Legislature(2019 - 2020)ADAMS 519

03/20/2020 01:30 PM House FINANCE

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01:36:17 PM Start
01:38:15 PM Informational Meeting on Resources Available for Economic Relief During the Covid-19 Pandemic
03:27:18 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 9:00 am on 3/21/20 --
+ Informational meeting on resources available for TELECONFERENCED
economic relief during the COVID-19 pandemic.
Uniform Rule 23(a) Waived
<Bill Hearing Canceled>
+ Bills Previously Heard/Scheduled TELECONFERENCED
Scheduled but Not Heard
Scheduled but Not Heard
Scheduled but Not Heard
Scheduled but Not Heard
                  HOUSE FINANCE COMMITTEE                                                                                       
                      March 20, 2020                                                                                            
                         1:36 p.m.                                                                                              
1:36:17 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair  Johnston   called  the  House   Finance  Committee                                                                    
meeting to order at 1:36 p.m.                                                                                                   
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Jennifer Johnston, Co-Chair                                                                                      
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Ben Carpenter                                                                                                    
Representative Andy Josephson                                                                                                   
Representative Gary Knopp                                                                                                       
Representative Bart LeBon                                                                                                       
Representative Kelly Merrick (via teleconference)                                                                               
Representative Colleen Sullivan-Leonard                                                                                         
Representative Cathy Tilton                                                                                                     
Representative Adam Wool                                                                                                        
MEMBERS ABSENT                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
Jon  Bitner,  Executive   Director,  Alaska  Small  Business                                                                    
Development  Center;  Joe  Schierhorn,  President  and  CEO,                                                                    
Northrim Bank; Todd MacManus, President  and CEO, First Bank                                                                    
of  Ketchikan; Jim  Dodson,  Fairbanks Economic  Development                                                                    
Corporation; Robert Venables,  Executive Director, Southeast                                                                    
Conference;   Julie   Saupe,   President  and   CEO,   Visit                                                                    
Anchorage; Bill Popp, President  and CEO, Anchorage Economic                                                                    
Development Corporation.                                                                                                        
INFORMATIONAL  MEETING ON  RESOURCES AVAILABLE  FOR ECONOMIC                                                                    
RELIEF DURING THE COVID-19 PANDEMIC                                                                                             
Co-Chair Johnston reviewed the meeting agenda.                                                                                  
^INFORMATIONAL MEETING  ON RESOURCES AVAILABLE  FOR ECONOMIC                                                                  
RELIEF DURING THE COVID-19 PANDEMIC                                                                                           
1:38:15 PM                                                                                                                    
JON  BITNER,  EXECUTIVE   DIRECTOR,  ALASKA  SMALL  BUSINESS                                                                    
DEVELOPMENT CENTER (via  teleconference), introduced himself                                                                    
and  provided detail  about the  Small Business  Development                                                                    
Center  (SBDC). The  center was  funded  partly through  the                                                                    
Small Business  Administration (SBA),  the State  of Alaska,                                                                    
local governments, and private  sector investors, to provide                                                                    
free  one-on-one  confidential  counseling and  advising  to                                                                    
businesses  across the  state.  The center  also provided  a                                                                    
series of trainings  and workshops. On an  average year SBDC                                                                    
worked  with about  1,700 entrepreneurs  and businesses  and                                                                    
provided  training for  another 1,600  to 1,700.  The center                                                                    
had offices  across the state  with locations  in Anchorage,                                                                    
Fairbanks,  Juneau,  Ketchikan,  Soldotna, Seward,  and  the                                                                    
Mat-Su Valley.                                                                                                                  
Mr. Bitner reported  a huge surge in  outreach from existing                                                                    
and new clients asking  for help, guidance, and information.                                                                    
He characterized the situation  as extremely fluid. He would                                                                    
tell the committee  what he could about  what was happening,                                                                    
what resources  were available, and  what SBDC was  doing to                                                                    
try to  stay ahead  of the  situation. However,  the reality                                                                    
was that everything could change over the next 48 hours.                                                                        
Mr. Bitner  shared that  SBDC had been  tracking all  of the                                                                    
businesses that  had reached out  due to the  COVID-19 virus                                                                    
and the impacts it was  having across the economy. He stated                                                                    
that  the stories  were  gruesome.  The smallest  businesses                                                                    
were getting hit  hardest and fastest -  many were reporting                                                                    
their  funding would  last  a  week or  two  at best  before                                                                    
having to  close their doors. Medium  sized small businesses                                                                    
were a  little better off  but were still projecting  two to                                                                    
three weeks out.  Even some of the  largest small businesses                                                                    
were concerned they  would have to close their  doors if the                                                                    
situation  continued for  several weeks  to a  month without                                                                    
any assistance provided.                                                                                                        
Representative  Sullivan-Leonard  asked   if  the  committee                                                                    
would take questions during the presentation.                                                                                   
1:41:05 PM                                                                                                                    
Mr. Bitner was happy to  entertain questions during or after                                                                    
his testimony.                                                                                                                  
Representative  Sullivan-Leonard  remarked that  the  Mat-Su                                                                    
Valley and Wasilla  were home to many  small businesses. She                                                                    
asked  what  was  considered  a  small,  medium,  and  large                                                                    
business in terms  of the number of  employees. For example,                                                                    
she wondered if a small business had under 100 employees.                                                                       
Mr. Bitner answered that 500  businesses [employees] or less                                                                    
was  the  general rule  from  the  SBA. He  elaborated  that                                                                    
99.3 or  99.4 percent  of all businesses  in the  state were                                                                    
considered small businesses.                                                                                                    
Mr. Bitner  continued to provide his  testimony. He reported                                                                    
that  the  current  situation [with  COVID-19]  had  already                                                                    
translated into  job losses. He detailed  that the Matanuska                                                                    
Brewing Company  had been forced  to release  147 employees.                                                                    
The owners  of the Spenard  Roadhouse, Crush, and  Snow City                                                                    
had  released 223  of their  employees.  The Sheraton  Hotel                                                                    
released 80  employees, the Fifth  Avenue Mall  in Anchorage                                                                    
had  closed down,  and Chena  Hot Springs  had released  100                                                                    
employees. He  noted the businesses listed  only represented                                                                    
large small businesses  that had made the  news. The smaller                                                                    
mom and pop  businesses did not get the  same media coverage                                                                    
because  they were  harder to  notice, but  they were  faced                                                                    
with the same layoff decisions.                                                                                                 
Mr. Bitner  addressed the  global scope  of the  problem and                                                                    
cited a  video released by Marriott  International where the                                                                    
CEO  reported the  impacts of  the COVID-19  virus on  their                                                                    
revenue were worse  than 9/11 and the  2009 financial crises                                                                    
combined.  He  detailed  that  between  9/11  and  the  2009                                                                    
financial  crisis   the  company  had  seen   a  25  percent                                                                    
reduction in  revenues globally.  The company  was currently                                                                    
seeing a  75 percent  reduction in revenues  for all  of its                                                                    
hotels. He  elaborated that the  company was in  the process                                                                    
of closing  hundreds of  its hotels  and was  furloughing as                                                                    
many employees as possible.                                                                                                     
1:43:27 PM                                                                                                                    
Mr. Bitner addressed actions being  taken to stem the losses                                                                    
in Alaska. The  biggest need the SBDC was  hearing about was                                                                    
funding. He  explained when a  business relied on  daily and                                                                    
weekly  infusions  of customer  cash,  it  was difficult  to                                                                    
overcome  in the  short-term  when the  cash  dried up.  The                                                                    
federal government  was doing what  it could. The SBA  had a                                                                    
disaster loan program  that the State of  Alaska had applied                                                                    
for,  but all  50 states  had applied  and only  several had                                                                    
been  approved  thus  far (Alaska  was  not  included).  The                                                                    
center was  poised to help businesses  with the applications                                                                    
and get them  in as quickly as possible. He  believed it was                                                                    
a phenomenal  program that  would do much  good, but  it was                                                                    
not  a silver  bullet. There  would be  many businesses  the                                                                    
program would  not help.  Once Alaska  was approved  for the                                                                    
program,  it  would take  the  SBA  two  to three  weeks  on                                                                    
average   to  turn   around   the   loan  applications.   He                                                                    
highlighted  that many  of the  eligible businesses  did not                                                                    
have that kind of time.                                                                                                         
Mr. Bitner highlighted a $1  trillion federal relief package                                                                    
currently working its way through  Congress. The package had                                                                    
a  wide variety  of funding  mechanisms that  would be  very                                                                    
helpful; however,  on a statewide  level there was  need for                                                                    
some  type of  intermediary  assistance  to help  businesses                                                                    
survive  the next  few weeks  or  however long  it took  for                                                                    
federal dollars to arrive.                                                                                                      
1:45:11 PM                                                                                                                    
Representative Tilton had heard  from a small business owner                                                                    
earlier  in  the day  that  fortunately  had funds  to  keep                                                                    
employees on for another month  or so. She detailed that the                                                                    
person indicated  that to get  some of the SBA  loan funding                                                                    
at  a zero  percent interest  rate, businesses  had to  keep                                                                    
employees  employed. She  did not  know that  all businesses                                                                    
were  able  to do  so.  She  asked  if the  information  was                                                                    
Mr. Bitner  answered that the  SBA disaster  assistance loan                                                                    
the  state  had   applied  for  had  an   interest  rate  of                                                                    
3.75  percent  for small  businesses  and  2.75 percent  for                                                                    
certain  nonprofit organizations.  He was  not aware  of any                                                                    
zero percent  APR [annual  percentage rate]  loans currently                                                                    
available. He noted  a zero percent loan may  be included in                                                                    
the federal relief bill, but he was not certain.                                                                                
Representative  Tilton   asked  if   the  loans   were  only                                                                    
available  to   employers  who  were  able   to  keep  their                                                                    
employees working. The business  owner who had contacted her                                                                    
was  fortunate to  have  enough  cash on  hand  to keep  his                                                                    
employees  working  until  they  could  access  the  federal                                                                    
funds. She highlighted there  were numerous small businesses                                                                    
that did not have enough cash on hand to do so.                                                                                 
Mr.  Bitner replied  that  the loan  program  was meant  for                                                                    
operational funding,  meaning that once a  business received                                                                    
the  funding  it  would  be   presumed  the  business  would                                                                    
continue operating  and employing. He did  not believe there                                                                    
