Legislature(1995 - 1996)

02/19/1996 03:10 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                          
                       February 19, 1996                                       
                           3:10 p.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Pete Kott, Chairman                                            
 Representative Norman Rokeberg, Vice Chairman                                 
 Representative Beverly Masek                                                  
 Representative Jerry Sanders                                                  
 Representative Brian Porter                                                   
 Representative Kim Elton                                                      
 Representative Gene Kubina                                                    
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 All members present                                                           
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 *HOUSE BILL NO. 450                                                           
 "An Act relating to trademarks; amending Alaska Rule of Appellate             
 Procedure 609; and providing for an effective date."                          
                                                                               
      - PASSED CSHB 450(L&C) OUT OF COMMITTEE                                  
                                                                               
 *HOUSE BILL NO. 478                                                           
 "An Act allowing licensed real estate brokers, associate real                 
 estate brokers, and real estate salespersons to prepare certain               
 documents; and providing for an effective date."                              
                                                                               
      - PASSED HB 478 OUT OF COMMITTEE                                         
                                                                               
 EXECUTIVE ORDER 93                                                            
 Relating to Executive Order transferring the ARDOR Program to the             
 Department of Community and Regional Affairs from the Department of           
 Commerce and Economic Development.                                            
                                                                               
      - TABLED IN COMMITTEE                                                    
                                                                               
 HOUSE BILL NO. 456                                                            
 "An Act relating to the Board of Storage Tank Assistance; and                 
 providing for an effective date."                                             
                                                                               
      - PASSED CSHB 456(L&C) OUT OF COMMITTEE                                  
                                                                               
 (* First public hearing)                                                      
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB 450                                                               
 SHORT TITLE: ALASKA TRADEMARK ACT                                             
 SPONSOR(S): REPRESENTATIVE(S) THERRIAULT                                      
                                                                               
 JRN-DATE     JRN-PG                  ACTION                                   
 01/26/96      2541    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/26/96      2541    (H)   LABOR & COMMERCE, JUDICIARY                       
 02/19/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
                                                                               
 BILL:  HB 478                                                               
 SHORT TITLE: REALTORS MAY PREPARE CERTAIN LEGAL DOCS                          
 SPONSOR(S): REPRESENTATIVE(S) ROKEBERG                                        
                                                                               
 JRN-DATE     JRN-PG                  ACTION                                   
 02/07/96      2650    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/07/96      2650    (H)   LABOR & COMMERCE                                  
 02/19/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
                                                                               
 BILL:  HB 456                                                               
 SHORT TITLE: BOARD OF STORAGE TANK ASSISTANCE                                 
 SPONSOR(S): LABOR & COMMERCE                                                  
                                                                               
 JRN-DATE     JRN-PG                  ACTION                                   
 01/30/96      2569    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/30/96      2569    (H)   LABOR & COMMERCE, FINANCE                         
 02/14/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
 02/14/96              (H)   MINUTE(L&C)                                       
 02/19/96              (H)   L&C AT  3:00 PM CAPITOL 17                        
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 WILDA WHITAKER, Legislative                                                   
   Administrative Assistant                                                    
   to Representative Gene Therriault                                           
 Alaska State Legislature                                                      
 Capitol Building, Room 421                                                    
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 465-4797                                                    
 POSITION STATEMENT:  Gave sponsor statement for HB 450.                       
                                                                               
 MIKE MONAGLE, Supervisor                                                      
 Records and Licensing                                                         
 Division of Banking, Securities                                               
   and Corporations                                                            
 Department of Commerce and Economic Development                               
 P.O. Box 110808                                                               
 Juneau, Alaska 99811                                                          
 Telephone:  (907) 465-2530                                                    
 POSITION STATEMENT:  Testified in support of HB 450.                          
                                                                               
 CRAIG JOHNSON                                                                 
 217 Center Street                                                             
 Kodiak, Alaska 99615                                                          
 Telephone:  (907) 486-2000                                                    
 POSITION STATEMENT:  Testified in support of HB 478.                          
                                                                               
 LAURA STOHL BEALEY                                                            
 Associated Island Brokers                                                     
 P.O. Box 408                                                                  
 Kodiak, Alaska 99615                                                          
 Telephone:  (907) 486-2000                                                    
 POSITION STATEMENT:  Testified in support of HB 478.                          
                                                                               
 RON JOHNSON                                                                   
 ERA                                                                           
 610 Attla Way, Suite 6                                                        
 Kenai, Alaska 99611                                                           
 Telephone:  (907) 283-7755                                                    
             1-800-ERA-KENAI                                                   
 POSITION STATEMENT:  Testified in support of HB 478.                          
                                                                               
 BRUCE MARION                                                                  
 Address and Telephone Unavailable                                             
 Anchorage, Alaska                                                             
 POSITION STATEMENT:  Testified in support of HB 478.                          
                                                                               
