Legislature(2019 - 2020)Anch LIO Lg Conf Rm

05/01/2020 03:15 PM LABOR & COMMERCE

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03:18:32 PM Start
03:21:38 PM Presentation(s): Covid-19 Pandemic Economic Response by Dcced
04:54:43 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Rescheduled from 4/29/20 --
+ Presentation: COVID-19 pandemic economic TELECONFERENCED
response by Dept. of Commerce, Community,
& Economic Development
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                       Anchorage, Alaska                                                                                        
                          May 1, 2020                                                                                           
                           3:18 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Ivy Spohnholz, Chair                                                                                             
Representative Zack Fields (via  teleconference)                                                                                
Representative Sara Hannan (via  teleconference)                                                                                
Representative Andi Story (via teleconference)                                                                                  
Representative Mel Gillis (via teleconference)                                                                                  
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Louise Stutes                                                                                                    
Representative Sara Rasmussen                                                                                                   
                                                                                                                                
OTHER MEMBERS PRESENT                                                                                                         
Representative Andy Josephson                                                                                                   
Representative Dan Ortiz                                                                                                        
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION(S):  COVID-19 PANDEMIC ECONOMIC RESPONSE BY DCCED                                                                  
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JULIE ANDERSON, Commissioner                                                                                                    
Department of Commerce, Community & Economic Development                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Provided a PowerPoint presentation,                                                                      
entitled "COVID-19: DCCED's Response Actions."                                                                                  
                                                                                                                                
JIM ANDERSON, Deputy Director                                                                                                   
Division of Economic Development                                                                                                
Department of Commerce, Community & Economic Development                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions during the presentation.                                                              
                                                                                                                                
REPRESENTATIVE DAN ORTIZ                                                                                                        
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Asked questions during the presentation.                                                                
                                                                                                                                
ALAN WEITZNER, Chief Investment Officer                                                                                         
Alaska Industrial Development and Export Authority                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions  during the presentation.                                                             
                                                                                                                                
LORI WING-HEIER, Director                                                                                                       
Division of Insurance                                                                                                           
Department of Commerce, Community & Economic Development                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the presentation on COVID-                                                              
19 pandemic economic response by DCCED.                                                                                         
                                                                                                                                
SARA CHAMBERS, Director                                                                                                         
Division of Corporations, Businesses and Professional Licensing                                                                 
Department of Commerce, Community & Economic Development                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the presentation on COVID-                                                              
19 pandemic economic response by DCCED.                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:18:32 PM                                                                                                                    
                                                                                                                                
CHAIR IVY SPOHNHOLZ  called the House Labor and  Commerce Standing                                                            
Committee meeting  to order at  3:18 p.m.  Representatives  Fields                                                              
(via  teleconference),  Hannan (via  teleconference),  Story  (via                                                              
teleconference),  and  Spohnholz  were  present  at  the  call  to                                                              
order.   Representative  Gillis  (via teleconference)  arrived  as                                                              
the meeting was in progress.                                                                                                    
                                                                                                                                
^PRESENTATION(S):  COVID-19 Pandemic Economic Response By DCCED                                                                 
 PRESENTATION(S):  COVID-19 Pandemic Economic Response By DCCED                                                             
                                                                                                                                
3:21:38 PM                                                                                                                    
                                                                                                                                
CHAIR SPOHNHOLZ  announced that the  only order of  business would                                                              
be  a  presentation  on  the  economic  response  to  COVID-19  by                                                              
Department   of  Commerce,   Community   &  Economic   Development                                                              
(DCCED), beginning with Commissioner Anderson.                                                                                  
                                                                                                                                
3:23:13 PM                                                                                                                    
                                                                                                                                
JULIE  ANDERSON,   Commissioner,  DCCED,  provided   a  PowerPoint                                                              
presentation, entitled  "COVID-19: DCCED's Response  Actions."  As                                                              
background  information,  she  reminded  the  committee  that  the                                                              
governor   declared   the   public   health   disaster   emergency                                                              
declaration  for  COVID-19  on  March 11,  2020  and  initiated  a                                                              
unified command  structure  between the Department  of Health  and                                                              
Social  Services  (DHSS),  Department   of  Military  &  Veterans'                                                              
Affairs (DMVA),  and the Department  of Public Safety (DPS).   The                                                              
governor   fully  engaged   state  departments   to  utilize   all                                                              
capabilities to  ensure a swift  and effective COVID-19  response.                                                              
She  reported  that  the  Department   of  Commerce,  Community  &                                                              
Economic  Development  (DCCED)   began  fully  participating  with                                                              
unified  command  and  providing  assistance where  needed.    She                                                              
reported that  when the pandemic  first became a real  concern for                                                              
the  state,  the   Commissioners   Office,  DCCED,   compiled  and                                                              
submitted  the disaster  declaration  request  to  the U.S.  Small                                                              
Business Administration (SBA) on behalf of the governor.                                                                        
                                                                                                                                
3:26:04 PM                                                                                                                    
                                                                                                                                
The committee took a brief at-ease.                                                                                             
                                                                                                                                