were  restrictions  on how  many  employees  a business  had                                                                    
maintained.  He  suggested that  the  SBA  may be  a  better                                                                    
information source for detailed questions on the program.                                                                       
1:47:26 PM                                                                                                                    
Mr.  Bitner continued  with his  testimony. He  informed the                                                                    
committee that the  SBDC was working as hard  as possible to                                                                    
stay ahead  of the  situation. He  detailed that  the center                                                                    
had  moved all  of its  offices online  - all  eight of  its                                                                    
locations were  working remotely.  Additionally, as  many of                                                                    
its trainings as possible were  online and on demand. All of                                                                    
the  trainings  were being  offered  for  free -  previously                                                                    
trainings had  a nominal fee  to cover costs, which  did not                                                                    
seem  appropriate  in  the  current  economic  climate.  The                                                                    
center developed  a series  of tools  and templates  to help                                                                    
people  with specific  issues  coming  up, particularly  the                                                                    
food industry transitioning from  onsite dining to delivery.                                                                    
There  were certain  things restaurants  needed to  consider                                                                    
such as insurance implications.                                                                                                 
Mr. Bitner  shared that  as late  as the  following morning,                                                                    
SBDC  would  launch  a  website   dedicated  to  all  things                                                                    
COVID-19  related for  small businesses  and small  business                                                                    
assistance. The  website would have  links to as  many local                                                                    
government  pages,   SBA  resources,  and  SBDC   tools  and                                                                    
templates as  SBDC could come  up with. The center  had been                                                                    
working closely with the  state, local governments, regional                                                                    
EDOs, and  anyone else it  could in  order to try  to ensure                                                                    
needs were  met and  voice of small  business was  heard and                                                                    
that the SBDC resources were used as fully as possible.                                                                         
Mr. Bitner  relayed that the  SBDC was looking at  a variety                                                                    
of  issues  in  addition  to  the  COVID-19  virus  and  the                                                                    
implications that  would have an  impact on the  state going                                                                    
forward.  The drop  in oil  prices was  problematic for  the                                                                    
state's budget. He suspected the  reduction in tourism would                                                                    
take  longer to  turn around  than the  quarantine protocols                                                                    
would be  engaged, which would  be a major  blow, especially                                                                    
to  Southeast communities.  The center  was anticipating  an                                                                    
increase  in   unemployment  across   the  board,   but  the                                                                    
magnitude was hard to discern  at present. He stated that it                                                                    
was  not all  gloom and  doom, but  it was  an economic  and                                                                    
social  crisis at  a level  SBDCs had  never witnessed.  The                                                                    
SBDC  was still  working  to determine  how  to address  the                                                                    
problem and the  best way to provide services,  but he hoped                                                                    
the  takeaway  was  that  the SBDC  was  still  working  and                                                                    
meeting the  capacity needs of  the businesses in  the state                                                                    
and it would continue to do so as long as it could.                                                                             
1:50:13 PM                                                                                                                    
Representative Josephson  appreciated Mr.  Bitner's attitude                                                                    
that  the situation  was not  all gloom  and doom,  which he                                                                    
thought was  a generous statement.  He asked about  gaps and                                                                    
what the legislature could do to help small businesses.                                                                         
Mr. Bitner replied that in the  short-term it came down to a                                                                    
question of  money. He stressed the  importance of providing                                                                    
funding to businesses that were  currently in desperate need                                                                    
to  get  them  through  the  short-term  until  more  robust                                                                    
programs were  brought online. He  stated that  the decision                                                                    
on the  mechanics of  the short-term  funding was  above his                                                                    
pay  grade. He  suggested leveraging  some type  of existing                                                                    
infrastructure, program, division,  or department to provide                                                                    
the loans in order to  avoid having to create something from                                                                    
scratch.  He did  not believe  the individual  dollar amount                                                                    
had  to  be  enormously  high, depending  on  how  long  the                                                                    
situation persisted. He suggested  that treating the funding                                                                    
as a  regular loan program  may not  be the best  option for                                                                    
the current scenario.  He referenced Representative Tilton's                                                                    
mention  of a  zero  percent APR.  He did  not  know of  any                                                                    
current zero percent  loans, but he suspected it  would go a                                                                    
long way toward helping  businesses. The important thing was                                                                    
finding a way  to get resources to businesses  to allow them                                                                    
to continue to operate and pay their employees.                                                                                 
1:52:01 PM                                                                                                                    
Representative  Wool  asked  if  Mr. Bitner  had  talked  to                                                                    
utility  companies,  particularly electric  companies,  that                                                                    
would  give business  customers any  leeway on  paying their                                                                    
Mr. Bitner responded  that the SBDC had spoken  to many, but                                                                    
not  all of  the  utility companies.  He  reported that  the                                                                    
companies were fairly universally  stepping up their efforts                                                                    
to ensure  no one had their  lights turned off or  late fees                                                                    
charged. He  noted that he did  not know whether it  was the                                                                    
case for all utility companies.                                                                                                 
Co-Chair   Johnston   noted   that   Congress   had   passed                                                                    
legislation to  provide paid leave  to employees  during the                                                                    
COVID-19 emergency  for companies with up  to 500 employees.                                                                    
She asked if Mr. Bitner knew any details.                                                                                       
Mr. Bitner  answered that  HR 6201  signed by  the president                                                                    
two  days earlier  included  sections  related to  emergency                                                                    
paid  sick leave  and emergency  family  and medical  leave.                                                                    
Both of the provisions applied  to businesses with less than                                                                    
500  employees. He  noted there  were good  cause exemptions                                                                    
for  employers  with  fewer than  50  employees.  Under  the                                                                    
emergency  paid  sick  leave   provision,  an  employer  was                                                                    
required to provide  two weeks of paid sick  leave for full-                                                                    
time covered employees  (there was a special  rule for part-                                                                    
time  employees  that  he  was not  as  familiar  with).  He                                                                    
detailed that sick  leave was at an  employee's regular rate                                                                    
of pay capped at $511 per day and $5,110 total.                                                                                 
Mr.  Bitner  explained  that the  emergency  family  medical                                                                    
leave was for individuals unable  to work or telework due to                                                                    
a need to care  for a son or daughter under  18 years of age                                                                    
under certain  circumstances. He  detailed that  the medical                                                                    
leave ran for a longer period  of time and was not less than                                                                    
two-thirds of  the regular rate  of pay based on  the number                                                                    
of hours an employee had worked,  capped at $200 per day and                                                                    
$10,000 total. He added that  it looked like the money spent                                                                    
would be  paid back through  tax credits, but he  was unsure                                                                    
on the details.                                                                                                                 
Co-Chair Johnston  surmised that the federal  government was                                                                    
frontloading funds to assist businesses.                                                                                        
Mr. Bitner  replied that it  looked like an attempt  to stem                                                                    
the number  of employees being  lost. He explained  that the                                                                    
employer  would recoup  the cost  later on  when they  filed                                                                    
their taxes.                                                                                                                    
Co-Chair Johnston thanked Mr. Bitner  for taking the time to                                                                    
present to the committee.                                                                                                       
1:55:41 PM                                                                                                                    
JOE  SCHIERHORN,  PRESIDENT  AND  CEO,  NORTHRIM  BANK  (via                                                                    
teleconference), thanked  the committee for  the opportunity                                                                    
to  testify. He  detailed  that Northrim  Bank  had been  in                                                                    
operation  for  almost  30 years  with  16  branches  spread                                                                    
across the  state from the  Interior to Ketchikan.  The bank                                                                    
also  had  offices in  the  Seattle  area.  The bank  had  a                                                                    
mortgage  company,  Residential   Mortgage,  which  was  the                                                                    
largest mortgage  originator in the state.  Between the bank                                                                    
and the  mortgage company, the  business had a total  of 440                                                                    
employees  (just  under  the 500  employee  level  discussed                                                                    
earlier in the meeting).                                                                                                        
Mr.  Schierhorn  reported  that  every  one  of  the  bank's                                                                    
customers  was being  impacted by  the COVID-19  crisis. The                                                                    
bank's  customers had  seen significant  layoffs at  a level                                                                    
close to 100 percent  of the workforce encompassing tourism,                                                                    
restaurants,  bars, and  amusement  centers.  He noted  that                                                                    
tourism  was   a  broad  category,   particularly  impacting                                                                    
Southeast Alaska and operations  catering to Denali National                                                                    
Park. The situation was beginning  to trickle down to impact                                                                    
customers reliant  on the businesses  for revenue.  The bank                                                                    
was  also  seeing  an  impact   in  the  medical  field  for                                                                    
customers    providing   nonessential    medical   services,                                                                    
including  dental  office   closures.  Some  customers  were                                                                    
seeing no  revenue for at  least 45 days and  potentially up                                                                    
to  six  months.  Businesses  dependent  on  summer  tourism                                                                    
expected to  lose most of  the season,  immediately followed                                                                    
by  the   difficult  winter  season.  Impacts   for  several                                                                    
customers were expected to last into May 2021.                                                                                  
Mr.   Schierhorn   reported   there  was   uncertainty   for                                                                    
businesses in regard to making  future plans, which also had                                                                    
a trickle down effect due  to the lack of capital investment                                                                    
and other  projects. However, there were  stronger customers                                                                    
currently  looking   to  purchase  businesses   and/or  make                                                                    
minority  investments, which  could help  stabilize some  of                                                                    
the businesses going forward.                                                                                                   
1:59:04 PM                                                                                                                    
Mr. Schierhorn shared that  Northrim had proactively reached                                                                    
out to customers in a  variety of ways including personally,                                                                    
via  phone,  and  electronically.  The  bank  had  a  robust                                                                    
electronic  banking  system,  as  did  all  other  financial                                                                    
institutions  in   Alaska.  He  detailed  that   the  system                                                                    
provided  electronic banking,  online  services, and  remote                                                                    
deposit capture.  The bank's 24-hour call  center was seeing                                                                    
significant   volume.   He   reported  that   the   mortgage                                                                    
origination company  was currently seeing record  volume due                                                                    
