Legislature(2017 - 2018)BUTROVICH 205

04/12/2017 08:00 AM EDUCATION

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SCR 5 ALASKA READS DAY TELECONFERENCED
Moved SCR 5 Out of Committee
-- Public Testimony <Time Limit May Be Set> --
+ HB 86 STUDENT LOAN DEFAULT/OCC. LICENSE RENEWAL TELECONFERENCED
Heard & Held
+ HB 135 SCHOOL CONSTRUCTION GRANT PROGRAM TELECONFERENCED
Heard & Held
+= HB 64 READING PROFICIENCY TASK FORCE; DYSLEXIA TELECONFERENCED
Heard & Held
-- Public Testimony <Time Limit May Be Set> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
        HB 86-STUDENT LOAN DEFAULT/OCC. LICENSE RENEWAL                                                                     
                                                                                                                                
8:10:24 AM                                                                                                                    
CHAIR HUGHES announced the consideration of HB 86.                                                                              
                                                                                                                                
8:10:32 AM                                                                                                                    
REPRESENTATIVE MATT CLAMAN, Alaska  State Legislature, sponsor of                                                               
HB 86.  He thanked  the committee  for hearing  HB 86.  He quoted                                                               
Thomas Jefferson,  "Government is best which  governs least." The                                                               
goal of  HB 86  is to revoke  Alaska Commission  on Postsecondary                                                               
Education's (ACPE)  authority to use non-renewal  of occupational                                                               
licensing as an  incentive to ensure payment of  student loans in                                                               
the instance  of default. As  the consequences of  defaulting are                                                               
already severe  and ACPE has  not exercised this  authority since                                                               
2010, it makes sense to repeal these statutes.                                                                                  
                                                                                                                                
8:11:17 AM                                                                                                                    
OWEN PHILLIPS,  Staff, Representative  Matt Claman,  Alaska State                                                               
Legislature, presented  information on  HB 86,  on behalf  of the                                                               
sponsor. He read from the sponsor 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.                                                                    
     Effectively,  nonrenewal  of  an  occupational  license                                                                    
     could obstruct  an individual's  main source  of income                                                                    
     and make  repayment of the defaulted  loan difficult if                                                                    
     not impossible. The ACPE has  not used this power since                                                                    
     2010,  and  prior  to 2010,  only  155  instances  were                                                                    
     listed.  Repealing this  authority will  allow licensed                                                                    
     individuals  to   continue  their  practice,   earn  an                                                                    
     income, and pay back  their defaulted loans without the                                                                    
     fear  of losing  their occupational  license and  their                                                                    
     income from that occupation.                                                                                               
                                                                                                                                
     Delinquency  and  default  have  serious  consequences.                                                                    
     Loss  of  an  occupational  license  may  take  away  a                                                                    
     debtor's  best means  to pay  off  their student  loan.                                                                    
     Student  loan default  can harm  the borrower's  credit                                                                    
     and  continued   loan  debt   can  create   late  fees,                                                                    
     additional interest, potential  court costs, collection                                                                    
     fees, attorney's fees, and  other costs associated with                                                                    
     the  collection process.  Failure  to  repay a  student                                                                    
     loan  may  result  in liens  on  property  and  adverse                                                                    
     reports  to  consumer  reporting agencies.  An  initial                                                                    
     default  can have  a domino  effect that  increases the                                                                    
     challenge of getting out of debt.                                                                                          
                                                                                                                                
     The current statute (AS 14.43.145  (4)) states that the                                                                    
     commission  has the  authority to  provide notice  to a                                                                    
     licensing  authority for  nonrenewal of  a license.  If                                                                    
     the  ACPE  posts such,  the  licensing  entity may  not                                                                    
     renew  said  license  during the  next  renewal  cycle.                                                                    
     Affected  occupations  include   licenses  for  nurses,                                                                    
     pharmacists,  social workers,  veterinarians, dentists,                                                                    
     attorneys,   teachers   (k-12),    EMS   workers,   and                                                                    
     correctional officers.                                                                                                     
                                                                                                                                
     In  the   1990s  and   early  2000s,   Congress  passed                                                                    
     legislation  to give  states the  authority to  revoke,                                                                    
     suspend, or  refuse to renew  a variety of  licenses in                                                                    
     the instance of  defaults on loans, as  student aid was                                                                    
     often  provided  by  states.  There  are  currently  21                                                                    
     states  with  similar  statutes in  place.  Last  year,                                                                    
     Montana became  the first state to  repeal statues that                                                                    
     allowed the state  to revoke a license in  the event of                                                                    
     a student loan default.                                                                                                    
                                                                                                                                
