Legislature(1993 - 1994)
01/25/1994 01:35 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE LABOR AND COMMERCE COMMITTEE January 25, 1994 1:35 p.m. MEMBERS PRESENT Senator Tim Kelly, Chairman Senator Steve Rieger, Vice-Chairman Senator Bert Sharp Senator Georgianna Lincoln Senator Judy Salo OTHERS PRESENT Senator Steve Frank Representative Sean Parnell COMMITTEE CALENDAR SENATE BILL NO. 184 "An Act relating to civil liability of employees and volunteers of certain nonprofit corporations; and providing for an effective date." SENATE BILL NO. 70 "An Act establishing a loan guarantee and interest rate subsidy program for assistive technology." HOUSE BILL NO. 180 am "An Act relating to the residential housing inspection requirements of the Alaska Housing Finance Corporation." HOUSE BILL NO. 294 "An Act extending the termination date of the Board of Pharmacy." PREVIOUS SENATE COMMITTEE ACTION SB 184 - See Labor & Commerce minutes dated 4/13/93. SB 70 - See HESS minutes dated 3/22/93. HB 180 - See Community & Regional Affairs minutes dated 4/22/93 and 4/24/93. HB 294 - No previous action. WITNESS REGISTER Mike Ford, Attorney Legislative Legal Counsel 130 Seward Street, Room 404 Juneau, Alaska 99801 POSITION STATEMENT: Drafted SB 184. Roxanne Stewart, Aide Senator Jim Duncan State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: introduced SB 70. Stan Ridgeway, Deputy Director Vocational Rehabilitation Department of Education 801 W. 10th St., Suite 200 Juneau, Alaska 99801-1894 POSITION STATEMENT: Supported SB 70. Mark Fresquez Southeast Alaska Independent Living 8800 Glacier Highway, Suite 236 Juneau, Alaska 99801 POSITION STATEMENT: Supported SB 70. Earl Clark Southeast Alaska Independent Living 9163 Parkwood Juneau, Alaska 99801 POSITION STATEMENT: Supported SB 70. Steve Priddle 801 Lincoln Street Sitka, Alaska 99835 POSITION STATEMENT: Supported SB 70. Jerry Kainulainen P.O. Box 1629 Sitka, Alaska 99835 POSITION STATEMENT: Supported SB 70. Elena Kilbuck Southeast Alaska Independent Living 1621 Tongass Ketchikan, Alaska 99901 POSITION STATEMENT: Supported SB 70. Nancy Anderson Southeast Alaska Independent Living Juneau, Alaska 99801 POSITION STATEMENT: Supported SB 70. Ken Dean P.O. Box 210529 Auke Bay, Alaska 99821 POSITION STATEMENT: Supported SB 70. Kay Klose P.O. Box 22164 Juneau, Alaska 99802 POSITION STATEMENT: Supported SB 70. Joe Tompkins 8221 N. Douglas Highway Juneau, Alaska 99801 POSITION STATEMENT: Supported SB 70. Connie Anderson Southeast Alaska Independent Living P.O. Box 34376 Juneau, Alaska 99803 POSITION STATEMENT: Supported SB 70. Patty Baumgartner Southeast Alaska Independent Living P.O. Box 27491 Juneau, Alaska 99801 POSITION STATEMENT: Supported SB 70. David Harding, Aide Representative Eileen MacLean State Capitol, Room 507 Juneau, AK 99801-1182 POSITION STATEMENT: Introduced HB 180. Robert Brean, Director Rural Housing Division Alaska Housing Finance Corporation Department of Revenue 520 E. 34th Anchorage, Alaska 99503 POSITION STATEMENT: Supported HB 180. Duane Wise Alaska Housing Finance Corporation Department of Revenue 520 E. 34th Anchorage, Alaska 99503 POSITION STATEMENT: Supported HB 180. Karl Luck, Director Division of Occupational Licensing Dept. of Commerce & Economic Development P.O. Box 110806 Juneau, Alaska 99811-0806 POSITION STATEMENT: Supported HB 294. ACTION NARRATIVE TAPE 94-2 SIDE A Number 001 CHAIRMAN TIM KELLY called the Labor and Commerce Committee meeting g to order at 1:35 p.m. SENATOR KELLY introduced SB 184 (VOLUNTEERS AND EMPLOYEES OF NONPROFITS) and invited the sponsor, SENATOR STEVE FRANK, to review his bill. SENATOR FRANK gave some past history on the bill and made the committee aware the original bill proposed to make volunteers and employees of non-profit corporations in Alaska immune to civil liability for damages incurred while they were working on the job. He explained subsequent work on the bill has produced a proposed committee substitute to eliminate "employees" from personal liability, and he referred to Subsection (b) on page 1 of the proposed committee substitute for SB 184. SENATOR KELLY called the committee's attention to the language on page 2, line 11, Subsection (d) which reads: "This section does not preclude liability for civil damages as a result of gross negligence, recklessness, or intentional misconduct." He asked for a motion to adopt the committee substitute. SENATOR RIEGER questioned the comparison of the original bill to committee substitute change on page 2, lines 5 through 10, and expressed some discomfort to extending immunity to the corporation. He used AHFC as an example of a non-profit corporation which might benefit from the provision. Number 053 SENATOR FRANK was not sure the AHFC was a good example of a non- profit corporation as far as the compensation of the board, and he couldn't think of anyone volunteering at AHFC. SENATOR RIEGER asked for clarification of the changes in question, and SENATOR FRANK asked the bill drafter, MIKE FORD, to answer questions. MR. FORD drew attention to the change in the title of the proposed committee substitute for SB 184, which he explained was because of Subsection (c) on page 2. He also explained the new provision would extend immunity to corporations and the amount of damages that could be