Legislature(2015 - 2016)BUTROVICH 205

02/10/2015 09:00 AM STATE AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 6 ELIMINATE DAYLIGHT SAVING TIME TELECONFERENCED
Moved SB 6 Out of Committee
-- Public Testimony --
*+ SJR 2 CONST. AM: G.O. BONDS FOR STUDENT LOANS TELECONFERENCED
Moved SJR 2 Out of Committee
-- Public Testimony --
+ "Continuing Discussion of the Implementation of TELECONFERENCED
Ballot Measure No. 2 (13PSUM) - An Act to Tax
and Regulate the Production, Sale, and Use of
Marijuana"
Bills or Topics Previously Heard/Scheduled
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE STATE AFFAIRS STANDING COMMITTEE                                                                           
                       February 10, 2015                                                                                        
                           9:01 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Bill Stoltze, Chair                                                                                                     
Senator John Coghill, Vice Chair                                                                                                
Senator Charlie Huggins                                                                                                         
Senator Lesil McGuire                                                                                                           
Senator Bill Wielechowski                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 6                                                                                                               
"An Act exempting the state from daylight saving time; and                                                                      
providing for an effective date."                                                                                               
                                                                                                                                
     - MOVED SB 6 OUT OF COMMITTEE                                                                                              
                                                                                                                                
SENATE JOINT RESOLUTION NO. 2                                                                                                   
Proposing an amendment to the Constitution of the State of                                                                      
Alaska relating to contracting state debt for postsecondary                                                                     
student loans.                                                                                                                  
                                                                                                                                
     - MOVED SJR 2 OUT OF COMMITTEE                                                                                             
                                                                                                                                
CONTINUING DISCUSSION OF THE IMPLEMENTATION OF BALLOT MEASURE                                                                   
NO. 2 (13PSUM) - AN ACT TO TAX AND REGULATE THE PRODUCTION,                                                                     
SALE, AND USE OF MARIJUANA.                                                                                                     
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
REVIOUS COMMITTEE ACTION                                                                                                      
                                                                                                                                
BILL: SB 6                                                                                                                    
SHORT TITLE: ELIMINATE DAYLIGHT SAVING TIME                                                                                     
SPONSOR(s): SENATOR(s) MACKINNON                                                                                                
                                                                                                                                
01/21/15       (S)       PREFILE RELEASED 1/9/15                                                                                
01/21/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/15       (S)       STA, FIN                                                                                               
02/10/15       (S)       STA AT 9:00 AM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SJR 2                                                                                                                   
SHORT TITLE: CONST. AM: G.O. BONDS FOR STUDENT LOANS                                                                            
SPONSOR(s): SENATOR(s) MACKINNON                                                                                                
                                                                                                                                
01/21/15       (S)       PREFILE RELEASED 1/9/15                                                                                
01/21/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/15       (S)       STA, EDC, FIN                                                                                          
02/10/15       (S)       STA AT 9:00 AM BUTROVICH 205                                                                           
                                                                                                                                
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SENATOR ANNA MACKINNON                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Sponsor of SB 6.                                                                                          
                                                                                                                                
ERIN SHINE, Staff                                                                                                               
Senator MacKinnon                                                                                                               
Alaska State Legislature                                                                                                        
POSITION STATEMENT: Provided an overview of SB 6.                                                                             
                                                                                                                                
LYNN WILLIS, representing himself                                                                                               
Eagle River, Alaska                                                                                                             
POSITION STATEMENT: Supports SB 6.                                                                                            
                                                                                                                                
THOMAS MAYER, Director                                                                                                          
Division of General Services                                                                                                    
Alaska Department of Administration                                                                                             
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Addressed the impact of Daylight Savings                                                                  
Time on building management.                                                                                                    
                                                                                                                                
JAY BUTLER, MD                                                                                                                  
Chief Medical Officer, and Director                                                                                             
Division of Public Health                                                                                                       
Alaska Department of Health and Social Services                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Commented on the health effects from                                                                      
Daylight Savings Time.                                                                                                          
                                                                                                                                
MIKE STEDMAN, business owner                                                                                                    
Wings Airways                                                                                                                   
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Opposes SB 6.                                                                                             
                                                                                                                                
MIKE WILSON, member                                                                                                             
Leadership Council                                                                                                              
National Federation of Independent Business-Alaska                                                                              
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Supports SB 6.                                                                                            
                                                                                                                                
SENATOR ANNA MACKINNON                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Sponsor of SJR 2.                                                                                         
                                                                                                                                
KRISTEN PRATT, Staff                                                                                                            
Senator Anna MacKinnon                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Offered to provide an overview of SJR 2.                                                                  
                                                                                                                                
JERRY BURNETT, Deputy Commissioner                                                                                              
Treasury Division                                                                                                               
Alaska Department of Revenue                                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered revenue impact questions regarding                                                               
SJR 2.                                                                                                                          
                                                                                                                                
DIANE BARRANS, Executive Officer/Executive Director                                                                             
Alaska    Student   Loan    Corporation/Alaska   Commission    on                                                               
Postsecondary Education                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered questions on SJR 2.                                                                              
                                                                                                                                
LANCE STEVENS, President                                                                                                        
Juneau Chamber of Commerce                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Supports SJR 2.                                                                                           
                                                                                                                                
MIKE COONS, representing himself                                                                                                
Palmer, Alaska                                                                                                                  
POSITION STATEMENT: Opposes SJR 2.                                                                                            
                                                                                                                                
DAVID NEES, representing himself                                                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Opposes SJR 2.                                                                                            
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
9:01:47 AM                                                                                                                    
CHAIR BILL STOLTZE called the Senate State Affairs Standing                                                                   
Committee meeting to order at 9:01 a.m. Present at the call to                                                                  
order were Senators Wielechowski, Huggins, and Chair Stoltze.                                                                   
                                                                                                                                
              SB 6-ELIMINATE DAYLIGHT SAVING TIME                                                                           
                                                                                                                                
9:02:10 AM                                                                                                                    
CHAIR STOLTZE announced that the business before the committee                                                                  
was the consideration of SB 6.                                                                                                  
                                                                                                                                
9:02:30 AM                                                                                                                    
SENATOR ANNA MACKINNON, Alaska State Legislature, Juneau,                                                                       
Alaska, provided a sponsor's overview as follows:                                                                               
                                                                                                                                
     SB 6  is requesting a  conversation with the  people of                                                                    
     Alaska about the repeal of  Daylight Saving Time (DST).                                                                    
     As many  of you know  in 1784, Benjamin Franklin  in an                                                                    
     effort to save "wax and  wicks" suggested that we could                                                                    
     change the time that we  do our daily living activities                                                                    
     and  save  energy. DST  was  first  implemented in  the                                                                    
     United States in 1918 and  in 1966, America adopted the                                                                    
     Uniform  Time  Act.  In 2005,  the  Energy  Policy  Act                                                                    
     extended  DST, we're  now participating  in the  moving                                                                    
     forward of one hour every  day for almost 7 months. Mr.                                                                    
     Chairman  and members  of the  committee, I  don't have                                                                    
     any personal  ambition about repealing DST  or not, but                                                                    
     I would like to bring to  your attention is some of the                                                                    
     effects that  DST has differently than  other states on                                                                    
     Alaskans, and Americans in general.                                                                                        
                                                                                                                                
9:02:59 AM                                                                                                                    
SENATOR COGHILL joined the committee meeting.                                                                                   
                                                                                                                                
SENATORY MCGUIRE joined the committee meeting.                                                                                  
                                                                                                                                
SENATOR MACKINNON reviewed statistics from a study referring to                                                                 
health consequences from DST as follows:                                                                                        
                                                                                                                                
     I know  each of you  are aware of the  heavy incidences                                                                    
     of suicide in  Alaska. I alluded to this  in a previous                                                                    
     session. When  I first brought  forward DST  I asserted                                                                    
     that there  may be  a relationship between  suicide and                                                                    
     DST and  it's just the  flipping, it's the  changing of                                                                    
     times and  how everyone's  body associates  itself with                                                                    
     the sun.  We are  creatures of this  world and  the sun                                                                    
     and  the  moon actually  does  have  an effect  on  our                                                                    
     wellbeing and as  we move back and  forth between these                                                                    
     two times  that are artificially  put before us  by the                                                                    
     U.S. Government, we are affecting people's health.                                                                         
                                                                                                                                