     Due  to  the  potential barriers  that  current  Alaska                                                                    
     statutes   may  cause,   passing  HB   86  will   allow                                                                    
     borrowers,   who  may   already   be  struggling,   the                                                                    
     opportunity   to   maintain    their   practice   while                                                                    
     addressing their financial challenges.                                                                                     
                                                                                                                                
8:12:49 AM                                                                                                                    
MR. PHILLIPS presented the sectional analysis of the bill:                                                                      
                                                                                                                                
Section 1 deletes language that  is no longer necessary after the                                                               
repeals mentioned in Section 2.                                                                                                 
                                                                                                                                
Section 2  repeals AS 14.43.145(a)(4), which  gives the authority                                                               
to the Commission to provided notice  of a default to a licensing                                                               
entity  for  non-renewal  of  the license.  It  also  repeals  AS                                                               
14.43.148, which indicates that a  licensing entity may not renew                                                               
a license if  they have received such notice  from the Commission                                                               
that  the  licensee  has  defaulted  on  a  loan  issued  by  the                                                               
Commission  and   AS  21.27.390(d),  which  makes   reference  to                                                               
temporary licenses.                                                                                                             
                                                                                                                                
MR. PHILLIPS noted those present to answer questions.                                                                           
                                                                                                                                
8:14:10 AM                                                                                                                    
SENATOR BEGICH asked how often recovation was used, if at all.                                                                  
                                                                                                                                
MR. PHILLIPS  replied that prior to  2010 it was used  155 times,                                                               
and to  date there are  46 outstanding  cases of loans  that were                                                               
never paid back.                                                                                                                
                                                                                                                                
8:14:38 AM                                                                                                                    
CHAIR HUGHES asked if, under current  statute, there is a way for                                                               
a student who defaults  to not lose their license or  if it is up                                                               
to the discretion of ACPE.                                                                                                      
                                                                                                                                
MR. PHILLIPS  understood that it  is discretionary.  He suggested                                                               
Ms. Butler can address that question.                                                                                           
                                                                                                                                
CHAIR  HUGHES asked  how many  students  are currently  receiving                                                               
student loans.                                                                                                                  
                                                                                                                                
MR. PHILLIPS  shared data from  ACPE: there are  currently 17,400                                                               
borrowers equaling about $240 million.                                                                                          
                                                                                                                                
CHAIR HUGHES asked  if there is any other place  in statute where                                                               
a person gets penalized for defaulting on their loan.                                                                           
                                                                                                                                
MR. PHILLIPS replied  that garnishing wages has  worked very well                                                               
because individuals are allowed to still earn some income.                                                                      
                                                                                                                                
8:16:25 AM                                                                                                                    
CHAIR HUGHES asked how the decision to garnish wages is made.                                                                   
                                                                                                                                
8:16:38 AM                                                                                                                    
MR. PHILLIPS deferred to Ms. Butler to answer.                                                                                  
                                                                                                                                
SENATOR COGHILL  liked the ability  to work  and pay off  debt at                                                               
the  same  time.  He  noted AS  21.27.390  applied  to  temporary                                                               
licenses and asked what they were.                                                                                              
                                                                                                                                
MR. PHILLIPS said he would have to look it up.                                                                                  
                                                                                                                                
8:17:51 AM                                                                                                                    
REPRESENTATIVE  CLAMAN related  that  they  discovered that  when                                                               
revoking licenses,  those with occupational licenses  would go to                                                               
another state  to obtain  a license  and Alaska  was not  able to                                                               
garnish  their wages.  It was  doubly  ineffective. Taking  wages                                                               
away was also not effective.                                                                                                    
                                                                                                                                
SENATOR COGHILL said Senator Begich  discovered that AS 21.27.390                                                               
applies to  a variety of  temporary licenses. He agreed  with the                                                               
sponsor's point.                                                                                                                
                                                                                                                                
8:19:27 AM                                                                                                                    
CHAIR  HUGHES  commented  out  that   the  bill  applies  to  all                                                               
occupational licenses and has an impact across the economy.                                                                     
                                                                                                                                
CHAIR  HUGHES requested  Ms. Butler  address members'  questions,                                                               
explain  the  current  process, and  state  the  administration's                                                               
position on the bill.                                                                                                           
                                                                                                                                
8:19:51 AM                                                                                                                    
STEPHANIE  BUTLER,  Executive   Director,  Alaska  Commission  on                                                               
Postsecondary   Education  (ACPE),   Executive  Officer,   Alaska                                                               
Student  Loan  Corporation,  Department of  Education  and  Early                                                               
Development  (DEED), answered  questions on  HB 86.  She provided                                                               
the history  of ACPE's  efforts to  collect defaulted  loans. She                                                               
spoke of  an effective  means to collect  defaulted loans  - wage                                                               
garnishment. Taking  occupational licenses away  was ineffective,                                                               
as was  putting a hold  on the  license renewal. She  noted there                                                               
are 40 holds pending, but it  appears that none of the people are                                                               
in Alaska. Should the legislation  pass, they would release those                                                               
holds.                                                                                                                          
                                                                                                                                