recovered to the amount of the insurance. MR. FORD opined SENATOR RIEGER was correct. SENATOR KELLY questioned whether this had been done on purpose. His aide, JOSH FINK, said it was an amendment before the committee last session. He explained the issue was raised as a result of a letter from the Office of ATTORNEY GENERAL COLE in a letter dated April 28, 1993, and placed in the bill packets. MR. FINK reviewed the points in the letter concerning the liability of the non-profit corporations as compared to the volunteers. SENATOR KELLY questioned MR. FORD whether Subsection (c) only restricts the liability of the corporation concerning the volunteer. MR. FORD answered it was damages resulting from an act or omission of a volunteer that would impact the corporation. SENATOR FRANK posed a scenario where a volunteer commits simple negligence and the non-profit corporation was sued, and the damages were limited to $500 thousand. MR. FORD said he was correct. Number 096 SENATOR SALO asked if the $500 thousand was in statute as a required amount of insurance. SENATOR FRANK said she was basically correct, and MR. FORD said it was a floor, but it could be more. SENATOR KELLY clarified a non-profit corporation would not get immunity for their volunteers unless they had insurance in the amount of $200 thousand, and MR. FORD confirmed the corporation would need liability insurance. MR. FORD suggested another wrinkle in which non-profit corporations could be exempt from the insurance requirement if they have operating costs of less than $100 thousand, and they are also exempt under federal law. He described a situation in which a non- profit is not insured, but would be immune. SENATOR KELLY led a short discussion on these provisions with committee members and suggested it was the small non-profits that have more dependence on the volunteers. He said it would solve the problem of exempting the non-profit corporation, AHFC. SENATOR LINCOLN questioned whether all small corporations would be immune if there was gross negligence or recklessness. SENATOR SALO asked MR. FORD for a legal difference between the terms, "simple negligence" and "gross negligence." MR. FORD spoke of extensive review by the courts, and concluded it is a matter of degree in the conduct. He gave an example of the meaning. SENATOR SHARP wanted assurance it wold not exempt any non-profit corporations for actions by any person receiving compensation - for volunteers only. MR. FORD said he was correct. SENATOR KELLY asked for a motion on the committee substitute. Number 149 SENATOR SHARP moved to adopt CS FOR SENATE BILL NO. 184(L&C). Without objections, so ordered. SENATOR SHARP moved to pass CS FOR SENATE BILL NO. 184(L&C) (VOLUNTEERS AND EMPLOYEES OF NONPROFITS) from committee with individual recommendations and a zero fiscal note. Without objections, so ordered. SENATOR KELLY introduced SB 70 (ASSISTIVE TECHNOLOGY LOAN GUARANTEES) by SENATOR JIM DUNCAN, and invited his aide, ROXANNE STEWART, to present the bill. MS. STEWART thanked SENATOR KELLY for hearing the bill, even though SENATOR DUNCAN was not able to be present. She explained their office had received a new proposal from the Division of Vocational Rehabilitation, a copy of which was given to JOSH FINK, aide to SENATOR KELLY. MS. STEWART also explained it would necessitate changes to the bill if the committee chooses to accept the changes. MS. STEWART reviewed the provisions of the legislation which would establish the Assistive Technology Loan Guarantee Program, would assist persons with disabilities to purchase durable equipment, adaptive aids, and assistive devices to obtain or maintain their employment or to live more independently. She explained the bill had included employers in the program, but the new proposal would eliminate the employers from the program. MS. STEWART suggested the committee look at SB 70 as a job's bill for persons with disabilities. Using the federal receipts, which are referenced in the fiscal note, she said the program would allow the Division of Vocational Rehabilitation to guarantee loans made to individuals with disabilities by private lending institutions. MS. STEWART explained the loan recipient must be unable to obtain the needed equipment through Vocational Rehabilitation, MEDICAID, MEDICARE, or other sources such as insurance companies. Under the bill, a loan could be used for purchase or modification of a vehicle, if the person lives independently or with their parents or guardian, and has been employed a minimum of 90 days before the initial loan request. MS. STEWART said the present legislation requires the Division of Vocational Rehabilitation to determine the applicant's ability to make loan payments and assume other responsibilities normally carried out by lending institutions. She explained this would be changed in the new proposal from the Division of Vocational Rehabilitation, and she further explained the proposal would clarify the respective responsibilities of the lenders, the Division of Vocational Rehabilitation, and establish a loan committee to administer the program. MS. STEWART reported the Division of Vocational Rehabilitation commissioned a study during the interim to determine the most effective means of implementing the loan program, based on what works