Legislature(1993 - 1994)
05/06/1994 08:00 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CSSB 70(L&C) - ASSISTIVE TECHNOLOGY LOAN GUARANTEES Number 579 CHAIRMAN VEZEY opened CSSB 70(L&C) for discussion. He commented that the committee did have HCSCSSB 70, version X, to consider. REPRESENTATIVE KOTT moved to adopt HCSCSSB 70 for purposes of discussion. CHAIRMAN VEZEY adopted HCSCSSB 70 for discussion. He noted HCSCSSB 70 modifies the Senate version in a couple of ways. CHAIRMAN VEZEY called an at ease. CHAIRMAN VEZEY stated the changes could be found on page 3, subsection (e). Subsection (e) was added. He explained the fund will have $400,000 put into it before it operates, thereby loans do have to be guaranteed by something very tangible. REPRESENTATIVE ULMER inquired why the amount was $400,000. CHAIRMAN VEZEY answered, based on testimony he had heard, $100,000 is a small program amount. Substantially larger sums through federal law and private moneys are available for this purpose. He felt if the state was going to set up a program, $400,000 suggests that it should be a meaningful program, rather than a small "pilot program." REPRESENTATIVE ULMER asked if $400,000 is a reasonable amount to achieve. CHAIRMAN VEZEY repeated the sources of money. He felt $400,000 would create a more meaningful program. REPRESENTATIVE KOTT interjected they had heard that testimony in House HESS Committee. Number 633 EARL CLARK, SOUTHEAST ALASKA INDEPENDENT LIVING CENTER, commented on HCSCSSB 70. He stated according to the Governor's Council on Disability and Special Education, he symbolically represented 95,000 Alaskans who have at least one permanent disability. He stated HCSCSSB 70 has been proceeding through the legislature for the last two years. HCSCSSB 70 is designed to allow the federal government to transfer $100,000 to the state for guaranteeing loans. He stated the loans themselves will be private loans with banks, to be paid back by the individuals who need assistive technology to help them become productive citizens in Alaska. He emphasized the moneys HCSCSSB 70 refers to are only used to guarantee loans, not to loan out. He stated, nationwide, there is about a 4.2 default rate. With $100,000 in the fund at a 4.2 default rate, it would take about 20 years to exhaust the $100,000. Number 665 ROXANNE STEWART, STAFF, SENATOR JIM DUNCAN, SPONSOR, addressed HCSCSSB 70. She noted the house bill that was discussed in House HESS was HB 139, sponsored by REPRESENTATIVE DAVIES. (REPRESENTATIVE OLBERG left the meeting at 9:47 a.m.) REPRESENTATIVE ULMER asked Ms. Stewart to comment on the $400,000 amount. MS. STEWART stated CSSB 70(L&C) did not specify a particular threshold amount before loans could be made. She stated $100,000 is available annually, possibly $200,000 from federal sources. She felt $400,000 would be a potential problem. REPRESENTATIVE B. DAVIS inquired if the state was going to make up the difference in the money, if the federal government is guaranteeing $100,000. CHAIRMAN VEZEY clarified no general fund moneys would go into the fund. REPRESENTATIVE B. DAVIS observed that with HCSCSSB 70 it would take four years for $400,000 to accumulate in it. She was opposed to putting this bill on hold for four years. CHAIRMAN VEZEY interjected he did not believe that would be the case. He explained, from testimony received, there is a minimum in federal intent to appropriate $100,000 a year specifically for this program. He noted there are other federal moneys appropriated every year that would be available for this use. In addition, because of new laws and regulations in federal banking practices, there is an interest in the private financial community to participate in this program to meet certain federal requirements. REPRESENTATIVE B. DAVIS asked if these streams of funding had been identified. CHAIRMAN VEZEY responded there has been some public commitment from private sources, however, some wish to remain anonymous until the bill becomes law. TAPE 94-54, SIDE A Number 000 REPRESENTATIVE B. DAVIS asked MS. STEWART's opinion about the change to $400,000. MS. STEWART stated it may be a problem to come up with that much money for a substantial length of time. She stated Vocational Rehabilitation would be better to answer the question. STAN RIDGEWAY, DEPUTY DIRECTOR, DIVISION OF VOCATIONAL REHABILITATION (DVR), DEPARTMENT OF EDUCATION, answered questions for the committee. He stated the assistive technology program was authorized initially by Congress for five years, and it has just been reauthorized for five additional years. The state of Alaska receives approximately $750,000 per year for technology. He explained about $250,000 of that $750,000 is for staff, and the other $500,000 is granted out to private nonprofits each year. DVR was going to fund the loan program by taking 20 percent of that $500,000 per year, and putting it into the fund for the next five years. The Community Reinvestment Act has changed, however, and Key Bank and North Rim Bank have both committed to participate in the fund. DVR is uncertain of the amount. He noted another bank has agreed to participate, but wishes to remain anonymous. He stated the $400,000 change would create a waiting game over the next 3-4 years. If DVR took more of the money they grant to private nonprofits, they would be cutting off people's access to get the loans. The bill has a zero fiscal note mainly because the nonprofits DVR funds will be assisting people, who are working and need loans, in processing their loans through local banks. The whole process works together. He encouraged the committee to go back to a lower amount. REPRESENTATIVE B. DAVIS moved to amend page 3, line 2, of HCSCSSB 70, to read "$200,000." CHAIRMAN VEZEY called for a roll call vote. IN FAVOR: REPRESENTATIVES G. DAVIS, B. DAVIS, ULMER, KOTT. OPPOSED: REPRESENTATIVE VEZEY. ABSENT: REPRESENTATIVES OLBERG, SANDERS. The MOTION PASSED. (REPRESENTATIVE OLBERG returned at 9:52 a.m.) CHAIRMAN VEZEY commented the committee would have to adopt a modified fiscal note for HCSCSSB 70. He stated the blank fiscal note for $400,000 would have to be modified to $200,000. He asked for a committee member to move to adopt the modified fiscal note reading $200,000. REPRESENTATIVE KOTT so moved. CHAIRMAN VEZEY, hearing no objection, adopted the fiscal note. REPRESENTATIVE G. DAVIS moved to pass HCSCSSB 70(STA) as amended from committee with accompanying fiscal note and individual recommendations. CHAIRMAN VEZEY called for a roll call vote. IN FAVOR: REPRESENTATIVES OLBERG, G. DAVIS, B. DAVIS, ULMER, KOTT, VEZEY. ABSENT: REPRESENTATIVE SANDERS. The MOTION PASSED. CHAIRMAN VEZEY recessed the meeting at 9:58 a.m. He stated he had not expected the committee would take as much time as they did on SB 190, therefore only SB 228 would be taken up by the committee after the recess. He stated the other items on the agenda would not be taken up today. CHAIRMAN VEZEY resumed the meeting at 10:03 a.m.
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