 LAMAR COTTEN, Deputy Commissioner                                             
 Department of Community                                                       
   and Regional Affairs                                                        
 P.O. Box 112100                                                               
 Juneau, Alaska 99811-2100                                                     
 Telephone:  465-4700                                                          
 POSITION STATEMENT:  Testified on Executive Order 93.                         
                                                                               
 JEFFREY BUSH, Deputy Commissioner                                             
 Department of Commerce and                                                    
   Economic Development                                                        
 P.O. Box 110800                                                               
 Juneau, Alaska 99811-0800                                                     
 POSITION STATEMENT:  Testified on Executive Order 93.                         
                                                                               
 DONNA TOLLMAN, President                                                      
 ARDOR Association                                                             
 P.O. Box 9                                                                    
 Glennallen, Alaska 99588                                                      
 Telephone:  (907) 822-5001                                                    
 POSITION STATEMENT:  Had no objection to Executive Order 93.                  
                                                                               
 JOHN BARNETT, Executive Director                                              
 Board of Storage Tank Assistance                                              
 Division of Spill Prevention and Response                                     
 Department of Environmental Conservation                                      
 410 Willoughby Avenue, Suite 105                                              
 Juneau, Alaska 99801-1795                                                     
 POSITION STATEMENT:  Testified on HB 456.                                     
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 96-10, SIDE A                                                            
 Number 001                                                                    
                                                                               
 The House Labor and Commerce Standing Committee was called to order           
 by Chairman Pete Kott at 3:10 p.m.  Members present at the call to            
 order were Representatives Sanders, Porter, Elton, Rokeberg and               
 Kott.                                                                         
                                                                               
 HB 450 - ALASKA TRADEMARK ACT                                               
                                                                               
 Number 050                                                                    
                                                                               
 CHAIRMAN PETE KOTT announced the first order of business the                  
 committee would address would be HB 450, "An Act relating to                  
 trademarks; amending Alaska Rule of Appellate Procedure 609; and              
 providing for an effective date."                                             
                                                                               
 WILDA WHITAKER, Legislative Administrative Assistant to                       
 Representative Gene Therriault, Alaska State Legislature, read the            
 sponsor statement into the record:                                            
                                                                               
      "This legislation is intended to update the State Trademark              
      Act.  Alaska's current law is modeled upon the 1964 Lanham               
      Act.  The proposed revision is to bring Alaska's trademark law           
      current with the changes to the Lanham Act over the past 30              
      years, and is modeled closely to the Model State Trademark               
      Bill written by the International Trademark Association.  This           
      revision will allow the registration of marks that currently             
      cannot be registered under state law, such as service marks,             
      certification marks and collective marks.  The legislation was           
      introduced at the request of the Division of Banking,                    
      Securities and Corporations.  Passage of the legislation is              
      needed to strengthen the intellectual property rights for                
      Alaska's business community."                                            
                                                                               
 MS. WHITAKER said in addition, she would like to ask for a simple             
 amendment that would allow the department to implement regulations            
 so they will be in effect by the time the bill becomes effective.             
 An amendment is needed to be able to do that.  Ms. Whitaker said              
 there is a letter of support from Don and Rose Harris, Owners, Red            
 Dog Saloon.  She indicated they have had to fight several                     
 infringements on their trademark over the past several years.  They           
 have found existing law protection to be vague and almost                     
 impossible to defend.                                                         
                                                                               
 MS. WHITAKER noted the Department of Commerce and Economic                    
 Development has provided a position paper.  The department says the           
 major improvements are to broaden trademark protection to protect             
 service providers, adding additional remedies to trademark owners             
 for infringement and providing anti-dilution provisions for                   
 intellectual property owners whose trademark has become famous in             
 this state.                                                                   
                                                                               
 CHAIRMAN KOTT announced Representative Kubina arrived at 3:14 p.m.            
                                                                               
 Number 288                                                                    
                                                                               
 MIKE MONAGLE, Supervisor, Records and Licensing, Division of                  
 Banking, Securities and Corporations, Department of Commerce and              
 Economic Development, came forward to testify on HB 450.  He                  
 informed the committee he is a member of the International                    
 Association of Trademark and Corporate Administrators (IATCA).  Mr.           
 Monagle explained that several years ago the United States                    
 Trademark Association, which is currently known as the                        
 International Trademark Association (INTA), approached his                    
 organization with the idea of updating the State Model Trademark              
 Act.  He noted the existing model dated back to the early 1960s.              
 They saw a need to get a model out there that would bring in a lot            
 of the changes that have taken place in the federal Lanham Act.               
 They desired to see some consistency among the states as practicing           
 attorneys who have to file at the federal level often ran into                
 problems with various states having different variations of the               
 law.  They approved it.  The Act has also been approved by the                
 National Association of Secretaries of State and IATCA.  He said it           
 is his understanding that the American Bar Association Committee on           
 Model Legislation has tentatively approved it and will formally do            
 so within the next year.                                                      
                                                                               
