Legislature(2017 - 2018)SENATE FINANCE 532
04/10/2018 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB216 | |
| SB157 | |
| SB186 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 79 | TELECONFERENCED | |
| + | HB 121 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | SB 157 | TELECONFERENCED | |
| + | SB 186 | TELECONFERENCED | |
| += | SB 216 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
April 10, 2018
9:14 a.m.
9:14:04 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:14 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Anna MacKinnon, Co-Chair
Senator Click Bishop, Vice-Chair
Senator Peter Micciche
Senator Donny Olson
Senator Gary Stevens
Senator Natasha von Imhof
MEMBERS ABSENT
None
ALSO PRESENT
Jonathan King, Staff, Senator Natasha Von Imhoff; Heidi
Teshner, Director, Finance and Support Services, Department
of Education and Early Development; Elwin Blackwell, School
Finance Manager, School and Finance Facilities Section,
Department of Education and Early Development; Britteny
Cioni-Haywood, Division Director, Division of Economic
Development, Department of Commerce, Community and Economic
Development; Carol Thompson, Absentee and Petition Manager,
Division of Elections, Office of the Governor; Libby
Bakalar, Assistant Attorney General, Department of Law;
Sara Race, Division Director, Permanent Fund Dividend
Division.
SUMMARY
SB 157 MICROLOAN REVOLVING FUND & LOANS
SB 157 was HEARD and HELD in committee for
further consideration.
SB 186 VOTER REGISTRATION & PFD APP REGISTRATION
SB 186 was HEARD and HELD in committee for
further consideration.
SB 216 SCHOOL FUNDING FOR CONSOLIDATED SCHOOLS
CSSB 216(FIN) was REPORTED out of committee with
a "do pass" recommendation and with one new
fiscal impact note from the Department of
Education and Early Development and one new zero
fiscal note from the Department of Education and
Early Development.
SENATE BILL NO. 216
"An Act relating to the calculation of state aid for
schools that consolidate; relating to the
determination of the number of schools in a district;
and providing for an effective date."
9:15:41 AM
Co-Chair MacKinnon recalled a question from Senator Stevens
regarding the cost to the state.
9:16:04 AM
JONATHAN KING, STAFF, SENATOR NATASHA VON IMHOFF, discussed
a brief history of the reason for the legislation. He
stated that the purpose of the bill was to promote the
efficient use of Alaska's existing K-12 education
infrastructure. He highlighted the sections of the bill.
Co-Chair MacKinnon wondered whether the state would pick up
the cost for transportation.
9:18:57 AM
HEIDI TESHNER, DIRECTOR, FINANCE AND SUPPORT SERVICES,
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, (DEED)stated
that the formula program in statute was a block grant. She
stated that there would be no increase to the state, as
long as the per pupil student amounts currently in statute
remained unchanged. She noted that districts may see an
increase in transportation costs.
Co-Chair MacKinnon queried additional comments.
ELWIN BLACKWELL, SCHOOL FINANCE MANAGER, SCHOOL AND FINANCE
FACILITIES SECTION, DEPARTMENT OF EDUCATION AND EARLY
DEVELOPMENT, replied in the negative.
Co-Chair MacKinnon wondered whether the total
transportation program would not increase. Ms. Teshner
replied in the affirmative
Co-Chair MacKinnon surmised that the state would not be
responsible for any decisions or financing required for
increased transportation costs for individual schools. Ms.
Teshner agreed.
Senator Micciche wondered why the bill would save the state
some level of funding after year four, but was not
adequately reflected in the fiscal note. Ms. Teshner
agreed. She looked at page 3 of the fiscal note, which
explained the reason for the lack of reflection. She stated
that it was because it was unknown which schools would
consolidate, in order to determine the state savings.
Co-Chair MacKinnon agreed that the fiscal note had some
cost, but another that did not reflect the intended
savings. She stressed that there was no increased funding
from the state level.
Vice-Chair Bishop MOVED to REPORT CSSB 216(FIN) out of
committee with individual recommendations and accompanying
fiscal notes. There being NO OBJECTION, it was so ordered.
CSSB 216(FIN) was REPORTED out of committee with a "do
pass" recommendation and with one new fiscal impact note
from the Department of Education and Early Development and
one new zero fiscal note from the Department of Education
and Early Development.
9:23:45 AM
AT EASE
9:26:15 AM
RECONVENED
SENATE BILL NO. 157
"An Act relating to the Alaska microloan revolving
loan fund and loans from the fund."
