Legislature(2013 - 2014)BARNES 124
04/09/2014 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| Board of Professional Counselors | |
| HB206 | |
| HB116 | |
| HB384 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 206 | TELECONFERENCED | |
| += | HB 116 | TELECONFERENCED | |
| += | HB 203 | TELECONFERENCED | |
| *+ | HB 384 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 9, 2014
3:28 p.m.
MEMBERS PRESENT
Representative Kurt Olson, Chair
Representative Lora Reinbold, Vice Chair
Representative Mike Chenault
Representative Bob Herron
Representative Charisse Millett
Representative Dan Saddler
Representative Andy Josephson
MEMBERS ABSENT
Representative Craig Johnson
COMMITTEE CALENDAR
CONFIRMATION HEARINGS
- HEARD
Board of Certified Real Estate Appraisers
Brit Szymoniak - Anchorage
- CONFIRMATION ADVANCED
Board of Professional Counselors
Stephanie Johnson - Nome
Lynn Tashea - Anchorage
- CONFIRMATION(S) ADVANCED
HOUSE BILL NO. 206
"An Act relating to motor vehicle service contracts; and
exempting motor vehicle service contracts from regulation as
insurance."
- MOVED CSHB 206(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 116
"An Act relating to the use of credited military service by
retired peace officers and firefighters to meet certain
requirements for major medical insurance coverage; and providing
for an effective date."
- MOVED CSHB 116(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 384
"An Act increasing the minimum wage; and providing for an
effective date."
- MOVED HB 384 OUT OF COMMITTEE
HOUSE BILL NO. 203
"An Act relating to payment or reimbursement of health care
insurance claims."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 206
SHORT TITLE: MOTOR VEHICLE SERVICE CONTRACTS
SPONSOR(s): REPRESENTATIVE(s) LEDOUX
04/12/13 (H) READ THE FIRST TIME - REFERRALS
04/12/13 (H) L&C
04/09/14 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 116
SHORT TITLE: PERS CREDIT FOR MILITARY SERVICE
SPONSOR(s): REPRESENTATIVE(s) MILLETT
02/13/13 (H) READ THE FIRST TIME - REFERRALS
02/13/13 (H) L&C, FIN
03/20/13 (H) L&C AT 3:45 PM BARNES 124
03/20/13 (H) Heard & Held
03/20/13 (H) MINUTE(L&C)
04/09/14 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 384
SHORT TITLE: ALASKA MINIMUM WAGE
SPONSOR(s): RULES
04/04/14 (H) READ THE FIRST TIME - REFERRALS
04/04/14 (H) L&C
04/09/14 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
KONRAD JACKSON, Staff
Representative Kurt Olson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of the House Labor and
Commerce Standing Committee, Kurt Olson, Chair, during the
confirmation hearings for the Board of Certified Real Estate
Appraisers and the Board of Professional Counselors.
REPRESENTATIVE GABRIELLE LEDOUX
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as prime sponsor of HB 206.
THOMAS BROWN, Staff
Representative Gabrielle LeDoux
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of the prime sponsor of
HB 206.
STEPHEN MCDANIEL, Assistant Executive Director;
Assistant General Counsel
Service Contract Industry Council (SCIC)
Tallahassee, Florida
POSITION STATEMENT: Testified in support of HB 206.
LORI WING-HIER, Director
Division of Insurance, Anchorage Office
Department of Commerce, Community & Economic Development (DCCED)
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of HB 206.
VASILIOS GIALOPSOS, Staff
Representative Charisse Millett
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of the sponsor during
the discussion of HB 116.
KATHY LEA, Chief Pension Officer, Central Office
Division of Retirement and Benefits
Department of Administration (DOA)
Juneau, Alaska
POSITION STATEMENT: Testified during the discussion of HB 116.
TOM WRIGHT, Staff
Representative Mike Chenault
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified during the discussion of HB 384.
GARY MILLER
Juneau, Alaska
POSITION STATEMENT: Testified during the discussion of HB 384.
NANCY COURTNEY
Juneau, Alaska
POSITION STATEMENT: Testified in opposition to HB 384.
BARBARA HUFF TUCKNESS, Director
Governmental and Legislative Affairs
Teamsters Local 959
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 384.
JAKE METCALFE, Executive Director
Public Safety Employees Association (PSEA)
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 384.
CHRIS ASHENBRENNER
Juneau, Alaska
POSITION STATEMENT: Testified in opposition HB 384.
ED FLANAGAN, Chair
Alaskans for a Fair Minimum Wage
Juneau, Alaska
POSITION STATEMENT: Testified in opposition of HB 384.
DOUG TANSY, President
Fairbanks Central Labor Council
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition of HB 384.
KEVIN POMEROY, Member
Laborers Local 942
Fairbanks, Alaska
POSITION STATEMENT: Testified during the discussion of HB 384.
DALE FOX, President and Chief Executive Officer
Cabaret, Hotel, Restaurant & Retailer's Association (CHARR)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 384.
JED WHITTAKER
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of HB 384.
ZEBULON WOODMAN, Member
Labors Local 942,
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition of HB 384.
BRYAN IMUS, Member
Laborers Local 942
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition of HB 384.
WALTER ROBINSON, Member
International Brotherhood of Electrical Workers Local 1547
Fairbanks, Alaska
POSITION STATEMENT: Testified in opposition of HB 384.
KARM SINGH, Power Line Representative
International Brotherhood of Electrical Workers Local 1547
Fairbanks, Alaska
POSITION STATEMENT: Testified during the discussion of HB 384.
CHRYSTAL SCHOENROCK, Business Owner
Nikiski, Alaska
POSITION STATEMENT: Testified during the discussion of HB 384.
DANIEL LYNCH
Soldotna, Alaska
POSITION STATEMENT: Testified during the discussion of HB 384.
VINCE BELTRAMI, President
Alaska AFL-CIO (AFL-CIO)
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition to HB 384.
JULIA SEYMOUR, Reverend
Lutheran Church of Hope
Eagle River, Alaska
POSITION STATEMENT: Testified in opposition to HB 384.
PAT FALON
Anchorage, Alaska
POSITION STATEMENT: Testified in opposition of HB 384.
ACTION NARRATIVE
3:28:28 PM
CHAIR KURT OLSON called the House Labor and Commerce Standing
Committee meeting to order at 3:28 p.m. Representatives
Josephson, Reinbold, Chenault, Millett, Saddler, Herron, and
Olson were present at the call to order.
^Confirmation Hearings
CONFIRMATION HEARINGS
^Board of Certified Real Estate Appraisers
Board of Certified Real Estate Appraisers
^Board of Professional Counselors
Board of Professional Counselors
3:29:26 PM
CHAIR OLSON announced that the first order of business would be
confirmation hearings for the Board of Certified Real Estate
Appraisers and the Board of Professional Counselors.
REPRESENTATIVE REINBOLD moved to advance the confirmations for
appointees for the Board of Certified Real Estate Appraiser and
the Board of Professional Counselors referred to the House Labor
and Commerce Standing Committee for consideration to the joint
session of the House and Senate for consideration.
KONRAD JACKSON, Staff, Representative Kurt Olson, Alaska State
Legislature, stated that members have a copy of the memorandum
before them to the Chief Clerk dated April 9, 2014 for the
Governor's appointees to the Board of Certified Real Estate
Appraisers and the Board of Professional Counselors referred to
the House Labor and Commerce Standing Committee.
3:30:21 PM
CHAIR OLSON reported that members have had the information on
the appointees and have not requested the appointees be
available for questions on their qualifications.
MR. JACKSON read the names of the Governor's appointees to the
Board of Certified Real Estate Appraisers and the Board of
Professional Counselors referred to the House Labor and Commerce
Standing Committee. He also reminded members that signing the
reports regarding appointments to boards and commissions in no
way reflect individual members' approval or disapproval of the
appointees, and that the nominations are merely forwarded to the
full legislature for confirmation or rejection.
3:31:09 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on the confirmation hearings.
REPRESENTATIVE REINBOLD removed her objection [The committee
treated it as though Representative Reinbold had objected for
the purpose of discussion]. There being no further objection,
the confirmations were advanced.
3:31:52 PM
The committee took an at-ease from 3:31 p.m. to 3:33 p.m.
HB 206-MOTOR VEHICLE SERVICE CONTRACTS
3:33:39 PM
CHAIR OLSON announced that the next order of business would be
HOUSE BILL NO. 206, "An Act relating to motor vehicle service
contracts; and exempting motor vehicle service contracts from
regulation as insurance."
