Legislature(1999 - 2000)

04/09/1999 03:24 PM House L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
    HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                                 
                   April 9, 1999                                                                                                
                     3:24 p.m.                                                                                                  
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                                 
                                                                                                                                
Representative Norman Rokeberg, Chairman                                                                                        
Representative Andrew Halcro, Vice Chairman                                                                                     
Representative Lisa Murkowski                                                                                                   
Representative John Harris                                                                                                      
Representative Sharon Cissna                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                  
                                                                                                                                
Representative Jerry Sanders                                                                                                    
Representative Tom Brice                                                                                                        
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
GOVERNOR'S APPOINTMENT:                                                                                                         
                                                                                                                                
Alaska Workers' Compensation Board                                                                                              
                                                                                                                                
     Andrew J. "Bear" Piekarski - Anchorage                                                                                     
                                                                                                                                
     - CONFIRMATION ADVANCED                                                                                                    
                                                                                                                                
HOUSE BILL NO. 143                                                                                                              
"An Act relating to the executive officer employed for the Real                                                                 
Estate Commission, to educational materials published by the Real                                                               
Estate Commission, to the Real Estate Surety Fund, to contracts by                                                              
the Real Estate Commission, and to disclosures in real property                                                                 
transactions."                                                                                                                  
                                                                                                                                
     - MOVED CSHB 143(L&C) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 62                                                                                                               
"An Act relating to the Alaska Public Utilities Commission; and                                                                 
providing for an effective date."                                                                                               
                                                                                                                                
     - MOVED CSHB 62(URS) OUT OF COMMITTEE                                                                                      
                                                                                                                                
HOUSE BILL NO. 158                                                                                                              
"An Act relating to the annual report of the director of the                                                                    
division of insurance and to notice of cancellation of personal                                                                 
insurance."                                                                                                                     
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 136                                                                                                              
"An Act relating to tourism and tourism marketing; eliminating the                                                              
Alaska Tourism Marketing Council; and providing for an effective                                                                
date."                                                                                                                          
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
(* First public hearing)                                                                                                        
                                                                                                                                
PREVIOUS ACTION                                                                                                                 
                                                                                                                                
BILL: HB 143                                                                                                                    
SHORT TITLE: REAL ESTATE:SURETY FUND & DISCLOSURES                                                                              
SPONSOR(S): REPRESENTATIVES(S) ROKEBERG                                                                                         
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 3/19/99       514     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 3/19/99       515     (H)  L&C, JUD, FIN                                                                                       
 3/24/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
 3/24/99               (H)  HEARD AND HELD                                                                                      
 3/24/99               (H)  MINUTE(L&C)                                                                                         
 4/09/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
                                                                                                                                
BILL: HB 62                                                                                                                     
SHORT TITLE: ALASKA PUBLIC UTILITIES COMMISSION                                                                                 
SPONSOR(S): REPRESENTATIVES(S) THERRIAULT                                                                                       
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 1/22/99        68     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 1/22/99        69     (H)  URS, L&C                                                                                            
 2/08/99       172     (H)  FIN REFERRAL ADDED                                                                                  
 2/17/99               (H)  URS AT  8:00 AM CAPITOL 120                                                                         
 2/17/99               (H)  HEARD AND HELD                                                                                      
 2/17/99               (H)  MINUTE(URS)                                                                                         
 3/10/99               (H)  URS AT  8:00 AM CAPITOL 120                                                                         
 3/10/99               (H)  HEARD AND HELD                                                                                      
 3/10/99               (H)  MINUTE(URS)                                                                                         
 3/17/99               (H)  URS AT  8:00 AM CAPITOL 120                                                                         
 3/17/99               (H)  MOVED CSHB 62(URS) OUT OF COMMITTEE                                                                 
 3/17/99               (H)  MINUTE(URS)                                                                                         
 3/19/99       511     (H)  URS RPT  CS(URS) NT 5DP 1NR                                                                         
 3/19/99       512     (H)  DP: DAVIES, COWDERY, HUDSON, KOTT,                                                                  
 3/19/99       512     (H)  PORTER; NR: BERKOWITZ                                                                               
 3/19/99       512     (H)  ZERO FISCAL NOTE (DCED)                                                                             
 3/19/99       512     (H)  REFERRED TO LABOR & COMMERCE                                                                        
 4/09/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
                                                                                                                                
BILL: HB 158                                                                                                                    
SHORT TITLE: NOTICE OF INS. CANCELLATION TO ELDERLY                                                                             
SPONSOR(S): REPRESENTATIVES(S) ROKEBERG                                                                                         
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 3/24/99       556     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 3/24/99       556     (H)  L&C, JUD                                                                                            
 4/07/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
 4/07/99               (H)  HEARD AND HELD                                                                                      
 4/07/99               (H)  MINUTE(L&C)                                                                                         
 4/09/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
                                                                                                                                
BILL: HB 136                                                                                                                    
SHORT TITLE: ABOLISH TOURISM MARKETING COUNCIL                                                                                  
SPONSOR(S): REPRESENTATIVES(S) THERRIAULT                                                                                       
                                                                                                                                
Jrn-Date    Jrn-Page           Action                                                                                           
 3/12/99       438     (H)  READ THE FIRST TIME - REFERRAL(S)                                                                   
 3/12/99       438     (H)  EDT, L&C, FIN                                                                                       
 3/29/99               (H)  EDT AT  5:00 PM CAPITOL 106                                                                         
 3/29/99               (H)  HEARD AND HELD SUBCMTE APPOINTED                                                                    
 4/06/99               (H)  EDT AT  4:30 PM CAPITOL 408                                                                         
 4/06/99               (H)  <SUBCOMMITTEE MEETING>                                                                              
 4/09/99               (H)  L&C AT  3:15 PM CAPITOL 17                                                                          
 4/09/99       712     (H)  EDT REFERRAL WAIVED                                                                                 
 4/09/99       712     (H)  REFERRED TO LABOR & COMMERCE                                                                        
                                                                                                                                
WITNESS REGISTER                                                                                                                
                                                                                                                                
ED FLANAGAN, Commissioner-designee                                                                                              
Department of Labor                                                                                                             
P.O. Box 21149                                                                                                                  
Juneau, Alaska 99802-1149                                                                                                       
Telephone:  (907) 465-2700                                                                                                      
POSITION STATEMENT:  Available for assistance during the                                                                        
committee's consideration of Andrew J. "Bear" Piekarski for the                                                                 
Alaska Workers' Compensation Board.                                                                                             
                                                                                                                                
LARRY SPENCER                                                                                                                   
Real Estate Commission                                                                                                          
175 South Franklin Street, Suite 330                                                                                            
Telephone:  (907) 463-4111                                                                                                      
POSITION STATEMENT:  Testified in support of HB 143.                                                                            
                                                                                                                                
TOM MARTIN                                                                                                                      
1216 Madsen Avenue                                                                                                              
Kodiak, Alaska 99615                                                                                                            
Telephone:  (907) 486-5421                                                                                                      
POSITION STATEMENT:  Testified in support of HB 143 as a licensed                                                               
real estate agent.                                                                                                              
                                                                                                                                
MICHAEL HUGHES, Board of Directors                                                                                              
Alaskan AIDS Assistance Association                                                                                             
P.O. Box 230523                                                                                                                 
Anchorage, Alaska 99523-0523                                                                                                    
Telephone:  (907) 345-3635                                                                                                      
POSITION STATEMENT:  The language he had been concerned about was                                                               
not present in the Version G committee substitute for HB 143.                                                                   
                                                                                                                                
CHARLES SANDBERG, President                                                                                                     
Alaska Association of REALTORS                                                                                                  
741 Sesame Street, Number 110                                                                                                   
Anchorage, Alaska 99503                                                                                                         
Telephone:  (907) 277-4372                                                                                                      
POSITION STATEMENT:  Testified in support of HB 143.                                                                            
                                                                                                                                
ART CLARK, Chairman                                                                                                             
Industry Issues Working Group                                                                                                   
Alaska Association of REALTORS;                                                                                                 
Member, Legislative Committee                                                                                                   
Anchorage Board of REALTORS                                                                                                     
7740 McHenry Circle                                                                                                             
Anchorage, Alaska 99502                                                                                                         
Telephone:  (907) 345-4116                                                                                                      
POSITION STATEMENT:  Testified in support of HB 143 on behalf of                                                                
the Alaska Association of REALTORS.                                                                                             
                                                                                                                                
RON JOHNSON                                                                                                                     
P.O. Box 529                                                                                                                    
Kenai, Alaska 99611                                                                                                             
Telephone:  (907) 283-7755                                                                                                      
POSITION STATEMENT:  Testified on HB 143 as a licensed real estate                                                              
broker and former member of the Real Estate Commission.                                                                         
                                                                                                                                
DAVE FEEKEN                                                                                                                     
Kenai Peninsula Association of REALTORS                                                                                         
100 Trading Bay Drive, Number 6                                                                                                 
Kenai, Alaska 99611                                                                                                             
Telephone:  (907) 283-5888                                                                                                      
POSITION STATEMENT:  Testified in support of HB 143.                                                                            
                                                                                                                                
CATHERINE REARDON, Director                                                                                                     
Division of Occupational Licensing                                                                                              
Department of Commerce and Economic Development                                                                                 
P.O. Box 110806                                                                                                                 
Juneau, Alaska 99811-0806                                                                                                       
Telephone:  (907) 465-2536                                                                                                      
POSITION STATEMENT:  Testified in support of HB 143.                                                                            
                                                                                                                                
WILDA RODMAN, Legislative Administrative Assistant                                                                              
   to Representative Gene Therriault                                                                                            
Alaska State Legislature                                                                                                        
Capitol Building, Room 511                                                                                                      
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-2812                                                                                                      
POSITION STATEMENT:  Presented HB 62 on behalf of the bill sponsor;                                                             
testified that the sponsor prefers the original bill title as                                                                   
opposed to the title of CSHB 62(URS), but is in favor of the                                                                    
two-year extension period rather than the original bill's four-year                                                             
period.                                                                                                                         
                                                                                                                                
JIM ROWE, Director                                                                                                              
Alaska Telephone Association                                                                                                    
201 East 56th Street                                                                                                            
Anchorage, Alaska 99518                                                                                                         
Telephone:  (907) 345-8760                                                                                                      
POSITION STATEMENT:  Testified in support of CSHB 62(URS).                                                                      
                                                                                                                                
MARK VASCONI, Director of Regulatory Affairs                                                                                    
AT&T Alascom                                                                                                                    
210 East Bluff Drive                                                                                                            
Anchorage, Alaska 99515                                                                                                         
Telephone:  (907) 264-7308                                                                                                      
POSITION STATEMENT:  Testified in support of CSHB 62(URS)                                                                       
                                                                                                                                
JANET SEITZ, Legislative Assistant                                                                                              
   to Representative Norman Rokeberg                                                                                            
Alaska State Legislature                                                                                                        
Capitol Building, Room 24                                                                                                       
Juneau, Alaska 99801                                                                                                            
Telephone:  (907) 465-4968                                                                                                      
POSITION STATEMENT:  Explained changes to current statute in HB 158                                                             
regarding notification of insurance cancellation as aide to the                                                                 
House Labor and Commerce Standing Committee.                                                                                    
                                                                                                                                
ROSEMARY HAGEVIG, Executive Director                                                                                            
Catholic Community Services                                                                                                     
419 Sixth Street                                                                                                                
Juneau, Alaska 99801                                                                                                            
Telephone:  (907) 463-6151                                                                                                      
POSITION STATEMENT:  Testified in support of HB 158, particularly                                                               
the section dealing with insurance notification, on behalf of                                                                   
Catholic Community Services, parent organization to Southeast                                                                   
Senior Services.                                                                                                                
                                                                                                                                
JOHN FERENCE, Deputy Director                                                                                                   
Division of Insurance                                                                                                           
Department of Commerce and Economic Development                                                                                 
P.O. Box 110805                                                                                                                 
Juneau, Alaska 99811-0805                                                                                                       
Telephone:  (907) 465-2560                                                                                                      
POSITION STATEMENT:  Answered questions regarding HB 158.                                                                       
                                                                                                                                
JOHN GEORGE, Lobbyist                                                                                                           
   for the National Association of Independent Insurers                                                                         
3328 Fritz Cove Road                                                                                                            
Juneau, Alaska 99801                                                                                                            
Telephone:  (907) 789-0172                                                                                                      
POSITION STATEMENT:  Testified on industry concerns regarding HB
158.                                                                                                                            
                                                                                                                                
KEVIN HAND, Legislative Administrative Assistant                                                                                
   to Representative Andrew Halcro                                                                                              
Alaska State Legislature                                                                                                        
Capitol Building, Room 418                                                                                                      
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-4939                                                                                                      
POSITION STATEMENT:  Provided cost of certified mail during hearing                                                             
on HB 158.                                                                                                                      
                                                                                                                                
JOE BALASH, Legislative Secretary                                                                                               
   to Representative Gene Therriault                                                                                            
Alaska State Legislature                                                                                                        
Capitol Building, Room 511                                                                                                      
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-4797                                                                                                      
POSITION STATEMENT:  Presented HB 136 on behalf of the bill                                                                     
sponsor.                                                                                                                        
                                                                                                                                
LISA VonBARGEN, Executive Director                                                                                              
Valdez Convention and Visitors Bureau                                                                                           
P.O. Box 1603                                                                                                                   
Valdez, Alaska 99686                                                                                                            
Telephone:  (907) 835-2984                                                                                                      
POSITION STATEMENT:  Commented briefly on the gradual tourism                                                                   
marketing funding reduction contained in the Version K committee                                                                
substitute for HB 136.                                                                                                          
                                                                                                                                
NANCY LETHCOE                                                                                                                   
P.O. Box 1313                                                                                                                   
Valdez, Alaska 99686                                                                                                            
Telephone:  (907) 835-5175                                                                                                      
POSITION STATEMENT:  Testified in support of the Version K                                                                      
committee substitute for HB 136 but encouraged the committee to                                                                 
consider alternative funding sources such as those proposed in SB
122.                                                                                                                            
                                                                                                                                
GINNY FAY, Legislative Liaison                                                                                                  
  and Acting Director of the Division of Tourism                                                                                
Department of Commerce and Economic Development                                                                                 
P.O. Box 110800                                                                                                                 
Juneau, Alaska 99811-0800                                                                                                       
Telephone:  (907) 465-2503                                                                                                      
POSITION STATEMENT:  Explained changes in the Version K committee                                                               
substitute for HB 136, answered questions.                                                                                      
                                                                                                                                
TINA LINDGREN, Executive Director                                                                                               
Alaska Visitors Association                                                                                                     
2525 "C" Street, Number 400                                                                                                     
Anchorage, Alaska 99515                                                                                                         
Telephone:  (907) 561-5733                                                                                                      
POSITION STATEMENT:  Answered questions and testified on the                                                                    
Version K committee substitute for HB 136.                                                                                      
                                                                                                                                
PHIL GREENEY                                                                                                                    
1801 Old Glacier Highway                                                                                                        
Juneau, Alaska 99801                                                                                                            
Telephone:  (907) 463-5855                                                                                                      
POSITION STATEMENT:  Testified as a bed and breakfast owner with                                                                
concerns, especially regarding secure funding, on the Version K                                                                 
committee substitute for HB 136.                                                                                                
                                                                                                                                
REPRESENTATIVE BETH KERTTULA                                                                                                    
Alaska State Legislature                                                                                                        
Capitol Building, Room 430                                                                                                      
Juneau, Alaska  99801                                                                                                           
Telephone:  (907) 465-4766                                                                                                      
POSITION STATEMENT:  Asked questions during HB 136 hearing.                                                                     
                                                                                                                                
ACTION NARRATIVE                                                                                                                
                                                                                                                                
TAPE 99-35, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce                                                                    
Standing Committee meeting to order at 3:24 p.m.  Members present                                                               
at the call to order were Representatives Rokeberg, Halcro, Harris                                                              
and Cissna.  Representative Murkowski arrived at 3:30 p.m.                                                                      
                                                                                                                                
GOVERNOR'S APPOINTMENT: AK WORKERS' COMPENSATION BOARD                                                                          
                                                                                                                                
Number 0118                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG announced the committee's first order of business                                                             
is the Governor's appointment of Andrew J. "Bear" Piekarski of                                                                  
Anchorage to the Alaska Workers' Compensation Board.  The chairman                                                              
questioned whether Commissioner-designee Flanagan of the Department                                                             
of Labor wished to provide any testimony.                                                                                       
                                                                                                                                
Number 0133                                                                                                                     
                                                                                                                                
ED FLANAGAN, Commissioner-designee, Department of Labor, stated he                                                              
is available if Mr. Piekarski needs assistance.                                                                                 
                                                                                                                                
CHAIRMAN ROKEBERG noted the record should reflect                                                                               
Commissioner-designee Flanagan is present for moral encouragement.                                                              
The chairman confirmed Mr. Piekarski's resume was made available to                                                             
the committee.  The chairman has known Mr. Piekarski for a number                                                               
of years as the business manager for the Alaska State District                                                                  
Council of Laborers.  He indicated he thought Mr. Piekarski would                                                               
make a very fine member of the Alaska Worker's Compensation Board.                                                              
Alluding to his involvement with Mr. Piekarski through hockey, the                                                              
chairman declared a conflict of interest.  He commented a vote to                                                               
move the Governor's recommendation from the committee does not                                                                  
reflect any intent on the part of the members to vote for or                                                                    
against an individual during further consideration before the joint                                                             
body of the legislature.                                                                                                        
                                                                                                                                
Number 0255                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO moved the name of Andrew J. "Bear" Piekarski                                                              
to the Alaska Workers' Compensation Board.  There being no                                                                      
objections, it was so ordered.                                                                                                  
                                                                                                                                