3:26:39 PM                                                                                                                    
                                                                                                                                
COMMISSIONER ANDERSON,  continuing her presentation,  said the SBA                                                              
approved the  request, opening the  Economic Injury  Disaster Loan                                                              
program  (EIDL)  to  Alaskan  businesses.    She  noted  that  the                                                              
department  has  worked  alongside  the  SBA  since  the  disaster                                                              
declaration  to stay  on  top of  loan opportunities  and  current                                                              
statistics   for  existing   programs,   such   as  the   Paycheck                                                              
Protection Program  (PPP) and  the EIDL.   She continued  to state                                                              
that the  Commissioners   Office has been  working to  communicate                                                              
the  different funding  options  available to  local business  and                                                              
tracking  how  different  communities  and  industries  are  doing                                                              
throughout  the  pandemic.    Additionally,   they  have  been  in                                                              
consistent communication  with mayors, city and  borough managers,                                                              
businesses, industries,  and other  state departments.   She added                                                              
that her  team is working with  various agencies and  other states                                                              
to develop  helpful programs for  resident small businesses.   The                                                              
Commissioners   Office  is also  working  with state  and  federal                                                              
partners  on coordination  for  Economic  Mitigation and  Recovery                                                              
programs,  as  well  as  funds.   She  noted  that  her  assistant                                                              
commissioner,  Amy Demboski,  was assigned  to work directly  with                                                              
unified  command on  issues regarding  health mandates,  including                                                              
aiding  in  the  developing the  framework  process  for  critical                                                              
infrastructure business  quarantine protocol plans.   She said Ms.                                                              
Demboski  has been  diligent  in  ensuring that  the  departments                                                               
divisions  have a direct  line to  unified command.   She  further                                                              
noted that the  DCCED Public Information Officer (PIO)  is part of                                                              
the unified command  PIO team, which ensures that  all departments                                                              
are in  alignment on messaging.   The PIOs   focus, she  said, has                                                              
been to  promote alternative  ways to  support businesses  through                                                              
this pandemic while  complying with health mandates.   She relayed                                                              
that   the  Commissioners    Office  is   compiling  hundreds   of                                                              
[questions]  via  phone and  email  relating to  business,  health                                                              
mandates,  and  travel  restrictions   in  an  ongoing  effort  to                                                              
respond  to the  public,  business, and  industry  representatives                                                              
seven days a week.   She emphasized that her team  is taking their                                                              
role of  serving the public seriously  and making every  effort to                                                              
be  responsive  and  timely  in  all  inquiries  coming  into  the                                                              
office.                                                                                                                         
                                                                                                                                
3:30:05 PM                                                                                                                    
                                                                                                                                
COMMISSIONER ANDERSON  prefaced slide 3, titled  DCCED  & SBA,  by                                                              
noting that the  first round of COVID-19 appropriated  funding for                                                              
the U.S. SBAs   PPP and EIDL has  run out; however, the  PPP began                                                              
accepting new  applications this week  for an additional  round of                                                              
                                             ,                                                                                  
funding.   She reported that  as of April  162020,   4,842 Alaskan                                                              
businesses  received  funds  from  the PPP  and  1,609  businesses                                                              
received  EIDL  advances.    She  said  the  department  has  been                                                              
communicating  with lending institutions  and small  businesses to                                                              
ensure that  people are  utilizing these tools  to get  funds into                                                              
Alaskans hands as quickly as possible.                                                                                          
                                                                                                                                
3:32:06 PM                                                                                                                    
                                                                                                                                
COMMISSIONER ANDERSON  continued to slide 4, titled   DCCEDs  ERRB                                                            
Website,  and explained  that the Alaska Development  Team created                                                              
the  COVID-19  Economic  Recovery Resources  for  Business  (ERRB)                                                              
portal.   The  website assembles  information  about resources  at                                                              
the state and  federal level to help Alaskan  businesses deal with                                                              
the effects  of the pandemic  and is updated  as new  tools become                                                              
available.     The  ERRB  portal   includes  information   on  the                                                              
different programs  available through  the U.S. SBA;  the Division                                                              
of  Economic  Development-Investments  (DED-INV), DCCED;  and  the                                                              
Alaskan    Business    Development     and    Export    Authority.                                                              
Additionally,  it includes  latest news,  contact information  for                                                              
economic  development organizations  around the  state, and  links                                                              
to additional resources.   She stated that the intent  was to make                                                              
the portal  a  one-stop  shop  for  individuals and businesses  in                                                              
Alaska by  providing them  with information on  how to  access the                                                              
tools to help them with their economic recovery.                                                                                
                                                                                                                                
3:33:12 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  ANDERSON   turned  attention  to  slide   5,  titled                                                              
 Division  of  Economic Development-Investments.     She  conveyed                                                              
that  the DED-INV  administers  and  services ten  revolving  loan                                                              
funds for DCCED,  which allowed the department  to offer immediate                                                              
relief funding  for businesses  when the pandemic  hit.   Three of                                                              
the ten  loan funds are specifically  designed to work  with small                                                              
and micro  businesses  and can be  made for  working capital:  The                                                              
Small Business  Economic Development  Loan Fund (SBED),  the Rural                                                              
Development Initiative  Fund, and the Alaska Microloan  Fund.  She                                                              
relayed that the  DED-INV has been working with  the U.S. Economic                                                              
Development Administration  (EDA) to  obtain $5 million  in grants                                                              
to  recapitalize  the SBED.    She  noted that  Alaska  Industrial                                                              
Development and Export  Authority (AIDEA) has agreed  to provide a                                                              
$1 million  match for this grant.   She continued to  explain that                                                              
the  DED-INV   also  administers   the  Commercial   Fishing  Loan                                                              
Program,  which is  designed to  assist  fisheries and  commercial                                                              
fishing operations  across the  state.   The divisions   staff has                                                              
been fielding  a large number of  inquiries from Alaskans  and has                                                              
been providing information  about the DED-INVs  programs,  as well                                                              
as the  PPP, the SBA loan  programs, general economic  development                                                              
council programs, and the AIDEA program.                                                                                        
                                                                                                                                
3:34:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN   questioned  whether  DED-INV   will  give                                                              
current loan  holders any  forbearance on  payments owed  and what                                                              
kind of communications should be expected from the department.                                                                  
                                                                                                                                