9:26:58 AM
BRITTENY CIONI-HAYWOOD, DIVISION DIRECTOR, DIVISION OF
ECONOMIC DEVELOPMENT, DEPARTMENT OF COMMERCE, COMMUNITY AND
ECONOMIC DEVELOPMENT, shared the purpose of the microloan
fund was to promote economic development in Alaska by
assisting small and micro business that may not have access
to traditional financing. She stated that the access to
badly needed capital would facilitate startup, expansion,
and job creation in the state with specific policy emphasis
on rural communities. She stated that new businesses were
responsible for 80 percent of all new jobs created in the
U.S. She asserted that finding ways to support and
incentivize new business growth would result in the state
filling some of the economic gap created in the downturn in
the economy. She stated that small scale startups and
businesses had difficulty securing funding, especially when
they may not fit the profile of a high-growth potential
business.
9:30:25 AM
Senator Stevens queried the default rate. Ms. Cioni-Haywood
replied that there was currently one loan in default, at a
6 percent rate. She noted that there were only 14 loans
from the fund.
Co-Chair Hoffman queried the reason for listing a fix rate,
instead of points above prime. Ms. Cioni-Haywood replied
that it was two percentage points above prime.
Senator Micciche surmised that there was a drop of the
interest rate, because interest rates were lower than when
the bill was enacted. Ms. Cioni-Haywood replied that the
floor amounts had been changed to 4 percent and 8 percent.
The interest rate calculation was 2 percentage points
versus 1 percentage point on prime. It allowed for some
additional risk with the longer term. She furthered that it
would also bring the rates in line with the other programs.
Vice-Chair Bishop queried the balance of the fund
capitalization, and the typical annual loan application
number. Ms. Cioni-Haywood replied that the cash available
to lend was just under $2.3 million, with 14 current loans,
33 applications, and 14 approved loans. She shared that it
averaged about 2 loans a year over the last six years. She
stated that the borrowers were unwilling to take on that
debt risk, so extending the term will allow for more
flexibility with the payments.
Senator von Imhof wanted permission to list her questions
via email.
Co-Chair MacKinnon felt that putting those questions on the
record may be helpful.
Senator von Imhof listed her questions.
9:36:20 AM
Senator Micciche wondered whether there was consideration
of a slotted rate. He noted that there was a socializing of
the risk. Ms. Cioni-Haywood replied that she would provide
that information.
Senator Micciche stated that he was aware of how the
program functions, but wanted to understand the change. Ms.
Cioni-Haywood replied that there was an examination of the
effectiveness of the program. She noted that the demand for
the program was lower than expected. She asserted that the
change might increase the program.
9:42:27 AM
Senator Stevens spoke in favor of the program. He queried
the success of the program.
Senator Olson understood that it was important for a
business to have capital. He noted that the program was
created in 2012 at a time of state surplus. He queried the
cost benefit ratio of the program. He assumed it was not
operating in the black. He wondered whether the state could
continue with the program. Ms. Cioni-Haywood replied that
it was a smaller revolving fund, and most of the work was
from the commercial fishing revolving loan fund. She stated
that the division was self-sufficient through the interest
and fees.
9:45:37 AM
Senator Olson clarified that the state operated somewhat in
the black with the oversight of the state. Ms. Cioni-
Haywood replied that she needed to do more analysis of the
microloan fund, but the other funds had grown over time.
Senator von Imhof wondered whether there was further effort
after a bank decline letter, and why the bank would not
lend the money. Ms. Cioni-Haywood replied the bank denial
letters must list a valid reason. She noted that lending to
individuals who may not be eligible increased the risk of
the portfolio, but the division often lent to nonstandard
borrowers.
Senator von Imhof queried existing organizations that
catered to the higher risk borrower. Ms. Cioni-Haywood
agreed to provide that information.
Co-Chair MacKinnon queried a sheet that addressed the
questions. She wondered how many loan agents were in the
program. Ms. Cioni-Haywood replied that there were 9
officers to service all ten revolving loan funds
9:50:34 AM
Senator von Imhof surmised that it was basically one loan
officer per loan.
Co-Chair MacKinnon stated that there were other loans
inside of the other programs. She stressed that this loan
program had 14 loans over its life, which was valued at 2.
She noted that some of the other loans had more activity.
She requested a larger fact sheet about all the loans.
Senator Micciche stressed that there were a number of
revolving loan programs with higher value.
Vice-Chair Bishop remarked that the loans could have great
benefit to small businesses.
Co-Chair MacKinnon queried Ms. Cioni-Haywood's place of
residence. Ms. Cioni-Haywood replied that she live in
Juneau.
Co-Chair MacKinnon asked for work to develop a presentation
to examine the investments. She wanted a simple explanation
of the programs. Ms. Cioni-Haywood agreed.