to  the drop  in  interest rates  and  customers seeking  to                                                                    
refinance their mortgages.                                                                                                      
Mr. Schierhorn stressed the importance  of keeping the state                                                                    
Recorder's Office open and operational  during this time. He                                                                    
explained  that  the  large   volume  of  mortgage  activity                                                                    
running  through  the  banking  institutions  needed  to  be                                                                    
recorded  in  order  for the  mortgage  refinances  to  take                                                                    
place.  Another need  was a  streamlined  approach to  small                                                                    
business loans,  particularly for tourism  businesses, bars,                                                                    
restaurants, and amusement centers.                                                                                             
Mr.  Schierhorn was  aware  the governor  was  working on  a                                                                    
program to  provide state  guaranteed loans,  which Northrim                                                                    
was supportive of.  To the degree that  the process required                                                                    
legislative action, it would be  another way the legislature                                                                    
could assist  with. He believed  the program  was envisioned                                                                    
to be similar  to the SBA disaster  relief program currently                                                                    
underway. He  relayed that it would  require underwriting by                                                                    
all financial  institutions as well as  a streamlined review                                                                    
from  the state,  assuming  it would  be  guaranteed by  the                                                                    
state. He  noted it would  also require  a fund of  money to                                                                    
back the  guarantee, which may require  separate legislative                                                                    
action. He  believed the program  would be very  helpful for                                                                    
many businesses  that would  be undergoing  severe shortages                                                                    
in  working   capital  and  their   ability  to   pay  their                                                                    
Mr. Shierhorn stated  that Mr. Bitner had  given an accurate                                                                    
description of  the recent federal legislation  put in place                                                                    
for  sick leave  and paid  family leave.  He agreed  that it                                                                    
would be funded  via a tax credit to  the business employing                                                                    
less than  500 employees. There would  be a lag time  on the                                                                    
payment. Additionally,  the program  assumed a  business was                                                                    
making money  and had taxes  it could get a  credit against,                                                                    
which may not be the case.  He thought the program needed to                                                                    
be viewed within that context regarding the impact.                                                                             
2:03:11 PM                                                                                                                    
Mr.  Schierhorn  believed  it   was  critical  to  get  more                                                                    
liquidity and  money into the economy  through various means                                                                    
including  the SBA  disaster relief  program  and the  state                                                                    
backed guarantee program. He  underscored that the financial                                                                    
institutions in Alaska were sound  and strong. He elaborated                                                                    
that financial institutions had  built up significant levels                                                                    
of   capital   since   the   financial   crisis   in   2009.                                                                    
Additionally,   the   financial   system   had   substantial                                                                    
liquidity  within the  state and  on a  national basis  that                                                                    
could  be  utilized  to provide  resources  to  the  state's                                                                    
businesses   in   particular.    He   knew   the   financial                                                                    
institutions were  all working  hard to  continue operations                                                                    
during the  current time.  He detailed  that Northrim  had a                                                                    
number of employees working remotely,  but its branch system                                                                    
was open to customers with  the intention of remaining open.                                                                    
Some financial  institutions had closed or  restricted lobby                                                                    
access  and  maintained  service  at  their  drive-throughs,                                                                    
which he believed would be a continuing trend.                                                                                  
Mr.  Shierhorn  emphasized  that the  banking  system  would                                                                    
continue   to   provide   services   for   individuals   and                                                                    
businesses, including deposit and  loan services. He relayed                                                                    
that Northrim was reaching out  aggressively to customers to                                                                    
provide access to credit and  to provide needed services for                                                                    
customers  to  make it  through  the  current situation.  He                                                                    
stated  that all  financial institutions  in the  state were                                                                    
actively engaged. He was available for any questions.                                                                           
2:05:45 PM                                                                                                                    
Representative LeBon  thanked Mr. Shierhorn for  calling in.                                                                    
He asked  if Northrim had  heard from regulators  about loan                                                                    
modifications,  possible  forbearance   agreements,  or  any                                                                    
direction  on  how  much flexibility  the  bank  could  have                                                                    
around working with borrowers.                                                                                                  
Mr.  Schierhorn  answered  that Northrim  had  not  received                                                                    
direct  correspondence   from  the  FDIC   [Federal  Deposit                                                                    
Insurance Corporation]; however,  he had seen correspondence                                                                    
between  the FDIC  and  the  Financial Accounting  Standards                                                                    
Board  (FASB)  the  previous day.  He  explained  that  FASB                                                                    
regulated  how  financial  institutions accounted  for  loan                                                                    
modifications. He was  aware there was a  request to provide                                                                    
more accounting flexibility for  the modifications to enable                                                                    
financial  institutions to  provide  greater flexibility  to                                                                    
borrowers.  He  noted  it  would  not  constrain  Northrim's                                                                    
activities with regards  to regulatory accounting standards.                                                                    
The bank would make every  effort to work with its customers                                                                    
on what made sense  for customers' financial situations. The                                                                    
bank accounting  would follow the  requirements of  the FDIC                                                                    
and  FASB  combined.  Based   on  correspondence  from  both                                                                    
entities,  he  believed they  were  trying  to provide  more                                                                    
regulatory flexibility with regard to the specific issue.                                                                       
2:08:35 PM                                                                                                                    
Representative  LeBon  highlighted  the  importance  of  the                                                                    
issue. He asked  about the type of  mortgage refinancing. He                                                                    
asked  if it  was  more about  requests  from borrowers  for                                                                    
mortgage modifications.                                                                                                         
Mr.   Schierhorn  answered   that   the   large  amount   of                                                                    
refinancing  was due  to  the very  rapid  drop in  mortgage                                                                    
interest  rates by  around 1  percent or  100 basis  points.                                                                    
There  were many  customers paying  4 percent  or more  on a                                                                    
loan, which historically  was a low rate,  but now customers                                                                    
could save close  to 100 basis points or more  on that rate.                                                                    
There  was  a  large   pipeline  of  requests  to  refinance                                                                    
mortgages,  which  would  save   a  significant  amount  for                                                                    
individuals. Currently,  the activity was more  about saving                                                                    
on monthly loan payments  versus requests to defer payments.                                                                    
He expected to see more  requests for deferments of payments                                                                    
going forward, but it had not taken place yet.                                                                                  
2:10:31 PM                                                                                                                    
Representative LeBon  expected there  may be  some borrowers                                                                    
who  had  started  a refinancing  process  that  would  need                                                                    
significant  flexibility from  the bank  in regard  to their                                                                    
current   employment  status.   He  appreciated   Northrim's                                                                    
Mr.  Schierhorn   recognized  the   point.  He   noted  that                                                                    
virtually  all residential  mortgage  loans  were under  the                                                                    
guidance of  a variety  of agency programs  including Fannie                                                                    
Mae,   Freddie  Mac,   and   the   Alaska  Housing   Finance                                                                    
Corporation  (AHFC).  Each   financial  institution  was  in                                                                    
constant   contact  with   their  associated   agencies  the                                                                    
mortgages were  provided under; therefore,  it was  a matter                                                                    
of working with those entities  for the flexibility as well.                                                                    
He  clarified  it  was  not an  independent  decision  by  a                                                                    
mortgage  originator;  the  decision   was  made  under  the                                                                    
guidelines of each associated program.                                                                                          
Representative LeBon thought the  committee should hear from                                                                    
those programs too.                                                                                                             
2:12:00 PM                                                                                                                    
Representative  Carpenter was  trying  to get  a picture  of                                                                    
what a  90-day exposure would  be for the  state's financial                                                                    
institutions  in terms  of  people who  were  unable to  pay                                                                    
their mortgages. He asked for a ballpark figure.                                                                                
Mr. Schierhorn asked  for clarity on the  question. He asked                                                                    
if Representative  Carpenter was referring to  the number of                                                                    
loans that may become past due within the next 90 days.                                                                         
Representative Carpenter replied affirmatively.                                                                                 
Mr. Schierhorn  answered that at present  the banking system                                                                    
was  not  experiencing  a   great  number  of  delinquencies                                                                    
through the  end of March.  However, he believed  the number                                                                    
of  past due  loans  would increase  significantly over  the                                                                    
90-day period from March 31 to  June 30. He hesitated to put                                                                    
a number on it. The bank  was dealing with each situation as                                                                    
it  came.  He  referenced  businesses  experiencing  layoffs                                                                    
including  tourism,  restaurants, bars,  amusement  centers,                                                                    
and  medical  office  buildings with  no  patients  such  as                                                                    
dental offices.  He elaborated that  many of  the businesses                                                                    
would have  cash resources on  hand for  30 to 60  days, but                                                                    
many  would not.  He relayed  there could  be a  significant                                                                    
increase in delinquent payments  through June 30. He assumed                                                                    
a  semi or  total lockdown  situation for  the next  several                                                                    
months. He could not provide  a more specific number, but he                                                                    
believed it would be significant.                                                                                               
2:14:41 PM                                                                                                                    
Representative  Carpenter  understood  that it  may  be  the                                                                    
wrong forum to  talk about the numbers;  however, he thought                                                                    
the  conversation  was  necessary   at  some  point  if  the                                                                    
legislature was  going to be  proactive. He did  not believe                                                                    
anyone   in  the   legislature   disagreed  that   something                                                                    
significant was  coming, but they  did not currently  have a                                                                    
way to  measure what  significant actually meant.  He stated                                                                    
it would  be helpful to  get some numbers and  he understood                                                                    
the numbers  could not be  guaranteed. He wondered  how many                                                                    
zeros they were talking about.                                                                                                  
Mr.  Schierhorn responded  that he  would give  the question                                                                    
some  thought  and  would  be   happy  to  have  an  offline                                                                    
conversation with the committee chair.                                                                                          
Representative  Wool  referenced Mr.  Schierhorn's  comments                                                                    
