Legislature(1997 - 1998)

04/25/1997 03:30 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                        
                          April 25, 1997                                       
                             3:30 p.m.                                         
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Norman Rokeberg, Chairman                                      
 Representative John Cowdery, Vice Chairman                                    
 Representative Bill Hudson                                                    
 Representative Jerry Sanders                                                  
 Representative Joe Ryan                                                       
 Representative Tom Brice                                                      
 Representative Gene Kubina                                                    
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 All members present                                                           
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 HOUSE BILL NO. 222                                                            
 "An Act relating to abandoned, wrecked, or junk vehicles."                    
                                                                               
      - WAIVED FROM COMMITTEE                                                  
                                                                               
 CS FOR SENATE BILL NO. 89(L&C)                                                
 "An Act relating to regulation of barbers and hairdressers;                   
 extending the termination date of the Board of Barbers and                    
 Hairdressers; and providing for an effective date."                           
                                                                               
      - MOVED CSSB 89(L&C) FROM COMMITTEE                                      
                                                                               
 CS FOR SENATE BILL NO. 91(STA) am                                             
 "An Act relating to the regulation of physical therapists, physical           
 therapy assistants, occupational therapists, and occupational                 
 therapy assistants; extending the termination date of the State               
 Physical Therapy and Occupational Therapy Board; and providing for            
 an effective date."                                                           
                                                                               
      - MOVED CSSB 91(STA) AM FROM COMMITTEE                                   
                                                                               
 HOUSE BILL NO. 178                                                            
 "An Act relating to letters of credit under the Uniform Commercial            
 Code; and providing for an effective date."                                   
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 * HOUSE BILL NO. 209                                                          
 "An Act regulating the use of pre-hire project labor agreements for           
 public construction projects by the state and political                       
 subdivisions of the state."                                                   
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 HOUSE BILL NO. 218                                                            
 "An Act relating to regulation and examination of insurers and                
 insurance agents; relating to kinds of insurance; relating to                 
 payment of insurance taxes and to required insurance reserves;                
 relating to insurance policies; relating to regulation of capital,            
 surplus, and investments by insurers; relating to hospital and                
 medical service corporations; and providing for an effective date."           
                                                                               
      - SCHEDULED BUT NOT HEARD                                                
                                                                               
 (* First public hearing)                                                      
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB 222                                                                 
 SHORT TITLE: ABANDONED,WRECKED,OR JUNK VEHICLES                               
 SPONSOR(S): REPRESENTATIVE(S) ROKEBERG, Kemplen                               
                                                                               
 JRN-DATE      JRN-PG                 ACTION                                   
 04/01/97       900    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 04/01/97       900    (H)   TRANSPORTATION, L&C                               
 04/23/97              (H)   TRA AT  1:00 PM CAPITOL 17                        
 04/23/97              (H)   MINUTE(TRA)                                       
 04/24/97      1317    (H)   TRA RPT  CS(TRA) 2DP 5NR                          
 04/24/97      1318    (H)   DP: HUDSON, WILLIAMS; NR: ELTON,                  
 04/24/97      1318    (H)   KOOKESH, SANDERS, COWDERY, MASEK                  
 04/24/97      1318    (H)   2 ZERO FNS (DPS, ADM)                             
                                                                               
 BILL:  SB 89                                                                  
 SHORT TITLE: BARBERS AND HAIRDRESSERS                                         
 SPONSOR(S): RULES BY REQUEST OF LEGISLATIVE BUDGET AND AUDIT                  
                                                                               
 JRN-DATE      JRN-PG                 ACTION                                   
 02/14/97       357    (S)   READ THE FIRST TIME - REFERRAL(S)                 
 02/14/97       357    (S)   L&C, STA                                          
 03/20/97              (S)   L&C AT  1:30 PM FAHRENKAMP RM 203                 
 03/20/97              (S)   MINUTE(L&C)                                       
 03/25/97              (S)   L&C AT  1:30 PM FAHRENKAMP RM 203                 
 03/25/97              (S)   MINUTE(L&C)                                       
 03/26/97       872    (S)   L&C RPT  CS  4DP          SAME TITLE              
 03/26/97       873    (S)   DP: LEMAN, MILLER, HOFFMAN, KELLY                 
 03/26/97       873    (S)   ZERO FISCAL NOTE TO SB & CS (DCED)                
 04/10/97              (S)   STA AT  3:30 PM BELTZ ROOM 211                    
 04/10/97              (S)   MINUTE(STA)                                       
 04/15/97              (S)   STA AT  4:30 PM BELTZ ROOM 211                    
 04/15/97              (S)   MINUTE(STA)                                       
 04/16/97      1161    (S)   STA RPT  3DP (L&C)CS                              
 04/16/97      1161    (S)   DP: GREEN, MACKIE, WARD                           
 04/16/97      1161    (S)   PREVIOUS ZERO FN (DCED)                           
 04/21/97              (S)   RLS AT 10:45 AM FAHRENKAMP RM 203                 
 04/21/97              (S)   MINUTE(RLS)                                       
 04/21/97      1330    (S)   RULES TO CALENDAR  4/21/97                        
 04/21/97      1332    (S)   READ THE SECOND TIME                              
 04/21/97      1332    (S)   L&C  CS ADOPTED UNAN CONSENT                      
 04/21/97      1332    (S)   ADVANCED TO THIRD READING UNAN CONSENT            
 04/21/97      1332    (S)   READ THE THIRD TIME  CSSB 89(L&C)                 
 04/21/97      1333    (S)   PASSED Y18 N1 E1                                  
 04/21/97      1333    (S)   EFFECTIVE DATE(S) SAME AS PASSAGE                 
 04/21/97      1369    (S)   TRANSMITTED TO (H)                                
 04/22/97      1232    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 04/22/97      1232    (H)   LABOR & COMMERCE                                  
 04/25/97              (H)   L&C AT  3:15 PM CAPITOL 17                        
                                                                               