3:33:53 PM
REPRESENTATIVE GABRIELLE LEDOUX, Alaska State Legislature,
stated that HB 206 will bring Alaska's regulation of motor
vehicle service contracts in line with how the industry is
regulated in most of the states. She said that similar laws
have been passed in 38 states and have been endorsed by a
variety of entities, including the Automobile Protection
Corporation, Ford Motor Company, Ally Financial, CNA National
Warranty Company, Toyota Financial Services, the Service
Contract Industry Council, and the National Trade Association.
This bill would protect consumers and and ensure the long-term
viability of the motor vehicle service contract industry. This
bill is necessary, not only for motor vehicle service contract
providers and automobile providers, but it is also good for
Alaskan consumers. She urged members to support HB 206.
3:35:12 PM
REPRESENTATIVE REINBOLD moved to adopt the proposed committee
substitute (CS) for HB 206, labeled 28-LS0501\C, Wallace, 2/6/14
as the working document.
CHAIR OLSON objected for the purpose of discussion.
3:35:33 PM
THOMAS BROWN, Staff, Representative Gabrielle LeDoux, Alaska
State Legislature, stated that HB 206 brings forth a fair and
comprehensive regulatory framework for motor vehicle service
contracts that protects consumers and ensures the long-term
viability of the motor vehicle contract industry. He said that
at the moment Alaska law is unclear at best as to how a motor
vehicle service contract provider should do business in the
state. He related that HB 206 sets a clear path for how a motor
vehicle service contract provider is regulated in Alaska,
consistent with the treatment of the industry in the majority of
the states. The industry supports this bill since it will
provide regulatory certainty and increased uniformity for motor
vehicle service contract programs. This bill would also create
a level playing field for providers to transact motor vehicle
service contracts and provides consumer protections.
Additionally, it would provide protection to consumers by
requiring providers to allow consumers to review the contract
after purchase and cancel the contract within a specified period
of time and receive a full refund of the purchase price.
MR. BROWN stated that HB 206 provides clear directives as to how
the industry is regulated and protects Alaska's consumers by
creating a regulatory structure which will allow the Division of
Insurance (DOI) to ensure that Alaskan consumers are treated
uniformly with other state consumers when purchasing a motor
vehicle service contract.
3:37:38 PM
MR BROWN reviewed the section-by-section analysis of the bill.
Section 1 would amend current law to remove motor vehicle
service contracts from the list of items excluded from the
current law's definition of "service contract." Section 2
creates new subsections clarifying certain provisions of motor
vehicle service contracts including which ones are governed by
Alaska law and defining the provisions of the contracts.
Section 3 makes a change to existing statutes that is necessary
as a result of HB 206. Section 4 would clarify that these laws
do not apply to a person but apply to the motor vehicle service
contract provider.
MR. BROWN related that Section 5 adds a new title to AS 21.61
which sets forth the following: It identifies specific services
that would be offered through any motor vehicle service contract
and identifies specific disclosures that must be included on a
motor vehicle service contract, including cancellation rights,
coverage provided, name and contact information, and "so forth."
3:39:23 PM
MR. BROWN continued his section-by-section analysis of HB 206.
Section 5, AS 21.61, includes language on party identification
and exemptions to the motor vehicle service contract. This
section contains provisions related to providing receipts and
copies of the motor vehicle service contract within a specified
period of time. Proposed AS 21.61.050 requires biennial renewal
of motor vehicle service contract provider license. Proposed AS
21.61.060 would require registration of an entity providing
motor vehicle service contracts and AS 21.61.070 would provide
the requirements for return and cancellation of a motor vehicle
service contract, including refunds, and information that must
be provided by the contractor to the consumer.
MR. BROWN stated that proposed AS 21.61.080 provides financial
responsibility requirements for motor vehicle service contract
providers to the consumer and liabilities that may accrue.
Proposed AS 21.60.090 and AS 21.60.100 would set forth
definitions and authorize the director of the Division of
Insurance to conduct examinations or investigations of licensees
and contract providers. Finally, Section 6 would clarify any
language used in these new sections.
3:41:11 PM
CHAIR OLSON stated that his office has not received any calls or
e-mails in opposition to HB 206. He asked whether the sponsor
has received any calls.
MR. BROWN responded that they had not.
3:41:26 PM
REPRESENTATIVE SADDLER asked whether he could provide a little
more information on service contracts and differentiate between
service contracts and maintenance agreements. He further asked
whether this is something provided by the dealers.
3:42:20 PM
STEPHEN MCDANIEL, Assistant Executive Director and Assistant
General Counsel, Service Contract Industry Council (SCIC),
related that HB 206 is consistent with the regulatory treatment
of the service contract industry across the country and will
bring Alaska's law into line with how the service providers and
industry is regulated. It puts forth important consumer
protections by providing for cancellation rights and acquiring
financial responsibility of those providers of service contracts
that are being sold in Alaska, while it creates regulatory
certainty for the industry with respect to how business is done
in the state. The language in HB 206 is largely based on a
model act adopted by the National Association of Insurance
Commissioners in the early 1980s. This has been the foundation
for similar legislation adopted across the country. The SCIC's
67 member companies support this, and it is a good step forward
for the regulation of motor vehicle service contracts in Alaska.
3:43:54 PM
REPRESENTATIVE JOSEPHSON asked whether the bill was seen as
being mutually beneficial for salesmen and the purchaser.
MR. MCDANIEL indicated this bill provides a regulatory framework
that the industry believes is beneficial to the salesmen.
Typically, auto dealers sell these contracts to the consumers.
It ensures individuals and entities that are making the promises
in service contracts have the financial ability on contractual
promises to consumers and customers of the automobile dealers.
In the worst case scenario, if the providers "go under" the
consumer would be left "holding the bag." A dealer will honor
the contract since they don't want the consumer to go away
upset. Also, the bill would ensure that appropriate financial
backing for the providers is available as well as to clarify the
way they are to be offered in the state. This is good for the
sellers, consumers, and contract providers, he said.
3:45:39 PM
REPRESENTATIVE SADDLER asked for clarification on service
contracts and a sense of how important this is to dealers.
MR. MCDANIEL answered that typically the contracts offer
coverage for defects in materials and workmanship as well as
some additional provisions for things such as road hazards,
which would cover tire and wheels for punctures. The benefits
vary from provider to provider, but typically will range from
five to seven years. The terms are chosen by the consumers and
by and large it is an extension of the manufacturer's warranty
and includes emergency roadside assistance to assist consumers
when the vehicle has a breakdown.
3:47:12 PM
REPRESENTATIVE SADDLER related his understanding that this is
not a network of mechanical shops but is an actual service that
arranges coverage and reimburses shops in Alaska for consumers
who have purchased contracts.
MR. MCDANIEL answered that is correct. The providers actually
pay for the repair so it isn't a reimbursement to consumers in
most instances. There is usually no outlay from the consumer
unless the contract has a deductible.
REPRESENTATIVE SADDLER asked for an estimate of the annual cost
to consumers.
MR. MCDANIEL responded that it would depend on contract. He
suggested that the standard cost for five years runs between
$1,200 to $1,500.
3:48:19 PM
REPRESENTATIVE CHENAULT recalled the service contract package
may provide oil changes and brake pads and can be crafted to
include all sorts of things can go wrong once the regular
warranty is up.
3:49:15 PM
LORI WING-HIER, Director, Division of Insurance, Department of
Commerce, Community & Economic Development, related that this
bill has been worked on for several years and the division has
finally reached a consensus that this bill will protect
consumers. She thanked the sponsor's staff and Mr. McDaniel,
who have been very patient with the division. She indicated
that the division is comfortable with Version C of HB 206.
3:50:03 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on HB 206.
CHAIR OLSON withdrew his objection.
3:50:47 PM
REPRESENTATIVE REINBOLD moved to report the proposed committee
substitute (CS) for HB 206, labeled 28-LS0501\C, Wallace, 2/6/14
out of committee with individual recommendations and the
accompanying fiscal note. There being no objection, CSHB
206(L&C) was reported from the House Labor and Commerce Standing
Committee.
The committee took an at-ease from 3:50 p.m. to 3:52 p.m.
HB 116-PERS CREDIT FOR MILITARY SERVICE
3:52:59 PM
CHAIR OLSON announced that the next order of business would be
HOUSE BILL NO. 116, "An Act relating to the use of credited
military service by retired peace officers and firefighters to
meet certain requirements for major medical insurance coverage;
and providing for an effective date."