 Number 389                                                                    
                                                                               
 CHAIRMAN KOTT said HB 450 refers to an applicant's entitlement to             
 register a mark and asked what the general time frame would be that           
 the commissioner could be expected to respond.                                
                                                                               
 MR. MONAGLE explained the commissioner who is listed in the                   
 existing law also is the officer who would file.  He noted his                
 agency is the dedicated agency that files on behalf of the                    
 commissioner.  Their typical turnaround time is about a week of               
 processing time and it shouldn't change.                                      
                                                                               
 CHAIRMAN KOTT referred to the filing fee and asked what changes are           
 expected.                                                                     
                                                                               
 MR. MONAGLE said currently, the fee set out in statute is $10 per             
 class code.  You would have a separate registration for each class            
 of goods that you registered under.  Part of the bill takes that              
 fee out of the statute and puts it into regulation.  He noted he              
 believes the fiscal note the committee has is based on a proposed             
 fee of $50 per class code.  Mr. Monagle said he realizes that is a            
 substantial increase but there hasn't been a change in 30 years to            
 that fee.  A survey done by IATCA several years ago showed that the           
 average fee charged by states was approximately $35 with about                
 eight states charging anywhere from $50 to $100.  Mr. Monagle                 
 explained the federal registration for a trademark is about $350              
 per class.                                                                    
                                                                               
 CHAIRMAN KOTT asked if the amount is sufficient enough to cover the           
 cost of the program.                                                          
                                                                               
 MR. MONAGLE explained there is currently one full-time person                 
 working 20 hours a week processing registrations.  The term of the            
 registration would also match what is being done with the federal             
 act.  Currently, the length of the registration is ten years and              
 would be decreased to five years.  The renewal fee would be the               
 same as the initial registration which is similar to what it                  
 currently is.                                                                 
                                                                               
 Number 570                                                                    
                                                                               
 REPRESENTATIVE KIM ELTON referred to a trademark registered with              
 the federal government and asked if a person would also have to               
 register it with the state.                                                   
                                                                               
 MR. MONAGLE said it is technically correct that they wouldn't have            
 to register with the state.  In practice, a lot of attorneys will             
 register in each state on the assumption that litigation is cheaper           
 or they avoid litigation if they register in each state in addition           
 to the federal government.  The reason is most states check with              
 the federal government when they have a registration.  What the               
 practices will do is take a federal registration out and then make            
 sure they get a registration in each state that their clients are             
 doing business.  The federal registration covers interstate                   
 commerce.                                                                     
                                                                               
 Number 639                                                                    
                                                                               
 CHAIRMAN KOTT asked if there is a real problem being addressed by             
 reducing the renewal from ten years to five years.                            
                                                                               
 MR. MONAGLE explained the intent is to get rid of the "dead wood."            
 Once the registration goes into effect, that mark is tied up for              
 ten years.  Under the federal proposal, their initial registration            
 is good, he thought, for one or two years.  The person registering            
 has to reaffirm that they are using that mark within that period              
 and then it will be extended out for the remaining five years.  He            
 said he doesn't anticipate it would cause any problems.  He noted             
 all states have some type of renewal or assignment provision.                 
                                                                               
 Number 760                                                                    
                                                                               
 CHAIRMAN KOTT referred to wording in Section 12, "An application              
 for renewal of a registration must include a verified statement               
 that the mark has been used and is still in use", and asked Mr.               
 Monagle to define "verified."                                                 
                                                                               
 MR. MONAGLE said typically for the department, it means a notarized           
 signature on a statement that the mark is being used.  The person             
 signing the application would have a notarized signature.  If it is           
 a corporation it would be one of the officers, if it is a                     
 partnership it would be one of the general partners.                          
                                                                               
 CHAIRMAN KOTT referred to a business being in a rural area of the             
 state where there isn't a notary available and asked what would be            
 used.                                                                         
                                                                               
 MR. MONAGLE explained he believes the under the notary laws, most             
 postmasters can act as notaries.  He said he also believes there is           
 a provision under the Notary Act where you can have witnesses who             
 can sign to your notarized signature.                                         
                                                                               
 Number 820                                                                    
                                                                               
 CHAIRMAN KOTT said Section 15 talks about notifying those                     
 individuals who are going to have to reapply or re-register and               
 that notification is sent out in writing by the department six                
 months prior to the expiration.  He asked if it is the department's           
 intent to send that notification through certified or registered              
 mail.                                                                         
                                                                               
 MR. MONAGLE said they could, but don't currently do that.                     
 Currently, the department must send out notification of                       
 registrations that will expire after ten years.  He said in 85                
 percent to 90 percent of the time, those addresses are no longer              
 valid and most of that mail is returned as being undeliverable.               
 He noted the department wouldn't have an objection to doing that              
 sending them registered or certified.                                         
                                                                               
