03/01/2017 08:00 AM House EDUCATION

        HB 86-STUDENT LOAN DEFAULT/OCC. LICENSE RENEWAL                                                                     
                                                                                                                                
9:21:28 AM                                                                                                                    
                                                                                                                                
CHAIR DRUMMOND announced  that the final order  of business would                                                               
be  HOUSE  BILL  NO.  86,  "An  Act  relating  to  nonrenewal  of                                                               
occupational licenses for default on a student loan."                                                                           
                                                                                                                                
9:21:54 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MATT  CLAMAN, Alaska  State Legislature,  as prime                                                               
sponsor,  introduced   HB  86,   paraphrasing  from   a  prepared                                                               
statement,   which   read   as  follows   [original   punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     Thomas Jefferson  said, "That government is  best which                                                                    
     governs least ..."  Our  goal in bringing forward House                                                                    
     Bill  86   is  to  revoke  the   Alaska  Commission  on                                                                    
     Postsecondary Education's  authority to  use nonrenewal                                                                    
     of  occupational licenses  as  an  incentive to  ensure                                                                    
     repayment of student loans in  the instance of default.                                                                    
     As the  consequences of defaulting are  already severe,                                                                    
     and  the commission  has not  exercised this  authority                                                                    
     since 2010, it makes sense to repeal these statutes.                                                                       
                                                                                                                                
9:22:48 AM                                                                                                                    
                                                                                                                                
OWEN PHILLIPS,  Staff, Representative  Matt Claman,  Alaska State                                                               
Legislature,  presented  HB  86,  paraphrasing  from  a  prepared                                                               
statement,   which   read   as  follows   [original   punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     House Bill  86 repeals current statutes  that allow the                                                                    
     Alaska Commission on  Postsecondary Education (ACPE) to                                                                    
     threaten  nonrenewal   of  occupational   licenses  for                                                                    
     individuals who have defaulted  on their student loans.                                                                    
     Repealing   this   authority    will   allow   licensed                                                                    
     individuals to continue their work  in order to earn an                                                                    
     income and pay back  their defaulted loans without fear                                                                    
     of losing their license.                                                                                                   
                                                                                                                                
     There are  already many difficulties that  one faces if                                                                    
     they  default on  their student  loans, not  limited to                                                                    
     late fees, court costs, liens  on property, and adverse                                                                    
     reports to consumer reporting agencies.                                                                                    
                                                                                                                                
     The current statute states that  the commission has the                                                                    
     authority to  provide notice  to a  licensing authority                                                                    
     for nonrenewal of a license  upon default.  If the ACPE                                                                    
     posts such  notice, the licensing entity  may not renew                                                                    
     said license  during the next  renewal cycle.   Many of                                                                    
     these laws  were passed in  the 1990s and  early 2000s,                                                                    
     when student  aid was often  provided by states.   Now,                                                                    
     however,  most loans  are federal.   In  addition, this                                                                    
     authority  has not  been  used since  2010  - prior  to                                                                    
     which it was utilized in 155 instances.                                                                                    
                                                                                                                                
     Last  year, Montana  became the  first state  to repeal                                                                    
     similar statutes and  now only 21 states  remain.  This                                                                    
     bill allows  us to follow Montana's  example and reduce                                                                    
     that  number  to 20  states  and  protect our  licensed                                                                    
     nurses,   pharmacists,    social   workers,   teachers,                                                                    
     correctional officers, and many others.                                                                                    
                                                                                                                                
     I'll  now provide  a brief  sectional  analysis of  the                                                                    
     bill.                                                                                                                      
                                                                                                                                
     Section  One   deletes  language  that  is   no  longer                                                                    
     necessary after the repeals mentioned in section two.                                                                      
                                                                                                                                
     Section  Two  repeals:   the  following  statutes:   AS                                                                    
     14.43.145(a)(4)   which   gives    authority   to   the                                                                    
     commission to provide notice of  default to a licensing                                                                    
     entity for nonrenewal of a license.                                                                                        
                                                                                                                                
     AS 14.43.148  which indicates  that a  licensing entity                                                                    
     may not  renew a license  if they have  received notice                                                                    
     from the commission that the  licensee has defaulted on                                                                    
     a loan issued by the commission.                                                                                           
                                                                                                                                
     AS 21.27.390(d) which references temporary licenses.                                                                       
                                                                                                                                
9:26:39 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FANSLER asked whether  there are any concerns that                                                               
removing the provision will result in a rise of default loans.                                                                  
                                                                                                                                
MR.  PHILLIPS  pointed  to  the  fiscal  note,  included  in  the                                                               
committee  packet,  which  shows  no plans  to  re-implement  the                                                               
practice.  He deferred further comment.                                                                                         
                                                                                                                                
9:27:57 AM                                                                                                                    
                                                                                                                                
STEPHANIE  BUTLER,  Executive Director,  Postsecondary  Education                                                               
Commission, Department of Education  and Early Development (EED),                                                               
replied  that the  commission holds  no  concerns for  a rise  in                                                               
default rates, should  the bill become law.  Further,  a suite of                                                               
authorities  exists  to  address  students  who  have  difficulty                                                               
repaying loans, she said.                                                                                                       
                                                                                                                                
9:29:23 AM                                                                                                                    
                                                                                                                                
CHAIR DRUMMOND closed public testimony on HB 86.                                                                                
                                                                                                                                
9:29:38 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TALERICO  stated support  for HB  86 and  said the                                                               
prospect  of  seizing  someone's  license  to  cover  a  debt  is                                                               
counter-productive.                                                                                                             
                                                                                                                                
9:30:25 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PARISH moved  to report  HB 86  out of  committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
notes.   There being no  objection, HB  86 was reported  from the                                                               
House Education Standing Committee.