     In  your packets  there are  studies,  we have  studies                                                                    
     that show that heart attack  rates for men in the first                                                                    
     24 or  48 hours coming  out of  DST in March  that your                                                                    
     heart  attack rates  increase by  almost 5  percent; as                                                                    
     well, we have  a study that shows the  rates of suicide                                                                    
     for men.  There's also issues  regarding safety  in the                                                                    
     workplace and  car crashes that happen  more frequently                                                                    
     in the spring. We have  feedback from across the state,                                                                    
     but specifically Northwest  Alaska regarding attendance                                                                    
     issues in  schools as  well as  testing issues  for our                                                                    
     students   and  how   students   actually  have   lower                                                                    
     performance  rates when  we  move on  and  off of  DST.                                                                    
     While   I  haven't   provided  it,   I   do  have   the                                                                    
     documentation  for  you,   we  have  studies  regarding                                                                    
     energy  and  the increased  energy  cost,  at least  in                                                                    
     Indiana  when they  moved on  to  DST and  they saw  an                                                                    
     increase of $9 million  overall for that increase. What                                                                    
     I'm here to tell you is  in the past we've moved on and                                                                    
     off because of  energy issues because of  DST and while                                                                    
     that may or may not be  a fact, from my perspective, we                                                                    
     have adverse  health effects with this  flipping on and                                                                    
     off.                                                                                                                       
                                                                                                                                
9:06:13 AM                                                                                                                    
SENATOR MAKINNON addressed support for SB 6 as follows:                                                                         
                                                                                                                                
     I always like  to know who is in support  and who is in                                                                    
     opposition to  different pieces of legislation  so that                                                                    
     we   may   make   sure  we   bring   those   particular                                                                    
     constituencies to  the table when we  talk about policy                                                                    
     issues  that could  affect businesses  or health.  So I                                                                    
     would just advise you that  some feedback I've received                                                                    
     is from the financial  markets, they are concerned that                                                                    
     moving off  of DST would create  their employees having                                                                    
     to come  to work one hour  earlier, so we would  be off                                                                    
     of Wall  Street per se  by five hours for  almost seven                                                                    
     months  out of  the year,  so  that is  a concern  that                                                                    
     those  employees would  have to  come to  work earlier;                                                                    
     but,  I would  refer you  to other  personal testimony,                                                                    
     Mr.  Dan  Cuddy,  [Chairman]  of  First  National  Bank                                                                    
     Alaska, is  in favor  of moving  the time  zone, that's                                                                    
     just   one   instance    of   people   with   different                                                                    
     perspectives of this  issue, but I wanted  to make sure                                                                    
     you  knew  that  from a  financial  perspective  people                                                                    
     would have  to come to  work earlier, possibly  to meet                                                                    
     those markets or  change the way that  they do business                                                                    
     in some  way. To counteract that  particular assertion,                                                                    
     we  do have  people  that believe  that technology  has                                                                    
     brought  us   a  long  way  and   that  those  business                                                                    
     practices  could  be  accommodated in  this  world  for                                                                    
     Alaska.                                                                                                                    
                                                                                                                                
     The second group I have  heard from when I carried this                                                                    
     bill  in the  past was  the networks  and the  networks                                                                    
     said that they may have  trouble bringing live TV, like                                                                    
     a  live football  game may  be a  challenge because  of                                                                    
     timing  issues; so  to try  to address  that particular                                                                    
     need we extended  the effective date out  until 2017 so                                                                    
     that  those that  had to  schedule  things like  Alaska                                                                    
     Airlines who  we are  reaching out  to and  others that                                                                    
     have  scheduling issues,  cruise ships  as an  example,                                                                    
     that  they  would  have  a  full year  and  a  half  to                                                                    
     implement  changes and  so they  could  respond. So  we                                                                    
     have  tried  to  be  responsive   to  people  who  have                                                                    
     suggested  troubles for  their particular  industry. In                                                                    
     addition,  I  had  a group  of  individuals  before  me                                                                    
     yesterday  during   a  meeting  environment   that  was                                                                    
     talking  to me  about  DST, those  are private  tourism                                                                    
     companies that  have direct schedules to  when a cruise                                                                    
     ship  docks   and  the  specific  folks   spoke  to  me                                                                    
     yesterday  said there  may  be  difficulty getting  the                                                                    
     last helicopter  flight or the  last air  flight during                                                                    
     the  evening if  we moved  forward in  time and  stayed                                                                    
     there.                                                                                                                     
                                                                                                                                
     In  favor  of DST  opposition  I  believe are  over  50                                                                    
     percent of Alaskans.  We have a survey  that is opening                                                                    
     up  online right  now, that's  at AlaskaSenate.org\DST.                                                                    
     The last  time I had  this legislation we had  over 500                                                                    
     people  from   across  the  Alaska,   specifically  our                                                                    
     teachers in  Northwest Alaska and as  I've said before,                                                                    
     are  supportive and  talked to  increased disruption  I                                                                    
     their classroom.                                                                                                           
                                                                                                                                
9:09:42 AM                                                                                                                    
SENATOR MACKINNON summarized that the DST issue is very                                                                         
important to Alaskans. She noted that she had introduced similar                                                                
legislation six  years prior and added  that Senator Wielechowski                                                               
also  introduced  a  bill  during   the  Session.  She  said  the                                                               
difference between the  bill she introduced 6 years ago  and SB 6                                                               
was that  the previous bill was  tied to specific DST  dates. She                                                               
explained that  the federal  government can  change dates  at any                                                               
time and  Alaska would then randomly  be forced back on  DST. She                                                               
said SB  6 is tied directly  to the federal government's  code on                                                               
time  versus the  specific dates.  She added  that the  effective                                                               
date is  further out to  accommodate those that may  be adversely                                                               
effected by scheduling.                                                                                                         
                                                                                                                                
9:10:28 AM                                                                                                                    
CHAIR  STOLTZE asked  Senator MacKinnon  to  address the  effects                                                               
from Alaska's time zone consolidation in 1983.                                                                                  
                                                                                                                                
SENATOR MACKINNON  noted that Southeast Alaska  is geographically                                                               
opposed. She  noted that  Southeast Alaska had  given up  an hour                                                               
from consolidation.  She pointed  out that Southeast  Alaska used                                                               
to be linked  to Seattle and they still believe  their economy is                                                               
crucially  linked to  Seattle. She  said  Southeast Alaska  feels                                                               
like they have  already given up their hour as  a team effort for                                                               
the whole state to align.  She specified that there are currently                                                               
two time zones, Adak and further west is on Hawaii Time.                                                                        
                                                                                                                                
CHAIR STOLTZE asked  how many time zones Alaska had  prior to the                                                               
consolidation.                                                                                                                  
                                                                                                                                
SENATOR MACKINNON answered five.                                                                                                
                                                                                                                                
CHAIR STOLTZE commented that Alaska  had more time zones than the                                                               
Continental U.S.                                                                                                                
                                                                                                                                
SENATOR MACKINNON added that her  original attempt was to advance                                                               
Alaska's time zone  and stay off of DST so  Alaska would be three                                                               
hours  off of  the stock  markets and  aligned with  Seattle. She                                                               
revealed that Alaska  was told that the state could  not do that.                                                               
She  said SB  6 is  specific about  the revolving  back-and-forth                                                               
issue that is  directly related to health that  is supported with                                                               
statistics.  She  conceded  that an  additional  conversation  is                                                               
needed at  some point to  address the consolidation of  five time                                                               
zones.  She  noted  that  the  Northwest  Arctic's  students  are                                                               
impacted from the  artificial time change when the sun  is at its                                                               
highest at 3:00  p.m. rather than noon. She  stated that sun-time                                                               
has  a significant  impact  on health.  She  revealed that  while                                                               
serving on Alaska's Suicide  Prevention Council, she hypothesized                                                               
whether there  could be  an issue  with Alaska's  sun-time versus                                                               
suicide rates and noted that she  did not have any proven studies                                                               
when she  carried her previous  bill six years ago.  She asserted                                                               
that she  now has some  initial research that  addresses sun-time                                                               
versus suicide rates.                                                                                                           
                                                                                                                                
