Legislature(2017 - 2018)BELTZ 105 (TSBldg)
01/30/2018 01:00 PM Senate LABOR & COMMERCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| SB126 | |
| HB124 | |
| HB208 | |
| HB102 | |
| HB114 | |
| HB121 | |
| HB86 | |
| HCR8 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 126 | TELECONFERENCED | |
| + | HB 208 | TELECONFERENCED | |
| += | HB 102 | TELECONFERENCED | |
| + | HB 114 | TELECONFERENCED | |
| + | HB 121 | TELECONFERENCED | |
| + | HB 124 | TELECONFERENCED | |
| + | HB 86 | TELECONFERENCED | |
| + | HCR 8 | TELECONFERENCED | |
HB 86-STUDENT LOAN DEFAULT/OCC. LICENSE RENEWAL
2:34:23 PM
CHAIR COSTELLO announced the consideration of HB 86.
2:34:38 PM
REPRESENTATIVE MATT CLAMAN, Alaska State Legislature, Juneau,
Alaska, sponsor of HB 86, quoted Thomas Jefferson who said,
"Government is best which governs least." He said the goal of HB
86 is to revoke the Alaska Commission on Postsecondary
Education's authority to use the nonrenewal of occupational
licenses as an incentive to ensure the payment of student loans
that are in default. The commission has not exercised this
authority since 2010 and has found that garnishing wages is a
more effective tool. In the past, those who had their licenses
revoked left the state and established practice elsewhere. In
those instances, the state not only lost the ability to collect
but also a skilled member of the Alaskan workforce. Thus, it
makes sense to ensure that this sort of government overreach
cannot occur.
2:35:56 PM
CERI GODINEZ, Staff, Representative Matt Claman, Alaska State
Legislature, Juneau, Alaska, presented HB 86, reading from the
following prepared statement:
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 2016, Montana became the first state to repeal
similar statutes and now only 20 states remain. This
bill allows us to follow Montana's example and reduce
that number to 19 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.
CHAIR COSTELLO asked Ms. Butler if the department had a position
on the bill.
2:38:26 PM
STEPHANIE BUTLER, Executive Director, Alaska Commission on
Postsecondary Education, Department of Education and Early
Development (DEED), Juneau, Alaska, stated that the
commission is not currently using its authority to threaten
nonrenewal of an occupational license for individuals who
have defaulted on their student loans. It has not been an
effective tool and therefore the commission has no concerns
with HB 86.
CHAIR COSTELLO asked her to comment on the March 20, 2017
memo in which Representative Birch asked if she had a sense
of the magnitude of the debt and number of recipients who
would be impacted by the bill.
MS. BUTLER said at that time there was about $240 million
in outstanding state loans. The value of that portfolio
currently is slightly less than $200 million. She
reiterated that the commission has found it is most
effective to collect on defaulted loans by garnishing
either wages or the permanent fund dividend PFD.
CHAIR COSTELLO noted that the memo identified 46 defaulted
borrowers with outstanding loans, none of whom are employed
in Alaska.
MS. BUTLER said that's correct and the commission has
released the holds on those licenses.
CHAIR COSTELLO asked if the comment about garnishing a
permanent fund dividend was hypothetical.
MS. BUTLER answered yes.
SENATOR MICCICHE asked if the commission is powerless to
collect on those 46 defaulted loans.
MS. BUTLER replied there are nationwide tools such as
credit reporting, but the ability to collect is less when
the defaulted borrower is out of state.
SENATOR MICCICHE asked if garnishing wages is an option,
although more difficult, when the defaulted borrower is out
of state.
MS. BUTLER answered yes.
SENATOR MICCICHE asked, "It's not something you use, and
you have no concern about eliminating the potential to
revoke licensing?"
MS. BUTLER replied that's correct; it wasn't an effective
tool.
2:42:52 PM
SENATOR GARDNER asked if [$200] million was the total
outstanding, not the amount in default.
MS. BUTLER replied that's correct.
SENATOR MEYER summarized that nonrenewal has not been used
since 2010, and the best tool is to garnish the PFD or
wages.
MS. BUTLER said that's correct.
SENATOR MICCICHE expressed interest in looking at the data
on the average amounts of the defaulted loans.
MS. BUTLER agreed to follow up with the information.
CHAIR COSTELLO asked the sponsor to comment on the
perception that it's a lose-lose situation if a defaulted
borrower leaves the state. The state doesn't collect, and
it also loses that worker.
REPRESENTATIVE CLAMAN said his office found that having the
authority to exercise this power was a double negative.
CHAIR COSTELLO said she would hold the bill awaiting the
information on the 46 borrowers with outstanding
occupational license holds.
SENATOR MEYER asked if licensing entities check on
outstanding loans in other states.
MS. BUTLER said she was unaware of any state reciprocity
specific to defaulted student loans.
SENATOR MEYER asked if they were talking about state or
federal loans.
MS. BUTLER replied only state loans.
SENATOR MEYER commented on the need to keep students in
Alaska.
SENATOR MICCICHE clarified that his request was on the
outstanding state loans. He added that he is inclined to
forgive loans to encourage Alaskans to stay here as opposed
to eliminating a collection tool.
2:49:54 PM
CHAIR COSTELLO opened public testimony on HB 86.
2:50:06 PM
AMBER MICHAIS, Registered Nurse, Alaska Nurses Association,
Anchorage, Alaska, stated support for HB 86 and described it as
student debt relief. She said student debt is a significant
issue and it makes sense to keep someone who has student debt
working. Preventing them from working by nonrenewal of their
professional license makes it difficult to impossible to pay
back their loan. HB 86 will ensure that Alaska nurses are able
to continue their profession so that Alaskans receive care when
it's needed.
She shared that she has high balance loans and the current law
could cripple her ability to support her family should she find
herself in default.
SENATOR GARDNER pointed out that debt relief is not the focus of
the bill. It's about how to best protect the state's interest in
collecting where appropriate.
2:53:29 PM
CHAIR COSTELLO closed public testimony on HB 86 and held the
bill in committee.