COMMISSIONER ANDERSON deferred to Jim Anderson                                                                                  
                                                                                                                                
3:35:59 PM                                                                                                                    
                                                                                                                                
JIM ANDERSON, Deputy  Director, Division of  Economic Development,                                                              
Department   of  Commerce,  Community   &  Economic   Development,                                                              
encouraged  Representative Hannans   constituents  to contact  him                                                              
directly to work  on a loan restructure that can  get them through                                                              
this time.   He noted  that the  Division of Economic  Development                                                              
is currently working  with hundreds of Alaskans who  have the same                                                              
concerns.                                                                                                                       
                                                                                                                                
3:36:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN  sought to clarify whether  her constituents                                                              
should  contact  Mr.  Anderson  to discuss  a  loan  extension  or                                                              
forbearance on their loans.  She asked if that is correct.                                                                      
                                                                                                                                
MR. ANDERSON  confirmed that.   He  explained that each  situation                                                              
is different, adding  that the goal is to restructure  the loan to                                                              
offer  the best  chance  of  success.   He  said the  division  is                                                              
finding  that  if  a  business   is  seasonal,  the  loan  can  be                                                              
restructured  to where  payment  is not  due  until after  another                                                              
full season of business  is completed.  He added  that any cost or                                                              
fees  associated  with  restructuring  loans has  been  waved  and                                                              
encouraged loan holders to contact the division.                                                                                
                                                                                                                                
REPRESENTATIVE HANNAN  asked how  people can contact  the Division                                                              
of Economic Development.                                                                                                        
                                                                                                                                
MR. ANDERSON  shared the  following phone number:  1-800-478-5626.                                                              
He instructed callers to ask for a loan officer.                                                                                
                                                                                                                                
3:38:34 PM                                                                                                                    
                                                                                                                                
CHAIR SPOHNHOLZ  asked for  the current number  of loans  and loan                                                              
officers.                                                                                                                       
                                                                                                                                
MR.  ANDERSON said  they are  administering 2,000  loans and  have                                                              
seven  loan officers  on staff.   He noted  that  they are in  the                                                              
process of hiring three new officers.                                                                                           
                                                                                                                                
3:39:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STORY  asked  for   the  typical  wait  time  that                                                              
callers should expect.                                                                                                          
                                                                                                                                
MR. ANDERSON  reported that the wait  time is a matter  of minutes                                                              
before  they  get  a  return  call.   He  said  people  have  been                                                              
experiencing 15  minutes at  the most.   He further noted  that if                                                              
an applicant  submits all  the required  information, the  request                                                              
will generally  be processed  in 14-21  days or sooner,  depending                                                              
on how responsive he or she is.                                                                                                 
                                                                                                                                
3:41:13 PM                                                                                                                    
                                                                                                                                
CHAIR  SPOHNHOLZ asked  if the  Division  of Economic  Development                                                              
administers the Commercial Fishing Loan Program.                                                                                
                                                                                                                                
MR. ANDERSON answered yes.                                                                                                      
                                                                                                                                
3:41:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DAN  ORTIZ,  Alaska State  Legislature,  asked  if                                                              
DCCED would be  involved in distributing the $100  million that is                                                              
slated for Alaska's fishing industry relief.                                                                                    
                                                                                                                                
MR. ANDERSON deferred to Commissioner Anderson.                                                                                 
                                                                                                                                
COMMISSIONER  ANDERSON said  the  method of  distribution for  the                                                              
economic  stimulus  for  Alaskan   fisheries  is  currently  under                                                              
discussion.   She offered her belief  that an initial idea  was to                                                              
administer  the funding  through  the  Northwest marine  fisheries                                                              
commission; however,  the department  is advocating for  the state                                                              
to distribute  the funds.   She offered to  follow up with  a more                                                              
 up-to-date answer to the requested information.                                                                                
                                                                                                                                
3:43:19 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  ANDERSON  resumed   her  presentation  on  slide  6,                                                              
titled   AIDEAs    AK  SAFE  Program,    which  read   as  follows                                                              
[original punctuation provided]:                                                                                                
                                                                                                                                
     On March  27th, the AIDEA  Board created the  Sustaining                                                                 
     Alaska's Future Economy Guaranty Program (AK SAFE):                                                                      
                                                                                                                              
     ?  In collaboration  with Alaska's  banks and  financial                                                                   
     institutions,  AIDEA will  provide a  loan guarantee  of                                                                   
     up to $1M per borrower.                                                                                                    
                                                                                                                                
     ? The  objective of  the program  is to enable  Alaska's                                                                   
     banks   and  financial   institutions   to   immediately                                                                   
     provide   additional   capital  to   Alaska   businesses                                                                   
     through  their existing relationships  as they  continue                                                                   
     to manage terms.                                                                                                           
                                                                                                                                
        The  proceeds  of any  loans  guaranteed  under  this                                                                   
     program may  be used for  any working capital  purposes.                                                                   
     ? All  Alaskan-based businesses  impacted by the  COVID-                                                                   
     19  disaster with  an  existing secured  loan  agreement                                                                   
     are eligible.                                                                                                              
                                                                                                                                
        Businesses  will  be  able   to  apply  for  AK  SAFE                                                                   
     guaranty   by   first  speaking   with   their   lending                                                                   
     institution.                                                                                                               
                                                                                                                                
COMMISSIONER  ANDERSON added  that  in addition  to  AK SAFE,  the                                                              
AIDEA  board established  the  Emergency  Loan Guarantee  Program,                                                              
which  provides  emergency  loans   to  qualified  businesses  and                                                              
nonprofit organizations.   The program  is intended  to complement                                                              
federal emergency  loan programs, such  as the PPP and  EIDL.  She                                                              
further  explained that  the AIDEA  board  also adopted  temporary                                                              
emergency regulations  to enable  [indisc.] provide  direct relief                                                              
to  Alaskan  businesses  suffering  the economic  effects  of  the                                                              
COVID-19 pandemic.                                                                                                              
                                                                                                                                
