Legislature(1999 - 2000)
04/23/1999 03:25 PM House L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 23, 1999
3:25 p.m.
MEMBERS PRESENT
Representative Norman Rokeberg, Chairman
Representative Andrew Halcro, Vice Chairman
Representative Jerry Sanders
Representative Lisa Murkowski
Representative John Harris
Representative Tom Brice
Representative Sharon Cissna
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 183
"An Act relating to the powers and duties of the chair of the
Alaska Public Utilities Commission; relating to membership on the
Alaska Public Utilities Commission; and relating to the annual
report of the Alaska Public Utilities Commission."
- HEARD AND HELD
* HOUSE BILL NO. 167
"An Act relating to mobile home dealers."
- HEARD AND HELD
HOUSE BILL NO. 110
"An Act relating to the sale, offer to sell, and labeling of fluid
milk, meat, and meat products."
- BILL POSTPONED TO 4/26
HOUSE BILL NO. 81
"An Act relating to the provision of electric service in the state;
and providing for an effective date."
- BILL POSTPONED TO 4/30
(* First public hearing)
PREVIOUS ACTION
BILL: HB 183
SHORT TITLE: ALASKA PUBLIC UTILITIES COMMISSION
SPONSOR(S): SPECIAL COMMITTEE ON UTIL RESTRUCTURING
Jrn-Date Jrn-Page Action
4/09/99 702 (H) URS, L&C
4/14/99 (H) URS AT 8:00 AM BUTROVICH ROOM 205
4/14/99 (H) SCHEDULED BUT NOT HEARD
4/16/99 (H) URS AT 2:00 PM CAPITOL 120
4/16/99 (H) MOVED CSHB 183(URS) OUT OF COMMITTEE
4/16/99 (H) MINUTE(URS)
4/20/99 880 (H) URS RPT CS(URS) NT 6DP
4/20/99 880 (H) DP: PORTER, KOTT, COWDERY, HUDSON,
4/20/99 880 (H) GREEN, ROKEBERG
4/20/99 880 (H) ZERO FISCAL NOTE (DCED)
4/20/99 880 (H) REFERRED TO L&C
4/09/99 702 (H) READ THE FIRST TIME - REFERRAL(S)
4/23/99 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 167
SHORT TITLE: REGULATION OF MOBILE HOME DEALERS
SPONSOR(S): REPRESENTATIVES(S) COWDERY BY REQUEST
Jrn-Date Jrn-Page Action
3/31/99 625 (H) READ THE FIRST TIME - REFERRAL(S)
3/31/99 625 (H) L&C, FIN
4/23/99 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
REPRESENTATIVE BILL HUDSON
Alaska State Legislature
Capitol Building, Room 108
Juneau, Alaska 99801
Telephone: (907) 465-3744
POSITION STATEMENT: Testified as chairman of the House Special
Committee on Utility Restructuring, the sponsor of HB 183.
WALT WILCOX, Legislative Assistant
to Representative Bill Hudson
Alaska State Legislature
Capitol Building, Room 108
Juneau, Alaska 99801
Telephone: (907) 465-6820
POSITION STATEMENT: Presented CSHB 183(URS) and answered questions
as aide to the House Special Committee on Utility Restructuring,
the bill sponsor.
JUDY WARWICK, Regional Manager of External Affairs
General Communications, Incorporated
505 Old Steese Highway, Suite 101
Fairbanks, Alaska 99701
Telephone: (907) 456-3354
POSITION STATEMENT: Testified on suggested amendments to CSHB
183(URS).
DON SCHROER, Lobbyist
for General Communications, Incorporated;
Former Chairman, Alaska Public Utilities Commission
1331 Bannister Drive
Anchorage, Alaska 99508
Telephone: (907) 272-5668
POSITION STATEMENT: Testified on suggested amendments to CSHB
183(URS); answered questions on CSHB 183(URS) as former chairman of
the Alaska Public Utilities Commission; suggested removal of
Section 3.
JIM CARTER
P.O. Box 212
Kenai, Alaska 99611
Telephone: (907) 283-7222
POSITION STATEMENT: Testified on CSHB 183(URS) on his own behalf
as a former commissioner of the Alaska Public Utilities Commission;
suggested removal of Section 3.
TERESA WILLIAMS, Assistant Attorney General
Fair Business Practices Section
Civil Division (Anchorage)
Department of Law
1031 West Fourth Avenue, Suite 200
Anchorage, Alaska 99501-1994
Telephone: (907) 269-5100
POSITION STATEMENT: Testified on CSHB 183(URS) regarding the legal
counsel provided to the Alaska Public Utilities Commission.
JIM ROWE, Executive Director
Alaska Telephone Association
201 East 56th Avenue
Anchorage, Alaska 99518
Telephone: (907) 563-4000
POSITION STATEMENT: Testified on CSHB 183(URS) and the possible
amendments.
ERIC YOULD, Executive Director
Alaska Rural Electric Cooperative Association, Incorporated
211 Fourth Avenue
Juneau, Alaska 99801
Telephone: (907) 463-3636
POSITION STATEMENT: Testified on CSHB 183(URS) and the possible
amendments.
JIM BALDWIN, Assistant Attorney General
Governmental Affairs Section
Civil Division (Juneau)
Department of Law
P.O. Box 110300
Juneau, Alaska 99811-0300
Telephone: (907) 465-3600
POSITION STATEMENT: Agreed to answer questions at the April 26
hearing on HB 183 regarding the removal of public utility
commissioners by the governor.
PETER TORKELSON, Researcher
for Representative John Cowdery
Alaska State Legislature
Capitol Building, Room 204
Juneau, Alaska 99801
Telephone: (907) 465-6848
POSITION STATEMENT: Presented HB 167 on behalf of the bill
sponsor.
REPRESENTATIVE JOHN COWDERY
Alaska State Legislature
Capitol Building, Room 204
Juneau, Alaska 99801
Telephone: (907) 465-3879
POSITION STATEMENT: Sponsor of HB 167.
GALE KINCAID, Owner/Operator
Triad Sales Company, Incorporated
3200 Seward Highway, Number 207
Anchorage, Alaska 99503
Telephone: (907) 277-5655
POSITION STATEMENT: Testified in support of HB 167.
GEORGE REED, Co-Owner
Lov-Bud Homes
2615 Pago Pago Avenue
Anchorage, Alaska 99507
Telephone: (907) 562-3599
POSITION STATEMENT: Testified on HB 167.
BEN MARSH, Executive Secretary
Alaska Manufactured Housing Association
2550 Denali Street, Number 1310
Anchorage, Alaska 99503
Telephone: (907) 278-3675
POSITION STATEMENT: Testified on HB 167 and noted the Alaska
Manufactured Housing Association has put forth a resolution against
the legislation.
MAC CAREY, President
Alaska Manufactured Housing Association;
President, Carey Homes, Incorporated
3317 Mountain View Drive
Anchorage, Alaska 99501
Telephone: (907) 272-5414
POSITION STATEMENT: Testified in opposition to HB 167.
WILLIAM FERGUSON, Owner
Alaskan Discount Mobile Homes
2621 Tudor Road
Anchorage, Alaska 99507
Telephone: (907) 562-1022
POSITION STATEMENT: Testified in support of HB 167.
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 on HB 167.
ACTION NARRATIVE
TAPE 99-44, SIDE A
Number 0001
CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce
Standing Committee meeting to order at 3:25 p.m. Members present
at the call to order were Representatives Rokeberg, Halcro, Harris
and Cissna. Representatives Murkowski and Brice both arrived at
3:33 p.m. Representative Sanders arrived at 4:22 p.m.
HB 183 - ALASKA PUBLIC UTILITIES COMMISSION
[Contains discussion relevant to SB 133.]
Number 0055
CHAIRMAN ROKEBERG announced the committee's first order of business
is HB 183, "An Act relating to the powers and duties of the chair
of the Alaska Public Utilities Commission; relating to membership
on the Alaska Public Utilities Commission; and relating to the
annual report of the Alaska Public Utilities Commission." The
chairman commented it was not his intention to move the legislation
at this hearing. He wishes to take some initial testimony and
noted that some amendments have been distributed, welcoming
Representative Hudson to the committee as a former committee
member.
Number 0084
REPRESENTATIVE BILL HUDSON, Alaska State Legislature, came forward
as the chairman of the House Special Committee on Utility
Restructuring (URS). He informed the committee that URS had worked
on the legislation for a couple of weeks, attempting to satisfy
many of the professional interests involved. He noted the special
committee thinks the legislation contains some good provisions and
he is aware of Chairman Rokeberg's proposed amendments.
Representative Hudson requested that Mr. Wilcox, aide to the
special committee, provide the current committee with a brief
overview on a sectional basis.
Number 0187
WALT WILCOX, Legislative Assistant to Representative Bill Hudson,
Alaska State Legislature, came forward as aide to the House Special
Committee on Utility Restructuring. He noted the committee has the
committee substitute (CS) for HB 183(URS) before it. Mr. Wilcox
mentioned the sponsor statement and stated that the committee [URS]
would like to create a responsible and accountable public utilities
commission. The method chosen by the special committee to
accomplish this is to allow the chair more power over the hiring
and termination of employees and the hiring of outside legal
consultants. Currently, a commissioner must be terminated by the
governor; that termination is then subject to the legislature's
review. The legislative review clause was removed by the special
committee. Currently, the commissioners must represent one
attorney, one engineer, one accountant and two public seats. This
requirement has been deleted to essentially allow five at-large
seats. CSHB 183(URS) does not allow more than two commissioners
from the same political party; ethics standards have been added.
The legislation requires the Alaska Public Utilities Commission
(APUC) to report February 1 of every year to the legislature
regarding commission activities, including the timeliness of docket
activity. The legislation has an immediate effective date and a
zero fiscal note. Mr. Wilcox noted that was the sponsor statement.
Number 0319
MR. WILCOX referred to the sectional analysis on page 2 of the
committee members' bill packets. He reviewed it briefly. Section
1: Makes a gender correction from "chairman" to "chair"; makes the
chair responsible for the administration of the commission and
commission employees. Section 2: Removal of a commissioner. The
governor will be able to remove a commissioner for cause, without
legislative approval. Section 3: No more than two members of the
commission may be from the same political party. Commissioners may
not change parties during the year prior to appointment or
reappointment. A commission member may not participate in
political campaigns or fund-raising, or lobbying activities outside
the scope of those charged to that commissioner in the role as a
commissioner. Section 4: The chair, rather than the commission,
may establish the offices for the APUC. Section 5: The chair,
rather than the commission, may employ temporary legal counsel.
Section 6: The chair, rather than the commission, may hire outside
consultants and experts with the approval of the commission.
Section 7: In addition to the annual report, the APUC will present
to the legislature the commission activities and timeliness of
docket activity for the previous year. Section 8: Removes the
employee/public category requirements. Section 9: Defines the
rights of sitting commissioners impacted by Section 2. Section 10:
Immediate effective date.
Number 0440
REPRESENTATIVE HALCRO asked for background regarding why the chair,
versus the whole commission, is being given so much power.
MR. WILCOX indicated the special committee concluded, from the
testimony it received, that the APUC was not functioning to its
highest capacity; there seemed to be a lack of responsibility and
accountability. Mr. Wilcox thought the words, "There's nobody in
charge," were frequently used. It was represented to the special
committee that someone needs to be in charge of an entity
regulating over $2 billion per year of goods and services delivered
to the people of Alaska. Mr. Wilcox commented that a strong chair
seemed to be a reasonable way to create that accountability and
responsibility.
