02/02/2010 01:00 PM House MILITARY & VETERANS' AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB291 | |
| HB292 | |
| HB274 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 274 | TELECONFERENCED | |
| *+ | HB 291 | TELECONFERENCED | |
| *+ | HB 292 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON MILITARY AND VETERANS' AFFAIRS
February 2, 2010
1:06 p.m.
MEMBERS PRESENT
Representative Carl Gatto, Chair
Representative Bob Lynn
Representative Jay Ramras
Representative Tammie Wilson
Representative Robert L. "Bob" Buch
Representative Scott Kawasaki
MEMBERS ABSENT
Representative John Harris
COMMITTEE CALENDAR
HOUSE BILL NO. 291
"An Act relating to the issuance of state-guaranteed revenue
bonds by the Alaska Housing Finance Corporation to finance
mortgages for qualifying veterans; and providing for an
effective date."
- HEARD AND HELD
HOUSE BILL NO. 292
"An Act relating to grants to victims of a disaster in this
state; and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 274
"An Act establishing August 7 as Purple Heart Day."
- MOVED HB 274 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 291
SHORT TITLE: GUARANTEED REVENUE BONDS FOR VETERANS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/19/10 (H) READ THE FIRST TIME - REFERRALS
01/19/10 (H) MLV, STA, FIN
02/02/10 (H) MLV AT 1:00 PM BARNES 124
BILL: HB 292
SHORT TITLE: GRANTS TO DISASTER VICTIMS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/19/10 (H) READ THE FIRST TIME - REFERRALS
01/19/10 (H) MLV, STA, FIN
02/02/10 (H) MLV AT 1:00 PM BARNES 124
BILL: HB 274
SHORT TITLE: ESTABLISHING PURPLE HEART DAY
SPONSOR(s): REPRESENTATIVE(s) DAHLSTROM, GARDNER, BUCH, KELLER,
PETERSEN, LYNN, GATTO, TUCK, DOOGAN, THOMAS, HAWKER, GUTTENBERG,
RAMRAS, FAIRCLOUGH, JOHNSON, MILLETT, HERRON
01/08/10 (H) PREFILE RELEASED 1/8/10
01/19/10 (H) READ THE FIRST TIME - REFERRALS
01/19/10 (H) MLV, STA
02/02/10 (H) MLV AT 1:00 PM BARNES 124
WITNESS REGISTER
DAN FAUSKE, CEO/Executive Director
Alaska Housing Finance Corporation (AHFC)
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Introduced HB 291 on behalf of the House
Rules Standing Committee and the governor.
JOE DUBLER, Chief Financial Officer/Finance Director, Alaska
Housing Finance Corporation (AHFC)
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
291.
McHUGH PIERRE, Deputy Commissioner
Department of Military & Veterans' Affairs (DMVA)
Fort Richardson, Alaska
POSITION STATEMENT: Presented HB 292, and answered questions.
MICHAEL O'HARE, Deputy Director
Division of Homeland Security/Emergency Management (DHS&EM)
Department of Military & Veterans Affairs (DMVA)
Fort Richardson, Alaska
POSITION STATEMENT: Assisted in the presentation of HB 292, and
answered questions.
REPRESENTATIVE BERTA GARDNER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Speaking as one of the prime sponsors of HB
274, indicated there is support for the bill by legislators and
members of the public.
ELLIE SICA, Intern
Representative Berta Gardner
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 274 on behalf of
Representative Berta Gardner, one of the prime sponsors.
TIM ARMSTRONG, Chief of Staff
Alaska Military Order of the Purple Heart
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 274.
VERDIE BOWEN, Director
Office of Veteran Affairs
Department of Military & Veterans' Affairs
Fort Richardson, Alaska
POSITION STATEMENT: Testified in support of HB 274.
MAJOR WILLIAM ALLEN, Commander
U. S. Marine Corps
Elmendorf Air Force Base, Alaska
POSITION STATEMENT: Testified in support of HB 274.
ACTION NARRATIVE
1:06:08 PM
CHAIR CARL GATTO called the House Special Committee on Military
and Veterans' Affairs meeting to order at 1:06 p.m.
Representatives Kawasaki, Tammie Wilson, Buch, Lynn, and Gatto
were present at the call to order. Representative Ramras
arrived as the meeting was in progress. Also in attendance was
Representative Gardner.