3:53:55 PM
VASILIOS GIALOPSOS, Staff to Representative Charisse Millett,
stated that HB 116 would be an option under PERS Tier II and III
for peace officers and firefighters who are veterans of the
armed forces to opt to purchase time up to five years towards
medical retirement benefits. He said this would create a
separate indebtedness in comparison to the existing PERS buy-
back provisions for PERS retirement. He stated that one change
in Version U of HB 116 [not yet before the committee] can be
found on page 2, [lines 28-30], of proposed Section 3, which
adds subsection (b). This amendment was suggested by the
Division of Retirement & Benefits in order for the intent of the
bill to take effect. He deferred to the division to explain the
effect.
3:55:13 PM
REPRESENTATIVE REINBOLD moved to adopt the proposed committee
substitute (CS) for HB 116, labeled 28-LS0398\U, Wayne, 2/25/14
as the working document.
CHAIR OLSON objected for the purpose of discussion.
3:55:30 PM
MR. GIALOPSOS referred to page 2, lines 28-30, of proposed
Section 3, which adds subsection (b). He deferred to the
Division of Retirement & Benefits to explain the effect.
3:55:44 PM
KATHY LEA, Chief Pension Officer, Division of Retirement and
Benefits, Department of Administration, stated the new
subsection [in Version U] clarifies that the costs calculated
for [AS 39.35.340] (j) are not in addition to any costs outlined
in subsection (b). Thus, there are not two costs to claim
military service for health eligibility, so only one cost will
be charged.
3:56:42 PM
REPRESENTATIVE CHENAULT asked for clarification on the fiscal
note explanation.
MS. LEA answered that HB 116 has a zero fiscal note. The cost
to using up to five years to count towards health eligible is
borne entirely by the member. It is an actuarial cost at time
of his/her retirement. Since there isn't any impact on the
system, the division submitted a zero fiscal note.
3:57:26 PM
CHAIR OLSON asked if it would be similar to the military buy in.
MS. LEA answered yes.
3:57:36 PM
REPRESENTATIVE CHENAULT referred to page 2, [Section 3], of HB
116. He asked what this language means and how it will affect a
peace officer who is retiring, and to further explain how that
would affect their retirement payments of benefits.
MS. LEA explained a provision in PERS states that any claim for
service which will reduce a member's payment below what it would
be absent claiming the service cannot use the service. This
paragraph refers to that provision. The division would want to
be able to use the service whether or not it had an effect on
the benefit.
3:58:42 PM
REPRESENTATIVE CHENAULT asked whether that was the reason for
the language change in Version U.
MS. LEA, after first mulling it over, answered yes.
3:59:34 PM
REPRESENTATIVE MILLETT pointed out that the profession of police
officer is a "young man's job," which is a reason for this bill.
She anticipated this bill is a cost savings measure. It will
allow police officers and firefighters to buy up to five years
of military medical service as a "buy back." In turn, this
allows municipalities to hire lower cost employees. She said
that she did not wish to disrespect any older officers.
4:01:16 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on HB 116.
CHAIR OLSON removed his objection.
REPRESENTATIVE JOSEPHSON said he was glad to see the bill again
in committee. He characterized the bill as a "win-win" that
gives great discretion to the firefighters and police officers
to choose whether to use the program.
4:02:18 PM
REPRESENTATIVE REINBOLD moved to report the proposed committee
substitute (CS) for HB 116, labeled 28-LS0398\U, Wayne, 2/25/14
out of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, CSHB
116(L&C) was reported from the House Labor and Commerce Standing
Committee.
The committee took a brief at ease.
HB 384-ALASKA MINIMUM WAGE
4:04:13 PM
CHAIR OLSON announced that the final order of business would be
HOUSE BILL NO. 384, "An Act increasing the minimum wage; and
providing for an effective date."
4:04:19 PM
TOM WRIGHT, Staff, Representative Mike Chenault, Alaska State
Legislature, stated that HB 384 would raise the minimum wage to
$8.75 per hour until December 31, 2015 and not less than $9.75
per hour on or after January 1, 2016 until December 31, 2017.
This language mirrors a proposed minimum wage initiative.
Thereafter, the minimum wage would be adjusted annually for
inflation. The Department of Labor & Workforce Development
commissioner will calculate the adjustment for inflation
annually, on or before September 30th for the following calendar
year. The language, as previously stated, is similar to that
found in the ballot initiative to increase the minimum wage.
Mr. WRIGHT said, that According to Alaskans for a Fair Minimum
Wage, [which he read from the sponsor statement - original
punctuation provided]:
After having the highest minimum wage in the nation
for the four decades following statehood, Alaska has
fallen in recent years to 17th place among the states.
A single parent working full-time, 2080 hours at the
current minimum wage of $7.75, earns $16,120 annually,
less than two-thirds of the poverty rate for a family
of three in Alaska. Had the Alaska Legislature not
repealed in 2003 the modest cost of living adjustment
mechanism they had approved less than a year earlier
in the bill raising the minimum wage to $7.15, that
wage today would be $9.53 today.
MR. WRIGHT said that this legislation is an opportunity to
ensure the minimum wage is inflation-proofed. While many
Alaskans support increasing the minimum wage, the ballot
initiative sponsors have voiced concern that if the legislature
passes HB 384 it will repeat events that occurred in 2002 and
2003. He explained that in 2002, the legislature passed a bill
similar to an approved voter initiative, thus removing the
petition from the ballot. The following year the legislature
passed a bill removing the annual inflation adjustment.
4:07:05 PM
MR. WRIGHT said he guessed he could speak on behalf of the
sponsor, that it is not the sponsor's intent to make similar
changes in the next legislative session or the following one;
however, he noted that one legislature can't bind future
legislatures. He noted that the legislative members for the
next legislature are not yet known and will depend on the
voters. He emphasized that it is not Speaker Chenault's intent
to repeat the events that occurred in 2002-2003.
MR. WRIGHT stated that passing legislation to increase the
minimum wage will guarantee Alaskans get a minimum wage
increase, including inflation-proofing. A ballot proposition
does not guarantee voters will pass the measure. He said that
passing a bill this legislative session would further allow for
a strong public process through legislative hearings and public
testimony, which is a process that would be lacking if the
minimum wage is increased through an initiative process.
4:08:08 PM
CHAIR OLSON said he has spoken to several union lobbyists in the
building. He suggested that their members e-mail written
testimony to the committee. He indicated the committee has
received over 100 e-mails or letters against the bill. He noted
some e-mails or letters have not yet been entered into the
system, but he anticipated that would happen within a few days.
MR. WRIGHT referred to information in members' packets,
including the language for a letter from the Department of Law
[dated June 20, 2013]; the initiative petition bill language; a
summarizing of the Alaska Wage and Hour Act; an NCLS minimum
wage survey of states; and several recent newspaper articles.
4:09:11 PM
REPRESENTATIVE JOSEPHSON referred to the second paragraph of the
sponsor statement. He said he was a legislative aide in 2002.
He asked for further clarification on why the legislature
"undid" what it had done the prior year.
MR. WRIGHT answered he cannot speak about actions that were
taken by prior Speaker [Pete] Kott. He said he did not want to
interpret what happened.
REPRESENTATIVE JOSEPHSON said the sponsor statement also states
that over the next 11 days that the legislature can give the
bill strong public process. He asked whether this would also
happen during the initiative process over the next four or seven
months, depending on when the ballot initiative is heard.
MR. WRIGHT said he couldn't answer that either since he doesn't
know about the sponsor's plans to conduct hearings or what that
process would entail.
4:10:41 PM
REPRESENTATIVE JOSEPHSON asked why the bill identically matches
the initiative and does not have another figure. He said that
the bill uses a minimum wage of $8.75 per hour next year and
$9.75 the year after that and a consumer price index (CPI). He
asked whether it is intentional or coincidental that the bill
language matches the initiative.
MR. WRIGHT suggested the legislative legal and research lawyers
could better answer that question.
4:11:32 PM
REPRESENTATIVE JOSEPHSON acknowledged that the language in HB
384 is identical with the ballot initiative petition bill
language for increasing Alaska's minimum wage. He asked the
reason the language in HB 384 is identical to the initiative.
For example, the bill requestor could have decided on $8.76 per
hour or $9.12 per hour.
MR. WRIGHT answered that HB 384 followed the language in the
initiative.