REPRESENTATIVE HALCRO asked Mr. Wilcox to speak to the apparently
greater divide being created between the chair and the commission
by giving the chair more power. He expressed one concern he has
heard about the current APUC structure: The commission will decide
to go one way and the chair ["commissioner" stated on tape] will go
another.
MR. WILCOX replied that sort of concern would always exist in a
politically-appointed group; he does not know if they could
realistically address that. The commission's current makeup is
five members with one chairman.
Number 0550
CHAIRMAN ROKEBERG pointed out that the committee would hear other
testimony. He referred to the October 1998 "Report on the Alaska
Public Utilities Commission" by the National Regulatory Research
Institute (NRRI), commissioned by the APUC itself. He asked Mr.
Wilcox to briefly describe the report and inform the committee
where it came from.
MR. WILCOX answered that the APUC retained NRRI for, he believes,
$25,000 to essentially perform an internal audit [on the APUC] and
see if the APUC's functional problems could be determined. The
National Regulatory Research Institute reached many conclusions,
basically saying that there were problems with management styles
and lines of communication between staff, the utilities and the
commission. Mr. Wilcox indicated additional problems that were
delineated would, in a business, be considered managerial
leadership problems. Mr. Wilcox believes it was mentioned that
leadership was lacking in many areas.
Number 0630
CHAIRMAN ROKEBERG indicated Representative Murkowski, and just
subsequently Representative Brice, had joined the committee. The
chairman informed the committee that NRRI is affiliated with the
National Association of Regulatory Commissioners (NARUC) located at
Ohio State University [Columbus, Ohio] and indicated, therefore,
that NRRI is very reputable. He commented that the APUC had
invited NRRI to make an analysis of the commission's management
problems and activities. The chairman commended the members to
read a substantial proportion of the very good report and informed
them this particular issue would occupy a lot of their time in the
next several weeks. He noted it would be relatively controversial
and commented that there is a good deal happening on this subject.
REPRESENTATIVE CISSNA mentioned the two parties, two seats, noting
the state's political composition, and asked for the history
regarding the political seats. Representative Cissna noted she did
not have the advantage of understanding the APUC's history.
Number 0758
MR. WILCOX replied that was the political will of the House Special
Committee on Utility Restructuring. He believes it was felt that
if there were three members of any one political party, they would
control the commission one way or the other. Mr. Wilcox indicated
that is a policy issue for the special committee and the current
committee to determine; as staff, he can just say that there was
argument both ways and presumes that the argument will replicate
itself here.
CHAIRMAN ROKEBERG indicated the feeling has existed regarding a
certain level of politicalization of the commission by appointments
and (indisc.) things. He noted one commissioner, Tim Cook, was
confirmed by, he believes, the Nineteenth Legislature as an
appointee of then-Governor Hickel and there has been a lawsuit over
this. The chairman commented, then, there has been kind of an aura
of that. He indicated he thinks the special committee's intention
was to admit the possibility of partisanship and put some specific
restrictions on this by not allowing more than two members of one
political party. Chairman Rokeberg pointed out that the commission
could have five non-partisans or "independent folks" because they
are not members of parties.
CHAIRMAN ROKEBERG commented that was the intention of the majority
of the special committee. The [House] minority leader
[Representative Ethan Berkowitz] made the amendments adding the
ethical provisions consistent with legislative conduct. Chairman
Rokeberg related the House Special Committee on Utility
Restructuring is composed of the Speaker of the House
[Representative Brian Porter], the chairman of the House Judiciary
Standing Committee [Representative Pete Kott], the chairman of the
House Rules Standing Committee [Representative John Cowdery,
Vice-Chairman, URS], the House Minority Leader [Representative
Berkowitz], Representative John Davies, and Representative Rokeberg
himself. Representative Hudson chairs the special committee, the
House Majority Leader [Representative Joe Green] is an alternate
member. Chairman Rokeberg noted he thinks the House Special
Committee on Utility Restructuring is the most important committee
in the legislature in terms of the level of authority and
experience of its members. He indicated he had offered an
unsuccessful amendment to remove the section regarding political
party membership, noting he had lost after fair debate on the
record and had basically agreed to leave the section in unless this
present committee wishes to take other action.
Number 0931
REPRESENTATIVE MURKOWSKI questioned if the APUC has an executive
director.
MR. WILCOX confirmed that is correct: Robert Lohr.
REPRESENTATIVE MURKOWSKI asked what has happened to the executive
director position if the commission's chair will be handling all
relations with the staff. She indicated it appears that this
legislation turns over the current duties of the executive director
to the chair. Representative Murkowski noted she, also, does not
know the APUC's political history and why that would be a wise
thing to do.
MR. WILCOX directed attention to the big picture: Currently, there
is the commission at the top of the picture, the executive director
somewhere in the middle, and dockets "out here" that are backed up
anywhere from recent file to five years or more which have not been
dealt with. If the executive director was a very strong position
it could mandate the timely decisions of dockets, make sure that
the scheduling of the commissioners is done in a reasonable
fashion, and they would not be here. Mr. Wilcox commented that
that has apparently not happened so they are struggling for a new
way to structure the commission so dockets are acted on in a
reasonable time frame.
Number 1025
REPRESENTATIVE MURKOWSKI questioned if the executive director
position is being removed.
MR. WILCOX answered that the executive director would remain. It
would be an executive director with diminished powers; the
executive director cannot schedule the commissioners or assign case
load.
REPRESENTATIVE MURKOWSKI noted, though, if part of the problem is
the case load and the backlog, she would think they would want all
of the commissioners working on that "instead of wondering whether
or not Representative Harris was gonna wear a tie today."
Number 1059
CHAIRMAN ROKEBERG, on that, commended the legislative audit to the
committee as well [audit control number 08-1459-99, 12/23/98]. He
indicated the audit had picked up on that. The chairman commented
there was a general feeling among the industry members, and so
forth, that strengthening some of the leadership would be
beneficial. He directed the committee's attention to language on
page 3 of CSHB 183(URS) in Section 6, employment of commission
personnel, "The chair of the commission may employ engineers,
hearing officers, administrative law judges to the extent provided
by AS 42.06.140(b), experts, clerks, accountants, and other agents
and assistants considered [IT CONSIDERS] necessary by the
commission." In other words, Chairman Rokeberg explained, before
the chair can make some of these decisions, he would have to have
the consent of the commission in general. Therefore, the
commission has some modicum of control here on the chair's actions.
As Mr. Wilcox points out, they are trying give the chair some more
power and perhaps diminish the executive director somewhat.
CHAIRMAN ROKEBERG noted this is part of it; it also allows the
chair to exercise his responsibility to move the agenda (indisc.).
The APUC is under severe criticism regarding its ability to act in
a timely manner on the tariffs, dockets and various items before
it. There is a real need to attempt some management reforms.
Chairman Rokeberg commented this is why the APUC itself
commissioned the NRRI study. He added, "[They] have just gotten
this study in the last few months and they're just beginning to
implement it, and is - (indisc.) I think in the legislature to help
to try to correct that." He noted some people even believe the
commission should be terminated - the Senate has legislation which
does that in part [SB 133]. This legislation [SB 133], proposed by
the Senate President [Senator Drue Pearce] extinguishes the
commission and reconstitutes it. Chairman Rokeberg indicated
communication is occurring regarding these two propositions. The
committee proceeded to take testimony.
[Much of the testimony relates to the following amendments which
were distributed to the committee but not formally taken up at this
hearing.]
The suggested amendments to CSHB 183(URS) distributed to the
committee for discussion read as follows:
Amendment H.2, labeled 1-LS0764\H.2, Cramer, 4/21/99:
Page 1, line 5, following ";":
Insert "relating to a management information
system;"
Page 4, following line 1:
Insert a new bill section to read:
"* Sec. 9. MANAGEMENT INFORMATION SYSTEM. The
legislature encourages the Alaska Public Utilities
Commission to continue to develop its management
information system and to make the system available to
utilities and to the public."
Renumber the following bill sections accordingly.
[amendment formatting per provided copy]
Amendment H.3, labeled 1-LS0764\H.3, Cramer, 4/21/99:
Page 1, line 5, following ";":
Insert "relating to provisions for the resolution of
consumer complaints;"
Page 3, following line 19:
Insert a new bill section to read:
"* Sec. 7. AS 42.05 is amended by adding a new
section to read:
Sec. 42.05.165. Consumer complaints. The
commission shall by regulation provide for
(1) the expedited hearing and resolution
of consumer complaints; and
(2) penalties against a party to a
complaint who causes unjustified delays in a
consumer complaint proceeding."
Renumber the following bill sections accordingly.
Amendment H.4, labeled 1-LS0764\H.4, Cramer, 4/23/99:
Page 2, line 13, following "(a)":
Insert "Members shall be qualified as follows:
(1) three members shall be at least one
of the following:
(A) a graduate of an accredited
school of law;
(B) a graduate of an accredited
university with a major in engineering; or
(C) a graduate of an accredited
university with a major in finance,
accounting, or business administration; and
(2) two members shall be consumers.
(b)"
Reletter the following subsection accordingly.
Amendment H.5, labeled 1-LS0764\H.5, Cramer, 4/23/99:
Page 1, line 4, following ";":
Insert "relating to hearings held by the Alaska
Public Utilities Commission;"
Page 3, following line 19:
Insert a new bill section to read:
"* Sec. 7. AS 42.05.141 is amended by adding a new
subsection to read:
(d) On the filing of a petition, application,
or complaint concerning a matter within the
jurisdiction of the commission under this chapter,
the chair of the commission shall promptly fix a
date for hearing. The hearing shall be held
without undue delay. The hearing may not be
scheduled to begin later than five months after the
petition, application, or complaint was filed
unless the commission approves an extension of time
for good cause. After the conclusion of the
hearing, the commission shall enter its order
within 30 days."
Renumber the following bill sections accordingly.
Page 4, following line 5:
Insert a new bill section to read:
"* Sec. 11. The provisions of AS 42.05.141(d),
enacted by sec. 7 of this Act, apply to petitions,
applications, and complaints first filed with the
commission on or after the effective date of this Act."
Renumber the following bill section accordingly.
Amendment H.6, labeled 1-LS0764\H.6, Cramer, 4/23/99:
Page 1, line 4, following ";":
Insert "relating to procedural motions of the Alaska
Public Utilities Commission;"
Page 3, following line 19:
Insert a new bill section to read:
"* Sec. 7. AS 42.05.151(b) is amended to read:
(b) The commission shall adopt regulations
governing practice and procedure, consistent with
due process of law, including the conduct of formal
and informal investigations, prehearing
[PRE-HEARING] conferences, hearings, and
proceedings, and the handling of procedural motions
by a single commissioner. The commission, or an
assigned commissioner, shall enter an order on
procedural motions within 10 days after the close
of the applicable briefing period. Technical rules
of evidence need not apply to investigations,
prehearing [PRE-HEARING] conferences, hearings, and
proceedings before the commission. The commission
shall provide for representation by out-of-state
attorneys substantially in accordance with Rule 81,
Alaska Rules of Civil Procedure."
Renumber the following bill sections accordingly.