in other states, which, she said, was the basis of the bill before the committee. In the proposal the participating lending institutions would process the loans using their standard procedures; however, if the borrower is not able to afford the payments due to the interest rate, the lender would refer the person to the Assistive Technology Loan Guarantee Program for an interest rate buy down. MS. STEWART said she was not able to get the suggested amendments drafted before the committee meeting, but she offered assistance to work with SENATOR KELLY'S staff if he chose to make the amendments. Number 199 MR. FINK explained to SENATOR KELLY the new proposal was delivered just prior to the committee meeting. SENATOR KELLY said a committee substituted would be drafted with the help of all of the participants in the legislation, but in the mean time he planned to continue the testimony on SB 70. Next, SENATOR KELLY called on STAN RIDGEWAY, Deputy Director for the Division of Vocational Rehabilitation, and asked if he wished to testify, or present his position paper. MR. RIDGEWAY said he was willing to work with staff on the changes to the committee substitute and leave the time for testimony. MARK FRESQUEZ testified as a hearing impaired person in support of HB 139 (ASSISTIVE TECHNOLOGY LOAN GUARANTEES), a companion bill to SB 70. He explained his support in terms of the benefits, not only to the persons with disabilities, but to their families, employers, co-workers, and the general public. MR. FRESQUEZ explained how he would be helped, not only in his world of work, but his social life. He explained how this assistance impacted the hearing impaired person working in an office, who, because they could answer the phone with a TDY system could get a promotion - and a feeling of pride. Number 261 EARL CLARK, next to testify, showed his disability in a slow, halting walk to the microphone. He works for the Southeast Alaska Independent Living Center with people who are disabled to varying degrees. MR. CLARK was enthusiastic in his praise that with assistive technology, namely a computer, he was able to become computer literate and save his career. He said the program provides technology to people who have the possibilities of employment and make them productive citizens of society. MR. CLARK said SB 70 was really an investment with an unlimited ability to help people who need help at crucial times in their lives. Number 294 SENATOR KELLY asked MS. STEWART if the program would allow the purchase of computers. She said it did. SENATOR SALO questioned the availability of the technology to the person but not to the employer. MS. STEWART said that was correct, and referred her question to MR. RIDGEWAY. MR. RIDGEWAY explained, under the Assistive Technology of Alaska Advisory Board (ATA), the employer has a separate obligation to provide technology to a person with a disability and have tax advantages to supply the equipment if it is for a person with a disability. He also explained the adaptive equipment needed by the employer is relatively simply, and he gave an example. MR. RIDGEWAY said the assistive technology bill is mainly aimed at helping individuals rather than businesses or corporations. SENATOR KELLY next turned to the Teleconference Network to take testimony from Sitka before returning to Juneau. STEVE PRIDDLE testified as a consumer and in favor of SB 70. He described his disability as a dual sensory lock, both blindness and hearing impairment. He explained he was presently in college, going for a degree in law, and able to maintain a 3.2 grade point. He gave adaptive technology credit for his success, and he stressed a significant need in Alaska for legislation such as SB 70 to help those people who need assistive technology. JERRY KAINULAINEN, testifying from Sitka, explained he was also a user of assistive technology, since his means of mobility is with a wheelchair, aided by a wheelchair lift in his van. He listed reasons for his support for SB 70 and the House companion bill: assisted communications, computer applications, environmental control systems, home or work site modifications, hearing and vision aides, mobility applications, and adaptive toys. MR. KAINULAINEN referred to a study conducted by the Institute of Social and Economic Research (ISER) in the Spring of 1991, which he explained documented a considerable need for the assistive technology. He quoted the survey as finding that 61% of the respondents to the study paid for their own devices; next being 13% with payments by private insurance companies, 10% from families, making it 84% altogether from these sources. He quoted other statistics to support SB 70. MR. KAINULAINEN explained there were similar bills in other states with programs doing very well with low default rates in most of the programs. Number 393 Hearing no questions from committee members, SENATOR KELLY turned to Ketchikan to hear ELENA KILBUCK. MS. KILBUCK introduced herself as working for the Southeast Alaska Independent Living program and explained there were three consumers and two citizens in Ketchikan, who agree that SB 70 is an opportunity the community can use, and she explained their needs. While a person was wheeling forth in her chair to testify, JOE TOMPKINS explained how the