 BILL:  SB 91                                                                  
 SHORT TITLE: PHYSICAL THERAPY AND OCCUPATIONAL THERAPY                        
 SPONSOR(S): RULES BY REQUEST OF LEGISLATIVE BUDGET AND AUDIT                  
                                                                               
 JRN-DATE      JRN-PG                 ACTION                                   
 02/14/97       357    (S)   READ THE FIRST TIME - REFERRAL(S)                 
 02/14/97       358    (S)   L&C, STA                                          
 03/18/97              (S)   L&C AT  1:30 PM FAHRENKAMP RM 203                 
 03/18/97              (S)   MINUTE(L&C)                                       
 03/19/97       780    (S)   L&C RPT  CS  4DP          NEW TITLE               
 03/19/97       780    (S)   DP: LEMAN, KELLY, MACKIE, MILLER                  
 03/24/97       832    (S)   CORRECTED L&C CS                                  
 03/19/97       780    (S)   ZERO FISCAL NOTE TO SB & CS (DCED)                
 04/10/97              (S)   STA AT  3:30 PM BELTZ ROOM 211                    
 04/10/97              (S)   MINUTE(STA)                                       
 04/15/97              (S)   STA AT  4:30 PM BELTZ ROOM 211                    
 04/15/97              (S)   MINUTE(STA)                                       
 04/16/97      1162    (S)   STA RPT  CS  3DP          NEW TITLE               
 04/16/97      1162    (S)   DP: GREEN, MACKIE, WARD                           
 04/16/97      1162    (S)   PREVIOUS ZERO FN APPLIES (DCED)                   
 04/21/97              (S)   RLS AT 10:45 AM FAHRENKAMP RM 203                 
 04/21/97              (S)   MINUTE(RLS)                                       
 04/21/97      1331    (S)   RULES TO CALENDAR  4/21/97                        
 04/21/97      1333    (S)   READ THE SECOND TIME                              
 04/21/97      1333    (S)   STA  CS ADOPTED UNAN CONSENT                      
 04/21/97      1333    (S)   ADVANCED TO THIRD READING UNAN CONSENT            
 04/21/97      1334    (S)   READ THE THIRD TIME  CSSB 91(STA)                 
 04/21/97      1334    (S)   FAILED PASSAGE Y10 N9 E1                          
 04/21/97      1334    (S)   PEARCE  NOTICE OF RECONSIDERATION                 
 04/22/97      1429    (S)   RECON TAKEN UP - IN THIRD READING                 
 04/22/97      1430    (S)   RETURN TO SECOND FOR AM 1  UNAN CONSENT           
 04/22/97      1430    (S)   AUTOMATICALLY IN THIRD READING                    
 04/22/97      1430    (S)   AM NO 1     ADOPTED UNANIMOUS CONSENT             
 04/22/97      1431    (S)   PASSED ON RECONSIDERATION Y19 N-  A1              
 04/22/97      1431    (S)   EFFECTIVE DATE(S) SAME AS PASSAGE                 
 04/22/97      1433    (S)   TRANSMITTED TO (H)                                
 04/23/97      1284    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 04/23/97      1284    (H)   LABOR & COMMERCE                                  
 04/25/97              (H)   L&C AT  3:15 PM CAPITOL 17                        
                                                                               
 BILL:  HB 178                                                                 
 SHORT TITLE: UNIFORM COMMERCIAL CODE:LETTERS OF CREDIT                        
 SPONSOR(S): LABOR & COMMERCE BY REQUEST                                       
                                                                               
 JRN-DATE      JRN-PG                 ACTION                                   
 03/06/97       561    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/06/97       561    (H)   LABOR & COMMERCE                                  
 03/14/97              (H)   L&C AT  3:15 PM CAPITOL 17                        
 03/14/97              (H)   MINUTE(L&C)                                       
 04/25/97              (H)   L&C AT  3:15 PM CAPITOL 17                        
                                                                               
 BILL:  HB 209                                                                 
 SHORT TITLE: PROJECT LABOR AGREEMENTS ON PUB CONSTR.                          
 SPONSOR(S): REPRESENTATIVE(S) VEZEY                                           
                                                                               