 Number 898                                                                    
                                                                               
 REPRESENTATIVE ELTON referred to the fee going up, as indicated in            
 the fiscal note, and said the department will be collecting the fee           
 twice as often because the renewal will be changed from ten years             
 to five years.  He said the fee collection fund would grow                    
 substantially because instead of collecting once every ten years,             
 it'll be done twice every ten years.                                          
                                                                               
 MR. MONAGLE said that is correct.  He noted the department doesn't            
 have a tremendous number of these filings.  Mr. Monagle said he has           
 checked with the INTA and there isn't single attorney in the state            
 of Alaska who is a member of that organization.  The largest                  
 omission with the current act is it simply precludes most service             
 providers, banks, insurance companies, etc., from registering.  He            
 said he doesn't think there will be a significant increase in                 
 revenue.                                                                      
                                                                               
 REPRESENTATIVE ELTON said the record should reflect that he                   
 probably didn't mean that there is no intellectual activity in the            
 state.                                                                        
                                                                               
 Number 1017                                                                   
                                                                               
 There being no further discussion on HB 450, REPRESENTATIVE NORMAN            
 ROKEBERG made a motion to move HB 450 out of the House Labor and              
 Commerce Committee with individual recommendations and the attached           
 positive fiscal note.  CHAIRMAN KOTT asked if there was an                    
 objection.  Hearing none, it was so ordered.                                  
                                                                               
 HB 478 - REALTORS MAY PREPARE CERTAIN LEGAL DOCS                            
                                                                               
 Number 1088                                                                   
                                                                               
 CHAIRMAN KOTT announced the next order of business would be HB 478,           
 "An Act allowing licensed real estate brokers, associate real                 
 estate brokers, and real estate salespersons to prepare certain               
 documents; and providing for an effective date."                              
                                                                               
 REPRESENTATIVE ROKEBERG, prime sponsor of the measure, said the               
 bill would allow real estate agents, real estate brokers and                  
 realtors to prepare certain legal documents.  The bill was a                  
 request by the Alaska Association of Realtors in which he is a                
 member of and a practicing commercial real estate broker.                     
 Representative Rokeberg said the request from the Association of              
 Realtors was based on Rule 33.3, which was approved by the                    
 governing board of the Alaska Bar Association, transmitted in                 
 October to the supreme court for adoption.  That rule is located in           
 the committee members' packets.  The intent of the rule was to                
 define the practice of law for the purposes of the enforcement by             
 the supreme court and the Bar Association.  In so doing, he                   
 believes they threw out a net to expand their authority.  By doing            
 so, the threat that they could impede commerce by encroaching on              
 areas that have traditionally been undertaken by realtors is                  
 important and is the bases for the need of the legislation.                   
                                                                               
 REPRESENTATIVE ROKEBERG said for a number of years, the Sword of              
 Damocles has been hanging over the head of realtors because of this           
 implied threat.  He said by his reading of the Bar rule                       
 recommendations and his understanding the circumstances surrounding           
 it, it is clear that the legislation is necessary.  The Bar rule              
 goes so far to say that the court and attorneys have to approve all           
 documents used in any transactions.                                           
                                                                               
 REPRESENTATIVE ROKEBERG informed the committee that there is                  
 correspondence in the committee packets from the Bar Association              
 that denies the fact that their intent is to bring real estate                
 practitioners within the meaning of the definition.  Representative           
 Rokeberg stated that realtors are governed by a very strict code of           
 ethics and have a grievance procedure within their organizations.             
 He referred to Article 13, which was in the committee packets, and            
 said it points out clearly that under the code of ethics for                  
 realtors they will not be practicing law.  When it's necessary to             
 provide and advise clients that an attorney, accountants, etc., are           
 necessary, they are required to do so by their standard of ethics.            
 In addition, the consumers in Alaska are protected by the assurity            
 bond system which is under the licensing provisions of the state.             
 It provides monetary compensation to people who have been damaged,            
 from the assurity fund.  He noted the fund is a self funding                  
 bonding fund that operates with the dues from the real estate                 
 communities.  Representative Rokeberg explained there are a number            
 of things that would preclude any possibilities of a realtor                  
 practicing law without a license.  All the realtors of the state              
 want to be able to do is continue their practice and their business           
 as they've been doing for decades, nothing more - nothing less.               
                                                                               