                                                                                                                                
HB 143 - REAL ESTATE:SURETY FUND & DISCLOSURES                                                                                  
                                                                                                                                
Number 0279                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG announced the committee's next order of business                                                              
is HB 143, "An Act relating to the executive officer employed for                                                               
the Real Estate Commission, to educational materials published by                                                               
the Real Estate Commission, to the Real Estate Surety Fund, to                                                                  
contracts by the Real Estate Commission, and to disclosures in real                                                             
property transactions."  The chairman noted the presence of a                                                                   
possible committee substitute (CS), Version G, and a possible                                                                   
amendment G.1.                                                                                                                  
                                                                                                                                
Number 0379                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO moved that the committee adopt the proposed                                                               
Version G CS for HB 143 as a working document.  Version G is                                                                    
labeled 1-LS0150\G, Bannister, 4/6/99.  There being no objection,                                                               
it was so ordered.                                                                                                              
                                                                                                                                
CHAIRMAN ROKEBERG stated Version G is before the committee and                                                                  
proceeded to explain the changes in the proposed CS.  The chairman                                                              
noted he had spent several hours in two meetings with the Real                                                                  
Estate Commission during the break and recognized that Larry                                                                    
Spencer of the commission was present.  The chairman indicated the                                                              
original bill had been reviewed and modified based on                                                                           
recommendations from the commission, the chairman, and industry                                                                 
members.  The bill packet contains a number of letters in support,                                                              
including an endorsement of Version G from the Alaska Association                                                               
of REALTORS.                                                                                                                    
                                                                                                                                
Number 0463                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG pointed out that Section 1 had been changed                                                                   
slightly in Version G:  "executive secretary" remains the formal                                                                
title of the executive secretary of the commission, but use of the                                                              
title "executive director" is allowed during performance of duties.                                                             
The use of this title would be allowed to provide title parity when                                                             
the executive secretary has dealings with directors of other                                                                    
states' real estate commissions, but it is clearly not intended to                                                              
result in a pay increase.  Section 2 of Version G allows the                                                                    
commission to adopt regulations regarding disclosure of information                                                             
on real estate transactions; this section replaces the original                                                                 
bill's entire section regarding psychological impairment, HIV                                                                   
[Human Immunodeficiency Virus], ghosts, and so forth.  The chairman                                                             
indicated he thought it would be best to allow the commission to                                                                
address this issue through regulation rather than including                                                                     
specific information in the legislation.  The chairman further                                                                  
indicated he has a legal opinion that the commission might not even                                                             
need this section.                                                                                                              
                                                                                                                                
Number 0598                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG explained the core of the legislation begins in                                                               
Section 3 of Version G.  The surety fund maximum is $500,000.                                                                   
Beginning on page 2, line 6, the legislation provides that the                                                                  
interest income earned by the surety fund returns to the fund - to                                                              
the licensees.  The chairman reminded the committee the surety fund                                                             
was established in lieu of a bonding situation.  It was done for                                                                
the convenience of the real estate industry, but, more importantly,                                                             
for protection of Alaskan consumers.  Page 2, line 7, specifies                                                                 
that the money appropriated to the fund does not lapse.  The                                                                    
chairman stated, "Currently it's been necessary to make the                                                                     
(indisc.) appropriation in the front section of the budget to move                                                              
the lapse of the fund, so this would prohibit that, any potential                                                               
excess monies in the fund, for example, right now because ... the                                                               
publications specialist position is not funded, the ... monies are                                                              
not being used up so it could be potentially under future surpluses                                                             
in the fund and that that should not lapse into the general fund,                                                               
... this prohibits that."  The chairman indicated the added                                                                     
language on lines 9 through 11, "for claims against the fund, for                                                               
hearing and legal expenses directly related to fund operations and                                                              
claims, and", ensures that any other expenses concerning a claim                                                                
can be addressed.  However, this would be relatively unusual                                                                    
because there is no legal counsel involved with hearings before the                                                             
fund:  the claimant and claimee bring their own cases.                                                                          
                                                                                                                                
Number 0741                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG continued.  Section 4 provides for an accounting                                                              
of fund balances to the Real Estate Commission by the Department of                                                             
Commerce and Economic Development (DCED).  This allows the                                                                      
commission to be aware if the fund is near the ceiling or floor                                                                 
amounts; this was part of the original legislation.  Section 5                                                                  
provides for the averaging of the surety fund balance, which can                                                                
vary, over the two-year licensing cycle.  The fund has a $250,000                                                               
floor and a $500,000 cap.  Averaging the fund balance allows the                                                                
commission to make adjustments accordingly when setting the                                                                     
two-year surety fund fee along with the licensing fee.  One                                                                     
significant difference in the proposed CS is that the legislation                                                               
would no longer affect the educational purposes of the surety fund.                                                             
The chairman indicated his original idea of transferring these                                                                  
purposes to the licensing fee would have subjected the Real Estate                                                              
Commission and the administration of this area to the whim of the                                                               
House Finance Standing Committee regarding funding because of the                                                               
budgetary statute regarding program receipts.  The chairman                                                                     
commented on the entire Real Estate Commission staff turnover                                                                   
occurring in Anchorage - executive secretary, the publication                                                                   
position under the surety fund, and the licensing examiner - and                                                                
indicated this lack of continuity was the reason to avoid                                                                       
jeopardizing the commission's operating ability.  Chairman Rokeberg                                                             
noted they have taken a different approach, referring to page 3,                                                                
subsection (d) of Version G.  Subsection (d) read:                                                                              
                                                                                                                                
          (d) If the salary of an employee is entirely or                                                                       
     partially paid for from money in the real estate surety                                                                    
     fund, the employee may perform administrative duties for                                                                   
     the commission in addition to any duties the employee                                                                      
     performs that are related to the real estate surety fund.                                                                  
     AS 08.88.910 does not apply to this subsection.                                                                            
                                                                                                                                
CHAIRMAN ROKEBERG indicated the industry complaint has been the                                                                 
alleged misuse of surety fund monies for educational purposes.                                                                  
However, one existing problem is that the publication specialist                                                                
funded out of the surety fund has not been allowed to perform                                                                   
administrative duties and assist the executive secretary because of                                                             
the statutory construction.  The chairman noted the executive                                                                   
secretary also receives some allocation from the surety fund.                                                                   
Subsection (d) would allow the publication specialist to perform                                                                
administrative duties for the commission in addition to duties                                                                  
relating to the surety fund, which is the education.  This approach                                                             
has been discussed with the legislative committee of the Alaska                                                                 
Association of REALTORS and they are in agreement at the current                                                                
juncture.                                                                                                                       
                                                                                                                                
Number 0956                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG referred to the possible G.1 amendment before the                                                             
committee.  This amendment would provide for the insertion of a new                                                             
subsection (b) on page 2 [later discussion amends the lettering of                                                              
this subsection to (c)].  The chairman declared a conflict of                                                                   
interest, noting he is a licensed real estate broker and does not                                                               
wish to be excused.  Chairman Rokeberg indicated the original bill                                                              
had sought to remove the responsibility for publication of the                                                                  
landlord-tenant booklet from the Real Estate Commission.  From the                                                              
chairman's discussions with the commission and the legislative                                                                  
committee of the Alaska Board of REALTORS, the licensees are                                                                    
willing to pay the approximately $6,000 publication cost of this                                                                
booklet for both the public benefit and the education of the                                                                    
industry members [testimony is unclear as to whether the cost is                                                                
annual or for the two-year licensing period].  However, there is no                                                             
statutory authority allowing the $6,000 removed for publication                                                                 
from the surety fund to be replaced into the fund.  The commission                                                              
charges $1 per booklet, but that $1 has to go into the general                                                                  
fund.  In addition, there are sometimes surplus funds from entry                                                                
fees for educational seminars the commission might hold.  This                                                                  
amendment provides that program receipts from any type of activity                                                              
funded by the surety fund go back into the surety fund, not into                                                                
the general fund.  The chairman designated this G.1 amendment as                                                                
Amendment 1.                                                                                                                    
                                                                                                                                
Number 1118                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO moved Amendment 1.  Amendment 1, labeled                                                                  
1-LS0150\G.1, Bannister, 4/9/99 read:                                                                                           
                                                                                                                                
     Page 2, line 6:                                                                                                            
          Delete "and"                                                                                                          
                                                                                                                                
     Page 2, line 7, following "in the fund":                                                                                   
          Insert ", and money deposited in the fund under (b)                                                                   
          of this section"                                                                                                      
                                                                                                                                
     Page 2, line 12:                                                                                                           
          Delete "a new subsection"                                                                                             
          Insert "new subsections"                                                                                              
                                                                                                                                
     Page 2, following line 12:                                                                                                 
          Insert a new subsection to read:                                                                                      
               "(b) If money from the real estate surety fund                                                                   
          is expended to prepare, print, manufacture,                                                                           
          sponsor, produce, or otherwise provide an item or a                                                                   
          service to a member of the public, to a real estate                                                                   
          licensee, to a potential real estate licensee, or                                                                     
          to another person, any money paid by the person to                                                                    
          the commission, either directly or through an agent                                                                   
          or contractor of the commission, to receive the                                                                       
          item or service shall be deposited in the fund.  In                                                                   
          this subsection, "an item or a service" includes an                                                                   
          information pamphlet, an examination preparation                                                                      
          packet, an educational course, the certification of                                                                   
          a real estate education course, and the approval of                                                                   
          a real estate education instructor."                                                                                  
                                                                                                                                
     Reletter the following subsection accordingly.                                                                             
                                                                                                                                
CHAIRMAN ROKEBERG asked if there was any discussion of Amendment 1.                                                             
                                                                                                                                
REPRESENTATIVE MURKOWSKI questioned if the existing subsection (b)                                                              
in Version G, beginning on line 13, page 2, was being deleted to                                                                
insert Amendment 1's language, or if the existing (b) remained and                                                              
was just relettered.  The existing subsection (b) in Version G                                                                  
read:                                                                                                                           
                                                                                                                                
          (b) The Department of Commerce and Economic                                                                           
     Development shall provide the commission every three                                                                       
     months with a statement of the activities of, balances                                                                     
     in, interest earned on, and interest returned to the real                                                                  
     estate surety fund."                                                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG initially responded that Amendment 1 was simply                                                               
deleting the words "a new subsection" and inserting "new                                                                        
subsections".  However, he also questioned why the new subsection                                                               
was designated (b).  He discussed this briefly with Janet Seitz,                                                                
aide to the House Labor and Commerce Committee and legislative                                                                  
assistant to the chairman.                                                                                                      
                                                                                                                                
Number 1196                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG called an at-ease at 3:42 p.m.  The committee                                                                 
came back to order in less than a minute.                                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG announced the committee would make a technical                                                                
amendment to line 10 of Amendment 1, the G.1 amendment, relettering                                                             
the subsection lowercase "(b)" to lowercase "(c)".  The chairman                                                                
clarified that Amendment 1 is only intended to add that new                                                                     
subsection.  There being no objection to Amendment 1 as technically                                                             
amended, Amendment 1 was adopted as amended.                                                                                    
                                                                                                                                
Number 1244                                                                                                                     
                                                                                                                                
LARRY SPENCER, Real Estate Commission, came forward at the                                                                      
chairman's invitation.  He stated the commission appreciated the                                                                
opportunity to have input through the chairman's office and is in                                                               
support of the legislation.                                                                                                     
                                                                                                                                
Number 1279                                                                                                                     
                                                                                                                                
TOM MARTIN testified next via teleconference from Kodiak in support                                                             
of HB 143.  He testified as a private citizen, stating he is a                                                                  
licensed real estate agent.  Mr. Martin noted Linda Freed had also                                                              
been present, but had to leave.  He conveyed that Ms. Freed is in                                                               
support of HB 143 and had said she would be sending a POM [public                                                               
opinion message].  Mr. Martin thanked the chairman for the bill's                                                               
introduction; he indicated he thinks it corrects some long-standing                                                             
problems with money going out of the surety fund inappropriately.                                                               
                                                                                                                                
Number 1332                                                                                                                     
                                                                                                                                
MICHAEL HUGHES, Board of Directors, Alaskan AIDS Assistance                                                                     
Association, testified next via teleconference from Anchorage.  Mr.                                                             
Hughes confirmed from the chairman that the committee was dropping                                                              
the miscellaneous provision specifying people exposed to HIV                                                                    
[Section 8, original bill, 1-LS0150\D].  He indicated that                                                                      
provision had been his reason for participating.                                                                                
                                                                                                                                
CHAIRMAN ROKEBERG questioned whether Mr. Hughes was aware that                                                                  
provision is currently a matter of federal law under HUD [U.S.                                                                  
Department of Housing and Urban Development].                                                                                   
                                                                                                                                
MR. HUGHES replied he had not been aware.                                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG indicated the legislation's former provision had                                                              
basically been redundant, and was more or less included for the                                                                 
information of Alaska licensees.  The chairman noted Mr. Hughes                                                                 
should be aware that currently any licensee is forbidden from                                                                   
making that disclosure.  The chairman added that Dr. Middaugh, the                                                              
chief state epidemiologist, had indicated his support for                                                                       
broadening that provision to all infectious diseases, if the                                                                    
provision had been retained, because there is no need to do so                                                                  
[disclose].                                                                                                                     
                                                                                                                                
MR. HUGHES said they had just been concerned with specifying one                                                                
disease versus any others.                                                                                                      
                                                                                                                                
Number 1413                                                                                                                     
                                                                                                                                
CHARLES SANDBERG, President, Alaska Association of REALTORS,                                                                    
testified next via teleconference from Anchorage in support of HB
143.  He thanked the chairman for allowing the association's input                                                              
on this issue and expressed the support for this legislation by the                                                             
Alaska Association of REALTORS, representing over 1,100 members                                                                 
statewide.                                                                                                                      
                                                                                                                                
CHAIRMAN ROKEBERG questioned Mr. Sandberg regarding the importance                                                              
of passing the legislation this year because of the two-year                                                                    
[licensing] cycle.                                                                                                              
                                                                                                                                
MR. SANDBERG replied they are ending their current licensing cycle.                                                             
The legislation affects how the Division of Occupational Licensing                                                              
and the Real Estate Commission calculate the license fees.  If this                                                             
legislation is passed, it puts some finality on how that                                                                        
calculation is made.                                                                                                            
                                                                                                                                
Number 1485                                                                                                                     
                                                                                                                                
ART CLARK, Chairman, Industry Issues Working Group, Alaska                                                                      
Association of REALTORS; Member, Legislative Committee, Anchorage                                                               
Board of REALTORS, testified next via teleconference from Anchorage                                                             
in support of HB 143 on behalf of the Alaska Association of                                                                     
REALTORS.  Mr. Clark indicated the issue of how the surety fund                                                                 
monies were allocated has caused quite a bit of controversy                                                                     
industry-wide in the past.  He thinks the legislation goes a long                                                               
way toward clearing up some of those issues in an equitable manner.                                                             
                                                                                                                                
REPRESENTATIVE HALCRO mentioned that airport noise is a huge                                                                    
concern "out in our area," as Mr. Clark knows.  Section 2 of the                                                                
legislation [misstated as "8"] gives the commission the power to                                                                
adopt disclosure information.  Representative Halcro questioned if                                                              
Mr. Clark's committee has examined or addressed anything about                                                                  
disclosures, or plans to do so, when someone buys or sells homes                                                                
within a certain noise corridor of the Anchorage International                                                                  
Airport.                                                                                                                        
                                                                                                                                
MR. CLARK indicated the issue has just recently come to the                                                                     
legislative committee's attention and no formal position has been                                                               
adopted.  Mr. Clark urged caution in this area.  The Real Estate                                                                
Commission has the ability to pass regulations concerning this                                                                  
matter; he would recommend that be the avenue addressed in seeking                                                              
any kind of noise level disclosure, rather than addressing it in                                                                
statute.  Mr. Clark indicates there are difficulties with regards                                                               
to this information for both real estate agents and homeowners.  He                                                             
thinks the noise level data are generated through the airport; he                                                               
is not aware how those calculations are made and where any problems                                                             
are.                                                                                                                            
                                                                                                                                
REPRESENTATIVE HALCRO agreed that the commission would be best                                                                  
suited to handle this.  He stated, "My concern is - I'm not quite                                                               
sure if you remember - a year ago when the local assembly tried to                                                              
free zoning out in a certain corridor out by the airport, which                                                                 
would have affected a number of subdivisions in our area and a                                                                  
number of vacant lots."  Representative Halcro indicated the                                                                    
concern is for the commission to address the issue preemptively so                                                              
there would be something in place "versus ... kind of tying folks'                                                              
hands when it comes to zoning changes."                                                                                         
                                                                                                                                
MR. CLARK replied he thinks that is probably a good way to handle                                                               
things.  He expressed concern regarding anything "stuck in stone"                                                               
regarding zoning regulations or statute.  He thinks it is better to                                                             
make the information available to people and let them decide                                                                    
whether they wish to live there or not.                                                                                         
                                                                                                                                
CHAIRMAN ROKEBERG thanked Representative Halcro for bringing the                                                                
issue up.  Proceeding to further teleconference testimony, the                                                                  
chairman invited Ron Johnson in Kenai to speak.  He noted there is                                                              
a communication in the committee packet from Mr. Johnson.                                                                       
                                                                                                                                
Number 1671                                                                                                                     
                                                                                                                                
RON JOHNSON testified next via teleconference from Kenai.  He is a                                                              
licensed real estate broker and former member of the Real Estate                                                                
Commission.  Mr. Johnson indicated his faxed comments to the                                                                    
committee provide his views but he would like to reiterate                                                                      
somewhat.  He indicated he might be able to offer the committee                                                                 
some insight as a commission member during the change from                                                                      
executive director to executive secretary.  His concern is that the                                                             
statute specifically precludes a licensee from misrepresenting                                                                  
designations [from Mr. Johnson's fax, AS 08.88.401(a)].  He has not                                                             
seen that the "executive secretary" position is of less importance                                                              
than "executive director" in his attendance at industry meetings.                                                               
Mr. Johnson sees this as a potential step in the wrong direction:                                                               
the reason for allowing this title use might be forgotten in the                                                                
future and the position might be funded as an executive director                                                                
position.  Per statute, the duties of the executive secretary of                                                                
the Real Estate Commission are specifically duties that would be                                                                
assigned to a secretary.  In some states where there is actually a                                                              
director and/or a real estate commissioner, it is a different                                                                   
position totally.  Mr. Johnson indicated he does not see the logic                                                              
or reasoning behind allowing the executive secretary to use the                                                                 
title of executive director.                                                                                                    
                                                                                                                                
