Legislature(2017 - 2018)BARNES 124

04/09/2018 03:15 PM LABOR & COMMERCE

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Audio Topic
03:17:26 PM Start
03:18:21 PM Confirmation Hearing(s)
03:39:04 PM HB193
04:11:39 PM HB358
04:20:42 PM HB376
04:51:28 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 358 INSURANCE COVERAGE FOR TELEHEALTH TELECONFERENCED
Heard & Held
-- Public Testimony --
+ HB 193 HEALTH CARE; BALANCE BILLING TELECONFERENCED
Heard & Held
-- Public Testimony --
*+ HB 376 ESTABLISH THE ALASKA STATE BANK TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
             HB 376-ESTABLISH THE ALASKA STATE BANK                                                                         
                                                                                                                              
4:20:42 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that the  final order of business  would be                                                               
HOUSE BILL NO. 376                                                                                                              
"An  Act  establishing  a  state  bank;  relating  to  insurance,                                                               
mortgage lending,  securities, and permanent fund  dividends; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
CHARLES DUNCAN,  Staff, Representative  Chris Tuck,  Alaska State                                                               
Legislature, introduced HB 376 on  behalf of Representative Tuck,                                                               
prime sponsor.   He paraphrased  the sponsor  statement [included                                                               
in   committee  packet],   which  reads   as  follows   [original                                                               
punctuation provided]                                                                                                           
                                                                                                                                
     The Alaska State  Bank is designed to  create the legal                                                                    
     ability  to access  Federal Reserve  and United  States                                                                    
     Treasury  monetary  policy  funds  and  use  fractional                                                                    
     reserve   banking  methods   to   promote  a   science,                                                                    
     education and infrastructure recovery.                                                                                     
                                                                                                                                
     As federal  fiscal policy funding continues  to decline                                                                    
     for state  governments and  as Federal  Reserve support                                                                    
     for  liquidity in  the monetary  base  continues to  be                                                                    
     maintained at  high historical levels,  the opportunity                                                                    
     is  opened for  state governments  to create  new legal                                                                    
     mechanisms to access monetary  policy. Fiscal policy is                                                                    
     taxation  and  spending   by  government  and  monetary                                                                    
     policy  is control  of the  money  supply and  interest                                                                    
     rates.                                                                                                                     
                                                                                                                                
     In  the   traditions  of  Benjamin  Franklin   and  the                                                                    
     Reconstruction  Finance  Corporation,  local  decision-                                                                    
     making is a requirement  in guiding monetary policy and                                                                    
     the best  method to  do that today  is to  create state                                                                    
     development banks.                                                                                                         
                                                                                                                                
     The   basic  proposal   is   to   use  existing   state                                                                    
     development institutions  to create packages  of state,                                                                    
     municipal,  borough,  port authority,  and  development                                                                    
     finance  authority bonds,  grants and  shares that  are                                                                    
     rediscounted through  the Federal Reserve  and combined                                                                    
     with federal  bonds and  Treasury currency.  The Alaska                                                                    
     State  Bank then  leverages or  transfers the  packages                                                                    
     back to the State  of Alaska, municipalities, boroughs,                                                                    
     port  authorities,   development  finance  authorities,                                                                    
     local     banks,    credit     unions,    universities,                                                                    
     corporations, small business and entrepreneurship.                                                                         
                                                                                                                                
     The Alaska  State Bank will begin  as an infrastructure                                                                    
     bank  that leverages  loans with  our  local banks  and                                                                    
     then evolve  into a full  featured development  bank in                                                                    
     the future.  The first goal  will be to  access Federal                                                                    
     Reserve   funds   to   provide  reserve   and   capital                                                                    
     requirements  for  the  Alaska  State  Bank.  Very  low                                                                    
     interest rates combined with the  function of the grant                                                                    
     and  equity process  will  guarantee payment  stability                                                                    
     and   long-term   investments   into   jobs,   science,                                                                    
     technology, education and infrastructure.                                                                                  
                                                                                                                                