Amendment H.7, labeled 1-LS0764\H.7, Cramer, 4/23/99:
Page 1, line 4, following ";":
Insert "permitting arbitrators to conduct formal
hearings before the Alaska Public Utilities Commission;"
Page 3, following line 19:
Insert a new bill section to read:
"* Sec. 7. AS 42.05.171 is amended to read:
Sec. 42.05.171. Formal hearings. A formal
hearing that the commission has power to hold may
be held by or before three or more commissioners, a
hearing officer, or an administrative law judge
designated for the purpose by the commission. In
appropriate cases, a formal hearing may be held
before an arbitrator designated for the purpose by
the commission. The testimony and evidence in a
formal hearing may be taken by the commissioners,
by the hearing officer, [OR] by the administrative
law judge, or by the arbitrator to whom the hearing
has been assigned. A commissioner who has not
heard or read the testimony, including the
argument, may not participate in making a decision
of the commission. In determining the place of a
hearing, the commission shall give preference to
holding the hearing at a place most convenient for
those interested in the subject of the hearing."
Renumber the following bill sections accordingly.
Number 1221
JUDY WARWICK, Regional Manager of External Affairs, General
Communications, Incorporated (GCI), testified via teleconference
from Fairbanks. Ms. Warwick noted GCI has four recommended
amendments to HB 183; she will provide an overview of, and
rationale for, those recommendations. Afterwards, Don Schroer,
former [APUC] commissioner, could provide his testimony from
Anchorage addressing those specific changes and could answer
questions from a former commissioner's perspective. Ms. Warwick
provided the following testimony:
"The first amendment [Amendment H.4] addresses commission
candidate qualifications. Currently the requirements,
other than for the two consumer seats are: one in the
field of law, one an engineer, and one from the fields of
finance, business administration or accounting.
"Due to the changing scope of utilities regulation, and
the transition to competitive provision of services,
rather than have one seat for each of the three specific
professions, we recommend those three seats being
eligible to be filled from any of the already specified
professions in addition to professionals in the public
policy field or the economics field. Adding these two
professions to the mix of qualifications would provide
expanded expertise and a larger pool of appropriately
qualified individuals.
"The second amendment [Amendment H.5] requires setting
dates and adhering to them. For the benefit of the
consumers of this state as well as the utilities, this
amendment would clearly state the statutory obligation of
the commission to schedule matters before it for timely
resolution and to render decisions in a timely manner."
CHAIRMAN ROKEBERG interjected. It was clarified that the first
amendment Ms. Warwick had referred to is Amendment H.4 and the
second is Amendment H.5.
Number 1336
MS. WARWICK repeated part of her statement at the chairman's
request. She noted she thinks the next recommendation varies a
small amount from what is before the committee, although she noted
she has not had a lot of time to read this one.
CHAIRMAN ROKEBERG confirmed she was referring to the (indisc.)
order of procedure (indisc.). He commented that is Amendment H.6
[as Ms. Warwick's testimony proceeded, Chairman Rokeberg corrected
this to Amendment H.7].
MS. WARWICK continued:
"This addresses arbitration, we recommend adding
arbitration to it of course. ... It recognizes
delegation of mediation and arbitration responsibilities
under the '96 Telecommunications Act, and the strong
Alaska state policy in favor of Alternate Dispute
Resolution techniques. Legislative guidance as to the
general applicability of Alaska's Uniform Arbitration Act
is expressed. We [GCI] favor strongly the prompt
procedural decisions to guide parties before the
commission.
"And then the last one I wanted to mention is Alaska
Statute 42.05.171, which includes an arbitrator as an
additional option, again recognizing the delegation of
arbitration responsibilities under the '96 Act
[Telecommunications Act of 1996] and the strong state
policy in favor of Alternate Dispute Resolution
techniques. These amendments which you have before you
are virtually -- well they're very similar, in most
cases, with what we recommend. I think there are a
couple of changes or differences, which perhaps Mr.
Schroer can cover during his testimony ...." Ms. Warwick
indicated that concluded her remarks.
CHAIRMAN ROKEBERG questioned if the committee had followed Ms.
Warwick's testimony. He noted she had spoke of Amendments H.4, H.5
and H.7.
REPRESENTATIVE BRICE requested Ms. Warwick fax a copy of her
written testimony.
MS. WARWICK agreed.
Number 1493
DON SCHROER, Lobbyist for General Communications, Incorporated;
Former Chairman, Alaska Public Utilities Commission, testified next
via teleconference from Anchorage. Mr. Schroer commented Ms.
Warwick had covered the points GCI would like to have as part of
this statute. He indicated he had a few comments, especially on
suggested Amendment H.6. He suggested the inclusion of
"mediations and arbitrations" following "hearings" on line 8,
Amendment H.6 [line 8 of the printed amendment]. If the amendment
would be adopted with Mr. Schroer's suggested change, this sentence
in Amendment H.6 would read: "The commission shall adopt
regulations governing practice and procedure, consistent with due
process of law, including the conduct of formal and informal
investigations, prehearing conferences, hearings, mediations and
arbitrations, and proceedings, and the handling of procedural
motions by a single commissioner." Mr. Schroer noted that if the
APUC is going to adopt regulations regarding mediations and
arbitrations, these two words should be in there and "H.7"
[Amendment H.7] would fit better.
MR. SCHROER then referred to suggested Amendment H.4. He noted
GCI's position, as Ms. Warwick mentioned, is to "loosen it up a bit
and include economics and public policy, and not have to have one
from each area, but make those the five areas of expertise from
which three people can be drawn." He indicated, as Ms. Warwick had
commented, that this would provide a larger pool of qualified
individuals.
Number 1589
CHAIRMAN ROKEBERG noted this was because previously there was a
chair stipulated for law, engineering, and he questioned what the
third one was.
MR. SCHROER added the present statute includes finance, accounting
or business administration. He stated they would like to add
economics and public policy to those lists, but not require one
from each area. Instead, allow the choice of three people from
within those five areas: engineering; law; finance, accounting or
business administration; economics; and public policy.
CHAIRMAN ROKEBERG indicated he would make a note of this proposed
addition to suggested Amendment H.4.
MR. SCHROER commented that otherwise the suggested amendments
follow GCI's thinking; the company does not disagree except for the
change he has suggested to Amendment H.6. Mr. Schroer offered to
answer any questions the committee might have.
CHAIRMAN ROKEBERG asked if Mr. Schroer had had a chance to look
over CSHB 183(URS). The chairman requested Mr. Schroer provide his
opinions on the concept of strengthening the chair discussed
earlier.
Number 1686
MR. SCHROER answered he thinks it is very important. He is not
sure if he agrees with the exact verbiage of the legislation but
believes it is fine as far as strengthening the chair. He
indicated strengthening the chair would eliminate much of the chaos
occurring at the APUC. Mr. Schroer noted someone has to be it, and
have the responsibility to be it. Currently, with five people,
there are nothing but arguments. He indicated the amendments to AS
42.05.121 in Section 6 of CSHB 183(URS) assures quite well that
most of the decisions the chair should carry out are still rendered
by the full commission. Mr. Schroer commented he thinks what is in
CSHB 183(URS) regarding the chair's authority would work quite
well.
REPRESENTATIVE BRICE noted, indicating that Ms. Warwick should
participate if she wished, it is obvious GCI's attitude toward
mediation and arbitration is fully favorable. He asked if GCI uses
these techniques much and how they see it working with the APUC.
MR. SCHROER replied that presently very little mediation and
arbitration occurs - it all goes to hearing. He thinks allowing
arbitration would shorten decision time in many cases. This is,
after all, what businesses are seeking. Mr. Schroer indicated
businesses would prefer to see these government decisions, right or
wrong, issued in a shorter time period. He noted he thinks an
arbitrator would "shorten up a lot of the areas (indisc.) and it
wouldn't have to go to a formal hearing."
REPRESENTATIVE BRICE asked if Mr. Schroer is speaking of "just
straight out and out advisory arbitration, or binding arbitration."
MR. SCHROER answered at this stage advisory arbitration. He noted
GCI has suggested they follow the Uniform Arbitration Act, AS
09.43.010-180. That would not be binding arbitration.
Number 1792
REPRESENTATIVE MURKOWSKI commented that Mr. Schroer had mentioned
the qualifications for the commissioners. With CSHB 183(URS), all
those qualifications have been eliminated and the only
qualifications are with regards to political affiliations. She
questioned if GCI is suggesting in the amendment that the
qualifications [of the commissioners] return to the professional
qualifications and have no reference to the political
qualifications, or if he is suggesting that there be both.
MR. SCHROER said he had wanted to comment on that although it had
not been part of his agenda. He personally thinks that entire
section, qualifications of members regarding politics, should be
removed. Although there had been some very great differences
between commissioners, as there are currently, during his six years
of experience he never saw party politics ever get involved in any
decision made in the adjudicatory room. He noted it just is not a
problem, unless it has changed, and he does not believe it has.
REPRESENTATIVE MURKOWSKI indicated she was glad to hear Mr.
Schroer's response, noting she had been thinking she was not really
following the issue. She commented, "Because I couldn't decide
whether garbage regulation should be a Republican or a Democrat
thing, and I just didn't know where to go, so I'm glad to hear you
make that comment."
MR. SCHROER noted he has always had that same problem. His thought
would be that "040" in the present bill should be deleted [CSHB
183(URS), Section 3, the repeal and reenactment of AS 42.05.040,
read:
* Sec. 3. AS 42.05.040 is repealed and reenacted to
read:
Sec. 42.05.040. Qualifications of members. (a) No
more than two members of the commission may be members of
the same political party. A person may not be appointed
or reappointed to the commission for one year after
changing political party membership.
(b) A member of the commission may not participate
in
(1) political management or in a political
campaign for a candidate for election to federal, state,
or local office regardless of whether the campaign is
partisan or nonpartisan or for passage or defeat of a
ballot measure of any type;
(2) the campaign of, or attend campaign
fund-raising events for, a candidate for governor or the
legislature;
(3) a fund-raising event held on behalf of a
political party or attend a political party fund-raising
event; or
(4) lobbying activities that would require a
person to register as a lobbyist.]
Number 1874
REPRESENTATIVE MURKOWSKI asked about the restrictions of the
commissioners to participate in politic activities: How important
is it for an APUC commissioner to basically steer clear of any
political activity?
MR. SCHROER answered that, again, he personally thinks the entire
section should be removed, noting he is obviously not an absolute
expert on this. He possibly questioned if some of the limits on
the commissioners' activities were constitutional. Mr. Schroer
reiterated his opinion that the entire section "040" should go out.
REPRESENTATIVE HALCRO questioned when Mr. Schroer had been
commissioner of the APUC.
MR. SCHROER responded he was chairman from his appointment in 1991
until August of 1996 when Mr. Cotten [Sam Cotten] became chair.
Mr. Schroer noted he left the commission in January of 1997.
CHAIRMAN ROKEBERG thanked Mr. Schroer for his testimony, commenting
that the committee would be taking these amendments up on Monday
[April 26].
MR. SCHROER indicated the committee should contact him if anything
specific is needed.