HB 291-GUARANTEED REVENUE BONDS FOR VETERANS
1:07:48 PM
CHAIR GATTO announced that the first order of business would be
HOUSE BILL NO. 291, "An Act relating to the issuance of state-
guaranteed revenue bonds by the Alaska Housing Finance
Corporation to finance mortgages for qualifying veterans; and
providing for an effective date."
1:08:38 PM
DAN FAUSKE, CEO/Executive Director, Alaska Housing Finance
Corporation (AHFC), Department of Revenue (DOR), informed the
committee that HB 291 is an act allowing the issuance of state
guaranteed revenue bonds by AHFC. The sale of these bonds is
mandated by federal law and requires a vote of the people and
unconditional backing by the state. In addition, the bonds are
exempt from federal income taxation. To date, the state has
issued $2.6 billion of veteran's bonds of which $338 million are
outstanding. He reminded the committee that the authorization
in 2002 was for $500 million and $95 million remains. Of the
amount issued, loans are $341 million and delinquencies are at
3.ll percent. In response to Chair Gatto, Mr. Fauske clarified
that 3.11 percent is a low delinquency rate and well below the
national average. He pointed out that there is no cost or cash
requirement for these bonds, simply state backing, and AHFC is
requesting a $600 million authorization to issue bonds after the
program is approved by the voters. The last time the program
was on the ballot, it was approved by about 72 percent of the
voters. In further response to Chair Gatto, he confirmed that
approval of the bonds is by a simple majority of voters. Mr.
Fauske stated that AHFC "has had to fight long and hard" to keep
these bonds and he expressed surprise that the bonds are not
accepted nationwide. Alaska is one of five states that continue
to issue veteran's bonds: Alaska, Oregon, California, Texas,
and Wisconsin. He opined that every state should issue these
bonds as "it's good for the state, it's good for our veterans,
it's a program that Alaska Housing Finance Corporation really
enjoys administering, and it just does a lot of good."
1:12:34 PM
MR. FAUSKE, in further response to Chair Gatto, said that the
abovementioned five states are the only states that have ever
participated in the program.
CHAIR GATTO remarked on the foreclosure market in other states.
MR. FAUSKE indicated that the foreclosure rates in California,
Michigan, Florida, and Nevada ware in double-digits.
1:13:48 PM
REPRESENTATIVE BUCH observed that these are exciting times in
many ways. He congratulated AHFC on its ability to use monies
to make monies. He then asked whether the federal bond market
is a healthy market.
MR. FAUSKE relayed that AHFC re-entered the market about six
months ago utilizing the national New Issue Bond Program (NIBP),
which has the Federal National Mortgage Association (Fannie Mae)
and the Federal Home Mortgage Corporation (Freddie Mac) buy
bonds. Through the NIBP, AHFC participated in the amount of
$193 million. He noted that another new program, the Tax Credit
Loan Program (TCLP) was disliked due to its limiting provisions
regarding the pre-payment of variable rate debt. He explained
AHFC's policy on variable rate debt. Returning to the bond
market, he said liquidity in the market has improved; in fact,
AHFC is now very competitive again, and its rate today is about
4.65 percent for first-time, tax-exempt, homebuyers. Mr. Fauske
assured the committee that AHFC is "back in play" and is looking
forward to increased activity. Actually, in the first ten
months of the calendar year 2009, AHFC purchased 240 loans with
a total principal balance of approximately $47 million.
Furthermore, AHFC interest rates became competitive around
September 2009, and loan activity increased with activity for
the last two months of 2009 being 189 loans purchased with a
total principal balance of approximately $40 million.
Additionally, 106 loan commitments were made in January 2010,
for approximately $23 million. Mr. Fauske anticipated a very
good year for AHFC if the Alaska economy stays healthy.
1:20:18 PM
REPRESENTATIVE BUCH asked if, during past difficult economic
times, the state required a vote of the people to approve bonds
issued by AHFC.
MR. FAUSKE responded that this is the only bond issued by AHFC
that requires a vote of the people. Other bonds are based on
the credit of the corporation or revenue bond activity. He
acknowledged that in the 1980's there was a state budget crisis
and shortfalls were internalized in the state. Only the
financial strength of the corporation let it recover from
14,000-15,000 [units] of "real estate owned (REO)" on its books.