that some  customers would seek  new residential  loans, and                                                                    
some  would  have  cash.  He   noted  that  individuals  who                                                                    
refinanced  would still  have to  make [mortgage]  payments.                                                                    
asked at what point they  looked at foreclosure policies. He                                                                    
noted that  Mr. Schierhorn had  mentioned that any  loan may                                                                    
be affiliated  with more than  one institution. He  asked at                                                                    
what  point  the  bank  looked  at  making  changes  to  its                                                                    
foreclosure policies.                                                                                                           
Mr.  Schierhorn replied  that all  of the  mortgage programs                                                                    
were  originated under  guidelines and  requirements of  the                                                                    
sponsoring  agencies  including  AHFC, Fannie  Mae,  Freddie                                                                    
Mac,  the Veterans  Administration,  and  more. He  detailed                                                                    
that each  organization providing  a mortgage  originated by                                                                    
local  and  national  financial  institutions  had  its  own                                                                    
requirements.  The policies  on  foreclosure and  collection                                                                    
were  set   at  that  level  with   regards  to  residential                                                                    
financing.  Whereas,  consumer loans  (e.g.  a  car loan  or                                                                    
unsecured  loan to  an individual)  and business  loans were                                                                    
set  by in  large by  individual financial  institutions. He                                                                    
knew that  all financial institutions were  actively engaged                                                                    
in working  on their  approach to modifications  with regard                                                                    
to borrowers that  may be in financial  difficulty. The home                                                                    
mortgage  industry and  the  requirements  for working  with                                                                    
borrowers  was  largely  set  at   the  national  level  and                                                                    
implemented according to those guidelines.                                                                                      
2:18:29 PM                                                                                                                    
Representative Wool  provided a scenario where  a person had                                                                    
recently purchased a lodge or  restaurant and had a sizeable                                                                    
monthly  payment.  He  detailed   that  the  individual  was                                                                    
depending on  the upcoming summer  season to bring  in money                                                                    
to  augment the  limited remaining  funds from  the previous                                                                    
year. He asked  what kind of a relief a  person could get if                                                                    
they missed  their summer season.  He understood  they could                                                                    
get  a new  loan  or line  of credit.  He  wondered about  a                                                                    
Mr.  Schierhorn replied  there was  not a  short answer.  He                                                                    
stated it  was a  case by case  situation, which  would take                                                                    
considerable  time  for  all financial  institutions  to  be                                                                    
working  with  individuals.  He elaborated  it  would  be  a                                                                    
matter of  modifying terms of  existing loans.  For example,                                                                    
the modification could  be to an interest  only situation or                                                                    
skipping a series of payments and  adding them on to the end                                                                    
of  a loan  because there  was  no current  revenue for  the                                                                    
payments.  He   projected  that   many  people   would  need                                                                    
additional  short-term working  capital without  significant                                                                    
collateral  to back  a loan;  therefore,  a guaranteed  loan                                                                    
program  to   provide  the   backing  would   be  incredibly                                                                    
important. There would have to be  a loan to a business with                                                                    
the prospect of getting paid back  in the future - there may                                                                    
be a  gap in the  payback process but  there needed to  be a                                                                    
viable  cashflow history  and  source of  repayment for  the                                                                    
Mr. Schierhorn did  not believe there was a  proposal by the                                                                    
governor for any  grants. He detailed that  the governor was                                                                    
proposing  a loan  guaranteed by  the state  as the  federal                                                                    
government  had proposed  guaranteed  loans.  The loans  all                                                                    
needed to eventually get paid  back; therefore, some type of                                                                    
historical cashflow was  needed in order for the  loan to be                                                                    
put into place.  There would be some kind  of combination of                                                                    
a working capital loan with  a guarantee and modification of                                                                    
existing loan  structures (e.g. interest only,  holiday skip                                                                    
payments for  three to six  sets of payments) would  need to                                                                    
be implemented for many borrowers.                                                                                              
Co-Chair Johnston thanked Mr.  Schierhorn for taking time to                                                                    
call in.                                                                                                                        
2:22:10 PM                                                                                                                    
TODD MACMANUS,  PRESIDENT AND CEO,  FIRST BANK  OF KETCHIKAN                                                                    
(via  teleconference),   shared  that  the  First   Bank  of                                                                    
Ketchikan was  headquartered in  Ketchikan and  had branches                                                                    
located   in  Southeast   Alaska   only  including   Juneau,                                                                    
Ketchikan,  Petersburg,  Wrangell,   Prince  of  Wales,  and                                                                    
Sitka. The bank was taking  a variety of measures to promote                                                                    
a  message of  safety  and security  for  its employees  and                                                                    
customers, particularly to deposit  customers with regard to                                                                    
the safety of  the bank. He shared  that unfortunately there                                                                    
had been  social media and irresponsible  reports that there                                                                    
was a shortage of cash,  which had created some concern from                                                                    
customers.  The  bank was  reiterating  to  people that  the                                                                    
safest  place  to   keep  money  was  in   an  FDIC  insured                                                                    
institution, particularly in safe  and sound institutions in                                                                    
Mr.  MacManus  shared  that  First  Bank  of  Ketchikan  was                                                                    
actively working  with each customer.  He detailed  that the                                                                    
bank  had loan  extension modification  agreements available                                                                    
and was  actively reaching out  to customers in  the tourism                                                                    
and hospitality industry with offers  for emergency lines of                                                                    
credit.  He explained  that  each  situation and  borrower's                                                                    
needs were unique. Some customers  had resources to get them                                                                    
through and  others were month-to-month  and were  trying to                                                                    
figure out how to make things work.                                                                                             
Mr.  MacManus  referenced   a  governor's  press  conference                                                                    
earlier  in  the day  where  the  governor had  mentioned  a                                                                    
100 percent  state guarantee for bridge  loans. He suggested                                                                    
that  one possible  way the  state could  help was  to offer                                                                    
guarantee programs to the  financial institutions in Alaska.                                                                    
He believed it was the fastest  and easiest way to get funds                                                                    
to  people  who   would  need  it  in   the  short-term.  He                                                                    
recommended  cutting as  much red  tape as  possible because                                                                    
decisions would be needed in  the hours and days rather than                                                                    
in weeks. He reported that  the bank had started closing its                                                                    
bank lobbies to protect its staff and the community.                                                                            
2:26:12 PM                                                                                                                    
Mr.  MacManus  continued to  review  actions  First Bank  of                                                                    
Ketchikan was taking. The  bank had drive-through facilities                                                                    
in  each of  its  communities, full  service online  banking                                                                    
tools, and  was taking appointments for  in-person meetings.                                                                    
The bank  had closed its  Ketchikan lobbies and  was working                                                                    
on a  plan to close  the rest  of its lobbies  beginning the                                                                    
following  week.  He  stated that  the  economic  impact  to                                                                    
Southeast Alaska  would be enormous. He  elaborated that the                                                                    
impact of the  cruise industry on the  Southeast economy was                                                                    
unparalleled.  He considered  that it  may bring  in revenue                                                                    
somewhat similar to what the  logging industry had generated                                                                    
in the past. He detailed that  the impact was not limited to                                                                    
tour  operators  and  retailers.  Municipalities  would  not                                                                    
receive the typical  tax revenue or head tax  and they would                                                                    
have  trouble   making  bond   payments  and   meeting  debt                                                                    
obligations.   The  impacts   filtered  down   through  tour                                                                    
companies and retailers  to cab drivers trying  to make rent                                                                    
who depended on the busy summer season.                                                                                         
2:27:49 PM                                                                                                                    
Mr. MacManus addressed what the  state could do. He believed                                                                    
some  of   the  items  included  in   the  governor's  press                                                                    
conference earlier  in the day  would be helpful.  He stated                                                                    
that some  people would need  cash in their hands  soon. For                                                                    
small  businesses and  people in  the communities  who would                                                                    
see the  biggest cuts  and the potential  loss of  a season,                                                                    
loan  guarantee  programs  were  a good  way  to  start.  He                                                                    
suggested  some  potential  long-term financial  options  as                                                                    
Mr.  MacManus  observed there  was  nothing  to compare  the                                                                    
current  situation  to. He  noted  there  had been  disaster                                                                    
declarations in the past for  various things. He highlighted                                                                    
that  the loss  of a  pink salmon  run had  been declared  a                                                                    
disaster  and some  federal funding  had  been received.  He                                                                    
reported that  the time it had  taken to get the  money into                                                                    
the hands of the impacted  fishermen was almost laughable as                                                                    
far as  helping them  out. The funds  had come  possibly the                                                                    
following season if the fishermen  were lucky after they got                                                                    
on the list  and went through the paperwork.  He pointed out                                                                    
that it would  not work for the  current situation. Anything                                                                    
that could be done to  expedite the funding would be helpful                                                                    
for the bank's customers.                                                                                                       
Mr.  MacManus echoed  Mr.  Schierhorn's  comments about  the                                                                    
Recorder's Office.  First Bank of Ketchikan  was also seeing                                                                    
record volume  in its mortgage  department and it  was vital                                                                    
to  keep  the  Recorder's  Office open.  He  cautioned  that                                                                    
without  the  Recorder's   Office,  commerce  would  decline                                                                    
significantly.  He believed  programs  would materialize  in                                                                    
the state's Division of Investments  and possibly the Alaska                                                                    
Industrial  Development  and  Export Authority  (AIDEA).  He                                                                    
thought  the fastest  way to  get  funds into  the hands  of                                                                    
impacted   people   was    through   the   local   financial                                                                    
institutions. He  stated that guarantee programs  or any way                                                                    
to expedite funds would be  helpful. The bank could react in                                                                    
minutes or  hours when a  request was  made, and he  hoped a                                                                    
similar response would come from the state.                                                                                     
2:30:50 PM                                                                                                                    
Representative  Wool asked  if  Mr.  MacManus was  concerned                                                                    
about  the health  of banks  in general.  He noted  that the                                                                    
state  had lost  numerous banks  in the  1980s. He  remarked                                                                    
that to put  it mildly, the news was not  very uplifting. He                                                                    