3:45:24 PM                                                                                                                    
                                                                                                                                
CHAIR SPOHNHOLZ  pointed out that  there is $290 million  in small                                                              
business  relief coming from  the federal  government courtesy  of                                                              
the CARES  Act.  She  recounted the sentiment  that loans  are not                                                              
an ideal  solution  to some of  the financial  problems that  many                                                              
small businesses  are facing,  because they wont   be able  to pay                                                              
back those  loans with  uncertain revenue for  some time  into the                                                              
future.   She  asked  if DCCED  is  considering  grants for  small                                                              
businesses.                                                                                                                     
                                                                                                                                
COMMISSIONER  ANDERSON explained  that when  the department  began                                                              
designing  programs   to  meet   the  needs  of   individuals  and                                                              
businesses  that could  not  access the  SBA  loan programs,  they                                                              
were  operating under  former federal  guidelines.   However,  she                                                              
said  that  under  current  federal  guidance  the  department  is                                                              
looking at incorporating  a forgiveness clause into  the emergency                                                              
loan  program to  allow  for a  significant  amount  of the  loans                                                              
could  be forgiven     ultimately  operating like  a  grant.   She                                                              
acknowledged  that  they understand  the  needs of  businesses  in                                                              
Alaska,  especially in  rural Alaska  where people  are having  an                                                              
extremely difficult  time.   Ultimately, she  said, their  goal is                                                              
to implement  a program  that can  provide a  combination  of both                                                              
loans and grants.                                                                                                               
                                                                                                                                
3:47:31 PM                                                                                                                    
                                                                                                                                
CHAIR SPOHNHOLZ  asked when the  loan provisions would  be updated                                                              
to  include a  forgiveness  clause.   She  recommended getting  it                                                              
established   expeditiously  and   distributing  the   information                                                              
widely  so  people  in the  small  business  community  understand                                                              
their options.                                                                                                                  
                                                                                                                                
COMMISSIONER ANDERSON agreed.  She deferred to Alan Weitzner.                                                                   
                                                                                                                                
3:48:01 PM                                                                                                                    
                                                                                                                                
ALAN  WEITZNER,   Chief  Investment  Officer,   Alaska  Industrial                                                              
Development  and   Export  Authority,  explained  that   AIDEA  is                                                              
working  with  Commissioner  Anderson   to  issue  a  request  for                                                              
proposals  from   Alaskas   financial  institutions   on  ways  of                                                              
implementing  a direct lending  program.  He  noted that  they are                                                              
currently trying  to determine  the specific  terms.   He reported                                                              
that   they   anticipate   implementing   a   program   with   the                                                              
aforementioned  changes and  announcing it  to Alaskan  businesses                                                              
within the next two weeks.                                                                                                      
                                                                                                                                
CHAIR  SPOHNHOLZ  applauded  that and  asked  which  organizations                                                              
AIDEA has  been working  with to gather  input on the  development                                                              
of that process.                                                                                                                
                                                                                                                                
MR.   WEITZNER   stated   that   AIDEA   has   been   specifically                                                              
communicating with  national institutions as a primary  vehicle to                                                              
understand the current  demand, needs, and requirements.   He said                                                              
they  have  also been  speaking  directly  with over  100  Alaskan                                                              
businesses to understand  their specific requirements  through the                                                              
AK SAFE  program.   He pointed  out that  the results  of the  new                                                              
program  have come  from  identifying issues  that  are not  being                                                              
addressed   for   Alaskas    businesses        specifically,   the                                                              
seasonality of those businesses.                                                                                                
                                                                                                                                
3:50:07 PM                                                                                                                    
                                                                                                                                
CHAIR  SPOHNHOLZ  asked  if  they have  been  working  with  local                                                              
economic development organizations.                                                                                             
                                                                                                                                
MR.  WEITZNER said  they  have been  working  with  DCCED and  Jim                                                              
Anderson  with the small  business and  economic development  loan                                                              
program; however,  they have not  been in direct contact  with the                                                              
community economic development councils.                                                                                        
                                                                                                                                
COMMISSIONER  ANDERSON noted  that  her team,  through the  Alaska                                                              
development  team, is  in contact  with  the economic  development                                                              
organizations.   Additionally, they worked closely  with the small                                                              
business development  center, as well as many  other organizations                                                              
throughout the  state.  She reiterated  that people in  Alaska are                                                              
in dire need.   She offered her belief that the  program will go a                                                              
long way  in helping Alaskans.   She added  that the  program will                                                              
have a    ural set-asideto    ensure that disadvantaged  people in                                                              
rural Alaska  can access  [indisc.] the  funding without  being in                                                              
competition with  people who have sophisticated  telecommunication                                                              
systems.   She said their  goal is for the  funds to reach  all of                                                              
Alaska and all sectors.                                                                                                         
                                                                                                                                
3:52:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FIELDS  surmised that the department  is channeling                                                              
$750,000   in   grants   through   Alaska   Regional   Development                                                              
Organizations  (ARDORs).   He  said it  seems  illogical that  the                                                              
department  is effectively  standing  up another  forgivable  loan                                                              
program,  which is  similar to  the PPP.   He  offered his  belief                                                              
that the  difference between  the two is  the lag time  associated                                                              
with designing  a new  program and a  degree of uncertainty  about                                                              
the competitiveness  of the  rates that the  program will  be able                                                              
to  offer.   He questioned  the advantage  of focusing  on a  loan                                                              
program  with questionable  forgiveness  when  the department  has                                                              
clear legislative authority to issue grants.                                                                                    
                                                                                                                                
