legislation has been passed that required school districts do in- service. The Division of Alcoholism and Drug Abuse has made treatment to pregnant women a priority. There is a treatment program in Anchorage for pregnant women and there are Fetal Alcohol Syndrome (FAS) awareness groups. Ms. Jackson indicated that in the committee member's packets there is a 1989 study which shows the economic impact of a FAS child. She indicated the lifetime cost for a FAS child is $1.4 million. The study didn't include estimates for physical problems such as facial problems, kidney problems, dental work, etc. The Center for Disease Control has completed a study giving new estimates of the rate of FAS in Alaska at 2.1 to 6.6 children per every 1,000. Ms. Jackson urged support for HCR 7. SENATOR LEMAN indicated support for the resolution as it draws more attention to FAS. SUZANNE PERRY, Division of Alcoholism and Drug Abuse, Department of Health and Social Services, said she is the former FAS coordinator for the division. She pointed out that FAS was officially identified by the American Medical Society in 1973. She said there are still doctors who encourage pregnant women to have a drink or two as it will relax them. She said there must be three criteria to have a diagnosis of FAS and if any one of those criteria is missing, then the diagnosis, if any, may be Fetal Alcohol Effect (FAE). One criteria is retarded growth prior to birth and after birth. She said there are specific facial features and showed the committee some photos. There is always central nervous system involvement, most commonly mental retardation. Ms. Perry continued to show the committee pictures, from the University of Washington, relating to FAS and discussed problems and physical features of FAS children. Ms. Perry said once a woman quits drinking, she can't have a child with FAS in a subsequent pregnancy. She discussed treatment centers for women who drink such a Reflections which is a twelve bed women's only treatment facility in Anchorage. Dena Acoy, which is jointly funded with the Indian Health Service and the Division of Alcoholism and Drug Abuse, is an 18 bed facility where women can stay throughout their entire pregnancy and up to six weeks postpartum. Ms. Perry said she believes that FAS is like drunk driving. Until society shares some of the responsibility, we will continue to have serious problems. CHAIRMAN RIEGER asked Ms. Perry what she can confirm about health professionals advising that moderate drinking is alright during pregnancy. MS. PERRY said she has not talked to a doctor that says that, but she has heard statements from women that have seen their doctors within the last two years who have been told that a couple glasses of wine or beer will relax you. The Center of Disease Control, in cooperation with the Department of Health and Social Services, is running a five year program in Anchorage to do surveillance to find out what the real rates for FAS are throughout the state. Part of the project is to do a knowledge, attitudes, and behavior survey for pediatricians and obstetricians. Chairman Rieger indicated he had a proposed amendment that the resolution be sent to the Board of Nursing, the State Medical Boards, and the Board of Certified Direct-Entry Midwives. He moved Amendment #1. SENATOR SALO suggested including the Board of Nurse Practitioners. Chairman Rieger referred to the Alaska Statutes and said he doesn't believe there is a Board of Nurse Practitioners but there are definitions of a "nurse practitioner." Hearing no objection, to Amendment #1, the motion carried. Number 577 Senator Salo moved to pass HCR 7 out of the Senate HESS Committee with a `Do Pass' recommendation. Hearing no objection, it was so ordered. There being no further business to come before the Senate HESS Committee, Chairman Rieger adjourned the meeting at 2:20 p.m.