asked  if banks  were  concerned about  their own  financial                                                                    
Mr. MacManus  answered that  he could not  speak for  all of                                                                    
the banks nationally  or in the state.  However, he reported                                                                    
that  banks in  general were  in a  much healthier  position                                                                    
currently  than they  were during  the financial  crisis and                                                                    
some  of  the  previous  banking  crises  in  the  past.  He                                                                    
elaborated that capital requirements  and levels were higher                                                                    
than they  had ever  been. He reported  that First  Bank was                                                                    
highly liquid and could withstand significant shock.                                                                            
Representative Wool was happy to hear some good news.                                                                           
Representative  LeBon  reported  that  the  Alaskan  banking                                                                    
community  was   in  very   good  financial   condition.  He                                                                    
elaborated  that all  of the  banks were  highly rated.  The                                                                    
existing banks  were the survivors  from the  mid-1980s. The                                                                    
banks  had  ample  opportunity   to  build  up  capital  and                                                                    
leadership had  learned valuable lessons from  the 1980s. He                                                                    
reported that  the management of  Alaska's banks  was sound,                                                                    
proven,  and  seasoned.  He advised  that  they  could  take                                                                    
comfort in that aspect.                                                                                                         
Vice-Chair Ortiz thanked Mr. MacManus  for his testimony. He                                                                    
asked if there were already signs of business failures.                                                                         
Mr. MacManus  replied that he  would not say there  had been                                                                    
business  failures. The  bank was  working proactively  with                                                                    
customers. He  highlighted the  "double barrel  attack" that                                                                    
included  the closure  of restaurants,  dental offices,  and                                                                    
bars  (which he  thought was  probably the  right course  of                                                                    
action), in combination  with not knowing when  or if cruise                                                                    
ships  would   arrive  during   the  coming   season.  Those                                                                    
individuals  were  anxious;  however, they  were  all  being                                                                    
proactive.  He detailed  that people  were  coming into  the                                                                    
bank  daily to  make  plans  to weather  the  storm and  get                                                                    
through  the season  if there  was  no season.  Some of  the                                                                    
businesses were  making plans to  start again  the following                                                                    
year. He reiterated that he had not seen business failures.                                                                     
2:34:32 PM                                                                                                                    
Vice-Chair  Ortiz   asked  if   banks  had   seen  increased                                                                    
communication  from  individuals   working  in  the  fishing                                                                    
industry due to concerns over the upcoming season.                                                                              
Mr.  MacManus responded  in the  affirmative.  He noted  the                                                                    
high number of  things tied in together and  impacted by the                                                                    
problem. He  explained that typically one  industry was hit,                                                                    
but the  current crisis was  all encompassing  worldwide. He                                                                    
reported that  the Southeast dive  fishery for  geoducks did                                                                    
not  take place  because its  primary buyer  was China.  The                                                                    
Southeast  herring seine  fishery in  Sitka had  experienced                                                                    
its own issues; however, one of  the main reasons it had not                                                                    
been  successful in  the  current year  was  because of  the                                                                    
market in  Japan. The salmon  season was coming up  and much                                                                    
of the salmon  industry had turned into export  to China and                                                                    
Korea  for processing  prior to  being returned  to shelves.                                                                    
The big  question was what  the price would be,  which could                                                                    
have a  significant impact on  fishermen. He had  heard that                                                                    
the Trident Seafoods  plant in Wrangell may not  open in the                                                                    
current  season,  which would  have  an  impact due  to  the                                                                    
absence   of  seasonal   workers  spending   money  in   the                                                                    
Vice-Chair Ortiz  thanked Mr. MacManus for  participating in                                                                    
the conversation.                                                                                                               
Representative  LeBon suggested  that the  banks speak  with                                                                    
the SBA  about resurrecting  its low-doc [loan]  program. He                                                                    
detailed that the program had ended  15 or 20 years back. He                                                                    
shared  that it  had  been a  single  page application  that                                                                    
allowed for  a quick  process and counted  on the  banks for                                                                    
proper  underwriting. There  had been  minimal documentation                                                                    
and the turnaround time had been a couple of days.                                                                              
2:37:42 PM                                                                                                                    
Co-Chair Johnston stated it was  her understanding there was                                                                    
a  significant amount  of  other capital  as  the state  was                                                                    
starting  to make  its way  out of  recovery. She  asked the                                                                    
banks to  provide follow up  information about the  depth of                                                                    
existing capital in communities.                                                                                                
Mr.  MacManus answered  that  he would  follow  up with  the                                                                    
Co-Chair  Johnston thanked  the testifiers  for their  time.                                                                    
She stated, "We're all in this together."                                                                                       
Mr.  MacManus thanked  the committee  and noted  he did  not                                                                    
mean  to paint  a picture  of  doom. He  believed the  state                                                                    
would pull through, but it would be a joint effort.                                                                             
Co-Chair  Johnston   stated  that  many  had   been  through                                                                    
difficult times  in Alaska in  the past and the  state would                                                                    
get through the current situation.                                                                                              
2:38:43 PM                                                                                                                    
JIM DODSON, FAIRBANKS  ECONOMIC DEVELOPMENT CORPORATION (via                                                                    
teleconference),  agreed  with   prior  testimony  that  the                                                                    
current  situation was  unprecedented, and  that Alaska  had                                                                    
the ability to pull through.  He thought there would be some                                                                    
economic impacts on Alaska, particularly  as it was narrowly                                                                    
coming out  of a recession.  He believed the state  would be                                                                    
quickly driven back  into recession. He had  listened to the                                                                    
governor's plan presented earlier in  the day on the state's                                                                    
COVID-19 stabilization  plan. He  shared that  the Fairbanks                                                                    
Economic  Development  Corporation  was  supportive  of  the                                                                    
plan. He reasoned it was not  the time to stand their ground                                                                    
for perfect and  he believed there was a lot  of good in the                                                                    
governor's  plan that  could help  Alaska  and Alaskans.  He                                                                    
highlighted  the  importance  of getting  the  corporation's                                                                    
information  out.  He  knew  the  committee  had  asked  the                                                                    
corporation for a list of  things the government could do to                                                                    
help the state get through the situation.                                                                                       
Mr.  Dodson  remarked that  everything  was  in a  state  of                                                                    
transition. He discussed that the  U.S. Senate had passed an                                                                    
economic stabilization  plan that had yet  to pass Congress.                                                                    
He understood there  was criticism of the plan  by the House                                                                    
as  may  be suspected.  He  believed  it was  necessary  for                                                                    
Alaska's leaders to take the  politics out of the situation.                                                                    
He pointed out  that at the end of the  day, the state would                                                                    
be looked at  for how it dealt with the  crisis. He believed                                                                    
the  state would  be driven  into tough  economic times.  He                                                                    
reasoned  that  how they  got  Alaskans  through the  crisis                                                                    
would be defined  not by their political parties  but by the                                                                    
action taken.  He remarked  that the  governor's appointment                                                                    
of a  taskforce headed by  former Governor Sean  Parnell and                                                                    
former  Senator  Mark  Begich  was a  great  step.  He  knew                                                                    
Anchorage  had put  together a  team. He  wanted to  see the                                                                    
legislature ask all municipalities  to pull together a team.                                                                    
He envisioned  a collective resource  page to  keep Alaskans                                                                    
informed  about the  economy and  ensure  that all  existing                                                                    
resources were available to Alaskans.                                                                                           
2:42:55 PM                                                                                                                    
Mr. Dodson  remarked that businesses were  vitally important                                                                    
to the  future economy;  however, it  was also  important to                                                                    
remember that  the businesses' employees were  the consumers                                                                    
supporting those  businesses. He highlighted  the importance                                                                    
of  sustaining   the  Alaskan   workforce  in   addition  to                                                                    
sustaining its  businesses. What  the state's  future looked                                                                    
like hinged upon the plans  the state's leaders put together                                                                    
at present and in the near future.                                                                                              
Mr.  Dodson  reported   that  he  would  like   to  see  the                                                                    
legislature consider  fees and payments  including mortgages                                                                    
through AHFC and  student loans. He underscored  that it was                                                                    
not a  good time to take  cash out of the  economy. He asked                                                                    
the legislature to consider finding  a way to give relief to                                                                    
Alaskans. He stated  that the red tape that  slowed down the                                                                    
system  needed to  be cut  through in  order to  make things                                                                    
happen.  He encouraged  the legislature  to  do whatever  it                                                                    
could to insist  that state agencies get their  jobs done as                                                                    
quickly as possible.  He recognized it was not  an easy time                                                                    
to do that.                                                                                                                     
Mr. Dodson asked  the legislature to consider  wage and hour                                                                    
regulations. He thought it may be  a good time to suspend or                                                                    
ease the  regulations to ensure employers  could do whatever                                                                    
possible to  retain employees. He stressed  that payroll was                                                                    
largely what drove the state's economy.                                                                                         
Mr.  Dodson  agreed  that the  fisheries  industry  and  the                                                                    
tourism industry  in Southeast would take  a tremendous hit.                                                                    
He  encouraged putting  specific teams  in place  to monitor                                                                    
the industries  and how they  were being impacted.  A recent                                                                    
briefing   from  JBER   [Joint  Base   Elmendorf-Richardson]                                                                    
estimated  that the  impact would  be  12 to  18 months.  He                                                                    
highlighted that  the economic  impact would be  longer than                                                                    
the health  impact. He addressed  the need to  determine how                                                                    
to sustain the  economy in order to be on  a path to recover                                                                    
once the  situation was  over. He  hoped an  economic triage                                                                    
team  could be  formed  that would  make  sure all  federal,                                                                    
state,   and   municipal   information  was   available   to                                                                    
consumers, allowing them to get  to the resources as quickly                                                                    
as possible.                                                                                                                    
2:47:30 PM                                                                                                                    
Mr. Dodson stated that legislators  were a large part of the                                                                    
state's leadership  and he hoped the  legislature would step                                                                    