committee room was not accessible. SENATOR LINCOLN agreed this was a good point, and SENATOR KELLY wondered how she had gotten into the building. SENATOR LINCOLN said a portable mike was needed. NANCY ANDERSON, who was unable to maneuver behind the table, explained she was a member of the Assistive Technologies of Alaska Council and the Southeast Alaska Independent Living Board. She testified as a consumer that the bill was more than a good thing to do, it would likely get people employed. MS. ANDERSON brought up the problem of not being able to get to an interview for a job because of an inadequate vehicle, or not having a wheelchair. She explained, in her own case, she presently has no transportation since her disability grew out of her car, and she is now dependent on other means of transportation. MS. ANDERSON said there would be an increase in her activities if she had a lift equipped van, but she was told the insurance company would not pay for that kind of equipment, since it isn't directly medically related. Number 447 MS. ANDERSON explained she has had assistance from Vocational Rehabilitation, but they have a limit on how much they can spend. The lift on the van would cost $12 thousand, but Vocational Rehabilitation can only pay $5 thousand. She said there were many disabled people in a situation where they have exhausted all of their resources. MS. ANDERSON continued discussing disability problems such as being able to purchase a special kind of blanket for those who can't maneuver under a heavy blanket. She concluded her testimony by stressing the need in the State of Alaska for adaptive technology. SENATOR SALO asked MS. ANDERSON whether there should be a maximum per individual using the loan fund. MS. ANDERSON thought there was limit. MS. STEWART opined there was a $10 thousand limit, but that provisions should be removed in a committee substitute, with the committee in Vocational Rehabilitation deciding on the maximum. SENATOR KELLY clarified the payment schedule, but said there was no limit. He discussed with SENATOR SALO and MS. ANDERSON the limits on the funding for $10 thousand wheelchair lifts, and MS. ANDERSON suggested a mechanism to make funding depend on the pot of money available. She thought it was better to help a significant number of people, even if they had to pay part of the cost of the adaptive equipment themselves. SENATOR SHARP thought the $100 thousand was to be used to subsidize interest reductions and to leverage to a larger amount. MS. STEWART quoted the Assistive Technology Council as saying they would put $100 thousand annually into the fund. SENATOR KELLY asked if federal funding was in the legislation, and there was reference to the fiscal note. MS. ANDERSON explained it would not be an interest free loan, which would provide additional money to the fund, and she cited an increase in funds in other states. KEN DEAN, an Auke Bay consumer, expressed concern for the potential limits on individual loans, and noted the cost of his wheelchair was $13 thousand plus $12 thousand for the lift in his van, all paid by him or his insurance company. These assistive devices have provided him with ongoing employment for the last five years, along with providing the college education MR. DEAN needed to pursue his career. MR. DEAN explained he was fortunate in that he previously had a good paying job until disease took his mobility away, but he was able to cross train and retrain through the university system. He was able to land a good job with a caring employer, who has helped him with his purchase of assistive devices. MR. DEAN hoped the legislation would help other disabled people to make suitable financial arrangements to open an area of accomplishments - instead of being housebound. SENATOR KELLY and SENATOR RIEGER discussed the passage of SB 70 from the HESS Committee in the original form. Next to testify was KAY KLOSE, an independent living specialist working throughout Southeast communities providing advocacy and case management services. She also returned to the 1991 survey conducted by ISER, which found there were between twenty and twenty-three thousand people who were disabled, but the study did not include those disabled people in institutional settings. MS. KLOSE said the survey also indicated that 58% of Alaskans, who need assisted technology do not have access to it, and rural Alaskans represent the largest unserved population. MS. KLOSE said this failure to have appropriate technology minimizes people's lives and their abilities to contribute as inclusive, productive members of society. She claimed there were over 40 thousand assistive technology devices available today, and she listed the aids in mobility, communication, adaptive computers, electronic systems, all kinds of prothesis, vehicle modification, and recreational devices such as used at Eaglecrest. MS. KLOSE said the cost for these devices was very expensive, and she reviewed the cost of some of them. TAPE 94-2 SIDE B Number 001 MS. KLOSE continued to discuss the improvement of accessibility, the employment and promotion of disabled persons, the reduction of worker's compensation costs, and the need to develop additional work forces. She explained persons with disabilities, families, and employers would be able to make direct