4:11:55 PM
REPRESENTATIVE JOSEPHSON noted that there is nothing in the
members' bill packets from the food and beverage industry. He
asked whether he knew their positions.
MR. WRIGHT responded that he did not know.
CHAIR OLSON related his understanding that the offer to comment
was made to all unions. He certainly hasn't been purging any
letters.
4:12:26 PM
REPRESENTATIVE JOSEPHSON said that he did not think the packet
had been purged. He expressed an interest in the breaking point
for small and large businesses. He asked whether the bill
should be $10 or $11 per hour instead of $8.75.
MR. WRIGHT said it would be up to the legislature to decide.
4:12:50 PM
REPRESENTATIVE SADDLER remarked that this issue has been around
and he has read national news on it. He asked whether people
plan on a comfortable life based on a minimum wage.
MR. WRIGHT offered his belief that it would be tough to be
comfortable on minimum wages even if they were based on the new
proposed scale.
REPRESENTATIVE SADDLER remarked that he didn't see anything in
the bill to indicate this was designed to guarantee a
comfortable life or a prosperous career. More to the point,
he's seen discussion that a minimum wage is considered a
transition wage that a person earns while learning a job.
Additionally, it could supplement other wages earned in the
household. He recalled hearing that one couldn't afford to buy
a house and feed five kids on minimum wages. He said, "Of
course you can't. That's not what a minimum wage is about." He
continued by sharing he once earned a minimum wage and he
learned skills and was able to get a better job. He
characterized it as a transition through minimum wage. It
wasn't where he stopped but was where he started in his career.
MR. WRIGHT responded that he recalled baling hay at $.75 per
hour.
CHAIR OLSON guessed that most of the people in the room may have
started out at the minimum wage.
MR. WRIGHT said, "Or less."
4:14:15 PM
REPRESENTATIVE HERRON commented that the legislature can pass a
law and overrule it the next year. Its life span can be short,
he said. He asked for the minimum life span of an initiative.
MR. WRIGHT answered the minimum span is two years.
4:14:42 PM
REPRESENTATIVE MILLETT referred to a "cruise ship" initiative a
few years ago that did not adhere to the single subject rule and
had six subjects. She recalled that they were able to modify
three of the subjects. Thus an initiative can be modified but
what can and cannot be modified is limited. She imagined if
this initiative passed that the legislature could adjust
numbers, but it would need to fall within a certain range. She
suggested it was similar to the requirement for reporting
offshore sales of products. She said that she passed a law
several years ago related to initiatives that required the
lieutenant governor to provide "pro and con" discussions twice
in each of the judicial districts. Additionally, it required a
legislative committee to meet, and although the legislature
couldn't change the initiative the committee could discuss the
pros and cons of the initiative. She argued that initiatives
end up being "bumper sticker slogans." With respect to the
clean water initiative, she commented that everyone wants clean
water. She said people want to get paid. She recalled that she
earned $3.91 with her first job and that led to her deciding to
get education to obtain a better job. She said, "That's what
minimum wage was to me. It was a place to start to move up and
to continue to move up and progress."
4:16:58 PM
REPRESENTATIVE MILLETT disagreed that the minimum wage should be
a "living wage," but it should be a starting point for teenagers
who can work themselves up to better wages. She reiterated that
people want a fair wage so that is what the bumper sticker for
this initiative will say. She questioned whether the minimum
wage would be for those 19 years old or if it would apply to
someone who is 50 years old with a master's degree in
psychology. She offered her belief that is why initiatives are
dangerous unless they are appropriately vetted. She preferred
to have a bill in which full discussions can occur, openly and
on the record, with news agencies reporting the actions so the
public can better understand the full ramifications. She argued
that this is a much better way of passing laws. She related her
understanding that the drafters of Alaska's Constitution
provided for an initiative process; however, the state is at the
point when one group doesn't get their way the first thing they
do is pull out an initiative rather than to make the case for
someone to carry a bill for them. While she is not against
initiatives, she thought the best way for legislation in Alaska
is through the committee process. Her district elected her so
she represents those 17,000 people and makes decisions on their
behalf. If she doesn't make the right decisions, the voters
will not reelect her, she said. She reiterated that initiatives
create "bumper sticker ads" that can be misleading. Again, she
would rather have a bill before the legislature that goes
through the committee process with feedback from constituents
statewide. She pointed out that many unions are in the
committee room objecting to this legislation. She predicted
that many people will object to the bill in the next 11 days,
many of which will be small "mom and pop" businesses. She said
that this bill may kill many of the small businesses and that
scares her. She added that it is wise to take up the minimum
wage bill this session instead of having a ballot fight that may
not be as truthful as it should be when discussing policy.
4:19:51 PM
CHAIR OLSON commented that he carried the current minimum wage
bill on the floor in 2008 or 2009, and it has not been touched.
He recalled the increase was $.75 above the federal rate, which
was reasonable at the time.
MR. WRIGHT said he would add to Representative Millet's
comments, that even if HB 384 doesn't pass it will still
represent a vetting process. In response to Representative
Josephson, he was not sure what hearings the initiative's
sponsors have in mind, if they do have hearings in mind;
however, most people will not attend so they will get their
information from an advertising campaign - good or bad. He
concluded that at least this bill provides a process.
4:21:09 PM
REPRESENTATIVE JOSEPHSON asked to respond to some of
Representative Millett's comments.
CHAIR OLSON asked him to hold his response under the committee
discussions on the bill.
4:21:22 PM
REPRESENTATIVE JOSEPHSON, relative to Representative Millett's
comments, said the sponsor statement seems to indicate that the
process in 2003 was unfair and resulted in a wage that was much
lower than it would have been today. He asked whether he
understood the frustration of the 50,000 signatories of the
initiative and why these people would remember what happened 11
years ago and would rather "roll the dice" and take a chance
with the voters.
MR. WRIGHT said that he could understand their frustration;
however, he said he cannot speak on behalf of earlier
legislative action. He said, "Quite frankly, I don't think all
50,000 signatories realized what happened in 2002-2003. I'd be
surprised. But again, I can understand why the backers of the
initiative are frustrated. I completely understand that. And
does history repeat itself? I hope not in this case, but again,
that's a question you all will have to answer, not me."
4:22:41 PM
REPRESENTATIVE JOSEPHSON surmised that the backers of the
initiative would know they have a result that would be secure
for two years if the legislature leaves it alone. He asked how
the legislature could offer voters something that the initiative
offers, which is two years of legitimate protection.
MR. WRIGHT said he didn't know.
4:23:30 PM
GARY MILLER said he is one of the 43,489 who signed the minimum
wage initiative. He stated that the initiative required
signatures of 10 percent of the qualified voters who voted in
the preceding general election, including at least 30 of the
House districts, of which at least 7 percent voted in the
preceding general election. He related that the referendum took
thousands of hours of work and thousands of dollars to complete.
The Alaska Constitution allows the citizens of Alaska to enact
legislation through the initiative process. He said there is
nothing else as democratic as the initiative process. He asked
why the legislature would deny the voters the opportunity to
vote on this referendum. It didn't make any sense to him, he
said. He thanked members for the opportunity to testify.
4:25:02 PM
NANCY COURTNEY asked to testify against HB 384. She said that
last year she spent hours gathering signatures to get a
citizen's initiative on the ballot to allow Alaskans to vote to
raise the minimum wage in Alaska. Citizens collected the
necessary signatures, and the initiative is currently scheduled
to be on the primary ballot in August, although she understood
the vote may be postponed until the November election. In 2001,
a similar citizen's initiative collected over 50,000 signatures
to place the matter on the November ballot; however, prior to
the vote, the legislature passed a minimum wage bill in 2002.
In 2003, the legislature removed the Cost of Living Allowance
(COLA) and instead of having a current minimum wage of $9.53 per
hour, the current minimum wage is $7.75. She remarked that she
has heard some legislators say the [composition of] the
legislature is not the same as in 2003 and that nobody has any
intention of removing the COLA from this bill, if it were to
pass. However, there is "nothing in stone" that says anyone has
control over what future legislatures will do. She feared a
repeat of what happened in 2003 will happen in 2015. She said
that 11 legislators who voted on the matter in 2003 are sitting
legislators today. She reminded members that Alaskans have
worked very hard to get the minimum wage initiative on the
ballot. She said, "We have the right to vote on it and when it
passes and becomes law to have the law in place for at least two
years before the legislature can repeal it." She thanked
members and urged members to vote against HB 384.