However, he opined that the present situation was induced by
greed, the lack of oversight, and improperly secured loans. In
truth, the mortgage-back security market collapsed and because
AHFC was not participating in interest-only loans and adjustable
rate mortgages (ARMS), it currently sits in a premium position:
Alaska, with North Dakota and Wyoming, are last in the country
in the amount of foreclosures and delinquencies. Although
activity has slowed, there is not a drastic decline in the value
of homes and there is nothing forecast that is alarming to AHFC.
He re-stated the importance of jobs to the strength of the
housing industry. One oversight of the current recovery effort
is that the state housing corporations are refused federal
assistance because of their inability to access capital markets.
1:25:42 PM
REPRESENTATIVE BUCH reminded the committee that the state has
one diminishing pot of money impacting the state's revenue. He
expressed his concern that, over the long-term, the state [may
fail to] follow-through with the kind of vision that AHFC has
proven to be effective and profitable. Representative Buch said
he would like "to get some reports about how much money you have
made, you guys have done a phenomenal job [in the] last two
years." However, AHFC policies need to be substantiated in
order to get "buy-in" from the public.
1:27:11 PM
REPRESENTATIVE KAWASAKI asked whether there are other bonding
mechanisms that AHFC uses for the same purpose, and if so, what
they are.
MR. FAUSKE answered that, in addition to the bonds authorized by
the bill, AHFC has guaranteed bonds through two other programs.
All of these bonds are monies used to fund the various programs,
whether it is the tax-exempt program for the first-time
homebuyer, the taxable program for the first-time homebuyer,
conventional loans, or the rural loan portfolio. He further
explained that in a good year, AHFC is in the market for $400
million to $800 million annually. AHFC's task is to access
capital and buy mortgages from banks that are "paid off, through
people paying of their mortgage payment." Although a huge
responsibility, this business model is heavily scrutinized and,
with good fiduciary and fiscal oversight, AHFC successfully
serves as the secondary market. Furthermore, after the normal
programs, it is sometimes necessary to find additional funding
through grant programs administered through AHFC's planning
department such as federal HOME monies, Community Development
Block Grants (CDBG), the Special Needs Housing Grant Program
(SNHG), and a good mix of corporate dollars and federal monies
for disabled Alaskans, disabled veterans, and seniors. On this
subject, he warned that Alaska has a fast growing population of
seniors and there is a need to keep pace. He then pointed out
the positive impact of the energy rebate and weatherization
program that reduces energy costs and makes home ownership more
affordable for young citizens and seniors. Mr. Fauske observed,
"That [program] is having an amazing impact on [this] very
issue."
1:31:27 PM
REPRESENTATIVE KAWASAKI asked for the size of the first-time
homebuyer program at its inception. He also questioned whether
there was a time limit on the bond authorization.
MR. FAUSKE deferred the question to Mr. Dubler.
1:33:04 PM
JOE DUBLER, Chief Financial Officer/Finance Director, Alaska
Housing Finance Corporation (AHFC), Department of Revenue (DOR),
in response to Representative Kawasaki, opined that there is not
a time limit on the bond authorization. In the case of the
veteran's bond, there is a monetary limit on the federal
legislation of $100 million per year; thus the most the state
could fund is $100 million each year. Mr. Dubler anticipated
the authorization would last between four and five years.
1:34:03 PM
CHAIR GATTO opined there is confusion when the government bonds
for a bridge, a building, or a public project. The committee's
questions to the presenters are realistic for public
understanding that this is an authorization to bond on an "as
needed basis."
MR. FAUSKE agreed that most people may misunderstand;
furthermore, because the bill will be on an election ballot,
AHFC cannot promote its passage. Explaining "how the process
would work" will be limited to public service announcements.
MR. DUBLER recalled the voting history of veteran's bonds. In
1982, the voters authorized $400 million in bonds and in 1983,
$400 million were sold. He noted that there was a lot of
activity then, and many veterans qualified for the program.
Furthermore, veteran's programs have always been one of the best
performing programs in terms of low rates of delinquencies and
foreclosures. In 1983, the voters approved $500 million in
bonds and those were all issued that year. In 1984, the voters
approved $700 million in bonds, and in 1986 the voters approved
$600 million in bonds for a total of $1.7 billion in those four
years. He re-stated that AHFC has [$94.6] million remaining
from the 2002 authorization. In response to Chair Gatto, he
said the vote is typically 70 percent in support.
