Legislature(1993 - 1994)
03/22/1993 01:33 PM Senate HES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
The first order of business was SB 70 (ASSISTIVE TECHNOLOGY LOAN GUARANTEES). SENATOR DUNCAN, sponsor of SB 70, explained the bill would establish the assistive technology loan guarantee program to assist people with disabilities. Equipment would be purchased to enhance employment possibilities and independent living for people with disabilities. Number 028 GARY ROTH, President, Denali State Bank - Fairbanks, testified in support of SB 70 and its companion bill HB 139. He asked the legislature to approve the program. As a long time banker and past president of the Fairbanks Resource Agency, he feels that the loan guarantee and interest subsidy program will assist many of the handicapped and developmentally disabled people to lead a productive life. Mr. Roth said the amount of pride and well being that is displayed by these people when they can contribute to society, rather than being a ward of society, is tremendous. Many of these people have completed training programs which have given them the necessary skills to become independent. Unfortunately, because of their past disabilities or handicaps, they have been unable to establish credit of any kind. SB 70 will assist financial institutions in making credit available to them. Additionally, the families of some of the disabled people may have had undue hardships in supporting this family member and this may have had a derogatory effect on their credit. With proper counseling and direction of the agency or department, funds could be made available through the guarantee program for personal computers, home workshops, handicapped accessible vehicles, and other adaptive or assistive devices. The program will also enable financial institutions to extend longer loan terms over what normally would be considered a maximum term allowable for personal loans. Mr. Roth noted the term is usually no longer than eighteen months. He explained the interest subsidy may or may not always be necessary. This will depend on the individual circumstances of each case in that it will have an effect in the amount of the proposed monthly installments on any given loan. He said it may mean the difference between qualifying under the bank's debt income ratios for such credits. Mr. Roth urged the legislation be passed. Number 083 CAROLYN MORRIS, Administrative Coordinator, Governor's Committee on Employment of People With Disabilities, testified in support of SB 70. She said there are important things that assistive technology can do for individuals who experience disabilities. She explained that through Assistive Technologies of Alaska and the Division of Vocational Rehabilitation, there is an assistive technology loan program so that individuals can come and try different types of adaptive equipment to see what will work for them before they make an investment in actually purchasing something for themselves. With the passage of the bill as well as the assistance of the agencies, this goes a long way for a lot of people in Alaska. Number 113 STAN RIDGEWAY, Deputy Director, Vocational Rehabilitation, Department of Education, said the department supports SB 70. There are approximately 4,000 Alaskans who are in need of technology to assist them with work, play, and living independently. Many of the people qualify for technology in some way through various agency's insurance. He noted some private individuals also help pay for devices. Mr. Ridgeway explained the loan subsidy and guarantee will enable individuals to have the ability to get a loan so that they can purchase the devices themselves. He referred to the fiscal note and said it shows that Assistive Technologies of Alaska, through their federal funding, has requested $100 thousand of seed money for the loan program. Mr. Ridgeway said by using the subsidy, guarantee, and the $100 thousand, it could possibly leverage about $750 thousand from the banking industry for loans. SENATOR LEMAN referred to the seed money and asked if he meant that the money can be used to leverage other money from private lenders or if there is going to be an ongoing requirement for the program to request money from the state. MR. RIDGEWAY said it is his understanding that other states that have similar programs have an excellent repayment rate and there have been very few defaults. He said it is his understanding the $100 thousand of initial seed money would probably be the only money that would be needed to keep the loan program going, even with the buy down interest rates. CHAIRMAN RIEGER said he assumes that it would be the Division of Vocational Rehabilitation who would determine whether it could do a guarantee or an interest buy down. He asked Mr. Ridgeway if the division has a draft plan of how this would be implemented. MR. RIDGEWAY explained the Division of Vocational Rehabilitation oversees the Assistive Technology Program which is a federal grant program that has a five year life span. Their staff has been working with some of their consumer committees to establish the plan. He said he thinks that what the Assistive Technology Program is really interested in doing is putting together a package that would assist the bank that is helping the individual apply for a loan, to determine if there is another source or place to obtain equipment without applying for a loan. CHAIRMAN RIEGER asked Mr. Roth how the interest buy down would work. He said if the rate you want to get to is, for example, 5 percent, how would the Division of Vocational Rehabilitation and a bank work out whether it is a 9 percent loan that is bought down to 5 percent or a 13 percent loan bought down to 5 percent. MR. ROTH said it would have to be established through negotiations. He said he doesn't think that the banks would want to get involved in the program if they were going to make it part of their high earning portfolio. He said they want to assist the people and assumes that they would try to arrive at a normal competitive rate. He noted that today's market rate for consumer lending is between 7.5 percent and 10.5 percent. Number 222 LYNNE KORAL, employed by Southeast Alaska Independent Living, explained she is a consumer of services. She showed committee members a talking clock and indicated it is part of her organization's lending library that is currently being developed. She showed committee members a small item called `Braille and Speak' which is a computer that has a memory computer chip. Ms. Koral referred to the loan guarantee fund and said it would help people with disabilities to be able to purchase and maintain or attain employment. She informed the committee that she purchased an IBM compatible computer, at a cost of $1,300, which speaks to her. Ms. Koral urged the committee to pass SB 70. SENATOR LEMAN asked Ms. Koral how much the talking clock cost. Ms. Koral indicated the cost is about $20. Senator Leman asked how much it costs to train a seeing eye dog. Ms. Koral said approximately $25 thousand. She explained that most dogs are trained with private foundation donations and donations from concerned citizens. MS. MORRIS asked if a parameter has been established as to what might be the minimum or maximum loan that may be obtained. MR. RIDGEWAY said he isn't sure of how much a person may borrow but said initially $10 thousand had been mentioned. SENATOR DUNCAN said the legislation doesn't specify a specific amount. It would be up to the department to help determine an amount depending on what type of equipment will be purchased. He noted page 2 sets out the term of the loan. Mr. Ridgeway noted a fully equipped accessible van for a person who uses a wheelchair would run from $30 thousand to $40 thousand. He noted that a big factor is the person's ability to repay a loan which would also govern how large the loan can be. CHAIRMAN RIEGER said before the bill goes to the Senate Finance Committee he would like a letter from the department saying what the parameters of the loan will be and how the department will determine whether they will do a guarantee or an interest buy down, and what the guidelines are. Number 332 There being no further testimony, SENATOR DUNCAN moved to pass SB 70 out of the Senate HESS Committee with individual recommendations. Hearing no objection, the motion carried.
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