up  to  the   plate.  He  thanked  the   committee  for  the                                                                    
opportunity to provide comments.                                                                                                
Co-Chair Johnston thanked the presenter.                                                                                        
2:47:57 PM                                                                                                                    
ROBERT  VENABLES, EXECUTIVE  DIRECTOR, SOUTHEAST  CONFERENCE                                                                    
(via teleconference), relayed  that Southeast Conference was                                                                    
Alaska's  regional  development organization  for  Southeast                                                                    
Alaska   and   one   of  the   many   economic   development                                                                    
corporations working  in concert  to understand  and address                                                                    
concerns  caused   by  the  COVID-19   virus.  One   of  the                                                                    
organization's  primary responsibilities  in the  region was                                                                    
the  development   of  a  regional   comprehensive  economic                                                                    
development  strategy,  which  included an  annual  business                                                                    
climate survey.                                                                                                                 
Mr.  Venables highlighted  the  Southeast Conference  annual                                                                    
report in  members' packets  ["Southeast Conference  2019 in                                                                    
Review"] (copy  on file) that outlined  the various economic                                                                    
sectors the organization was  engaged with. The organization                                                                    
had over  200 members including  businesses, municipalities,                                                                    
and  tribes.  The board  was  evenly  split between  private                                                                    
sector  and public  sector members.  He  emphasized that  no                                                                    
matter  how badly  its business  members had  been impacted,                                                                    
the  businesses had  consistently stated  they consider  the                                                                    
personal health of the community,  their families, and their                                                                    
customers  to be  the number  one priority.  He thanked  the                                                                    
public  sector   for  addressing  the  concerns.   He  noted                                                                    
everyone  was  making  adjustments  to how  they  lived  and                                                                    
conducted business.                                                                                                             
Mr.  Venables relayed  that the  Southeast  region had  been                                                                    
struggling economically  for many years. Tourism  had been a                                                                    
lone bright spot and mining  had been a stabilizing backbone                                                                    
in  northern  Southeast.  He  detailed  that  fisheries  had                                                                    
experienced a  tough time with  low harvest levels,  but the                                                                    
price  had  been  high  enough   to  give  good  support  in                                                                    
otherwise bad  years. However, in the  current year, seafood                                                                    
markets  had  been  closing  and   prices  had  dropped.  He                                                                    
elaborated  that if  the season  resulted in  another dismal                                                                    
harvest, the sector would have an extremely difficult time.                                                                     
Mr.  Venables  discussed  that   the  tourism  industry  had                                                                    
anticipated  nearly  1.5   million  cruise  ship  passengers                                                                    
coming  into  the region,  the  loss  of  which would  be  a                                                                    
gamechanger for the  region and state. He  stressed that the                                                                    
impact to the  45,642 [tourism] jobs in the  region could be                                                                    
catastrophic.  Many  of  the businesses  in  Southeast  were                                                                    
small  and  locally owned  and  many  had already  leveraged                                                                    
their assets  and livelihood to  get through the  winter and                                                                    
gear  up  for  a  summer  season that  may  not  happen.  He                                                                    
referenced  an  earlier  question from  a  committee  member                                                                    
about the definition  of a small business.  He reported that                                                                    
the average number  of workers was about 29,  which close to                                                                    
doubled in the summer season.                                                                                                   
2:51:16 PM                                                                                                                    
Mr.   Venables   addressed   actions  taken   by   Southeast                                                                    
Conference. First, the organization  wanted to ensure it did                                                                    
not  perpetuate  the  panic,   which  was  often  a  primary                                                                    
impulse.  He stressed  that Alaskans  were resilient  people                                                                    
and  the  state would  make  it  through, but  its  economic                                                                    
health was  at risk  and the  damage could  be years  in the                                                                    
repair. He  considered actions  that could  be taken  by the                                                                    
state. Some  of the early concerns  Southeast Conference had                                                                    
heard  about  was  the  lack  of  working  capital  to  keep                                                                    
businesses afloat until cashflow started back up.                                                                               
Mr. Venables shared that Southeast  Conference had also been                                                                    
hearing  about   impacts  on   infrastructure,  particularly                                                                    
internet access, bandwidth, and  even phone capacity in some                                                                    
cases, as businesses  were struggling to find  ways to reach                                                                    
their  customers  outside   their  shutdown  businesses.  He                                                                    
reported that businesses were finding  that internet was not                                                                    
reliable  enough to  hold the  meetings  they were  striving                                                                    
for,  especially in  rural communities.  He stated  that the                                                                    
problem was exacerbated by the  influx of students trying to                                                                    
conduct  studies online.  He believed  it was  an area  that                                                                    
needed addressing.                                                                                                              
Mr.  Venables  shared  that there  had  been  discussion  on                                                                    
whether or not  there should be a waiver  requested from the                                                                    
federal  government for  the Passenger  Vessel Services  Act                                                                    
that would allow cruise ships  to salvage part of the season                                                                    
on the backend of the summer.  He noted it was an area where                                                                    
the  legislature's  support  would be  greatly  appreciated.                                                                    
Southeast  Conference was  still  working  to determine  the                                                                    
impacts, which  were in the  early stages.  The organization                                                                    
was reaching  out to  the business  community to  gather the                                                                    
data to  define the  needs and  impacts more  accurately. He                                                                    
elaborated  that   the  organization  was  using   a  survey                                                                    
formatted by the  Anchorage Economic Development Corporation                                                                    
and  was working  to  ensure there  was  consistency in  the                                                                    
collected data. The goal was  to use the information to help                                                                    
guide  efforts  that policy  makers  and  state and  federal                                                                    
agencies undertake to meet the needs of the region.                                                                             
Mr.  Venables  shared  that  in  early  February,  Southeast                                                                    
Conference had its  legislative fly-in and had  met with the                                                                    
House  Finance  Committee  co-chairs. The  organization  had                                                                    
surveyed  a  handful  of legislators  on  issues  they  were                                                                    
thinking about and only 4  percent had been concerned by the                                                                    
Coronavirus. He  observed how times  had changed  since that                                                                    
meeting. The early  responses for the survey  showed that 96                                                                    
percent of  businesses felt they were  already impacted, and                                                                    
26 percent were not operating.  He reported that revenue was                                                                    
down  36 percent  compared  to the  previous  year and  each                                                                    
company had  already laid  off five  workers on  average. He                                                                    
elaborated that 20 percent of  businesses had specified they                                                                    
were  at risk  of closing  for good  and another  12 percent                                                                    
reported there was a significant risk of closing for good.                                                                      
Mr.  Venables relayed  that the  organization was  concerned                                                                    
about what  the long-term  impacts would  be. He  noted that                                                                    
the  group   of  testifiers   during  the   current  meeting                                                                    
reflected  a wide  group of  local  and regional  grassroots                                                                    
organizations statewide that could  provide an effective and                                                                    
efficient  conduit  for  supporting  Southeast  Conference's                                                                    
mission  of strong  economies and  healthy communities.  The                                                                    
organization would continue to  be a resource going forward.                                                                    
He thanked  the committee for  the opportunity to be  a part                                                                    
of  the  conversation  and  solution  set  in  the  face  of                                                                    
daunting times.                                                                                                                 
2:55:07 PM                                                                                                                    
Vice-Chair  Ortiz  mentioned  a   letter  by  the  Ketchikan                                                                    
Visitors  Bureau requesting  a waiver  related to  passenger                                                                    
vessels. He asked  for additional detail on  what the impact                                                                    
of the waiver would be.                                                                                                         
Mr. Venables  explained that  the Passenger  Vessel Services                                                                    
Act (PVSA)  of 1886 was part  of the Jones Act  and required                                                                    
foreign vessels call into another  country. He detailed that                                                                    
vessels leaving  Seattle, Washington  were required  to stop                                                                    
in  Canada -  typically  Victoria or  Vancouver  - prior  to                                                                    
coming  to  Alaska.  He  elaborated   that  the  closure  of                                                                    
Canadian   ports  to   vessels   exceeding  500   passengers                                                                    
effectively shut down  the ability for cruise  lines to come                                                                    
north to Alaska. The impact  to Southeast, Southcentral, and                                                                    
Denali was huge. The discussion  was about whether or not to                                                                    
request a waiver to allow  ships go directly from Seattle to                                                                    
Alaska. He  clarified that the  scenario was  not guaranteed                                                                    
to happen  if the  waiver was  granted. There  were numerous                                                                    
concerns about the timing. He  explained that if they waited                                                                    
until summer to  request the waiver it would be  too late to                                                                    
salvage  the summer  season. He  elaborated that  requesting                                                                    
the  waiver  at  present  would   preserve  the  ability  to                                                                    
exercise the  option later on if  it was the right  thing to                                                                    
Vice-Chair Ortiz  asked if  the waiver  would be  granted at                                                                    
the federal administration level.                                                                                               
Mr. Venables  replied it was  his understanding it  had been                                                                    
done previously by presidential  order. He believed Congress                                                                    
could grant the waiver as well.                                                                                                 
Co-Chair Johnston thanked Mr. Venables for calling in.                                                                          
2:57:51 PM                                                                                                                    
JULIE  SAUPE,  PRESIDENT  AND   CEO,  VISIT  ANCHORAGE  (via                                                                    
teleconference),  thanked  the   committee  for  taking  the                                                                    
testimony.  She   relayed  that  Visit  Anchorage   was  the                                                                    
convention   and   visitors   bureau   for   Anchorage   and                                                                    
Southcentral.  She  was  also co-chair  with  Bill  Popp  of                                                                    
Anchorage's Economic  Resiliency Task Force. She  noted that                                                                    
Mr.  Popp   would  speak  about  the   taskforce  work.  She                                                                    
expressed  appreciation   for  the  testimony   by  previous                                                                    
callers, particularly  from bankers and  lenders recognizing                                                                    
what  the industry  was  experiencing.  She recognized  that                                                                    
health  needs  and  human  costs  came  first,  as  did  the                                                                    
industry.  She stated  that  Visit  Anchorage supported  the                                                                    
procedures  and restrictions  that had  been implemented  to                                                                    
minimize  the health  impacts and  maximize  the ability  of                                                                    