1:36:33 PM
MR. DUBLER, in response to Representative Kawasaki, indicated
that the current amount of veteran's mortgage program bonds
outstanding is $338 million and that amount represents four or
five different transactions. In further response, he confirmed
that [$94.6] million is left from 2002.
1:37:18 PM
CHAIR GATTO posed a scenario in which a veteran obtains a loan
and five years later wants to sell his house and "carry the
mortgage himself."
MR. DUBLER responded that some loans are assumable, with the
qualification that the new buyer would also have to be a
veteran.
MR. FAUSKE added that there is no requirement that the veteran
remain living in the home.
MR. DUBLER clarified that the veteran cannot rent the home and
then apply for another veteran's loan, but can get a second loan
if he sells the first home.
1:38:49 PM
REPRESENTATIVE BUCH assumed that the state patterns its program
after federal compliance requirements.
MR. DUBLER pointed out that the veteran's program is a loan
guarantee program that can be added to any one of AHFC's loans
to allow the financing of closing costs and a loan of a higher
amount than what would be available with a conventional loan.
1:39:27 PM
REPRESENTATIVE KAWASAKI asked for the total amount of money that
AHFC currently has that is not out to bond.
MR. FAUSKE explained that this is the one time AHFC comes before
the legislature for authorization. However, AHFC reports
annually on activity that is anticipated for the upcoming year
to the Joint Legislative Committee on Budget and Audit (JBUD).
AHFC is also authorized to come to the Joint Legislative
Committee on Budget and Audit for additional funds, although, he
could not recall if this was ever necessary.
MR. DUBLER, in further response to Representative Kawasaki, said
AHFC currently has approximately $3.1 billion in debt
outstanding for all of its programs including state capital
projects, the Atwood Building, all of the first-time homebuyer
programs, the multi-family programs, and veteran's programs. He
explained that the majority of the debt was for the first-time
homebuyer programs that are through the federal government and
authorized through the private-activity bond cap and the state
bond committee allocates the money to whatever entities issue
the bonds.
1:41:53 PM
CHAIR GATTO observed that the Alaska Commission on Postsecondary
Education is another very successful organization, along with
AHFC and the Alaska Permanent Fund Corporation. He asked for
the percentage of AHFC's return on equity.
MR. DUBLER remarked:
To look at return on equity of AHFC like you look at a
bank, with all the social programs that we support
with our capital budget and operating budget, doesn't
really make a lot of sense and we ... don't keep those
numbers .... I can calculate it for you and I can get
it to your office ... we haven't done one in years.
MR. FAUSKE offered that AHFC returns a substantial amount of
cash to the state every year. In response to Chair Gatto, he
confirmed that the corporation was
front-loaded in the 1980s with $1.8 billion from the state.
MR. DUBLER assured the committee that AHFC looks closely at its
net interest spread-which is the difference between the rate at
which it borrows and the rate at which it lends-and that
difference has been over 1 percent for many years, and was about
1.4 percent at AHFC's last board meeting. He concluded that
this percentage tells AHFC how well it is managing its debt and
mortgage portfolios; typically, state housing finance
corporations earn less than 1 percent.
1:44:23 PM
REPRESENTATIVE TAMMIE WILSON inquired as to the number of
veterans that stay in the state because of this program.
MR. FAUSKE estimated that there are 76,000 veterans in Alaska;
in fact, Alaska has the highest per capita number of veterans in
the nation.
MR. DUBLER opined that AHFC does not have any knowledge as to
whether veterans stay in the state because of this program,
although it may one of the "top three reasons."
CHAIR GATTO observed that soldiers know that Alaska welcomes the
military.
1:45:44 PM
REPRESENTATIVE BUCH related that the VA has an accurate count of
the number of veterans living in the state. He said this
program, and others, influence veterans to return to Alaska to
retire.
1:46:22 PM
MR. FAUSKE stressed that from a business perspective, veteran's
loans "stand out" with low foreclosures and low delinquencies.
He then offered to provide committee members with further
answers to questions at any time.
1:47:34 PM
REPRESENTATIVE KAWASAKI asked for Mr. Fauske's opinion as to why
this loan program has a low delinquency rate.