4:27:43 PM
BARBARA HUFF TUCKNESS, Director, Governmental and Legislative
Affairs, Teamsters Local 959, stated she was one of the hundreds
who gathered signatures for the minimum wage initiative. She
said it is very difficult to get initiatives through the process
now. She said the Teamsters Local 959 opposes HB 384. It has
nothing to do with the minimum wage. In fact, she agrees that
no one on the committee or in either body of the legislature can
guarantee that the bill won't be changed next year since
legislators don't know if they will be re-elected. She said
that if voters are allowed to vote on this initiative at least
their wishes will be heard and the pressure will be taken off
the legislators. She urged members to vote no.
4:29:47 PM
REPRESENTATIVE CHENAULT asked whether people who were gathering
signatures were paid.
MS. HUFF TUCKNESS answered that she was not paid to gather
signatures.
4:30:19 PM
REPRESENTATIVE CHENAULT said he would be curious what wage
gatherers were paid. He pointed out something else that cannot
be guaranteed is that the initiative will pass. He acknowledged
that the polls predict it will pass; however, there is no
guarantee. In fact, he has seen voters vote against initiatives
that seemed to be popular, such as the coastal zone management
initiative. The difference between that initiative and the bill
currently before the committee is that the legislature failed
coastal zone management (CZM). It created such havoc that
people obtained the required signatures to put the CZM issue on
the ballot. Even though everyone thought it would pass it
failed. If the legislature passes HB 384, it is a way for
Alaskans to obtain a minimum wage increase. He emphasized that
it is not intended to change any part of this bill.
REPRESENTATIVE CHENAULT answered that if this bill moves through
it may help Alaskans and will take care of an issue. He said
this is the only guarantee that the minimum wage will increase.
He acknowledged that the question is whether the legislature
will not change the law again; however, it is his intent to keep
the bill for two years. There isn't any guarantee he will be
elected or be in the same position. He said that it is a good
process. Again, just because an initiative is on the ballot
does not guarantee the voters will pass it.
4:33:19 PM
MS. HUFF TUCKNESS agreed with him that there isn't any
guarantee; however, at least through the initiative process the
voters will have gone to the polls and will have spoken. She
stated that if the voters do pass the initiative it will
guarantee it for two years. In the event voters didn't pass it,
she suggested that it would be likely constituents would be
before each of you asking for a $10.10 minimum wage. She
concurred that there really isn't any guarantee.
REPRESENTATIVE CHENAULT wondered about the willingness of the
legislature to seek a minimum wage bill in the event the
initiative process failed. He suggested it was likely that the
legislature would say, "The voters voted and the voters made
their statement."
4:34:39 PM
REPRESENTATIVE JOSEPHSON asked how long she has worked in the
building [for the Teamsters 959].
MS. HUFF TUCKNESS answered that she has been coming to Juneau as
the legislative liaison for Teamsters 959 since 1994.
REPRESENTATIVE JOSEPHSON asked whether this bill hearing is
largely due to the initiative process.
MS. HUFF TUCKNESS answered that it seems to be the case.
4:35:12 PM
REPRESENTATIVE JOSEPHSON asked whether the signatories of the
initiative would rather be defeated at polls in August or
November or to see the legislature roll it back in 2015.
CHAIR OLSON pointed out that is not in HB 384.
MS. HUFF TUCKNESS answered that she was not sure she could
respond since it is a theoretical question. She also said she
can't speak on behalf of the rest of the voters.
4:35:58 PM
REPRESENTATIVE MILLETT asked how many times ballot initiatives
to move the capital have occurred and how many times the
initiative passed or failed.
CHAIR OLSON did not know.
4:36:25 PM
JAKE METCALFE, Executive Director, Public Safety Employees
Association (PSEA), said he doesn't support this bill since the
minimum wage is enough. He said he grew up in Juneau and began
working when he was 5 years old. After high school he worked at
Juneau Cold Storage for $11.25 in 1979. He went to Europe in
the fall and college in the spring. He didn't have [financial]
help from his parents. Last summer his son worked in Bristol
Bay cleaning fish and earned $8 per hour. He offered his belief
that something isn't right when his wages 30 years ago were more
than what his son earned in 2013. At the same time, the cost of
living has increased at 2.5 percent per year. Costs for health
care and college have gone up, but people are making less than
he did in 1979. He remarked that it isn't good for anyone. He
has heard transition jobs mentioned and his summer job was a
transition job. However, he also worked with people of all ages
who made a career working on fish. These people made a living
wage in 1979, but people don't make a living wage today. He
suggested that if the legislature passes HB 384, people will not
be given a living wage. He suggested the minimum wage starting
point should be $15 per hour, which is what Seattle's SeaTac
airport has done. This bill doesn't provide a living wage. He
further suggested the committee consider amending it so that
people who work in these transition jobs earn a living wage -
whether they are kids or 50 year-olds trying to support a
family. In response to a question, he answered that his first
job was shining shoes at the local barber shop.
4:39:31 PM
MR. METCALFE said Alaskans should have a living wage and
shouldn't live in poverty just because they work in transition
jobs. He suggested that people earning a minimum wage are
living life in poverty. He concluded his testimony by saying,
"That's not right in this country, especially in this state,
which is the richest state in the union."
4:40:00 PM
CHRIS ASHENBRENNER stated that she was very involved in the CZM
initiative, which came before the legislature as a bill with the
same language as the initiative. It did not pass, but at the
time the governor and many legislators said, "Let the people
speak." With respect to the voters voting it down, she reported
that $3.5 million was raised to oppose the initiative; whereas
$600,000 [was raised in support of the initiative] which also
included the signature drive. Sometimes the playing field is a
little more level than others, she said. Young people aren't
always the ones earning minimum wages. She worked with people
coming out of poverty, domestic violence victims, and
immigrants, and she said "there's a lot of people out there that
are supporting families and they're working on minimum wage
jobs." She asked members to keep this in mind. She pointed out
that initiatives are vetted in public hearings in four different
regions, held by the lieutenant governor. The minimum wage
initiative will be publically vetted. She urged members not to
pass the bill; "let the people speak."
4:42:33 PM
ED FLANAGAN, Chair, Alaskans for a Fair Minimum Wage, stated
that he would normally address the merits of the bill and debate
the issue. He said he won't due to the process, which is a bit
of a sham. He suggested members vote no because the [supporters
of the initiative] will take their chances with the electorate.
Everyone knows what is going on in this situation. This
legislature has shown no interest in fixing the minimum wage
since the legislature "broke it" in 2003. He said the bill that
Chair Olson carried happened because Alaska's minimum wage,
which had been the highest in country for 40 years and had been
$0.50 over federal minimum wage since 1959 (when the federal
minimum wage was $1.00), was about to be eclipsed by the federal
minimum wage, because when the legislature repealed the cost-of-
living allowance in 2003, it did not even put back on the $0.50-
over-federal amount. He recalled in 2002, at a time when Alaska
was about to be surpassed, a bill came up at $8.75 and the CPI
[consumer price index], "which all of a sudden you're interested
in correcting," but the only thing that passed was the $0.50
over the federal minimum wage, which was "better than nothing"
at $7.75. He reported that the minimum wage has increased $0.60
in 11 years. He predicted that had it not been eviscerated, the
minimum wage would be $9.53 per hour. He emphasized that "low
wage" workers have lost ground in this state because of the
legislature's "bad faith action" in 2003, in particular, those
17 who voted for the bill in 2002 and later to "gut it" in 2003.
4:45:26 PM
MR. FLANAGAN offered his belief that low-wage workers have lost
ground except for 2010 when the $.50 cent increase was restored.
He offered his belief that the way to correct this is through
the initiative process. There isn't anything that has been said
to convince anyone that this is not ploy to take the initiative
off the ballot. He questioned whether this bill is being
introduced because folks don't want it on the ballot along with
other ballot measures or to be an issue in campaign races. He
suggested that people have overstated the impact that
initiatives like this have in bringing people to the polls;
however, he imagined it could have some impact during close
elections. He characterized this bill as being improper
"electioneering" motivation. He predicted that next year it
would be gutted. He found it remarkable that the National
Federation of Independent Business, seafood processors, and the
restaurant industry are not coming out to testify against this
bill. He observed this is the first minimum wage bill that they
have not testified against. He offered his belief that "the fix
is on. They know what's happening. This is what they want
because then, at least, they don't have to wait two years before
they can try to do a tip credit...."