CHAIR STOLTZE  asked what authorizing entities  must be contacted                                                               
for  time zone  changes  and  inquired what  the  next steps  are                                                               
should SB 6 pass.                                                                                                               
                                                                                                                                
SENATOR MACKINNON  replied that a  letter would be issued  by the                                                               
Alaska  Department   of  Transportation  (DOT)  to   the  federal                                                               
government  for the  state to  make a  case for  changing a  time                                                               
zone.                                                                                                                           
                                                                                                                                
9:13:36 AM                                                                                                                    
ERIN SHINE,  Staff, Senator Mackinnon, Alaska  State Legislature,                                                               
Juneau, Alaska,  explained that changing  a time zone  requires a                                                               
two-step  process. She  specified that  the state  would have  to                                                               
exempt itself  from the Uniform Time  Act and then either  pass a                                                               
resolution or executive order to petition the U.S. DOT.                                                                         
                                                                                                                                
CHAIR  STOLTZE noted  that Senator  Wielechowski has  a companion                                                               
bill. He asked Senator Wielechowski for any comments.                                                                           
                                                                                                                                
SENATOR  WIELECHOWSKI  explained that  he  has  met with  Senator                                                               
MacKinnon and supports SB 6. He  noted that when he first ran for                                                               
office going door-to-door,  he was surprised at  the magnitude of                                                               
feeling that people have about  DST. He revealed that he surveyed                                                               
his constituents  a year  ago and  75 percent  supported changing                                                               
DST.                                                                                                                            
                                                                                                                                
CHAIR  STOLTZE commented  that the  feeling from  constituents is                                                               
probably higher during March and October.                                                                                       
                                                                                                                                
SENATOR HUGGINS concurred that his  constituents feel the same as                                                               
Senator   Wielechowski's   constituents.    He   asked   if   the                                                               
Administration supports SB 6.                                                                                                   
                                                                                                                                
SENATOR MACKINNON answered  that a request was made  to meet with                                                               
the Governor's office  and to date there has not  been a response                                                               
that allows her to ask the question.                                                                                            
                                                                                                                                
SENATOR   HUGGINS   noted   that    receiving   word   from   the                                                               
Administration is  important in  order to  unite the  regions and                                                               
understand  the  rational and  the  Administration  is the  right                                                               
place to do that. He apologized  for addressing DST over the past                                                               
years  because  it is  artificial  and  people realize  that.  He                                                               
commended  Senator Mackinnon  for  taking on  the  DST task  once                                                               
again.                                                                                                                          
                                                                                                                                
9:16:21 AM                                                                                                                    
SENATOR MCGUIRE  noted that she  has supported the DST  change in                                                               
the past. She  said a series of economic and  health impacts were                                                               
noted and  pointed out that  the committee had not  heard whether                                                               
the  Chamber of  Commerce  supported  SB 6  due  to possible  DST                                                               
impact on workplace efficiency.                                                                                                 
                                                                                                                                
MS. SHINE noted  two DST studies that show a  financial impact on                                                               
businesses  where an  increase in  non-work related  websites are                                                               
accessed as well as an  increase in workplace injuries during the                                                               
time switch in the spring when an hour is lost.                                                                                 
                                                                                                                                
SENATOR  MACKINNON  noted  that   an  article  pointed  out  that                                                               
thousands of hours  are lost as far as gross  domestic product by                                                               
just changing mechanical clocks twice a year.                                                                                   
                                                                                                                                
SENATOR COGHILL asked why the U.S. DOT must be involved.                                                                        
                                                                                                                                
SENATOR MACKINNON explained  that the U.S. DOT acts  as a central                                                               
location  to  notify other  countries.  She  reiterated that  the                                                               
state  has  to  make  a  case  for a  time  zone  change  with  a                                                               
resolution.                                                                                                                     
                                                                                                                                
9:19:47 AM                                                                                                                    
SENATOR COGHILL  asked if  the Governor is  involved in  the time                                                               
zone change request.                                                                                                            
                                                                                                                                
MS. SHINE  replied that to  change Alaska's time zone,  the state                                                               
would have to  petition or pass a resolution  requesting the U.S.                                                               
DOT to change the state's time zones.                                                                                           
                                                                                                                                
SENATOR  COGHILL asked  if  a resolution  should  be prepared  in                                                               
anticipation of a time zone change.                                                                                             
                                                                                                                                
SENATOR MACKINNON replied that she  will let Senator Coghill know                                                               
as soon as she talks to the Governor.                                                                                           
                                                                                                                                
CHAIR  STOLTZE explained  that in  1983, Governor  Sheffield made                                                               
the  personal  request  to   then  Secretary  of  Transportation,                                                               
Elizabeth  Dole during  the  Regan  Administration. He  specified                                                               
that a  state generally  asks permission for  a time  zone change                                                               
rather than demanding a change from the federal government.                                                                     
                                                                                                                                
MS. SHINE answered that Chair Stoltze is correct.                                                                               
                                                                                                                                
SENATOR HUGGINS stated that to say  Alaska is in a different time                                                               
zone is  an understatement. He noted  that the number of  days to                                                               
gain 1  hour of  daylight after DST  is 6 days  in Barrow  and 40                                                               
days in Miami.                                                                                                                  
                                                                                                                                
CHAIR  STOLTZE  announced  that the  committee  will  proceed  to                                                               
public testimony.                                                                                                               
                                                                                                                                
9:22:44 AM                                                                                                                    
LYNN WILLIS, representing himself,  Eagle River, Alaska, Supports                                                               
SB 6.  He said  most Alaskans  want to stop  DST. He  pointed out                                                               
that he  is concerned that  the bill will  meet the same  fate as                                                               
five  previous bills  that  did not  pass  the Legislature  since                                                               
1999. He  stated that the  1983 time zone change  placed Alaska's                                                               
southcentral and  western communities on permanent  DST. He noted                                                               
that DST  causes problems with  the human circadian  rhythm where                                                               
the sun is  at its highest during DST at  2:00 p.m. in Anchorage,                                                               
3:00 p.m.  in Kotzebue and  Nome. He opined that  proponents have                                                               
argued that  DST is necessary  for commerce,  a claim that  is no                                                               
longer valid due to the impact  from the internet's 24 hour a day                                                               
business  cycle. He  said DST  works in  the temperate  zones and                                                               
tends not  to work in the  polar or equatorial regions  where the                                                               
length of  day either varies  significantly or hardly at  all. He                                                               
stated  that when  DST was  moved  up a  month, mornings  without                                                               
daylight  were   extended  which  makes  for   dangerous  working                                                               
conditions for  outdoor workplaces.  He summarized that  DST does                                                               
not save energy  and noted that no testimony has  ever been given                                                               
or information provided that cites energy savings in Alaska.                                                                    
                                                                                                                                
9:27:50 AM                                                                                                                    
CHAIR  STOLTZE  noted that  he  is  a  co-sponsor  for SB  6.  He                                                               
revealed  that Senator  MacKinnon's  previous legislation  passed                                                               
through the House Finance Committee.                                                                                            
                                                                                                                                
9:28:25 AM                                                                                                                    
CHAIR STOLTZE announced that committee will stand at ease.                                                                      
                                                                                                                                
9:28:37 AM                                                                                                                    
CHAIR STOLTZE called the committee  back to order. He stated that                                                               
now is the  time for the Administration to step  forward and note                                                               
their issues or  concerns. He asked Senator MacKinnon  if she had                                                               
any questions for the Administration.                                                                                           
                                                                                                                                
SENATOR MACKINNON  noted that the  financial impact on  the state                                                               
changing its "mechanicals" twice a year is not known.                                                                           
                                                                                                                                
CHAIR STOLTZE  asked Mr. Mayer for  a comment on DST's  fiscal or                                                               
technical impacts on the state.                                                                                                 
                                                                                                                                
9:30:02 AM                                                                                                                    
THOMAS  MAYER, Director,  Division  of  General Services,  Alaska                                                               
Department  of Administration  (DOA),  Juneau, Alaska,  explained                                                               
that  the DOA  manages approximately  20 buildings  and the  vast                                                               
majority are  on electronic  systems that  automatically adjusts.                                                               
He specified  that electronic  systems are  simple to  adjust and                                                               
there is minimal  savings if Alaska goes off of  DST. He said for                                                               
the  buildings that  DOA  manages, most  have  had a  significant                                                               
amount of  energy work done.  He asserted  that the DOA  does not                                                               
see any fiscal impact to the department at all.                                                                                 
                                                                                                                                
