Legislature(2019 - 2020)SENATE FINANCE 532
03/26/2020 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB242 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 242 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 242
"An Act relating to tolling deadlines for actions by
state agencies; relating to income determinations for
purposes of determining eligibility for certain public
assistance programs; relating to forbearance from
action against borrowers who owe money on state loans;
relating to a temporary moratorium on certain mortgage
foreclosures, certain evictions from rental
properties, and disconnection of residential
utilities; and providing for an effective date."
9:18:26 AM
Co-Chair von Imhof explained that SB 242 was a COVID-19
virus economic mitigation bill. She informed that her staff
would present the bill and would discuss intent language
and other aspects of the bill.
9:19:13 AM
JULI LUCKY, STAFF, SENATOR NATASHA VON IMHOF, started off
with some notes. She relayed that based on research,
timelines, and the changing landscape of the federal
government efforts, it had been difficult to get a bill
that had all the elements that people wanted. The bill was
the first attempt to get the items people wanted into a
bill for consideration. She acknowledged that some of the
bill language was not quite right, but the sponsor wanted
to get a document in front of stakeholders so people could
begin to look at it critically. She noted that as she
discussed the Sectional Analysis, she would make note of
sections that were being re-written. She requested that
committee members let staff know if any language did not
match the bill intent.
Ms. Lucky specified that there had been ten health mandates
from the governor to reduce and prevent the spread of the
COVID-19 virus, including such things as closing businesses
and limiting travel, which would have a profound effect on
the state's economy. She explained that while the measures
were necessary to protect public health, the Senate was
concerned about the impact on Alaskans. Previous bills on
the same subject had focused on the effects of the
pandemic, while the bill being presented was meant to
mitigate the economic effect created by the mandates.
Ms. Lucky emphasized that the bill was narrow in focus and
was meant to mitigate the economic impact of the mandates.
She understood that there were many ideas about economic
stimulus that could be taken up after the crisis was over.
The bill did not have economic recovery provisions, but
rather focused on economic mitigation.
Co-Chair von Imhof pondered how long the economic downturn
would last. She thought federal relief funds were imminent
but did not know when the funds would arrive. She explained
that the Senate was trying to provide efforts through
funding, intent language, and possibly temporary statute
change to provide economic relief in a myriad of areas.
Ms. Lucky commented that the bill did not intend to
jeopardize or duplicate any federal funding. There were not
many funding elements in the bill because the sponsors had
been unsure of what concepts were put in federal law. The
concepts would be forthcoming. She hoped to receive
guidance from the committee about what items should be put
into the bill.
9:23:52 AM
Ms. Lucky discussed a Sectional Analysis for the bill (copy
on file):
Senate Bill 242
Sectional Analysis
Version 31-LS1748\U
The intent is that all protections and programs in the
bill start on March 11, 2020 and remain in place until
30 days after the state emergency has ended.
Sec. 1: States the findings and intents of the
legislature.
Sec. 2: Allows statutory deadlines for actions or
decisions by a state agency to be delayed. States that
if an agency fails to act on a filing or issue a
decision, it is not considered approval or denial.
Ms. Lucky explicated that the idea in Section 2 had been
discussed in the other body. She noted that there was not
"good cause" language in the section, which the committee
might want to consider. The sponsor wanted to ensure there
was not approval or denial if there was a problem with
health mandates or getting necessary quorums.
Ms. Lucky continued to address the Sectional Analysis:
Sec. 3: States that payments including a Permanent
Fund Dividend or aid provided by the state or federal
government for the outbreak of COVID-19 shall not be
considered when determining eligibility for Medicaid
or public assistance.
Ms. Lucky noted that Section 3 pertained to what often was
called a "hold harmless" provision. She wanted to point out
that often a hold harmless provision was often used to talk
about backfill money. The section did not deal with nay
backfill of payments, rather it was language to ensure that
additional money would not take a person off public
assistance or eligibility for Medicaid. She continued to
address the Sectional Analysis:
Sec. 4: Prohibits the state from finding a person in
default or take loan collateral.