COMMISSIONER ANDERSON  maintained that they are working  under new                                                              
federal  guidance to  design the  emergency loan  program to  meet                                                              
those needs.   She said its   difficult to responsibly  direct the                                                              
funds to  viable entities  that will  use the  funds as  they were                                                              
intended  to  offset  COVID-19  expenses.    She  stated  that  by                                                              
utilizing  a  program  that  was  already  under  development  and                                                              
adding  provisions  to  effectively  forgive  the  loan  based  on                                                              
specific  criteria, it  will essentially  be   a granting  avenue                                                               
that the  department can  use to quickly  distribute funds  to all                                                              
areas  of the  state in  a responsible  manner.   She offered  her                                                              
belief that  the recently  appropriated $750,000  is an  excellent                                                              
idea.   She added  that it  will be  helpful to  work with  ARDORs                                                              
within the community to help people prepare for the loans.                                                                      
                                                                                                                                
3:56:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FIELDS  noted that $750,000  is tiny sum  of money.                                                              
He reiterated that  setting up a new program  that is structurally                                                              
similar  to a  federal program  does not  make sense.   He  opined                                                              
that  it  will  not be  faster  than  using  existing  legislative                                                              
authority that  was designed to  {indisc.] the CARES  Act funding.                                                              
He reported  hearing from  many small businesses  that have  had a                                                              
hard time  working with  their financial  institutions to  tap the                                                              
PPP.    He  suspected  that they  would  have  a  similar  problem                                                              
accessing  state funds.   Furthermore, he  reported that  Northrim                                                              
Bank  is the  only bank  that  is helping  people  who dont   have                                                              
existing  loans.    He  suggested  that  this  gets  back  to  the                                                              
inherent limitations  of loans.   He  said,  forgivable  loans are                                                              
great, but they arent a panacea.                                                                                                
                                                                                                                                
COMMISSIONER  ANDERSON said  she shares  the same  concerns.   She                                                              
noted that  Mr. Weitzner is addressing  them by sending  a request                                                              
for proposals  to all financial  institutions within the  state of                                                              
Alaska    both banks and credit  unions.  She explained  that they                                                              
are  in  the  process  of reviewing  the  proposals  now,  with  a                                                              
specific  focus  on a  quick  and  timely application  process  so                                                              
Alaskans can  swiftly access the funds.   She said they  will have                                                              
more information to provide on that program next week.                                                                          
                                                                                                                                
3:59:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FIELDS  observed that of the $300  million allotted                                                              
to DCCED  in the  RPL, between  $150-250 million  is allocated  to                                                              
AIDEA for  the emergency loan guarantee  program.  He  inquired as                                                              
to how the rest of the funds would be used.                                                                                     
                                                                                                                                
COMMISSIONER  ANDERSON  offered  her understanding  that  $750,000                                                              
would go  from DCCED to  ARDORs and the  remaining funds  would be                                                              
allocated to  different programs  within AIDEA  and DED-INV.   She                                                              
added that  they intend  on utilizing  the most effective  vehicle                                                              
to distribute the  funds quickly and at the lowest  possible cost.                                                              
She said  their goal is  to  beat what the  SBA had in  their cost                                                              
structure.                                                                                                                      
                                                                                                                                
4:01:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN  asked if AIDEA has contemplated  a specific                                                              
segment of  Alaskas  business  economy    the cannabis  industry -                                                              
that  cannot utilize  Alaskas  financial  institutions because  of                                                              
banking laws.                                                                                                                   
                                                                                                                                
MR.  WEITZNER said  the RFP  asked respondents  to disclose  their                                                              
ability to  address the  cannabis industry for  loan support.   He                                                              
explained  that they  will have  a more informed  answer once  all                                                              
the responses  have been  evaluated.  He  offered his  belief that                                                              
this issue  may need  to be tackled  through another  program that                                                              
directly addresses the cannabis industry.                                                                                       
                                                                                                                                
4:03:44 PM                                                                                                                    
                                                                                                                                
CHAIR  SPOHNHOLZ questioned  whether the  RFP process  for the  AK                                                              
SAFE program  will allow  for multiple  lenders to participate  in                                                              
the program.                                                                                                                    
                                                                                                                                
MR. WEITZNER  stated that ultimately,  the goal is to have  one or                                                              
more financial  institutions involved;  however, it comes  down to                                                              
providing   funding   to   Alaskas    businesses   and   nonprofit                                                              
organizations at  the lowest  cost.  He  said the top  priority is                                                              
to ensure  that the specific  program operator would  provide full                                                              
access to  the entire state.   Another  condition, he said,  is to                                                              
identify subsectors  for specific  rural community involvement  to                                                              
grant them equal access.                                                                                                        
                                                                                                                                
4:05:42 PM                                                                                                                    
                                                                                                                                
CHAIR  SPOHNHOLZ  asked for  the  plan  to distribute  the  ARDORs                                                              
fund.                                                                                                                           
                                                                                                                                
COMMISSIONER ANDERSON said she does not know.                                                                                   
                                                                                                                                
CHAIR  SPOHNHOLZ echoed  Representative  Fields' sentiments  about                                                              
the $750,000 allocation.   She said that amount of  money will not                                                              
go very  far.  She  urged the involvement  of business  experts in                                                              
each community.   She  further clarified  that the governor  makes                                                              
budget  requests   while  the   legislature  is  responsible   for                                                              
appropriations.                                                                                                                 
                                                                                                                                
4:06:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STORY  asked for the  number of loan  requests that                                                              
could not be fulfilled.                                                                                                         
                                                                                                                                
COMMISSIONER  ANDERSON  said that  data  is  not available.    She                                                              
noted that the  Division of Insurance, DCCED, can  help people get                                                              
access to working capital.                                                                                                      
                                                                                                                                
REPRESENTATIVE  STORY  asked  why   loan  applications  are  being                                                              
denied.                                                                                                                         
                                                                                                                                
COMMISSIONER  ANDERSON said  she does  not know.   She offered  to                                                              
follow up on the requested information.                                                                                         
                                                                                                                                
