03/23/2022 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB160 | |
| SB174 | |
| HB133 | |
| SB233 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 160 | TELECONFERENCED | |
| *+ | SB 234 | TELECONFERENCED | |
| + | HB 133 | TELECONFERENCED | |
| *+ | SB 233 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 174 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
March 23, 2022
1:30 p.m.
MEMBERS PRESENT
Senator Mia Costello, Chair
Senator Joshua Revak, Vice Chair
Senator Peter Micciche
Senator Elvi Gray-Jackson
MEMBERS ABSENT
Senator Gary Stevens
COMMITTEE CALENDAR
SENATE BILL NO. 160
"An Act providing a premium tax credit for flood insurance;
relating to flood insurance; relating to property insurance;
establishing the Alaska Flood Authority and the Alaska flood
insurance fund; and providing for an effective date."
- HEARD & HELD
SENATE BILL NO. 174
"An Act relating to dress codes and natural hairstyles."
- MOVED CSSB 174(EDC) OUT OF COMMITTEE
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 133(L&C)
"An Act relating to the Alaska savings program for eligible
individuals; relating to education savings programs; relating to
the Education Trust of Alaska; relating to the Alaska advance
college tuition savings fund; relating to the Alaska education
savings program for children; and relating to the Governor's
Council on Disabilities and Special Education."
- HEARD & HELD
SENATE BILL NO. 233
"An Act relating to allowable absences for permanent fund
dividend qualification; and providing for an effective date."
- HEARD & HELD
SENATE BILL NO. 234
"An Act establishing the office of broadband; creating the
broadband parity adjustment fund; establishing the Statewide
Broadband Advisory Board; and providing for an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: SB 160
SHORT TITLE: FLOOD INSURANCE
SPONSOR(s): SENATOR(s) STEDMAN
01/18/22 (S) READ THE FIRST TIME - REFERRALS
01/18/22 (S) L&C, FIN
03/23/22 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 174
SHORT TITLE: ALLOW NATURAL HAIRSTYLES
SPONSOR(s): SENATOR(s) WILSON
02/01/22 (S) READ THE FIRST TIME - REFERRALS
02/01/22 (S) EDC, L&C
02/16/22 (S) EDC AT 9:00 AM BUTROVICH 205
02/16/22 (S) Heard & Held
02/16/22 (S) MINUTE(EDC)
02/23/22 (S) EDC AT 9:00 AM BUTROVICH 205
02/23/22 (S) Moved CSSB 174(EDC) Out of Committee
02/23/22 (S) MINUTE(EDC)
02/25/22 (S) EDC RPT CS 1DP 4NR SAME TITLE
02/25/22 (S) DP: HOLLAND
02/25/22 (S) NR: HUGHES, STEVENS, BEGICH, MICCICHE
02/28/22 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/28/22 (S) Heard & Held
02/28/22 (S) MINUTE(L&C)
BILL: HB 133
SHORT TITLE: AK ED SAVINGS PROGRAMS/ELIGIBILITY
SPONSOR(s): LABOR & COMMERCE
03/10/21 (H) READ THE FIRST TIME - REFERRALS
03/10/21 (H) L&C, FIN
03/17/21 (H) L&C AT 5:45 PM BARNES 124
03/17/21 (H) <Bill Hearing Canceled>
03/19/21 (H) L&C AT 3:15 PM BARNES 124
03/19/21 (H) Heard & Held
03/19/21 (H) MINUTE(L&C)
03/24/21 (H) L&C AT 3:15 PM DAVIS 106
03/24/21 (H) Moved CSHB 133(L&C) Out of Committee
03/24/21 (H) MINUTE(L&C)
03/24/21 (H) L&C AT 5:45 PM DAVIS 106
03/24/21 (H) -- MEETING CANCELED --
03/25/21 (H) L&C RPT CS(L&C) 6DP 1NR
03/25/21 (H) DP: SNYDER, SCHRAGE, MCCARTY, NELSON,
SPOHNHOLZ, FIELDS
03/25/21 (H) NR: KAUFMAN
04/07/21 (H) HSS REPLACES FIN REFERRAL
04/07/21 (H) BILL REPRINTED
04/20/21 (H) HSS AT 3:00 PM DAVIS 106
04/20/21 (H) Heard & Held
04/20/21 (H) MINUTE(HSS)
04/22/21 (H) HSS AT 3:00 PM DAVIS 106
04/22/21 (H) Moved CSHB 133(L&C) Out of Committee
04/22/21 (H) MINUTE(HSS)
04/26/21 (H) HSS RPT CS(L&C) 5DP 1NR
04/26/21 (H) DP: FIELDS, SPOHNHOLZ, MCCARTY,
ZULKOSKY, SNYDER
04/26/21 (H) NR: KURKA
05/07/21 (H) TRANSMITTED TO (S)
05/07/21 (H) VERSION: CSHB 133(L&C)
05/10/21 (S) READ THE FIRST TIME - REFERRALS
05/10/21 (S) HSS, L&C
02/03/22 (S) HSS AT 1:30 PM BUTROVICH 205
02/03/22 (S) Heard & Held
02/03/22 (S) MINUTE(HSS)
02/08/22 (S) HSS AT 1:30 PM BUTROVICH 205
02/08/22 (S) Heard & Held
02/08/22 (S) MINUTE(HSS)
02/15/22 (S) HSS AT 1:30 PM BUTROVICH 205
02/15/22 (S) Moved HB 133 Out of Committee
02/15/22 (S) MINUTE(HSS)
02/16/22 (S) HSS RPT 3NR 2DP
02/16/22 (S) NR: WILSON, REINBOLD, COSTELLO
02/16/22 (S) DP: BEGICH, HUGHES
03/23/22 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 233
SHORT TITLE: PFD ALLOWABLE ABSENCE/MERCHANT MARINE
SPONSOR(s): LABOR & COMMERCE
03/15/22 (S) READ THE FIRST TIME - REFERRALS
03/15/22 (S) L&C
03/23/22 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
SENATOR BERT STEDMAN
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 160.