MR. FLANAGAN recalled that the sponsor had previously introduced
a bill in 2009. The effect was that waiters and waitresses can
be paid subminimum wages because the tips are counted. Alaska
has never allowed it, he said. He expressed confidence that the
Alaska people will not support it. He explained that the
initiative would reaffirm the whole provision including the tip
credit, which should protect those workers for two more years.
He predicted if HB 384 passes, the only guarantee is $1
increase, which takes effect January 1, 2015. The second dollar
is at risk and the cost of living allowance is at risk. He
reiterated that he prefers to take chances with the voters. He
said that the 69 percent approval is prior to initiating a
campaign. The initiative process complied with Representative
Millett's legislation, apparently motivated by distaste or
contempt for the initiative process, and requires nine hearings.
The lieutenant governor needs to hold two hearings in each of
the four judicial districts. Additionally, the joint Alaska
Judiciary Committees recently held a hearing. There is plenty
of opportunity for hospitality retailers to work to have a bill
introduced. He predicted that next year this group could do a
"tip exemption" rather than a "tip credit." He welcomed the
[hospitality retailers] entry into the field to oppose the
minimum wage during the campaign. He predicted that the outcome
will be two to one in August or November. He stated that the
Department of Labor and Workforce Development in its statement
of cost identified, like a fiscal note that accompanies the
initiative, identified a small recurring cost of $83, which
should merit a fiscal note.
4:49:19 PM
MR. FLANAGAN expressed astonishment that he would be in the
situation in which he is urging a no vote on a minimum wage
bill; however, it is a "bad faith" bill - and he's sorry if
anyone takes offense at that, but he's calling it like he sees
it. He described the rigorous initiative process, exceeding the
7 percent in 30 districts by obtaining 7 percent in 33
districts. He reported missing the necessary signature by slim
margins in two additional districts. He further reported the
tally at 36,500 valid registered voters, which is 6,500 more
than necessary. He said that 4,900 signatures were collected in
committee members' seven districts
MR. FLANAGAN highlighted that [the effort] is a combination of
paid workers and volunteers. In fact, almost all initiatives
that are successful include paid signature gatherers. He said
that the paid signature gatherers pulled in 65 percent or 28,000
signatures and volunteers collected 15,500. He collected
several thousand signatures since it was a good way to get a
feel for how people felt about the minimum wage. He offered to
share anecdotes. As the poll shows, the minimum wage issue is a
majority across party lines with super majorities with
Democrats, undeclared, and non-partisan registered voters. In
Ketchikan, folks knew who paid minimum wages and did not want to
support those that didn't. Small business owners in Sitka said
they couldn't in good conscious pay their workers less than $10.
In North Pole, he collected signatures at the transfer station
in a very conservative district.
MR. FLANAGAN related his informal survey based on all sorts of
comments made on other issues, but they signed the minimum wage
petition, remarking it didn't go high enough. He predicted that
the initiative will pass overwhelmingly. It is overdue, he
said. These folks didn't sign the petition to have the
legislature act. In fact, the legislature had 11 years to act
and make it right, but the legislature did not. The initiative
process is in Alaska's Constitution for the voters to make
things right when the legislature doesn't do it. He
characterized the coastal zone analogy as not holding water. He
concluded by sharing that he is passionate about this because he
was the commissioner of the Department of Labor & Workforce
Development in 2002, so he was basically "the bill manager" for
the administration. He had thought that the initiative process
was to help move the bills and it did so. Lots of legislators
helped do what former Representative Kott did when he indicated
that the legislature take action the next year rather than to
repeal the Cost of Living Allowance two years later. He said,
"When I'm told, well it's better if you pass a bill; then you
know you have it - well, I bought that bridge 12 years ago and I
feel some responsibility that he was insufficiently skeptical
that he had not pushed to let the initiative go to the ballot
where the lives of thousands of Alaskan workers in the 11 years
would have been materially better than they ended up as a result
of the 2003 ...."
4:54:56 PM
REPRESENTATIVE MILLETT clarified that Representative Bill
Williams legislation in 1999 required gatherers to collect
signatures in 30 of 40 districts. She characterized her bill as
one of requiring transparency since hearings must be held around
the state. Further, her bill required clear and concise
conversation about the pros and cons of an initiative. She
described initiative gatherers to carry a copy of the initiative
so voters could read it. Finally, her bill required a
legislative hearing to identify the fiscal impacts of an
initiative, similar to the legislative process requirement for a
fiscal note. She argued that her bill made the process more
transparent but not more difficult. She characterized this
process as one that informed voters. She expressed concern
about previous initiative processes in which the gatherers were
less than truthful. She said she doesn't hate or loathe
initiatives; rather, it is a great process that the Alaska
Constitution allows. She said she is a fan of the initiative
process and finds it to be a necessary process; however, she
also wanted to ensure that the process was transparent. She
related a scenario in which it took two years to pass a bill.
During that time, 60 legislators were able to review her bill
and improve her bill through the legislative process.
4:58:06 PM
CHAIR OLSON related that Mr. Flanagan was one of several people
invited to testify on HB 384.
DOUG TANSY, President, Fairbanks Central Labor Council, voiced
his support for the initiative process. He asked members not to
pass this bill and to allow the people of Alaska to express
their will through the initiative process. He offered his
belief that good reasons exist to be skeptical due to what has
previously happened. He urged members not to pass bill.
5:00:03 PM
KEVIN POMEROY, Member, Laborers Local 942, thanked members for
the opportunity to testify. He said that he has worked several
minimum wage jobs and recalled it was definitely a struggle. He
has a lot of respect for the people who raise kids on minimum
wages, which is difficult. This is something that needs review.
There were times when he felt like he was "spinning his tires"
but with the cost of living increasing that term doesn't even
seem like a fair analogy. He said raising the minimum wage
would be a positive for the community. He said, "They say you
are only as strong as your weakest link." He recognized the
struggle people have and "he's been there and done that." He
offered his wholehearted support to raise the minimum wage.
5:02:36 PM
REPRESENTATIVE JOSEPHSON asked whether he supports the bill or
the initiative process.
MR. POMEROY offered his support for the initiative process.
5:03:14 PM
DALE FOX, President & Chief Executive Officer, Cabaret, Hotel,
Restaurant & Retailers Association (CHARR), offered CHARR's
support for HB 384 as a reasonable and measured approach and not
due to the "skullduggery" that some people imply but because
CHARR has observed what happened at SeaTac. He said that
reasonable and measured makes sense whereas a $15 per hour or a
"living wage" proposal does not. He commented that his 15-year-
old granddaughter will appreciate if the legislature passes this
bill because it will mean a raise for her. The CHARR members
would have preferred this bill be introduced in January because
they were hoping for relief for owners, as well; however, CHARR
members did not want to slow down the process. He offered his
belief that whether HB 384 or the initiative passes, it provides
a reasonable and measured approach.
5:04:32 PM
JED WHITTAKER offered his belief that the minimum wage should be
increased to $20 minimum with an effective date of January 2014.
He makes this suggestion based on research done by the
Department of Labor & Workforce Development (DLWD) and the
Department of Health and Social Services and using the poverty
guidelines. In Alaska Economic Trends, published by the DLWD,
an August 2013 article noted that Anchorage had the second
highest median rent at $1,154 per month. He reported that
Kodiak had the most expensive with a median of $1,365 per month,
Fairbanks is $1,239 per month; Juneau is $1,250 per month; and
the statewide median is $1,119 per month. Additionally, the
September 2009 issue related that economist Caroline Schultz
said that AHFC considers housing affordable when it costs no
more than 30 percent of a person's income. He suggested that
for a median two-bedroom apartment to be affordable a renter
must earn at least 90 percent of the average or $42,300 per
year, which translates into a wage of approximately $20 per
hour. Ms. Shultz further wrote that in order to afford an
average two-bedroom apartment in Anchorage, a household would
need to earn the equivalent of 2.7 minimum-wage jobs. He also
reported that Alaska ranked 10th in being the most expensive
rental market in 2009.
MR. WHITTAKER related that according to a DHSS survey in 2009,
in order to afford a two-bedroom apartment, a worker would need
to earn $19.83 per hour in Anchorage, $24.85 in Barrow, $19.31
in Fairbanks, $16.44 in Kenai, $18.87 in the Matanuska-Susitna
Borough, $24.63 in Juneau, and $21.62 per hour in Ketchikan. He
further reported the federal poverty guideline at $14,350 for a
single person per year, and $19,300 for a household of two. The
guideline used by many federal programs, including the
Supplemental Nutrition Assistance Program (SNAP), the monthly
gross income must be at or below 130 percent of the poverty
line, which is $25,400 for a family of three per year. He
stated that HB 384 would raise the minimum wage to $8.75 by
December 2015; however, a minimum wage worker with a household
of two, would still be below the federal poverty income
guidelines and would qualify for food stamps.