CHAIRMAN ROKEBERG noted, though, the current executive secretary                                                                
[Grayce Oakley] is retiring.  The commission is attempting to fill                                                              
the position and the chairman commented it is not an especially                                                                 
high-paying job.  The chairman questioned whether Mr. Johnson                                                                   
didn't think that could be helpful in recruiting, or if Mr. Johnson                                                             
thought that was not important.                                                                                                 
                                                                                                                                
Number 1762                                                                                                                     
                                                                                                                                
MR. JOHNSON indicated he didn't think it was at all important.  He                                                              
thinks the position pays well enough to the duties.  He indicated                                                               
the only place where he sees the duties being somewhat different                                                                
from the duties of a secretary is when the executive secretary, at                                                              
times, during surety fund or license hearings, acts as a                                                                        
representative of the commission.  Mr. Johnson noted that is part                                                               
of the surety fund travel budget he had planned to address a little                                                             
later - that is one of the reasons the executive secretary will                                                                 
have to be allowed some money for travel.  Mr. Johnson reiterated                                                               
his disagreement with allowing the executive secretary to use the                                                               
title of executive director; he sees it as a "pitfall down the                                                                  
pike."   He commented Governor Cowper perceived the only way to                                                                 
regain control of the Real Estate Commission, forcing the board                                                                 
itself to control the real estate business, was to eliminate the                                                                
director position and put it into a secretarial position.                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG noted he appreciated Mr. Johnson's testimony.                                                                 
The chairman indicated Mr. Johnson's suggested additional wording                                                               
in his fax, "into the general fund but is returned to the surety                                                                
fund.", to be placed after "does not lapse." on page 2, line 7 of                                                               
Version G, was not necessary from a statutory or drafting stand                                                                 
point.                                                                                                                          
                                                                                                                                
Number 1845                                                                                                                     
                                                                                                                                
MR. JOHNSON explained he suggested the additional language for                                                                  
clarity.  Mr. Johnson also indicated he thinks the portion of the                                                               
legislation allowing the Real Estate Commission to adopt                                                                        
regulations concerning disclosure should cite the enabling statute                                                              
[from Mr. Johnson's fax, AS 08.88.071(H)(7)].  Mr. Johnson                                                                      
expressed his view of the importance of the newsletter, which gives                                                             
the commission the ability to communicate with the membership.  He                                                              
further expressed his opinion that the budget, travel fund, et                                                                  
cetera, should be controlled by the commission, and that the                                                                    
director position should be vacant so the real estate commission is                                                             
able to direct the secretary.                                                                                                   
                                                                                                                                
CHAIRMAN ROKEBERG confirmed there were no questions for Mr. Johnson                                                             
and noted he thought Mr. Johnson had made some excellent comments.                                                              
                                                                                                                                
Number 1917                                                                                                                     
                                                                                                                                
DAVE FEEKEN, Kenai Peninsula Association of REALTORS, testified                                                                 
next via teleconference from Kenai in support of HB 143.  The Kenai                                                             
Peninsula board's legislative committee has met and is in total                                                                 
agreement with the other witnesses who have testified, including                                                                
Mr. Johnson, in support of this issue.                                                                                          
                                                                                                                                
Number 1959                                                                                                                     
                                                                                                                                
CATHERINE REARDON, Director, Division of Occupational Licensing,                                                                
Department of Commerce and Economic Development, came forward to                                                                
testify in support of HB 143.  The division employs the Real Estate                                                             
Commission's staff.  Ms. Reardon appreciates the work done on the                                                               
draft CS and anticipates the fiscal note will be zero.                                                                          
                                                                                                                                
CHAIRMAN ROKEBERG asked if Ms. Reardon had a comment on the issue                                                               
Mr. Johnson raised concerning the executive director/executive                                                                  
secretary title change.                                                                                                         
                                                                                                                                
MS. REARDON appreciated the change from the original bill because                                                               
of her expressed concern about it triggering a salary change.                                                                   
Currently, the executive secretary is authorized by Ms. Reardon to                                                              
use the working title "executive administrator" when useful.  Ms.                                                               
Reardon indicated she had not heard a lot of concern about negative                                                             
effects resulting from use of the "executive secretary" title, but                                                              
it is not a big issue to her either way.                                                                                        
                                                                                                                                
REPRESENTATIVE HALCRO sought clarification on the committee's                                                                   
positive fiscal note of $104,000.                                                                                               
                                                                                                                                
Number 2020                                                                                                                     
                                                                                                                                
MS. REARDON explained that fiscal note from the original bill had                                                               
been created with the intention of showing $104,000 less being                                                                  
spent from the surety fund, with the money being moved straight                                                                 
over as a "wash" to the general fund, but had not looked that way                                                               
as was pointed out at the previous hearing.  In the proposed CS,                                                                
that shift from the surety fund no longer occurs and the issue                                                                  
becomes moot.  Ms. Reardon indicated the original bill's fiscal                                                                 
note could have been presented differently to show the intended                                                                 
zero wash, but a new zero note would be required to go with the CS                                                              
once it is adopted.  In response to the chairman's comment, she                                                                 
explained the department is not allowed to present fiscal notes                                                                 
until committee substitutes are formally adopted.                                                                               
                                                                                                                                
REPRESENTATIVE CISSNA questioned if Ms. Reardon thought there might                                                             
possibly be a good reason to change the title since Ms. Reardon had                                                             
informed the executive secretary there was another title which                                                                  
could be used if needed.                                                                                                        
                                                                                                                                
MS. REARDON indicated she has informed the three people in the                                                                  
executive secretary job class that they may use the title                                                                       
"executive administrator."   Besides the executive secretary to the                                                             
Real Estate Commission, there is the executive secretary to the                                                                 
State Medical Board and the executive secretary to the Board of                                                                 
Nursing.  Ms. Reardon further indicated at times one or the other                                                               
had mentioned it might be helpful to use a different title when                                                                 
signing correspondence to avoid confusion that the executive                                                                    
secretary was a clerical position rather than the top staff person                                                              
for the profession.  They had arrived at "executive administrator"                                                              
or "administrator" as a working title.  Ms. Reardon noted that                                                                  
since "executive director" is another job class in the state                                                                    
system, she did not switch to "executive director" at that time.                                                                
"Executive director" goes with autonomous commissions such as the                                                               
Alaska Public Utilities Commission.  Ms. Reardon agreed she had                                                                 
heard it might be useful to not always require the "executive                                                                   
secretary" title be used, but indicated she has not heard of any                                                                
ongoing problem since that time.                                                                                                
                                                                                                                                
Number 2142                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG requested Mr. Spencer of the Real Estate                                                                      
Commission rejoin the committee at the table.  The chairman                                                                     
indicated he wished to hear what Mr. Spencer thinks the                                                                         
commission's position would be.                                                                                                 
                                                                                                                                
MR. SPENCER replied the idea did not originate with the commission                                                              
but it was brought to their attention in the drafting of this                                                                   
legislation.  He thinks the commission felt that it would useful to                                                             
provide the incoming secretary with possibly somewhat more of a                                                                 
position of authority in dealing with the public, with licensees,                                                               
and people outside the state.  If more respect for the position                                                                 
could be engendered without necessarily increasing the pay, that                                                                
might be desirable.                                                                                                             
                                                                                                                                
CHAIRMAN ROKEBERG questioned the use of "executive administrator"                                                               
to be consistent with the directive of the division director.                                                                   
                                                                                                                                
MR. SPENCER thought either of those languages would assist.                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG asked if Ms. Reardon had an opinion.                                                                          
                                                                                                                                
MS. REARDON answered she is very happy with the bill so it is a                                                                 
minor detail to her.  She supposes she prefers "executive                                                                       
administrator," but does not want hinder the legislation in any                                                                 
way.                                                                                                                            
                                                                                                                                
Number 2219                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG questioned if anyone else wished to testify on HB
143.  He noted the committee's dilemma regarding what this position                                                             
would be called and requested input.                                                                                            
                                                                                                                                
REPRESENTATIVE HALCRO indicated he would recommend the committee                                                                
adopt the language currently in the bill.                                                                                       
                                                                                                                                
MR. JOHNSON commented the National Association of REALTORS has been                                                             
endorsing the "executive administrator" title for some time now,                                                                
moving away from the executive officers and that sort of thing.  He                                                             
thinks it would really have a significant impact if they put the                                                                
"executive director" back.                                                                                                      
                                                                                                                                
CHAIRMAN ROKEBERG closed the public testimony on HB 143.                                                                        
                                                                                                                                
REPRESENTATIVE MURKOWSKI referred to the language in Section 2 of                                                               
the proposed CS which would be added to AS 08.88.081, "The                                                                      
commission may adopt regulations concerning the disclosure of                                                                   
information in real estate transactions.".  She sought                                                                          
clarification on the change from the specific language in the                                                                   
original bill to this language which would allow the commission to                                                              
do the disclosure simply through regulation.  Representative                                                                    
Murkowski apologized if the chairman had made the explanation                                                                   
already.  She noted Mr. Johnson had touched on it briefly when he                                                               
said it might be wise to include the enabling statute.                                                                          
                                                                                                                                
Number 2322                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG moved an amendment to remove Section 2 from                                                                   
Version G.  He indicated his reason for the amendment is that the                                                               
Real Estate Commission already has the authority to make                                                                        
regulations and that he has a legal opinion supporting this.  The                                                               
chairman noted, "The records of the Real Estate Commission will                                                                 
show the discussion at which I requested them (indisc.) request the                                                             
Attorney General ask whether or not they have authority to make                                                                 
regulations on any of the issues that were covered in the first                                                                 
portion (indisc.) first draft of the bill.  They have agreed to do                                                              
that.  They also request[ed] to me that I request legal counsel,                                                                
our legal affairs, to do the same and I have done so.  I have in                                                                
hand an opinion that says that the Real Estate Commission does have                                                             
the authority to draft regulations on those issues currently.  This                                                             
is consistent with what the committee staff has found to be the                                                                 
case in the state of New York where, relying on a real estate                                                                   
opinion from the attorney general of the state of New York, the New                                                             
York Real Estate Commission has promulgated regulations as to                                                                   
psychological impairment."  He commented the form of disclosure                                                                 
statement is AS 34.70.050 and there is an additional specific                                                                   
portion of the chapter that allows the commission to draft                                                                      
regulations to implement the chapter.  He asked Ms. Reardon for                                                                 
confirmation.                                                                                                                   
                                                                                                                                
MS. REARDON indicated it looked like the existing language in AS                                                                
08.88.081 allows this.                                                                                                          
                                                                                                                                
          Sec. 08.88.081.  Commission regulations.  The                                                                         
     commission shall adopt regulations necessary to carry out                                                                  
     the purposes of this chapter.                                                                                              
                                                                                                                                
REPRESENTATIVE MURKOWSKI confirmed the chairman only intended to                                                                
remove the language which was to be added, not to remove the                                                                    
existing statutory language.                                                                                                    
                                                                                                                                
Number 2425                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG noted with that he would move Amendment 2:  that                                                              
conceptually Section 2 be removed from the bill.  There being no                                                                
objection, Conceptual Amendment 2 was adopted.                                                                                  
                                                                                                                                
Number 2442                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO moved Amendment 3 on page 1, line 10, after                                                               
"executive" to delete "director" and insert "administrator".                                                                    
                                                                                                                                
CHAIRMAN ROKEBERG asked if there were any questions or objections                                                               
to Conceptual Amendment 3.  There being none, Conceptual Amendment                                                              
3 was adopted.                                                                                                                  
                                                                                                                                
REPRESENTATIVE MURKOWSKI indicated the bill title would need to be                                                              
changed because of the wording "executive officer".                                                                             
                                                                                                                                
CHAIRMAN ROKEBERG indicated the amendment should include the                                                                    
appropriate title change, noting that was the reason it was                                                                     
conceptual.                                                                                                                     
                                                                                                                                
TAPE 99-35, SIDE B                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
There was brief discussion regarding "executive officer" in the                                                                 
bill title and whether another amendment was necessary.  No                                                                     
additional amendment was deemed necessary.                                                                                      
                                                                                                                                
Number 0053                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO made a motion to move CSHB 143, Version G as                                                              
amended, out of committee with individual recommendations and the                                                               
attached "zero" fiscal note.  There being no objection, CSHB(L&C)                                                               
moved out of the House Labor and Commerce Standing Committee.                                                                   
                                                                                                                                
                                                                                                                                
HB 62 - ALASKA PUBLIC UTILITIES COMMISSION                                                                                      
                                                                                                                                
Number 0083                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG announced the committee's next order of business                                                              
is HB 62, "An Act relating to the Alaska Public Utilities                                                                       
Commission; and providing for an effective date."  The chairman                                                                 
pointed out the committee has before it CSHB 62(URS), Version H.                                                                
                                                                                                                                
Number 0094                                                                                                                     
                                                                                                                                
WILDA RODMAN, Legislative Administrative Assistant to                                                                           
Representative Gene Therriault, Alaska State Legislature, came                                                                  
forward to present HB 62 on behalf of the bill sponsor.  She noted                                                              
Representative Therriault apologizes for his absence; he has a                                                                  
House Finance Standing Committee commitment.  Ms. Rodman summarized                                                             
the sponsor statement.  Under AS 42.05 and AS 42.06, the Alaska                                                                 
Public Utilities Commission (APUC) regulates public utilities by                                                                
certifying qualified providers of public utility and pipeline                                                                   
services.  The commission is designed to ensure utilities provide                                                               
safe and adequate services and facilities at reasonable rates.                                                                  
Under AS 44.66.010, termination of state boards and commissions,                                                                
APUC will expire June 30, 1999.  If the legislature does not act to                                                             
extend the commission, APUC would have one year, until June 30,                                                                 
2000, to conclude its affairs.  The CS for HB 62 was amended to                                                                 
extend the commission for two years, instead of four, to allow the                                                              
legislature to revisit the commission's progress toward addressing                                                              
several problems identified through the public hearing process.                                                                 
                                                                                                                                
MS. RODMAN explained HB 62 was intentionally introduced with a                                                                  
broad title because Representative Therriault believes the reason                                                               
the legislature specifies the sunset date is to address possible                                                                
commission shortcomings.  Representative Therriault believes                                                                    
shortcomings have been identified through the hearing process.  Ms.                                                             
Rodman indicated the sponsor prefers the legislation's original                                                                 
title but, because of the short time remaining in the legislative                                                               
session, does not object to passage of the current version in a                                                                 
timely manner.                                                                                                                  
                                                                                                                                
Number 0199                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked for clarification regarding the                                                                  
sponsor's non-support of the title change.  [HB 62's original title                                                             
was, "An Act relating to the Alaska Public Utilities Commission;                                                                
and providing for an effective date."  CSHB 62(URS)'s title is, "An                                                             
Act extending the termination date of the Alaska Public Utilities                                                               
Commission until June 30, 2001; and providing for an effective                                                                  
date."]                                                                                                                         
                                                                                                                                
MS. RODMAN related the title was changed over the sponsor's                                                                     
objections.  The sponsor wished the title to remain broad and to                                                                
address some structural problems with the commission.  She noted                                                                
many of the structural problems have been identified, and some are                                                              
being addressed in another bill.  In response to Representative                                                                 
Murkowski's request for further clarification, Ms. Rodman confirmed                                                             
the sponsor supports the commission's extension, but not the                                                                    
current title change.  She added the sponsor supports the two-year                                                              
extension, as opposed to the four-year extension contained in the                                                               
original bill.  Ms. Rodman clarified for Representative Cissna that                                                             
the title change contained more than just the change in extension                                                               
period.  She indicated the much narrower new title means many other                                                             
issues relating to the commission cannot be dealt with. Ms. Rodman                                                              
noted the sponsor would like the record to reflect that he thinks                                                               
it is not good public policy to usher the sunset through without                                                                
dealing with the problems; the reason for the sunset is to deal                                                                 
with shortcomings in the commission.  However, the sponsor wishes                                                               
to see the bill move.                                                                                                           
                                                                                                                                
Number 0247                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG said he is also a member of the House Special                                                                 
Committee on Utility Restructuring (URS).  This particular                                                                      
legislation received significant hearing in that committee.  As the                                                             
sponsor's staff indicates, the original bill contained additions                                                                
beyond the sunset.  The chairman noted the audit had not been                                                                   
completed when the bill came to URS; that audit is now complete.                                                                
From the testimony before it, URS determined restructuring of APUC                                                              
is necessary.  Chairman Rokeberg indicated the House Labor and                                                                  
Commerce Standing Committee would be receiving the legislation                                                                  
dealing with this restructuring and would have ample opportunity to                                                             
take up the issues surrounding the commission at that time.  The                                                                
chairman further indicated, noting he had been part of the                                                                      
decision-making process, that the prior committee determined it                                                                 
would be cleaner to do this with a shorter horizon.  He emphasized                                                              
the need for the APUC to be extended because of the effect of a                                                                 
sunset on industry, the existing dockets, and business before the                                                               
commission.                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG commented the testimony was that the commission                                                               
is dysfunctional enough without the threat of a "wind-down" year,                                                               
and the resulting cost of that to the utilities.  The chairman                                                                  
noted, therefore, the bill sponsor has agreed to allow this bill to                                                             
move forward, although the sponsor had wished to do further                                                                     
restructuring with his legislation.  Chairman Rokeberg stated his                                                               
intention to move CSHB 62(URS) as rapidly as possible.  In response                                                             
to Representative Halcro's question about whether the National                                                                  
Regulatory Research Institute's (NRRI) report ["audit"] on APUC in                                                              
the bill packet was done in lieu of LB&A's [Joint Committee on                                                                  
Legislative Budget and Audit] audit, the chairman answered in the                                                               
negative.  He indicated the LB&A audit picked up a great deal of                                                                
the NRRI report and the committee would be dealing extensively with                                                             
that report unless URS did more work by the following week.                                                                     
Chairman Rokeberg noted the presence of Walter Wilcox, Sr., aide to                                                             
the House Special Committee on Utility Restructuring.                                                                           
                                                                                                                                