DAVID SCOTT, Staff
Senator Bert Stedman
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis for SB 160.
LORI WING-HEIER, Director
Division of Insurance
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Answered questions and provided information
during the hearing on SB 160.
SENATOR DAVID WILSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 174.
REPRESENTATIVE ZACK FIELDS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of HB 133.
GRACE KUBIT, Staff
Representative Zack Fields
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the sectional analysis for HB 133.
CATHY TAYLOR, Board Member
Alaska Behavioral Health
Kenai, Alaska
POSITION STATEMENT: Testified by invitation in support of HB
133.
DAN SADDLER, former Representative
Eagle River, Alaska
POSITION STATEMENT: Testified by invitation in support of HB
133.
KATIE MCCALL, Staff
Senator Mia Costello
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced SB 233 on behalf of the Senate
Labor and Commerce Standing Committee.
RICH BERKOWITZ, Consultant
Transportation Institute (TI)
Seattle, Washington
POSITION STATEMENT: Testified by invitation in support of SB
233.
TIFFANY ALBERT, Director of Communications
Alaska State Chamber
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation in support of SB
233.
MYKEL POTTER, representing self
Sitka, Alaska
POSITION STATEMENT: Testified in support of SB 233.
ANNA MACKINNON, Director
Permanent Fund Dividend Division
Department of Administration (DOA)
Juneau, Alaska
POSITION STATEMENT: Expressed concern that the language in SB
233 was too broad.
ACTION NARRATIVE
1:30:31 PM
CHAIR MIA COSTELLO called the Senate Labor and Commerce Standing
Committee meeting to order at 1:30 p.m. Present at the call to
order were Senators Micciche, Gray-Jackson, Revak, and Chair
Costello.
SB 160-FLOOD INSURANCE
1:31:06 PM
CHAIR COSTELLO announced the consideration of SENATE BILL NO.
160 "An Act providing a premium tax credit for flood insurance;
relating to flood insurance; relating to property insurance;
establishing the Alaska Flood Authority and the Alaska flood
insurance fund; and providing for an effective date."
CHAIR COSTELLO stated that this is the first hearing and the
intention is to hear the introduction and take invited and
public testimony.
1:31:39 PM
SENATOR BERT STEDMAN, Alaska State Legislature, Juneau, Alaska,
sponsor of SB 160, introduced the legislation. The sponsor
statement read as follows:
SB 160 has been introduced to protect Alaskans from
financial abuse at the hands of the Federal Emergency
Management Agency (FEMA).
Over the past 5-years, FEMA has expanded its 'flood
zone' maps and for the first time ever, hundreds and
possibly thousands of homes and businesses will now be
in a federally designated 'high risk' zone. Virtually
none of these homes or businesses have ever
experienced a flood and are unlikely to flood in the
future.
Homes and businesses in a new FEMA flood zone could
see significant negative impacts to property values
from requirements to purchase expensive flood
insurance (flood insurance must be purchased if the
owner uses a federally insured bank). Also, the new
and expanded flood zones can also restrict how a
structure is built on private property and impact
existing homes and businesses that want to
rehabilitate, upgrade, expand, and repair building.
FEMA administers the National Flood Insurance Program
(NFIP). The NFIP was created to share the risk of
flood losses (nationwide) via flood insurance. The
program enables property owners in participating
communities to purchase insurance protection,
administered by the government, against losses from
flooding, and requires flood insurance for all loans
or lines of credit that are secured by existing
buildings, manufactured homes, or buildings under
construction, located in the FEMA Flood Zone in a
community that participates in the NFIP.