application to their local bank for this loan. MS. KLOSE closed her remarks by explaining there was no cost to the state budget and the federal funds would guarantee up to 90% of the loan principal amount. She said she was the only person not disabled in her office, and she was amazed at what the staff was able to do, provided they have assistive technology available to them. SENATOR KELLY continued to invite others to speak to the committee. JOE TOMPKINS thanked the committee for their time. He suggested to the members they use a wheelchair for a week, wear a blindfold for a day, or plug their ears to experience the difference in trying to do all the things they do during the day. Because of a non-profit organization and volunteers, MR. TOMPKINS described how he was able to go skiing for the first time last Saturday at Eaglecrest, which was something he had never done before. He praised the volunteers who happily helped him ski. Without Vocational Rehabilitation, MR. TOMPKINS would not have been able to testify, and he explained the doors on his house had to be widened to accommodate his wheelchair. He asked the committee to pass SB 70 because there were many more things he wanted to do. MR. TOMPKINS described how the set-up of the committee room did not consider wheelchairs or blind people. He urged the committee members to be more understanding of the challenges facing the disabled. Number 045 Next to testify was CONNIE ANDERSON, who is hearing impaired. She introduced herself as the Executive Director of Southeast Alaska Independent Living, and the current Chair of the State of Alaska Independent Living Council, and she explained the services provided by both of these groups. MS. ANDERSON reviewed the intent of the Assistive Technology Loan Guarantee and Interest Subsidy program, and how the program enables the disabled to purchase assistive technology equipment which is necessary to their employment and/or their independence. MS. ANDERSON explained that with the advent of technology in the work place and the community, it has become more critical that people with disabilities have the same opportunities to purchase and utilize whatever assistive or adaptive technology necessary to assist them with daily living and employment. She gave examples of "high-tech" devices such as computers, reader/scanners, and speech synthesizers. MS. ANDERSON also referred to the ISER research conducted from November 1990 to January 1991, in which is was found there were approximately 22,000 persons in Alaska who experience a disability. This figure did not include the disabled in institutions or those without phones or deaf. She quoted the study's estimate that over fourteen thousand of the people in the study could benefit from the use of assistive technology equipment especially designed for their needs. MS. ANDERSON also quoted from the ISER study that the most common reason why this assistive technology equipment is not used is that people cannot afford the cost of the special equipment. In addition, MS. ANDERSON said the survey documented that Alaska natives with disabilities and rural Alaskans with disabilities not only constituted a greater need for all types of assistive technology but it represented the largest unmet need. She reviewed the most common types of equipment such telecommunication devices for the deaf, (TDD) which MS. ANDERSON said she used to answer the telephone. Number 117 In her final words of support for SB 70, MRS. ANDERSON said, "This initiative has no immediate impact on the current state budget. It is anticipated that federal funding of approximately $100,000 will serve as seed money to this program. These federal monies will guarantee up to 90% of the loan principal amount or subsidize the interest of the loan to a state or federally chartered financial institution. Persons with disabilities, their families, and their employers will be able to make a direct application to their local bank for an assistive technology loan." SENATOR LINCOLN asked for a copy of MS. ANDERSON'S testimony. SENATOR LINCOLN clarified with MR. RIDGEWAY that 38% of those with disabilities were Bush Alaska residents, and she gave the example of helping a constituent who needed a stroller to use for a disabled child. She described the difficulty in securing both the certification from an Assistive Technology Resource Center and the application for the low-interest, long term loan, because there are no banks or eligibility offices in the Bush. She hoped this would be resolved. Number 164 SENATOR KELLY next called on PATTY BAUMGARTNER, who is sight impaired and accompanied by her working dog. MS. BAUMGARTNER explained she was a coordinator for older, blind Alaskans, including those with low vision. In reference to the problems outlined by SENATOR LINCOLN, she described the extent of an out-reach program into the rural areas for information and referral. MS. BAUMGARTNER told of the frustrations of going from being a sighted person to not being able to read anything, but she described scanning devices to allow her to read any typed print. She also described other devices connected to a computer that would talk to her, and how important these devices were to her work. MS. BAUMGARTNER talked about the importance of being able to purchase