Legislature(2017 - 2018)BARNES 124
03/22/2017 03:15 PM LABOR & COMMERCE
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HB 86-STUDENT LOAN DEFAULT/OCC. LICENSE RENEWAL 3:52:01 PM CHAIR KITO announced that the next order of business would be HOUSE BILL NO. 86, "An Act relating to nonrenewal of occupational licenses for default on a student loan." 3:52:31 PM REPRESENTATIVE MATT CLAMAN, Alaska State Legislature, reminded the committee that Thomas Jefferson said, "Government is best which governs least," and the goal in bringing HB 86 forward is to revoke the Alaska Commission on Post-Secondary Education's authority to use non-renewal of occupational licenses as an incentive to ensure repayment of student loans in the instance of a default. He described that the consequences of defaulting are already severe, and as the commission has not exercised its authority since 2010, it makes sense to repeal these statutes. 3:53:21 PM OWEN PHILLIPS, Staff, Representative Matt Claman, Alaska State Legislature, reiterated that HB 86 repeals current statutes allowing the Alaska Commission on Postsecondary Education (ACPE) to threaten non-renewal of occupational licenses for individuals who have defaulted on their student loans. Repealing this authority will allow licensed individuals to continue their work and earn an income and pay back their defaulted loans without fear of losing their license. He noted that there are difficulties one faces if defaulting on their student loans such as, late fees, court costs, liens on property, and adverse reports to consumer reporting agencies. Under current statute, the Alaska Commission on Postsecondary Education (ACPE) has authority to provide notice to the licensing authority for non- renewal of a license. Many of the laws giving authority to the ACPE were passed in the 1990s and 2000s when student aid was often provided by states, currently, most loans are provided federally. Last year, he advised, the State of Montana became the first state to repeal similar statutes and 21 states still have similar statutes. This bill allows Alaska to follow the example of the State of Montana and reduce that number to 20 in order to protect the state's nurses, pharmacists, social workers, teachers, correctional officers, and many others. 3:54:47 PM MR. PHILLIPS offered an analysis of the bill as follows: Section 1 deletes language that is no longer necessary after the repeals mentioned in Sec. 2. Sec. 2 repeals AS 14.43.145(a)(4), which gives ... authority to the commission to provide notice of default to a licensing entity for non-renewal of a license. Repeals 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. 3:56:21 PM REPRESENTATIVE BIRCH remarked that "This is kind of our version of -- of they're trying to collect on debt," and noted that the debt collection appeared reasonable. He asked the magnitude of the debt, and the number of recipients impacted by this legislation. MR. PHILLIPS opined that since 2010, the commission has not acted upon the section forcing the default. REPRESENTATIVE BIRCH remarked that in the event someone misses their car payments, the "repo man" tows away the car. The State of Alaska presumably has a fairly significant liability out there, vis-a-vis many educated folks. Granted the authority has not been exercised, he remarked, but it is a means of enforcing collection at some level. He asked the size of the liability, how rapidly that liability is paid off, the timeframe, and how many people it impacts. REPRESENTATIVE CLAMAN responded that the Alaska Student Loan Corporation has multiple means to encourage payment and this method has rarely been used because there are fewer Alaska student loans due to more federal student loans. He related that taking away someone's nursing license, for example, causes that person to work at a lower wage and makes the person more likely to default. 4:00:22 PM REPRESENTATIVE BIRCH related that he was not disputing whether HB 86 might be a good idea, his question was whether the necessary research had been performed in order to understand the general magnitude of the liability, how many people would be impacted, and the timeframe in which the loans would be repaid. MR. PHILLIPS opined that prior to 2010, this non-renewal of licensing authority was used 155 times, and of those 155 individuals, 49 did not pay any amount, left the state, and assumed to have found a license elsewhere. He said he would reach out to Stephanie Butler, Executive Director, Alaska Commission on Postsecondary Education (ACPE) in response to Representative Birch's questions. REPRESENTATIVE BIRCH advised he was looking for numbers roughly to the nearest $500,000. 4:02:40 PM REPRESENTATIVE KNOPP asked Representative Claman, "Do you just read the books until you find a statute that doesn't fit any longer?" He asked what brought this issue forward because it had been unused for eight years. REPRESENTATIVE CLAMAN credited one idea to a prior staff member currently attending law school, and answered that someone had approached the staffer with this issue. The staff member performed research and realized the non-renewal authorization was rarely used and brought it to Representative Claman's attention. CHAIR KITO opened public testimony. After ascertaining no one wished to testify, closed public testimony on HB 86. [HB 86 was held over.]