1:33:56 PM
Currently, Alaskans are paying flood insurance to
offset the billions in hurricane losses in the Lower
48. Combine this with very few payouts to flood
victims and it can easily be concluded that the NFIP
doesn't work for Coastal Alaskans.
It is the intent of SB 160 to supplant the NFIP with
an Alaska based insurance program that keeps the
premium payments in Alaska, benefitting Alaskans.
SENATOR STEDMAN stated that he contacted the Division of
Insurance to discuss addressing this issue by creating an Alaska
insurance program that sets premiums commensurate to the losses
and overhead to administer the program. He highlighted that
FEMA's focus on limiting waterfront development in coastal
Alaska to reduce risk would no longer be an issue if Alaska had
its own insurance program.
CHAIR COSTELLO asked if he was aware of other states that have
started their own insurance program.
SENATOR STEDMAN answered no, but his office would do a little
research to provide a more accurate answer.
CHAIR COSTELLO said it would also be interesting to look at the
miles of coastline in Alaska compared to other coastal states.
She asked Mr. Scott to walk through the sectional analysis.
1:43:10 PM
DAVID SCOTT, Staff, Senator Bert Stedman, Alaska State
Legislature, Juneau, Alaska, presented the sectional analysis
for SB 160. It read as follows:
[Original punctuation provided.]
Section 1 Amends AS 21.09.210 to add
A Qualified insurer in the Alaska Flood Authority
is entitled to a premium tax credit.
Section 2 Amends AS 21.39.030(a) to add
Flood insurance rates must made with
consideration of historical flood and damage on
real and personal property to be insured.
Section 3 amends 21.39.030(c) to add
Definition of 'flood'.
Section 4 Adds 21 subsections (AS 21.60.100 thru
.300) creating the "Alaska Flood Authority".
AS 21.60.100 Creation & Membership
Creates Flood Authority. Membership includes
all licensed property insurers. Membership
is required and they must submit reports or
provide information as required by the Board
or the Director.
AS 21.60.110 Board; Organization; Report
Creates 7-member Board for the Alaska Flood
Authority:
• 3 selected by Authority members,
subject to Director's approval.
• 2 selected by Director who represent
consumers.
• 1 selected by director who represents
banks.
• 1 selected by director who represents
AHFC.
Requires an annual report of operations to:
• Analyze effectiveness.
• Evaluate the benefits in comparison to
the National Flood Insurance Act.
• Identify penalties imposed or
potentially imposed on individuals and
communities by the federal government.
1:45:04 PM
AS 21.60.120 Powers of Authority
The Authority may:
• Exercise powers granted to insurers
under laws of the state.
• Sue or be sued.
• Enter into contracts with insurers,
similar authorities in other states for
the performance of administrative
functions.
• Establish administrative and accounting
procedures.
• Receive funds from sources other than
members.
AS 21.60.130 Plan of Operation
Requires Authority to submit a plan of
operations. The Director must approve and
may adopt regulations to carry out the
provisions. Members are required to comply
with the plan.
AS 21.60.140 Administrative Procedures Act
Authority is exempt from the Administrative
Procedures Act.
AS 21.60.150 Tax Exemption
Authority is exempt from fees and taxes of
the state or political subdivisions, except
property taxes.
AS 21.60.160 Types of Insurance Plans
Requires Authority to provide at least one
state plan of flood insurance.
AS 21.60.170 Coverage & Terms
Requires state flood insurance plan to be
the same as coverage provided by the
National Flood Insurance Program. Further
defines terms of state flood insurance plan.
AS 21.60.180 State Plan Premiums
Rates must not be discriminatory. Board must
use actual historical flood and damage data
to determine rates. The Director must
approve rates before use.
AS 21.60.190 Duties of Authority
The Authority shall:
• Perform administrative and claims
payment required.
• Provide a policy statement to enrolled
persons.
1:46:58 PM
AS 21.60.200 Funding; Penalties; Premium Tax
Credit
Each member of the authority shall share in
the losses, pay dues, and share in the
operating and administrative expenses.
Calculates member's liability and requires
board to make annual assessment. Addresses
failure to pay assessments. Provides for a
premium tax credit of 50% of assessment. If
the amount of assessments is insufficient to
satisfy a claim, the Legislature may
appropriate up to $10m to DCCED.
AS 21.60.210 Eligibility
Authority determines eligibility. Director
may impose additional requirements.
AS 21.60.220 Enrollment by Eligible Person
A person must apply to enroll in a state
plan.
AS 21.60.230 Response by the Authority
Authority must reject or accept within 90
days.
AS 21.60.240 Effective Date of Insurance
Insurance takes effect upon receipt of first
premium. Retroactive if plan expires and
person re-applies within 60 days and pays
premium.
AS 21.60.250 Solicitation of Eligible Persons
The Authority shall inform persons in a
special flood hazard area the existence of a
state flood insurance plan.