REPRESENTATIVE  STORY questioned  whether the  list of people  who                                                              
were successful in  receiving loans could be produced.   She asked                                                              
if that is confidential.                                                                                                        
                                                                                                                                
4:12:16 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  ANDERSON said she  cannot access  data from  the SBA                                                              
programs; however,  she could follow up with  information form the                                                              
loan programs administered by her department.                                                                                   
                                                                                                                                
4:12:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STORY  asked if  the  department  could follow  up                                                              
with a list of people who are awarded the AIDEA grants.                                                                         
                                                                                                                                
CHAIR  SPOHNHOLZ  in response  to  Representative  Story, said  it                                                              
sounds  like  the  commissioner   will  have  to  speak  with  the                                                              
Department  of Law  about  the legality  of  sharing  names.   She                                                              
pointed  out  that  there  could   be  issues  of  confidentiality                                                              
associated with publicly  sharing business loans.   She added that                                                              
it would  be interesting  to know how  many loans were  allocated,                                                              
the  total value  of those  loans,  and in  what communities  they                                                              
were distributed.                                                                                                               
                                                                                                                                
COMMISSIONER ANDERSON  said those statistics would  be provided as                                                              
part of the RFP process.                                                                                                        
                                                                                                                                
4:14:10 PM                                                                                                                    
                                                                                                                                
LORI WING-HEIER,  Director, Division  of Insurance,  Department of                                                              
Commerce,   Community   &  Economic   Development,   resumed   the                                                              
presentation  on slide  7, titled   Division of  Insurance.    She                                                              
stated  that  the  Division  of   Insurance  proactively  provided                                                              
guidance to  insurers and reduced  auto and other  insurance costs                                                              
for  consumers  by  instituting  measures, such  as  waving  cost-                                                              
sharing for  respiratory illness diagnostic  testing; liberalizing                                                              
telehealth  benefits  to allow  for  unprecedented  flexibilities;                                                              
prohibiting   cancellation   of   insurance   contracts   due   to                                                              
nonpayment  until June  1, 2020;  suspending  deadlines for  claim                                                              
filings  or  appeals  by  insurers;  and  directing  property  and                                                              
casualty insurers  to adjust premiums  due to reduced  exposure or                                                              
risk  profiles during  the pandemic.    Furthermore, the  division                                                              
worked  with  insurers  to keep  employees  on  employee  benefits                                                              
plans  regardless of  the  hours that  they  work in  the wake  of                                                              
layoffs.  The  Division of Insurance also  waived preauthorization                                                              
and retrospective  audits for health care providers  to allow them                                                              
to   concentrate  on   treating  patients.     Additionally,   she                                                              
explained  that CMS  awarded  the division  more  money than  they                                                              
anticipated  for the  reinsurance  program.   She  said the  extra                                                              
money was put into  both the 2020 and 2021 program  to ensure that                                                              
members would  not bear  the cost  of a  large number of  COVID-19                                                              
claims  the   following  year.     She  further  noted   that  the                                                              
divisions  website  provides information  on what each  carrier is                                                              
doing  in  respect  to  COVID-19,  as  well  as  frequently  asked                                                              
questions  and information  on  specific  insurance coverage  that                                                              
could  be useful during  this pandemic.   She  expressed her  hope                                                              
that people  would return  to work and  that these measures  wont                                                               
be necessary in the future.                                                                                                     
                                                                                                                                
4:19:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   JOSEPHSON   sought   clarification  on   how   to                                                              
interpret  the  Treasury Secretarys   guidance  regarding  medical                                                              
expenses.   He questioned whether  the state could use  money from                                                              
the CARES  Act funding to  pay the medical  bill of a  patient who                                                              
lost his or her insurance due to layoffs.                                                                                       
                                                                                                                                
MS. WING-HEIER  offered her understanding  that CMS and  the Trump                                                              
administration  said  that  costs   for  the  uninsured  would  be                                                              
covered;  however, its   not  clear whether  the  claims would  be                                                              
paid for by the CARES Act or another funding mechanism.                                                                         
                                                                                                                                
4:21:04 PM                                                                                                                    
                                                                                                                                
CHAIR  SPOHNHOLZ sought  further  clarification  on the  differing                                                              
rates for telehealth.                                                                                                           
                                                                                                                                
MS. WING-HEIER pointed  out that primary care physicians  who, due                                                              
to COVID-19, have  been forced to use telehealth  to practice from                                                              
home,  still have  overheard and  staffing costs.   She  explained                                                              
that the  Division of  Insurance considered  paying them  a higher                                                              
rate than  normal telehealth providers.   She said their  goal was                                                              
to  stabilize their  balance sheet  and  allow them  to come  back                                                              
with their full staff, equipment, and clinics going forward.                                                                    
                                                                                                                                
CHAIR  SPOHNHOLZ noted  that Alaskan  health  care providers  that                                                              
have  been  reticent   of  using  telehealth  in   the  past  have                                                              
transitioned  into  that  mechanism  of care  delivery  under  the                                                              
current circumstances.    She expressed her  appreciation  for the                                                              
flexibility  that has allowed  those providers  to bill  at higher                                                              
rates, as  they still  have to pay  for nurses and  administrative                                                              
personnel.   She asked if there  has been any discussion  with the                                                              
Trump administration  or Alaskas   congressional delegation  about                                                              
the Employee Retirement  Income Security Act (ERISA)  plans in the                                                              
state of Alaska that do not cover telehealth.                                                                                   
                                                                                                                                
COMMISSIONER  ANDERSON acknowledged  that members  of trusts  have                                                              
called the  division to ask  why their  benefits are not  as broad                                                              
as either  the insured  market or Alaska  Care.  Nonetheless,  she                                                              
said  she has  not discussed  that  matter with  either the  Trump                                                              
administration or the congressional delegation.  She                                                                            
                                                                                                                                