Number 1955
JIM CARTER testified next via teleconference from Kenai on his own
behalf. Mr. Carter informed the committee he had served on the
APUC at the time Mr. Schroer was the chairman, noting it was nice
to hear Mr. Schroer involved here today. Mr. Carter stated the
questions he had intended to bring up have been answered. He
agrees with Mr. Schroer that "42.05.040" should "absolutely go out"
[CSHB 183(URS)]. Mr. Carter commented, "I think that it brings in
conflicts and could also possibly if you just do that for the
commission and do it for other commissions that you're - you, know
there might be some complications in the future. And of course the
Hatch Act - the federal Hatch Act could be used as an example ...
in which it permits certain political activities." Additionally,
Mr. Carter noted he wished to comment on how a governor can remove
a commissioner. He asked for confirmation that the legislature has
to concur with the removal.
CHAIRMAN ROKEBERG answered that is not correct; Version H of HB 183
[CSHB 183(URS) is Version H of HB 183] has a provision in Section
2, the repeal and reenactment of AS 42.05.035, "which provides that
the governor for cause can remove (indisc.)." [CSHB 183(URS),
Section 2, read:
* Sec. 2. AS 42.05.035 is repealed and reenacted to
read:
Sec. 42.05.035. Removal of commissioners. The
governor may remove a commissioner from office only for
inefficiency, neglect of duty, or misconduct in office,
or because the member, while serving on the commission,
is convicted of a misdemeanor for violating a statute or
regulation related to public utilities or is convicted of
a felony. The governor shall deliver to the commissioner
a copy of the charges against the commissioner. The
commissioner shall have an opportunity to present a
defense in person or through counsel at a public hearing
before the governor or the governor's designee. The
commissioner shall be informed of the hearing by
registered mail at least 10 days before the hearing date.
At the hearing, the commissioner may confront and
cross-examine adverse witnesses. Upon removal of the
commissioner, the findings and a complete statement of
all charges made against the commissioner shall be filed
in the Office of the Lieutenant Governor.]
MR. CARTER noted, then, it does not require concurrence by the
legislature.
CHAIRMAN ROKEBERG indicated this is correct. He stated this was a
significant policy change made by the special committee - deleting
legislative concurrence in the removal.
MR. CARTER highly recommended that it be left as it had been, with
concurrence required by the legislature. He did not know that
there would be a check and balance otherwise. Mr. Carter noted the
new language allowed removal for inefficiency, neglect of duty, et
cetera, and he mentioned a situation of four Republicans on the
commission with one Democrat as chair, and a Democrat governor.
Mr. Carter questioned what constitutes inefficiency or neglect of
duty; he thinks "you (indisc.) yourself over to extreme
circumstances in compliance with that." Mr. Carter indicated that
concluded his remarks and reiterated his agreement with Mr. Schroer
that "040" should be removed.
Number 2113
TERESA WILLIAMS, Assistant Attorney General, Fair Business
Practices Section, Civil Division (Anchorage), Department of Law,
testified next via teleconference from Anchorage. Ms. Williams
said she is online to answer questions about the role of the Office
of the Attorney General as legal counsel for the commission. She
referred to Chairman Rokeberg's April 14, 1999, memorandum to
Representative Hudson and the other members of the House Special
Committee on Utility Restructuring. Ms. Williams noted this
memorandum discussed the topic of the commission hiring its own
in-house legal counsel. She would offer her comments on this, if
the timing is appropriate.
CHAIRMAN ROKEBERG indicated the timing is fine. The issue
discussed in the memorandum had been brought forward because of
certain recommendations from various people; the chairman noted he
believes "it's commented on in the NRRI report that there's been
some suggestions that might be (indisc.)." He further indicated
there are two elements and that one of the issues is that all of
the APUC's legal counsel are employed by the Department of Law -
they work for the attorney general - but work at the commission.
He questioned Ms. Williams if she could answer that: Does she have
an opinion or is there an Administration opinion?
MS. WILLIAMS responded she supervises the two attorneys who
represent the APUC. These attorneys work in the attorney general's
office but also have quarters at the commission to use when they
are there. The Office of the Attorney General opposes the concept
of counsel going out to the individual agencies and working solely
for those agencies; there are a number of concerns when that
happens. First, there would be persons within an agency who feel
constrained in giving independent and sound legal advice that might
be unwelcome to the agency. If the agency feels that good legal
advice is too inhibiting, it might want to get rid of that
attorney. Another consideration is that the legal advice given to
state agencies needs to be consistent. There are certain issues
that every agency must address; examples are public records, open
meetings, personnel issues and the drafting of regulations. Those
issues cut across state agencies, and, for that reason, it is
important that the advice given to the agencies is consistent. The
Office of the Attorney General needs to know what is going on at
the various agencies to provide a "heads-up" when there are
problems that might be going toward the agencies. There are issues
that cut across lines of [legal] expertise; examples are personnel,
anti-trust and torts. All sorts of different legal issues arise
that attorneys in other portions of the attorney general's office
are consulted on to make sure agencies are receiving consistent,
good legal advice. Therefore, they are opposed to the concept of
"basically Balkanizing" the state agencies so that the agencies
would have separate legal counsel not supervised by a central
person responsible for the large picture regarding the position of
state government on legal matters.
Number 2266
CHAIRMAN ROKEBERG asked Ms. Williams if she had said the counsel
has premises at the AG's [Attorney General's] office and at the
commission's office.
MS. WILLIAMS answered that the counsels' offices are at the
attorney general's office where they have secretaries, computers,
et cetera. The counsels spend most of their time at the attorney
general's office, but have also been given a room at the APUC for
use when over there. Ms. Williams noted the attorneys can
certainly borrow secretaries and so forth. She commented this is
probably the most accommodation any agency has given to a member of
the attorney general's office; sometimes the attorneys just have to
find an empty corner if they are over at their agencies. Ms.
Williams added, "But I'd say as far as their location - their
(indisc.) location is in the Attorney General's Office."
CHAIRMAN ROKEBERG asked if Ms. Williams feels the attorneys
spending most of their time in the attorney general's office is a
positive, so that they will not be pestered or bothered by the
commission members.
MS. WILLIAMS replied that is always an advantage, commenting it is
kind of like having one's phone turned off - sometimes that is a
real blessing. She noted another advantage is that when the
attorneys have questions regarding statutory interpretation,
meetings, torts, et cetera, they can walk and speak to that person.
Ms. Williams said the attorney general's office has legal
resources, including a good law library, that would not be readily
available if the attorneys were at the commission. She indicated
it also maintains the attorneys' independence - having the sense
that they can provide impartial and good legal advice without
feeling that their jobs are in jeopardy.
CHAIRMAN ROKEBERG noted he somewhat takes the opposite view,
indicating he thinks being closer to one's clientele allows one to
provide better service.
Number 2334
REPRESENTATIVE BRICE asked Ms. Williams to explain "inefficiency",
referring to the language allowing a governor to remove a
commissioner for "inefficiency".
MS. WILLIAMS responded she believes Jim Baldwin [Assistant Attorney
General, Governmental Affairs Section, Civil Division (Juneau),
Department of Law] is present to speak to question of removal of
commissioners; he would be better suited to answer that question.
REPRESENTATIVE BRICE indicated he would address the question to Mr.
Baldwin.
CHAIRMAN ROKEBERG recognized the attendance of Representative John
Cowdery, who joined the committee at the table. The chairman
confirmed there were no further questions for Ms. Williams and
asked her if she had anything in writing regarding her testimony.
MS. WILLIAMS responded she had nothing in writing but would be glad
to do so if it is the chairman's preference.
CHAIRMAN ROKEBERG noted he would appreciate that but indicated she
should not spend too much time on it.
Number 2398
JIM ROWE, Executive Director, Alaska Telephone Association (ATA),
testified next via teleconference from Anchorage. Mr. Rowe noted
he would like to comment first on Amendment H.4 concerning the
qualifications of commissioners. It is one of the amendments
suggested by Ms. Warwick and Mr. Schroer [of GCI]. Mr Rowe said,
"As, Mr. Chairman, you mentioned earlier, the utilities
restructuring committee was pretty well stacked with power in the
House and the people who have quite a bit of interest and
expertise, I think, in utilities matters, and I think they wisely
at the time took a section out that had very similar
qualifications." Mr. Rowe indicated part of this decision resulted
from the historic basis for these qualifications. With fewer
staff, it was felt that there needed to be commissioners skilled in
the fields of law, engineering and finance to address those
problems with a degree of knowledge. However, Mr. Rowe further
indicated he thinks there is currently enough staff to address
these issues. Noting the proposed amendment does not limit it to
one commissioner from each area, he commented they could end up
with three attorneys, three engineers, et cetera. This leads him
to think they do not necessarily need all of these skills; they
could have three in any one of the areas.
MR. ROWE thought the special committee very wisely recognized that
if the Administration appoints a person and the legislature
confirms that person, the person would hopefully be very capable.
He mentioned the qualities of being able to work hard, bring
leadership and make good decisions. Mr. Rowe thinks they ought to
have that trust and he hopes the committee will consider leaving
that portion of the legislation the way it is. A lot of effort has
been put into Version H, many amendments were offered, some
adopted, some removed. One amendment inserted into the
legislation, now appearing on page 2, line 1, which Mr. Carter had
addressed, regards "inefficiency". Mr. Rowe thought one of the
previous bill versions in the special committee contained that
section with "inefficiency" deleted. He commented, "And I think at
the time it was discussed that it was pretty hard..." [TESTIMONY
INTERRUPTED BY AUTOMATIC TAPE CHANGE]
[From tape log notes: 'had to' 'Mr. Wilcox' 'my mem[ory?]' 'I think
better w/o [without] ineffic[iency]']
TAPE 99-44, SIDE B
Number 0001
MR. ROWE continued, "...section without the word 'inefficiency' in
there. That's all I have to offer at this time, Mr. Chairman, and
I thank you for the opportunity and I hold for questions."
REPRESENTATIVE HALCRO asked if Mr. Rowe has been experiencing a
significant wait in action on his docket when he files with the
APUC to change his rates.
MR. ROWE answered that he represents a trade association made up of
local members that do file tariffs; he does not. He indicated
that, yes, these members do experience significant delays, noting,
"Some of them feel like they've gone down to some hole and they
wonder where they are. ... Some of them are fairly simple matters
and some of them do come back, but I do sit across lunch tables
with these people on occasion and they vent frustrations, so I
think you're exactly right."
REPRESENTATIVE HALCRO asked Mr. Rowe to explain the process: Once
one of his members files, it just sits in "some black hole, as you
call it." Representative Halcro questioned how one checked on
that. He wondered if one called up the commission asking when the
issue was going to be addressed. He questioned if there is some
kind of regularly scheduled meeting where everything on the docket
is reviewed and where it is in the process.
MR. ROWE noted, first, not all go into "that dark hole." They seem
to see the exceptions, he is sure. He indicated these exceptions
are the source of irritation, the ones that are remembered and
being discussed today. He finds the APUC very approachable; they
do telephone the commission and ask what happens on a particular
issue. Mr. Rowe thinks they receive answers most of the time.
Number 0077
REPRESENTATIVE MURKOWSKI noted she is looking at the April 22
[1999] letter Mr. Rowe cosigned with Eric Yould [Executive
Director, Alaska Rural Electric Cooperative Association,
Incorporated (ARECA)], specifically relating to the timeliness
issue and the inefficiencies or problems in receiving decisions
from the commission. She understands he is in support of a
management information system, referring to the language in the
letter, "Timeliness is probably our greatest complaint, but it
would be wrong to put the same specific time line on each item that
comes before the commission. Some issues are not controversial and
can be done almost by rote, while others are complex,
ground-breaking policy issues that need much more input, research
and discussion." Representative Murkowski asked if Mr. Rowe is in
support of Amendment H.5 which basically puts a time frame on when
a hearing is to be scheduled and when the commission should enter
its order after the hearing's conclusion.