MR. FAUSKE explained that these loans often involve people with
established careers and job security. In addition, the interest
rate reduction is a condition of federal law as is "the tax-
exempt issuance of debt [that] is controlled by the [Internal
Revenue Service (IRS)] in this country, and the federal
government." Historically, the taxable rate versus the tax-
exempt rate is a 100 basis points spread in difference, which is
1 percentage point of interest. Thus a conventional rate in
today's market might be 5 percent, but a tax-exempt rate might
be 4 percent, and this interest rate incentive helps drive down
the cost of the mortgage for the veteran. For this, and a
variety of other reasons, it is a "very high-performing, very
successful loan program."
1:49:59 PM
REPRESENTATIVE KAWASAKI inquired as to why more states do not
participate in this program.
MR. DUBLER recalled there was a very short window during which
states could enter the program. In the 1970s, AHFC and the
other [four] states had the foresight to get in the program.
MR. FAUSKE acknowledged that veteran's groups have had to defend
the program over the years. In response to Representative
Kawasaki, he indicated that the bonds for this program can only
be used for veterans.
1:52:57 PM
REPRESENTATIVE KAWASAKI then asked for confirmation that the
total number of loans issued since 1994 was 4,758.
MR. FAUSKE assumed that number may include some first-time
homebuyers. He re-stated that the total number was "$2.6
billion of bonds issued on the veteran's side, since inception."
In response to Representative Kawasaki, Mr. Fauske indicated
that more information will be provided.
1:53:45 PM
CHAIR GATTO announced that HB 291 was held.
HB 292-GRANTS TO DISASTER VICTIMS
1:54:31 PM
CHAIR GATTO announced that the next order of business would be
HOUSE BILL NO. 292, "An Act relating to grants to victims of a
disaster in this state; and providing for an effective date."
1:54:48 PM
McHUGH PIERRE, Deputy Commissioner, Department of Military &
Veterans' Affairs (DMVA), reminded the committee the state
suffered monumental disasters last year, two of which were
Presidential Disaster Declarations. The largest disaster, the
spring flood that spread from Eagle down to the Kuskokwim and
Yukon Rivers, focused attention on the state's Individual and
Family Grant (IFG) program, portions of which have not been
changed since 1977. For example, the Federal Emergency
Management Program (FEMA) was granting relief in the amount of
approximately $30,000 per family, but families eligible under
the state disaster declaration were receiving $5,000. He said,
"It was very troubling to witness people who were trying to
rebuild ... to see the disparity when someone lost their house
in one location of our state and another person ... [was]
eligible for different amounts of service." Mr. Pierre
expressed his hope that the proposed bill will change this
situation.
1:56:25 PM
MICHAEL O'HARE, Deputy Director, Division of Homeland
Security/Emergency Management (DHS&EM),Department of Military &
Veterans Affairs (DMVA), explained that the governor is limited
by statute to grant a maximum of $5,000 in individual assistance
to those affected in a state-declared disaster emergency.
Recent experience shows this amount is just not enough; in fact,
in current dollars $5,000 in 1977 values about $18,500. A
multi-agency task force, including DMVA, DHS&EM, the Department
of Health and Social Services (DHSS), the Department of Public
Safety (DPS), AHFC, and the U.S. Department of Agriculture Rural
Development, recommended the provisions in the proposed bill
such that in a state-declared disaster or emergency, the
governor may allow individual assistance grant funding up to
one-half of the federal amount. Mr. O'Hare further explained
that the federal amount fluctuates based on the consumer price
index (CPI). Therefore, the bill amends the $5,000 limit to a
more reasonable and current amount based on today's economy.
1:58:48 PM
CHAIR GATTO posed a scenario in which an insured homeowner
suffers a loss in a declared disaster zone.
MR. O'HARE responded that homeowners with insurance, or the
means by which to recover from the loss, are not eligible; in
fact, DHS&EM has staff to assess damages and the economic status
of victims. In further response to Chair Gatto, he said cases
can also be reviewed as to the insured's deductable.
2:00:18 PM
REPRESENTATIVE TAMMIE WILSON asked why the amount of $14,950 was
chosen for the eligibility amount.
MR. O'HARE indicated that an increase from $5,000 to half of the
FEMA Individual Assistance (IA) allotment "seemed appropriate."
He estimated that only 30 percent of those affected by a
disaster will qualify for 100 percent of the eligible expenses.