communities    to    protect     citizens    and    services                                                                    
infrastructure. She  was speaking  about the  long-game. She                                                                    
communicated that  Visit Anchorage  was playing its  part to                                                                    
achieve the best result for the community and state.                                                                            
Ms.  Saupe shared  how  the situation  was  playing out  for                                                                    
Anchorage businesses.  The virus  was impacting  all sectors                                                                    
with  substantial negative  effects. Tourism  was the  first                                                                    
sector to feel the economic  strain. She elaborated that the                                                                    
effects of  COVID-19 were  immediate for  businesses relying                                                                    
on visitation  from overseas markets, businesses  reliant on                                                                    
winter  visits, and  businesses  getting ready  to open  for                                                                    
peak summer  season. She stated  it was unlikely  the damage                                                                    
would lift.  She shared that in  a span of several  days the                                                                    
industry had shifted  from what it would market  and what it                                                                    
was  doing to  market to  how they  could save  their summer                                                                    
season and whether their businesses  would survive. The bulk                                                                    
of the questions at a  recent member webinar hosted by Visit                                                                    
Anchorage  had been  directed to  toward the  representative                                                                    
from the  Small Business Administration. She  explained that                                                                    
the  businesses  were already  in  need  of loans  and  cash                                                                    
assistance to make it through.                                                                                                  
Ms. Saupe believed  committee members were all  aware of the                                                                    
concerns of  the industry internationally. She  believed Mr.                                                                    
Schierhorn    had   painted    a    picture   of    Marriott                                                                    
[International] all the way down.                                                                                               
3:00:50 PM                                                                                                                    
Ms. Saupe relayed there were  several factors in Alaska that                                                                    
exacerbated   the   issue   for  tourism   businesses.   She                                                                    
highlighted timing as the first  issue. She detailed that it                                                                    
was  a lean  time of  year for  most businesses.  She stated                                                                    
that summer  was "king"  for most of  the leisure  travel in                                                                    
Alaska.  For  example, 63  percent  of  hotel revenues  were                                                                    
earned from May  to September in Anchorage.  The other seven                                                                    
months  accounted  for  one-third   of  the  revenues.  Most                                                                    
tourism businesses were most financially  stable in the fall                                                                    
and most were at  their most financially vulnerable position                                                                    
at the current time of year.                                                                                                    
Ms. Saupe  continued that many businesses  were operating on                                                                    
fumes at  the current time  of year and were  just beginning                                                                    
to receive  deposits and bookings.  Bookings had  dropped to                                                                    
zero  and cancelations  had been  a real  challenge for  the                                                                    
industry in  the past couple  of weeks. The current  time of                                                                    
year was  typically a  vital time  for future  bookings. She                                                                    
shared that  a couple  of weeks back  she began  hearing the                                                                    
first reports of businesses having  a day where cancelations                                                                    
outnumbered  bookings. She  believed the  situation was  100                                                                    
percent true for all of the [tourism] businesses she knew.                                                                      
Ms.  Saupe identified  the state's  location  as the  second                                                                    
exacerbating factor.  The state was a  long-haul destination                                                                    
with a small population, which  meant Alaska was unlikely to                                                                    
see   travel   related   business   rebound   until   travel                                                                    
restrictions  were  lifted  (i.e.  flights,  cruises,  Alcan                                                                    
Highway access).  She pointed out that  once travel resumed,                                                                    
the  national economic  effects would  damage visitation  if                                                                    
people were  saving, had been  laid off, were  worried about                                                                    
their retirement  accounts, and/or were still  worried about                                                                    
losing  their own  jobs. Alaska's  distance meant  the state                                                                    
could not rely  solely on residents to fill in  the gaps for                                                                    
short-term  travel (weekend  getaways) once  it was  safe to                                                                    
travel again. She explained there  were other locations that                                                                    
were great  drive locations and  would have an  advantage on                                                                    
how quickly they could rebound.                                                                                                 
Ms. Saupe  reported that a recent  national survey suggested                                                                    
58  percent of  people planning  to travel  in the  next six                                                                    
months  would change  their travel  plans  due to  COVID-19.                                                                    
Trips  would  either  be   canceled,  reduced,  or  delayed.                                                                    
Additionally,  travel  destinations   may  be  changed,  and                                                                    
people may take drive trips  instead of a trip requiring air                                                                    
travel. All  of which  were alarm  bells for  Alaska travel.                                                                    
She  highlighted the  unique challenge  for Alaska  cruises.                                                                    
She  mentioned previous  testimony that  the Canadian  ports                                                                    
were  closed until  July 1.  She elaborated  that without  a                                                                    
waiver to  the PVSA,  at best  for Southcentral  Alaska, the                                                                    
season would start with 48  percent of its cruise passengers                                                                    
not able to travel.                                                                                                             
3:03:56 PM                                                                                                                    
Ms. Saupe addressed the meetings  business in Anchorage. She                                                                    
detailed  that the  Anchorage  convention  centers had  been                                                                    
closed.  She reported  that since  March 10  there had  been                                                                    
$1.1  million   in  lost   business.  The   Visit  Anchorage                                                                    
organization was doing all it  could to preserve late summer                                                                    
and fall  conventions that would  be coming into  the state.                                                                    
There  was no  sense  that the  current  closure and  travel                                                                    
conditions would  be resolved by  that time. She  noted that                                                                    
the  impact  trickled to  all  sectors.  She expounded  that                                                                    
history  showed  the  meetings and  corporate  and  business                                                                    
travel  were   slower  to  rebound   after  a   crisis.  She                                                                    
highlighted 9/11  and the 2008/2009 global  financial crisis                                                                    
as examples.                                                                                                                    
Ms. Saupe  communicated that Mr.  Popp would  provide detail                                                                    
at  the tactical  level regarding  needs  and programs  that                                                                    
could  help.  She  asked  the  legislature  to  support  any                                                                    
Coronavirus  emergency  aid.  She  stressed  that  the  PVSA                                                                    
waiver was  critical to  the industry, so  that once  it was                                                                    
safe and  appropriate to travel  again, the option  was left                                                                    
open for businesses  to save at least the first  half of the                                                                    
summer. The  situation would also  impact local  revenues in                                                                    
the form of tax  collections for many communities throughout                                                                    
the  state.  She urged  looking  at  ways to  support  local                                                                    
communities as  well. She appreciated the  lenders' comments                                                                    
and hearing that  banks were figuring out ways  to work with                                                                    
the state's  small businesses.  She encouraged  anything the                                                                    
legislature  could do  to  support assistance,  particularly                                                                    
bridge loans in the very  near term. She relayed that people                                                                    
were well  aware of  the SBA grants,  but they  were worried                                                                    
their businesses may not last that long.                                                                                        
3:06:16 PM                                                                                                                    
Co-Chair Johnston highlighted the  tourism industry had many                                                                    
seasonal employees.  She detailed  that the  legislature had                                                                    
moved quickly on legislation  to make unemployment insurance                                                                    
available as quickly as possible.  She was interested in the                                                                    
employee pool for the tourism  season. She wondered how much                                                                    
of  the pool  was  comprised of  returning students,  people                                                                    
from  outside Alaska,  and long-term  Alaskan residents  who                                                                    
did other work during the winter.                                                                                               
Ms.  Saupe  replied that  she  was  happy to  pull  together                                                                    
information.  She  relayed  that   one  in  nine  year-round                                                                    
full-time jobs  was supported by  tourism in  Anchorage. She                                                                    
would have to do some digging for seasonal numbers.                                                                             
Co-Chair Johnston  realized many  jobs were  affiliated with                                                                    
tourism  including  the  food   service  industry.  She  was                                                                    
interested in the seasonal aspect of tourism.                                                                                   
3:08:15 PM                                                                                                                    
BILL   POPP,   PRESIDENT   AND   CEO,   ANCHORAGE   ECONOMIC                                                                    
DEVELOPMENT  CORPORATION (via  teleconference), thanked  the                                                                    
committee  for  the  invitation to  speak.  He  relayed  his                                                                    
intent   to  speak   about  the   effort  put   together  by                                                                    
[Anchorage] Mayor Ethan Burkowitz and  his team to start the                                                                    
Economic Resiliency  Task Force the past  Monday. The effort                                                                    
had begun  at about  6:30 a.m.  and by  9:00 a.m.  the first                                                                    
meeting had taken place. The  second meeting had taken place                                                                    
on Thursday.  The group of local  business organizations and                                                                    
businesses was  growing with new  members almost  daily. The                                                                    
job of  the task  force was  to seek  to develop  advice and                                                                    
tactical advice  strategies to the  municipality in  ways it                                                                    
could respond  to mitigate  the significant  and devastating                                                                    
damage  the  pandemic was  causing  to  Anchorage. The  task                                                                    
force  was  also  designed  to   help  develop  tactics  the                                                                    
business community  and community  as a  whole could  use to                                                                    
mitigate  the  significant  damage  being  done  to  several                                                                    
sectors of the economy.                                                                                                         
Mr. Popp  relayed that  the task force  was focusing  on the                                                                    
devastating  cash   flow  and  liquidity  crunch   in  local                                                                    
businesses  that had  been  either forced  to  shut down  or                                                                    
seriously  curtail business  activities. The  crunch rippled                                                                    
through the workforce  and was creating a  parallel front of                                                                    
ever exponentially  growing damage to the  economy. The task                                                                    
force  was looking  to  find ways  to  advocate and  support                                                                    
efforts at the  federal, state, and local  levels to improve                                                                    
cash  flow  by  coming  up   with  strategies  to  get  cash                                                                    
available to  businesses to  help carry  them over  the next                                                                    
several  months to  one year  to ensure  there were  as many                                                                    
businesses as  possible still standing when  2021 began. The                                                                    
task  force would  look at  where it  could focus  ideas and                                                                    
strategies  that  would  help  with deferral  or  waiver  of                                                                    
expenses  related  to  government  services  at  the  local,                                                                    
federal, and state levels.                                                                                                      
Mr.  Popp  elaborated that  the  task  force would  work  to                                                                    