Ms. Lucky explained that Section 4 related to forbearance
on state loans during the Covid-19 outbreak. She detailed
that there were some drafting issues that were being
addressed, and the Department of Revenue had indicated that
some of its programs could be considered state loans. The
intent of the section was that collateral would not be
taken if a person had a loan such as a student loan or loan
on a fishing boat.
Senator Olson asked about loans for businesses or
municipalities.
Ms. Lucky stated that Section 4 was broadly written, and
she believed it would include businesses. She reiterated
that there were some technical problems, and she hoped the
committee would discuss parameters that would help to
refine the language.
Co-Chair von Imhof thought the committee could discuss the
conundrum of to what degree would the legislature (versus
the governor's executive act) exercise its jurisdiction to
direct businesses or banks to behave in a certain way. She
wanted the committee to discuss the limits of the
legislature in terms of providing loan relief or requiring
institutions to provide loan relief for a period of time.
9:28:37 AM
Senator Wielechowski wanted to understand the ramifications
of Section 2 of the bill. He. He was curious if the section
would apply to things like school funding. He wondered if
it would be possible for the Department of Education and
Early Development to not pay school funding for the
duration of the emergency, or if it would be possible for
the Department of Health and Social Services (DHSS) to stop
paying public assistance program payments. He wanted to
more fully understand the authority being proposed.
Ms. Lucky stated that the intent of the section was to
state that a quasi-judicial agency could delay a "yea or
nay" decision until it had a quorum. She reiterated that
the section could use guidance from members to tighten up
the language.
Co-Chair von Imhof stated that there was staff from the
Department of Law and the Legislative Legal Department
available to answer questions.
Senator Wielechowski wanted to ensure that committee
understood the intent.
Senator Wielechowski asked if Co-Chair von Imhof had heard
anything from the judicial branch. He had heard the
Judiciary was not having grand jury trials or jury trials.
He wondered if the Judiciary was looking for some kind of
relief. He mentioned the right to a speedy trial and
wondered if the legislature needed to provide language or
guidance.
Ms. Lucky stated that she had reached out to the Judiciary
and asked if it needed any statutory authority. She had
heard an initial response that statutory authority was
likely not needed.
9:32:32 AM
Ms. Lucky pointed out that there was a distinction between
Section 4, which dealt with state agencies; and Section 5
through Section 7, which dealt with regulating things that
were not state agencies. She noted that there was a bill in
the other body, and staff had been working diligently with
the power association and Regulatory Commission of Alaska
to perfect the language in Section 5. She continued to
address the Sectional Analysis:
Sec. 5: Prohibits a public utility company from
disconnecting service for nonpayment and requires
reasonable efforts to reconnect utility service that
was disconnected.
Ms. Lucky acknowledged that the language in Section 5 was
flawed, and conveyed that she was waiting to get additional
language. The intent was to put a moratorium on
disconnection of residential utility service during the
state disaster.
Senator Hoffman thought the intent of Section 5 was an
excellent plan. He thought it was problematic that smaller
utilities in rural Alaska could not absorb the lack of
payments. He thought there should be a plan to help
utilities if they did not have enough revenue to operate.
Ms. Lucky relayed that the other body had been looking at
the issue. There had been a suggested solution that would
allow a utility company to treat the unpaid bills as
assets, which would allow the company to put the cost over
time. She understood Senator Hoffman was asserting that the
utility companies would need operating cash to keep
functioning, and she promised to continue looking into the
matter.
Senator Hoffman thought the mechanism described by Ms.
Lucky was complicated for many small utilities. He thought
the committee needed to look at streamlining the process
and maybe provide cash and accept the receivables.
Senator Wielechowski noted that Section 6 and Section 7 had
provisions that indicated that a person seeking protection
to not make payments would have to file a certification. He
noticed there was not a similar provision in Section 5. He
wondered if the members had considered the issue.
Ms. Lucky read Section 6 and Section 7:
Sec. 6: Prohibits eviction for nonpayment of rent if
a person is experiencing financial hardship.