Number 0379                                                                                                                     
                                                                                                                                
JIM ROWE, Director, Alaska Telephone Association (ATA), testified                                                               
via teleconference from Anchorage in support of CSHB 62(URS).                                                                   
Noting he appreciated the chairman's remarks, Mr. Rowe said the ATA                                                             
is very much in support of passage of this reauthorization and they                                                             
look forward to working on APUC restructuring issues in another                                                                 
bill.  In response the chairman's question, Mr. Rowe confirmed ATA                                                              
is in support of this bill.                                                                                                     
                                                                                                                                
Number 0402                                                                                                                     
                                                                                                                                
MARK VASCONI, Director of Regulatory Affairs, AT&T Alascom, came                                                                
forward to testify in support of CSHB 62(URS).  He thinks the                                                                   
chairman's comments were accurate; if the commission went into a                                                                
"wind-down" period, more problems might arise from that.  Mr.                                                                   
Vasconi believes industry wants at least the assurance of some                                                                  
continuity.  He noted other possible structural changes are being                                                               
addressed in another bill, expressing that they would all probably                                                              
have an opportunity to comment on those changes in the near future.                                                             
                                                                                                                                
CHAIRMAN ROKEBERG closed the public hearing on HB 62 after                                                                      
confirming no one else wished to testify.  The chairman confirmed                                                               
the committee had no further questions or discussion regarding the                                                              
legislation.                                                                                                                    
                                                                                                                                
Number 0455                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO made a motion to move CSHB 62(URS) out of                                                                 
committee with individual recommendations and the attached zero                                                                 
fiscal note.  There being no objection, CSHB 62(URS) moved out of                                                               
the House Labor and Commerce Standing Committee.                                                                                
                                                                                                                                
Number 0477                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG called an at-ease at 4:22 p.m.  The committee                                                                 
came back to order at 4:29 p.m.                                                                                                 
                                                                                                                                
                                                                                                                                
HB 158 - NOTICE OF INS. CANCELLATION TO ELDERLY                                                                                 
                                                                                                                                
Number 0484                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG announced the committee's next order of business                                                              
is HB 158, "An Act relating to the annual report of the director of                                                             
the division of insurance and to notice of cancellation of personal                                                             
insurance."  Chairman Rokeberg explained the legislation as the                                                                 
bill sponsor.  He indicated the first portion of the bill would                                                                 
amend AS 21.06.110 by adding a new subsection with the language,                                                                
"statistical information regarding health insurance, including the                                                              
number of individual and group policies sold in the state; and".                                                                
This information would be provided to the Division of Insurance,                                                                
Department of Commerce and Economic Development, to assist the                                                                  
division by mandating insurance companies doing business in the                                                                 
state to determine the number of people covered under individual                                                                
group policies or non-ERISA policies [ERISA, Employee Retirement                                                                
and Security Act].  The chairman noted this has been after a                                                                    
five-year quest for information from the department.                                                                            
                                                                                                                                
Number 0524                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG explained the second portion of the legislation                                                               
results from the experience of his neighbor.  The neighbor is in                                                                
his 80s, with an invalid wife.  The neighbor was involved in an                                                                 
automobile accident and afterwards discovered his insurance had                                                                 
expired about four months previously; he hadn't realized he had                                                                 
failed to pay his bill.  The chairman indicated his neighbor is                                                                 
quite lucid but might be suffering from mild forms of dementia,                                                                 
which is not unusual at that age.  As a result, the gentleman was                                                               
able to make a settlement of some $25,000 against an actual $80,000                                                             
damage amount.  [Chairman Rokeberg indicated this settlement                                                                    
information is in a letter in the bill packet from Reverend Ronald                                                              
Martinson of the Central Lutheran Church in Anchorage.  There is an                                                             
April 7, 1999, letter from Reverend Martinson on this issue in the                                                              
bill packet but it does not contain information regarding                                                                       
settlement.]                                                                                                                    
                                                                                                                                
Number 0577                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG emphasized the need to verify that senior and                                                                 
elderly Alaskans receive proper notice their insurance is going to                                                              
be canceled.  The legislation only covers personal insurance -                                                                  
property and casualty - excluding life and health.  Currently, the                                                              
insurance companies only have to register a notice of mailing                                                                   
within their own records; they do not have to have a return                                                                     
receipt.  The legislation gives Alaskans over 67 years old a longer                                                             
period of notification and a letter mailed return receipt ten days                                                              
prior to cancellation.  Commenting that this is like an unfunded                                                                
mandate to the insurance industry, the chairman noted the insurance                                                             
industry would incur some costs because the timing would begin at                                                               
60 days, rather than the current 30 days, and the return receipt                                                                
would be required.  The chairman requested that Janet Seitz, aide                                                               
to the House Labor and Commerce Standing Committee, explain the                                                                 
current statutory requirements for notification and the changes the                                                             
legislation would make for older Alaskans.                                                                                      
                                                                                                                                
Number 0665                                                                                                                     
                                                                                                                                
JANET SEITZ, Legislative Assistant to Representative Norman, Alaska                                                             
State Legislature came forward.  As aide to the House Labor and                                                                 
Commerce Standing Committee (Labor and Commerce), she explained the                                                             
changes.  Ms. Seitz indicated the current basic scheme for everyone                                                             
is shown on page 2, line 17 through 23, of the bill:  written                                                                   
notice of cancellation at least 30 days before the effective date,                                                              
a 20-day notice, and a 10-day notice.  House Bill 158 would require                                                             
a different notice schedule if a person is 67 or older:  first                                                                  
notice at least 60 days before the effective date of cancellation,                                                              
second notice at least 30 days, and a third written notice at least                                                             
10 days before sent by certified mail.                                                                                          
                                                                                                                                
CHAIRMAN ROKEBERG questioned if the committee understands what the                                                              
legislation does.  He confirmed for Representative Harris that only                                                             
the last mailing is by certified mail.                                                                                          
                                                                                                                                
Number 0720                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO confirmed from the chairman that the incident                                                             
mentioned in the sponsor statement and in the letter on the Central                                                             
Lutheran Church letterhead concern the same individual.                                                                         
Representative Halcro commented the letter says the couple had a                                                                
caregiver who confessed to taking advantage of the couple's                                                                     
finances for over $40,000.                                                                                                      
                                                                                                                                
CHAIRMAN ROKEBERG said that is a different incident not spoken to                                                               
in the bill; he indicated it simply makes this couple's situation                                                               
that much worse.                                                                                                                
                                                                                                                                
REPRESENTATIVE HALCRO questioned whether the caregiver could have                                                               
thrown away the notice of cancellation.                                                                                         
                                                                                                                                
CHAIRMAN ROKEBERG agreed it was possible.                                                                                       
                                                                                                                                
REPRESENTATIVE HALCRO questioned how this legislation would prevent                                                             
this situation if someone keeps throwing the notice away or if                                                                  
someone moves.                                                                                                                  
                                                                                                                                
CHAIRMAN ROKEBERG answered he thinks it protects the insurance                                                                  
company because it would have the return receipt, being able to                                                                 
prove the notice was sent.  He thinks it helps both the recipient                                                               
and the insurer.                                                                                                                
                                                                                                                                
REPRESENTATIVE HALCRO asked if any other cases like this have                                                                   
occurred, indicating he is trying to understand the reason for                                                                  
changing the notice structure.                                                                                                  
                                                                                                                                
CHAIRMAN ROKEBERG commented the witness testimony might be helpful.                                                             
                                                                                                                                
Number 0804                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI questioned why the legislation is                                                                      
requesting statistical information on health insurance but no other                                                             
types of insurance.                                                                                                             
                                                                                                                                
CHAIRMAN ROKEBERG replied that is the figure they have been seeking                                                             
for five years.  The department does an excellent job obtaining all                                                             
kinds of other statistics but that one has been elusive.  This                                                                  
legislation is something of a statutory mandate to obtain that                                                                  
statistical information.  It gives the Division of Insurance                                                                    
justification if there is a cost involved in obtaining the                                                                      
information and provides justification to the insurance companies                                                               
for the division's request.                                                                                                     
                                                                                                                                
Number 0856                                                                                                                     
                                                                                                                                
ROSEMARY HAGEVIG, Executive Director, Catholic Community Services,                                                              
came forward to testify in support of HB 158.  Ms. Hagevig noted                                                                
Catholic Community Services is the parent organization to Southeast                                                             
Senior Services; they serve 2,200 seniors in 15 Southeast Alaska                                                                
communities.  They support the legislation, particularly the                                                                    
section dealing with insurance notification for Alaska's elderly                                                                
citizens.  The efforts to provide an extra safety net for probably                                                              
some of the most vulnerable members of the state's population are                                                               
appreciated.  Ms. Hagevig shared that she speaks from personal                                                                  
experience as a distant caregiver for an aging parent.  Her sibling                                                             
living close to the parent tries to intercept the mail every day to                                                             
make sure something important does not go astray.  Ms. Hagevig                                                                  
indicated this legislation would be of great assistance to those                                                                
seniors, many of whom might be afflicted with dementia or                                                                       
Alzheimer's disease, who are trying very hard to maintain                                                                       
independent living for as long as possible outside of institutional                                                             
situations.  She understands there would be some complications with                                                             
the insurance industry but is confident they could be resolved.                                                                 
                                                                                                                                
REPRESENTATIVE MURKOWSKI noted this applied to personal insurance                                                               
and questioned whether Ms. Hagevig thought it should be broadened.                                                              
                                                                                                                                
MS. HAGEVIG thinks it is a step in the right direction, and she is                                                              
sure there was a good reason for beginning this process with                                                                    
personal insurance.  She related a recent situation she had heard                                                               
firsthand from a woman in Ketchikan.  The woman's husband had died,                                                             
had apparently forgotten to pay his life insurance premiums, and                                                                
the wife was unable to collect anything.   Ms. Hagevig noted these                                                              
are very serious situations in people's lives as they become older,                                                             
and she commented on the growth of this segment of the population.                                                              
                                                                                                                                
Number 0993                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG pointed out to the committee there is a statutory                                                             
grace period for life insurance, mentioning 30 days, but no                                                                     
mandated grace period for personal insurance.  The chairman                                                                     
indicated he has had some discussion with members of the industry                                                               
regarding notifications to relatives or other caregivers; he thinks                                                             
it is difficult to do that statutorily.                                                                                         
                                                                                                                                
MS. HAGEVIG said in her personal situation her sibling has made                                                                 
every effort to change the [mailing] address when these situations                                                              
come to light; this is another solution but it is not always                                                                    
effective.  Also, not all senior citizens have family members close                                                             
enough to be able to do that for them.                                                                                          
                                                                                                                                
CHAIRMAN ROKEBERG commented that having a change of address is                                                                  
probably the best advice to anyone in the circumstance; hopefully                                                               
they will generate some publicity with this legislation and pass                                                                
that information on.                                                                                                            
                                                                                                                                
Number 1094                                                                                                                     
                                                                                                                                
JOHN FERENCE, Deputy Director, Division of Insurance, Department of                                                             
Commerce and Economic Development, came forward to answer the                                                                   
committee's questions on HB 158 from a technical standpoint.                                                                    
                                                                                                                                
REPRESENTATIVE MURKOWSKI referred to an April 7, 1999, letter in                                                                
the bill packet from the Alliance of American Insurers which states                                                             
that this is going to be very problematic because there is nothing                                                              
currently in place for them to monitor when someone turns 67.                                                                   
Representative Murkowski commented regular notices would be sent                                                                
out to 70 percent of the public but it would then be necessary to                                                               
monitor everyone's birthday.  She asked Mr. Ference how the                                                                     
division would monitor the industry's compliance with this                                                                      
legislation, if passed.                                                                                                         
                                                                                                                                
MR. FERENCE replied they monitor in two fashions: through consumer                                                              
complaints and a periodic random audit process addressed to both                                                                
insurance agents and companies.  The division looks at producer                                                                 
files to see if the notices are copied there and it examines                                                                    
insurance companies to see if the companies have issued proper                                                                  
notices.  In addition, the division responds to individual consumer                                                             
complaints.                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI questioned whether the division has                                                                    
received complaints regarding the notification situations this                                                                  
legislation would address.                                                                                                      
                                                                                                                                
Number 1198                                                                                                                     
                                                                                                                                
MR. FERENCE replied the division receives consumer complaints on a                                                              
regular basis about inadequate or missing notices.  Investigation                                                               
results show that more often than not the notices were sent and are                                                             
missing in transit or were received and ignored.  Mr. Ference                                                                   
indicated the complaints come from no particular concentration of                                                               
the population.                                                                                                                 
                                                                                                                                
CHAIRMAN ROKEBERG indicated an amendment to the effect that nothing                                                             
in this paragraph would authorize the director to require the                                                                   
insurer to release proprietary information had been suggested                                                                   
regarding the statistical information.  The chairman questioned                                                                 
whether Mr. Ference objected to an amendment of this type.                                                                      
                                                                                                                                
MR. FERENCE replied he is not really in a position to offer an                                                                  
opinion because he does not know if the carrier they would request                                                              
this information from would view it as proprietary.  However, if                                                                
the provision is not in the legislation, it is not a question.                                                                  
                                                                                                                                
CHAIRMAN ROKEBERG asked if a distinction would be made between                                                                  
covered lives and policies, questioning if the committee needed to                                                              
be specific in law or if the division could handle that.                                                                        
                                                                                                                                
Number 1297                                                                                                                     
                                                                                                                                
MR. FERENCE confirmed the division could handle that itself.                                                                    
                                                                                                                                
CHAIRMAN ROKEBERG emphasized the objective is the amount of                                                                     
non-ERISA-covered.                                                                                                              
                                                                                                                                
MR. FERENCE questioned that the information desired is the number                                                               
of people who are beneficiaries of health insurance.                                                                            
                                                                                                                                
CHAIRMAN ROKEBERG noted they wanted to make the distinction between                                                             
non-ERISA and ERISA-covered.                                                                                                    
                                                                                                                                
REPRESENTATIVE HALCRO questioned whether there is similar                                                                       
legislation in other states regarding the amount of notice as well                                                              
as the statistical mandate.                                                                                                     
                                                                                                                                
MR. FERENCE replied that, to the best of his knowledge, this would                                                              
be a longer notice period than is required in any other                                                                         
jurisdiction.  In response to chairman's question, Mr. Ference                                                                  
confirmed this is a new idea, to the best of his knowledge, and has                                                             
not been directly looked at in other states.                                                                                    
                                                                                                                                
CHAIRMAN ROKEBERG expressed his approval.                                                                                       
                                                                                                                                
Number 1367                                                                                                                     
                                                                                                                                
JOHN GEORGE, Lobbyist for the National Association of Independent                                                               
Insurers (NAII), came forward.  Among the members of NAII are                                                                   
Allstate [Allstate Insurance Company], GEICO [GEICO Corporation],                                                               
USAA, Progressive [The Progressive Corporation] - major writers of                                                              
automobile insurance in the state of Alaska.  The notice required                                                               
by this legislation would be a real problem for insurers.  Mr.                                                                  
George said he had spoken this afternoon with an Allstate                                                                       
representative who had been an underwriter in the pre-computer                                                                  
days.  This representative commented the company did not have age                                                               
information for some of its clients because the original                                                                        
applications were taken manually.  Unless the client applied for a                                                              
senior citizen discount, the company might not know who its                                                                     
67-year-olds are.  The NAII believes that there are thousands or                                                                
possibly even hundreds of thousands of cancellation notices issued                                                              
every year in the state of Alaska.  Mr. George questioned how many                                                              
people even pay their insurance 60 days before it is due,                                                                       
commenting it is due just prior to cancellation.  He indicated                                                                  
there would also be problems with people who pay their insurance on                                                             
a monthly basis.  Mr. George further indicated they are working on                                                              
these logistical concerns with the chairman.                                                                                    
                                                                                                                                
Number 1453                                                                                                                     
                                                                                                                                
MR. GEORGE expressed that his foremost concern, however, is the                                                                 
approaching year 2000 (Y2K).  The NAII and other trade associations                                                             
have lobbied the National Association of Insurance Commissioners                                                                
(NAIC), the National Conference of Insurance Legislators (NCOIL),                                                               
and the National Conference of State Legislators (NCSL) who have                                                                
all passed resolutions urging state legislators not to pass                                                                     
legislation which could require insurance company programmers to                                                                
concentrate on issues other than meeting Y2K compliance.  Even if                                                               
this legislation were to progress, NAII would urge the legislature                                                              
for an effective date after Y2K so the insurance company                                                                        
programmers can continue their compliance efforts to ensure that                                                                
the entire system doesn't crash.  Mr. George indicated his clients                                                              
have some serious problems with the legislation but the intent is                                                               
appreciated.  He thinks there are some solutions and these are                                                                  
being discussed with the companies.  He noted it has occurred to                                                                
him that the more a person suffers from dementia, the less likely                                                               
the person is to need an automobile.  Mr. George added there is an                                                              
additional fail-safe with automobiles or homes that are financed:                                                               
there is a lender ensuring that that insurance stays in force as                                                                
well.  He admitted, however, the older a person is, the less likely                                                             
there is to be a lender involved.                                                                                               
                                                                                                                                