develop ideas on  collaborating between different government                                                                    
entities   and   the   private  sector   in   public-private                                                                    
partnerships  on the  initiatives. He  emphasized that  time                                                                    
was of the  essence. The task force  recognized clearly that                                                                    
the old ways  of doing things where  government relief could                                                                    
take years, would not work in the current circumstance.                                                                         
3:11:39 PM                                                                                                                    
Mr.  Popp discouraged  against a  strategy  that would  take                                                                    
months to  deploy because  it would likely  not have  a real                                                                    
effect.  The  task  force  was  meeting  twice  a  week  and                                                                    
collaborating  daily.  They   were  forming  policy  working                                                                    
groups to  advise at the  local, state, and  federal levels.                                                                    
Additionally, the task force  would develop tactical working                                                                    
groups and a  group of the whole to start  to deploy initial                                                                    
Mr.  Popp   shared  that  the  task   force  recognized  the                                                                    
tremendous damage  done to the restaurant  community and had                                                                    
been working with community  players including Edible Alaska                                                                    
and AEDC, to  develop a list of restaurants  that were still                                                                    
open for takeout  or home delivery. He  noted the importance                                                                    
of  the  list  because  many  of  the  restaurants  had  not                                                                    
previously been  known for take  out and  delivery services.                                                                    
The task force was getting  out lists and webpages to spread                                                                    
the  word  to the  consuming  public.  He characterized  the                                                                    
alternative to  restaurant dining as  a band aid on  a large                                                                    
wound; however, it was something.  Members of the task force                                                                    
understood there were much bigger  lifts left to do and they                                                                    
were  working as  rapidly as  possible  to develop  strategy                                                                    
proposals for all three levels of government to consider.                                                                       
Mr.  Popp stated  that many  of the  ideas discussed  by the                                                                    
task force  had already  been addressed to  varying degrees,                                                                    
from  the recent  announcement of  the embargo  on evictions                                                                    
and foreclosures to the federal  announcement earlier in the                                                                    
day where  Fannie Mae and  Freddie Mac were looking  to help                                                                    
forego mortgage  payments by providing  a year's  grace time                                                                    
(essentially adding  one year to  the end of  the mortgage).                                                                    
He reported that new solutions  were happening almost hourly                                                                    
-   strategies   were   developing,   recommendations   were                                                                    
occurring, and  action was taking  place. He  explained that                                                                    
the  task force  was trying  to keep  up and  ahead and  was                                                                    
working to come  up with strategies that  would help benefit                                                                    
the entire economy.                                                                                                             
Mr.  Popp  reported  that  impacts  were  occurring  in  the                                                                    
tourism industry, the  professional business service sector,                                                                    
the oil  and gas  sector in Anchorage,  and the  airport was                                                                    
feeling  the  pinch in  terms  of  the impact  to  passenger                                                                    
travel  and cargo.  He detailed  that the  airport accounted                                                                    
for  one out  of ten  jobs in  Anchorage. Impacts  were also                                                                    
occurring in the government sector.                                                                                             
3:15:56 PM                                                                                                                    
Mr. Popp  addressed the impacts  to the school  district and                                                                    
University.  The school  district  was currently  in a  hold                                                                    
mode -  the impacts  to the school  year and  workforce were                                                                    
not  yet known.  The same  was  true for  the University  of                                                                    
Alaska, which was already dealing  with significant cuts due                                                                    
to  state fiscal  issues and  was  likely facing  additional                                                                    
significant challenges due to the epidemic.                                                                                     
Mr. Popp  shared that the  task force  had put out  a survey                                                                    
the  past  Tuesday  that  had been  closed  earlier  in  the                                                                    
current afternoon.  There had been 530  responses, which was                                                                    
far  more than  they  had  expected to  receive  in a  short                                                                    
timeframe.  He noted  that they  had not  yet dissected  the                                                                    
survey responses in detail. He  communicated that 90 percent                                                                    
of the  responders had  reported experiencing  disruption in                                                                    
business due to COVID-19.  Additionally, 70 percent reported                                                                    
a decline  in revenue in the  past 30 days due  to COVID-19.                                                                    
He  elaborated that  1 percent  of responders  anticipated a                                                                    
significant increase  in revenue in  the first half  of 2020                                                                    
compared to 2019,  3 percent anticipated an  increase, and 7                                                                    
percent anticipated no change.  He expounded that 33 percent                                                                    
anticipated a decrease in revenue  and 55 percent expected a                                                                    
significant decrease  in revenue. He shared  that 60 percent                                                                    
of respondents  reported making  employee reductions  due to                                                                    
Mr.  Popp relayed  that responses  represented a  good cross                                                                    
section  of the  business  community, although  it was  more                                                                    
heavily  weighted  towards   the  restaurant,  tourism,  and                                                                    
entertainment sector as they were  at the front lines of the                                                                    
losses.   He  believed   the   numbers   reflected  a   good                                                                    
representation  of  the  community overall.  When  asked  if                                                                    
businesses anticipated making employment  cuts in the future                                                                    
due  to COVID-19,  39  percent  responded affirmatively,  20                                                                    
percent  responded  in the  negative,  and  41 percent  were                                                                    
uncertain.  He   shared  that  18  percent   of  respondents                                                                    
reported their  business was at risk  of closing permanently                                                                    
because of  impacts caused  by COVID-19 (nearly  1 out  of 5                                                                    
businesses  that responded).  He underscored  that it  was a                                                                    
serious  situation that  surpassed  anything  the state  had                                                                    
experienced in the past.                                                                                                        
3:18:49 PM                                                                                                                    
Mr. Popp stressed the critical  nature of a timely and rapid                                                                    
response  in order  to mitigate  the damage  created by  the                                                                    
pandemic, to the extent possible.                                                                                               
Representative Sullivan-Leonard thanked  the presenters. She                                                                    
discussed  that the  situation was  stressful for  many. She                                                                    
asked if  there were  businesses rising to  the top  to fill                                                                    
needs of  homebound individuals. She listed  the delivery of                                                                    
groceries, supplies, and medications as examples.                                                                               
Mr. Popp replied  that Carrs Safeway had  announced it would                                                                    
be  hiring 400  individuals statewide  due to  the increased                                                                    
demand.  He   had  heard   indirectly  that   other  grocery                                                                    
retailers  including warehouse  retailers  were stepping  up                                                                    
with  additional  hire  because  of  increased  volumes.  He                                                                    
highlighted that  the restaurant  industry was  dealing with                                                                    
the   incredibly  devastating   challenge  of   closing  for                                                                    
in-house  meals. He  stated that  the innovation  and spirit                                                                    
from many restauranteurs  in working with the  SBDC to pivot                                                                    
their  business model  to  a home  delivery  model had  been                                                                    
amazing  to watch.  The task  force  was doing  its best  to                                                                    
support them  by getting marketing out  through social media                                                                    
and  other means  to  ensure  the public  was  aware of  the                                                                    
services  being  provided.  He   believed  there  were  many                                                                    
businesses working to find a  new way to maintain operations                                                                    
at  least to  a modest  degree to  serve the  public in  the                                                                    
social distancing world that was the current reality.                                                                           
Mr.  Popp   stated  the  efforts  were   heartening,  showed                                                                    
community spirit, and a can  do attitude. He believed it was                                                                    
a  silver  lining that  the  business  community was  coming                                                                    
together to help each other out.                                                                                                
Representative  Sullivan-Leonard thanked  Mr.  Popp for  the                                                                    
bit of positive news amidst the very difficult news.                                                                            
3:22:27 PM                                                                                                                    
Representative  Wool shared  that he  had experience  in the                                                                    
restaurant/bar/entertainment business,  and he felt  for the                                                                    
people  in  the  business,  especially the  ones  that  were                                                                    
forced to  close. He applauded  the effort and  ingenuity of                                                                    
restaurants able  to do  take out, but  he believed  part of                                                                    
the  reason  people went  out  to  eat  was  to go  out.  He                                                                    
believed  many  people staying  home  would  end up  cooking                                                                    
more.  He  remarked  that  people   staying  home  was  just                                                                    
beginning. He asked if there  had been discussion of putting                                                                    
the businesses  on cold storage  where they could  shut down                                                                    
and alleviate  their debt and  try to reopen in  six months.                                                                    
He asked if the restaurant  owners were entitled to the same                                                                    
unemployment insurance that wage and hour employees were.                                                                       
Mr. Popp answered that he  was not certain about the ability                                                                    
to collect  unemployment for a  sole proprietor  or business                                                                    
owner.  He stated  that putting  the businesses  into stasis                                                                    
was a  complicated question, especially when  trying to keep                                                                    
employees on payroll. He did not  have a good answer yet. He                                                                    
spoke to  the challenge of trying  to figure out how  all of                                                                    
the parts and  pieces put together at the  federal and state                                                                    
level would all  fit together. He relayed it was  one of the                                                                    
things the Economic Resiliency Task  Force and the statewide                                                                    
rapid   response  team   (an  ad   hoc  group   of  economic                                                                    
development organizations) would look  into. He spoke to the                                                                    
need to determine how the  overall need was being filled and                                                                    
where  the gaps  were.  He thought  Representative Wool  had                                                                    
likely identified  two or  three gaps  via his  question. He                                                                    
stated  that  everything  was  happening  very  rapidly.  He                                                                    
highlighted there  were numerous moving parts  that were not                                                                    
yet  fully understood  and  that had  not  yet happened.  He                                                                    
noted that the situation was changing daily.                                                                                    
Co-Chair Johnston  understood and stated, "We're  all in the                                                                    
same place."  She thanked  all of  the presenters  for their                                                                    
time and help. She recessed  the meeting until the following                                                                    
morning  at 9:00  a.m.  She reviewed  the  schedule for  the                                                                    
following morning.                                                                                                              
3:27:18 PM                                                                                                                    

Document Name Date/Time Subjects
SEC Annual Report 2020 HFIN 032020.pdf HFIN 3/20/2020 1:30:00 PM
HFIN Discussion Covid 19 Resources