Sec. 7: Prohibits foreclosure on the property of a
person experiencing financial hardship.
Ms. Lucky noted that the language was still being perfected
and was not written clearly enough. There was concern about
evictions due to illegal acts. There were some public
assistance programs that required eviction if tenants did
certain illegal things. The sections were being reworked to
accommodate the issues. She stated she would find an answer
to Senator Wielechowski's question.
Senator Wilson referenced Senator Wielechowski's question
and asked if the bill would define "financial hardship" so
that it was clearly understood.
Ms. Lucky suggested that the topic be discussed by
Legislative Legal Services, and she was unsure if the
definition already existed in statute. The intent was to
provide for financial hardship due to the state disaster.
She deferred to the legislative legal drafters and stated
that some definition would be provided for understanding.
9:37:30 AM
Senator Hoffman asked about individual loans and noted that
his argument about Section 5 also applied to Section 6. He
mentioned credit ratings and thought non-payment of rent
could result in landlords not being able to pay mortgages.
He thought the process needed to be worked out.
Co-Chair von Imhof thought Senator Hoffman brought up a
good point regarding Equifax and other credit agencies. She
wondered if there could be intent language added to hold
credit scores harmless. She pondered whether the state
could impact the matter.
Senator Wielechowski referenced Section 6 and asked about
an individual that had a lease expire. He wondered if a
landlord could evict a person at the end of a lease.
Co-Chair von Imhof thought Senator Wielechowski brought up
a good point and thought there were various reasons why a
landlord might want to evict a tenant at the end of a
lease. She thought having a more concise definition of
financial hardship.
Ms. Lucky thought it was a tough policy decision to
consider being under a hunker-down order when a person was
at the end of a lease. She pondered whether it was good to
have people changing residence during the state emergency.
She emphasized the need for the legislature to make policy
decisions and pondered the difficulty of the chain of
events involved in non-payment.
Co-Chair von Imhof wanted to consider financial hardship
and discussed individuals that received unemployment
benefits or continued to receive wages from employers that
received loans from the federal government. She pondered
whether it was possible to control to direct how
individuals spent their money. She was not sure it was
possible to direct how wage replacement was spent.
9:42:08 AM
Ms. Lucky addressed the final sections of the Sectional
Analysis:
Sec. 8-13: Sections that explain the effective dates.
These will have to be amended for consistency.
Ms. Lucky explained that the bill intended to define state
emergency in Section 8, and the definition would be used
throughout the bill. The definition did not have to be tied
to the emergency declaration. She explained that the intent
was to have the provisions in place for 30 days after the
lifting of the disaster declaration, and as the bill moved
forward the sponsor would work to have the dates conform.
Ms. Lucky continued to speak to the bill. She addressed
items members might have expected to see in the bill but
were not, such as wage replacements. She stated that
initially wage replacement was considered to put into the
bill. She understood there would be a certain amount of
federal wage replacement, and after talking to the
departments it was found that the state efforts could be
duplicative or harmful as the federal law would take
precedent. She understood that the federal provision would
provide an addition $600 per week for those collecting
unemployment insurance. There was a conforming payment for
people that were in the "gig economy." The department was
working through how to program the payments, which could
take a few weeks. There was an outstanding question of if
the $600 payment would be retroactive, and she would
provide the committee with further information when it
became available.
9:45:27 AM
Senator Hoffman asked about the $600 payment. He asked if
it had been determined if the funds were taxable.
CAROLINE SCHULTZ, STAFF, SENATOR NATASHA VON IMHOF, did not
have the information regarding taxability of the extra
payments. She offered to get back to the committee with the
information. She stated that the federal government had
indicated that it would be funding the additional $600
weekly payment in addition to the base weekly payment for
the non-covered population, "gig economy," and those that
weren't' previously eligible for unemployment benefits.
Senator Hoffman thought it was critical to have the answer
as soon as possible. He thought whatever the committee did
with the legislation, it should look at least one or two
months past when the legislature would reconvene in
January.