Number 1558                                                                                                                     
                                                                                                                                
REPRESENTATIVE HARRIS questioned if the insurance companies would                                                               
be a lot happier if the notification series remained as it is                                                                   
currently - 30, 20, 10 - and the last letter had to been sent by                                                                
certified mail no matter the person's age.  It seems to him the                                                                 
certified part is the point here, that someone signed for the                                                                   
letter verifying that it was actually picked up.                                                                                
                                                                                                                                
MR. GEORGE replied that would make it more palatable.  He thinks                                                                
anytime something has to be done differently, such as the certified                                                             
mail, it is less than optimal, but that is certainly one of the                                                                 
alternatives being examined.  He referred to a previous comment of                                                              
the chairman's regarding this being an unfunded mandate; Mr. George                                                             
noted that is actually not true.  Insurance premiums are largely                                                                
based on age categories.  It might be discovered that this could                                                                
result in a premium increase for whatever age group it applies to                                                               
because insurers can add the extra notice requirement into their                                                                
rate structure.  Mr. George noted this aspect is being worked on as                                                             
well.  He reminded the committee that insurers don't like canceling                                                             
insurance and would much rather keep it on the books if it is good,                                                             
solid business.                                                                                                                 
                                                                                                                                
Number 1681                                                                                                                     
                                                                                                                                
REPRESENTATIVE HARRIS commented it seems from Mr. George's                                                                      
testimony that if the certified cost is spread out over all the age                                                             
categories for health insurance, the 67-plus Alaskans would not be                                                              
hit any more than the lower age brackets.                                                                                       
                                                                                                                                
MR. GEORGE clarified that this would apply to automobile and                                                                    
homeowners' insurance, not health insurance.  Mr. George said he                                                                
did not know why it would be spread out over everyone if they were                                                              
speaking of a specific notice for a specific group, indicating he                                                               
had misunderstood Representative Harris's comment about a certified                                                             
final mailing for all policy cancellations, no matter the person's                                                              
age.  Mr. George made a few additional statements under this                                                                    
misunderstanding.                                                                                                               
                                                                                                                                
Number 1797                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI questioned which would be more expensive                                                               
for the insurance companies:  determining and monitoring the age of                                                             
all of a company's insureds to identify incoming 67-year-olds or                                                                
Representative Harris's idea that all final 10-day cancellation                                                                 
notices would be automatically sent via certified mail.                                                                         
                                                                                                                                
MR. GEORGE replied that uniformity would be nice.  He reminded the                                                              
committee that Alaska is a very small market and these are national                                                             
companies.  Almost anything the legislature does would probably be                                                              
a minor exception to these companies.  Mr. George commented that                                                                
sending out a certified notice to every Alaskan would still be                                                                  
somewhat of a thorn in the companies' side.  Even in Alaska they                                                                
are speaking of thousands and thousands of these notices.  A lot of                                                             
people pay their insurance within 10 days of the expiration date.                                                               
He indicated sending 20,000 certified letters out per month could                                                               
be a significant expense and even the physical process of                                                                       
certifying the letters would be inconvenient.  Mr. George also                                                                  
noted from his previous experience as director of the Division of                                                               
Insurance, when the division was "served" for an insurance company,                                                             
the division, in turn, had to send that summons/complaint to the                                                                
insurance company certified return request, and about a third of                                                                
the cards never came back.  Mr. George related he became so                                                                     
frustrated he called the office of Senator Ted Stevens.  He                                                                     
received a call back from the Postmaster General informing him the                                                              
postal service did not know what was happening but could not fix                                                                
it.  Mr. George said the situation was never resolved and he                                                                    
indicated certified return receipt was not a fail-safe.                                                                         
                                                                                                                                
Number 2000                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG asked how much certified mail costs.                                                                          
                                                                                                                                
KEVIN HAND, Legislative Administrative Assistant to Representative                                                              
Andrew Halcro, Alaska State Legislature, answered $2.90.                                                                        
                                                                                                                                
CHAIRMAN ROKEBERG indicated a business could also apply and fill                                                                
out their own certified mail if the mail is picked up at the place                                                              
of business.                                                                                                                    
                                                                                                                                
MR. GEORGE noted that is a manual step and indicated the companies'                                                             
current mailing processes are completely automated.  Mr. George                                                                 
reiterated the companies do think there are some solutions here and                                                             
they are continuing to work on them.  He mentioned Florida and                                                                  
Arizona both have aged populations; he commented someone has                                                                    
probably thought of this there as well.                                                                                         
                                                                                                                                
CHAIRMAN ROKEBERG questioned Mr. George's indicated testimony                                                                   
regarding concern for the upcoming year 2000 date change and the                                                                
programmers' ability to program.  The chairman noted Mr. George had                                                             
also testified that the underwriters are looking at age groups when                                                             
doing actuarial calculations to assess rates.  The chairman                                                                     
commented he was not sure if he could buy into the Y2K problem Mr.                                                              
George had mentioned; it seems to the chairman that if actuarial                                                                
calculations are going to be done for a policy rate quote to an                                                                 
individual, that person's age already has to be in the calculation.                                                             
                                                                                                                                
Number 2170                                                                                                                     
                                                                                                                                
MR. GEORGE responded that the major changes are for young drivers                                                               
versus anyone over 25 or so.  They are speaking about a fair number                                                             
of people who have been insured for the last 30 or 40 years who did                                                             
not get into the computer system.  Mr. George emphasized his                                                                    
concern about Y2K is that any changes which require a programmer to                                                             
change the program to give a different notice to a certain group of                                                             
people, or other action, takes a programmer's time.  Currently,                                                                 
that programmer is concentrating on generically beating the Y2K                                                                 
problem.  The companies would like to let the programmers continue                                                              
to concentrate on that.  Mr. George noted it would be a significant                                                             
problem for some companies, and would not be as big a deal for                                                                  
others.                                                                                                                         
                                                                                                                                
CHAIRMAN ROKEBERG noted he looked forward to Mr. George's letter                                                                
endorsing HB 82 [HB 82 - IMMUNITY: CLAIMS ARISING FROM Y2K                                                                      
PROBLEMS].                                                                                                                      
                                                                                                                                
Number 2263                                                                                                                     
                                                                                                                                
REPRESENTATIVE CISSNA commented regarding health insurance and                                                                  
expressed that she could see a significant advantage in having an                                                               
extended time to make sure people received something.  She                                                                      
questioned if older policy holders didn't usually pay more because                                                              
of their age.                                                                                                                   
                                                                                                                                
MR. GEORGE answered there is actually a senior citizen discount on                                                              
automobile policies.                                                                                                            
                                                                                                                                
REPRESENTATIVE CISSNA questioned if this discount was often given                                                               
because the senior citizens had been policy holders for many years,                                                             
had helped support the company, and helped support other policy                                                                 
holders.                                                                                                                        
                                                                                                                                
MR. GEORGE replied he doesn't know that they are required to have                                                               
been longtime policy holders.  He believes the theory is that                                                                   
people probably drive less as they reach a more mature age and                                                                  
probably are statistically involved in fewer accidents because of                                                               
fewer miles.  He noted, though, the rate of accident per mile might                                                             
actually be higher.  Mr. George qualified that he was speaking off                                                              
the top of his head and really does not know how that comes out                                                                 
statistically.                                                                                                                  
                                                                                                                                
Number 2435                                                                                                                     
                                                                                                                                
REPRESENTATIVE CISSNA noted her father had had an insurance                                                                     
company; the thought had been to always try and provide service.                                                                
She commented she was sure all of the companies Mr. George                                                                      
represents do that.                                                                                                             
                                                                                                                                
MR. GEORGE reminded the committee that insurance companies make                                                                 
money by writing insurance, not by canceling it.  It is expensive                                                               
to cancel a policy then reinstate it or lose it altogether.  The                                                                
companies pay commissions to agents to make sure those things don't                                                             
happen.                                                                                                                         
                                                                                                                                
REPRESENTATIVE HALCRO said he had a couple of questions.  He                                                                    
stated, "The way the bill is written, you have to give 60 days                                                                  
first notice, then 30 and then..." [TESTIMONY INTERRUPTED BY TAPE                                                               
CHANGE]                                                                                                                         
                                                                                                                                
[From tape log notes: 'If my policy']                                                                                           
                                                                                                                                
TAPE 99-36, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO continued, "...and send out three notices                                                                 
before you can cancel me, is that the way you're reading ... the                                                                
legislation?"                                                                                                                   
                                                                                                                                
MR. GEORGE replied, "I'm not sure that carrying someone would be                                                                
the (indisc.) - you would - if the policy expired August 1, 60 days                                                             
prior to that you would send out the notice, so that on the day the                                                             
policy expired it could be canceled.  You wouldn't wait until close                                                             
to the end and then cancel it and have to extend it beyond."                                                                    
                                                                                                                                
REPRESENTATIVE HALCRO agreed, noting Mr. George had said some                                                                   
people do pay their insurance on a monthly basis.  Therefore, there                                                             
is no way this time period would fit within that 60-day window.                                                                 
                                                                                                                                
MR. GEORGE replied it would be "putting a round peg in a square                                                                 
hole," indicating it created some logistical problems.                                                                          
                                                                                                                                
Number 0089                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO questioned if the company would have to                                                                   
continue to carry the person if the certified mail was returned,                                                                
asking what the intent was.                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG noted the company could cancel the policy.                                                                    
                                                                                                                                
REPRESENTATIVE HALCRO said that is where his problem lies.  In the                                                              
case the chairman had cited, if the caregiver had thrown away the                                                               
certified letter it would not have made any difference.                                                                         
                                                                                                                                
CHAIRMAN ROKEBERG agreed that is true.                                                                                          
                                                                                                                                
REPRESENTATIVE HALCRO stated, "With all due respect, I think this                                                               
is a solution looking for a problem."                                                                                           
                                                                                                                                
MR. GEORGE pointed out Ms. Hagevig had described that her sibling                                                               
tries to intercept the parent's mail:  a notice to another person                                                               
might be a simple solution.  A person could designate themselves or                                                             
someone else to receive notices of cancellation.  Mr. George                                                                    
indicated that perhaps information to this effect could be included                                                             
with the person's premium billing when he/she hits the specific                                                                 
age.  Mr. George further indicated the industry is examining all of                                                             
these things to find workable solution.                                                                                         
                                                                                                                                
Number 0218                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG reminded Representative Halcro the present                                                                    
statutory policy is that the insurance company makes and files a                                                                
note to itself that the cancellation notice has been sent.  The                                                                 
company does not have to account to anyone regarding this.  To the                                                              
chairman, requiring the return receipt ensures there was an intent                                                              
to make notice by mail to the insured.  The return receipt also                                                                 
gives the insurance company proof it did make the notice.                                                                       
                                                                                                                                
REPRESENTATIVE HALCRO noted the current statutes state that they                                                                
shall obtain a certificate of mailing from the United States Postal                                                             
Service, so that is already required under AS 21.36.260.                                                                        
                                                                                                                                
MR. GEORGE explained, as he understands it, an insurance company                                                                
will have a computer printout with the list of names and the stack                                                              
of envelopes.  This list is signed by a postal employee.  Mr.                                                                   
George indicated there is also is a certification by the insurance                                                              
company employee that he/she actually mailed those notices.  He                                                                 
expressed doubt about certified mailing.                                                                                        
                                                                                                                                
Number 0337                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG indicated the company would receive the return                                                                
receipt verifying the letter had been delivered.                                                                                
                                                                                                                                
MR. GEORGE answered, "Or not."                                                                                                  
                                                                                                                                
CHAIRMAN ROKEBERG commented that perhaps the committee should                                                                   
mandate that if the return receipt was not received, the company                                                                
should give the individual a grace period.                                                                                      
                                                                                                                                
MR. GEORGE referred to the return receipt, indicating that piece of                                                             
paper would have to be dealt with manually, rather than by                                                                      
computer, and there would be some matching problems because it is                                                               
a fixed post office form.                                                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG noted he appreciates Mr. George's comments and                                                                
has indicated to the industry that he is happy to work with them on                                                             
solutions.  Chairman Rokeberg commented some of the possible                                                                    
solutions might be increasing the age and examining other forms.                                                                
He explained the intent of the 60-day period was to allow                                                                       
sufficient time if a caregiver or someone else was paying the bills                                                             
for the individual.  However, the chairman does understand that                                                                 
probably would be a programming change and probably a larger cost                                                               
than the certified return receipt.                                                                                              
                                                                                                                                
Number 0501                                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked why statutory grace periods are                                                                  
allowed with a cancellation or termination of a life insurance                                                                  
policy, but not with any other form of insurance.                                                                               
                                                                                                                                
MR. GEORGE answered that life and health have very different types                                                              
of products and grace periods do exist.  He noted he had been                                                                   
surprised on examining the statute that a person has two or three                                                               
years after a life insurance policy lapses to be able to pay the                                                                
premium and have the policy reinstated.  Mr. George indicated this                                                              
might affect the Ketchikan woman whose situation Ms. Hagevig                                                                    
described.                                                                                                                      
                                                                                                                                
REPRESENTATIVE MURKOWSKI said it makes one wonder if a grace period                                                             
couldn't just be allowed for certain individuals above a certain                                                                
age.                                                                                                                            
                                                                                                                                
MR. GEORGE noted that was one of the possibilities being                                                                        
considered, even if there were a fee for that.  For example, the                                                                
person receives the notice on the day the policy actually cancels                                                               
but if he/she sends payment in within 15 days for an extra $25                                                                  
dollars, the person could possibly be reinstated.                                                                               
                                                                                                                                
Number 0599                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG commented, "Option to extend prepayment," noting                                                              
it could be inserted in the initial billing.  He indicated possibly                                                             
the person could be sold 30 or 60 days worth of grace for a prepaid                                                             
premium.  He confirmed no one else wished to testify on the                                                                     
legislation and expressed his desire to see HB 158 move out of                                                                  
committee to the next committee of referral, the House Judiciary                                                                
Standing Committee (Judiciary).  The chairman noted he has agreed                                                               
to work with industry and make some adjustments to the legislation                                                              
as it moves through the process.  He commented the chairman of                                                                  
Judiciary formerly chaired Labor and Commerce and has been an                                                                   
active legislative participant with NAIC and NCOIL.  Chairman                                                                   
Rokeberg thinks the required age needs to be raised somewhat and                                                                
the time frames need to be examined, along with any suggestions the                                                             
industry can make that might reduce the cost and serve these people                                                             
better.  Confirming no one else wished to testify, the chairman                                                                 
closed the public testimony on HB 158.  He pointed to the D.1                                                                   
amendment before the committee, explaining it was requested by some                                                             
members of the insurance industry and he thinks it is valid.  The                                                               
chairman designated this proposed amendment as Amendment 1.                                                                     
Amendment 1, labeled 1-LS0128\D.1, Ford, 4/7/99, read:                                                                          
                                                                                                                                
     Page 2, line 11                                                                                                            
          Following "sold":                                                                                                     
               Insert "or terminated"                                                                                           
          Following "state;":                                                                                                   
               Insert "this paragraph does not authorize the                                                                    
     director to require an insurer to release proprietary                                                                      
     information;"                                                                                                              
                                                                                                                                
CHAIRMAN ROKEBERG moved Amendment 1, questioning if everyone had an                                                             
understanding of it.  He asked if there were any objections to the                                                              
amendment.  There being none, Amendment 1 was adopted.  With that,                                                              
the chairman requested the committee's indulgence to move the                                                                   
legislation to Judiciary for further activity.                                                                                  
                                                                                                                                
Number 0786                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO objected to moving the legislation out of                                                                 
committee.                                                                                                                      
                                                                                                                                
CHAIRMAN ROKEBERG asked Representative Halcro to speak to his                                                                   
objection.                                                                                                                      
                                                                                                                                
REPRESENTATIVE HALCRO said he thinks the bill has a lot of                                                                      
logistical problems; since he does not sit on Judiciary, he does                                                                
not feel comfortable moving the legislation until these problems                                                                
are addressed in the current committee.                                                                                         
                                                                                                                                
REPRESENTATIVE MURKOWSKI noted she sits on Judiciary and she would                                                              
prefer that the work on this legislation be done in this committee,                                                             
rather than Judiciary.  She thinks Labor and Commerce will produce                                                              
a good product and then Judiciary can do the final review.                                                                      
                                                                                                                                
Number 0881                                                                                                                     
                                                                                                                                
REPRESENTATIVE CISSNA commented on the references to the committee                                                              
members as freshmen legislators, noting many of the new members are                                                             
younger members.  She indicated the issue the bill addresses is                                                                 
something that becomes a more significant problem as one approaches                                                             
her own age and she expressed the hope that if the legislation is                                                               
heard again in Labor and Commerce, the committee would hear from                                                                
other witnesses.                                                                                                                
                                                                                                                                
CHAIRMAN ROKEBERG indicated he is concerned about the lateness of                                                               
the session and the "bottleneck" in Judiciary.                                                                                  
                                                                                                                                
REPRESENTATIVE HARRIS suggested the committee take an at-ease.                                                                  
                                                                                                                                
REPRESENTATIVE MURKOWSKI noted, "And Mr. Chairman, if I may speak                                                               
to that bottleneck I think that we could address..."                                                                            
                                                                                                                                
Number 0945                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG called a brief at-ease at 5:19 p.m.  The                                                                      
committee came back to order at approximately 5:21 p.m.                                                                         
                                                                                                                                
Number 0947                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG announced that HB 158 would be held over until                                                                
Monday [April 12, 1999].                                                                                                        
                                                                                                                                
Number 0997                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG called an at-ease at 5:22 p.m.  The committee                                                                 
came back to order at 5:26 p.m.                                                                                                 
                                                                                                                                