these devices, but how you lose income when you lose your eye sight. She said you can't get a conventional loan to buy an unconventional device, and she outlined the problems of trying to persuade a bank to loan money to a disabled person. She also talked in terms of wanting to be an asset rather than a liability to society, and how it can be accomplished with an affordable loan. SENATOR KELLY said staff would work together to develop a committee substitute, and he posed questions about all phases of the loans, restricting the money, and the availability of the funding. He thought the banking terms would have to be strengthened, and the problems with foreclosing on a loan from a disabled person. SENATOR KELLY expressed concerns that some banks might not even want to make these loans, unless there was encouragement to do so. He indicated the committee would work on a committee substitute to the persons who testified. Number 224 SENATOR SALO returned to MS. BAUMGARTNER to ask her how she handles her paperwork load now. MS. BAUMGARTNER said she presently has an employed reader, but she also described a working agreement with many people who generate the paper to send it on a diskette. She explained she has Wordperfect with Windows on her computer at work, and when she inserts the diskette, her computer talks to her. MS. BAUMGARTNER said it was a mutual cooperation with other agencies such as the City & Borough of Juneau. She described how some of her information comes to her on cassette. SENATOR SALO asked about the price of the computer that talks, and MS. BAUMGARTNER answered that the one she has at home, an Apple IIGF, is about $5 thousand. She described other types of computers as well as software that turns the spoken word into print and to braille which was $195. She thought there were many marvelous programs on the market now for disabled persons and for bilingual persons. SENATOR SALO asked about her dog's name, and MS. BAUMGARTNER introduced her seeing eye dog, Snoopy. Number 259 CONNIE ANDERSON asked to comment on the computers, the financing, and the need for ready access in their office. MS. BAUMGARTNER described how some people in their fifties are loosing both their eye sight and their jobs - and they are not ready to retire. The problems of access and cost can turn a person into a liability, and she explained how she helps them get a piece of equipment to help them remain productive. SENATOR SHARP asked about the maximum allowable and running afoul of restrictions on federal money. SENATOR KELLY clarified there presently was no "maximum allowable" in SB 70, and he asked MR. RIDGEWAY if anything would preclude buying a 35 foot seiner with assistive technology on it. MR. RIDGEWAY discussed the process of the loan committee, and he reminded the committee the loan had to be repaid. He said it was difficult to think in terms of buying a boat as an assistive technology device, but he thought it may come up. He thought the loan committee would limit the loans to insure it was helping the person to live independently and to work. Number 310 In reading the bill, SENATOR SHARP decided there was a limitation to the payment period of four to six years. MR. RIDGEWAY explained that last year in the HESS Committee, SENATOR RIEGER brought up many of the technical questions on how to manage the loan. He noted the President of the Alaska Banker's Association testified in favor of SB 70. He said forty two other states have these loan programs, and three of the states have capitalized their loans through federal funds, which is the way the Administration wants to structure the loan program in SB 70. SENATOR KELLY questioned which banks in Alaska would provide these loans, and MR. RIDGEWAY answered that banks were supporting the loan legislation because of their requirement for community reinvestment. MR. RIDGEWAY also described the difficulty banks had in repossessing equipment purchased for the disabled, but the bank are in agreement because the loans are guaranteed at 90% and can be claimed as a community reinvestment project. SENATOR KELLY clarified it was a loan program, not a welfare program, and he explained the collateral side of the program. Number 350 MS. ANDERSON said that banks had looked at the track records of other states with similar programs, which claim a spectacular response and low default rates in relation to other consumer loans. SENATOR KELLY said he would like to see the results from some of the other programs in terms of limits on loans, interest rates, origination fees, and financial institutions. He asked MS. STEWART if the program was limited to banks, or did it include credit unions. She explained it was "lending institutions," and they concluded it would be credit unions, too. MS. ANDERSON pointed out, in the example of the seine boat, the loans are not structured to purchase the boat, but the assistive technology could be purchased on a boat. She also reviewed the loan procedures for handling the debt load of the prospective borrower. SENATOR KELLY explained the legislation would allow a bank to loan on a van plus the modifications, but it would be difficult to purchase many of these large ticket items with the $100 thousand funding available, even when leveraged up to $750 thousand. He wondered if the