8:22:02 AM                                                                                                                    
SENATOR  BEGICH   recalled  when  Representative   Porchet  tried                                                               
various methods of loan collection.                                                                                             
                                                                                                                                
8:22:35 AM                                                                                                                    
CHAIR HUGHES  said it is a  good bill and is  needed. She pointed                                                               
out  that   when  people  leave   the  state,  the   state  loses                                                               
jurisdiction.  She asked,  if  the  bill were  to  not pass,  and                                                               
someone defaults  and is  in Alaska,  would it be  up to  ACEP to                                                               
proceed with the different authorities.                                                                                         
                                                                                                                                
8:23:23 AM                                                                                                                    
MS.  BUTLER  explained  that wage  garnishment  is  an  automated                                                               
process which  treats all equally. It  is set into motion  when a                                                               
person has  not made  a payment  in six months  or they  have not                                                               
made  an  arrangement for  a  deferment.  At  180 days  they  are                                                               
notified and  they receive notifications  every 30 days  up until                                                               
that time. They have 30 days  to appeal the default, after which,                                                               
wage  garnishment commences.  At that  point their  option to  be                                                               
relieved  from  wage  garnishment  is  to  demonstrate  financial                                                               
hardship.                                                                                                                       
                                                                                                                                
CHAIR HUGHES asked  if the default will be reflected  on a credit                                                               
score for those who move out of state.                                                                                          
                                                                                                                                
MS. BUTLER said yes.                                                                                                            
                                                                                                                                
8:24:58 AM                                                                                                                    
CHAIR HUGHES  opened public testimony, and  seeing no testifiers,                                                               
closed public testimony. She held HB 86 in committee.                                                                           
                                                                                                                                

Document Name Date/Time Subjects
SCR 5 - Supporting Document - Best Beginnings Update.pdf SEDC 4/12/2017 8:00:00 AM
SCR 5
SCR 5 - Supporting Document - Best Beginnings Report.pdf SEDC 4/12/2017 8:00:00 AM
SCR 5
SCR 5 - Supporting Document - reading proficiency vs. poverty.pdf SEDC 4/12/2017 8:00:00 AM
SCR 5
HB 86 Sponsor Statement.pdf SEDC 4/12/2017 8:00:00 AM
HB 86
HB 86 Legislation - Ver. A.PDF SEDC 4/12/2017 8:00:00 AM
HB 86
HB 86 Fiscal Note - EED-ACPE-2-22-17.pdf SEDC 4/12/2017 8:00:00 AM
HB 86
HB 86 Questions Memo HLNC.pdf SEDC 4/12/2017 8:00:00 AM
HB 86
HB 86 Supporting Document - ACPE Loan Default Consequences.pdf SEDC 4/12/2017 8:00:00 AM
HB 86
HB 86 Supporting Document - Letter of Support.PDF SEDC 4/12/2017 8:00:00 AM
HB 86
HB 86 Supporting Document - NPR States Review.pdf SEDC 4/12/2017 8:00:00 AM
HB 86
HB 135 - Legislation - Ver. D.A SEDC 4/12/2017 8:00:00 AM
HB 135
HB 135 - Ver A 2.27.17.PDF SEDC 4/12/2017 8:00:00 AM
HB 135
HB 135 Summary of changes - Ver. A to Ver. D.A.pdf SEDC 4/12/2017 8:00:00 AM
HB 135
HB 135 Fiscal Note - HB135-EED-SFF-3-03-17.pdf SEDC 4/12/2017 8:00:00 AM
HB 135
HB 135 Supporting Document- Support Letter NWABSD 2.27.17.pdf SEDC 4/12/2017 8:00:00 AM
HB 135
HB 135 Additional Document- Memo for H-EDU questions.PDF SEDC 4/12/2017 8:00:00 AM
HB 135
HB 135 Supporting Document- Support Letter NWAB 2.27.17.pdf SEDC 4/12/2017 8:00:00 AM
HB 135
HB 64 - Supporting Document - the-dyslexia-dilemma-a-history-of-ignorance-complacency-and-resistance-in-colleges-of-education.pdf SEDC 4/12/2017 8:00:00 AM
HB 64
HB 64 - Supporting Document - FINAL emailed 160620_Joint ASD-Assembly Meeting June 10 of 2016.pdf SEDC 4/12/2017 8:00:00 AM
HB 64
HB 64 - Supporting Document - IDA Dyslexia Handbook-1.pdf SEDC 4/12/2017 8:00:00 AM
HB 64