     The Alaska  Permanent Fund or  other existing  State of                                                                    
     Alaska financial  institutions will not be  required by                                                                    
     statute  to dedicate  reserve  or capital  requirements                                                                    
     and there will not  be mandatory state revenue deposits                                                                    
     into  the state  bank.  Maintaining existing  financial                                                                    
     agreements while  using the self-interest  of voluntary                                                                    
     participation  will  be  important  keys  for  insuring                                                                    
     long-term financial success.                                                                                               
                                                                                                                                
     Self-interest  will  identify   partnerships  with  our                                                                    
     local banks in retailing some of the new funds.                                                                            
     Local  banks   and  credit  unions  will   become  more                                                                    
     valuable assets for  increasing transactions efficiency                                                                    
     and helping to choose viable loan partners.                                                                                
     Creating  an infrastructure  development bank  with the                                                                    
     legal  ability to  access federal  and Federal  Reserve                                                                    
     monetary  policy funds  is a  much  better solution  to                                                                    
     Alaska's   fiscal  crises   than  increasing   personal                                                                    
     taxation or  confiscating the Permanent  Fund Dividend.                                                                    
     Less  than $5  billion per  year in  total transactions                                                                    
     will make  the Alaska  State Bank the  primary solution                                                                    
     to Alaska's fiscal crisis.                                                                                                 
                                                                                                                                
4:25:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CHRIS  TUCK, Alaska State  Legislature, introduced                                                               
HB  376 as  prime  sponsor.   He  shared  the  Alaska State  Bank                                                               
project was modelled on the  Bank of Japan and the Reconstruction                                                               
Finance Corporation  established after  the U.S.  Civil War.   He                                                               
said at one time the state  had a foundation which contributed to                                                               
science  and   technology.    He  mentioned   the  Committee  for                                                               
Measurable Objectives.   He spoke to infrastructure  needs of the                                                               
state.   He  said  the  state could  access  federal funds  using                                                               
fractional reserve banking practices.                                                                                           
                                                                                                                                
4:29:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES  said [the  aim  of  the proposal  is]  to                                                               
facilitate access through the federal  banking system.  She asked                                                               
whether the Alaska state bank  could "handle any of the marijuana                                                               
dollar."                                                                                                                        
                                                                                                                                
REPRESENTATIVE TUCK  answered it  is not the  focus of  the bank.                                                               
He said it would be  the "insulating institution between them and                                                               
the federal  government."  He  said the proposed bank  could help                                                               
with required reports.   He described ways in  which the proposed                                                               
bank could help the industry.                                                                                                   
                                                                                                                                
REPRESENTATIVE  BIRCH said  it seems  like a  terrible idea.   He                                                               
said he  spends his time trying  to restrain the growth  of state                                                               
government.  He asked about the genesis of the proposal.                                                                        
                                                                                                                                
REPRESENTATIVE TUCK answered that  the proposal would be allowing                                                               
money to  be created in Alaska  through the Federal Reserve.   He                                                               
stated it cannot  be done with Alaska  Industrial Development and                                                               
Export Authority  (AIDEA) or  Alaska Housing  Finance Corporation                                                               
(AFHC)  because those  institutions cannot  work with  fractional                                                               
reserve banking.                                                                                                                
                                                                                                                                
REPRESENTATIVE BIRCH asked about liability.                                                                                     
                                                                                                                                
REPRESENTATIVE  TUCK  said  that  one way  that  money  is  being                                                               
created is through  the Federal Reserve buying up debt.   He said                                                               
the idea  is to  take advantage  of that  to expand  the monetary                                                               
supply in Alaska.                                                                                                               
                                                                                                                                
MR. DUNCAN said  the proposal would be asking for  money from the                                                               
Federal Reserve.   He said  there are  three ways to  access that                                                               
money   loan  guarantees, capital purchase in which  the Fed buys                                                               
bonds, and credit stimulus.                                                                                                     
                                                                                                                                