MR. ROWE commented that, having just seen the amendment very
recently, he is comfortable with it, generally speaking. He
indicated their feeling is that the legislation probably would not
be before the committee if timeliness was not a major concern.
They are afraid to put a certain time line - 30 or 90 days, six
months - on every issue. Some of the issues probably shouldn't
take that long; some are very complex and might take longer.
However, Mr. Rowe indicated he thinks the amendment would allow
items that need further study to be addressed in that manner.
Number 0164
CHAIRMAN ROKEBERG confirmed there were no further questions for Mr.
Rowe. He indicated the current informational nature of the
amendments, that the amendments originated from various parts of
the industry, that further discussion with the special committee
and others would occur on these possible amendments, and that the
intention is to not move the legislation at this hearing.
REPRESENTATIVE MURKOWSKI referred to the previous question
regarding removal [of a commissioner] for cause, asking if that
would be addressed today and mentioning Mr. Baldwin.
CHAIRMAN ROKEBERG noted the committee did have one more witness.
The chairman recognized that Mr. Wilcox wished to add something.
MR. WILCOX indicated, regarding clarification on the removal, a
previous witness mentioned "inefficiency" had been removed at one
time. Mr. Wilcox commented that, indeed, that whole section had
been removed and that word removed at one time. Subsequent to
that, a motion was made to reinsert, he believes, "G.3" or one of
the amendments which contained the word "[in]efficiency".
CHAIRMAN ROKEBERG indicated a lot of other words had been
reinserted with "inefficiency".
MR. WILCOX agreed, but noted it might be appropriate to remove that
if the original intent is to be followed.
Number 0225
ERIC YOULD, Executive Director, Alaska Rural Electric Cooperative
Association, Incorporated (ARECA), came forward in Juneau to
testify. He noted ARECA is the trade association for the electric
utility industry in Alaska. His industry generates roughly 95
percent of the power throughout the state. They have a very keen
interest in this particular bill and, ultimately, in the efficient
operation of the APUC. Their interest is to get dockets and
decisions made as timely, efficiently and accurately as possible.
In many respects, sometimes they are more interested in getting the
decision rather than getting the right decision because at least
this lets them know where they are headed. Obviously, they would
like to have the right decision but he noted there are two sides to
every issue. ARECA has testified in the House Special Committee on
Utility Restructuring regarding this legislation. Mr. Yould drew
the committee's attention to the April 22 letter in the committee
members' packets cosigned by himself and Mr. Rowe. [Mr. Yould's
and Mr. Rowe's 4/22/99 letter read:
RE: HB 183, APUC
Dear Representative Rokeberg:
Thank you for bringing before the Utilities Restructuring
Committee the issues raised in your memorandum of April
14. We appreciate the effort the committee members
devoted to HB 183 and the very significant amount of time
that industry was permitted to offer its thoughts. We
are satisfied that the bill is addressing some of our
concerns with the APUC and that its passage would be
beneficial, however, as you noted, there is more to do.
Ex Parte Communication and Advocacy
In practice, a staff person is concurrently party (public
advocate) on one docket and professional staff (counsel)
to the commissioners on another docket. Rules prohibit
ex parte communications so that one party before a
judicial panel is not disadvantaged relative to an
opposing party. The current practice, at best, strains
the natural human inclinations for incidental (or less
incidental) conversation. Some separation is appropriate
without degrading the quality of the public advocacy
staff or the staff who provides research and analytical
assistance to the commissioners.
If the presently allocated staff positions at the
commission are filled, we think the chair could achieve
the proposed separation now without the need for specific
legislation.
Timeliness: Speed and Quality
Timeliness is probably our greatest complaint, but it
would be wrong to put the same specific timeline on each
item that comes before the commission. Some issues are
not controversial and can be done almost by rote, while
others are complex, groundbreaking policy issues that
need much input, research and discussion. With
sufficient staffing, the burden of timeliness
(efficiency) should fall on the shoulders of the chair.
Three-member panels should be encouraged, used much more
often, but not mandated. The chair should appoint
three-member panels to all but the most complex and
controversial dockets; however, each member should retain
the opportunity to join in any docket.
Although we are aware that the APUC is developing a
Management Information System for their dockets, we think
a legislative directive would assure the successful
completion of this project. Therefore we think that it
would be appropriate to establish in statute this method
to manage dockets with the following language.
"The commission shall establish a Management Information
System, accessible by the general public through the
Internet, for the purpose of tracking, scheduling and
managing all dockets within the commission."
Decision-making delays are a major problem that must be
rectified!
Legal Advice
The commission should have the authority to seek outside
counsel, but would generally use the Office of the
Attorney General for normal workload.
Consumer Complaints
We are not aware of consumer complaints that languish.
Summaries of consumer complaints are presented monthly at
a public meeting and upon occasion a particular complaint
is reviewed. We believe staff resolves most consumer
complaints without need for referral to the
commissioners.
Statutory Construction: Liberally Construed
This issue has been addressed previously. It is moot.
Thank you for this opportunity to comment. We look
forward to participating as this process continues and we
are available for any assistance we might be able to
provide.]
MR. YOULD noted the items in the letter are ones that his and Mr.
Rowe's two industries could pretty much agree on as they relate to
the APUC. He commented that, as a general rule, they see this
legislation as doing two things: 1) It attempts to clarify and
give the chair more authority to act on and carry out the policy of
the commissioners themselves. This is an important distinction.
Mr. Yould stated, "Right now you have a commission that sometimes
wonder[s] to what extent they have input to the execution of
certain things by the chairman, and I thinks sometimes the chairman
is not sure what his authority is either." Mr. Yould thinks this
legislation does a pretty good job of clarifying that distinction.
2) The other thing this legislation does, and the amendments - if
adopted - will attempt to do, is to provide more resources and
tools for the commission to act in a timely manner. ARECA strongly
endorses this. Currently, they often see all five commissioners
feeling compelled to hear and adjudicate on virtually any docket
which comes before them. In ARECA's opinion, this is a waste of
the commissioners' time; it would like see many of the management
techniques being discussed today actually implemented and he
commended the committee for considering some of these management
changes.
MR. YOULD said he had some additional comments in terms of the bill
itself. He stated, "First of all, as it relates to the one section
having to do with requiring X number of people from various parties
and that sort of thing, quite frankly we think that if anything
that polarizes the commission even more and we question the need
for that. I think we would like to see that element struck. The
portion that has to do with lobbying and so forth ... I guess we
don't see a problem with that, I think that's good public policy."
Mr. Yould noted ARECA also questions the need for specifically
stating qualifications of the individual members. Like Mr. Rowe,
ARECA generally feels a governor is going to try to put the best
possible people on the commission and it is up to the legislature
to decide whether these people have the ability to act on behalf of
the general public. ARECA doesn't really see the need for an
attorney and an accountant, although Mr. Yould joked it might be
okay to have an engineer since he is one.
Number 0374
CHAIRMAN ROKEBERG indicated the intention, and mentioned the
testimony designating other fields, is not to assign a particular
seat to a particular professional area; it is intended to assure
that the people appointed have some fundamental qualifications,
academic and otherwise. He asked Mr. Yould if his concern is that
it is too close to the other model.
MR. YOULD answered that he does not have a problem with the other
model; it is simply that, as a general rule, he would have to say
they have not seen the exercise of that expertise on the present
commission anyway. Mr. Yould emphasized this is not a negative; it
is because the commissioners are not called to make those kind of
determinations, and, therefore, ARECA questions whether there is
really a need for that sort of thing.
CHAIRMAN ROKEBERG recognized the presence of Representative
Sanders.
Number 0420
MR. YOULD continued his testimony. He noted there had been a
question on an amendment concerning a management information system
(MIS) and whether or not they agree with that. Mr. Yould stated
ARECA strongly agrees; he does not think the language in Amendment
H.2 goes quite far enough or is strong enough. He would almost
mandate that a management information system be put in place. Mr.
Yould indicated his and Mr. Rowe's joint letter contains suggested
language. Whether or not the committee uses the amendment's
current language or ARECA's and ATA's suggested language, Mr. Yould
noted they would like to indicate that the management information
system should be accessible electronically through the Internet.
He explained the Internet is becoming a medium that is very
accessible to the utilities and the general public; the dockets
should be available on the Internet through a MIS system of some
type.
CHAIRMAN ROKEBERG indicated that had been the intention with the
amendment but it may not have been reflected in the drafting.
MR. YOULD said those were the basic comments he had regarding the
current bill and the amendments. He would like to offer another
amendment which is not available to him today. However, he
described the situation his industry would like to see rectified.
Currently, APUC's funding comes from the RCC, the regulatory cost
charge.
CHAIRMAN ROKEBERG pointed out this is on everyone's utility bill.
MR. YOULD explained the way the formula is written, the electric
utility industry is basically paying between 25 and 30 percent of
the APUC's budget. The electric utility industry has no quarrel
with paying for the APUC's services; it does have a problem with
not receiving a level of effort commensurate with that payment. In
1996, when deregulation came to the telecommunications industry,
the number of telecommunications dockets virtually tripled. Mr.
Yould said only 10 percent of the APUC's dockets are actually
electric utility dockets and yet the industry is paying between 25
and 30 percent of the total budget. The electric utility industry
would like to see some sort of cost tracking system within the APUC
ensuring that each individual utility industry pays based on the
level of effort going into its individual dockets.
Number 0542
CHAIRMAN ROKEBERG questioned if Mr. Yould knew of any other states
with a similar model, or if there is software or anything like that
available.
MR. YOULD answered he did not know but could certainly find out.
CHAIRMAN ROKEBERG indicated Mr. Yould should pursue this. He
confirmed that concluded Mr. Yould's testimony.
REPRESENTATIVE MURKOWSKI referred to Mr. Yould's earlier statement
that sometimes they want to get the decisions soon just to get a
decision made even if the decisions are not necessarily the right
ones. She noted this is somewhat disconcerting, indicating that
efficiency and expediency without sacrificing quality is the hoped
for result. Representative Murkowski commented one of the reports
in the bill packet mentioned APUC rulings are very seldom
overturned at the court level: Maybe the commission is doing one
thing right although it is spending a lot of time doing it.
Representative Murkowski indicated she thinks the amendments which
somewhat mandate a schedule order or tracking system is the right
direction to be going in. However, she questioned if Mr. Yould is
still suggesting they want the order sooner than later, at the
expense of good deliberative decision making, in some of these more
complex cases where it is truly not reasonable to expect an order
within 30 days.
MR. YOULD replied absolutely not. Referring to his and Mr. Rowe's
joint letter, he noted they had equivocated on that very question.
They were asked if they would like to see time lines dictated in
statute. Because of the complexity of the various types of
dockets, as Representative Murkowski has said, they felt it would
be hard to delineate what should or shouldn't be on an immediate
time line. Mr. Yould stated he would agree with Representative
Murkowski; they do not want to see a decision made on a docket just
for the sake of expediency. However, he noted there are some
dockets affecting business decisions of the utilities that have
been out there so long that they would have rather have had a "no"
even though they wanted a "yes" so that they could move forward.