CHAIR  STOLTZE  stated that  it  is  hard to  put  a  value on  a                                                               
happier, healthier, more rested workforce.                                                                                      
                                                                                                                                
MR. MAYER  replied that what  Chair Stoltze noted is  pretty hard                                                               
to do  from a  facility standpoint.  He pointed  out that  he was                                                               
speaking  specifically from  a facility  standpoint  and did  not                                                               
claim to  have personal  knowledge of whether  or not  having DST                                                               
will make him healthier or not.                                                                                                 
                                                                                                                                
SENATOR COGHILL  asked Mr. Mayer if  the DOA manages some  of the                                                               
DOT's facilities.                                                                                                               
                                                                                                                                
MR.  MAYER  answered  no.  He explained  that  the  DOA  strictly                                                               
manages   facilities  assigned   by   the   Legislature  or   the                                                               
Administration. He specified that  DOA manages 12 public building                                                               
fund  buildings and  6 non-public  building fund  buildings which                                                               
are traditionally  non-office space buildings that  are warehouse                                                               
type  buildings.   He  specified  that  DOT   manages  their  own                                                               
buildings  and noted  that they  have a  very large  portfolio of                                                               
buildings as well.                                                                                                              
                                                                                                                                
SENATOR COGHILL asked  if there is anything that  Mr. Mayer would                                                               
find in  opposing the  resolution he  previously proposed  to the                                                               
Administration to exempt the state from DST.                                                                                    
                                                                                                                                
MR. MAYER answered no.                                                                                                          
                                                                                                                                
SENATOR COGHILL  noted that DOT  should be  on the record  due to                                                               
their impact from DST.                                                                                                          
                                                                                                                                
CHAIR STOLTZE opined that there is  consensus to move SB 6 out of                                                               
committee.  He   asserted  that   all  of   the  Administration's                                                               
departments should provide comments on any DST challenges.                                                                      
                                                                                                                                
9:34:21 AM                                                                                                                    
JAY BUTLER, MD, Chief Medical  Officer, and Director, Division of                                                               
Public Health,  Alaska Department of Health  and Social Services,                                                               
Anchorage, Alaska.                                                                                                              
                                                                                                                                
CHAIR  STOLTZE announced  that  the committee  will  not ask  Dr.                                                               
Butler  to take  a position  and asked  for general  comments. He                                                               
stated  that  Dr.  Butler's  input  will not  be  viewed  as  the                                                               
Administration's position.                                                                                                      
                                                                                                                                
DR. BUTLER addressed the increased  rates of heart attaches after                                                               
the period DST  takes effect and pointed out that  the study came                                                               
from Sweden,  an Arctic region  rather than a temperate  area. He                                                               
noted  another  study  that revealed  increased  rates  of  motor                                                               
vehicle accidents  during the day  after the one hour  DST change                                                               
in the  spring. He revealed  that he  had recently looked  at the                                                               
seasonality  of suicide.  He explained  that there  is a  peak in                                                               
suicide in mid-summer and another  in November. He stated that he                                                               
cannot say  that there is a  causation in November is  due to the                                                               
change back to standard time from DST.                                                                                          
                                                                                                                                
CHAIR STOLTZE thanked  Dr. Butler and asked if  anyone would like                                                               
to testify.                                                                                                                     
                                                                                                                                
9:36:55 AM                                                                                                                    
MIKE  STEDMAN, business  owner,  Wings  Airways, Juneau,  Alaska,                                                               
explained that  Wings Airways  is a  tour operator  business that                                                               
caters to  the cruise  ships in  the summer  time. He  added that                                                               
Alaska Seaplanes is  also a business that he owns  that acts as a                                                               
small commuter  airline that  flies throughout  Southeast Alaska.                                                               
He  said he  opposes SB  6  because in  the summer  time, as  the                                                               
daylight starts  to dwindle,  there are late  trips that  will be                                                               
impacted  because  of  the  daylight  issue.  He  explained  that                                                               
floatplanes  cannot land  on water  during darkness.  He revealed                                                               
that  Wings  Airways' cruise  ship  business  will realize  a  20                                                               
percent reduction in tours as well  as a loss of charter business                                                               
on Alaska Seaplanes  due to the loss of DST.  He asserted that SB                                                               
6 is  a commerce  issue that will  cause a big  impact with  a 20                                                               
percent loss in revenue for his business.                                                                                       
                                                                                                                                
9:38:50 AM                                                                                                                    
MIKE WILSON,  member, Leadership Council, National  Federation of                                                               
Independent  Business-Alaska,  Juneau,   Alaska,  noted  that  he                                                               
operates  an aviation  business  in Juneau  and  stated that  his                                                               
business finds DST to be an inconvenience.                                                                                      
                                                                                                                                
CHAIR STOLTZE  noted that  Mr. Wilson's  company is  a helicopter                                                               
tour business.                                                                                                                  
                                                                                                                                
MR. WILSON answered correct.                                                                                                    
                                                                                                                                
SENATOR COGHILL  noted that the  timeline for the  bill's sponsor                                                               
takes the movement of cruise ships  into account. He asked if Mr.                                                               
Wilson's company is in the tourism business.                                                                                    
                                                                                                                                
MR. WILSON  answered correct.  He stated  that his  business will                                                               
not  be  affected  because  his   permits  require  tours  to  be                                                               
completed by 8:00 p.m.                                                                                                          
                                                                                                                                
CHAIR STOLTZE  asked if Mr. Wilson's  permit is based on  a local                                                               
ordinance.                                                                                                                      
                                                                                                                                
MR. WILSON  answered that the  permits are federal  and regulated                                                               
by the U.S. Forest Service.                                                                                                     
                                                                                                                                
9:40:41 AM                                                                                                                    
CHAIR  STOLTZE  announced that  public  testimony  is closed.  He                                                               
asked  Senator  MacKinnon if  she  had  spoken to  the  education                                                               
community regarding DST's impact.                                                                                               
                                                                                                                                
SENATOR  MACKINNON replied  that her  office is  reaching out  to                                                               
every  opportunity that  it can.  She said  that she  will verify                                                               
that her staff has reached out  to all of the school districts in                                                               
Alaska.                                                                                                                         
                                                                                                                                
CHAIR  STOLTZE  noted  that  a   principal  in  his  district  is                                                               
addressing DST to advise the district's superintendent.                                                                         
                                                                                                                                
SENATOR MACKINNON specified  that she does not  want to adversely                                                               
affect any business.  She said after she heard  from Mr. Stedman,                                                               
she  reached  out to  the  cruise  industry  and noted  that  Mr.                                                               
Stedman  had  indicated  that  it  is  difficult  to  change  the                                                               
schedules for  the cruise  ship because her  intention is  not to                                                               
harm anyone but to help people  in any way possible. She conceded                                                               
that there are  tradeoffs and asserted that the  health aspect is                                                               
the overwhelming concern for her in  advancing SB 6. She said she                                                               
will  run  the  numbers  in   the  Senate  Finance  Committee  to                                                               
absolutely understand how businesses  will be disadvantaged by SB                                                               
6.                                                                                                                              
                                                                                                                                
9:43:10 AM                                                                                                                    
CHAIR STOLTZE stated that he  is confident that Senator MacKinnon                                                               
will continue  to research the bill's  pros and cons. He  said he                                                               
has no  discomfort in moving  SB 6  forward and noted  the bill's                                                               
zero fiscal  note. He added  that Senator MacKinnon  will further                                                               
study  any impacts  and noted  that the  Administration certainly                                                               
has a right to change the fiscal note.                                                                                          
                                                                                                                                
SENATOR MACKINNON  stated that  her purpose is  to have  a policy                                                               
discussion in front  of the people of Alaska. She  noted that she                                                               
had discussions  with the Alaska  Permanent Fund  Corporation and                                                               
the Department of  Revenue regarding the negative  impact from SB                                                               
6  due  to  the  added  time difference  when  dealing  with  the                                                               
financial markets.  She reiterated  that her concern  pertains to                                                               
the issue  of health. She said  she would consider a  second step                                                               
to  review  Alaska's  time  zones after  DST  is  addressed.  She                                                               
reiterated  that  the  state's  legal  department  revealed  that                                                               
Alaska cannot change to permanent DST.                                                                                          
                                                                                                                                