5:09:30 PM
MR. WHITTAKER offered his belief that workers deserve a "living
wage" and government should not be subsidizing the private
sector because the private sector relies on the government to
feed and house it workers. He said that McDonalds and Wal-Mart
have been called the biggest welfare queens in America. It's a
misnomer to say these jobs are transitional jobs. People need
to work and if these are the only jobs available the workers
will be forced to take them. The companies like Wal-Mart
actually instruct employees how to get on welfare since their
salaries are insufficient. He found it strange that HB 384 has
no sponsors or cosponsors. He urged members to amend the bill
to increase the minimum wage to $20 per hour since that reflects
the actual cost of living in Alaska. He said if Alaskans are to
be "free people" in a "free society" and not wage slaves it is
necessary to increase the minimum wage.
5:11:54 PM
ZEBULON WOODMAN, Member, Labors Local 942, stated that he is a
20-year member. He recalled a minimum wage bill in 2009, but it
was to reduce the minimum wage for tip employees through tip
credits. Employees are paid less than minimum wages and
gratuities from customers make up the difference.
CHAIR OLSON reminded him that this bill is HB 384.
MR. WOODMAN suggested that HB 384 was introduced on April 4 to
preempt the initiative. He expressed concern about the suspect
motives and suggested that to help workers the legislature would
go well past the minimum wage to a "living wage." The current
minimum wage initiative, by reaffirming a long term ban on tips
credit, will protect tip employees from efforts to reduce their
pay. Unlike the 2002 initiative, which called for one large
increase on the wage, the current measure phases it in over two
years. In the event the legislature supplants the initiative,
along with the COLA, they could eliminate or reduce the second
dollar increase and the COLA by January 2016. He concluded by
asking members to please let Alaskans vote on ballot measure 3
and kill HB 384.
5:14:30 PM
BRYAN IMUS, Member, Laborers Local 942, said he is a husband,
father, and organizer. He said he did not understand this "mean
spirited race to the bottom." He said it seems easy to balance
budgets on the backs of people and "kick the little guy while
he's down." He said that no one expects a minimum wage worker
to live in the "house on the hill," but it would be nice if the
mother or father working 40 hours per week didn't need to be on
public assistance to feed their kids. He said he deals with
working people on a daily basis, and those earning $15 per hour
are still on public assistance, day care assistance, and rental
assistance. He asserted that if the intention of HB 384 is not
to do end run then why not leave the initiative on the ballot
and let the voters decide. He questioned assurances that the
same thing as in 2003 would not happen next year. He concluded
by saying that he trusts the voters and working people of
Alaska. He urged members to kill HB 384.
5:16:51 PM
WALTER ROBINSON, Member, International Brotherhood of Electrical
Workers (IBEW) Local 1547, questioned why this bill was
introduced so late in the session. He said he would hate to see
HB 384 pass and be stripped to nothing. He stated that the
lower wage workers can't afford to "take another hit" and go
backwards. He related that he has spent many hours collecting
signatures for the Alaska minimum wage initiative and has seen
first-hand how important this initiative is to the people of
Alaska. Over 36,000 signatures were gathered. He said he
thinks the people have spoken. He asked members not to move
this bill forward and to let the people vote on ballot measure 3
on August 19. He offered his belief that it is the right and
just decision for the future of Alaska's workers.
5:18:07 PM
KARM SINGH, Power Line representative, International Brotherhood
of Electrical Workers (IBEW) Local 1547, stated he participated
by gathering signatures. He has contracts in Kotzebue, Nome,
Barrow, Fairbanks, Healy, and Delta. He said he doesn't observe
kids working at minimum wage; instead, people ages 30-40 years
old are working minimum wage. These people work part time
because no one wants to pay for their insurance. Some are
working 30 hours at one job and 30 hours at another job trying
to make ends meet. He said he would like to see the "working
poor" get a "bump up" and he encouraged committee members to let
the people speak. He said, "I could live with a no from the
people, but I don't trust politicians. I never have. I'm a
non-partisan. Both political groups are corrupt as far as I'm
concerned. So please let the people speak. Thank you."
5:20:07 PM
CHRYSTAL SCHOENROCK, Business Owner, said that she is a bar
owner and acknowledged that perhaps there should be a small
increase in the minimum wage. She pointed out that she has a
small business in a very small community. She stated that she
can't afford those increases. She has two employees who work
six hours each because she can't afford to pay them. She told
members that things are rough in Nikiski, yet she must pay for
permits, licenses, insurance, and utilities. She informed
members that business is slow, things are tough, and she can't
afford an increase in minimum wage beyond $.50 per hour. She
said that if it increases she will have to close her doors. She
reported that there are only three bars and liquor stores in
Nikiski. She reiterated that she has done everything she can.
5:22:34 PM
DANIEL LYNCH said he is affiliated with working human beings.
He encouraged members to let the initiative go to the polls. He
pointed out the numerous people involved in the process to
collect signatures. The legislature has had 12 years since the
last "sabotage" to the working poor. He questioned the intent to
address the issue the past 12 years. He recalled Representative
Millet's testimony and responded. He said that he knows what an
initiative is and is simple. It doesn't say anything about
living wage, mortgage, education, or better jobs in the future.
He reiterated that it a simple initiative. He characterized his
view of the working poor as earning a minimum wage but only
being able to afford a cardboard box to live in and food stamps.
He suggested that these people are provided a reason to drink
and commit crimes. He suggested that the legislature take no
action and let the people vote.
5:24:21 PM
VINCE BELTRAMI, President, Alaska AFL-CIO (AFL-CIO), stated that
the AFL-CIO represents 50,000 to 55,000 union members in Alaska,
but he advocates for all workers, union and nonunion alike. He
said that passage of HB 384 would circumvent the public process
at this time. He suggested that if HB 384 had been introduced
at the beginning of the session, it may have had time to be
vetted properly. He pointed out that the legislature has about
two weeks left and many issues to contend with and insufficient
time to adequately discuss this issue in a public process,
particularly since this bill does not have other committee
referrals. He expressed concern that the public process may be
cut short in terms of HB 384. He suggested that the public
process would be better served by letting the people vote on the
minimum wage initiative. There will have been nearly four
months of discussion to hear from both sides of the issue. He
informed members he sent an e-mail to all members yesterday that
highlighted the AFL-CIO's views.
MR. BELTRAMI informed members that he has never been in the
position to advocate against something that the average Alaskan
might view as "a positive for Alaska workers" but because of
this issue's specific history it is a much larger issue,
although it is not a simple one. He acknowledged that previous
testifiers have covered the 2002-2003 actions. He related his
understanding that several oil and gas representatives are
lobbying for the bill since they did not want it to be on ballot
with the SB 21 referendum. He said that he has spoken to the
Alaska Oil and Gas Association (AOGA) and he is comfortable that
AOGA is not advocating on the minimum wage issue. He further
related his understanding that others in the oil industry have
indicated their intent to advocate for HB 384. This action
casts a pall over the issue. It seems like an unseemly way to
try to influence the elections. Certainly, he did not wish to
suggest that this is the sponsor's goal. He recalled and agreed
with previous testimony by Mr. Fox, CHARR, who had stated he
wished the process had been initiated in January.
5:28:51 PM
MR. BELTRAMI related his understanding that other folks in the
hospitality industry have been advocating for passage for the
bill with the intent to advocate for a "tip credit" in the next
legislative session. He remarked that this is punitive only to
the low wage workers who work hard for tips. He said it is a
little dubious that people are relying on a poll as
justification for good public policy. He commented that he
received a nice e-mail from Representative Hawker in which he
stated, "Good policy is good policy - no matter how it comes
about." He couldn't agree more. Good public policy can't be
vetted in a week. He recalled the sponsor statement indicates
that the legislature cannot bind future legislatures.
5:30:16 PM
MR. BELTRAMI asked to address a few points. Representative
Saddler suggested the minimum wage as a starting point or
transitional wage, but not a "living wage." Actually, national
figures show that more than 25 percent of minimum wage workers
are supporting at least one child. Additionally, Representative
Millett suggested that this wage is often earned by teens, which
is true. He said that when he was 16 years old the minimum wage
was about $2 per hour. He suggested that the trends have
shifted and currently 14 percent of the workers earning under
$10 are teens, which means 86 percent are adults. He also
reported that 64 percent were females so unfortunately it isn't
as much of a transitional wage as it historically has been.