1:49:00 PM
AS 21.60.260 Duties of Director of Insurance
Requires Director to formulate general
policy and adopt regulations to administer
the State Flood Insurance Program. The
regulations must establish a reserve of
payment or flood claims and require the
amount held in reserve an amount required by
a private insure participating in the
National Flood Insurance Program based on a
similar risk profile.
AS 21.60.270 State not Liable
State is not liable for acts or omissions of
the Authority.
AS 21.60.280 Board Member Civil & Criminal
Immunity
Board member not liable if acting in good
faith.
AS 21.60.290 Alaska Flood Insurance Fund
Establishes Alaska Flood Insurance Fund.
Money in the Fund does not lapse.
AS 21.60.300 - Definitions
1:50:06 PM
Section 5 Amends AS 37.05.146(c) to add
Assessments and civil penalties of the Alaska
Flood Authority to the list program receipts.
Section 6 Uncodified Law: Applicability
Section 2 applies to policies/renewals after the
effective date of this Act.
Section 7 Uncodified Law: Transition
Director may adopt regulations if the Authority
does not submit a suitable plan of operation by
January 1, 2023.
Section 8 Effective Date
Immediate effective date for Section 7.
Section 9 Effective Date
July 1, 2022 effective date.
CHAIR COSTELLO asked whether any federal action would be
necessary to allow Alaska to stop participating in FEMA's
National Flood Insurance Program.
MR. SCOTT deferred the question to Ms. Wing-Heier.
CHAIR COSTELLO asked Mr. Scott to discuss the funding mechanism
for the bill.
MR. SCOTT asked if she was referring to the $2 million fiscal
note.
CHAIR COSTELLO answered yes.
1:52:16 PM
MS. SCOTT offered his understanding that the fiscal note
reflects the cost to establish a reserve to cover any claims
that may be filed immediately after the program is implemented.
He deferred further explanation to Ms. Wing-Heier.
CHAIR COSTELLO asked Ms. Wing-Heier to talk about the bill, how
it would work, and what her role would be as the director of the
Division of Insurance.
1:53:39 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community and Economic Development (DCCED), Anchorage,
Alaska, agreed with the sponsor that flood premiums in Alaska
are prohibitive. So much so that some people have been unable to
sell their property because interested buyers could not afford
the premiums. She said the funding for the National Flood
Insurance Program (NFIP) that FEMA manages is upside down and a
political football. Right now the program is funded until just
September 30, and if it's not funded after that it will be
necessary to take action to help property owners.
MS. WING-HEIER stated that the division is a member of the
National Association of Insurance Commissioners (NAIC). As such,
it has been working diligently with other members to find
private property insurers to step in and provide coverage in
Alaska and all the other coastal states where flooding routinely
occurs. She said insurers are willing to write policies but
banks and mortgage holders require insurance policies to come
from the National Flood Insurance Program (NFIP). She said she
can't argue with what the sponsor is saying, but the bill does
need some work and her understanding is that it will be done
during the interim.
MS. WING-HEIER referenced the large fiscal notes and explained
that the Division of Insurance currently collects a 2.7 percent
tax on every insurance policy that is sold. SB 160 imposes an
additional 6 percent tax to fund the Alaska Flood Authority then
provides a 50 percent credit. This reduces the premium taxes the
state collects by about $41-45 million. Based on the additional
6 percent tax, the fund is expected to collect more than $90
million a year. She said this is a problem, but if the
legislature decides to move forward with a program, the division
will work cooperatively to make it happen.
1:57:30 PM
CHAIR COSTELLO asked if the requirement for mortgage holders to
have insurance policies from the National Flood Insurance
Program (NFIP) could be addressed in state statute.
MS. WING-HEIER replied she didn't know that amending state
statutes would help when the requirement is in federal statute.
CHAIR COSTELLO noted who was available to answer questions.
1:58:24 PM
CHAIR COSTELLO opened public testimony on SB 160; finding none,
she closed public testimony.
1:58:40 PM
CHAIR COSTELLO held SB 160 in committee for future
consideration.
SB 174-ALLOW NATURAL HAIRSTYLES
1:58:44 PM
CHAIR COSTELLO announced the consideration of SENATE BILL NO.
174, "An Act relating to dress codes and natural hairstyles."
[CSSB 174(EDC) was before the committee.]
She asked the sponsor if he had any final comments.
1:59:10 PM
SENATOR DAVID WILSON, Alaska State Legislature, Juneau, Alaska,
sponsor of SB 174, thanked the committee for considering the
bill. He clarified that the intent of SB 174 is to ensure that
schools and workplaces do not discriminate against someone's
natural hair style. This will give voice to this issue that some
people have been dealing with silently for a very long time.
CHAIR COSTELLO found no questions and solicited a motion.