fishing boat would qualify as durable goods, and he was concerned about the limited amount of money. SENATOR KELLY wanted to see more definition in the bill. MR. RIDGEWAY thought an answer to his concerns was in taking out the employer as a recipient of an Assistive Technology Loan. SENATOR KELLY agreed the program was a good idea and the committee should work on a draft on which all participants could agree, and go forward from there. Number 401 SENATOR LINCOLN asked when the bill could be expected back in committee, and she talked in terms of helping those who testified, and for those across the state who also have a need. SENATOR KELLY asked about the status of the companion bill, HB 139, and was informed it was still in the first committee of referral. He said he would start with providing a committee substitute. SENATOR KELLY introduced HB 180 AM (ALASKA HOUSING FINANCE CORPORATION HOUSING INSPECTION REQUIREMENTS) sponsored by REPRESENTATIVE EILEEN MACLEAN, and he called on her aide, DAVID HARDING, to review the bill. MR. HARDING reviewed some previous action by explaining, "When, in 1992 the legislature merged the Department of Regional Affairs Rural Housing Loan Program (DCRA) into AHFC, the rural loans became subject to certain housing inspection requirements as listed in AS 18.56.300(b). These requirements were never intended to apply to rural housing loan programs; in fact, AHFC's primary rural loan program, non-conforming housing, is specifically exempted in the status. Rural housing loans have been subject to AHFC inspection requirements since July 1, 1992." MR. HARDING cited problems with inspection requirements that were not originally intended to affect rural loans, but has caused an unfair burden on rural homeowners, which was not the legislative intent. Rather than exempting the rural housing loan program from these requirements, REPRESENTATIVE MACLEAN felt the rural home owners and rural lenders would benefit from some form of an inspection program. MR. HARDING quoted REPRESENTATIVE MACLEAN's Sponsor Statement to provide flexibility in the program in HB 180. "It broadens the pool of eligible inspectors in rural areas by allowing licensed architects and engineers to conduct the inspections. These professionals are clearly qualified to accomplish the task, and they often travel to rural areas to monitor construction projects. Number 450 It allows AHFC to identify other qualified individuals in rural communities. A local contractor or journeymen in a trade might be obvious candidates to carry out part or all of a remote inspection. It authorizes inspection methods other than a physical site visit by an inspector. For example, AHFC could approve an inspection of footings and foundations based on video tape or photographs." In addition, MR. HARDING explained HB 180 would allow AHFC to accept building methods or materials that may not meet state building codes if the corporation is satisfied that the code variation does not sacrifice health or safety. If a building material is available that may not meet code but would stand up to an engineering review, then AHFC would be allowed to accept such equivalent substitution. He said this would save on building costs and make use of available materials in remote locations. MR. HARDING explained the International Conference of Building Officials (IBCO) inspection requirements were originally put into law in order to address the concerns of some builders in the Railbelt, and he promised the proposed changes would not affect any builders on the road system, but would only address problems in rural Alaska loan programs. SENATOR KELLY asked if this would include Sitka, and MR. HARDING answered it would exempt both Sitka and Juneau, because any place that has a municipal building code is already exempt. SENATOR KELLY led a general discussion of this provision which is in current law. SENATOR KELLY said he agreed with the thrust of SB 180, but he wanted to be sure there was an adequate definition of rural. MR. HARDING reviewed the list of exempt communities that have their own codes, including a number in Southeast. SENATOR SHARP had some questions because he didn't think the definition was inclusive, but MR. HARDING clarified the list. Number 499 SENATOR KELLY asked whether Cordova was on the list, and SENATOR SALO asked about Soldotna. MR. HARDING explained Cordova would come under the provisions of HB 180, but Soldotna was not included in the exemption because it is on the road system. SENATOR SALO questioned the video tape method of inspecting footings and foundations, and MR. HARDING answered it would be up to the discretion of AHFC to allow this method. SENATOR KELLY asked who was on teleconference in Anchorage from AHFC, and he was told ROBERT BREAN, who introduce two other persons. SENATOR KELLY questioned whether any of the three had any objections to the bill, and MR. BREAN indicated they had worked with the sponsor in suggesting the amendments, in order to provide the flexibility for rural Alaska. SENATOR KELLY asked if they had any proposed amendments to HB 180, and MR. BREAN indicated they did not. SENATOR KELLY clarified they supported HB 180 as amended by the House and now before the Judiciary Committee. SENATOR SHARP asked the AHFC members if they were able