SENATOR COGHILL commented that every  policy the committee brings                                                               
up  uncovers another  need for  policy. He  opined that  the time                                                               
zone  really answers  more to  the objections  of this  bill than                                                               
almost anything that he has seen so  far. He said if the state is                                                               
going to  be under  one time zone,  then the  flexibility between                                                               
the furthest east  and the furthest west are just  going to be in                                                               
huge tension  with DST  highlighting that. He  asked if  there is                                                               
anything  the Legislature  can do  to  help bring  the time  zone                                                               
issue  up. He  assumed that  the time  zone change  is a  federal                                                               
issue. He  inquired if a resolution  is required for a  time zone                                                               
change.                                                                                                                         
                                                                                                                                
9:45:22 AM                                                                                                                    
SENATOR MACKINNON  replied that she  has reached out  to Alaska's                                                               
congressional delegation.  She pointed out that  different states                                                               
at  different  times  are  all  trying to  get  off  of  DST  and                                                               
specified that time-flipping is a  health problem. She noted that                                                               
Dr. Butler  had suggested that  time-flipping is similar  to jet-                                                               
lag where some people require 5 to 10 days to adjust.                                                                           
                                                                                                                                
She summarized  that there  is nothing  that can  be done  at the                                                               
current  time   except  recognizing  DST's   health  consequences                                                               
followed by  addressing Southeast  Alaska's business  issues. She                                                               
asserted   that  Alaska's   northern  and   western  communities,                                                               
especially  children,  struggle with  being  three  hours off  of                                                               
their circadian  rhythm. She  noted that  March and  November are                                                               
higher points  of suicide rates  in Alaska  and she is  trying to                                                               
see if  the rates occur  after the  DST changes. She  opined that                                                               
the  state is  having huge  issues and  dealing with  DST from  a                                                               
biological perspective is the right way to go.                                                                                  
                                                                                                                                
9:48:10 AM                                                                                                                    
SENATOR  WIELECHOWSKI noted  that  switching  permanently to  DST                                                               
solves  a lot  of the  business community  issues. He  asked what                                                               
Senator  MacKinnon's concerns  are  with  switching to  permanent                                                               
DST.                                                                                                                            
                                                                                                                                
SENATOR MACKINNON  answered that she  is in favor of  a permanent                                                               
DST and  noted that  she had  originally asked  the Legislature's                                                               
legal department to look at  permanent DST. She revealed that the                                                               
legal department  said the  state could  not switch  to permanent                                                               
DST.   She  added   that  the   National   Conference  of   State                                                               
Legislatures  revealed that  several other  states were  actually                                                               
proceeding with eliminating DST. She  added that changing DST and                                                               
time zones at  the same time previously  delayed legislation. She                                                               
reiterated  that  addressing  Alaska's time  zones  should  occur                                                               
after the state is taken off of DST.                                                                                            
                                                                                                                                
CHAIR STOLTZE  noted that  he erred  in saying  that there  was a                                                               
fiscal   note.  He   added  that   the  Administration   has  the                                                               
opportunity to express any concerns or potential costs.                                                                         
                                                                                                                                
9:50:17 AM                                                                                                                    
SENATOR WIELECHOWSKI  moved that  the committee  move SB  6, [29-                                                               
LS0111\H], out  of committee with individual  recommendations and                                                               
zero fiscal note.                                                                                                               
                                                                                                                                
9:50:27 AM                                                                                                                    
CHAIR STOLTZE  announced that  hearing no  objection, SB  6 moves                                                               
from committee.                                                                                                                 
                                                                                                                                
         SJR 2-CONST. AM: G.O. BONDS FOR STUDENT LOANS                                                                      
                                                                                                                                
9:50:49 AM                                                                                                                    
CHAIR STOLTZE announced that SJR  2 is the committee's next order                                                               
of business.                                                                                                                    
                                                                                                                                
9:51:29 AM                                                                                                                    
SENATOR  ANNA   MACKINNON,  Alaska  State   Legislature,  Juneau,                                                               
Alaska, SJR  2 sponsor,  explained that SJR  2 proposes  to amend                                                               
Alaska's  Constitution, a  process that  is an  extremely serious                                                               
issue.  She referred  to page  30, Article  9, Section  8 in  the                                                               
Constitution regarding state debt as follows:                                                                                   
                                                                                                                                
     No state debt shall  be contracted unless authorized by                                                                    
     law for  capital improvements  or unless  authorized by                                                                    
     law for  housing loans for  veterans and ratified  by a                                                                    
     majority of the qualified voters  of the state who vote                                                                    
     on the question; Mr. Chairman,  what that means is that                                                                    
     we can't  right now use  the full faith and  credit for                                                                    
     student loans, so our corporation  goes out into a bond                                                                    
     market   and  uses   a   revenue   stream  to   provide                                                                    
     opportunities for Alaskans to borrow.                                                                                      
                                                                                                                                
     Currently the  state interest  rates for  student loans                                                                    
     is 6.7  percent and the  federal rate is  4.66 percent;                                                                    
     should this be  passed into law, the  question would go                                                                    
     before voters in  the 2016 election and  the first time                                                                    
     we can  try to  reduce student loan  debt, or  at least                                                                    
     the interest rate we charge,  would be in 2018 where we                                                                    
     would offer a  bond and the first time  a student could                                                                    
     benefit from this is 2019.                                                                                                 
                                                                                                                                
CHAIR  STOLTZE pointed  out that  voting does  not have  to occur                                                               
during the general election.                                                                                                    
                                                                                                                                
SENATOR MACKINNON  answered correct  and noted that  voting could                                                               
occur in a special election.                                                                                                    
                                                                                                                                
She declared  that SJR 2,  should it be  passed by the  people of                                                               
Alaska, would provide an opportunity  to reduce student loan debt                                                               
through refinancing or lowered interest rates.                                                                                  
                                                                                                                                
9:53:38 AM                                                                                                                    
KRISTEN   PRATT,   Staff,   Senator   MacKinnon,   Alaska   State                                                               
Legislature,  Juneau, Alaska,  confirmed  that Senator  MacKinnon                                                               
had addressed the resolution's main points.                                                                                     
                                                                                                                                
CHAIR STOLTZE asked to verify  that there were similar mechanisms                                                               
for veterans'  bonds in 1982 and  2002. He inquired if  there are                                                               
any other bond authorization mechanisms.                                                                                        
                                                                                                                                
SENATOR MACKINNON  replied that bonding mechanisms  have been for                                                               
capital improvements  that were  originally in  the Constitution.                                                               
She noted  that Chair Stoltze  pointed out that  the Constitution                                                               
was amended  in 1982 to  include veteran housing.  She reiterated                                                               
that SJR 2  specifically allows an opening for  something that is                                                               
not capital.  She noted  that there  has been  conversation about                                                               
trying  to broaden  the resolution  to give  the Legislature  the                                                               
full  power and  authority  to use  the  state's Triple-A  credit                                                               
rating.  She summarized  that SJR  2 addresses  Alaska's students                                                               
who are  adversely effected by  the revenue bond stream  and that                                                               
the people of Alaska support the change.                                                                                        
                                                                                                                                
CHAIR STOLTZE noted that SJR  2 is a constitutional amendment and                                                               
that  he  intends  to  have the  Department  of  Revenue  address                                                               
questions. He asked if  there was a time limit or  if there was a                                                               
substantive change  on the veteran's housing  bonds authorization                                                               
that  required  the  Legislature   to  do  a  new  constitutional                                                               
amendment.                                                                                                                      
                                                                                                                                
9:54:27 AM                                                                                                                    
JERRY  BURNETT, Deputy  Commissioner,  Treasury Division,  Alaska                                                               
Department  of  Revenue,  Juneau,   Alaska,  explained  that  the                                                               
constitutional amendment  in 1982 allowed for  veterans' mortgage                                                               
bonds and  additional veterans' mortgage bonds  was authorized in                                                               
2002. He stated  that he assumed the change in  2002 was strictly                                                               
an authorization and not a constitutional change.                                                                               
                                                                                                                                
CHAIR  STOLTZE  asked  to  verify   that  2002  was  not  another                                                               
constitutional amendment.                                                                                                       
                                                                                                                                
