Legislature(1993 - 1994)
03/04/1993 03:00 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE COMMITTEE STANDING COMMITTEE March 4, 1993 3:00 p.m. MEMBERS PRESENT Rep. Bill Hudson, Chairman Rep. Joe Green, Vice Chairman Rep. Joe Sitton Rep. Brian Porter Rep. Eldon Mulder MEMBERS ABSENT Rep. Jerry Mackie Rep. Bill Williams COMMITTEE CALENDAR *HB 113: "An Act regulating the solicitation of contributions by charitable organizations and paid solicitors and the solicitation of sales by telephonic means; and amending Alaska Rules of Civil Procedure 79 and 82." MOVED FROM COMMITTEE *HB 158: "An Act making appropriations for contract settlement costs and cost-of-living adjustments for public employees who are members of certain collective bargaining units; and providing for an effective date." MOVED FROM COMMITTEE (* First public hearing.) WITNESS REGISTER REP. RON LARSON Alaska State Legislature State Capitol Juneau, Alaska 99801-1182 463878 Position Statement: Prime Sponsor of HB 113 JIM FORBES Assistant Attorney General Department of Law 1031 West 4th, Suite 200 Anchorage, Alaska 99501-1994 269-5100 Position Statement: Answered questions on HB 113 RICK GILMORE, President Better Business Bureau 4011 Artic Blvd. Anchorage, Alaska 99502 562-0704 Position Statement: Answered questions on HB 113 NANCY USERA, Commissioner Department of Administration P.O. Box 110200 Juneau, Alaska 99811-0200 465-2200 Position Statement: Testified in support of HB 158 DON VELESCO, Business Manager Public Employees Local 71 2510 Arctic Blvd. Anchorage, Alaska 99503 Position Statement: Testified on HB 158 CHERYL FRASCA, Division Director Division of Budget Review Office of Management and Budget Office of the Governor P.O. Box 110020 Juneau, Alaska 99811-0020 465-4681 Position Statement: Commented on HB 158 and offered two amendments BRIAN ROGERS Vice President for Finance University of Alaska 910 Yukon Drive Fairbanks, Alaska 99775-2388 474-7448 Position Statement: Commented on HB 158 DON DEITZ Alaska's Regional Port Port of Anchorage 2000 Anchorage Port Road Anchorage, Alaska 99501 337-1258 (H) 272-1531 (W) Position Statement: Available for questions; did not testify PREVIOUS ACTION BILL: HB 113 SHORT TITLE: CHARITABLE & TELEPHONIC SOLICITING/SALES BILL VERSION: SPONSOR(S): REPRESENTATIVE(S) LARSON TITLE: "An Act regulating the solicitation of contributions by charitable organizations and paid solicitors and the solicitation of sales by telephonic means; and amending Alaska Rules of Civil Procedure 79 and 82." JRN-DATE JRN-PG ACTION 02/01/93 199 (H) READ THE FIRST TIME/REFERRAL(S) 02/01/93 199 (H) LABOR & COMMERCE, FINANCE 02/10/93 290 (H) JUD REFERRAL ADDED,FOLLOWING L&C 03/04/93 (H) L&C AT 03:00 PM CAPITOL 17 BILL: HB 158 SHORT TITLE: APPROP: CONTRACT SETTLEMENT COSTS BILL VERSION: SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR TITLE: "An Act making appropriations for contract settlement costs and cost-of-living adjustments for public employees who are members of certain collective bargaining units; and providing for an effective date." JRN-DATE JRN-PG ACTION 02/15/93 348 (H) READ THE FIRST TIME/REFERRAL(S) 02/15/93 348 (H) LABOR & COMMERCE, FINANCE 02/15/93 348 (H) GOVERNOR'S TRANSMITTAL LETTER 03/04/93 (H) L&C AT 03:00 PM CAPITOL 17 ACTION NARRATIVE TAPE 93-18, SIDE A Number 006 VICE CHAIRMAN GREEN opened the House Labor and Commerce committee meeting. He informed the members that they would be hearing HB 113 first. HB 113: CHARITABLE & TELEPHONIC SOLICITING/SALES Number 015 REP. RON LARSON, PRIME SPONSOR of HB 113, gave a brief history as outlined in his sponsor statement (Attachment 1). The bill, in short, would establish regulations on telephonic solicitation and charitable solicitation. Number 088 REP. SITTON asked what type of enforcement capability would the state have on outfits operating out-of-state. Number 096 REP. LARSON said this piece of legislation would cover the out-of-state solicitation, and he mentioned that Mr. Forbes from the attorney general's office could explain the technical aspects of how that could be done. REP. SITTON said there were a number of exemptions and inquired if Mr. Forbes would be able to answer questions about that as well. REP. LARSON responded that he would. Number 104 REP. PORTER commented on Rep. Sitton's inquiry. He said he had understood the bill to be an attempt to get at the fraudulent solicitors rather than those organizations that may just be bothersome. He asked Rep. Larson if that was a fair analysis of HB 113. REP. LARSON answered affirmatively. Number 127 JIM FORBES, ASSISTANT ATTORNEY GENERAL, GENERAL CIVIL SECTION, DEPARTMENT OF LAW, testified via teleconference, said he was the attorney general assigned to the fair business practices section in Anchorage. He informed the committee that this section of the attorney general's office covers statewide and anti-trust and consumer protection problems. MR. FORBES clarified the section in the bill regarding exemptions by explaining that this section was meant to help weed out the smaller organizations that have not been a problem. MR. FORBES went on to say that the problems this bill attempts to address deal with charitable solicitation fraud and telemarketing fraud. Often these solicitations involve the use of false information that cannot be readily verified over the telephone, which is why the telephonic nature of the fraud needs to be addressed. The bill helps the law enforcers on the charitable solicitation side by giving them the way to require registration of all entities engaged in charitable fundraising in the amount of over five thousand dollars a year. MR. FORBES provided examples of fraudulent