CHAIR SPOHNHOLZ  recounted communications  from Alaskans  who have                                                              
had trouble  getting coverage  for their  telehealth visits.   She                                                              
encouraged  addressing that  issue with  the Trump  administration                                                              
and the states congressional delegation.                                                                                        
                                                                                                                                
4:25:00 PM                                                                                                                    
                                                                                                                                
SARA  CHAMBERS,  Director, Division  of  Corporations,  Businesses                                                              
and Professional  Licensing, Department  of Commerce,  Community &                                                              
Economic  Development,  resumed   the  presentation  on  slide  8,                                                              
titled   Division  of  Corporations,  Business,  and  Professional                                                              
Licensing.    She proceeded  to address the  actions taken  by the                                                              
Division  of Corporations,  Business,  and Professional  Licensing                                                              
(CBPL), including  suspending fees  for new and renewing  business                                                              
licenses;  allowing  payment  plans   for  professional  licenses;                                                              
launching    more   online    applications    for   health    care                                                              
professionals;  collecting   COVID-19  health   mandate  violation                                                              
complaints for Unified  Command; and establishing  the CBPL COVID-                                                              
19 webpage,  which incudes guidance  produced by the  division and                                                              
its boards.  The  CBPL also issued three emergency  orders, one of                                                              
which extends  the renewal  deadline for  certified nurse  aids to                                                              
July  2020.   The two  additional emergency  orders established  a                                                              
payment extension  for all  consent agreements  that were  in good                                                              
standing  and extended  the  life  of nursing  home  administrator                                                              
provisional licenses.                                                                                                           
                                                                                                                                
4:30:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN sought  clarification  the  type of  health                                                              
mandate  violation complaints  that  the division  is  addressing.                                                              
She  also  asked for  the  volume  of complaints  that  have  been                                                              
received.                                                                                                                       
                                                                                                                                
MS.  CHAMBERS stated  that the  CBPL  offered to  be a  collection                                                              
point  for  all  public  complaints.     She  explained  that  the                                                              
divisions   professional  investigators  handle  any  confidential                                                              
information  and  that they  are  screening for  information  that                                                              
falls within  Title 8 [Business  and Professions], which  would be                                                              
within  the divisions   jurisdiction.   She  explained that  every                                                              
complaint is  entered into  a spreadsheet,  which is then  triaged                                                              
by the  Department  of Law.   She reported  that  in the last  few                                                              
weeks they have received over one thousand complaints.                                                                          
                                                                                                                                
4:32:10 PM                                                                                                                    
                                                                                                                                
CHAIR  SPOHNHOLZ said  she  expects the  number  of complaints  to                                                              
dramatically increase  as businesses  reopen in the  coming weeks.                                                              
She asked  what  the Department  of Law  plans to  do in terms  of                                                              
enforcing the health mandates.                                                                                                  
                                                                                                                                
MS. CHAMBERS replied  that would be an excellent  question for the                                                              
Department  of Law  to explain  how they  are prioritizing  public                                                              
health and  safety issues from those  that are nonessential.   She                                                              
explained  that the divisions   primary focus  is educating  their                                                              
licensees  about  the  laws,  as mandates  are  being  updated  in                                                              
correspondence with CDC guidelines.                                                                                             
                                                                                                                                
4:34:29 PM                                                                                                                    
                                                                                                                                
MS.  CHAMBERS  directed   attention  to  slide  9,   titled   CBPL                                                              
Professional Licensing  Boards,  which  read as follows  [original                                                              
punctuation provided]:                                                                                                          
                                                                                                                                
        The  health  care  boards'   chairs  meet  weekly  to                                                                 
     discuss COVID-19 matters and the Health Mandates.                                                                          
                                                                                                                                
       The  Board of Pharmacy  extended the renewal  deadline                                                                 
     from   June   to  September;   and   adopted   emergency                                                                   
     regulations  expanding  the tasks  of  a pharmacy  tech,                                                                   
     decreasing   unnecessary  administrative   requirements,                                                                   
     streamlining   application  and  renewal   requirements,                                                                   
     expanding shared  pharmacy services functions,  allowing                                                                   
     for  temporary   relocations,   and  allowing  for   the                                                                   
     distribution   of   sufficient   medication   to   avoid                                                                   
     patients making multiple trips to the pharmacy.                                                                            
                                                                                                                                
        The Board  of Nursing  adopted emergency  regulations                                                                 
     allowing successful  LPNs, RNs, or APRNs to  apply for a                                                                   
     courtesy   license;  and  waived   fees  for   temporary                                                                   
     permits and emergency courtesy licenses.                                                                                   
                                                                                                                                
       The  State Medical  Board created  new regulations  on                                                                 
     emergency courtesy  licenses to waive  the collaborative                                                                   
     plan agreement requirements for physician assistants.                                                                      
                                                                                                                                
        Many   boards  are   altering  continuing   education                                                                   
     requirements for this year.                                                                                                
                                                                                                                                
MS. CHAMBERS  concluded by  stating that the  actions of  the CBPL                                                              
are  efforts to  ensure that  Alaskan  professionals can  maintain                                                              
their  licenses  and continue  working  through the  pandemic,  as                                                              
well as to ensure  that health care services  are available across                                                              
the state.                                                                                                                      
                                                                                                                                
4:41:13 PM                                                                                                                    
                                                                                                                                
COMMISSIONER ANDERSON  continued to slide 10, titled   Division of                                                              
Community and Regional  Affairs,  which read as  follows [original                                                              
punctuation provided]:                                                                                                          
                                                                                                                                
     Actions by the DCRA Division:                                                                                            
                                                                                                                                