 Number 1383                                                                   
                                                                               
 CRAIG JOHNSON testified via teleconference from Kodiak in support             
 of HB 478.  He recalled a recently agreed to transaction between a            
 buyer and a seller where an attorney was involved and explained it            
 involved a lot of negotiation.  Mr. Johnson said (indisc.) an                 
 attorney if the transaction was not consummated, you'd have that              
 difficulty to deal with.  There is the extra burden of meeting and            
 drafting addendums, counter offers and offers back and forth                  
 between the parties.  Mr. Johnson said he understands that on the             
 national level the trend is away from attorneys.  There has been              
 other states that have enacted legislation similar to the Bar rule            
 that Representative Rokeberg referred to.  At one time the trend              
 was to put attorneys in the loop.  Now at the national level, the             
 trend is away from that.  That seems to be appropriate for our                
 state.  It doesn't seem to be an easy solution to add attorneys               
 into the contract loop.  He noted he had faxed information to each            
 of the committee members the previous Friday.                                 
                                                                               
 Number 1513                                                                   
                                                                               
 LAURA STOHL BEALEY, Associated Island Brokers, was next to testify            
 via teleconference from Kodiak.  She informed the committee she has           
 been a real estate associate broker in the Kodiak area for 15                 
 years.  Ms. Bealey said she is testifying in support of HB 478.               
 She said it seems to her that the bill protects real estate agents            
 against what the attorneys are trying to accomplish.  The attorneys           
 are trying to accomplish something in their interest and not the              
 interest of consumer, the public or the real estate entity.  She              
 said she thinks the real estate industry has a code of ethics that            
 regulates ethical behavior very well.  They have the assurity bonds           
 protecting consumers that have been (indisc.).  Ms. Bealey said she           
 always recommends to customers and clients that they have an                  
 attorney review their paperwork if they so choose to do so.  She              
 urged HB 478 be passed.                                                       
 Number 1588                                                                   
                                                                               
 RON JOHNSON, ERA, testified via teleconference from Kenai.  He                
 informed the committee he served on the Real Estate Commission for            
 eight years, two full terms.  He has been licensed since 1982.  Mr.           
 Johnson said the law, as written, clarifies what they do today.  It           
 appears that the reason the law was written was to defend a                   
 position they have had for some time.  Mr. Johnson said he thinks             
 that the assurity fund, the realtor code of ethics and the inbred             
 fear, as a result of the required education and continuing                    
 education that has been brought about in the past few years, causes           
 the real estate community not to get involved in the practice of              
 law.  Mr. Johnson stated that his concern is the cost to the                  
 consumer.  He said he just returned from the ERA National                     
 Conference in Phoenix and said part of the discussion was with real           
 estate professionals from the East Coast.  Mr. Johnson referred to            
 Alaska and said he would suggest that the average commission in               
 closing costs and other related costs, are in the neighborhood of             
 8 percent to 10 percent of the closing of a sales transaction.  On            
 the East Coast, they're paying 12 percent to 14 percent and                   
 sometimes higher.  A great deal of their percentage cost increases            
 are relative to attorney costs.  Mr. Johnson said there isn't a               
 real estate professional in the state that won't call for an                  
 attorney to get involved if something is real technical.  He urged            
 support for the bill.                                                         
                                                                               
 Number 1738                                                                   
                                                                               
 BRUCE MARION testified via teleconference from Anchorage.  He noted           
 he is a realtor, legislative chairman for the Valley Board of                 
 Realtors, Alaska Association of Realtors, (indisc.).  Mr. Marion              
 urged the committee to support HB 478.  Realtors must meet                    
 extensive education requirements for the completion of the forms              
 which are drawn by and approved by attorneys.  The forms are                  
 commonly used by real estate practitioners with protection to the             
 consumer.  Passage of the bill would facilitate the transfer of               
 real estate in Alaska without adding an extra cost.  He thanked the           
 committee.                                                                    
                                                                               
 Number 1777                                                                   
                                                                               
 There being no further witnesses, CHAIRMAN KOTT closed public                 
 testimony.                                                                    
                                                                               
 Number 1784                                                                   
                                                                               
 REPRESENTATIVE GENE KUBINA made a motion to pass HB 478 out of the            
 House Labor and Commerce Committee with individual recommendations            
 and a zero fiscal note.  There being no objection, HB 478 moved out           
 of committee.                                                                 
                                                                               
 HB 450 - ALASKA TRADEMARK ACT                                               
                                                                               
 REPRESENTATIVE JERRY SANDERS referred to HB 450, "An Act relating             
 to trademarks; amending Alaska Rule of Appellate Procedure 609; and           
 providing for an effective date," which moved out of committee                
 earlier in the meeting and said the committee neglected to adopt a            
 proposed amendment.                                                           
                                                                               
 Number 1828                                                                   
                                                                               
 REPRESENTATIVE SANDERS made a motion to rescind the action of                 
 passing HB 450 out of committee.  Hearing no objection, HB 450 was            
 back before the committee.                                                    
                                                                               
 CHAIRMAN KOTT announced there is a proposed amendment in the                  
 committee packets which relates to the transition regulations and             
 has an effective date of January 1, 1997.                                     
                                                                               