operations in Alaska to illustrate how this requirement, as outlined in HB 113, would help the law enforcers catch fraudulent operators or deter misconduct. MR. FORBES stated that HB 113 would make engaging in fundraising without filing registration papers a misdemeanor. If an organization was found to be dealing in fraudulent operation, that would mean they had filed fraudulent registration. This amounts to unsworn falsification under existing law and would have the same criminal deterrent. MR. FORBES said he was optimistic that HB 113 would help address the two-fold problem in the charitable fundraising industry. He explained the first problem as being that the "phoney" charities are taking money from those that otherwise may give to legitimate charities. The second problem deals with consumer confidence. MR. FORBES pointed out that with an increased amount of fraud there is a decrease in consumer confidence; as a result, people are less likely to trust the legitimate organizations. He concluded that as a result of the regulations outlined in HB 113, consumers may have more confidence in charitable giving, thus giving more. MR. FORBES continued his testimony outlining the problems of the telemarketing industry. He referenced and elaborated on Rep. Larson's comments regarding the psychological angle used by the telemarketers. MR. FORBES explained that HB 113 would require telemarketers to register and have a contract with a prospective customer. This aspect of the bill was patterned after a Florida law. If a fraudulent telemarketer crossed state lines, they would be guilty of a Class B felony. Number 305 REP. GREEN asked Mr. Forbes if there was a proposal that would help assure people that they should sign a contract when dealing with these telemarketing organizations. Number 318 MR. FORBES said there was and stated that they planned to continue in a vigorous public education campaign with respect to the issues stated above. He further stated that the assistant attorney general's office has an excellent working relationship with the Better Business Bureau of Alaska and together they can monitor the situation and put out press releases, etc. Number 330 REP. MULDER asked how this would affect businesses, such as telephone companies, or other organization involved in telemarketing activities. Number 332 MR. FORBES pointed out that newspaper sales, sales of telephone answering services, cable television or any organization regulated by the Public Utilities Commission are exempt from HB 113. Number 342 REP. PORTER asked if an individual would be guilty of a crime if they were to place an ad in the paper to sell a car and in the same day make the same proposition to three people. Number 352 (Vice Chairman Green noted that Rep. Hudson had joined the committee at 3:30 p.m.) Number 363 REP. PORTER pointed out that it was most likely a technical matter. Referencing page 1, Section 1 (a), he noted that it does not distinguish the caller. He went on to say he assumed the intent of that section was for the initiator of the call to register. Number 374 MR. FORBES agreed with Rep. Porter's interpretation of the intent. He added that a he did not believe that "you can't sell that car to two or more people on the same terms because you've only got one car." Number 380 REP. PORTER asked for further clarification regarding the wording "attempt to sell" and "person" in Section 1 (a). Number 387 MR. FORBES said he felt that this concern could be dealt with by adding another exemption and added that he felt that would be appropriate. Number 392 REP. SITTON reiterated his concern about prosecuting out-of- state offenders and asked what kind of cooperation there would be in other states. MR. FORBES said that most states are cooperative right now and it is the best interest of all to find the offenders. Number 406 RICK GILMORE, PRESIDENT OF THE BETTER BUSINESS BUREAU, testified in favor of HB 113. He reported that the bureau office receives approximately three thousand calls a month and a minimum of fifty to sixty percent of those calls deal directly with sweepstakes and charities. He pointed out that Alaskans are especially susceptible to this type of telemarketing because people are used to ordering things by catalog. Number 419 REP. HUDSON asked for some examples of persons or businesses that would register. MR. GILMORE said that most telemarketing organizations operate out of Nevada. He pointed out that Nevada has laws similar to those outlined in HB 113. He said his hope would be that once this law was enacted, it would deter fly-by- night telemarketers from operating in Alaska. Number 442 MR. FORBES pointed to exemption number 16 in answer to Rep. Porter's earlier questions. Number 450 REP. GREEN asked if the penalties were severe enough. Number 455 MR. FORBES answered that the legislature could make the penalties more severe, but there are provisions in the law that carry heavier penalties for multiple offenses. Number 473 REP. PORTER moved HB 113 with a zero fiscal note and individual recommendations. No objections were heard; it was so ordered. HB 158: APPROP: CONTRACT SETTLEMENT COSTS Number 484 COMMISSIONER NANCY USERA, COMMISSIONER, DEPARTMENT OF ADMINISTRATION, presented the monetary terms of the labor contract recently negotiated and gave the following description of the types of employees covered under this appropriation: classified, nonsupervisory, and blue and gray collar employees of the executive branch. Classifications include cooks, custodians, equipment operators and skilled crafts. The employees work primarily for the Departments of Transportation & Public Facilities, Administration, Corrections, and