MR.  BURNETT answered  correct.  He remarked  that using  general                                                               
obligation bonds for  student loans would have  no adverse effect                                                               
on the state's  credit rating. He noted that  student bonds would                                                               
not be  included in  the state's  calculation of  state supported                                                               
debt due  to the secured  revenue from the student  loan program.                                                               
He  revealed that  he  sits  on the  board  of  the Student  Loan                                                               
Corporation and  the Department of  Revenue is familiar  with the                                                               
bonding  issue.  He  pointed  out  that  due  to  adverse  market                                                               
conditions,  legislation  was passed  in  2009  to allow  student                                                               
loans to be financed directly out of the general fund.                                                                          
                                                                                                                                
CHAIR  STOLTZE asked  if  the difficulty  was  linked to  federal                                                               
laws.                                                                                                                           
                                                                                                                                
MR.  BURNETT answered  no. He  explained that  the change  was in                                                               
response  to  the  financial crisis  where  direct  student  loan                                                               
lending was locked-up.                                                                                                          
                                                                                                                                
9:58:02 AM                                                                                                                    
CHAIR STOLTZE recalled that  Postsecondary Education prompted the                                                               
Legislature to pass some statutory changes on requirements.                                                                     
                                                                                                                                
MR.  BURNETT  replied  correct. He  specified  that  the  changes                                                               
improved the  program with additional credit  standards. He added                                                               
that legislation was  passed to allow the state to  have a letter                                                               
of credit  to support  the Student  Loan Program's  borrowing and                                                               
finance student loans directly from the general fund.                                                                           
                                                                                                                                
CHAIR  STOLTZE noted  that enhanced  levels of  securitization by                                                               
the borrower was added.                                                                                                         
                                                                                                                                
SENATOR MACKINNON  noted that the  rating for student  credit was                                                               
changed  where  students were  required  to  either use  parents'                                                               
credit ratings or have parents co-sign for loans.                                                                               
                                                                                                                                
SENATOR  WIELECHOWSKI  noted  that  there  are  very  interesting                                                               
provisions  in  the  Constitution's original  section  about  the                                                               
state being able  to contract debt for the  purpose of "Repelling                                                               
invasion, suppressing  insurrection, and  defending the  state in                                                               
war." He asked  what the current student loan rates  were and how                                                               
much the interest rates could possibly be lowered.                                                                              
                                                                                                                                
MR. BURNETT  answered that Diane Barrans  could address questions                                                               
regarding  interest  rates. He  stated  that  borrowing from  the                                                               
Triple-A  rated  general  obligation  debt  will  result  in  low                                                               
interest rate  loans when the  current money market  is sub-three                                                               
percent.                                                                                                                        
                                                                                                                                
10:00:26 AM                                                                                                                   
SENATOR HUGGINS asked  what the default rates  were for veterans'                                                               
mortgages and student loans.                                                                                                    
                                                                                                                                
MR. BURNETT answered  that he was not certain.  He explained that                                                               
the  programs are  structured in  a way  that there's  additional                                                               
security beyond the  borrowing to allow a default  rate that does                                                               
not directly hit the lending.                                                                                                   
                                                                                                                                
SENATOR HUGGINS  noted that student  loans have  some forgiveness                                                               
provisions and pointed out that  mortgages cannot be forgiven. He                                                               
asked what the student loan default rate was.                                                                                   
                                                                                                                                
10:02:06 AM                                                                                                                   
DIANE  BARRANS,  Executive   Officer/Executive  Director,  Alaska                                                               
Student    Loan   Corporation    (ASLC)/Alaska   Commission    on                                                               
Postsecondary  Education (ACPE),  Juneau, Alaska,  explained that                                                               
the current default rate for student  loans is 6.6 percent on the                                                               
overall  portfolio.  She conceded  that  the  default rate  would                                                               
appear high when compared against commercial loans.                                                                             
                                                                                                                                
She  explained  that  funding  for student  loan  debt  is  over-                                                               
collaterized to ensure that the debt to loan ratio is never one-                                                                
to-one. She specified that the  loan program always has excess in                                                               
order to offset any impacts to  the program's ability to pay debt                                                               
service or outstanding loans.                                                                                                   
                                                                                                                                
She added  that there  have been  no loan  forgiveness provisions                                                               
for  some  years. She  noted  that  forgiveness for  the  Teacher                                                               
Education Loan  is being phased out  due to an inability  to fund                                                               
the program with debt.                                                                                                          
                                                                                                                                
CHAIR STOLTZE asked to verify  that there is a medical provider's                                                               
loan forgiveness program.                                                                                                       
                                                                                                                                
MS.  BARRANS answered  correct.  She explained  that  there is  a                                                               
Washington, Wyoming, Alaska, Montana,  and Idaho (WWAMI) Graduate                                                               
Medical Program  where the state directly  funds Alaska students'                                                               
participation with general funds.  She specified that students in                                                               
the WWAMI  Program have  an obligation  to work  in the  state in                                                               
order to receive  loan forgiveness. Students that  fail to comply                                                               
with loan  requirements have to  repay the support the  state has                                                               
provided.                                                                                                                       
                                                                                                                                
10:04:17 AM                                                                                                                   
CHAIR STOLTZE  asked to verify  that there is a  medical provider                                                               
forgiveness program  that is paid  for with general  funds rather                                                               
than the student loan program.                                                                                                  
                                                                                                                                
MS.  BARRANS  noted  that  Chair   Stoltze  was  referencing  the                                                               
Providing  Support-for-Service   to  Health   Care  Practitioners                                                               
(SHARP) Program  which the Legislature has  funded. She explained                                                               
that the  SHARP Program pays for  a percentage of a  student loan                                                               
if  an individual  works in  eight different  medical specialties                                                               
and works in certain underserved areas.                                                                                         
                                                                                                                                
SENATOR  WIELECHOWSKI   asked  what  the  current   student  loan                                                               
interest  rate is  and  what  the percentage  will  be  if SJR  2                                                               
passes.                                                                                                                         
                                                                                                                                
MS. BARRANS answered that the  current student loan interest rate                                                               
is  6.7  percent. She  explained  that  the ASLC  Board  annually                                                               
approves borrower  benefits and noted that  individuals attending                                                               
school in  Alaska receive a  0.50 percent discount,  resulting in                                                               
an interest rate of 6.2 percent.                                                                                                
                                                                                                                                
She  noted that  financial advisors  have indicated  that passing                                                               
SJR 2 could result in interest  rates being lowered by 1.0 to 1.3                                                               
percent.                                                                                                                        
                                                                                                                                
SENATOR HUGGINS  noted that the  University of Alaska  is looking                                                               
at homegrown-teachers  that target Alaska's  bush-communities and                                                               
asked if  a loan  forgiveness will be  instituted to  support the                                                               
program.                                                                                                                        
                                                                                                                                
MS. BARRANS  answered that  supporting homegrown-teachers  with a                                                               
loan  forgiveness  program  similar  to SHARP  is  a  possibility                                                               
rather than  the Teacher Education  Loan that is  currently being                                                               
phased   out.  She   explained   that  the   SHARP  program   has                                                               
successfully  targeted   underserved  areas  where   the  Teacher                                                               
Education Loan  resulted in  a small  percentage actually  in the                                                               
field teaching where the program ideally targeted them.                                                                         
                                                                                                                                
10:07:41 AM                                                                                                                   
SENATOR COGHILL asked  how the bonding process would  work if SJR                                                               
2 passed.                                                                                                                       
                                                                                                                                
SENATOR  MACKINNON  answered  that  the revenue  source  for  the                                                               
bonding service  will change where  a lower interest  is attained                                                               
through the full faith and credit of the State of Alaska.                                                                       
                                                                                                                                
MS.  BARRANS explained  that general  obligation bonds  addresses                                                               
the amount of  debt beyond an authorized cap.  She specified that                                                               
the ASLC  Program goes into  the market  in February or  March in                                                               
order to  coincide with the  academic year.  She said one  of the                                                               
advantages of having general obligation  authority is the process                                                               
will be  more expedited  because there  will not  be the  kind of                                                               
labor intensive  work involve with  rating agencies  that examine                                                               
student loan cash flow portfolios.                                                                                              
                                                                                                                                