MR. PIERRE added that this recommendation came from the task
force because a state disaster is less in magnitude than a
federal disaster.
MR. O'HARE further noted that the amount fluctuates with the
CPI. In response to Chair Gatto, he clarified that the maximum
an individual or household can qualify for is the federal
amount, not both the state and the federal amount. Mr. O'Hare
further described the qualification process.
2:03:00 PM
CHAIR GATTO asked whether the grant was a reimbursable amount or
"a check upfront to help you get started."
MR. O'HARE provided the options for payments, verification of
expenses, and the methods for checking for non-compliance.
2:03:45 PM
REPRESENTATIVE BUCH assumed there is a pool of money.
MR. O'HARE said yes, the Disaster Relief Fund is funded through
the general fund. In further response to Representative Buch,
he relayed the fund consists of approximately $100,000, which is
all that is left after the spring disaster cost $10 million.
MR. PIERRE added that his department is bound by statute and
cannot spend more than $1 million without legislative
authorization. However, the legislature has forward-funded the
disaster fund in the amount of $5 million per year. If
necessary during the interim or session, the department can
request the legislative leadership to approve additional or
future funds.
MR. O'HARE, in response to Chair Gatto, explained that in the
interim the leadership of both bodies of the legislature issues
the authorization; during session, the department requests a
supplemental authorization.
2:05:49 PM
REPRESENTATIVE KAWASAKI referred to the fiscal note and pointed
out that the fiscal note only includes monies that would be
designated to grantees; therefore, there is zero overhead for
the agency.
MR. O'HARE agreed. Although the fiscal note is speculative, the
sponsors have based its numbers on an average over the past five
years. In further response to Representative Kawasaki, he said
the bill identifies "U.S. code 42, which is that federal element
which fluctuates on the CPI."
MR. PIERRE further added that the sponsors based the fiscal note
on the amount "that we would pay out this year, so we've tried
to make it very appropriate to today's response...."
2:07:27 PM
REPRESENTATIVE BUCH expressed his concern that at the time this
obligation would be instituted, the state will enter into an
extended period of potential shortfalls in the budget. In fact,
two or three disasters could encumber the state with massive
obligations. He warned that to triple the state's obligation
seems to be a very expensive adjustment.
MR. PIERRE stated that the department shares Representative
Buch's concerns; however, the intent of the original language of
the fund would be equal to an $18,000 expenditure today. He
concluded that the proposed bill does not surpass the original
intent of the legislature and encouraged the committee to make
recommendations after considering the needs of Alaskans,
particularly those in rural areas.
2:10:33 PM
CHAIR GATTO suggested the legislation may need "sideboards" to
prevent abuse of the benefits.
MR. O'HARE encouraged Chair Gatto to meet his staff who perform
damage assessments and audits in affected communities. He
assured the committee his staff is diligent in assessing and
verifying losses of items for which there may not be documented
evidence, through interviews with elders and other individuals.
2:13:04 PM
MR. PIERRE reminded the committee the maximum grant is $14,950.
2:13:40 PM
MR. O'HARE said that he shared the concern about the opportunity
for fraud, but encouraged the committee to focus on the intent
of the bill that is to help those who have been affected by
disaster in a manner that is appropriate in the current economy.
The state is not an insurance company, and this funding "will
only get them up on one knee, or maybe two feet."
2:14:49 PM
REPRESENTATIVE RAMRAS observed that fraud is a crime, and
although people will abuse the system, most people are honest
and most times the reimbursement or insurance payment does not
leave a person whole. He expressed his belief that the
overwhelming majority of people who would be eligible for this
assistance are honest. Representative Ramras said, "We should
not allow the bad behavior of ... the few to affect good
legislation for the many."
2:16:17 PM
MR. O'HARE assured the committee that his staff has prosecuted
fraudulent claims.
2:16:46 PM
REPRESENTATIVE BUCH said, "Doubling the numbers of disasters and
tripling the response to that, we would go from 10 to 60 million
dollars of obligation. That's my concern."
2:17:47 PM
REPRESENTATIVE TAMMIE WILSON pointed out that the legislation
states, "may appropriate up to $15,000." Therefore, this amount
could be changed by the governor; in addition, the legislature
must re-appropriate money into the fund. She asked whether her
understanding of the legislation was correct.