Co-Chair MacKinnon noted that there were audits about some
of the loan programs.
Co-Chair MacKinnon OPENED public testimony.
Co-Chair MacKinnon CLOSED public testimony.
Vice-Chair Bishop discussed the fiscal note.
Co-Chair MacKinnon requested that program concerns be
submitted by noon the following day.
SB 157 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 186
"An Act relating to voter registration; and providing
for an effective date."
9:58:38 AM
CAROL THOMPSON, ABSENTEE AND PETITION MANAGER, DIVISION OF
ELECTIONS, OFFICE OF THE GOVERNOR, provided a brief
overview of the bill. She stated that Division of Elections
put forth legislation to harmonize the interaction between
the permanent fund dividend (PFD) and the Division of
Elections in relation to the automated voter registration
law passed by ballet initiative in 2016. The ballot
initiative required the Permanent Fund Division to provide
the Division of Elections with the PFD electronic data of
applicants who met the eligible requirements of voter
registration. She explained that upon receipt of the
electronic data, the division compared it with the voter
registration database to target applicants considered as
newly registered voters and those with update to their
registration record. She stated that under current law the
division was required to send by mail a notification to
allow applicants an opportunity to opt out of voter
registration. She stated that applicants had up to thirty
days to notify the division of their intention to opt out.
She stated that if the opt out notice was not received; the
division would process the applications for registration
accordingly. She stated that the goal of the legislation
was to improve the experience of applicants registering to
vote, or updating their registration by providing the
opportunity to opt out of voter registration at the time of
PFD application. She stated that with the change the
division could leverage existing tools and procedures
already in use for processing automatic voter registrations
between the Division of Elections and the Division of Motor
Vehicles. The legislation would also allow for the division
to efficiently manage the program, process voter
registrations in a timelier manner, and reduce state
expenditures by eliminating the cost of sending an
expensive mailer during the 30-day opt out requirement.
Co-Chair MacKinnon felt that there were multiple problems
with implementation of the initiative. The bill had an opt
in provision. Ms. Thompson agreed.
10:00:50 AM
LIBBY BAKALAR, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF
LAW, introduced herself.
Co-Chair MacKinnon wondered whether the bill met the voter
intent of the ballot initiative. Ms. Bakalar replied that
it did not.
Co-Chair MacKinnon queried the reason for that perspective.
Ms. Bakalar replied that Article 11, Section 6 of the
Alaska Constitution provided that an initiated law may be
amended at any time, but may not be repealed by the
legislature within two years of its effective date. She
stated that the difference between an amendment versus a
repeal was a factual question that had been litigated over
the years. She stated that the case law said that an
amendment that vitiates the intent of an initiative would
constitute an effective repeal of that measure. She stated
that it was the Department of Law opinion that changing the
initiative to be "opt in" versus "opt out" would be an
unconstitutional overreach to undo what the people, by
initiative, had enacted in 2016. She furthered that the
legislature could change to an opt in or repeal after that
two year time period.
Co-Chair MacKinnon wondered what would occur without
consensus to appropriately change state statute to reflect
the voter intent. She asked what would occur without
garnering the support to do what the people had done
through initiative. She felt that there was a flaw in the
initiative. Ms. Bakalar replied that the legislature had
discretion to amend the initiative in the ways that the
division had proposed. She noted that a drastic change to
opt in from opt out would be exceeding the legislature's
constitutional authority.
10:05:24 AM
Co-Chair MacKinnon stated that she would not have a
sectional analysis in the current meeting. She wanted the
committee to consider the voters who had supported the
initiative to register everyone through the PFD application
process. She noted that all applicants data would be
automatically registered based on the division's work to
support the voter initiative. She asserted that all the raw
data would be available to the public. She stressed that
the data had mailing addresses, and sometimes email
addresses and phone numbers. She stated that she had
another bill related to the issue.
Senator Micciche wondered whether the department challenged
the constitutionality of forcing people to register to vote
through the initiative process. He felt that there must be
a constitutional issue. Ms. Bakalar responded that Article
11, Section 7 of the Alaska Constitution sets four limits
on the use of the initiative: 1) the dedication of revenue;
2) the making and repealing of appropriations; 3) rules of
court; and 4) local and special legislation. She stated
that the administration must honor the case law precedent
of the Alaska Supreme Court and the Constitution. She
furthered that they were not permitted prior to the
election to keep measures off the ballot that did not
violate the four restrictions.
Senator Micciche surmised that the privacy section of the
constitution could be violated, as long as it did not
violate the four restrictions. Ms. Bakalar replied that
there was a difference between a pre-election review and a
post-election review. She noted that there were
constitutional challenges to an initiated law may be made
after it's enacted.