Co-Chair von Imhof thought it was important to try, to the
degree possible, to set a date as far as possible in the
future. She thought economic hardships could last for quite
some time. She thought the committee could have a
discussion regarding dates and relying on the governor's
proclamation that the disaster was over or on another date.
9:47:51 AM
Senator Bishop wanted to have an overview by the Department
of Labor and Workforce Development to get questions
answered. He noted that he had worked with Ms. Lucky and
the department. He stated that the department had
sufficient receipt authority for staffing and programming,
which it could put on the record.
Ms. Lucky stated that there had been a section that was
requested to be drafted relating to getting more money to
food banks but there had been problems figuring out how to
make it work. There had been intent to get more money into
food banks and get more food into underserved areas. She
had been working with the department to ensure that
providers had the necessary resources to implement the
plan. She let the committee know that it was a priority
issue to get language in the bill.
Ms. Lucky detailed that the last component that would go
into the bill was to allow Alaska Housing Finance
Corporation (AHFC) to do more to prevent homelessness.
There was potential language that would allow AHFC to
expand its homelessness programs as a result of a disaster,
and the proposed provision should be forthcoming.
Senator Wielechowski referenced Section 10 and asked if
staff planned to work on repeal language. He thought all
the sections stipulated that the provisions would last for
the duration of the state emergency and 30 days thereafter,
and then repealed the sections on June 30.
Ms. Lucky clarified that once there was an idea of what the
committee desired for effective dates, the provisions would
conform to the decision. She knew there were
inconsistencies and affirmed that the dates would be
adjusted when a decision was made by the committee.
9:51:09 AM
Senator Hoffman referenced some work he had done addressing
the food issue.
Co-Chair von Imhof asked Senator Hoffman to elaborate.
Senator Hoffman discussed food security, heating, and
travel needs in rural Alaska. He had materials that his
staff distributed (copy on file). The question of food
security had been raised in his region. He discussed
concerns about heating fuel and the eventuality of being in
lockdown over the winter and inability to pay heating
bills. He relayed that he had worked on a program that
addressed the heating fuel component. He noted that the
first page of his materials discussed a program that
provided heat for households that fell below federal
poverty guidelines. He thought more and more people would
fall into the category, and the existing program might not
have adequate funds to address the growing needs. He
pondered expanding the eligibility for the program.
Senator Hoffman noted that travel was essential to get
commodities to rural Alaska. He knew that travel in rural
Alaska had been drastically reduced, as it had in other
areas. He mentioned a federal program that propped up large
carriers experiencing financial hardship. He did not know
if there would be supports for small carriers in rural
Alaska. He asserted that travel for people in the remotest
parts of the state was critical for health, life, and
safety. He emphasized that heating, food, and travel for
rural Alaska needed to be addressed in the context of the
virus' effects in remote villages.
Co-Chair von Imhof thought Senator Hoffman had brought
forward three very important topics. She addressed food
security, and thought there could be a dollar amount in the
other appropriation bill to set aside money for a
centralized grant-making department in DHSS that would be
directed to work with all statewide food pantries. She
thought there might be varying needs in different parts of
the state. She thought it was important to be prescriptive
but not granular. It was the intent of the bill to provide
support for food.
9:56:34 AM
Senator Hoffman wanted to bring attention to an incident
that happened the previous day in the Yukon-Kuskokwim
Delta. He read from an email that came from the
President/CEO of the Yukon-Kuskokwim Health Corporation:
It has begun. Ravn has a policy in effect to deny
boarding of anyone that has a respiratory illness. Two
babies were denied this morning. My chief doc called
the state epidemiologist and they tried to convince
them that it is like RSV and not COVID. They refused.
When COVID shows up, there are not going to be enough
medivac aircraft in Western Alaska to handle our
region. Ambulatory patients using commercial aircraft,
not medivacs. If the government refuses to tell them
to serve respiratory patients, then we need the guard
to mobilize in all hubs of Western Alaska to provide
the services to get these individuals to medical
facilities.