to determine any trends in losses or lack of quality due to less stringent inspections than on other AHFC financed houses. MR. BREAM described a period when they were exempt until after the merger with AHFC in 1992, and he further explained the present flexibility presently used in the inspections. He assured the committee their goal is an improvement in the quality of housing all over the State of Alaska, rural Alaska included. SENATOR SHARP asked if AHFC specifically got complaints from buyers about the quality of the homes, or lack of quality after they buy them. MR. BREAM explained in many cases, these were owner built houses, with the owner acting as their own contractor. He further explained foreclosed properties were sold "as is," and the foremost concern in the rural areas is the availability of housing. SENATOR KELLY clarified that the AHFC would not allow an owner- builder to inspect their own house. MR. BREAN said he was correct, and he described their procedures. SENATOR RIEGER questioned AHFC about title insurance for rural housing loans, and DUANE WISE answered that they do. TAPE 94-3 SIDE A Number 001 SENATOR KELLY took an informal poll of the persons in the committee audience and found there was support for the bill. He then ask for the will of the committee. SENATOR RIEGER said that in reading AS 18.56.300(b), he didn't think it was clear the stated exemption for some communities applies in Subsection (b) the way it does in Subsection (a). He wanted to check on the provisions before voting. SENATOR KELLY asked about the next committee of referral, and MR. FINK said there was no Finance Committee referral. SENATOR RIEGER explained the differences in Subsections (a) and (b) claiming Subsection (b) did not give the same exemption. SENATOR KELLY said, since Labor & Commerce was the last committee of referral, the committee would hang on to the bill just long enough to straighten out the subsections. He said the bill would be returned to committee as soon as possible. SENATOR KELLY introduced HB 294 (EXTEND THE BOARD OF PHARMACY) sponsored by REPRESENTATIVE SEAN PARNELL, and invited KARL LUCK, Director of the Division of Occupational Licensing for the Dept. of Commerce and Economic Development, to testify on the bill. MR. LUCK stated the department was in favor of the recommendation by the auditors to extend this board, and he commented on the fiscal note showing the revenues did not equal the annual cost of the operations, until last May when the fees were adjusted for all of the professions. He explained that as all of the professions renew their licenses their fees will cover the exact cost of operating each of the individual boards. SENATOR KELLY questioned this change in fees, and MR. LUCK answered it was pro-rationed for each individual board, explaining there were now 32 separate budgets instead of one budget for the whole Division of Occupational Licensing. He explained the current budgeting process within the Division of Occupational Licensing. SENATOR SALO questioned how a professional person would know how much their license would cost. MR. LUCK said the fees were set in regulation, and he explained how they were established. SENATOR SALO asked what the fees are now, and MR. LUCK did not have that information with him. He offered to provide it to her, and she accepted. SENATOR LINCOLN questioned the auditor's recommendation on the extension of the Board of Pharmacy to June 30, 2003 and the date of the bill as 1997. She asked for the reason for the difference. Number 051 MR. LUCK explained to SENATOR LINCOLN the governor had disagreed with the recommendations from the Legislative Auditor to push the licenses out to a 10 year window, because it would limit the governor's ability to cut costs or boards if needed. SENATOR KELLY quoted an auditor's report that a four year sunset is one of the shortest in all the states, with most states having a longer sunset provision. SENATOR LINCOLN asserted boards have been eliminated before their expiration date. SENATOR KELLY agreed the legislature could abolish the board any time they liked, and suggested an expiration date of 2000. The sponsor, REPRESENTATIVE PARNELL, had no problems with the extension, but he thought there was a statutory provision prohibiting a ten year extension. SENATOR KELLY suggested using 1999, but returning to the original if it was not possible. SENATOR LINCOLN referred to the fiscal note by COMMISSIONER PAUL FUHS, and asked whether the fees would meet the cost. MR. LUCK assured her it was being done and explained how all the fees were adjusted. SENATOR RIEGER moved to amend the date to 1999 in HB 294 (EXTEND THE BOARD OF PHARMACY). Without objections, SENATOR KELLY announced the adoption of CSHB 294(L&C). REPRESENTATIVE PARNELL testified that AS 44.66.010 speaks to the termination of boards and commissions, with a process for termination. He thought the statute gave the committee authority to extend the date to 1999, and he thanked the committee. SENATOR SHARP moved to pass SENATE CS FOR HOUSE BILL NO. 294(L&C) (EXTEND THE BOARD OF PHARMACY) from committee with individual recommendations. Without objections, so ordered. There being no further business to come before the committee, the meeting was adjourned at 3:25 p.m. by SENATOR KELLY.