MR. O'HARE replied yes.
2:18:33 PM
REPRESENTATIVE KAWASAKI has heard that is difficult to apply for
the $5,000 due to the lack of receipts. He surmised that
raising the cap on eligibility might cause more people to apply.
MR. PIERRE opined that more people will not apply. The
department already conducts an aggressive advertising campaign
in affected disaster areas during which staff are sent in to
help with the application process. Moreover, the fiscal note
purposefully reflects "a very liberal number there, because I
wanted to show ... the maximum impact, in case there were
questions."
2:20:14 PM
REPRESENTATIVE KAWASAKI asked for confirmation that the funding
would be just for the grant, and not for more man hours.
MR. PIERRE indicated that DMVA is a very small department that
makes up 0.3 percent of the overall budget. There are 70
employees in Mr. O'Hare's staff at DHS&EM, and there are 300
state employees at DMVA, with 4,000 National Guard members. He
stressed that DMVA employees are dedicated to helping folks
during times of disaster.
MR. O'HARE explained that his staff sets up disaster assistance
centers in affected communities to interview local individuals
and verify damages.
MR. PIERRE, in response to Representative Kawasaki's earlier
question about the budget, further explained that although
employees are sometimes pulled from other areas to maintain
consistency in handling cases, the amount of money and number of
staff remains the same. Furthermore, his department is looking
for more efficiency and has reduced its budget by 0.5 percent
this year.
2:23:16 PM
CHAIR GATTO questioned whether renters who purchased flood
insurance at different times would benefit.
MR. O'HARE answered that because both renters would benefit from
flood insurance, they would not qualify for this program, except
perhaps for the amount of the deductible.
CHAIR GATTO referred to the last page of document entitled
"State Individual and Family Grant Program (IFG)" and read:
If the grantee is a renter, flood insurance required
under this section must be maintained on the contents
of the rental unit for as long as the grantee resides
at the flood-damaged property address.
MR. O'HARE clarified that owners or renters need to have had
insurance coverage prior to the disaster.
2:25:38 PM
REPRESENTATIVE RAMRAS asked what happens to a typical off-duty
enlisted soldier who volunteers for duty during an emergency.
MR. PIERRE informed the committee that in an emergency, the
local community government sends a disaster declaration to the
state. If the governor agrees to declare a state disaster, the
state emergency coordination center at DHS&EM will task from the
local community "response-to-needs." The community's request is
sent to the joint force commander who asks for volunteers.
These volunteers are paid a state active duty rate, according to
their rank, from the Disaster Relief Fund; in fact, their pay
from the state is in lieu of their regular week-end drill or
annual training time paid by the federal government.
2:29:21 PM
REPRESENTATIVE KAWASAKI asked whether the disaster relief funds
can go to purposes other than directly to individuals.
MR. O'HARE said yes. The funds also encompass response costs
such as safety of life and protection of property. However, the
portion of the bill being discussed addresses the recovery
aspect of a disaster; state monies to assist affected
individuals recover from a disaster.
MR. PIERRE added that disaster relief funds are also used in a
25 percent matching fund program with FEMA. In response to
Chair Gatto, he clarified that an arrangement with the
Department of Defense National Guard Bureau allows for expenses
on the federal side in response to a disaster. These expenses
are paid through federal training funds; in fact, to pay for
expenses incurred during a disaster, the department uses federal
funding through the U.S. Property and Fiscal Office, which is a
federal [contractor] working for the National Guard Bureau in
Washington, D.C. The federal training monies can be applied to
gasoline, trucks, repairs, and other expenses.
2:31:46 PM
CHAIR GATTO set aside HB 292.
[Although not formally announced, HB 292 was held.]
HB 274-ESTABLISHING PURPLE HEART DAY
2:31:50 PM
CHAIR GATTO announced that the final order of business would be
HOUSE BILL NO. 274, "An Act establishing August 7 as Purple
Heart Day."
2:32:13 PM
REPRESENTATIVE BERTA GARDNER, Alaska State Legislature, thanked
the four other prime sponsors on the committee for their
support. In addition, she pointed out that there are members of
the public, including a Purple Heart recipient, who are present
in support of the bill. She then introduced Ellie Sica, a
member of her staff.