Number 0651
REPRESENTATIVE BRICE questioned if they would find use of
arbitration helpful in APUC deliberation.
MR. YOULD thought Don Schroer had addressed this and done a good
job. It is an advisory decision. One could also say that of an
administrative law judge. The agency is not bound by the
recommendation of the administrative law judge, and Mr. Yould
agrees with that. He noted in a previous life he had gone against
an administrative law judge and had it upheld in court. He likes
the advisory approach even if one was to go in to some sort of
arbitration, but not necessarily binding arbitration.
REPRESENTATIVE BRICE referred to Mr. Yould's mention of the
realignment of the chair's duties. He asked for Mr. Yould's input
regarding having the chair be responsible for the administration of
the commission and commission employees.
MR. YOULD answered he thinks it really means that the chair is
responsible and will basically have the overall responsibility to
act on the policy decisions of the commission in management,
communications, issues and that sort of thing. He commented that
perhaps administration is not the best word, but he thinks it is an
appropriate intent.
REPRESENTATIVE BRICE indicated he wondered if the description of
strengthening the chair and removing a bit of responsibility from
the executive director would be correct.
MR. YOULD answered in the affirmative.
Number 0743
REPRESENTATIVE HALCRO noted Mr. Yould had mentioned use of the
Internet. He referred to the legislature's Bill Action and Status
Inquiry System (BASIS) and questioned if Mr. Yould had envisioned
something similar - where someone could go online and see where an
order is and its position in the process.
MR. YOULD said yes, very much so.
REPRESENTATIVE HALCRO mentioned the repeated concerns raised about
timeliness, whether due to the federal Telecommunications Act of
1996, or because the process is so cumbersome. He questioned the
process of having five commissioners hear every docket, noting the
NRRI report speaks of other states sometimes having only one
commissioner sit or having some kind of a system. Representative
Halcro indicated it seems that embracing the concept of allowing
fewer than all five commissioners to hear a case would reduce the
backlog a bit more.
MR. YOULD indicated that some cases could be heard and recorded by
a hearing officer, then brought to the individual commissioners for
their review and ultimate decision. That does not require five
commissioners. He thinks the same could be said of the commission
chairman possibly only appointing three commissioners to hear a
docket. Mr. Yould said he wouldn't go below three; if it is
important enough to be heard, they would probably want at least a
majority. Another option would be to have the chair and the
commissioners periodically review the dockets before them to
determine, in advance, the relative importance of the dockets. He
indicated this would allow the commission to determine which
dockets might require all of the commissioners and which could
possibly be handled by a hearing officer or something along those
lines. Mr. Yould guessed they are saying that they would like to
see a more flexible use of the commissioners' time, even to the
extent that a commissioner is not sitting there listening to two
parties try make their case, if it could be done with a hearing
officer.
Number 0848
CHAIRMAN ROKEBERG questioned if Mr. Yould thinks there is any way
the dockets could be categorized so that there would be a natural
break to assign them to a more fast-track system. The chairman
asked if there is some indicia, or some style or type of docket
that would lend itself to categorization.
MR. YOULD thinks there is but would not want to be the one to try
to determine what that break is. For instance, quite often there
are dockets having to do with power cost equalization. Mr. Yould
noted he thinks that is very rote in many respects. Possibly that
might lend itself to a category of dockets which could be
time-lined. He reiterated, however, that he would not want to be
the one to tell them where that break should be regarding the
various categories.
REPRESENTATIVE HALCRO referred to Sam Cotten's [APUC Chairman]
March 4, 1999, letter attached to the December 23, 1998,
legislative audit. Representative Halcro noted a portion of the
letter: "For example, recently we directed staff to analyze the
backlog by utility type and case type and expect a report back next
week." He asked Mr. Yould if they had received a copy of that
report.
MR. YOULD answered in the negative, adding that is not to say that
it is not there. However, he has not seen the report.
CHAIRMAN ROKEBERG asked if there were further questions for Mr.
Yould, commenting that there are five people online waiting to
testify on the next bill [HB 167]. The chairman stated the
committee would not be moving HB 183 at this hearing and that he
would like to speak to Mr. Yould before he left the building. The
chairman indicated he thought Representative Murkowski had had a
question for Mr. Baldwin.
REPRESENTATIVE MURKOWSKI indicated her question could wait until
the next hearing on April 26 if Mr. Baldwin would be available
then.
Number 0937
JIM BALDWIN, Assistant Attorney General, Governmental Affairs
Section, Civil Division (Juneau), Department of Law, said he was at
the chairman's pleasure.
CHAIRMAN ROKEBERG indicated Representative Murkowski's question
would wait until Monday and thanked Mr. Baldwin for his patience.
He confirmed no one else wished to testify on HB 183. The chairman
requested input on the legislation. The public hearing was
recessed and HB 183 was held over.
Number 0961
CHAIRMAN ROKEBERG called a brief at-ease at 4:34 p.m. The
committee came back to order at 4:36 p.m.
HB 167 - REGULATION OF MOBILE HOME DEALERS
Number 0964
CHAIRMAN ROKEBERG announced the committee's next order of business
is HB 167, "An Act relating to mobile home dealers."
Number 0972
PETER TORKELSON, Researcher for Representative John Cowdery, Alaska
State Legislature, came forward to present HB 167 on behalf of the
bill sponsor, Representative Cowdery, who was also in attendance.
Mr. Torkelson stated HB 167 was designed to remedy what they
believe is an untenable situation under existing law. Used mobile
home dealers are required to be licensed and bonded. The question
is: To whose benefit? The mobile homes sold by used dealers carry
no warranty; the rule is buyer beware. Mr. Torkelson noted the
committee has been provided with copies of numerous binding
documents that the buyer must sign in order to close the purchase.
In no fewer than five places the buyer is reminded that there is no
warranty on the product he or she is purchasing. It is worth
noting not one claim has been made against a licensee or the
licensee's bond under the existing law. Indeed, it is difficult to
find any compelling reason for regulating a used mobile home dealer
who offers no warranty.
MR. TORKELSON noted they have been informed that most of the used
mobile home dealers are relatively small operators. To these
operators, the cost or perhaps unavailability of bonding can mean
the difference between staying in or going out of business. It can
mean the difference between operating a legitimate business or
operating one that merely exists on the margins. Mr. Torkelson
indicated it a worthy goal to protect small business and promote a
vibrant community of competition, which is what HB 167 does. House
Bill 167 relieves the small operator from the burden of bonding
against a claim that will never come. If the current statutes
suppress competition with burdensome bonding fees, there will
probably be someone who supports keeping the statutes in place.
Mr. Torkelson noted they do not support the current structure; they
have put HB 167 forward to correct this situation and relieve small
business. He asked for the committee's support.
Number 1066
CHAIRMAN ROKEBERG questioned the cost of the $50,000 bond.
MR. TORKELSON noted the cost would vary with the experience of the
person applying for the bond and the risk perceived by the bonding
agent. They have received indication the bond can cost up to
$1,500. Mr. Torkelson commented some people, because of a past
bankruptcy, might not even be able to attain a bond. He asked if
they were going to eliminate some people from this business simply
because they could not attain an affordable bond.
REPRESENTATIVE MURKOWSKI indicated the sponsor statement relates
that there are currently 14 licensed mobile home dealers statewide
and 10 of these would no longer need licensing if this legislation
was passed. She asked if there are only four dealers throughout
the state who sell exclusively new mobile homes.
MR. TORKELSON replied the current wording of the bill would require
those dealers selling both new and used mobile homes to maintain
licensing and bonding. It is their understanding from information
received from the Division of Occupational Licensing that of the 14
licensed mobile home dealers in the state, only 4 of those deal in
new mobile homes.
CHAIRMAN ROKEBERG confirmed there were no further questions for the
sponsor's staff. The committee proceeded to take teleconference
testimony.
Number 1177
GALE KINCAID, Owner/Operator, Triad Sales Company, Incorporated,
testified next via teleconference from Anchorage in support of HB
167. He noted his family has owned and operated Triad Sales
Company in Anchorage for the past 10 years. He asks the
committee's support of HB 167 for the following reasons. All used
mobile homes are sold as is, where is, with no warranty intended or
implied. His company has never had a problem because this clause
is spelled out in several places in its documents. He does not
believe a bond is needed when there is no liability to the dealer
or protection to the consumer. The bond does help reduce
competition because most small dealers cannot obtain one.
Currently the state does not enforce HB 436 and many dealers today
are forced to operate without a bond [HB 436, Nineteenth
Legislature, "An Act relating to purchase and sale of mobile homes
by mobile home dealers; to mobile home titles; and providing for an
effective date." Misstated on tape as "House Bill 346"]. Mr.
Kincaid reiterated his support for HB 167.
REPRESENTATIVE MURKOWSKI noted it was nice to hear Mr. Kincaid's
voice, indicating that they have known each other for a while. She
referred to Mr. Kincaid's statement that all used mobile homes are
sold without a warranty and that with Mr. Kincaid's company they
are always sold as is, where is. Representative Murkowski asked if
anyone selling used mobile homes offered a warranty, to Mr.
Kincaid's knowledge.
Number 1266
MR. KINCAID replied none he knew of. He indicated the only one
that might is Carey Homes, Incorporated; they sell new and used,
and are probably one of the best in town.
REPRESENTATIVE MURKOWSKI asked if he knew whether or not Carey
Homes included a warranty with those used mobile homes the company
sold.
MR. KINCAID answered that he believes Carey Homes usually owns and
finances the product itself, noting Representative Murkowski could
ask Mr. Carey. He commented this is a lot different than himself
or other used dealers who are selling the mobile homes for
individuals.
REPRESENTATIVE COWDERY asked Mr. Kincaid if he had ever had any
claims or problems, for example, from a buyer for a refrigerator
failing in two days or two months.
MR. KINCAID responded they have never had a claim. They state it
very well: they sell a used mobile home, they never owned it,
never lived in it, they don't guarantee it. They only guarantee
that when the buyer opens the door and moves in, all the appliances
will be working. After that there is no guarantee because "you
can't tell on used."
CHAIRMAN ROKEBERG asked if Mr. Kincaid took an earnest money or
down payment when someone buys a used mobile ["motor"] home from
his business.
Number 1355
MR. KINCAID answered in the affirmative, noting it starts the
contract: earnest money, deposit to purchase based on terms or
conditions of the purchase.
CHAIRMAN ROKEBERG noted this is similar to a real estate deal.
MR. KINCAID agreed; earnest money is received and then typing the
contracts and closing the sale proceeds.
CHAIRMAN ROKEBERG questioned how the financing is usually handled
for those kind of homes.
MR. KINCAID commented that although the banks in Anchorage say they
finance mobile homes, most don't. Ninety percent of his company's
sales are owner-financed.
CHAIRMAN ROKEBERG questioned how this works: Does Mr. Kincaid take
his goods on consignment or something?
MR. KINCAID answered they consign it like a real estate company:
They find a buyer, go to the owner of the mobile home, the owner
accepts the deal, Mr. Kincaid's company types the contracts,
follows with a bank escrow, the new buyer pays the bank. He
continued, "The bank pays you, and you, as an owner and financer."
Mr. Kincaid noted that is 98 percent of their business.