     ?  Created   the  COVID-19  Resources   for  Communities                                                                   
     website.                                                                                                                   
                                                                                                                                
        Actively  participating   in  weekly  teleconferences                                                                   
     with  the  Alaska  Regional   Development  Organizations                                                                   
     (ARDORs)  regarding  the  economic   impact  across  the                                                                   
     state.                                                                                                                     
                                                                                                                                
     ?  Division   staff  have  spoken  directly   with  many                                                                   
     Alaskan communities  and local governments  about COVID-                                                                   
     19  management,  emergency   regulations,  and  concerns                                                                   
     about availability of supplies.                                                                                            
                                                                                                                                
     ? Division  is working with  communities to  ensure they                                                                   
     are ready to receive the CARES act funds.                                                                                  
                                                                                                                                
     ?  Working  with  FEMA  on  their  established  COVID-19                                                                   
     Interagency Federal Partners Task Force.                                                                                   
                                                                                                                                
COMMISSIONER  ANDERSON  noted  that the  DCRAs   local  government                                                              
specialist  team has provided  the DHSS  resource request  process                                                              
for COVID-19  response to  many rural  communities and  also asked                                                              
the Alaska Native  Tribal Health Consortium for  information about                                                              
where  they can  request  supplies  for quarantine  facilities  in                                                              
their areas.                                                                                                                    
                                                                                                                                
4:44:09 PM                                                                                                                    
                                                                                                                                
COMMISSIONER ANDERSON  continued to slide 11, titled   Division of                                                              
Banking  and  Securities.     She  stated  that  the  Division  of                                                              
Banking  and  Securities,  DCCED,  acted quickly  to  ensure  that                                                              
banks and credit  unions could roll out the PPP and  EIDL funds to                                                              
Alaskan businesses  as efficiently as possible.   She relayed that                                                              
reporting deadlines  were extended  and the requirement  to obtain                                                              
a  branch  license  was  waived   for  mortgage  loan  originators                                                              
working from  home.   Additionally, key  information for  mortgage                                                              
loan  originators, extensions,  on  deadlines, and  more was  made                                                              
available  on the  divisions  website.   She  turned attention  to                                                              
slide 12,  titled  Alcohol  and Marijuana  Control Office,   which                                                              
read as follows:                                                                                                                
                                                                                                                                
     Actions taken by the ABC and MCB                                                                                         
     ?  The  Alcoholic  Beverage   Control  Board  (ABC)  has                                                                   
     allowed   curbside  and  home   delivery  of   alcoholic                                                                   
     beverages in certain circumstances.                                                                                        
                                                                                                                                
      ? The Marijuana Control Board (MCB) has allowed for                                                                       
     curbside delivery of marijuana products.                                                                                   
                                                                                                                                
        ? The ABC passed a motion to allow distillers to                                                                        
     produce ethanol alcohol for use in hand sanitizers.                                                                        
                                                                                                                                
      ? The ABC and MCB have extended TAPS/Alcohol Server                                                                       
     Cards and Marijuana Handler Permits.                                                                                       
                                                                                                                                
4:47:02 PM                                                                                                                    
                                                                                                                                
COMMISSIONER  ANDERSON  continued  to slide  13,  titled   Looking                                                              
Forward.    She  said in  these uncertain  times, predicting  what                                                              
the  future weeks  and  months will  bring  and  what actions  are                                                              
necessary  for DCCED is  difficult.   She added  that her  team is                                                              
prepared  to   launch  into  action   in  whatever   direction  is                                                              
necessary  to best  support Alaskan  businesses  and the  economy.                                                              
Currently,  she  said,  the  departments    future  plans  include                                                              
continuing  to work  closely with  state and  federal partners  in                                                              
many areas, such  as the coordination for economic  mitigation and                                                              
recovery   programs   and   funds    and   the   development   and                                                              
implementation  of programs to  help residents, small  businesses,                                                              
and   industries.     The  department   will   also  continue   to                                                              
communicate  with  Alaskas   communities  and  community  leaders,                                                              
mayors, city  and borough managers,  other state  departments, and                                                              
unified command.   Furthermore, DCCED will continue  to search for                                                              
additional  funding   assistance  programs  that  could   be  made                                                              
available to Alaskan businesses.                                                                                                
                                                                                                                                
4:50:54 PM                                                                                                                    
                                                                                                                                
CHAIR SPOHNHOLZ  encouraged the  department to consider  grants as                                                              
well as  expediting  loans to small  businesses.   She said  small                                                              
businesses   across  Alaska   need  to   be  held   as  close   to                                                              
economically harmless  as possible  given the generous  provisions                                                              
of the  federal CARES Act.   She offered  her belief  that keeping                                                              
small  businesses  in business  despite  COVID-19  would keep  the                                                              
economy strong.   She  reiterated that  in this devastating  time,                                                              
Alaska should  be smart,  efficient, and  wise with its  resources                                                              
and preserving  the states   economic diversity.   She  noted that                                                              
DCCEDs   licensees  and  small  business  owners  are  essentially                                                              
frontline  workers in  preventing  the spread  of  COVID-19.   She                                                              
said supporting  and advising them  as they work to  safely reopen                                                              
Alaskas  economy  is important.  She suggested  providing training                                                              
and  additional  resources  to   businesses  and  licensees  about                                                              
health mandates and  methods to be part of the  solution, possible                                                              
in partnership with the Department of Health and Social Services                                                                
(DHSS), to harness the power of Alaskans.                                                                                       
                                                                                                                                
4:54:43 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Labor and Commerce Standing Committee meeting was adjourned at                                                                  
[4:54] p.m.                                                                                                                     

Document Name Date/Time Subjects
DCCED COVID-19 presentation before HL&C 04.29.2020.pdf HL&C 5/1/2020 3:15:00 PM
DCCED COVID19 Response