1:59:55 PM
SENATOR GRAY-JACKSON moved to report SB 174, work order 32-
LS1298\G, from committee with individual recommendations and
attached fiscal note(s).
CHAIR COSTELLO asked Senator Jackson to restate the motion to
reflect the current version before the committee.
2:01:50 PM
SENATOR GRAY-JACKSON moved to report SB 174, work order 32-
LS1298\W, from committee with individual recommendations and
attached fiscal note(s).
CHAIR COSTELLO found no objection and CSSB 174(EDC) was reported
from the Senate Labor and Commerce Standing Committee.
HB 133-AK ED SAVINGS PROGRAMS/ELIGIBILITY
2:02:15 PM
CHAIR COSTELLO announced the consideration of CS FOR HOUSE BILL
NO. 133(L&C) "An Act relating to the Alaska savings program for
eligible individuals; relating to education savings programs;
relating to the Education Trust of Alaska; relating to the
Alaska advance college tuition savings fund; relating to the
Alaska education savings program for children; and relating to
the Governor's Council on Disabilities and Special Education."
She stated that this is the first hearing and the intention is
to hear the introduction and take invited and public testimony.
2:02:40 PM
REPRESENTATIVE ZACK FIELDS, Alaska State Legislature, Juneau,
Alaska, sponsor of HB 133, stated that the House Labor and
Commerce Committee worked collectively on the bill. He thanked
Representative Nelson whose staff Kim Skipper was working when
the original ABLE Act was introduced by Representative Dan
Saddler. He said that is relevant because HB 133 has conforming
changes to the federal law that passed after that original ABLE
Act passed.
REPRESENTATIVE FIELDS gave a presentation to explain the updates
HB 133 makes to the ABLE Act. He paraphrased slide 2 that read
as follows:
WHAT IS AN ABLE ACCOUNT?
• ABLE: "Achieving a Better Life Experience"
• Tax-free savings account for individuals with
qualifying disabilities
• Funds may be used to pay for items such as
disability expenses, education, housing,
transportation
• Distributions into accounts are not counted
against individual in determining eligibility for
Medicaid and needs-based assistance programs
REPRESENTATIVE FIELDS provided a brief history of the 2013
federal ABLE Act:
• Signed into federal law in December 2014 as part
of the Tax Extenders package.
• Established 529A (ABLE) savings account
exclusively for individuals with disabilities.
REPRESENTATIVE FIELDS reviewed the Alaska ABLE Act, paraphrasing
slide 5:
• Signed into law in July 2016.
• Authorized establishment of a state ABLE program
to be administered by Department of Revenue.
• Matched the 2013ABLEAct passed by Congress.
• Alaska joined the National ABLE Alliance, a group
of 17 states formed to share information, create
economies of scale and provide a hub for
financial inquiries.
• Since passage, 787 accounts have been created in
Alaska with more than $7,100,000.00 in assets.
2:05:11 PM
REPRESENTATIVE FIELDS reviewed the improvements Congress made to
the federal ABLE Act. He spoke to the bullet points on slides 7-
9, which read as follows:
ABLE TO WORK ACT
• Signed into law in 2017 as part of the Tax Cuts
and Jobs Act.
• Increased annual contributions levels.
• Incentivized employment by increasing the
contribution level for employed beneficiaries
from $15,000 to $27,060.
ABLE FINANCIAL PLANNING ACT
• Signed into law in 2017 as part of the Tax Cuts
and Jobs Act.
• Allowed college saving account funds (529
accounts) to roll over into ABLE accounts.
• Allowed individuals who incurred disabilities
after they established 529 college savings plan
to roll over savings into ABLE account.
ABLE AGE ADJUSTMENT ACT
• Will increase the age of eligibility from 26 to
reflect federal code-legislation is under way to
increase this age eligibility to 46.
• Will allow more participation in ABLE accounts.
2:05:46 PM
REPRESENTATIVE FIELDS noted that in the previous committee of
referral Senator Hughes suggested writing to the federal
delegation to voice support for raising the age of eligibility.
The argument is why shouldn't someone who becomes disabled after
age 26 be allowed to create an ABLE account. HB 133 will link to
the federal age threshold so it won't be necessary to amend the
statute in the future because it will track the federal enabling
law automatically.
REPRESENTATIVE FIELDS reviewed the updates proposed in HB 133:
HB 133 PROPOSED UPDATES
• Expands age eligibility limits.
• Allows greater flexibility in using funds to pay
for education expenses.
• Allows 529 program accounts to roll into an ABLE
account.
• Aligns with federal regulations regarding program
savings accounts.
CHAIR COSTELLO asked the members if there were any questions.
2:07:46 PM
SENATOR MICCICHE summarized this state statute will
automatically update when the federal law changes.
REPRESENTATIVE FIELDS agreed.