Health and Social Services. There are approximately 1,634 employees represented by the Public Employees Local 71. COMMISSIONER USERA went into some detail regarding management's goals in coming to this agreement and the contract agreement itself. (These are on file in the committee room.) Number 585 COMMISSIONER USERA noted that the agreement includes a provision to refund the costs to employees who were required to obtain a commercial driver's license as a condition of employment. She noted renewals will be at the expense of the employee. Number 599 CHAIRMAN HUDSON inquired if that new requirement was the result of the federal law change. Number 604 DON VELESCO, MANAGER, PUBLIC EMPLOYEES LOCAL 71, stated that the federal government does require persons driving certain vehicles to have a commercial license. Mr. Velesco further stated that the federal government controls the purse strings on some of the projects, so the state then enacted a law to require this. Number 611 REP. PORTER asked if the license was portable. COMMISSIONER USERA responded that it was. COMMISSIONER USERA testified that the other large item in the agreement was the health insurance escalator which raises the state's contribution to $500.00 a month. Number 638 REP. GREEN asked why the funding was coming from several different sources. TAPE 93-18, SIDE B Number 001 CHERYL FRASCA, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, responded that the funding composition for the salary increase was the same as the funding composition to pay the salaries normally. Number 060 REP. MULDER expressed concern over there being no savings in this contract. Number 069 COMMISSIONER USERA noted that there were no wage escalator associated with this contract; reduction of a holiday saves money; and a real monetary value to change the cola date from January 1 to July 1 also adds up to a savings for the state. Number 109 COMMISSIONER USERA stated that it is her belief that health care in this nation is going to change so dramatically that in the long-run the state will realize a cost savings. Number 160 REP. GREEN asked what happens if health care costs skyrocket instead of come down. COMMISSIONER USERA responded that in two years the contract will be up. Number 180 REP. GREEN expressed concern that this sets precedent. Number 189 COMMISSIONER USERA said she believes that the precedent set is a positive and realistic one. Discussion ensued concerning strategy and details regarding the contract settlement. Number 279 REP. HUDSON asked how the amount of health insurance the state has agreed to provide compares to other public employers or other unions the state has bargained with. COMMISSIONER USERA stated that the only one she knew of that was higher was the Anchorage employees. She further stated that the committee should remember that the Local 71 "bought" this health coverage by giving up other priorities. Number 317 REP. MULDER asked where Commissioner Usera felt the state stood in comparison to other employers as far as benefits. COMMISSIONER USERA said she felt at this time the state was providing a great benefit package, but for the record she wanted to note that this package has been put together in increments over the years. Furthermore, the commissioner wanted to note that the state was in a position in the late 1970's where it was scrambling to find and retain a skilled workforce given the high wages paid on the slope. Number 349 REP. MULDER asked if the state had looked into going out to bid for an insurance carrier. Number 353 COMMISSIONER USERA answered that the state was currently looking at a variety of options. Number 357 REP. SITTON congratulated the unions and the administration on the process and end result of the negotiated settlement they came to. Number 371 CHAIRMAN HUDSON asked what kinds of considerations could be looked at for noncovered employees; i.e., legislative staff. Number 372 COMMISSIONER USERA responded that she agreed wholeheartedly that this was an area of importance to both the noncovered employee and management. CHAIRMAN HUDSON noted that the administration had proposed two amendments to the bill, and a third one would be presented by the university. Number 439 MR. VELESCO testified that he disagreed with the commissioner on characterizing the amount of health insurance payments as being one of the finest. Mr. Velesco noted that the union he represents has different needs based on the kind of work done. Number 502 REP. PORTER asked if Local 71 ratified this agreement. MR. VELESCO replied yes. Number 507 MS. FRASCA offered two amendments affecting Sections 3 and 4 of the bill. Basically, these amendments were revised estimates of the number of employees affected by this agreement. Number 524 BRIAN ROGERS, VICE PRESIDENT FOR FINANCE, UNIVERSITY OF ALASKA, testified that the amendments before the committee represented the obligation the university had to the members of the Alaska Community College Federation of Teachers. Number 567 REP. PORTER asked if the university system had binding arbitration. Number 568 MR. ROGERS answered that they do have binding arbitration to deal with any disputes under the collective agreement, but they would not proceed to binding arbitration except by mutual consent if they were to fail to reach agreement. Number 623 REP. SITTON moved amendments 1, 2, 3 and 4, with fiscal notes and asked unanimous consent. There were no objections; it was so ordered. Number 638 REP. PORTER moved for passage of CSHB 158(L&C)am with individual recommendations and zero fiscal notes. There were no objections; it was so ordered. CHAIRMAN HUDSON adjourned the meeting at 4:40 p.m.