CHAIRMAN ROKEBERG said his reason for the questions is that a bond
is one of the provisions of this licensing law. Usually the bond
is a surety bond to protect against the breach of fiduciary duty.
Number 1434
MR. KINCAID noted most banks handle the money. They have an escrow
account, naturally, but it is all spelled out in their paperwork:
the money goes for down payment and it is refundable if it is not
financed. Mr. Kincaid commented he has never gone to court over
this problem in 35 years in this business. He does not know of any
other used mobile home dealers who have had the problem. They used
to be required to have a $10,000 DMV [Department of Motor Vehicles]
bond.
CHAIRMAN ROKEBERG questioned what this was about.
MR. KINCAID replied they handled titles - they had a $10,000 DMV
bond to transfer titles, et cetera. They are no longer required to
have this bond because they cannot transfer titles since DMV does
not recognize them as a dealer.
REPRESENTATIVE COWDERY confirmed that they were speaking of only
mobile homes, not motor homes.
Number 1529
GEORGE REED, Co-Owner, Lov-Bud Homes, testified next via
teleconference from Anchorage. He noted he was co-owner of his
company with his wife. They sell approximately 12 used mobile
homes a year. Mr. Reed commented, as Mr. Kincaid had said, they
sell the homes for people like a Realtor. They advertise and sell
people's homes, handle the paperwork and try to make a business out
of it.
REPRESENTATIVE MURKOWSKI repeated her previous question to Mr.
Kincaid. She asked Mr. Reed if his company has any warranties on
any of the used mobile homes they sell.
MR. REED answered in the negative. Their paperwork stipulates that
the home is sold without guarantee/warranty. There is a comment on
the contract which says that the appliances will be working at the
day of closing; they do not warranty that the appliances will work
the next day.
REPRESENTATIVE MURKOWSKI asked how long he has been in this
business.
MR. REED replied he has been selling mobile homes in Anchorage
since 1985. In response to Representative Murkowski's further
question, he confirmed they had had no claims on their business.
Number 1650
BEN MARSH, Executive Secretary, Alaska Manufactured Housing
Association (AMHA) testified next via teleconference from
Anchorage. The AMHA is an association of businesses that includes
[mobile home] dealers and mobile home courts. Mr. Marsh personally
does not own anything, does not sell mobile homes, and does not own
any mobile home courts. He works for the association and reports
the sense of the association in accordance with the instructions he
receives. At the association's April 15 [1999] meeting, it adopted
a resolution indicating, first, that the association did support
and had requested HB 436 because it was felt in 1996 that there was
no regulatory or control agency overseeing mobile home dealers.
Mr. Marsh noted there is a great deal of control and oversight for
real estate licensees but he indicated there was no such control
over mobile home dealers because mobile homes are not real estate.
Mobile homes are quite different in the sense that a loan on a
mobile home is not guaranteed with a deed of trust. Mr. Marsh
commented a chattel mortgage is used instead, although he is not
very knowledgeable about that. Mr. Marsh said it was felt at that
time [1996], and he guesses the association still feels the same
way, that there needs to be someplace a person who feels wronged in
some way can resort to. The bond would serve that purpose; it
would guarantee ethics and honesty on the part of the dealer. They
recognize, and think everyone does, that there is nothing saying
"Joe Blow can't come in off the street and make himself into a
mobile home dealer by putting an ad in the paper and he may not
know a dog-darn thing about selling mobile homes or protecting
buyers."
Number 1800
MR. MARSH said he knows these gentlemen present do; they protect
the buyers because they are experienced, but there are no
requirements for experience, education, or any knowledge of the
field. Therefore, AMHA thought it was wise to have such
protection. Mr. Marsh indicated the bond is a consumer protection
device, it is not intended to penalize dealers in any way. The
April 15 resolution says it is resolved that AMHA opposes the
adoption of HB 167. The president of the association is there and
can elaborate. Mr. Marsh indicated that concluded his testimony.
[The Alaska Manufactured Housing Association resolution adopted
April 15, 1999, read:
WHEREAS, House Bill 436 was enacted into law in 1996 and
became AS 08.67.010, and was amended by HB 33, Twentieth
Legislature, in 1998, and
WHEREAS, AS 08.67.010 sets forth the requirements for
registration of Mobile Home Dealers, including
application, bond, and fee, and
WHEREAS, AS 08.67.010 was enacted into law as a consumer
protection measure, since mobile home dealers were not
regulated nor licensed as real estate licensed agents are
required to be, and
WHEREAS, Alaska Manufactured Housing Association,
speaking for the mobile home industry, asked for and
supported HB 436 as originally adopted, and
WHEREAS, HB 167 has been introduced in the current
legislative session, and would exempt mobile home dealers
selling used units only from the requirements of AS
08.67.010 and,
WHEREAS, enactment of HB 167 would removed important
consumer protection features from the law,
NOW, THEREFORE BE IT RESOLVED, that AMHA opposes the
adoption of HB 167.]
Number 1882
REPRESENTATIVE BRICE questioned if the association had heard
complaints from people "sort of stuck with bad products" regarding
the used mobile homes.
MR. MARSH replied they have not. He doesn't think the association
is the place where someone would make such a complaint.
REPRESENTATIVE BRICE wondered if Mr. Marsh had heard of anything or
any anecdotal evidence, et cetera, from the association members.
MR. MARSH answered he has not; there has been no such report made
to him.
REPRESENTATIVE HARRIS noted the AMHA resolution says that HB 167
would remove important consumer protection features from the law
and it does not sound like the consumer has had many complaints
over these years regarding mobile homes. Representative Harris
asked Mr. Marsh to elaborate on what kind of consumer protections
would be removed.
MR. MARSH responded it may be that the consumer protections which
are built into the law have headed off complaints from buyers. He
noted that buyers of mobile home are in many cases, he thinks,
unsophisticated and the only source of their loan is the seller.
Mr. Marsh doesn't know if there has been any occasion where people
have been unhappy with their purchases or not. The purpose of HB
436 was to prevent such problems.
Number 2018
CHAIRMAN ROKEBERG noted there are apparently 14 licensees; he
questioned how many are members of AMHA.
MR. MARSH replied that four [mobile home] dealers are association
members.
MR. KINCAID commented that his company is a member as well,
bringing the total to five.
CHAIRMAN ROKEBERG questioned if they were all present and Mr. Marsh
could count them. The chairman confirmed it is Mr. Marsh's
testimony that five mobile home dealers are members of AMHA. He
questioned if those five mobile home dealers sell new homes, used
homes or a combination.
MR. MARSH answered that the latest member is (indisc.), it is
basically a used dealer. Mr. Marsh noted it is Mr. Kincaid.
MR. KINCAID commented he had just joined again.
CHAIRMAN ROKEBERG questioned if Mr. Kincaid had voted on the April
15 resolution.
MR. KINCAID indicated he had not been present for that meeting
because it had been his wife's birthday.
REPRESENTATIVE HALCRO commented to Mr. Marsh that he would read the
actual statutory language regarding the bond and the action on the
bond [AS 08.67.050 and .060]. Representative Halcro noted, "It
talks about committing fraud or making fraudulent representations
in the course of doing business as a dealer, the person may bring
an action in the appropriate court against the dealer and upon the
bond." Therefore, if a person is selling used mobile homes with no
stated or implied warranty, Representative Halcro concluded there
is really no way a person could be making fraudulent representation
or committing fraud. He asked Mr. Marsh to speak to this point.
MR. MARSH replied he could not speak to that point. Representative
Halcro is speaking of policies the dealers themselves have; Mr.
Marsh is only the association secretary and he just views the
meetings of the members, he does not get involved in the members'
actions.
Number 2190
MAC CAREY, President, Alaska Manufactured Housing Association;
President, Carey Homes, Incorporated, testified next via
teleconference from Anchorage in opposition to HB 167. Mr. Carey
indicated his main reason for opposing the legislation is that it
pretty much eliminates the whole reason why the original law came
into being. He noted Carey Homes was established in 1952; he has
been president for the past nine years. Carey Homes is a fixed
location where people can view new homes. Mr. Carey said he
probably has a very large stock of used homes at any given time -
they sell quite a few used homes. He indicated people find it easy
to locate and contact his business, and have known the business for
quite some time. Mr. Carey noted he is also somewhat associated
with Glencaren Court ["Glencaren Mobile Home Court"] and Nanook
Mobile Home Court. He indicated he has acted as the assistant
manager or property manager for Nanook Mobile Home Court for quite
some time. Mr. Carey commented these places are pretty easy for an
individual to seek out if he/she has complaints and, yes, they have
heard of quite a few complaints in the past. Since the legislation
was passed they have not heard as many complaints, simply because
it is very easy to convey to someone that there is a bond a person
can attach to.
MR. CAREY noted the complaints range from earnest money held to
unpaid taxes to misrepresentation. He does not remember the topic
of warranty being the big issue of the time in the conception of HB
436 because, as was mentioned, it is usually the new homes that
have warranties, not necessarily the pre-owned homes. The big
thing was the accountability of the sales representative. The
other side of that is to be able to obtain such a bond. Someone
has to be in pretty good standing before an insurance company would
actually issue the bond. Currently, Carey Homes pays $1,500 a year
for its bond, and it does not feel it is a big stumbling block for
someone to go into business to sell pre-owned homes. For the most
part, someone can do this straight out of his/her house with a home
phone number, a couple signs and some "yellow pages" advertising.
In some cases, a person could only have business cards. Mr. Carey
said probably the biggest concern is when people close cash
transactions in their own offices. It is true, "buyer beware," but
Mr. Carey said they believe consumer protection ought to be out
there.
Number 2427
REPRESENTATIVE HALCRO noted he would put the same question to Mr.
Carey he had put to Mr. Marsh. He commented, "The statute says
that if the dealer commits fraud or is guilty of making fraudulent
representations, the consumer can take the dealer to court and
force action upon the bond. But if you're selling a used product
that you have no warranty stated or implied, ... in my mind there'd
be no way for fraudulent representation if there's no warranty on
the thing. Can you speak to that?"
MR. CAREY answered, "Sure. You know, we can't take for granted
there won't be any warranty. There may not be a warranty according
to the purchase agreement but a used home is a used home..."
[TESTIMONY INTERRUPTED BY TAPE CHANGE]
TAPE 99-45, SIDE A
Number 0001
MR. CAREY continued, "...(indisc.) but the bigger issue is there
could be $2,000 worth of taxes owed, there could be a title that
they haven't - that they didn't produce. And all these things are
very, very important."
REPRESENTATIVE HALCRO noted Mr. Carey had mentioned he was aware of
complaints. He asked Mr. Carey to somewhat summarize those
complaints and perhaps speak to the committee about who those
complaints were directed at. Representative Halcro questioned if
it was Mr. Carey's customers complaining or someone else's.
Number 0055
MR. CAREY responded he most certainly does not "have any wings on
his back;" he would be lying if he said he had not had a customer
call him on an issue or two. Mr. Carey noted they do try to
correct anything they do have out there. He is sure anyone in
business does have a customer who calls after the fact; the
business does have to take care of these customers. However, in
response to who these customers call upon, Mr. Carey said some of
these individuals are not in practice today; some are, but not
necessarily in this room today. With the caveat that when someone
calls or comes into the office, only one side of the story is being
heard, Mr. Carey noted earnest money is a very common complaint.