2:08:24 PM
GRACE KUBIT, Staff, Representative Zack Fields, Alaska State
Legislature, Juneau, Alaska, read the sectional analysis for HB
133.
[Original punctuation provided with small formatting changes.]
Section 1 Establishes AS 06.65.020(b).
Directs the Department of Health and Social Services
to consult with the Governor's Council on Disabilities
and Special Education when overseeing the Alaska
Savings Program.
Section 2 Amends AS 06.65.100.
Expands the age of eligibility for a program account
from age 26 to match that in the federal authorizing
law. This effectively removes an age cap that
prevented those who became disabled after 26 years of
age from being eligible.
Section 3 Amends AS 06.65.160(a).
Expands the rules allowing a person to make a
contribution for a designated beneficiary to match the
guidelines in AS 14.40.802(f)(3).
Section 4 Amends AS 06.65.160(c).
Expands the rules regarding who is eligible to make a
program account contribution to match the guidelines
in AS 14.40.802(f)(3).
Section 5 Amends AS 06.65.200(a).
Specifies that rollover may occur between a program
account to another account as long as the new account
is authorized by federal law.
Section 6 Amends AS 09.38.015(a)(8).
Replaces "higher education" savings account with
"education savings account".
Section 7 Amends AS 14.10.170(a).
Replaces "postsecondary education" with "education"
when referring to an education savings account and
renames the "Alaska Higher Education Savings Trust" to
the "Education Trust of Alaska".
2:10:14 PM
Section 8 Amends AS 14.40.802(a).
Renames the "Alaska Higher Education Savings Trust" to
the "Education Trust of Alaska" and replaces
"postsecondary education" with "education" when
referring to education savings accounts. Removes the
allowance that education savings accounts can be used
to pay for room and board when using funds for
education costs as this language is included already
included federal law.
Section 9 Establishes AS 14.40.802(f)(3).
Allows a participant of an account to change the
beneficiary of their account to any individual, not
just a family member. Allows participants to transfer
all or a portion of their account as a contribution to
another account if it does not exceed federal limits
when added to any other contributions and is for the
beneficiary of that new account or for a family member
who is an eligible individual as well.
Section 10 Amends AS 14.40.802(g).
Makes transfers between accounts limitable or deniable
if the transfer does not meet the guidelines
established in AS 14.40.802(f)(3).
Section 11 Amends AS 14.40.802(j).
Removes the restriction that when a beneficiary
designates a successor participant to their account
the change cannot take effect until after the death or
mental incapacity of the beneficiary.
Section 12 Amends AS 14.40.802(n)(2).
Redefines "beneficiary" to match what is defined under
federal law.
2:11:59 PM
Section 13 Amends AS 14.40.802(n)(7).
Replaces "qualified higher education expenses" with
"qualified education expenses" and redefines the
phrase to mean qualified higher education expenses as
defined in federal law.
Section 14 Amends AS 14.40.802(n)(8).
Redefines "trust" to reflect the name change of
"Alaska Higher Education Savings Trust" to the
"Education Trust of Alaska".
Section 15 Amends AS 14.40.809(b).
Renames the "Alaska Higher Education Savings Trust" to
the "Education Trust of Alaska".
Section 16 Amends AS 40.25.120(a).
Renames the "Alaska Higher Education Savings Trust" to
the "Education Trust of Alaska".
Section 17 Amends AS 47.10.093(b).
Removes the distinction of higher education when
referring to the Alaska education savings program.
Section 18 Amends AS 47.12.310(b).
Removes the distinction of higher education when
referring to the Alaska education savings program.
Section 19 Amends AS 47.14.400(a).
Removes the distinction of higher education when
referring to an education investment program and
replaces "University of Alaska college savings plan"
with "education savings plan".
2:13:21 PM
Section 20 Amends AS 47.14.400(b).
Removes the distinction of higher education when
referring to an education investment program.
Section 21 Amends AS 47.14.400(c).
Replaces "college savings plan" with "education
savings plan" and replaces "University of Alaska
College savings plan" with "education savings plan".
Section 22 Amends AS 47.14.400(e)(3).
Replaces "higher education savings program" with
"education savings program" and "college savings
account" with "education savings plan".
Section 23 Establishes AS 47.14.400(e)(5).
Defines "education savings plan" to mean an education
savings program.
Section 24 Repeals AS 47.14.400(e)(2).
CHAIR COSTELLO observed that most of the Act takes effect July
1, 2022, but Section 7 takes effect immediately.
2:14:44 PM
REPRESENTATIVE FIELDS replied he believes so and added that most
of the sections are conforming changes to rename the Alaska
Higher Education Savings Trust to the Education Trust of Alaska.
CHAIR COSTELLO asked if there was a reason for renaming the
trust.
REPRESENTATIVE FIELDS replied it's a conforming change; the UA
System renamed the trust in 2019.