10:09:57 AM                                                                                                                   
SENATOR COGHILL  asked to verify that  general obligation bonding                                                               
will smooth  out some of the  cyclical issues by having  a ready-                                                               
bondable system.                                                                                                                
                                                                                                                                
MS. BARRANS answered yes.                                                                                                       
                                                                                                                                
SENATOR  COGHILL  asked  if   the  definition  for  postsecondary                                                               
education  being  inserted  into  the Constitution  needs  to  be                                                               
flexible.                                                                                                                       
                                                                                                                                
MS. BARRANS  answered that the  use of the funding  is controlled                                                               
by the  Legislature through the  student loan statutes  that very                                                               
explicitly set  out what  the loans  can be  used for.  She noted                                                               
that  student  loans  include   vocational  training  that  meets                                                               
certain criteria.                                                                                                               
                                                                                                                                
10:12:01 AM                                                                                                                   
SENATOR WIELECHOWSKI  asked what the  formula is to come  up with                                                               
the current 6.7 percent interest rate.                                                                                          
                                                                                                                                
MS. BARRANS  answered that the  fairly complicated  formula looks                                                               
at the  cost of issuance, the  cost of debt which  ASLC pays, and                                                               
the cost of servicing.                                                                                                          
                                                                                                                                
SENATOR WIELECHOWSKI  noted that  the federal interest  rates are                                                               
much lower,  4.6 percent for  2014-2015. He pointed out  that the                                                               
state's  interest rate  for students  is over  two points  higher                                                               
than the federal interest rate,  a significant difference for the                                                               
tens of thousands  of dollars that students take on.  He asked if                                                               
Ms. Barrans had a component breakdown the student interest rate.                                                                
                                                                                                                                
MS. BARRANS answered  that Congress sets the  rate. She explained                                                               
that because  the federal government  is not financing  the loans                                                               
through  the  financial  markets,   the  federal  government  can                                                               
essentially  choose to  subsidize  the loans  to whatever  extent                                                               
they choose to  and that is a matter of  federal policy. She said                                                               
an  analogy would  be  if the  State of  Alaska  funded the  ASLC                                                               
Program with cash  and the State of Alaska could  set the rate at                                                               
whatever rate they chose to.                                                                                                    
                                                                                                                                
SENATOR MACKINNON pointed out that  most students are referred to                                                               
the federal  program to  access lower  interest rates  first, the                                                               
state's program second,  and the private sector  third. She noted                                                               
that  the   private  sector's  interest  rates   depend  on  what                                                               
educational career the student is pursuing.                                                                                     
                                                                                                                                
MS. BARRANS agreed  with Senator MacKinnon. She  pointed out that                                                               
the Federal  Stafford Loan  is also  available for  students, but                                                               
the interest  rate is 0.50  percent higher than the  state's rate                                                               
at  7.21 percent.  She added  that  the ASLC  Program also  makes                                                               
students and parents  aware of the Family Education  Loan as well                                                               
as the  Supplemental Education Loan.  She revealed that  when the                                                               
instate discount  is factored  in, the  state's loan  options are                                                               
1.0 percent below the federal rate.                                                                                             
                                                                                                                                
10:15:58 AM                                                                                                                   
SENATOR HUGGINS  asked Ms. Barrans  to explain  President Obama's                                                               
proposal to offer education at community colleges.                                                                              
                                                                                                                                
MS.  BARRANS answered  that the  proposal is  in the  President's                                                               
budget.  She  detailed that  the  proposal  comes with  "strings"                                                               
attached  so the  entire concept  is not  free, but  the proposal                                                               
would reduce cost.                                                                                                              
                                                                                                                                
SENATOR HUGGINS  asked for  an explanation  of how  the "strings"                                                               
attached to the program will affect Alaska's students.                                                                          
                                                                                                                                
MS. BARRANS answered  that she has not done the  analysis nor has                                                               
she spoken with the University of Alaska.                                                                                       
                                                                                                                                
SENATOR  HUGGINS  stated  that  he   is  not  supportive  of  the                                                               
President's  concept with  the attached  "strings."  He asked  if                                                               
Alaska  has  a  community  college  campus  that  will  meet  the                                                               
concept's definition.                                                                                                           
                                                                                                                                
MS.  BARRANS   answered  yes.  She  said   Prince  William  Sound                                                               
Community College  and most other  campuses that  primarily offer                                                               
associates  or lower  credentials would  qualify. She  noted that                                                               
there  are   income  contingent   provisions  that  are   in  the                                                               
President's proposal  where students  would not qualify  if their                                                               
family incomes reach certain levels.                                                                                            
                                                                                                                                
10:18:23 AM                                                                                                                   
SENATOR MACKINNON  noted that she has  a son with a  student loan                                                               
debt  in Alaska.  She said  she did  not think  that she  will be                                                               
positively  impacted  because her  son  intends  to pay  off  his                                                               
student loan debt by 2019.                                                                                                      
                                                                                                                                
CHAIR  STOLTZE  inquired if  a  student's  degree is  taken  into                                                               
account when assessing a student loan.                                                                                          
                                                                                                                                
SENATOR MACKINNON  replied that  there is an  education component                                                               
of  the   student  loan  program   where  monthly   payments  are                                                               
calculated based upon a student's career choice.                                                                                
                                                                                                                                
CHAIR STOLTZE noted  that the data provided  from the calculation                                                               
was strictly informational.                                                                                                     
                                                                                                                                
SENATOR MACKINNON replied yes.                                                                                                  
                                                                                                                                
SENATOR WIELECHOWSKI  asked what the  cost breakdown was  for the                                                               
6.7 percent  rate. He  asked what the  three components  are that                                                               
make up the percentage.                                                                                                         
                                                                                                                                
MS. BARRANS explained  that the board annually  sets the interest                                                               
rate that is derived from the three components.                                                                                 
                                                                                                                                
SENATOR WIELECHOWSKI  asked if ASLC  is a breakeven  operation or                                                               
if money is returned to the general fund.                                                                                       
                                                                                                                                
MS. BARRANS  answered that  there have  been dividends  that ASLC                                                               
has  paid to  the  state. She  noted  that ASCL  has  not paid  a                                                               
dividend to the state since  2009. She explained that ASLC's goal                                                               
is  to do  just  enough better  than breaking  even  to keep  the                                                               
organization in the black.                                                                                                      
                                                                                                                                
10:21:26 AM                                                                                                                   
SENATOR WIELECHOWSKI  asked if Ms.  Barrans had any sense  of how                                                               
the state's interest rate compares with other states.                                                                           
                                                                                                                                
MS. BARRANS  answered that the  state's interest rates  are quite                                                               
comparable  to  other  states,  but   noted  that  Texas  is  the                                                               
exception  with   a  program  that  is   funded  through  general                                                               
obligation bonds. She  pointed out that Texas  actually has loans                                                               
that range from a 0.0 percent to 5.5 percent.                                                                                   
                                                                                                                                
SENATOR  WIELECHOWSKI  asked  if  the Texas  model  is  something                                                               
Alaska could replicate.                                                                                                         
                                                                                                                                
MS. BARRANS answered that replicating  a program similar to Texas                                                               
would  seem  unlikely  due  to   the  state's  current  financial                                                               
climate.  She explained  that Texas  has built  their large  fund                                                               
source over a  40 year period. She noted that  Texas is seriously                                                               
looking at ending their 0.0 interest rate.                                                                                      
                                                                                                                                
SENATOR COGHILL asked what the cost of debt is for ASLC.                                                                        
                                                                                                                                
MS. BARRANS  answered that ACPS  actually services the  loans for                                                               
the  ASLC and  there  are costs  associated  with servicing.  She                                                               
revealed that other  than servicing, the other  costs include the                                                               
interest paid  on the debt and  the onetime cost of  issuance for                                                               
the bond council rating agency fees.                                                                                            
                                                                                                                                
CHAIR  STOLTZE  announced that  the  committee  will hear  public                                                               
testimony.                                                                                                                      
                                                                                                                                
10:24:29 AM                                                                                                                   
LANCE  STEVENS, President,  Juneau Chamber  of Commerce,  Juneau,                                                               
Alaska, Supports  SJR 2. He  said the Juneau Chamber  of Commerce                                                               
feels  that  any opportunity  to  increase  the participation  in                                                               
continuing education increases the ability  to hire and recruit a                                                               
qualified workforce.  He asserted that driving  down student debt                                                               
servicing costs  increases the opportunity for  repayment, lowers                                                               
default rates, and sets individuals up for long term success.                                                                   
                                                                                                                                
