Legislature(1993 - 1994)
03/10/1994 08:30 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
CSSB 70 An Act establishing a loan guarantee and interest rate (L&C): subsidy program for assistive technology. Senator Duncan, sponsor of SB 70, and Stan Ridgeway, Deputy Director, Vocational Rehabilitation, Department of Education, testified in support of the bill. Discussion was had between Co-chair Frank and Senator Kerttula regarding loan guarantees and leveraging. Mary Lou Miners, American Association Retired Persons, also spoke in strong support of the bill. SB 70 was REPORTED OUT of committee with a "do pass" and a fiscal note for the Department of Education in the amount of $100.0 (federal funds). CS FOR SENATE BILL NO. 70(L&C): An Act establishing a loan guarantee and interest rate subsidy program for assistive technology. Co-chair Pearce invited Senator Duncan to come before the committee to speak to SB 70. SENATOR DUNCAN, sponsor of SB 70, said that the bill would establish the assistive technology loan guarantee program to assist persons of disabilities to purchase durable equipment, adaptive aids, and assistive devices to obtain or maintain employment in order to allow them to live more independently. He said that this could be thought of as a jobs bill for persons with disabilities. Under the federal receipts referenced in the fiscal note, the federal funded program would allow the Division of Vocational Rehabilitation to guarantee loans made to individuals with disabilities by private lending institutions. The loan recipient must be unable to obtain the needed equipment through other programs such as Vocational Rehabilitation, Medicare, Medicaid, or third party payments from insurance companies. Under the bill, a loan could be used for a modification of a vehicle if the person lives independently, or with their parents or guardian and had been employed a minimum of 90 days before the initial loan request. The Labor and Commerce Committee amended the bill and those amendments were included in CSSB 70(L&C). One amendment by Senator Kelly stated that no state funds would be expended on the program. End SFC-94 #33, Side 1 Begin SFC-94 #33, Side 2 Senator Duncan went on to say that the participating lending institutions would process loans pursuant to their standard lending procedures. However, if the borrower with the disability was not able to afford the payments due to the prevailing interest rate, the lender would then refer them to the assisted technology program for a loan guarantee of up to 90 percent of the principle amount of the loan, or to buy down the interest rate to a payment level affordable to the borrower. Under the bill, the Division of Vocational Rehabilitation would establish an assistive technology loan committee within the Division. The purpose of the loan committee was to establish loan guidelines, evaluate the fund, and annually determine the amount available for loan guarantees and/or interest subsidies, and to report to the legislature on the operation of the program. He understood the Division of Vocational Rehabilitation supported SB 70 and indicated that the fiscal note annually for that division committed $100,000 of federal funds to this program for at least 3 years. Co-chair Pearce confirmed that federal funds amounted to $100,000 and that funds could be leveraged for a greater amount perhaps to $750,000. STAN RIDGEWAY, Deputy Director, Vocational Rehabilitation, Department of Education, stated that several states have similar loan programs. Some of those states use their guarantee to leverage money by purchasing an insurance policy that would allow the $100,000 to be leveraged so more loans could be made. Another part of the loan program would subsidize interest. The loan committee would decide each year, depending on the health of the fund, how much money could be used to subsidize interest for persons that would normally qualify but the payback of interest would make their payment too high. Most loans in the lower 48 were 6.5 to 8 percent. In answer to Senator Kerttula, Mr. Ridgeway said the maximum loan per person in most states was $5,000. The loan committee appointed by the director would actually decide on a maximum amount on a yearly basis depending upon the health of the fund. In concurrence with Senator Kerttula, Mr. Ridgeway agreed the amount was modest but explained this loan program was a last resort for most people. Other funds and sources from the Division of Vocational Rehabili-tation would be exhausted before a person applied for this program. For example, this loan program could help a person afford the adaptive equipment, if they had qualified to buy an automobile but not the equipment. CO-CHAIR FRANK said he supported the bill but asked how the guarantee would work if up to 90 percent of a loan would be guaranteed and only $100,000 was available. Mr. Ridgeway said there were several similar programs in other states that had been established. When the legislation passes, the committee would investigate the possibility of leveraging the money. $100,000 could be leveraged into $750,000 by buying an insurance policy that would guarantee those loans. The simplest way and the least risk would be to just guarantee the loans with as much money as was in the fund, dollar for dollar, up to 90 percent. Co-chair Frank hoped other ways would be used to leverage the money since it would not reach very many people on a dollar for dollar basis. MARY LOU MINERS, Chairperson, Legislative Committee for American Association of Retired Persons, spoke in support of SB 70. She said that people with handicaps and disabilities needed special assistance at times and this bill would answer those needs. She encouraged the committee to pass SB 70. SENATOR KERTTULA MOVED for passage of CSSB 70(L&C) from committee with individual recommendations. No objection having been raised, CSSB 70(L&C) was REPORTED OUT of committee with a "do pass," and a fiscal note for the Department of Education of $100.00 of federal funds. Co- chairs Pearce and Frank, Senators Rieger, Kerttula and Sharp signed "do pass."
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