Co-Chair von Imhof wanted to hear from committee members.
Senator Bishop wanted to address food security. He stressed
that the state produced 50 percent of its foodstuffs 50
years ago, and currently it only produced one percent. He
thought it was a good example of why the state needed to
produce its own food and preserve it for emergencies.
Senator Wilson stated his office had been working on trying
to identify food shortages and had looked at food
processors in the state. He noted that the state had issued
Requests for Proposals to the processors to keep the
entities going and try and provide food for the state. He
was trying to find a package with salmon processers to be
part of the food solution and was looking at intent
language to add.
Senator Wilson referenced Section 6 and the non-payment of
rent. He wondered if it was possible to add a clause about
the ability to terminate leases or rentals for people who
were unable to find work due to the emergency.
10:00:15 AM
Senator Wielechowski thought the governor had mentioned
banning air travel in the state the previous day. He
referenced Senator Hoffman's comments and wanted to have
discussion on the topic. He hoped that matter was thought
through very carefully. He thought for much of Alaska it
could be death sentence if people were trapped in villages
and could not access help.
Co-Chair von Imhof wanted to pivot to people on the phone
waiting to testify. She listed the names of individuals
that were available.
Ms. Lucky stated that the issues discussed by members had
also been identified by staff. She wanted to let members
know that the committee was in receipt of many amendments.
She stated it would be helpful if members let the co-
chair's office know of any desired changes to the bill or
suggested language. She stated she was not familiar with
rural Alaska. The committee would be relying on staff from
those areas of the state for expertise and guidance.
Co-Chair von Imhof emphasized that the legislature was
under a severe time constraint and cautioned that the bill
could not include everything every person wanted. She
cautioned, "do not let the great get in the way of good."
She had faith that if money or direction were provided, the
departments would execute the intent of the bill.
Co-Chair von Imhof pondered the earlier question about what
was defined as a financial hardship; and if those receiving
wage replacement should be required to pay rent and
utilities.
10:04:30 AM
AT EASE
10:05:38 AM
RECONVENED
Co-Chair von Imhof relayed that committee staff would give
an overview of the federal stimulus package, and then
invited testimony would discuss food security and loan
relief.
Ms. Schultz addressed some of the items being worked into
federal legislation for the COVID-19 response. She reminded
that the federal bill was 800 to 900 pages in length and
all the provisions and effects were not known. It was
unknown how much money the state would be receiving as a
result. Many of the provisions would use existing federal
granting programs or federal formula programs, and she
thought Alaska would get its relative share. She thought
some of the gaps in SB 242 might be filled in by some of
the federal elements.
Ms. Schultz noted there was a $5 billion appropriation to
the Community Block Grant Development Program, which was an
important source of federal funding for many of the state's
community non-profits such as food banks. There would be
subsidies for state disaster relief response, which could
involve food and transportation. She mentioned that there
was an extension for the Real I.D. and the deadline had
been moved to September 30, 2021.
Ms. Schultz listed proposed federal funding available for
hospitals. The federal legislation had a focus on ensuring
that rural hospitals stayed solvent. There was funding for
childcare grants to make sure childcare providers would be
able to remain in business. There was additional funding
for the Low Income Home Energy Assistance Program (LIHEAP),
which was a state-federal cooperative program managed by
the Division of Public Assistance. There was considerable
funding for the National Guard for response and deployment
response for transportation. There was urban and rural
transportation block grant funding available, which she
imagined would be use for smaller transportation issues
such as rural and urban transit systems.
10:09:35 AM
Ms. Schultz spoke to larger scale items addressed in the
federal legislation. There was funding for an extra $600
per week in unemployment insurance as well as extension of
unemployment insurance to non-covered individuals. There
was funding for a $1200 payment to individuals. There was
also a very large chunk of funding made available to
states, with the minimum amount set at $1.25 billion. She
assumed that Alaska would receive the minimum amount.
Co-Chair von Imhof asked if the $1.25 billion would be
spread out amongst programs, or if the funding would go to
the General Fund.