He added that taxes is a very important issue, as he thinks
everyone there would agree, because the Municipality of Anchorage
["city"] doesn't even file UCC [Uniform Commercial Code] liens to
record their taxes more often then not. He indicated two women had
"mentioned just such" at the recent AMHA meeting. Mr. Carey noted
there are any number of questions on the titling. It is true that
DMV did not title for a short period of time but it does title
presently; Mr. Carey noted it is very common for him to receive
calls from people who say they do not have a title and who were
told there isn't a title. Mr. Carey indicated this was the result
of a very unknowledgeable individual handling the transaction, and
these people are stuck with a $30,000-$40,0000 home they cannot
sell because they do not have title. He commented these people
have to go through the procedure of title search, et cetera.
Number 0194
CHAIRMAN ROKEBERG mentioned the committee would be hearing from Ms.
Reardon and indicated she would be asked this next question as well
[Catherine Reardon, Director, Division of Occupational Licensing,
Department of Commerce and Economic Development]. The chairman
questioned if Mr. Carey thinks AMHA can justify the existence of
Chapter 67 [AS 08.67] and this particular licensure in "this light
of cost reduction." The chairman asked Mr. Carey if he thinks it
has done its intended purpose, noting he takes it that Mr. Carey
opposes the statute's repeal. The chairman clarified he was
referring to the legislation enacted by HB 436, and questioning if
it has done any good.
MR. CAREY indicated he is very much opposed to the repeal of this
chapter. It was a goodwill gesture on the association's part,
which really represents the largest portion of their industry, to
take it upon themselves to contact the state to improve their own
industry in the interests of consumer protection. He noted they
thought it was a good bill then and they feel it is a good bill now
[HB 436, AS 08.67].
REPRESENTATIVE COWDERY, the bill sponsor, informed Chairman
Rokeberg he had to leave to attend another meeting. He noted he
doesn't think he can add much to this and hopes the committee moves
the legislation.
CHAIRMAN ROKEBERG confirmed there were no further questions for Mr.
Carey, noting there is one more witness.
Number 0322
WILLIAM FERGUSON, Owner, Alaskan Discount Mobile Homes, testified
next via teleconference from Anchorage in support of HB 167. His
business is currently in its third year of operation in Anchorage.
They strictly sell used mobile homes and they broker them. He
indicated he feels the existing law hurts the largest group of
employment providers in the public sector, small business, while at
the same time greatly enhancing larger businesses' abilities to
control monopolized bargaining. That begs the question, "What
about the consumer?" Mr. Ferguson said that the bond is in favor
of the state. It should be apparent to voters and legislators
alike that the law in its present form is just for the benefit of
large businesses through the elimination of competition. Mr.
Ferguson said that he enjoys competition because it keeps him and
his sales staff sharp. No claims have been filed since the law was
enacted. He informed the committee he knew of two businesses which
have failed as well as those jobs the businesses provided. The law
as it exists, has not helped and should be changed, as HB 167
suggests. Mr. Ferguson emphasized that protection for the consumer
is provided in the court system. He said, "A $50,000 bond for
taxes, I mean the average tax on a mobile home, for a used one,
a[n] older one is what - $300 a year." Mr. Ferguson did not
believe a $50,000 bond was necessary or relative. As Mr. Kincaid
pointed out, all of their documents specify, "as is", "where is",
"no warranty written or implied," in more than one location.
Number 0522
CHAIRMAN ROKEBERG questioned the cost of Mr. Ferguson's bond.
MR. FERGUSON answered that the cost of his bond is $2,400 per year.
He noted that he has not been in business long enough nor is his
business large enough to receive a lower rate.
CHAIRMAN ROKEBERG also asked the cost of Mr. Kincaid's and Mr.
Reed's bonds.
MR. KINCAID stated that his bond costs $1,500 per year.
MR. REED thinks his bond cost is quoted at $2,000.
MR. KINCAID commented, "If you look at the licensees you won't find
too many people licensed and bonded."
CHAIRMAN ROKEBERG announced that concluded the teleconference
testimony and invited Ms. Reardon forward.
Number 0611
CATHERINE REARDON, Director, Division of Occupational Licensing,
Department of Commerce and Economic Development came forward. She
informed the committee the division administers this licensing
program directly; it is one of the programs without a licensing
board. The program has been in effect for only two years. Ms.
Reardon explained that this law went into effect as the result of
legislation that passed very rapidly; she had not had the
opportunity to become as familiar with some of the issues. She
commented that although it is true that the bond is in favor of the
state, her interpretation of the statute is that the bond is for
judgments against the licensee. It is one of the two things that
the bond is for, judgments entered against the applicant. Ms.
Reardon assumes that to mean that the state holds the bond, but
would give it to someone who proves that there has been a judgment
- that the court has rendered a judgement against the dealer.
Number 0720
MS. REARDON expressed concern with a program that would be left
with four licensees. The program would still operate under the
state's self-sufficiency mandate. She explained this is the reason
there is a zero fiscal note. The division's costs would not be
affected; the same amount of revenue would be raised from fewer
people. Ms. Reardon informed the committee that the cost to
operate the program during fiscal year (FY) 1999 to date, April 1,
was $500. Last year, FY 1998 , the program's first year, the cost
was $4,900. However, she noted that ordinarily there are higher
costs the first year because staff time is spent doing
applications, advertising, et cetera. Although Ms. Reardon
expected the costs to remain low - around $1,000 to $2,000 - the
exception would occur when someone appealed a license denial or
action was taken against a person. This results in legal costs
which could become a pressing issue since there would only be four
people to spread the costs among. On the other hand, 14 people to
spread the costs among is not very many either. Ms. Reardon noted
that if a new mobile home has a warranty, the owner of that mobile
home would have less need for the bond than the owner of a used
mobile home. Ms. Reardon commented that if there is not a purpose
for the bond, perhaps no one should have to obtain one; new mobile
homes are probably sold with warranties. On the other hand,
perhaps the purpose of the bond was aimed more at title and escrow
theft. In that case, Ms. Reardon did not know whether the new or
used mobile homes posed the most risk.
Number 0891
REPRESENTATIVE MURKOWSKI asked if the division managed any other
licenses with as few as four licensees.
MS. REARDON replied no. There are two programs with fewer than 20
licensees.
REPRESENTATIVE MURKOWSKI commented, then, this would be a departure
to maintain something for so few entities.
MS. REARDON replied yes, although a program without a board that
has fewer than 20 licensees is almost the same. She pointed out
that it is dependent upon whether there is legal action. She noted
that not having a license is a Class A misdemeanor.
Number 0940
REPRESENTATIVE HALCRO noted mention of the title and indicated it
is possible that is where some of the problems may occur when a
mobile home is sold. He questioned that when a dealer sells a
mobile home, the dealer would not receive payment until the bank
receives the title, if the sale is financed. He asked if there are
normal checks and balances in place there.
MS. REARDON said she was not certain that there are. If a bank is
loaning money, the bank would look out for its own interests and
would probably provide checks and balances. The testimony seems to
indicate that in the mobile home industry there are cash
transactions. She compared it more to buying an expensive used
car.
CHAIRMAN ROKEBERG clarified the testimony was that on used mobile
homes most are either self-financed or cash [transactions]. That
means they have separate escrow accounts and there is a promissory
note involved in the chattel mortgage.
REPRESENTATIVE HALCRO questioned the average cost of a used mobile
home.
MR. CAREY said that the typical mobile home in Anchorage, a 1976-
78 model, would sell for about an average of $22,000. Of course
there are mobile homes at the lower and higher ends of the scale.
In response to the chairman's question, Mr. Carey said an average
mobile home is roughly 900 square feet.
Number 1065
MR. REARDON commented she is unsure of the committee's intent. If
HB 167 is not going to move out of the committee that day, the
other two pages of statute could be reviewed to determine that they
cover what was intended. Ms. Reardon indicated that perhaps an
attorney could determine if the bond is protecting what it is
intended to protect, if there is a concern regarding whether the
bond is really there to cover items like escrow and title problems.
She further indicated it might be fine, since the division has
never had an action. Ms. Reardon explained the division's job with
the existing law is not to take away a license from anyone who
might be operating unfairly. The division's job is simply to hold
the bond and give it over once a court judgment has been provided.
Therefore, there has not been much exploration under what
conditions someone might lose in court and the bond would have to
be given over.
CHAIRMAN ROKEBERG asked how many mobile home dealers there are in
Alaska.
MS. REARDON answered that she only knows how many mobile home
dealers are licensed, the 13 or 14 which have been discussed here.
Noting the division had done newspaper advertising, she strongly
suspects there are people out there who are not licensed.
Number 1142
CHAIRMAN ROKEBERG commented that testimony on HB 33 [Twentieth
Legislature] when they received the exemption from this indicated
there are many who are not registered. He asked how many people
had licenses in the first year.
MS. REARDON said that she believes there were under five - two or
three.
CHAIRMAN ROKEBERG commented the division spent $4,900 and had two
or three licensees in 1998. He asked if that was correct.
MS. REARDON said, "I believe, at the end of '98, that sounds likely
to me; [a] $500 license fee."
CHAIRMAN ROKEBERG indicated he appreciated Ms. Reardon noting how
little was spent, but the division had not done anything.
MS. REARDON pointed out that this fiscal year would be the year in
which 10 more are licensed by only spending $500.
Number 1200
REPRESENTATIVE CISSNA asked if Ms. Reardon saw value to licensing
the mobile home dealers.
MS. REARDON indicated her initial orientation had been in favor of
eliminating the licensing program. Although after hearing the
testimony, she is no longer sure. She said that she always wishes
that there are consumer groups to be at the table to testify as to
whether the protection is desired or necessary, but she knows that
is not really practical. Ms. Reardon concluded, "But I kind of
feel like either don't have any licensing or have licensing for all
the mobile home dealers."
CHAIRMAN ROKEBERG commented he thinks that is really the primary
issue before the committee. He believes that passage of HB 167
would destroy the entire license; then the issue becomes whether
the program should even exist. The chairman indicated he had had
some question about HB 436, the existing law, when it originally
passed. He noted he is concerned, particularly because of past
testimony that very few people had signed up, although it sounds
like more are. The chairman asked if there have been any
complaints filed or claims against the bonds.
MS. REARDON stated that they have not received any judgments to pay
the bond on.
CHAIRMAN ROKEBERG questioned that there is no sunset provision on
this chapter.
MS. REARDON said that is correct because only licensing board
programs have sunsets. The programs the division manages are never
examined.
CHAIRMAN ROKEBERG informed the teleconference participants, the
committee and the committee, that he would give everyone the
weekend to justify the existence of the entire chapter. House Bill
167, if passed, would destroy the licensing. The chairman
indicated the teleconference participants should work together to
assist the committee on this issue. If this issue cannot be
settled by the committee's next meeting on Monday afternoon [April
26], the sponsor would be asked to modify the bill and repeal the
entire chapter because that has the same effect. Chairman Rokeberg
questioned if the teleconference participants understood.
MR. MARSH answered that they understand very well.
CHAIRMAN ROKEBERG indicated he would appreciate any other comments
from the committee members and hopes the sponsor's representative
understands what the chairman is attempting to do here.
MR. TORKELSON indicated he believes the sponsor would be in
agreement with "shaving the whole head." [HB 167 WAS HELD]
ADJOURNMENT
Number 1433
CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Standing
Committee meeting at 5:23 p.m.
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