SENATOR  HUGGINS noted  that some  states  with large  industrial                                                               
bases  have companies  that  buyout student  loans.  He asked  if                                                               
Alaska has programs that buyout student loans.                                                                                  
                                                                                                                                
MR.  STEVENS noted  that the  Juneau Chamber  of Commerce  offers                                                               
class reimbursement within its organization  for classes that are                                                               
business  oriented. He  specified that  students pay  upfront and                                                               
reimbursement is based on achieving  a certain qualifications. He                                                               
said what Senator Huggins referred to is more industry specific.                                                                
                                                                                                                                
10:28:04 AM                                                                                                                   
MIKE  COONS, representing  himself, Palmer,  Alaska, stated  that                                                               
student  loans negatively  impact taxpayers  and harms  students'                                                               
and parents'  credit ratings.  He opined that  there needs  to be                                                               
more  encouragement  for  Alaska's  parents to  save  more  money                                                               
rather than  borrowing. He inquired  if the Alaska  student loans                                                               
can  be used  at colleges  outside of  the state.  He added  that                                                               
students  who  attend colleges  outside  of  Alaska tend  not  to                                                               
return.  He  noted   that  the  6.6  percent   default  rate  was                                                               
substantial  and asked  what the  specific default  rate was  for                                                               
veterans.                                                                                                                       
                                                                                                                                
10:32:57 AM                                                                                                                   
CHAIR STOLTZE  noted that he  shares a  lot of the  same personal                                                               
values  with Mr.  Coons about  personal responsibility  and being                                                               
debt free.                                                                                                                      
                                                                                                                                
He  noted  that  Ms.  Barrans  had testified  in  the  past  that                                                               
Alaskans who  did not return to  the state actually had  a higher                                                               
repayment rate than students who remained in Alaska.                                                                            
                                                                                                                                
MS. BARRANS acknowledged that Chair Stoltze was correct.                                                                        
                                                                                                                                
CHAIR STOLTZE  added that  the state needs  to strive  to correct                                                               
the default percentage for instate students.                                                                                    
                                                                                                                                
10:34:23 AM                                                                                                                   
DAVID NEES,  representing himself, Anchorage, Alaska,  noted that                                                               
he  is concerned  about  amending the  Constitution  to bond  for                                                               
something  that  is not  real  property.  He  stated that  he  is                                                               
worried that  additional programs might be  considered to receive                                                               
lower interest  rates from the  state. He asked what  the current                                                               
default rate  was. He pointed  out that the current  loan program                                                               
pays  for 90  percent or  100 percent  of the  ACPE's budget.  He                                                               
inquired if a  lowered loan rate program will  ultimately be paid                                                               
for from the state's general fund.                                                                                              
                                                                                                                                
10:36:48 AM                                                                                                                   
MS. BARRANS reiterated  that the current student  default rate is                                                               
6.6 percent  on the outstanding  portfolio. She pointed  out that                                                               
the  default  rate will  continue  to  decline because  a  higher                                                               
credit requirement has been in  place for the last several years.                                                               
She  said the  structure from  the proposed  bill should  have no                                                               
effect in the  way ACPE's activities are funded.  She stated that                                                               
ACPE does  not expect to shift  any of its supported  cost to the                                                               
general  fund and  costs will  continue  to be  paid from  ASLC's                                                               
receipts.                                                                                                                       
                                                                                                                                
10:38:00 AM                                                                                                                   
CHAIR STOLTZE stated that he  suspects the bill will receive more                                                               
scrutiny in the Senate Finance Committee.                                                                                       
                                                                                                                                
SENATOR HUGGINS asked if ACPE has wage garnishment authority.                                                                   
                                                                                                                                
MS.  BARRANS answered  yes. She  said the  Legislature has  given                                                               
ACPE  the  authority  by statute  to  issue  administrative  wage                                                               
garnishments. She  stated that wage  garnishment is  another tool                                                               
that  ACPE uses  on a  regular basis.  She added  that ACPE  also                                                               
garnishes Permanent Fund Dividends  (PFD). She revealed that ACPE                                                               
is  third in  line for  PFD garnishment  after child  support and                                                               
court ordered restitution.                                                                                                      
                                                                                                                                
CHAIR  STOLTZE  announced  that seeing  no  additional  requests,                                                               
public testimony is closed.                                                                                                     
                                                                                                                                
SENATOR  WIELECHOWSKI asked  after  garnishment procedures,  what                                                               
default percentage is actually not recovered.                                                                                   
                                                                                                                                
MS. BARRANS  replied that she can  provide write-off information.                                                               
She  noted that  some write-offs  occurs  due to  death or  total                                                               
disability.                                                                                                                     
                                                                                                                                
CHAIR   STOLTZE  asked   if  the   ASLC   oversees  its   default                                                               
collections.                                                                                                                    
                                                                                                                                
MS. BARRANS  answered that  ACPE does  instate collections  and a                                                               
third party collection agency is  used to pursue some instate and                                                               
out of state collections.                                                                                                       
                                                                                                                                
CHAIR  STOLTZE  asked  what percentage  ACPE  collects  from  its                                                               
defaulters.                                                                                                                     
                                                                                                                                
MS. BARRANS  answered that 15  percent is considered a  good rate                                                               
for badly-aged debt.                                                                                                            
                                                                                                                                
10:41:59 AM                                                                                                                   
SENATOR COGHILL moved to report SJR 2, [29-LS0010\W], from                                                                      
committee with individual recommendations and attached fiscal                                                                   
note(s).                                                                                                                        
                                                                                                                                
10:42:19 AM                                                                                                                   
CHAIR STOLTZE announced that seeing no objection, SJR 2 moved                                                                   
out of committee.                                                                                                               
                                                                                                                                
CHAIR STOLTZE noted that the committee meeting did not have time                                                                
to address Ballot Measure No. 2 (13PSUM) - An Act to Tax and                                                                    
Regulate the Possession of Marijuana.                                                                                           
                                                                                                                                
10:43:45 AM                                                                                                                   
There being no further business to come before the committee,                                                                   
Chair Stoltze adjourned the Senate State Affairs Standing                                                                       
Committee hearing at 10:43 a.m.                                                                                                 

Document Name Date/Time Subjects
SB6 ver H.pdf SSTA 2/10/2015 9:00:00 AM
SB 6
SB6 Sponsor Statement.pdf SSTA 2/10/2015 9:00:00 AM
SB 6
SB6 Fiscal Note - DOA-FAC-02-06-2015.pdf SSTA 2/10/2015 9:00:00 AM
SB 6
SB6 Supporting Documents - Letters and Emails of Support 2-9-2015.pdf SSTA 2/10/2015 9:00:00 AM
SB 6
SB6 Supporting Document - Alaska Time Zones History.pdf SSTA 2/10/2015 9:00:00 AM
SB 6
SB6 Supporting Document - Daylight Gains by City.pdf SSTA 2/10/2015 9:00:00 AM
SB 6
SB6 Supporting Documents - Journal Articles.pdf SSTA 2/10/2015 9:00:00 AM
SB 6
SJR2 ver W.pdf SSTA 2/10/2015 9:00:00 AM
SJR 2
SJR2 Sponsor Statement.pdf SSTA 2/10/2015 9:00:00 AM
SJR 2
SJR2 Sectional Analysis.pdf SSTA 2/10/2015 9:00:00 AM
SJR 2
SJR2 Letter of Support - University of Alaska.pdf SSTA 2/10/2015 9:00:00 AM
SJR 2
SJR2 Fiscal Note OOG-DOE 2-9-15.pdf SSTA 2/10/2015 9:00:00 AM
SJR 2
SB6 Support Document - Email Janet Boylan 1-28-2015.pdf SSTA 2/10/2015 9:00:00 AM
SB 6
SJR2 ACPE Follow-Up from 2-10-15 SSTA.pdf SSTA 2/10/2015 9:00:00 AM
SJR 2
SJR2 Support Document - Letter Juneau Chamber of Commerce 2-10-15.pdf SSTA 2/10/2015 9:00:00 AM
SJR 2