Legislature(2003 - 2004)
02/25/2003 08:05 AM House CRA
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* first hearing in first committee of referral
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ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
February 25, 2003
8:05 a.m.
MEMBERS PRESENT
Representative Carl Morgan, Chair
Representative Kelly Wolf, Vice Chair
Representative Tom Anderson
Representative Sharon Cissna
Representative Albert Kookesh
MEMBERS ABSENT
Representative Mike Chenault
Representative Ralph Samuels
COMMITTEE CALENDAR
OVERVIEW: DEPARTMENT OF COMMUNITY & ECONOMIC DEVELOPMENT
TAPES
03-4, SIDE(S) A & B
CHAIR CARL MORGAN convened the meeting of the House Community
and Regional Affairs Standing Committee at 8:05 a.m.
Representatives Morgan, Wolf, and Cissna were present at the
call to order. Representatives Anderson and Kookesh arrived as
the meeting was in progress.
SUMMARY OF INFORMATION
EDGAR BLATCHFORD, Commissioner, Department of Community &
Economic Development (DCED), began the departmental overview by
reviewing the department's mission: "Promoting strong
communities and a healthy economy." He informed the committee
that DCED consists of seven divisions and houses six independent
agencies. Commissioner Blatchford reviewed the department's
budget sources. All of this information and a one-page review
of each division can be found in the document entitled, "Alaska
Department of Community and Economic Development Overview" that
is included in the committee packet. Commissioner Blatchford
then had division directors come forward and provide a brief
overview of their division.
GENE KANE, Acting Director, Division of Community and Business
Development, Department of Community & Economic Development,
informed the committee that the mission of the Division of
Community and Business Development is to promote independent
local governments and job growth. He noted that the committee
packet should include the division's annual report. He then
reviewed the four services provided by the division, which are
business development, community development, funding resources,
and information resources. He pointed out that on page 28 of
the division's annual report there is a list of recent division
publications. Mr. Kane said, "Collectively, the programs
carried out by [the Division] of Community and Business
Development reflect a mandate of Article X, Section 14 of
Alaska's constitution for a state agency to collect and publish
local government information and to advise and assist local
governments." He concluded his presentation by reviewing the
goals and strategies of the division.
MARGY JOHNSON, Director, Division of International Trade and
Market Development, Department of Community & Economic
Development, specified that the Division of International Trade
and Market Development includes the promotion of tourism and
Alaska seafood, which she said were her two passions. Ms.
Johnson informed the committee that under the Murkowski
Administration there should be a lot of cooperative marketing
between the Alaska Travel Industry Association (ATIA) and the
Alaska Seafood Marketing Institute (ASMI). She emphasized that
any trade mission to any country should promote all of Alaska's
resources. She also informed the committee that Alaska Airlines
and ASMI are going to meet in order to encourage Alaska Airlines
to serve more Alaskan products on the aircraft. In response to
questions, Ms. Johnson reviewed the history of the change from
the three separate funding entities of the Alaska Tourism
Marketing Council, the Division of Tourism, and the Alaska
Visitor's Association to the current organization of ATIA. Ms.
Johnson noted that the visitor count to Alaska is down.
Information from an unidentified speaker was provided as to the
number of board members on ASMI and the break down of ASMI's
budget. In response to concerns with the direction of ASMI, Ms.
Johnson related her belief that there will be an increased
emphasis on salmon [marketing].
GREG WINEGAR, Director, Division of Investments, Department of
Community & Economic Development, began by pointing out that the
committee packet should include an overview booklet for the
division. The division's primary responsibility is to handle 15
different loan programs, which are primarily designed to promote
economic development in the state. He explained that the
programs can be broken into three broad categories: active
programs, inactive programs, and other agency loans. He related
some general statistics that are included in the division's
overview booklet. He reviewed the largest program the division
administers, the Commercial Fishing Revolving Loan Fund. He
also reviewed the Fisheries Enhancement Revolving Loan Fund, the
Rural Development Initiative Fund, and the Small Business
Economic Development Revolving Loan Fund. Mr. Winegar directed
attention to page 8 of the division's overview booklet, which
discusses some of the significant issues for fiscal year 2004,
including the salmon industry and replacement of the division's
loan servicing software. The booklet also includes a list of
some of the division's accomplishments on page 9, such as the
refinancing of Commercial Fishing Revolving Loans and Fisheries
Enhancement Loans and telephone payments. He concluded by
pointing out that page 10 of the division's booklet is a list of
contact information.
MARK DAVIS, Director, Division of Banking, Securities, and
Corporations, Department of Community & Economic Development,
related that the division has four functions. The first
function is to charter, regulate, and exam state banks and trust
companies. The second function is to regulate the Alaska
Securities Act of 1999. The third function is to provide a
legal structure for business, which is essentially a filing
process. The fourth function is to provide an overview of proxy
statements for Native corporations that have more than 500
shareholders and more than $2 million in assets. Mr. Davis
pointed out that the division takes in more revenue than it
costs to operate the division, and therefore any extra funds are
placed in the general fund. He related that last year the
division's budget was $2.4 million while approximately $8.1
million was collected.