 Number 1843                                                                   
                                                                               
 REPRESENTATIVE SANDERS made a motion to adopt Amendment 1.  Hearing           
 no objection, Amendment 1 was adopted.                                        
                                                                               
 REPRESENTATIVE SANDERS moved to pass HB 450, as amended, with                 
 fiscal notes, out of committee with individual recommendations.               
 There being no objection, CSHB 450(L&C) was passed out of the House           
 Labor and Commerce Committee.                                                 
 Number 1919                                                                   
                                                                               
 EO 93 - TRANSFERRING THE ARDOR PROGRAM                                      
                                                                               
 Executive Order (EO) 93, relating to transferring the ARDOR Program           
 to the Department of Community and Regional Affairs from the                  
 Department of Commerce and Economic Development, was the next order           
 of business.                                                                  
                                                                               
 Number 1948                                                                   
                                                                               
 LAMAR COTTEN, Deputy Commissioner, Department of Community and                
 Regional Affairs, explained EO 93 concerns the transfer of the                
 ARDOR Program from the Department of Commerce and Economic                    
 Development to the Department of Community and Regional Affairs.              
 The ARDORs, as they're called, are regional development                       
 organizations that have been in existence since 1987.  The                    
 Department of Commerce and Economic Development and the Department            
 of Community and Regional Affairs, through a series of meetings and           
 discussions, went through an inventory of the different activities            
 that they do which may be in conflict or duplication, surrounding             
 rural economic development.  As a part of that process, it was                
 decided it would be more appropriate to transfer the administrative           
 responsibilities of the ARDORs to the Department of Community and             
 Regional Affairs.  The was because the ARDORs are probably more               
 active and have more state interaction with those ARDORs that are             
 located in rural Alaska.  The Department of Community and Regional            
 Affairs has an office in Dillingham, Kotzebue, Nome, Bethel,                  
 Fairbanks, Anchorage and Juneau.  They also have a lot more                   
 outreach into rural Alaska from their offices in the urban areas.             
 It was felt that they could provide better technical and                      
 administrative assistance to those ARDORs.  This doesn't mean that            
 there is a lessor of a role for the Department of Commerce and                
 Economic Development or other departments.  He referred to cases in           
 rural Alaska and said the services that the Department of Community           
 and Regional Affairs provides seem to have a better connection with           
 the ARDORs.  Mr. Cotten said for a number of reasons, his                     
 department is providing the administrative costs at a lessor amount           
 than the Department of Commerce and Economic Development.  He said            
 he believes it was roughly about $250,000.  In the budget for the             
 Department of Community and Regional Affairs, it is about $60,000.            
                                                                               
 Number 1039                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG said it looks like a new addition is being            
 added in statute.  He asked if this is a new regime and methodology           
 for the establishment of additional ARDORs.                                   
                                                                               
 MR. COTTEN indicated it doesn't establish additional ARDORs.  It              
 relates to the transfer itself.                                               
                                                                               
 REPRESENTATIVE ROKEBERG asked if Section 4 is new.                            
                                                                               
 MR. COTTEN indicated he didn't have the executive order in front of           
 him, but noted the only changes that were made was to switch the              
 program from the Department of Commerce and Economic Development to           
 the Department of Community and Regional Affairs.  There aren't any           
 program changes.                                                              
                                                                               
 Number 2109                                                                   
                                                                               
 REPRESENTATIVE KUBINA referred to the order as not dealing with the           
 funding of ARDORs.                                                            
                                                                               
 REPRESENTATIVE ROKEBERG asked if this separates or consolidates               
 things.                                                                       
                                                                               
 MR. COTTEN said it consolidates those efforts that directly affect            
 rural Alaska within the Department of Community and Regional                  
 Affairs.                                                                      
                                                                               
 REPRESENTATIVE ROKEBERG asked if there will be any rural economic             
 development activity in the Department of Commerce and Economic               
 Development.                                                                  
                                                                               
 MR. COTTEN said he couldn't speak for the Department of Commerce,             
 but there always has been and will be.  The distinction that has              
 been made between the two departments is that Community and                   
 Regional Affairs focus is primarily dealing with either governments           
 or nonprofits.  It deals more with what he would characterize as              
 community development.  That is the water, the sewer, the roads,              
 the waterfront projects.  He said you're never going to attract               
 private capital or someone to risk capital in rural Alaska unless             
 you have that basic infrastructure in place.  That is where the               
 Department of Community and Regional Affairs has taken a stronger             
 presence.  You're not going to have somebody attracted to a                   
 community if the community government is dysfunctional.  The                  
 Department of Community and Regional Affairs focuses on working               
 directly with councils, clerks and city managers.  Commerce takes             
 a broader regional approach.  It deals with the private sector and            
 other issues such as international trade, Alaska seafood marketing,           
 etc.  The Department of Commerce deals on the basics with all                 
 municipalities, but in a large part, smaller rural communities.               
                                                                               