Co-Chair MacKinnon wondered whether statutory foundation
must be made before the challenge. Ms. Bakalar replied that
regulations could be challenged. She remarked that the
division's intent of the bill could not be accomplished by
regulation.
Senator von Imhof remarked that an unintended consequence
of the ballot initiative was the public display of personal
data. She wondered whether it was known at the time of the
election. She did not recall in her PFD application that
there was a notification that the information would be
shared with the division of elections.
10:11:12 AM
Co-Chair MacKinnon remarked that her other bill addressed
privacy. She stated that the bill currently discussed. Ms.
Thompson stated that the current version of the bill was a
change from "opt out" to "opt in."
Ms. Bakalar furthered that there was an amendment proffered
by Senator Coghill in the Senate State Affairs Committee.
Co-Chair MacKinnon noted that it was her job to measure
actions by the law after voter initiatives were passed by
voters. She asserted that there was another conversation
about voter privacy.
Senator von Imhof noted that the 2018 PFD application was
closed, and there was also an election in 2018. She noted
that all applicants for the current year's PFD
automatically registered to vote with the application for
the PFD. Ms. Bakalar deferred to Ms. Thompson.
Ms. Thompson replied in the affirmative.
Senator von Imhof shared that a letter from the governor
stated that the bill would make harmonizing amendments
governing record sharing procedures from the commissioner
of the Department of Revenue (DOR) to the director of the
Division of Elections. She queried the current harmonizing
record exchange. Ms. Thompson replied that "harmonizing"
meant that the data could be accessed form the Permanent
Fund. She shared that there was a hope to provide
information to the applicants to the PFD.
10:15:28 AM
Senator von Imhof surmised that the data would be given to
the Division of Elections. She wondered when that data
would be made public. Ms. Thompson replied that it would be
available when data entry was complete. She stated that the
division was currently in the process of the 2018 period,
and the first letters would be sent. There would then be
thirty days to respond to that mailer. She explained that
after that thirty days, data entry would begin to be
entered into the database. She stressed that anyone could
call and receive that information to request voter lists.
Senator von Imhof wondered whether the letters would
provide an option to "opt out." She asked whether they had
thirty days to determine how the data would be shared after
the PFD application. She queried the current options for
someone to opt out. Ms. Thompson replied that a person
could complete the mailer, call, or send an email. Once
that occurs, the person would be removed from the list to
be included in the voter registration.
Co-Chair MacKinnon wanted to know what was included in the
letter. Ms. Thompson replied that it stated that it would
be a notice of automatic voter registration.
Co-Chair MacKinnon expressed concern about the privacy
issue. She remarked that there may or may not be a reason
for a person to not be registered to vote. She shared that
someone in her community had chosen not to vote in order to
avoid harassment from a family member. She stressed that
there were people who did not want their information
public, and the initiative bypassed that process. She
remarked that it violated their rights to privacy. She felt
that the state had not adequately responded to that
concern. She wondered how people would be able to see that
mailer. Ms. Thompson agreed.
10:20:01 AM
Vice-Chair Bishop wondered whether the administration had
considered another way of informing the public of the opt
out option. Ms. Thompson replied that she would consider
that idea.
Co-Chair MacKinnon shared that the letter form the division
stated that someone did not need to be a registered voter,
so one could opt out of voter registration. Ms. Thompson
agreed.
Co-Chair MacKinnon shared that her bill would allow for
voter registration, but would blind the data.
Senator Micciche fundamentally disagreed with a paper opt
out going to the people of Alaska. He felt that people may
have the lowest voter turnout in the history of the United
States. He remarked that there were still many Alaskans who
preferred to respond through the mail.
Co-Chair MacKinnon recalled that the division was in the
process of data entry from the PFD application. Ms.
Thompson replied that it had not begun, but the mailer
would be sent out in the current week.
Co-Chair MacKinnon surmised that the state would get the
address from somewhere. Ms. Thompson agreed. The PFD
application raw data would be compared with the voter
registration data to develop the pool of targeted people.
10:25:05 AM
Co-Chair MacKinnon stated that the people would not be in
the Division of Election database until the thirty days had
elapsed. Ms. Thompson replied that it would range around
forty days.
Co-Chair MacKinnon wondered whether the names would be
deleted from the PFD application. Ms. Thompson replied that
the names would be removed as soon as the notice to opt out
was received.
Co-Chair MacKinnon wondered whether a person had to file
the paperwork every year. Ms. Thompson replied in the
affirmative.
Co-Chair MacKinnon felt that it was another problem for an
individual.