RICK URION, Director, Division of Occupational Licensing,
Department of Community & Economic Development, stated that the
division's mission is to ensure that competent professional and
commercial services are available to Alaska consumers. During
his review of the services the division provides, Mr. Urion
related that the division administers 37 occupational licensing
programs for over 130 occupations. He said that the goal of the
division is to make applying for and receiving either a
professional or business license as easy and convenient as
possible. He informed the committee that the division receives
many complaints about businesses in Alaska and those lead to
investigations. This is an area in which the division is
overloaded and thus there is the need for more staff. Mr. Urion
pointed out that the division is self-sufficient and doesn't
require any general funds. In response to questions, Mr. Urion
specified that the license fee, by law, is determined by the
cost to the division to manage the occupation divided by the
number of people in the occupation. In response to further
questions, Mr. Urion related his belief that in general it's
best not to merge [boards of] various fields because of the
diversity of each. During discussion of the fact that the
division generates revenue, Mr. Urion pointed out that the
revenue generated is used to regulate the businesses. With
regard to the cost of license fees, Mr. Urion explained that the
license fee is dependent upon the costs [of regulating the
business]. One of the factors determining the cost is whether
there have been disciplinary actions and legal fees, which could
result in an increase in the license fee. These are biennial
licenses and thus every two years fees are reviewed.
STAN RIDGEWAY, Acting Director, Division of Insurance,
Department of Community & Economic Development, began by
relating that the division's mission is to "enforce the
insurance statutes and regulations and to protect and educate
the consumer, and enhance the insurance market in the state of
Alaska." He pointed out that the division is the primary
regulator for insurance because the federal government leaves
that task to the states. The seven sections of the division
join together to regulate the insurance industry in Alaska. He
discussed the seven sections of the division: consumer
services, licensing, investigative, market examination,
financial examination, filings review, and actuarial analysis.
He informed the committee that the division operates primarily
from licensing fees. Mr. Ridgeway presented the following four
major issues the division faces. First, the division is
reviewing the Premera Blue Cross application to convert from a
nonprofit to a for profit status. Second, the division has just
completed an examination of the use of credit scoring to rate
insurance policies for underwriting and the rating of personal
automobile and homeowner's insurance. Third, the division has
completed draft regulations on privacy. Fourth, the division is
monitoring rate increases and the reduced availability of health
and property casualty insurance in the state, particularly for
the aviation industry and assisted living homes. Mr. Ridgeway
said that the rate increases are due, in part, to a hardening
insurance market, terrorism and catastrophic losses, and lower
investment incomes for insurance companies. In response to
questions, Mr. Ridgeway related that Alaska has experienced a
relatively good insurance market in the last 6-10 years [and now
the state is facing a hardening of the insurance market]. He
noted that the division's annual report specifies all the claims
filed and the insurers leaving the state. He highlighted that
some insurers are not renewing policies, which is a trend
nationwide.
MR. RIDGEWAY, in response to questions regarding the issue of
credit scoring, deferred to the new director for the division's
position on this matter. He then explained the market conduct
study on credit scoring. He confirmed that the surveys and
general information gathered during the study produced findings
that the elderly may be impacted by credit scoring. There are
also findings that those living in certain zip codes, areas with
higher income levels, are more favorably rated. Mr. Ridgeway
related his belief that whether or not to regulate credit
scoring is a policy call. With regard to questions about the
rate increases schools and school districts have faced, Mr.
Ridgeway announced that the division has monitored this
situation. He related his understanding that the rates will
drop a bit for municipalities and school districts this year.
COMMISSIONER BLATCHFORD, in response to questions, confirmed
that there has been a suggestion to change the name of DCED to
the Department of Commerce & Economic Development. Although
there may be a name change, the department would strengthen its
commitment to the unorganized boroughs and municipalities, he
said. In response to a question regarding the lack of a rural
administrative office, Commissioner Blatchford stated that he is
very committed to rural Alaska and the department is going
through a reorganization process and is reviewing ways in which
to strengthen the department's commitment.
ANNOUNCEMENTS
There were no announcements.
COMMITTEE ACTION
The committee took no action.
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 9:09 a.m.
NOTE: The meeting was recorded and handwritten log notes were
taken. A copy of the tape(s) and log notes may be obtained by
contacting the House Records Office at State Capitol, Room 3,
Juneau, Alaska 99801 (mailing address), (907) 465-2214, and
after adjournment of the second session of the Twenty-Third
Alaska State Legislature this information may be obtained by
contacting the Legislative Reference Library at (907) 465-3808.
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