Ms. Schultz explained that the funding was specifically
directed to state and local governments. The local
government provision was for entities with a population of
500,000 or more; and since Alaska had no cities or boroughs
of the required size, the full amount would go to the
state. There was direct funding for the state for
education, and for the Office of the Governor to focus on
education. She continued that there was a provision for $8
billion available for tribal governments, nearly half of
which resided in Alaska.
Co-Chair von Imhof wondered if the $1.25 billion would be
one large lump sum, or would the funds come in payments.
She wondered who would direct how the funds were spent.
Ms. Schultz stated she was working diligently to get the
information and would get back to the committee as soon as
any details were available.
Ms. Schultz stated that she had given a high-level overview
and included topics that had come up in the committee
discussion.
Co-Chair von Imhof asked about two questions Ms. Lucky had
brought up regarding SB 242.
Ms. Lucky stated that the SB 242 bill drafter was available
for questions, as well an attorney from the Department of
Law. She referenced member's questions about how far
someone could step between a borrower and a bank. She
thought there might be legal questions about how far some
of the bill provisions could go. She noted that the
Director of the Division of Public Assistance was available
to talk about food assistance and getting resources to the
places that were most in need. She thought the topic of
hold harmless provisions or eligibility for public
assistance and Medicaid programs could be addressed.
Co-Chair von Imhof raised the question of state
jurisdiction. She invited testimony from the Department of
Law to consider how far the state could step in between a
borrower and a bank and if the state could require a bank
to refrain from vehicle repossession or property
foreclosures.
10:14:03 AM
STUART GOERING, DEPARTMENT OF LAW, ANCHORAGE (via
teleconference), relayed that he was available to deal with
questions pertaining to the Regulatory Commission of Alaska
and issues related to utility disconnection. The
jurisdiction question was outside his area of expertise.
Co-Chair von Imhof asked if Mr. Goering would work to find
a colleague that had expertise in the area in question.
Mr. Goering stated he had initiated a request to the
section chief to find staff available to discuss state
jurisdiction as it pertained to Co-Chair von Imhof's
question.
Co-Chair von Imhof tabled the question for a later time.
Senator Wilson asked about the state's contractual
obligations. He wondered if the state could push back some
of its financial obligations to make other more immediate
payments available. He wondered about school district
employees and contracts. He wondered if the state could put
a moratorium on the payments.
Co-Chair von Imhof thought there were endless examples of
contractual obligations and payments between entities. She
thought commerce had ceased in ways that were unfathomable.
She pondered how to have every trade held harmless.
Co-Chair von Imhof thought Senator Wielechowski had
referenced Section 2. She thought he had used an example of
a state department refusing to pay an obligation.
Senator Wielechowski thought the way the bill language was
written had unintended consequences.
Mr. Goering thought the way the language was written
applied to statutory and regulatory action or decisions,
which were typically things like applications, tariff
filings, and dispute resolutions. He thought many of the
items had consequences for missing the timelines, which in
some cases included automatic denial or approval. He
thought the language was clear and understood that the
intent of the bill was that the provision would apply to
the kinds of decisions he cited rather than executive
decisions such as what checks to write or contracts. He
thought the provision could perhaps apply to issuing a
grant, but thought the language was directed primarily at
quasi-judicial decisions rather than all state decisions.
10:19:15 AM
Co-Chair von Imhof asked for more clarity and direction
regarding food security and hold harmless provisions.
SHAWNDA O'BRIEN, DIRECTOR, DIVISION OF PUBLIC ASSISTANCE,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES (via
teleconference), stated that the division was working on a
number of different efforts to allow for relaxing of the
division's rules for food stamps and other programs to
maintain or gain eligibility. She continued that in terms
of the hold harmless provision, there were provisions in
place already for the Permanent Fund Dividend. She
explained that the division was still waiting for federal
guidance regarding rules and how to apply them for any
federal funds that were issued. She stated that on a
federal level there was an intent to relax rules and
increase services. The federal government was working hard
to get formal guidance out, and she would provide the
information when it became available. She referenced
heating assistance had just learned that additional federal
funds would be made available for the LIHEAP Program.