CHAIR COSTELLO turned to invited testimony.
2:15:50 PM
CATHY TAYLOR, Board Member, Alaska Behavioral Health, Kenai,
Alaska, testified by invitation in support of HB 133. She stated
that she is the mother of two sons who receive disability
benefits. Her background is in finance and the ABLE program has
been one of the best resources she has found to help disabled
persons manage their financial resources and become more
independent. It builds self-confidence, she said.
MS. TAYLOR stated that the increase in the annual contributions
from $15,000 to $20,060 allows people with disabilities to put
away as much money as they can when they are able to work
without jeopardizing their disability benefits. She described
the ability to roll over college funds as a valuable
enhancement. It will help people whose education is interrupted
because of their disability. Prior to this they would lose the
opportunity. Increasing the age of eligibility is another
valuable enhancement. As the sponsor mentioned, disability
doesn't just strike before age 27 so it makes sense to extend
these benefits to a larger range of people. It is also
beneficial to be able to use these funds for more than a typical
university program. A four-year program isn't what everybody
wants or needs, so being able to participate in a certificate or
vocational program is very beneficial and will increase
employment opportunities.
2:20:23 PM
MS. TAYLOR said the ABLE program has been very beneficial to her
family, but because she didn't learn about it until just a few
years ago she would like to see an education component attached
to ensure that agencies that work with the disabled have this
information so they can help people set up these accounts.
2:21:19 PM
DAN SADDLER, former Representative, Eagle River, Alaska,
testified by invitation in support of HB 133. He reminded the
committee that he sponsored the original legislation in 2016
that authorized ABLE accounts in Alaska. He shared that he
supported ABLE as a legislator and a parent. His son Danny has
autism and at age 23 is transitioning into adult life. He needs
special behavioral support, special equipment for his physical
needs, supplementary educational services, employment support
services, and healthy recreational outlets. He said these are
qualified disability expenses that will help him achieve a
better life experience. He highlighted how important it is that
deposits into an ABLE account would not disqualify his son from
Medicaid or Supplemental Social Security (SSI) benefits, because
both are critical in meeting his life needs.
REPRESENTATIVE SADDLER opined that that ABLE accounts clearly
have been successful in Alaska. A report in the bill packets
indicates that there are 787 ABLE accounts in Alaska, and the
private contributions to those accounts totals $7 million. He
posited that this has kept many individuals from seeking support
from the state. He mentioned the other conforming changes and
described HB 133 as legislation that makes the existing law
better. He also thanked the Alaska Mental Health Trust that put
$100,000 into designing ABLE accounts and the Governor's Council
on Disabilities and Education for its tireless efforts to get
ABLE accounts established.
He concluded his comments with the observation that legislators
often are faced with how to allocate limited public assets among
limitless needs. The value of HB 133 is that it empowers private
citizens to use their own money to take better care of loved
ones without cost or burden to the state.
CHAIR COSTELLO expressed appreciation for his testimony.
2:25:52 PM
CHAIR COSTELLO opened public testimony on HB 133; finding none,
she closed public testimony.
CHAIR COSTELLO held HB 133 in committee for further
consideration.
2:26:17 PM
At ease
SB 233-PFD ALLOWABLE ABSENCE/MERCHANT MARINE
2:28:07 PM
CHAIR COSTELLO reconvened the meeting and announced the
consideration of SENATE BILL NO. 233 "An Act relating to
allowable absences for permanent fund dividend qualification;
and providing for an effective date."
2:28:39 PM
KATIE MCCALL, Staff, Senator Mia Costello, Alaska State
Legislature, Juneau, Alaska, introduced SB 233 on behalf of the
Senate Labor and Commerce Standing Committee, paraphrasing the
following sponsor statement:
In 1999, House Bill 157 was offered by Representative
Jerry Sanders. The bill added those serving under
articles of employment aboard oceangoing vessels of
the US Merchant Marine to an allowable absence for the
purposes of qualifying for the permanent fund
dividend. At the time, the apprenticeship program that
qualified them for these careers as commercial sailors
was an allowable absence. This program was created in
part with the help of Congressman Don Young, and
decades ago when touring a ship, the Congressman had
asked "where are all of the Alaskans?" To his
disappointment, there were no Alaskans working on the
ship. This interaction helped begin an effort to train
more Alaskans for careers in the US Merchant Marine.
The intent of the 1999 legislation was to allow
merchant mariners and trainees to qualify for an
allowable absence, with that intent clearly expressed
through the testimony and supporting documents for the
original bill. Since 1999, over 750 Alaskans have
graduated from the Harry Lundeberg School of
Seamanship and the Paul Hall Center. However, due to
statutes and regulations that have been amended since
then, Alaskans who participate in this training
program remain ineligible for the permanent fund
dividend while they are out of state receiving the
training.