 Number 2225                                                                   
                                                                               
 REPRESENTATIVE ELTON referred to the administrative costs being               
 much less and said he would have expected a negative fiscal note              
 because there won't be any need in the Department of Commerce and             
 Economic Development to maintain that $250,000 administrative                 
 umbrella.                                                                     
                                                                               
 MR. COTTEN said the reductions happen in part because they think              
 they can accomplish some of the similar tasks with existing staff,            
 particularly in rural Alaska.  Mr. Cotten said he thinks that the             
 $250,000 was actually a separate line item in the Department of               
 Commerce's budget as opposed to the amount shown in the Department            
 of Community and Regional Affairs' fiscal note which is for the               
 ARDORs.                                                                       
                                                                               
 Number 2267                                                                   
                                                                               
 REPRESENTATIVE ELTON said he believes there are two grant                     
 administrators in the Department of Commerce and Economic                     
 Development that administer the ARDOR Program.  He asked what will            
 happen to those two positions.                                                
                                                                               
 MR. COTTEN said those two positions aren't in his department's                
 budget.                                                                       
                                                                               
 Number 2287                                                                   
                                                                               
 JEFFREY BUSH, Deputy Commissioner, Department of Commerce and                 
 Economic Development, explained the $250,000 that has been used in            
 the past to administer the ARDOR Program was funded through federal           
 EDA money.  He said the department anticipates that the EDA money             
 is not going to be forthcoming, effective at the end of this fiscal           
 year.  That money is disappearing and is not being transferred.  It           
 doesn't show up in the budget because it is essentially a                     
 designated program receipt line item in the budget.  They are still           
 applying to EDA for those funds.  He said they have been told they            
 cannot come through with ARDOR funding.  Mr. Bush said they have              
 also been told that there is at least a possibility that they may             
 get funding for other forms of economic development, including the            
 Governor's Marketing Alaska Program.  He noted they have no idea              
 how much funding there will be.  If they don't get funding, the two           
 grant administrator positions will go away.  Those people have been           
 notified that those positions are not funded at the present time.             
                                                                               
 Number 2360                                                                   
                                                                               
 DONNA TOLLMAN, President, ARDOR Association, testified via                    
 teleconference from Glennallen.  She stated her organization didn't           
 have an objection to this move.  Their basic interest is to                   
 continue the work they are currently doing within their region.               
 The ARDOR Program is not just a rural program, it is also a urban             
 program.  She thanked the committee for listening to her testimony.           
                                                                               
 Number 2379                                                                   
                                                                               
 REPRESENTATIVE KUBINA pointed out that he has a couple of ARDORs in           
 his district and urged that the Administration keep moving because            
 people doing things and the local level is the best way to get                
 economic action moving in areas of the state.                                 
                                                                               
 Number 2412                                                                   
                                                                               
 CHAIRMAN KOTT closed public testimony on Executive Order 93.                  
                                                                               
 REPRESENTATIVE KUBINA said the executive order would go into effect           
 unless it is turned down by the legislature.                                  
                                                                               
 CHAIRMAN KOTT said March 8, 1996, is the date that it must be                 
 complete.                                                                     
                                                                               
 Number 2450                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG asked what the Community and Regional                 
 Affairs Committee did.                                                        
                                                                               
 CHAIRMAN KOTT said the Community and Regional Affairs passed it out           
 of committee.  He noted the order would go to the Finance Committee           
 once it is passed out of the Labor and Commerce Committee.  If they           
 don't want to hear it, it becomes law without them hearing the                
 order.                                                                        
                                                                               
 Number 2458                                                                   
                                                                               
 REPRESENTATIVE KUBINA said if the committee doesn't object to the             
 order, they would need a motion to table or take no action.                   
 CHAIRMAN KOTT said it could be passed on to State Affairs and                 
 Finance then to the speaker.                                                  
                                                                               
 Number 2458                                                                   
                                                                               
 REPRESENTATIVE KUBINA made a motion to table EO 93.                           
                                                                               
 CHAIRMAN KOTT asked if there was an objection.                                
                                                                               
 Number 2490                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG objected for the purpose of discussion.  He           
 asked if Chairman Kott would prefer to send the EO on to the State            
 Affairs Committee.                                                            
                                                                               
 TAPE 96-10, SIDE B                                                            
 Number 001                                                                    
                                                                               
 CHAIRMAN KOTT said he hasn't really heard any strong opposition to            
 moving the matter forward.  He referred to discussion that took               
 place in another committee and said he didn't hear strong                     
 opposition to moving the EO.                                                  
                                                                               
 REPRESENTATIVE PORTER indicated he supports the motion.  He said if           
 there is something that comes up later that hasn't been considered            
 and needs consideration, it could be done in the committee.                   
                                                                               
 CHAIRMAN KOTT pointed out that there is a time element of March 8.            
                                                                               