REPRESENTATIVE  TUCK  said  it is  called  the  capital  stimulus                                                               
method, but it is really a debt stimulus method.                                                                                
                                                                                                                                
4:38:18 PM                                                                                                                    
                                                                                                                                
CHAIR KITO asked  whether there are any  other financial entities                                                               
that have access to the proposed type of financing.                                                                             
                                                                                                                                
MR.  DUNCAN answered  that a  bond-creating  institution such  as                                                               
AIDEA can  access two of the  methods mentioned.    He reiterated                                                               
those institutions cannot  act with fractional reserve  bank.  He                                                               
explained that is what the proposal is.                                                                                         
                                                                                                                                
CHAIR KITO suggested  the proposal would open  access to reserves                                                               
to which the state does not currently have access.                                                                              
                                                                                                                                
MR. DUNCAN answered that is correct.                                                                                            
                                                                                                                                
4:40:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH stated  he  is not  comfortable with  using                                                               
debt  to acquire  more debt.   He  asked how  the proposal  would                                                               
produce new money.                                                                                                              
                                                                                                                                
REPRESENTATIVE TUCK  said the aim  is to create money  in Alaska.                                                               
He said banks have  a lot of surplus.  He said  the bank would be                                                               
an infrastructure and development driver.   He spoke to using the                                                               
university system to enhance development.                                                                                       
                                                                                                                                
MR. DUNCAN answered the central  issue in monetary policy is what                                                               
the money  is being increased  for.  He  said the proposal  is to                                                               
subsidize science and technology rather than speculation.                                                                       
                                                                                                                                
4:44:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES  asked for  a  simple  explanation of  the                                                               
proposal and how it would access federal dollars.                                                                               
                                                                                                                                
MR.  DUNCAN  answered  that  currently   there  is  a  debt-based                                                               
monetary system.   He said  the state institutions  create bonds.                                                               
Those bonds are  put into an account with the  Alaska State Bank.                                                               
The bank  issues stock, and that  package is put on  account with                                                               
the Federal Reserve.   The account is considered  the capital and                                                               
reserve requirement for loaning new money.                                                                                      
                                                                                                                                
REPRESENTATIVE TUCK said that is where the confusion comes in.                                                                  
                                                                                                                                
CHAIR  KITO shared  his  understanding that  the  proposal is  to                                                               
create a  revolving loan  fund.   The bonds  on account  with the                                                               
Federal Reserve,  which in turn gives  credit on the bonds.   The                                                               
money is then lent out for other things.                                                                                        
                                                                                                                                
REPRESENTATIVE STUTES  said it sounds  like the state  would then                                                               
always owe someone money.                                                                                                       
                                                                                                                                
CHAIR  KITO  said  that  with  the  proposed  bank,  the  federal                                                               
government would  loan money based  on the bonds on  account with                                                               
the state bank.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  STUTES suggested  the  bonds sold  would then  be                                                               
sold to the Fed.                                                                                                                
                                                                                                                                
MR. DUNCAN corrected that the bonds  would be on account with the                                                               
Fed, not sold to it.                                                                                                            
                                                                                                                                
REPRESENTATIVE TUCK added that AIDEA  could do the same thing but                                                               
does  not.   He  added  the  Fed prefers  to  have  the bonds  on                                                               
account.                                                                                                                        
                                                                                                                                
CHAIR KITO  asked whether  it would  be correct  to say  that the                                                               
bonds would be used as collateral.                                                                                              
                                                                                                                                
REPRESENTATIVE TUCK answered in the affirmative.                                                                                
                                                                                                                                
4:49:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD asked about a fiscal note.                                                                      
                                                                                                                                
MR. DUNCAN  said the fiscal  note would be  the next step  in the                                                               
process.    He said  the  total  cost would  not  be  great.   He                                                               
explained there would be four boards for the bank.                                                                              
                                                                                                                                