                                                                                                                                
HB 136 - ABOLISH TOURISM MARKETING COUNCIL                                                                                      
                                                                                                                                
Number 1004                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG announced the committee's next order of business                                                              
is HB 136, "An Act relating to tourism and tourism marketing;                                                                   
eliminating the Alaska Tourism Marketing Council; and providing for                                                             
an effective date."  Representative Beth Kerttula joined the                                                                    
committee just prior to the chairman's announcement.  The chairman                                                              
indicated there was a Version K committee substitute for HB 136.                                                                
                                                                                                                                
Number 1015                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO moved that the committee adopt the proposed                                                               
Version K CS for HB 136 as a working document.  Version K is                                                                    
labeled 1-LS0616\K, Cook, 4/9/99.  There being no objection,                                                                    
Version K was before the committee.                                                                                             
                                                                                                                                
Number 1044                                                                                                                     
                                                                                                                                
JOE BALASH, Legislative Secretary to Representative Gene                                                                        
Therriault, Alaska State Legislature, came forward to present HB
136 on behalf of the bill sponsor.  Mr. Balash read the sponsor                                                                 
statement into the record:                                                                                                      
                                                                                                                                
     "House Bill 136 is based on a plan brought forward by the                                                                  
     tourism industry and is similar to legislation sponsored                                                                   
     last session by the House and Senate Finance Committees.                                                                   
     It consolidates the state's tourism marketing efforts,                                                                     
     reduces the size and functions of the Division of                                                                          
     Tourism, and allows the state to reduce its contribution                                                                   
     to tourism marketing over time.                                                                                            
                                                                                                                                
     "Currently, Alaska's statewide tourism marketing efforts                                                                   
     are carried out by three organizations - the Alaska                                                                        
     Tourism Marketing Council, the Alaska Visitors                                                                             
     Association, and the Division of Tourism in the                                                                            
     Department of Commerce and Economic Development.  These                                                                    
     efforts, under our bill, will be consolidated into a                                                                       
     single marketing function that is broadly representative                                                                   
     of the various sectors of the visitor industry in the                                                                      
     state.  This organization will put together a marketing                                                                    
     program to address media advertising, visitor inquiries,                                                                   
     publishing and distributing ["distribution"] information                                                                   
     regarding vacation planning, and establishing and                                                                          
     maintaining Internet sites that provide tourism                                                                            
     information.                                                                                                               
                                                                                                                                
     "The Division of Tourism will continue to provide inquiry                                                                  
     assistance, administer visitor information centers, and                                                                    
     plan and advocate for tourism and tourism development in                                                                   
     coordination with the private sector, ... municipalities,                                                                  
     and state and federal agencies.  They will enter into a                                                                    
     contract with a single, qualified trade organization for                                                                   
     the purpose of planning and executing the state's                                                                          
     destination tourism marketing campaign.  The contract may                                                                  
     include promotion of distinct segments of tourism, such                                                                    
     as highway, seasonal, cultural, regional, rural, and                                                                       
     ecotourism.  This will take the state out of the business                                                                  
     of marketing and reduce the number of employees required                                                                   
     to carry out the functions of the Division of Tourism.                                                                     
                                                                                                                                
     "A central feature of the contract is that the                                                                             
     organization awarded it will be required to match the                                                                      
     state's effort with 30 percent of its own money in the                                                                     
     initial year.  It is expected that the organization will                                                                   
     grow and its membership collections increase.  Therefore,                                                                  
     the match will rise to 60 percent in 2002.  The benefits                                                                   
     of this are twofold:  first, the state will be able to                                                                     
     reduce its contribution without extreme harm to the                                                                        
     industry; second, the private sector will contribute more                                                                  
     of its own funds towards the marketing ["marketed"]                                                                        
     efforts they benefit from.                                                                                                 
                                                                                                                                
     "The industry is coming forward with more of its own                                                                       
     dollars. Coupled with efficiencies provided by                                                                             
     consolidation, the marketing efforts to bring more                                                                         
     visitors to the state will be more effective.  This is a                                                                   
     responsible approach to reduce the state's monetary                                                                        
     contribution without harming the growth of this vital                                                                      
     industry."                                                                                                                 
                                                                                                                                
Number 1222                                                                                                                     
                                                                                                                                
REPRESENTATIVE HARRIS questioned where they are currently at as far                                                             
as tourism marketing funding goes if this bill becomes law.                                                                     
                                                                                                                                
MR. BALASH answered that the state will continue the status quo in                                                              
the fiscal year (FY) 2000 beginning July 1, 1999, as it transitions                                                             
to this new effort.  The total funds spent by the state are                                                                     
approaching $6,700,000.  In the year 2000 initial year, the                                                                     
contract from the state is expected to be $5 million, with the                                                                  
industry matching at 30 percent.                                                                                                
                                                                                                                                
REPRESENTATIVE HARRIS asked if the New Millennium Plan people have                                                              
given fair assurance they will be able to raise that much money at                                                              
that period of time.                                                                                                            
                                                                                                                                
MR. BALASH answered in the affirmative.  He believes cards went out                                                             
this week or the past week for the initial charter memberships to                                                               
create a board that will begin the fund-raising efforts.                                                                        
                                                                                                                                
REPRESENTATIVE HARRIS questioned if there is any fall-back plan on                                                              
the state's part if the amount of money needed in the following                                                                 
years is not raised, or if it will be up to that legislature to                                                                 
decide whether it wishes to provide additional funding.                                                                         
                                                                                                                                
Number 1323                                                                                                                     
                                                                                                                                
MR. BALASH replied the match rate will be set in statute.  This                                                                 
will require the organization to come up with a suitable amount of                                                              
money if it wishes to retain the full amount appropriated by the                                                                
legislature.  If the organization does not do this, there are                                                                   
provisions allowing the division to enter into an additional or                                                                 
further contract which would not require that same match.                                                                       
                                                                                                                                
REPRESENTATIVE CISSNA indicated the legislation has come before the                                                             
committee suddenly and close examination would be necessary to find                                                             
out the differences in the proposed CS from the earlier versions.                                                               
She indicated there were some questions already in terms of the                                                                 
organization to be created.  She asked if Mr. Balash had any                                                                    
explanatory literature or a copy of the card that was sent out.                                                                 
                                                                                                                                
MR. BALASH pointed to the copies in the bill packets of "The New                                                                
Millennium Plan, A Concept for the Future of Tourism in Alaska,"                                                                
[Alaska Travel Industry Association Organizational Outline, revised                                                             
December 1998] put together by the Alaska Visitors Association                                                                  
(AVA).  Mr. Balash did not have an example of the card.  He                                                                     
indicated he would happy to explain further if Representative                                                                   
Cissna wished, noting there are industry representatives available                                                              
to testify to that as well.                                                                                                     
                                                                                                                                
Number 1430                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG indicated the committee would proceed to                                                                      
teleconference testimony.  He confirmed Allen LeMaster (ph),                                                                    
Gakona, was no longer on teleconference.  The chairman confirmed                                                                
Valdez was still participating via teleconference and requested                                                                 
Lisa VonBargen's testimony.                                                                                                     
                                                                                                                                
Number 1462                                                                                                                     
                                                                                                                                
LISA VonBARGEN, Executive Director, Valdez Convention and Visitors                                                              
Bureau (VCVB), stated via teleconference from Valdez that she did                                                               
not have comment at this time.                                                                                                  
                                                                                                                                
Number 1472                                                                                                                     
                                                                                                                                
NANCY LETHCOE testified next via teleconference from Valdez.  She                                                               
spoke from a statement faxed to the committee:                                                                                  
                                                                                                                                
     "My name is Nancy Lethcoe.  My husband and I are                                                                           
     celebrating 25 years in the Alaskan tourism industry.                                                                      
     ... I'm past President of the Alaskan Wilderness                                                                           
     Recreation and Tourism Association [AWRTA], and a member                                                                   
     of the Valdez and Anchorage CVB.  However, I am speaking                                                                   
     as a private person.                                                                                                       
                                                                                                                                
     "I support the work draft of 4/9/99 ["4/4/9"] ...                                                                          
     although I have some reservations about the funding.                                                                       
     Here in Valdez, because of budget constraints, we are                                                                      
     facing the loss of our community hospital.  I'm sure you                                                                   
     can appreciate the potential significance of this upon                                                                     
     the community and visitors.                                                                                                
                                                                                                                                
     "So, though I would appreciate (indisc.) state funding                                                                     
     tourism as proposed by HB 136, I think as public policy,                                                                   
     the state should fund medical services before allocating                                                                   
     funds to tourism marketing.                                                                                                
                                                                                                                                
     "Therefore, I encourage you to consider alternative                                                                        
     sources of funding - such as proposed in Senator Elton's                                                                   
     bill [SB 122] - even though this means our business would                                                                  
     incur increased expenses."                                                                                                 
                                                                                                                                
CHAIRMAN ROKEBERG confirmed Valdez had copies of Version K.                                                                     
                                                                                                                                
Number 1548                                                                                                                     
                                                                                                                                
MS. VonBARGEN asked to briefly add one item.  Mentioning the                                                                    
existence of legislation which suggested all tourism marketing                                                                  
funding should cease at the end of this fiscal year, Ms. VonBargen                                                              
emphasized the need to have reduction in state funding come at a                                                                
graduated level.  She indicated complete sudden elimination of                                                                  
funding could be seriously detrimental to the state's efforts to                                                                
gain momentum in tourism marketing and she noted the necessity of                                                               
a backup plan.  The proposed New Millennium Plan would go through                                                               
three fiscal years before the goal of $10 million in terms of                                                                   
funding is reached.  Ms. VonBargen indicated the gradual funding                                                                
reduction she thinks is important is represented in the legislation                                                             
and was outlined after Representative Harris's comments.                                                                        
                                                                                                                                
CHAIRMAN ROKEBERG confirmed there were no other witnesses on                                                                    
teleconference.  The chairman indicated Ms. Fay should come forward                                                             
to explain the changes in the very recent Version K.                                                                            
                                                                                                                                
Number 1642                                                                                                                     
                                                                                                                                
GINNY FAY, Legislative Liaison and Acting Director of the Division                                                              
of Tourism, Department of Commerce and Economic Development(DCED),                                                              
came forward.  She highlighted the most significant changes in                                                                  
Version K from the original bill, as introduced.  Ms. Fay indicated                                                             
there have been some change in section order from the original                                                                  
bill; this could make it difficult to compare the two versions.                                                                 
Section 1, findings and intent, has been simplified to say the                                                                  
intent is that the private and public sectors cooperate and                                                                     
condense it into one marketing effort.  Section 2 is unchanged.                                                                 
Section 3 is an exemption from procurement.  In the original bill                                                               
this exemption was only extended to the contract with the qualified                                                             
trade association (QTA).  So that it would be clearer to all the                                                                
contracted parties, it was decided that even if the QTA chooses not                                                             
take a portion of the contract with the state and DCED contracts                                                                
elsewhere, those other contracts would also be exempt from                                                                      
procurement.                                                                                                                    
                                                                                                                                
CHAIRMAN ROKEBERG asked, "Has the ATMC [Alaska Tourism Marketing                                                                
Council] exempt -- (indisc.) exempt (indisc.)?"                                                                                 
                                                                                                                                
MS. FAY replied it is her understanding that they are.                                                                          
                                                                                                                                
CHAIRMAN ROKEBERG questioned if that was in the repealer.                                                                       
                                                                                                                                
MS. FAY responded that all the ATMC statute is repealed.  She                                                                   
questioned in an aside if ATMC is exempted.                                                                                     
                                                                                                                                
TINA LINDGREN, Executive Director, Alaska Visitors Association,                                                                 
answered that ATMC is not exempted; ASMI [Alaska Seafood Marketing                                                              
Institute] is exempt.                                                                                                           
                                                                                                                                
Number 1756                                                                                                                     
                                                                                                                                
MS. FAY referred to Section 4, purposes.  She indicated the                                                                     
original bill had deleted purposes (2), (3) and the current (5)                                                                 
from the existing statute, but these have been returned in Version                                                              
K.  These were primarily concerning the purposes to retain benefits                                                             
in Alaska and to residents of the state.  In Section 5, Ms. Fay                                                                 
indicated the primary change was to ensure that research for                                                                    
tourism development, and also assessing the contract, could be                                                                  
done.  Section 6 has been the most difficult to reach agreement on.                                                             
Section 6 of Version K read:                                                                                                    
                                                                                                                                
     * Sec. 6.  AS 44.33.120 is amended by adding a new                                                                         
     subsection to read:                                                                                                        
          (d) During the term of a contract with a qualified                                                                    
     trade association under AS 44.33.125(a), the Department                                                                    
     of Commerce and Economic Development may not execute                                                                       
     another tourism marketing campaign except as provided                                                                      
     under AS 44.33.125(b), (c), or (d).                                                                                        
                                                                                                                                
MS. FAY indicated this section was changed from the original bill                                                               
by adding (b), (c) and (d) to allow the exceptions in the statute                                                               
for other contracting provisions.  Ms. Fay further indicated the                                                                
portion of this section in the original bill prohibiting promotion                                                              
of Alaska travel by the department was deleted; the department                                                                  
would be able to continue activities with the contract in place                                                                 
like encouraging "Iceland Air" [Air Iceland?] to land in Anchorage.                                                             
                                                                                                                                
Number 1833                                                                                                                     
                                                                                                                                
MS. FAY noted the main changes in Section 7 of Version K.  If a                                                                 
contract is to be awarded, the department can review and has to                                                                 
approve the marketing plan before the contract is executed.  The                                                                
department can indicate important components of the contract; those                                                             
are contained in subsections (a) and (b).  If the QTA does not want                                                             
to do a portion of the contract the department feels is essential,                                                              
the department can contract with another entity as long as the                                                                  
terms of that contract are essentially the same as what was offered                                                             
to the QTA.  Subsection (c) allows the QTA to have first right of                                                               
refusal on all subsequent contracts while the contract is in place.                                                             
The only change here is that this applies to marketing contracts,                                                               
not to all of the division's contracts.  Subsection (c) also                                                                    
basically requires that the terms not be materially different.                                                                  
Subsection (e) is essentially unchanged.                                                                                        
                                                                                                                                
Number 1927                                                                                                                     
                                                                                                                                
MS. FAY explained that subsection (f) relates to use of the                                                                     
materials that would be the joint property of the QTA and the                                                                   
state.  If these materials are sold or leased, they have to be used                                                             
for the promotion of Alaska.  Subsection (i) requires the                                                                       
contracted QTA to provide notice of availability and consider the                                                               
responses when it goes to subcontract.  This new subsection was                                                                 
requested by the House Special Committee on Economic Development                                                                
and Tourism (EDT) subcommittee.  Ms. Fay indicated the list of                                                                  
major sectors of the visitor industry had been expanded to include                                                              
some of the smaller operations.  This was by the addition of "bed                                                               
and breakfast enterprises, wilderness lodges and outfitters, and                                                                
charter operations" in subsection (j), which was subsection (h) in                                                              
the original bill.  Ms. Fay indicated Section 8 is the same as                                                                  
Section 7, subsection (a), but the percentage has been increased to                                                             
60 percent.  Ms. Fay continued, "Section 9 adds an amendment that                                                               
was agreed upon by the parties but did not get addressed earlier in                                                             
Senate Labor and Commerce that makes it so in the granting                                                                      
provisions that the Division of Tourism has, that those grants                                                                  
cannot be used for tourism marketing."                                                                                          
                                                                                                                                
CHAIRMAN ROKEBERG asked for clarification on the effects of Section                                                             
9.                                                                                                                              
                                                                                                                                
MS. FAY answered that the repealer section, now Section 10, had                                                                 
originally repealed AS 44.33.135 because of AVA's concern that the                                                              
matching grant provision would be used a means to provide tourism                                                               
marketing money to competing entities.  However, that repeal would                                                              
have removed the department's ability to provide its matching grant                                                             
to the Rural Tourism Center.  Ms. Fay indicated AVA realized it                                                                 
wanted to restrict the Division of Tourism from providing marketing                                                             
grants, not delete the division's granting ability.                                                                             
                                                                                                                                
Number 2067                                                                                                                     
                                                                                                                                
REPRESENTATIVE CISSNA questioned that there is no specific entity                                                               
which would really supervise, monitor and evaluate this.                                                                        
                                                                                                                                
MS. FAY explained, "Currently what happens with our contract with                                                               
the AVA that is used to - for the matching grants for the matching                                                              
- the required match for the ATMC program, is the contract is                                                                   
between the department and the AVA.  In this situation, ... the                                                                 
Division of Tourism would be involved in administering this but the                                                             
actual contract would be between the department through the                                                                     
commissioner and the qualified trade association."                                                                              
                                                                                                                                
REPRESENTATIVE BETH KERTTULA questioned if they were currently                                                                  
going out under competitive bid, under contract, and if they still                                                              
had procurement code requirements in that contract.                                                                             
                                                                                                                                
MS. FAY replied their contract with the AVA is not covered under                                                                
procurement.                                                                                                                    
                                                                                                                                
REPRESENTATIVE KERTTULA indicated that was something the special                                                                
committee had been concerned about.  Referring to subsection (i) on                                                             
page 6 of Version K, Representative Kerttula asked if that is the                                                               
same as a competitive bid or in what way does the department                                                                    
envision that working.  Subsection (i) read:                                                                                    
                                                                                                                                
          (i) A qualified trade association may, pursuant to                                                                    
     the performance of a tourism marketing contract awarded                                                                    
     under (a) or (c) of this section, award a subcontract                                                                      
     only on a competitive basis after providing adequate                                                                       
     notice of the availability of the subcontract and                                                                          
     considering all responses.                                                                                                 
                                                                                                                                
MS. FAY answered that this entity would not fall under state                                                                    
procurement.   She thinks a private right of action would occur if                                                              
someone protested this; the probable remedy would be legal action                                                               
if they did not feel there was adequate notice.  Ms. Fay indicated                                                              
it would be the responsibility of the qualified trade association                                                               
to set a standard it felt reflected the legislature's intent in                                                                 
requesting this.                                                                                                                
                                                                                                                                