 Number 059                                                                    
                                                                               
 REPRESENTATIVE ELTON asked if there is a companion EO in the                  
 Senate.                                                                       
                                                                               
 CHAIRMAN KOTT indicated there is a companion EO in the Senate and             
 it was referred to the Community and Regional Affairs Committee,              
 the Labor and Commerce Committee and the Finance Committee.                   
                                                                               
 Number 072                                                                    
                                                                               
 REPRESENTATIVE ROKEBERG said his concern is that the ARDORs include           
 such groups as the Anchorage Economic Development Council, which is           
 a very vibrant and excellent organization which has done a                    
 significant amount of work in the Anchorage and Upper Cook Inlet              
 areas.  A vast majority of their funding is privately generated               
 into the municipality of Anchorage.  One thing that troubles him is           
 that there are a number of ARDORs that do almost nothing and                  
 receive money.  Then there are several ARDORs that do a lot of                
 things and get the same amount of money.  Representative Rokeberg             
 said there was testimony that the Department of Community and                 
 Regional Affairs is a group that is interested in building                    
 infrastructure in rural areas.  That is all good, but he doesn't              
 think that is what ARDORs are all about.  Representative Rokeberg             
 then withdrew his objection.                                                  
                                                                               
 Number 1333                                                                   
                                                                               
 CHAIRMAN KOTT said they aren't supposed to address the merits of              
 the program.  They are to address whether or not they want to see             
 the program shifted from one department to another.                           
                                                                               
 CHAIRMAN KOTT said there is a motion to table EO 93.  He said if              
 there are no objections, EO 93 will be tabled.                                
                                                                               
 HB 456 - BOARD OF STORAGE TANK ASSISTANCE                                   
                                                                               
 CHAIRMAN KOTT announced the last order of business would be the               
 continuation hearing HB 456, "An Act relating to the Board of                 
 Storage Tank Assistance; and providing for an effective date."                
 He said there was a concern regarding the number of members to be             
 on the board.                                                                 
                                                                               
 Number 173                                                                    
                                                                               
 JOHN BARNETT, Executive Director, Board of Storage Tank Assistance,           
 Division of Spill Prevention and Response, Department of                      
 Environmental Conservation, informed the committee he has spoke to            
 the board members and also contacted the Alaska Underground Tank              
 Owners and Operators Association and presented the committee's                
 concerns for having an eighth member on the board or whether or not           
 a members should be replaced or a ninth member added.  Mr. Barnett            
 said although the preference was to add a ninth member, in the                
 interest of fiscal conservancy, they felt it would be much more               
 appropriate to replace one of the existing members.  Their                    
 consensus was they would concede to go with seven members, which is           
 the current number of board members.  The consensus was the to                
 replace the representative representing the Department of                     
 Transportation and Public Facilities (DOT/PF).  The matter was                
 discussed with the DOT/PF designee and the department concurred               
 that although they had a major goal in the early days of the                  
 program relating to regulation development, they felt it was very             
 important that DOT/PF's concern and voice was heard during the                
 regulation development stage.  Since the program has matured and              
 the regulations are currently in place, they feel they would                  
 concede to taking a back seat roll at this point.  The department             
 does support their seat being replaced by the public member.  Mr.             
 Barnett noted the chairman of the board wants to continue to have             
 the DOT/PF designee as an advisor so the board will continue to               
 post their meetings with the DOT/PF.                                          
                                                                               
 Number 255                                                                    
                                                                               
 REPRESENTATIVE ELTON proposed the following amendment:                        
      Page 1, line 10                                                          
           Delete "s" from the word "commissioners"                            
                                                                               
      Page 1, lines 10 and 11                                                  
           Delete "and transportation and public facilities"                   
           Insert "or the commissioner's designee"                             
                                                                               
 REPRESENTATIVE ELTON asked unanimous consent the proposed amendment           
 be adopted.                                                                   
                                                                               
 Number 289                                                                    
                                                                               
 CHAIRMAN KOTT said the change would read, "The board consists of              
 the commissioner of environmental conservation, or their                      
 designees,".                                                                  
                                                                               
 CHAIRMAN KOTT asked if there was an objection.  Hearing none,                 
 Chairman Kott announced conceptional Amendment 1 was adopted.                 
                                                                               
 Number 315                                                                    
                                                                               
 REPRESENTATIVE ELTON made a motion to move HB 456 out of committee            
 with the attached zero fiscal note, as amended.                               
                                                                               
 CHAIRMAN KOTT asked if there was an objection.  Hearing none, CSHB            
 456(L&C) was moved out of the House Labor and Commerce Committee.             
 ADJOURNMENT                                                                   
                                                                               
 CHAIRMAN KOTT adjourned the House Labor and Commerce Committee                
 meeting at 4:10 p.m.                                                          
                                                                               

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