Co-Chair von Imhof understood that comprehending the
federal provisions was a work in progress. She knew that
her office received a call from Sana Efird, the
Administrative Services Director for DHSS. She added that
DHSS oversaw grants for food banks, and thought it made
sense to provide a grant to DHSS, which would then
disseminate the funds to food banks throughout the state.
Senator Bishop thought Ms. Shultz had mentioned something
regarding food banks. He thought farmers markets were
included.
Co-Chair von Imhof thought there was an issue because there
were state funds layered with federal funds. She pondered
how to avoid duplication and preserve state funds as long
as possible for when the federal funds were expended. She
emphasized the importance of leveraging federal funds to
the degree that it was possible.
Co-Chair von Imhof wanted to discuss loans and all things
pertaining to delayed loan payments.
10:24:17 AM
DAN WAYNE, LEGISLATIVE COUNSEL, LEGISLATIVE LEGAL SERVICES
(via teleconference), asked if the committee had a specific
question about loans or loan payments.
Co-Chair von Imhof asked to what degree the legislature
could direct a bank or a financial institution to behave a
certain way.
BILL MILKS, ATTORNEY, CIVIL DIVISION, LABOR AND STATE
AFFAIRS SECTION, DEPARTMENT OF LAW (via teleconference),
mentioned that the other body was working on a similar
bill. He referenced Section 4 through Section 6 of SB 242
and addressed the proposed moratorium on evictions and
foreclosures. He thought that the provisions were arguably
a government action taken for public benefit that could
have an economic consequence on a private entity (a bank or
landlord). He stated that there was a statutory provision
under the Alaska Disaster Act in AS 26.23.160 that provided
compensation when the state determined it was necessary to
commandeer property in response to a disaster.
Mr. Milks continued to address Co-Chair von Imhof's
question. He thought the committee might consider more
finely tuning Section 6 and Section 7 to address the
specific kind of damage that could occur to a landlord or
to a mortgage holder from lost rent. He thought the
existing disaster act addressed the subject generally but
not precisely. He thought if the bill passed as is, the
existing statute would kick in. He considered that when
there was government action for public benefit, some kind
of compensation for the private party would have to result.
10:27:49 AM
Co-Chair von Imhof asked if a bank and a landlord or a bank
and borrower were working together and the borrower could
not make payments, what would the existing statute mean for
the bank. She asked about recourse for the bank.
Mr. Milks acknowledged that the bill analysis was happening
very quickly. He considered Section 6 and Section 7, which
put a moratorium on eviction for non-payment of rent. The
consequence of lost rent revenues through a government
action could be considered "taking" of property by the
government. He explained that existing disaster statute
addressed compensation when the government took action that
affected private property. When it took the action pursuant
to disaster relief powers, statute provided a method for
compensation. He thought the bill in the other body was
more specifically focused on moratoriums and foreclosures.
He thought provisions could be drafted to specify the kind
of damages a bank or landlord could receive from the
government.
Co-Chair von Imhof thought that it was possible for the
banks to be made whole by the economic plan.
Senator Wielechowski thought it was unusual to get legal
advice from the Department of Law as opposed to the
legislature's own attorneys. He noted that the governor had
shut down barbers, tattoo parlors, and other kinds of small
businesses. He asked if Mr. Milks was saying that all the
small businesses were entitled to compensation from the
state.
Mr. Milks replied that he was only addressing Section 6 and
Section 7 of the proposed bill.
Senator Wielechowski thought the bill was much more limited
than the action of the governor shutting down businesses.
He thought the same logic would apply to small businesses
losing revenue. He advised Mr. Milks to be careful about
what he told the committee.
Mr. Milks responded that the department was trying to aid
the committee with its questions and the rough statutory
reference he made was concerning commandeering or
destroying property per AS 26.23.160.