CHAIRMAN ROKEBERG confirmed Ms. Lindgren had to leave soon.                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO expressed the wish to have Ms. Lindgren join                                                              
the committee at the table, noting this might assist Representative                                                             
Kerttula.  Representative Halcro indicated there are certain                                                                    
functions the QTA would perform, as does the current organization                                                               
now, that would be difficult to bid.  He indicated it was the                                                                   
subcommittee's intent with subsection (i) to require the QTA to                                                                 
provide notice of subcontracts and have a competitive format                                                                    
criteria so that subcontracts would be open to more than one                                                                    
bidding party, without tying the QTA's hands with regards to                                                                    
weighing proposals differently for creativity.  Representative                                                                  
Halcro provided an example concerning advertising.  Advertising                                                                 
agency A's proposal for a television commercial using a star would                                                              
be more expensive than advertising agency B's proposal using an                                                                 
unknown actor.  He indicated Ms. Lindgren should comment where she                                                              
felt necessary.                                                                                                                 
                                                                                                                                
Number 2249                                                                                                                     
                                                                                                                                
TINA LINDGREN, Executive Director, Alaska Visitors Association,                                                                 
answered that Representative Halcro is exactly right. She indicated                                                             
"bid" was interpreted to mean that the only weighting would be for                                                              
price.  In the marketing field there are some things where price is                                                             
not the only consideration.  However, the subcommittee had wished                                                               
to make sure it was done competitively and that that was spelled                                                                
out in the legislation.                                                                                                         
                                                                                                                                
REPRESENTATIVE KERTTULA asked if this is the only place in the                                                                  
statute where competitive basis and adequate notice is discussed.                                                               
She questioned if there is any attempt to "flesh it out at all,"                                                                
noting she did not recall if there is any discussion in the New                                                                 
Millennium Plan itself about how that would work.  Her underlying                                                               
concern is still the large amount of state money coming in and                                                                  
ensuring that it is monitored.                                                                                                  
                                                                                                                                
MS. LINDGREN responded that "competitive basis" does not appear                                                                 
anywhere else in the statute.  Ms. Lindgren indicated another way                                                               
to achieve this monitoring is through the contract.  The                                                                        
department's responsibility to oversee the contract and terms gives                                                             
it a lot of leeway to examine how the QTA is operating.  However,                                                               
it is necessary to keep in mind the entire attempt was to privatize                                                             
this effort and work with the private sector, as opposed to it                                                                  
remaining a state agency.  She understands the concern.                                                                         
                                                                                                                                
CHAIRMAN ROKEBERG asked Ms. Lindgren if she wished to make any                                                                  
general comments at this juncture.                                                                                              
                                                                                                                                
Number 2342                                                                                                                     
                                                                                                                                
MS. LINDGREN indicated many of the members present were on the EDT                                                              
subcommittee which reviewed the legislation on April 6, 1999.  She                                                              
emphasized the years' worth of work that has gone into bringing the                                                             
plan forward at the request of the legislature, and the                                                                         
approximately two years it took to bring the legislation itself                                                                 
forward.  Ms. Lindgren noted Version K is supported by the AVA and                                                              
the Administration.  She added she believes AWRTA [Alaska                                                                       
Wilderness Recreation and Tourism Association] has not seen the                                                                 
competitive bid clause but, with that exception, supports the bill                                                              
as written.  Ms. Lindgren, therefore, does not think they will ever                                                             
be able to do much better than this.  She hopes the committee will                                                              
pass the legislation out as written to the House Finance Standing                                                               
Committee, indicating it is the result of serious effort and has                                                                
been closely examined.  The legislation sets up a mechanism for the                                                             
new organization to contract with the state; it does not contain                                                                
other items that are part of what the new organization will have to                                                             
create.  In addition, there are funding challenges ahead for that                                                               
organization.                                                                                                                   
                                                                                                                                
REPRESENTATIVE HALCRO thanked Ms. Fay and Ms. Lindgren for their                                                                
patience and efforts on this.                                                                                                   
                                                                                                                                
REPRESENTATIVE MURKOWSKI indicated she understands the legislation                                                              
provides a right of first refusal for every other tourism marketing                                                             
contract offered by the department.  However, she believed Ms. Fay                                                              
had commented this would not include something like encouraging Air                                                             
Iceland to come in.  Representative Murkowski sought clarification                                                              
on what the QTA has the full right of refusal to.                                                                               
                                                                                                                                
Number 2434                                                                                                                     
                                                                                                                                
MS. FAY answered that the QTA would have had the first right of                                                                 
refusal on every other tourism contract offered by the department                                                               
in the earlier draft, in what is now subsection 125(c) [Section 7].                                                             
She noted, for example, the organization would have had to be                                                                   
offered first right of refusal for printing letterhead.  Ms. Fay                                                                
said, "We requested and they accepted changing it to marketing                                                                  
because the idea behind the bill is to consolidate tourism                                                                      
marketing, not to consolidate all the tourism-related functions..."                                                             
[TESTIMONY INTERRUPTED BY TAPE CHANGE]                                                                                          
                                                                                                                                
[From tape log notes: 'government to government' 'in terms of                                                                   
airline routes']                                                                                                                
                                                                                                                                
TAPE 99-36, SIDE B                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
MS. FAY continued, "...(indisc.) things of that nature that are not                                                             
marketing, but they're maintaining sort of the foundation of the                                                                
tourism industry and tourism development, especially on public                                                                  
lands in Alaska, and we wanted to be able to maintain our ability                                                               
to do that."                                                                                                                    
                                                                                                                                
CHAIRMAN ROKEBERG commented it was approaching 6:00 p.m., inviting                                                              
the last witness forward.  The chairman announced the committee                                                                 
would not be moving the legislation at this hearing because the                                                                 
fiscal note has not been received and because of the chairman's                                                                 
commitment to Representative Kerttula.  The committee will take up                                                              
HB 136 as the first order of business at the next meeting.                                                                      
                                                                                                                                
Number 0048                                                                                                                     
                                                                                                                                
PHIL GREENEY came forward to testify.  He is a bed and breakfast                                                                
(B&B) operator in Juneau and his wife is past president of the                                                                  
Alaska Bed and Breakfast Association, chair of the INNside Passage                                                              
Chapter.  He is present on his own behalf, indicating he also                                                                   
speaks for some of the many people in his business who are                                                                      
extremely concerned with the effects of the most current version of                                                             
HB 136.  Mr. Greeney stated, "Mr. Chairman, if you're going to                                                                  
completely change the process of destination marketing for the                                                                  
state of Alaska, I suggest you must do so only with a concrete                                                                  
plan, and certainly with secure funding.  And so far, with HB 136,                                                              
it appears you cannot guarantee the level of funding, if any at all                                                             
from the state. ... What then happens to marketing if all the                                                                   
funding's coming from the industry?  Doesn't this then invite the                                                               
question of why the industry should allow any controls under that                                                               
scenario?  And please ask yourselves where that then leaves the                                                                 
thousands upon thousands of smaller tourism businesses.  B&Bs were                                                              
mentioned frequently in earlier testimony as representative of one                                                              
end of the economic scale in the tourism industry."                                                                             
                                                                                                                                
MR. GREENEY continued, "As a representative of that component, I                                                                
can confirm that it appears that AVA has already begun to march                                                                 
away from small businesses and their needs and concerns, pricing                                                                
themselves, perhaps out of necessity, out of our market.  There are                                                             
signs that JCVB [Juneau Convention and Visitors Bureau] is                                                                      
following, and, according to a spreadsheet I believe compiled by                                                                
JCVB, we can see some of the reasons for that concern.  They're                                                                 
projecting some near future increases in the participation, say                                                                 
from Anchorage CVB [Anchorage Convention and Visitors Bureau] -                                                                 
that would increase, I believe, 830 percent.  Juneau's increase is                                                              
projected at 541 percent, and Homer's increase ... will be 4,445                                                                
percent."                                                                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG confirmed this was from the spreadsheet in front                                                              
of the committee and he asked if Mr. Greeney was referring to the                                                               
figure of $135,000 from Homer.                                                                                                  
                                                                                                                                
Number 0141                                                                                                                     
                                                                                                                                
MR. GREENEY indicated the bottom of the spreadsheet gives the                                                                   
dollar amounts and the percentage increases they represent.  Mr.                                                                
Greeney further indicated all of the increases are substantial - in                                                             
the three and four digit range - with the possible exception of                                                                 
Wrangell at 9 percent.                                                                                                          
                                                                                                                                
CHAIRMAN ROKEBERG noted the spreadsheet is from the Alaska Society                                                              
of Convention and Visitors Bureaus.  He sought clarification as to                                                              
whether these percentage increases are the budget projections to                                                                
meet the commitment.                                                                                                            
                                                                                                                                
MR. GREENEY replied he believes so.                                                                                             
                                                                                                                                
CHAIRMAN ROKEBERG requested assistance from Ms. Lindgren.                                                                       
                                                                                                                                
MS. LINDGREN indicated this spreadsheet was prepared by all of the                                                              
convention and visitors bureaus at the AVA's request.  It was                                                                   
prepared for a board meeting where the CVBs could discuss current                                                               
programs, expenditures, and the relationship of this to some of the                                                             
budget numbers in the plan.  Homer is in support of the plan; it                                                                
has mentioned it knows the city has been receiving a "free ride"                                                                
for a long time and is very willing to come to the table with more                                                              
money.  Ms. Lindgren indicated the amounts on the spreadsheet are                                                               
not necessarily reflective of what these organizations will end up                                                              
paying; it was against one set of numbers.  She explained this was                                                              
an informational piece and there were problems with some of the                                                                 
information because different CVBs reported differently.  Ms.                                                                   
Lindgren noted many of these organizations currently use the                                                                    
statewide program and marketing to fulfill their own information:                                                               
in other words, these organizations receive names generated by the                                                              
statewide program and base their own entire programs on this.  She                                                              
indicated the lack of a statewide program puts some of these                                                                    
organizations in serious trouble because, with the possible                                                                     
exception of Anchorage, they cannot generate visitors on their own.                                                             
Ms. Lindgren noted, therefore, this is very useful information in                                                               
speaking with the CVBs but it is ongoing discussion.                                                                            
                                                                                                                                
Number 0253                                                                                                                     
                                                                                                                                
MR. GREENEY continued his testimony, commenting that their concern                                                              
with these figures is higher convention and visitor bureau fees                                                                 
because of the increased necessity for participation from these                                                                 
organizations.                                                                                                                  
                                                                                                                                
CHAIRMAN ROKEBERG questioned if that means bed tax.                                                                             
                                                                                                                                
MR. GREENEY answered not necessarily, indicating he was speaking of                                                             
the fees to belong to these organizations.  He related he had                                                                   
recently had a conversation with two other small business                                                                       
operators, one the operator of a flying service and the other a                                                                 
guide service operator.  Mr. Greeney commented all three of them                                                                
had had to drop out of AVA because AVA had priced itself out of                                                                 
their market.  He noted advertising in the state planner has become                                                             
prohibitively expensive as well.  Mr. Greeney said, "These things                                                               
are very, very difficult, and we're looking at a time when only big                                                             
business will be able to afford these organizations, and receive                                                                
the benefits of these organizations."                                                                                           
                                                                                                                                
CHAIRMAN ROKEBERG asked how the JCVB is funded, questioning if it                                                               
is a bed tax, a percentage of sale tax, or what.                                                                                
                                                                                                                                
Number 0306                                                                                                                     
                                                                                                                                
MR. GREENEY answered that Juneau has a 7 percent bed tax in                                                                     
addition to a 5 percent sales tax, equaling 12 percent on every                                                                 
room night they sell.  In response to the chairman's further                                                                    
question, Mr. Greeney confirmed the 7 percent goes into the CVB,                                                                
noting he believes much of that goes to finance Centennial Hall and                                                             
the other JCVB functions.                                                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG noted, then, it is an allocation formula.                                                                     
                                                                                                                                
MR. GREENEY replied to the best of his knowledge, commenting he is                                                              
not fairly versed in that.                                                                                                      
                                                                                                                                
REPRESENTATIVE HALCRO indicated the breakdown shows none of the                                                                 
sales tax Mr. Greeney's customers pay goes to support the JCVB.                                                                 
                                                                                                                                
MR. GREENEY noted he does not believe that is the case.                                                                         
                                                                                                                                
REPRESENTATIVE HALCRO indicated the spreadsheet shows 70 percent of                                                             
JCVB's budget comes from the bed tax and 0 percent comes from sales                                                             
tax.  He asked if the 7 percent bed tax all went into JCVB and some                                                             
to Centennial Hall.                                                                                                             
                                                                                                                                
MR. GREENEY replied to the best of his knowledge.                                                                               
                                                                                                                                
REPRESENTATIVE HALCRO noted, then, the 5 percent would go to the                                                                
city for roads, tourism, (indisc.).                                                                                             
                                                                                                                                
Number 0368                                                                                                                     
                                                                                                                                
MR. GREENEY continued his testimony, stating, "Our fears [are] that                                                             
if HB 136 passes without a secure funding source, we can anticipate                                                             
that within a relatively short time funding may well dry up due to                                                              
lack of matched industry funds or state funding, and we'll be back                                                              
to square one, leaving Alaska with no tourism marketing for a few                                                               
years while those involved try to put something else in place  ...                                                              
Meanwhile, the state's second largest industry will be left with no                                                             
destination marketing.  The impact would be devastating.  And, on                                                               
a  personal note, I mean I have to struggle to comprehend the                                                                   
reasoning of those who want to take the state out of the business                                                               
of tourism marketing, marketing the cleanest industry we could                                                                  
have.  ... Whether or not we like the idea, we must compete with                                                                
states and nations who have the foresight to vigorously promote                                                                 
their own tourist industries, and in view of that, I have to ask                                                                
you, Mr. Chairman and the committee, to please put the brakes on HB
136.  ... At least give us time to review the different committee                                                               
substitutes, which I believe we're now up to Version K, and put the                                                             
brakes on long enough to firm up a stable and secure funding                                                                    
source.  I have to ask, 'What is the rush?'  I mean, true, the New                                                              
Millennium Plan has been discussed for years, but HB 136 has not                                                                
and I - and certainly the committee revisions have not.  And I ask                                                              
you to allow this bill to follow due process, take it off the fast                                                              
track, and let the system work.  And again, I thank you for your                                                                
time."                                                                                                                          
                                                                                                                                
Number 0438                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO commented HB 136 does have another committee                                                              
of referral so he would not say the legislation is rushed.                                                                      
However, he explained the reason for the legislation's pace is that                                                             
tourism funding has been zeroed out, and the only funding the state                                                             
is going to provide for tourism is with a fiscal note attached to                                                               
this bill.  To Representative Halcro's knowledge, if this                                                                       
legislation does not pass, there will not be any tourism dollars                                                                
for FY 2000.  He indicated the legislation's intent is to reduce                                                                
the state's contribution to tourism marketing in the next three                                                                 
years while gaining contributions from the private sector.                                                                      
Representative Halcro asked Mr. Greeney to expand on the request to                                                             
slow HB 136's progress to shore up funding sources.  He commented,                                                              
"If you're a company and I'm going to come to you say I have this                                                               
plan, you're going to need to make an investment, that to my                                                                    
knowledge that would be how you'd shore up funds, but it sounds                                                                 
like it's a concern to you and I just wanted to know..."                                                                        
                                                                                                                                
MR. GREENEY noted it was a concern, certainly in his own thought                                                                
and in what he heard expressed at, he believes, the previous                                                                    
meeting.  Mr. Greeney indicated there are two current pieces of                                                                 
legislation on this topic, HB 136 and SB 122.  He commented, "We                                                                
need some solid funding and certainly Senator Elton's bill provides                                                             
some mechanism for that."                                                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG commented, "On top of your 12 percent?"                                                                       
                                                                                                                                
Number 0528                                                                                                                     
                                                                                                                                
REPRESENTATIVE HALCRO requested to follow up.  Noting he is in the                                                              
tourism industry, he said, "When I saw SB 122, I immediately                                                                    
started crunching the numbers in ... the estimates - and I know                                                                 
that's not the bill we're discussing here - but his revenue                                                                     
estimates are way out of line.  ... His forecasts for tax revenue                                                               
are so overly optimistic there is no way you're gonna achieve 14                                                                
and a 1/2 million dollars in three years.  (Indisc.) there's just                                                               
no way.  I come from Anchorage, we have an 8 percent bed tax.  Last                                                             
year ... there was $100 million in room and bed revenue in 12                                                                   
months, so 8 percent of that was split 50/50 between the ACVB and                                                               
the city, out of 100 million.  With his projections you'd have to                                                               
do - I think it is - it came out to like $280 million in 6 months.                                                              
I mean, there's absolutely no way that those figures would work.                                                                
And what his bill does, is his bill simply shifts the costs to the                                                              
larger hotels and larger operators, so they're gonna be paying ...                                                              
more of the share.  And so, it's not a pay as you play, it's if                                                                 
you're a big hotel with 600 rooms, you pay more.  And to me, ...                                                                
that seems unfair rather than going out and saying, if your - if                                                                
you want to invest in tourism, you're gonna have to invest in                                                                   
tourism.  So I mean, and I've heard a lot of testimony on this ...                                                              
and a lot of comments over two public hearings over this SB 122,                                                                
and I'm gonna tell you, I've run the numbers and they don't work                                                                
out at all."                                                                                                                    
                                                                                                                                