MR. BELTRAMI testified in opposition to HB 384. The AFL-CIO
wants the initiative to be heard by the people and give them an
opportunity to "weigh in" not because the bill should have been
introduced a long time ago, but the union has seen what has
happened in the past, which unfortunately gives us pause.
CHAIR OLSON reported that his written testimony was received.
MR. BELTRAMI estimated that well over 100 letters have been
submitted, but there hasn't been a lot of time.
5:33:31 PM
CHAIR OLSON remarked that a number of committee members also
serve on the House Resources Standing Committee. He said that
he has not had one oil industry representative approach him even
though he has been spending 4-6 hours a day with many of them.
REPRESENTATIVE SADDLER asked to correct his view for the record.
He recalled that he previously said, "A minimum wage can serve
either as a transitional wage or learning wage, or as a
supplemental wage that will boost other wages earned in a
household." He recalled seeing a Pew Research Center report
that said that 75 percent of those earning federal minimum wage
or lower fall in the ages of 16-24; and 25 percent earning a
minimum wage are ages 25 and older.
5:35:03 PM
JULIA SEYMOUR, Reverend, Lutheran Church of Hope, stated that
she serves for the Lutheran Church of Hope in Anchorage, which
is part of the Evangelical Lutheran Church in America (ELCA).
She related that her church provides support to Lutheran Social
Services of Alaska and outreach efforts for Catholic Social
Services in Anchorage. She asked the committee to stop this
bill in committee or to vote against HB 384. More than 100
families gather in her church's parking lot to receive fresh
food from the food bank. In recent months, she has held
discussions regarding Medicare, which has led her to understand
some of the significant statistics that retirees and senior
citizens face. She suggested that senior citizens require good
care for elders, but workers are not willing to work for $7.75
per hour. She advocated for an increase in the minimum wage.
She suggested that her congregation wants to have the minimum
wage initiative come before the voters. She suggested that an
increase of $1 per hour could positively impact an annual salary
by $2,500, which could provide for first and last month's rent.
Although she could go on at length about scripture, she pointed
out the number of times caring for the poor surfaces. She
stated that human needs include food, shelter, and dignity.
People who vote in the state take the time, effort and money to
have the dignity to vote. She cautioned against circumventing
the will of the voters. She asked members to recall Alaska's
Constitution, in particular, Section 7.5, and in the name of
public welfare, urged members to let the bill die.
REVERAND SEYMOUR asked members to consult their conscience when
considering what providing for public welfare means. She
suggested that pushing this bill forward and potentially
repeating what happened in 2002-2003, or denying the common good
of a minimum wage increase that can improve the health,
wellbeing, and dignity of Alaskans and their families should be
contemplated. She also suggested telling hard working men and
women that they are not doing enough, pushes them into a pool in
which they are struggling not to drown. She further suggested
that people need to exercise their legal rights by having the
opportunity to vote on an increased minimum wage. She said if
members believe that providing for the public welfare means
granting the needs and desires of the powerful, the moneyed, the
loudest, and the established over the little, the least, and the
lost in the system, that choice would clearly be signaled by
moving this bill forward or by voting yes on HB 384. She said
doing so would demonstrate that the committee is deliberately
choosing to ignore the political desire of Alaskans who have
petitioned for the current ballot initiative as well as choosing
to ignore the fiscal needs of fellow citizens and the dignity of
those who desire to support themselves and their families with
honest work.
5:40:57 PM
REVERAND SEYMOUR said that given the legislature history on the
minimum wage issue people cannot help but to expect an
historical repeat, which is that members will push it forward
and "gut it" before it is fully implemented. She offered her
belief that if members let the bill die or vote no that the
legislature can strike a blow against the cynicism that infects
the populous. Members can say that work, workers, and working
matters in Alaska. She stated that continuing with HB 384 will
contribute to a greater sense of distrust and indicate disdain
for the Alaska's Constitution, public welfare, and public
process for thousands of working Alaskans who cannot make ends
meet but still want to believe that this is "the great land."
5:41:49 PM
REPRESENTATIVE REINBOLD asked if Ms. Seymour is from Eagle
River.
REVERAND SEYMOUR said she lives in Eagle River but works in
Anchorage. In further response to a question, she said she
represents a church in Anchorage in the Turnagain community, but
she lives in Eagle River near the nature center.
REPRESENTATIVE REINBOLD clarified that she is not representing a
church in Eagle River.
REVERAND SEYMOUR answered that she represents Lutheran Church of
Hope on Northern Lights Boulevard.
5:43:37 PM
PAT FALON asked members not to support the bill and to let the
people of Alaska vote on the minimum wage initiative. He stated
that the support is evident by all the signatures it took to get
the initiative on the ballot. He asked members not to allow
this issue to be "gutted" like the last initiative in 2002. As
a minimum wage initiative signer, he asked member to let the
people of Alaska decide and not the legislature.
5:44:28 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on HB 384.
REPRESENTATIVE JOSEPHSON stated that the public remembers 2002-
2003. He noted several dissenting letters in members' packets
as compared to the hundreds that asked the committee to hold
this bill. If the legislature had not taken action in 2003, the
minimum wage would be $9.53 and Alaska wouldn't be the 17th
state as to minimum wage. Previously, like Hawaii, Alaska is an
expensive place to live. He offered his belief that the public
feels the adage, "Once bitten, twice shy." The public was
bitten and bitten badly in 2003 and earned the right to be
cynical. He suggested that people would rather suffer defeat
and hold their heads up high than have the rug pulled out. He
suggested that Alaskans want the minimum wage increase in place
for two years and understand the legislature could undo the
second dollar per hour, impose a tip credit, and undo the CPI.
He further thought that the 2003 decision cost hundreds of
millions for low wage workers. He felt certain that this bill
would not be before this committee if it wasn't for the
initiative process. The evidence is to the contrary, he said.
REPRESENTATIVE JOSEPHSON noted that this is a turn of the
century issue. A great Republican pushed for minimum wages. He
suggested that the committee should hold the bill and listen to
the overwhelming testimony that people want to go to the polls.
He said he would just give them what they want.
CHAIR OLSON offered his belief that the legislature hasn't had
anyone bring forth a minimum wage bill since 2004.
REPRESENTATIVE CHENAULT did not recall any minimum wage bill in
recent years.
5:48:51 PM
CHAIR OLSON remarked that if HB 384 passes, it would guarantee
the minimum wage. He suggested there isn't any guarantee that
the minimum wage initiative will pass as evidenced by other
initiatives that have failed. He has liked some initiative and
not liked others, noting the 90 day session as an example. He
said he would never make a move to "go back" [on an initiative]
unless it came from the people.
REPRESENTATIVE HERRON reflected that substantial testimony has
been given by people who would like to see the minimum wage
initiative go forward. He recalled earlier testimony that
suggested "if there was genuine interest by the legislature" the
minimum wage figures should be higher. He said he is mulling
over this testimony.
REPRESENTATIVE CHENAULT acknowledged that if the bill passes the
legislature the minimum wage would increase. Further, he can't
speak for future legislatures, but only for himself. He
indicated it is not his intention, and in fact, he would vote
against any changes to the current bill. He acknowledged that
he would like the minimum wage to be higher. He has a family
member who has earned minimum wage for a long time. He did not
view this as a union or nonunion issue, but it is fairness issue
to people who work. He related that he has run a business and
he tried to pay his employees well and still make a profit and
keep good people around. He said that the higher wages paid,
the better and more content employees are. Things just work
better. He suggested that HB 384 is as close to a guarantee as
can be put on paper. He trusts the people voting, but even
after the coastal zone management initiative failed, some people
wanted the legislature to take action to fix it.
5:54:04 PM
REPRESENTATIVE SADDLER moved to report HB 384 out of committee
with individual recommendations and the accompanying fiscal
notes.
REPRESENTATIVE JOSEPHSON objected.
A roll call vote was taken. Representatives Chenault, Reinbold,
Herron, Saddler, Millett and Olson voted in favor of reporting
HB 384 out of committee. Representative Josephson voted against
it. Therefore, HB 384 was reported out of the House Labor and
Commerce Standing Committee by a vote of 6-1.
5:54:44 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:54 p.m.