Senate Bill 233 would amend state statute to include
an allowable absence for Alaskans attending a merchant
marine training program, so they are not
disincentivized from attending.
2:30:42 PM
MS. MCCALL presented the sectional analysis for SB 233 that read
as follows:
Sec. 1 AS 43.23.008(a)(4) Page 2, Lines 6-7
Is amended by adding a new subsection specifying that
an Alaska resident who is otherwise eligible to
receive the permanent fund dividend remains eligible
if they are absent from the state during the
qualifying year for the purposes of attending a
program that prepares students for careers in the
United States merchant marine.
Sec. 2 Page 3, Line 14
Provides for an effective date of January 1, 2023.
CHAIR COSTELLO turned to invited testimony.
2:31:45 PM
RICH BERKOWITZ, Consultant, Transportation Institute (TI),
Seattle, Washington, testified by invitation in support of SB
233. He advised that until recently he worked as the Pacific
Coast Vice President of Transportation Institute, which is an
educational and research organization that supports US flagged
vessel operators. He listed the companies in Alaska that are TI
members.
MR. BERKOWITZ recapped the genesis of promoting maritime local
hire of Alaskans on ocean going vessels plying trade in Alaska
as outlined in the sponsor statement above. Despite the intent
of Representative Jerry Sanders' House Bill 157 that passed the
Alaska Legislature in 1999, Alaskans who participate in an out-
of-state federally registered maritime training program are not
eligible for the permanent fund dividend. SB 233 resolves this
issue by amending state statute to include an allowable absence
for Alaskans attending a merchant marine training program.
2:36:24 PM
TIFFANY ALBERT, Director of Communications, Alaska State
Chamber, Anchorage, Alaska, testified by invitation in support
of SB 233. She stated that the Chamber's mission is to promote a
healthy business environment in Alaska. As such, the Chamber
supports amending the PFD statute to assure that Alaskans who
attend training out of state at federally registered apprentice
programs are eligible to receive a PFD provided they have met
all other eligibility criteria. Since 1997, over 700 Alaskans
have been trained and placed in maritime employment after
graduating from the Paul Hall Center for maritime training
education. This includes a broad range of Alaskans whose
training was paid for through a labor management training trust
fund. This assures management that these individuals are
thoroughly trained to US Coast Guard standards and uniformly
meet security, safety, and competency standards. By recruiting
Alaskans for maritime work in Alaska, maritime companies that
ply trade in Alaska waters continue to meet their commitment to
hire local. Denying PFD benefits to Alaskans while they are
engaged in training for this work is an impediment to the
pursuit of this career path.
MS. ALBERT reiterated support for SB 233 on behalf of the Alaska
State Chamber and urged passage of this "good for business"
bill.
2:38:44 PM
CHAIR COSTELLO opened public testimony on SB 233.
2:39:03 PM
MYKEL POTTER, representing self, Sitka, Alaska, testified in
support of SB 233. He relayed his story of joining the Merchant
Marine in 2017 through a local recruitment program and attending
training at Piney Point, Maryland. He filed for the PFD and his
application was denied because of the time he spent in training
at Piney Point. He said the denial was particularly confusing
because he had a contract with the Department of Labor to attend
the training. He urged the committee to resolve this issue so
Alaskans like himself are not denied a dividend for attending
federally authorized maritime training outside the state.
2:41:48 PM
CHAIR COSTELLO discerned no others wished to comment and closed
public testimony on SB 233.
She asked Anna MacKinnon if SB 233 would create a problem for
the Permanent Fund Dividend Division.
2:42:25 PM
ANNA MACKINNON, Director, Permanent Fund Dividend Division,
Department of Administration (DOA), Juneau, Alaska, directed
attention to the new text in SB 233, "or attending a vocational
program that" on page 2, lines 6-7. She described the provisions
attached to that phrase as overly broad and potentially would
allow programs beyond what is intended. She noted that the
programs have been described as a certified federal program or
one that is held at the US Coast Guard National Maritime Center,
but that language is not in the bill so the division would have
to look at each application and determine whether the program
qualified to prepare the applicant for a career in the US
Merchant Marine. She noted that the PFD division had received
some interesting requests for out-of-state training and
suggested that may have been what caused the Alaska Commission
on Postsecondary Education to change its regulations. She said
the PFD division recognizes the issue and appreciates that this
registered merchant mariner training program benefits the Alaska
workforce.
2:45:39 PM
CHAIR COSTELLO offered her belief that the drafters were not
comfortable naming certain programs in statute and the bill
attempts to provide that specificity. She committed to work with
the PFD division and other interested parties to tighten the
language so it is clear which programs qualify.
CHAIR COSTELLO held SB 233 in committee for further work.
2:47:01 PM
There being no further business to come before the committee,
Chair Costello adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:47 p.m.