Vice-Chair Bishop queried efforts with the Division of
Elections to enhance security. Ms. Thompson could not speak
to that question.
Senator Micciche expressed concern with the constitutional
changes in the bill. He felt that changing the contact
methods could be regarded as a constitutional issue. He
wanted every Alaskan to participate in the voting process,
but knew that some people did not participate. He felt that
there should be many opportunities, and stated that he had
concerns with the bill.
Co-Chair MacKinnon OPENED public testimony.
Co-Chair MacKinnon CLOSED public testimony.
Vice-Chair Bishop addressed the fiscal note.
Co-Chair MacKinnon queried perspective on the most recent
version F the bill.
10:30:24 AM
SARA RACE, DIVISION DIRECTOR, PERMANENT FUND DIVIDEND
DIVISION, noted that there would be an updated fiscal note.
She stated that there would be a zero fiscal note, because
funds would be used from a capital project. She stated that
the division was an information data center that would pass
information in administering the PFD.
Senator Micciche wondered how one enjoyed volunteering a
person who issues PFDs to working for the Division of the
Elections. Ms. Race replied that the role of the division
was to help people understood that they could answer
questions about the PFD, but questions about voter
registration should be directed at the Division of
Elections.
Co-Chair MacKinnon wondered whether there were other
provisions that had an opt out within the PFD application.
Ms. Race replied that it was the only automatic option that
would be part of the PFD application.
Co-Chair MacKinnon recalled that there was an issue of the
data being accessible to the general public, and the
legislature had provided an opportunity for peoples'
information being blocked, or was there was a specific for
vulnerable people. Ms. Race replied that PFD was considered
confidential information in statute. The only information
that could be released is the individual's first and last
name. She furthered that a yes or no answer could be
provided when inquired whether an individual had applied or
not.
Co-Chair MacKinnon felt that there would be a quandary in
state statute, because there was an initiative to expose
data of those who had originally petitioned the state to
protect them. She wondered whether there was recollection
of that conversation. Ms. Race replied that she was not
part of that conversation. She furthered that there had
been individuals who approached the division asking similar
questions.
10:35:42 AM
Co-Chair MacKinnon remarked that all that data was now
exposed because of the initiative process. Ms. Race replied
that the division provided seven data elements to the
Division of Elections: the applicant's name and sex; the
applicant's Alaska driver's license or social security; the
applicant's date of birth; the applicant's residence
address; whether the applicant was a U.S. citizen; the date
of application; and the applicant's marker signature.
Co-Chair MacKinnon wondered whether the social security
number was protected as it travelled between the divisions.
Ms. Race replied in the affirmative, because the
information was through the state's secured system.
Co-Chair MacKinnon asked whether both the driver's license
and social security number would travel between the
divisions. Ms. Race replied that she believed that it was
either one or the other.
Senator Micciche asked how many PFDs were paid in the
previous year. Ms. Race replied that she believed that
there were 630,000.
Senator Micciche wondered how many of those PFDs were
mailed out of state. Ms. Race agreed to provide that
information.
Senator Micciche understood that there were some military
members who had not lived in the state for many years. He
wondered how often and for how long those military members
had to return to the state. Ms. Race replied that there
were several different eligibility requirements, which
depended on how long an individual had been out of the
state. She stated that it could be 72 hours or an
accumulation of 30 days.
Co-Chair MacKinnon wondered whether that was a timeframe to
return to the state. Ms. Race agreed.
Senator Micciche asked whether people were automatically
signing people to register to vote who had been gone from
the state for many years due to those eligibility
requirements. Ms. Race replied that there was a focus on
those with a physical address in the state. She stated that
there was a potential for individuals who were still
reporting a physical address.
Co-Chair MacKinnon queried challenges in implementing the
voter initiative. Ms. Race replied that it stepped the
focus outside of eligibility and focusing on dividends. She
noted that there was extensive work with the Division of
Elections to develop a successful data transfer.
Co-Chair MacKinnon wondered whether people who had applied
for a dividend may be in "limbo" until they could be
finalized. Ms. Race replied in the affirmative.
Co-Chair MacKinnon asked whether the initiative specified
"receive a dividend", "apply for a dividend", broader
language. Ms. Race replied that she believed that the
initiative said, "apply for a dividend", and did not speak
to the eligibility process.
Co-Chair MacKinnon stressed that the intent of the bill was
to increase voter turnout. She remarked that there were
some challenges in implementing the voter initiative.
Co-Chair MacKinnon discussed the afternoon meeting's
agenda.
SB 186 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:42:37 AM
The meeting was adjourned at 10:42 a.m.