2:33:29 PM
ELLIE SICA, Intern, Representative Berta Gardner, Alaska State
Legislature, speaking on behalf of Representative Gardner, one
of the prime sponsors of HB 274, introduced the bill. The
Purple Heart is awarded to any member of the U.S. armed forces
who is wounded or killed in battle, and it has been awarded to
approximately 1.7 million service men and women. August 7 is
historically significant because on this day in 1782, General
George Washington established the Badge of Military Merit to
honor military enlisted men and noncommissioned officers. In
1932, the badge was reinstituted and renamed the Purple Heart.
Other states currently recognize August 7 as Purple Heart Day;
in fact, the Alaska State Legislature has previously supported
Purple Heart related legislation and proclamations such as the
Purple Heart Trail and the governor's proclamation of August 7,
2009, as Purple Heart Day. Ms. Sica explained that the intent
of the proposed bill is to establish this day in perpetuity and
to show that Alaska honors its citizens that have been wounded
or killed in action.
2:35:42 PM
REPRESENTATIVE LYNN pointed out that the Badge of Military Merit
was established to honor enlisted men and noncommissioned
officers; however, the Purple Heart can be awarded to any member
of the military.
REPRESENTATIVE GARDNER agreed.
2:37:11 PM
TIM ARMSTRONG, Chief of Staff, Alaska Military Order of the
Purple Heart, informed the committee that his organization is in
favor of the bill. He said he received the Purple Heart on
November 23, 1968. The Alaska Military Order of the Purple
Heart has active chapters in Anchorage, Fairbanks, the
Matanuska-Susitna Valley, and Soldotna, and a chapter will open
soon in Juneau. There are approximately 254 life members of the
Order in Alaska including two females. He noted that the
national Order is the only 100 percent combat veteran
organization in the country. Mr. Armstrong related his past and
present affiliations with other veterans' organizations and
thanked the committee members who are in support of the bill.
He stated his organization's support for establishing Purple
Heart Day in perpetuity in order to recognize those deserving of
this award. He said, "This is one award that nobody went out in
search of." Mr. Armstrong stressed that the award began as a
medal of merit that was changed to include those wounded as a
result of hostile action. He noted that the majority of
awardees receive the medal posthumously and unfortunately, the
number of awardees is growing.
2:41:48 PM
REPRESENTATIVE LYNN thanked Mr. Armstrong for his service.
MR. ARMSTRONG reviewed how he came to be a recipient of the
Purple Heart.
2:45:01 PM
VERDIE BOWEN, Director, Office of Veteran Affairs, Department of
Military & Veterans' Affairs, verified that Alaska honors its
military; in fact, the passage of HB 274 would be one more way
to show veterans that Alaska cares about them. He recalled the
dedication of the Purple Heart Trail in Alaska and noted that
the majority of the state's Purple Heart recipients are Vietnam
veterans.
2:46:37 PM
MAJOR WILLIAM ALLEN, Commander, U. S. Marine Corps, said that he
had eight encounters with Improvised Explosive Devices (IEDs) in
Iraq.
2:47:03 PM
CHAIR GATTO described his feelings when he drove by the Purple
Heart Trail sign in Tok.
2:47:26 PM
MAJOR ALLEN expressed his belief that, as a Purple Heart
recipient, his reception in Alaska was like no other Marine
community as he was welcomed and given an opportunity to tell
his story. The designation of this date does more than honor
Purple Heart recipients, but also recognizes those who may
return with injuries suffered due to training and noncombat
injuries, or from injuries that remain internalized. He advised
that suffering also extends beyond the service member and
affects family members, who are the "home front warriors."
Major Allen concluded that the bill is a symbol for the heroic
young men and women who have served and have been injured, as
well as those with lesser injuries, and the families at home who
suffer the "injuries of absence."
2:49:19 PM
REPRESENTATIVE RAMRAS thanked Major Allen for his service and
his work done on behalf of veterans, reservists, and service
members on active duty.
2:50:27 PM
MR. BOWEN opined the most important aspect of the bill is to
demonstrate support for the veteran and his or her family, as do
the Purple Heart Trail markers.
2:52:02 PM
REPRESENTATIVE LYNN moved to report HB 274 out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, HB 274 was reported from the House
Special Committee on Military and Veterans' Affairs.
2:52:42 PM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Military and Veterans' Affairs meeting was
adjourned at 2:52 p.m.
| Document Name | Date/Time | Subjects |
|---|