CHAIRMAN ROKEBERG confirmed that concluded Mr. Greeney's testimony                                                              
and thanked him for his patience.  The chairman indicated to both                                                               
Ms. Fay and Ms. Lindgren that he is concerned over the concept of                                                               
the first right of refusal.  He has used this concept in business                                                               
for many years and it is not a favorite of his.  He mentioned                                                                   
another method, a first right of offer.  The chairman expressed                                                                 
that his concern with the first right of refusal is it requires a                                                               
bonafide third party.  He commented, "Because when you have a first                                                             
right of refusal, you have to have a bonafide third party that's                                                                
standing in place.  (Indisc.) which -- in this instant, the                                                                     
department would say to the qualified trade association, 'If you                                                                
want to do this,' and I'm not sure they would do that - they'd have                                                             
to go out and find a third party, do an RFP [request for proposal]                                                              
and then go back to the qualified trade association to say                                                                      
(indisc.) give you the first right of refusal after they have                                                                   
already made the deal out over here, and then you have to say yes                                                               
or no.  So, ... under a first right of offer, they would just                                                                   
offer, 'Do you want to do this deal?' and you say, 'No,' and then                                                               
they go get somebody else.  ... That may be a problem because of                                                                
the concern about what the substantially similar terms are, and                                                                 
that may have been part of the history of the problems of reaching                                                              
an agreement, so, I'm just kind of curious about some feedback from                                                             
both of you around the concept of what you mean and how the first                                                               
right of refusal would operate."                                                                                                
                                                                                                                                
Number 0664                                                                                                                     
                                                                                                                                
MS. LINDGREN responded she believes their intent is to consolidate                                                              
marketing, as Ms. Fay had said.  The reason that was added was in                                                               
the event of a serious disagreement about what should be done to                                                                
promote Alaska.  It is the hope that clause never "kicks in."                                                                   
However, Ms. Lindgren indicated this would, if there is a                                                                       
disagreement, provide another option besides complete refusal of                                                                
the contract by the QTA or complete refusal to contract by the                                                                  
department.  Ms. Lindgren further indicated the concern and part of                                                             
the difficulty with the previous year's bill had been that if it                                                                
was offered to other organizations, these organizations were not on                                                             
the same terms - there wasn't a level playing field.  Therefore,                                                                
that language was added so that if there was a component and there                                                              
was a disagreement, the department had the latitude of contracting                                                              
elsewhere as long as the terms were the same, so that one                                                                       
organization wasn't penalized compared to others.                                                                               
                                                                                                                                
CHAIRMAN ROKEBERG indicated he wanted the record to reflect that if                                                             
one goes through a traditional first right of refusal, there has to                                                             
be a bonafide third party.  He noted there is an avenue (indisc.)                                                               
that but he thinks in this instance using the traditional                                                                       
interpretation of first right of refusal may be most beneficial.                                                                
He noted, "Because it would smoke out the basic terms that you'd                                                                
have to live with, and I think that was part of point of contention                                                             
... in the previous negotiations, is that not correct?  That's what                                                             
you just testified to, so rather than try to tweak with this ... I                                                              
think we should leave the first right of refusal in there, but ...                                                              
I want to make sure everybody understands what that means in having                                                             
the bonafide third party. "  He asked Ms. Fay if that was her                                                                   
understanding of Ms. Lindgren's comments.                                                                                       
                                                                                                                                
Number 0753                                                                                                                     
                                                                                                                                
MS. FAY answered in the affirmative.  She indicated she thinks the                                                              
department was actually the one that came up with the notion of                                                                 
first right of refusal.  Ms. Fay commented on the recognition that                                                              
the industry has to raise funds if it is to receive this match and                                                              
that it is not a very homogeneous industry.  It is probably worse                                                               
than the fishing industry in terms of different sizes and                                                                       
interests.  Ms. Fay indicated the department understood the                                                                     
industry's concern about splinter groups that would not want to                                                                 
contribute to the whole well-being.  She further indicated giving                                                               
the qualified trade association the first opportunity on a contract                                                             
offered by the department was intended to be an encouragement, an                                                               
incentive for all the players to work together in their industry to                                                             
reach an agreement on things that satisfied everyone's needs.                                                                   
                                                                                                                                
Number 0815                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG requested that Ms. Lindgren and Ms. Fay each                                                                  
explain what Section 6 means to them.  [Both Ms. Fay's and Ms.                                                                  
Lindgren's responses were transcribed verbatim per the chairman's                                                               
request.]                                                                                                                       
                                                                                                                                
MS. FAY answered, "What Section 6 means, okay.  I think this is --                                                              
I think throughout - throughout the bill in almost every single                                                                 
section that you have in here is the intent that tourism marketing                                                              
be consolidated and conducted primarily by - or entirely by one                                                                 
contract that the department has with a single qualified trade                                                                  
association.  I think that's in the findings and intent, and as you                                                             
work through, every - all signs are pointing you to Rome, and I                                                                 
think this is one more place where it's basically saying that while                                                             
this contract is in effect, you cannot execute any other tourism                                                                
marketing campaign except for these exceptions that we've allowed                                                               
for you.  And that's our understanding of it, and so if we want to                                                              
do tourism marketing, we will contract with the qualified trade                                                                 
association in order to do it, unless there's something they don't                                                              
want to do."                                                                                                                    
                                                                                                                                
CHAIRMAN ROKEBERG addressed the question to Ms. Lindgren.                                                                       
                                                                                                                                
MS. LINDGREN responded, "Our intent in this section is that while                                                               
there is a contract in place for tourism marketing - if there's no                                                              
contract the department does it - but while there is a contract,                                                                
the department is not doing tourism marketing."                                                                                 
                                                                                                                                
CHAIRMAN ROKEBERG requested both responses and the follow-up                                                                    
questions on this issue be transcribed verbatim for the record.  He                                                             
asked, "If I might then - to both of you - one of the points of                                                                 
contention as I understand it, has been the fear that if you do go                                                              
out, or if the department's allowed to go out after the (indisc.)                                                               
right of refusal provision is denied by the qualified trade                                                                     
association and the department awards another contract which                                                                    
requires the contractor to - the contractee to go out and get                                                                   
additional funding from various other tourism-related businesses in                                                             
that particular niche, let's say, it's been my understand that was                                                              
one of the fears, that there'd be competition for funding outside                                                               
of the depart[ment] -- in other words, non-state funds.  Is - is                                                                
that a fear?  And I direct this question to Ms. Lindgren.  Was that                                                             
- was that one of your fears (indisc.)?"                                                                                        
                                                                                                                                
Number 0961                                                                                                                     
                                                                                                                                
MS. LINDGREN replied, "Mr. Chairman, I'm not maybe - I'm not                                                                    
following quite the way you're stating it, but one of the fears was                                                             
that in an effort to consolidate what we didn't want to do was                                                                  
start breaking it up into lots of pieces and many contracts.  The                                                               
intent language now still reads a tourism contract with the ability                                                             
if there's a disagreement to have some other contracts, but, as                                                                 
Ginny said, the intent is to have a single contract.  There is a                                                                
fear that if - exactly as you stated - that if it's split up into                                                               
multiple contracts, this new organization will not be able to raise                                                             
these kinds of funds because many people will be out there trying                                                               
to raise funds for different purposes, and also, rather than having                                                             
a cohesive tourism marketing program for the state, we'll have                                                                  
different people doing different things, so that is a concern that                                                              
we both have, I think."                                                                                                         
                                                                                                                                
CHAIRMAN ROKEBERG noted, "And Ms. Fay, do you think the department                                                              
on July first of this coming year will go out - assuming this bill                                                              
passes - and be interested in expanding beyond the single                                                                       
contractor out of the get-go?"                                                                                                  
                                                                                                                                
MS. FAY questioned, "I'm not sure I understand (indisc.) - would we                                                             
[be] interested in expanding beyond a single contractor?"                                                                       
                                                                                                                                
CHAIRMAN ROKEBERG replied, "Right, initially.  In other words - in                                                              
other words we're - you're going - the department will generate the                                                             
actual contract with the specific discrete elements of it - of                                                                  
different marketing goals, and if - if I take it correctly, the                                                                 
qualified trade association would then bid on it and then if they                                                               
refused to do or did not want to do a certain provision of that                                                                 
contract, could they turn down a portion of that contract?"                                                                     
                                                                                                                                
Number 1060                                                                                                                     
                                                                                                                                
MS. FAY answered, "That's correct, the - if - if there was an                                                                   
element that the department perceived to be essential in marketing                                                              
Alaska as a destination, and the qualified trade association did                                                                
not want to do that portion of it, or did not want to provide match                                                             
for that portion of it, then we would have the option of going out                                                              
and letting a contract for that component.  I think, though, it is                                                              
still, when you -- as an example, if there was a group of                                                                       
sportfishing lodges in Western Alaska who thought there should be                                                               
more marketing towards rural sportfishing in Alaska and they were                                                               
ready - they were willing to put up match for it, then it would                                                                 
still probably work better for them to work through this new trade                                                              
association to let them know that this is an area of niche                                                                      
marketing that's critical for the industry, and work with them to                                                               
get this money leverage, and have it be part of an overall                                                                      
coordinated package.  In a sense though this - this bill contains                                                               
a safety valve that if - if they - if it was really considered to                                                               
be important, people were willing to pay for it and the qualified                                                               
trade association was not willing to be responsive to the needs of                                                              
those businesses, then we could potentially contract with them.  I                                                              
think our interest as a department, though, is when this                                                                        
legislation passes is to - is to encourage every single business in                                                             
Alaska to become a member of this organization because every single                                                             
business will have a vote on who the - who the - will be on the                                                                 
board of directors and how the marketing plan will unfold and so it                                                             
would be -- if we want it to be truly representative of all the                                                                 
needs in Alaska, the best thing that could happen is all the                                                                    
businesses who are - who stand to benefit from this organization                                                                
would join and become involved in it."                                                                                          
                                                                                                                                
Number 1183                                                                                                                     
                                                                                                                                
Chairman Rokeberg asked, "And then, if you'll allow me, if - if                                                                 
this contract and this bill had passed last year and it was already                                                             
in place, and we had a circumstance like we have with the                                                                       
unfortunate situation in the Mediterranean, which to me seems to be                                                             
a - a marketing opportunity here, where you wanted to appeal to                                                                 
Mediterranean cruise passengers who are canceling their trips and                                                               
the potentiality of the cruise lines to relocate vessels that were                                                              
going to Mediterranean cruises into the Alaska traffic, how would                                                               
you be able to generate any funding?  Or how would that work?                                                                   
Would you have a - an additional addendum to the contract with the                                                              
qualified group or would you go out your own or how would you                                                                   
handle it under this bill?"                                                                                                     
                                                                                                                                
MS. FAY answered, "Well, my understanding that the - the bill                                                                   
allows for us under section d to be - to be able to allocate                                                                    
additional funds for that kind of special situation - this is page                                                              
5, d, - and that we could amend the contract and specify the work                                                               
that would be done, but that we would not have to have the matching                                                             
requirements be identical to the original contract.  In the case in                                                             
point that you're talking about now, I'm not sure there would be                                                                
any problem getting the cruise industry to put in extra money to                                                                
take advantage of the situation, there -- we wanted to have this be                                                             
flexible because there may be circumstances like similar to when                                                                
the Malaspina blockade occurred, that it might not be possible for                                                              
the - for those funds to be immediately generated because the                                                                   
people who see the most benefit from that might not be able to - to                                                             
put in - raise that additional funds on - on that quick a basis."                                                               
                                                                                                                                
Number 1290                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG noted, "And finally from the Chair, one of the                                                                
key problems, or one of the key things that always seems to                                                                     
(indisc.) have been control of the - the finances and the whole                                                                 
process.  Is the department satisfied with their level of control                                                               
over this legislation, and I'll ask the same question to the - to                                                               
Miss Lindgren.  Miss Fay?"                                                                                                      
                                                                                                                                
MS. FAY responded, "Well, I think that throughout our whole                                                                     
negotiations we have been doing a very balancing act between -- I                                                               
mean I think some of our obstacles have been in balancing out that                                                              
- that level of control because both parties will come to the table                                                             
with substantial investments of resources and want to have - each                                                               
of us want to make sure that the other side can't, you know, blow                                                               
the money, (indisc.) sense.  I think I feel fairly comfortable now                                                              
with - with the - the terms that we recently worked out, where even                                                             
though we're limited to only having one contract, being able to                                                                 
approve the marketing plan and to be able to specify what needs to                                                              
be in it is helpful for us because we didn't feel - without those                                                               
provisions we didn't feel that we really could -- if you can only                                                               
negotiate with one party and you can't say what's the terms of the                                                              
contract, then you aren't really negotiating a contract, but now                                                                
that we have a little more leeway about being able to specify some                                                              
of the terms of the contract we feel fairly comfortable with that."                                                             
                                                                                                                                
CHAIRMAN ROKEBERG asked, "Tina?"                                                                                                
                                                                                                                                
Number 1382                                                                                                                     
                                                                                                                                
MS. LINDGREN answered, "Mr. Chairman, I - I would have to believe                                                               
that the - the members of the tourism industry have the most to                                                                 
gain or lose by what happens, I don't think that - that the                                                                     
Department of Commerce probably has any more at stake than members                                                              
do of the industry, and so there's a - there is a concern that they                                                             
have enough control over their destiny to use the funds that they                                                               
see fit and that they not be regulated as to how those funds are                                                                
used, but they also recognize that there are substantial state                                                                  
dollars involved, and that that money comes with strings and that                                                               
what you see in the bill are the strings that are attached to                                                                   
those."                                                                                                                         
                                                                                                                                
REPRESENTATIVE MURKOWSKI asked, "... The qualified trade                                                                        
association has the right to refuse - or not - not the right to                                                                 
refuse, but if  there's a component in the contract that they don't                                                             
want to do -- let's say we (indisc.) are handling it, they can opt                                                              
out of that and the state goes somewhere else.  Is there any                                                                    
provision that the state could say, 'We don't want you as the                                                                   
qualified trade association to do this aspect of it.'"                                                                          
                                                                                                                                
MS. LINDGREN replied, "Yes there is because they approved the                                                                   
marketing plan in advance."                                                                                                     
                                                                                                                                
REPRESENTATIVE MURKOWSKI noted, "So that's where it is at the very                                                              
get-go.  And then, let's see what else was I going to ask you?"                                                                 
                                                                                                                                
Number 1472                                                                                                                     
                                                                                                                                
REPRESENTATIVE KERTTULA commented, "Could - could I ask a question                                                              
about that, though in my mind it kind of raises - but they can't                                                                
then..."                                                                                                                        
                                                                                                                                
CHAIRMAN ROKEBERG recognized Representative Kerttula.                                                                           
                                                                                                                                
REPRESENTATIVE KERTTULA replied, "Pardon me, thank you, yeah, just                                                              
on that point.  But if they don't have it in the plan to begin with                                                             
they can't just go out to another group to do something, right?  I                                                              
mean, it's either in the plan or it's not, and if it's not in the                                                               
plan, they can't go to another group to market, it has -- all the                                                               
marketing has to be through this one group unless you refuse it, is                                                             
that right?"                                                                                                                    
                                                                                                                                
AN UNIDENTIFIED SPEAKER responded very softly, "Correct."                                                                       
                                                                                                                                
REPRESENTATIVE MURKOWSKI commented, "And then, if in fact..."                                                                   
                                                                                                                                
CHAIRMAN ROKEBERG recognized Representative Murkowski                                                                           
                                                                                                                                
REPRESENTATIVE MURKOWSKI continued, "Thank you - and this is my                                                                 
last question - if in fact your - your - your QTA says, 'I don't                                                                
want this component, I don't want this component, I don't want this                                                             
component,' at what point do you say, 'Wait a minute, this contract                                                             
isn't working because we're having to look elsewhere to handle all                                                              
these aspects of what we had agreed to be our - our plan.  I - I                                                                
don't know enough about this to say how do you get out of it if it                                                              
- if it's not working."                                                                                                         
                                                                                                                                
Number 1532                                                                                                                     
                                                                                                                                
MS. FAY confirmed Representative Murkowski was referring to either                                                              
party and answered, "Well, I think the way this whole system is set                                                             
up - and I think it's a good thing - is that we both have a great                                                               
deal of incentive to work these things out with each other.  I                                                                  
mean, ultimately, both of our objectives is to support and promote                                                              
tourism in Alaska.  Where - I would guess that where our                                                                        
differences might come in is that our mission at the Department of                                                              
Commerce is especially directed towards Alaska-based businesses,                                                                
Alaska jobs and protecting small businesses in Alaska.  So, I think                                                             
from our standpoint, as long as their marketing plan addresses                                                                  
those basic elements and missions that Department of Commerce has,                                                              
we probably should - we probably won't have very many                                                                           
disagreements.  That's - that's where we see our - sort of our                                                                  
oversight role (indisc.)."                                                                                                      
                                                                                                                                
CHAIRMAN ROKEBERG asked if there were further questions from                                                                    
committee, recognizing Representative Cissna.                                                                                   
                                                                                                                                
REPRESENTATIVE CISSNA responded, "Thank you, Mr. Chair.  And I                                                                  
guess that - for either of you - there is, in at least what I saw,                                                              
was no specified time of the contract.  Is there a standard time                                                                
period that contracts are normally let for with the state, or how                                                               
does that work?"                                                                                                                
                                                                                                                                
MS. FAY replied, "Through the Chair, Representative Cissna,                                                                     
(indisc.) basically the - the legislation states that on August 1                                                               
of each year, so  we - there would be one-year contracts."                                                                      
                                                                                                                                
Number 1646                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG confirmed there were no more questions from the                                                               
committee.  He complimented the department, the industry members,                                                               
and the House Special Committee on Economic Development and Tourism                                                             
subcommittee for their work on the legislation.  He personally is                                                               
much more comfortable with this now.  The chairman indicated the                                                                
public hearing would be kept open and the legislation taken up as                                                               
the first item of business on April 12, with the intention being to                                                             
move the legislation at that time.                                                                                              
                                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
Number 1727                                                                                                                     
                                                                                                                                
CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Standing                                                               
Committee meeting at 6:36 p.m.                                                                                                  

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