Co-Chair von Imhof thought the question could be more
nuanced. She pondered what the state could do to help
businesses like Senator Wielechowski mentioned, as well as
expanding the help to banks and others.
10:32:37 AM
Senator Wilson understood that everything was speculation
and there was no applicable statute. He thought the
situation would mean letting the Judicial Branch set
policy.
Mr. Milks asked for clarity.
Senator Wilson restated his question. He thought the
legislature could take action for helping with utilities,
evictions, rent, and loan relief; and whether the state
would be held liable to make businesses whole would be a
matter for litigation for the court to decide.
Mr. Milks thought Mr. Goering could address a regulated
utility environment and the implications of Section 5.
Co-Chair von Imhof stated the committee had about 30
minutes remaining to discuss the bill. She thought the
state's ability and role to direct businesses was pretty
murky. She acknowledged that the governor and various
mayors had shut down businesses and the federal government
had responded by having a significant bailout. She asked if
it made sense to include intent language to dictate that
some of the $1 billion in federal funds be spent to make
banks and air transportation whole. She questioned what
could be done to ensure landlords knew employees were
receiving unemployment insurance benefits and federal funds
of up to $600 per week, and if those receiving the funds
had the ability to pay.
10:36:36 AM
Co-Chair von Imhof repeated her question. She asked how a
landlord could know if an employee received compensation,
either through their employer's federal subsidy or other
federal subsidy. She asked how the legislature could direct
renters to continue to pay rent if the individuals had the
means to do so.
Mr. Wayne thought the information would be private and the
employee would have to give an employer permission to
divulge the information to a person that asked.
Co-Chair von Imhof asked if it was possible to force
someone to pay rent or add intent language that would
prioritize the payment of rent.
Mr. Wayne did not think what Co-Chair von Imhof described
was possible. He pointed out that there was a
constitutional provision that prohibited the state from
adopting a law that impaired the obligation of contracts
such as a lease. He thought Mr. Milks had referenced
Article I, Section 18, which stipulated that private
property shall not be taken or damaged for public use
without compensation. He thought if the provision was
challenged in court the court would probably apply a
balancing test, and say the rights of the people involved
be free from the consequences of the taking were offset
somewhat by the needs of the government to address health,
safety, and welfare. He thought the court would consider if
the law was narrowly focused to deal with the crisis. He
thought if the statute was overly broad, the court might
not be able to find justification through the balancing
test.
10:40:05 AM
Senator Wilson considered incentives and did not want to
penalize businesses. He pondered tax credits as a way to
incentivize potential losses. He acknowledged the limited
time available to ponder the possibilities.
Mr. Wayne stated there was a federal pre-emption issue with
telling banks what to do. He explained that national banks
and federally chartered savings associations were covered
by federal law, and in the case of a conflict with state
and federal law, the federal law would prevail.
Senator Olson was concerned the committee was getting too
granular and slowing down the bill process. He was afraid
the committee would fall behind.
Co-Chair von Imhof wanted to set the bill aside. She asked
the committee to continue consideration of the bill and
work with Ms. Lucky on any proposed intent language or
amendments. She thought the committee should meet in the
afternoon to work on the bill. She asked that any
amendments be worked through Ms. Lucky to get them drafted
expeditiously. She emphasized that the bill could not cover
every contingency. She acknowledged there would be things
that could not be addressed.
Senator Bishop agreed with Co-Chair von Imhof. He thought
once the federal law was passed the committee could
consider things that were missed in more detail.
Co-Chair von Imhof thought food, fuel, and travel were
topics to direct to Co-Chair Stedman as he considered the
appropriation. She pondered that there was potentially $1
billion coming to the state and asked if intent language
should be added to direct funds to certain industries such
as tourism, fishing, or bank lenders.
SB 242 was HEARD and HELD in committee for further
consideration.
10:44:24 AM
RECESSED
[Co-Chair von Imhof ADJOURNED the meeting at 5:53 p.m.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 242 Sectional Analysis v. A 3.26.2020.docx |
SFIN 3/26/2020 9:00:00 AM |
SB 242 |