4:50:42 PM                                                                                                                    
                                                                                                                                
CHAIR KITO opened public testimony on HB 376.                                                                                   
                                                                                                                                
CHAIR KITO held over HB 376.                                                                                                    

Document Name Date/Time Subjects
HB193 Supporting Documents Alaska ACEP 03.30.2018.pdf HL&C 4/9/2018 3:15:00 PM
HB 193
HB193 Supporting Documents EDPMA_ALASKA_FINAL 03.30.2018.pdf HL&C 4/9/2018 3:15:00 PM
HB 193
HB193 Supporting Documents Balance Billing by Providers State Consumer Protections - The Commonwealth Fund 03.30.2018.pdf HL&C 4/9/2018 3:15:00 PM
HB 193
HB193 Supporting Documents Georgetown University Health Policy Institute 03.30.2018.pdf HL&C 4/9/2018 3:15:00 PM
HB 193
HB193 Supporting Documents NASHP Surprise-Balance-Billing 03.30.2018.pdf HL&C 4/9/2018 3:15:00 PM
HB 193
HB193 Supporting Documents Surprise Medical Bills _ The Henry J. Kaiser Family Foundation 03.30.2018.pdf HL&C 4/9/2018 3:15:00 PM
HB 193
HB193 ver I 3.30.2018.pdf HL&C 4/9/2018 3:15:00 PM
HB 193
HB193 Additional Documents Emergency CPT Code Reference Table 03.30.2018.pdf HL&C 4/9/2018 3:15:00 PM
HB 193
HB193 Definitions 03.08.2018.pdf HL&C 4/9/2018 3:15:00 PM
HB 193
HB193 Fiscal Note DCCED DOI 3.2.18.pdf HL&C 4/9/2018 3:15:00 PM
HB 193
HB193 Fiscal Note DOA DRB 4.5.18.pdf HL&C 4/9/2018 3:15:00 PM
HB 193
HB193 Sectional Anaylsis ver I 03.30.2018.pdf HL&C 4/9/2018 3:15:00 PM
HB 193
HB193 Sponsor Statement 03.30.2018.pdf HL&C 4/9/2018 3:15:00 PM
HB 193
HB358 ver J 03.30.18.pdf HL&C 4/9/2018 3:15:00 PM
HB 358
HB358 Sectional Analysis ver J 03.30.18.pdf HL&C 4/9/2018 3:15:00 PM
HB 358
HB376 Support Document Economists Ignore One of Capitalism's Biggest Problems.pdf HL&C 4/9/2018 3:15:00 PM
HB 376
HB376 Support Document Reconstruction Finance Corporation.pdf HL&C 4/9/2018 3:15:00 PM
HB 376
HB376 Support Document Public Banking Institute-FAQ.pdf HL&C 4/9/2018 3:15:00 PM
HB 376
HB376 Support Document Why Public Banks Outperform Private Banks.pdf HL&C 4/9/2018 3:15:00 PM
HB 376
HB376 ver O.PDF HL&C 4/9/2018 3:15:00 PM
HB 376
HB376 Economic Charts.pdf HL&C 4/9/2018 3:15:00 PM
HB 376
HB376 Opposition Letter.pdf HL&C 4/9/2018 3:15:00 PM
HB 376
HB376 Sectional Analysis ver A 4.6.18.pdf HL&C 4/9/2018 3:15:00 PM
HB 376
HB376 Sponsor Statement 4.6.18.pdf HL&C 4/9/2018 3:15:00 PM
HB 376
HB376 Support Document Bank of North Dakota.pdf HL&C 4/9/2018 3:15:00 PM
HB 376
HB376 Support Document Benjamin Franklin quote House of Commons 1766.pdf HL&C 4/9/2018 3:15:00 PM
HB 376
HB193 Support Letters 4.9.18.pdf HL&C 4/9/2018 3:15:00 PM
HB 193
HB193 AKACEP presentation.pdf HL&C 4/9/2018 3:15:00 PM
HB 193