 JRN-DATE      JRN-PG                 ACTION                                   
 03/25/97       827    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/25/97       827    (H)   LABOR & COMMERCE                                  
 04/25/97              (H)   L&C AT  3:15 PM CAPITOL 17                        
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 ART PETERSON, Uniform Law Commissioner                                        
 State of Alaska                                                               
 350 North Franklin Street                                                     
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 586-4000                                                    
 POSITION STATEMENT:  Commented on HB 178.                                     
                                                                               
 L. S. "JERRY" KURTZ, JR., Uniform Law Commissioner                            
 State of Alaska                                                               
 1050 Beech Lane                                                               
 Anchorage, Alaska 99501                                                       
 Telephone:  (907) 258-6051                                                    
 POSITION STATEMENT:  Commented on HB 178.                                     
                                                                               
 DOUGLAS LOTTRIDGE, Assistant Attorney General                                 
 Commercial Section                                                            
 Civil Division                                                                
 Department of Law                                                             
 1031 West Fourth Avenue, Suite 200                                            
 Anchorage, Alaska 99501-1994                                                  
 Telephone:  (907) 269-5100                                                    
 POSITION STATEMENT:  Commented on HB 178.                                     
                                                                               
 WILLIS KIRKPATRICK, Director                                                  
 Division of Banking, Securities and Corporations                              
 Department of Commerce and Economic Development                               
 P.O. Box 110807                                                               
 Juneau, Alaska 99811-0907                                                     
 Telephone:  (907) 465-2521                                                    
 POSITION STATEMENT:  Commented on HB 178.                                     
                                                                               
 REPRESENTATIVE AL VEZEY                                                       
 Alaska State Legislature                                                      
 Capitol Building, Room 13                                                     
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 465-3719                                                    
 POSITION STATEMENT:  Sponsor of HB 209.                                       
                                                                               
 DONNA C. WILLARD, Attorney                                                    
 124 East Seventh Avenue                                                       
 Anchorage, Alaska 99501                                                       
 Telephone:  (907) 278-3641                                                    
 POSITION STATEMENT:  Testified on HB 209.                                     
                                                                               
 JOHN BITNEY                                                                   
 Alaska Housing Finance Corporation                                            
 326 Fourth Street, Suite 504                                                  
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 586-3587                                                    
 POSITION STATEMENT:  Testified in opposition to HB 209.                       
                                                                               
 SAM KITO III, Special Assistant                                               
 Office of the Commissioner                                                    
 Department of Transportation                                                  
   and Public Facilities                                                       
 3132 Channel Drive                                                            
 Juneau, Alaska 998801-7898                                                    
 Telephone:  (907) 465-3904                                                    
 POSITION STATEMENT:  Testified on HB 209.                                     
                                                                               
 MICHAEL SAMSON, President                                                     
 Samson Electric                                                               
 P.O. Box 56888                                                                
 North Pole, Alaska 99705                                                      
 Telephone:  (907) 451-0252                                                    
 POSITION STATEMENT:  Testified in support of HB 209.                          
                                                                               
 JEFF ALLING, President                                                        
 Alcan Builders, Incorporated                                                  
 1326 Valley Drive                                                             
 North Pole, Alaska 99705                                                      
 Telephone:  (907) 456-1382                                                    
 POSITION STATEMENT:  Testified in support of HB 209.                          
                                                                               
 RUSS SCHWARTZ, President                                                      
 Associated General Contractors                                                
  of Alaska; Senior Manager                                                    
 Osborne Construction Company                                                  
 4273 Birch Lane                                                               
 Fairbanks, Alaska 99709                                                       
 Telephone:  (907) 456-7554                                                    
 POSITION STATEMENT:  Testified in support of HB 209.                          
                                                                               
 JUDY MONTGOMERY, Employee                                                     
 Associated General Contractors                                                
   of Alaska                                                                   
 4041 "B" Street                                                               
 Anchorage, Alaska 99503                                                       
 Telephone:  (907) 561-5354                                                    
 POSITION STATEMENT:  Testified in support of HB 209.                          
                                                                               
 JULIE DUQUETTE, Employee                                                      
 Osborne Construction                                                          
 458 Shannon Drive                                                             
 Fairbanks, Alaska 99701                                                       
 Telephone:  (907) 451-0079                                                    
 POSITION STATEMENT:  Testified in support of HB 209.                          
                                                                               
 HAROLD SKELTON                                                                
 1714 Roosevelt                                                                
 Fairbanks, Alaska 99709                                                       
 Telephone:  (907) 451-0079                                                    
 POSITION STATEMENT:  Testified in support of HB 209.                          
                                                                               
 TONY FAZIO, Co-owner and Vice President                                       
 Slayden Plumbing and Heating                                                  
 P.O. Box 55518                                                                
 North Pole, Alaska 99705                                                      
 Telephone:  (907) 488-3359                                                    
 POSITION STATEMENT:  Testified in support of HB 209.                          
                                                                               
 KEVIN DOUGHERTY                                                               
 Alaska Laborers Union                                                         
 2501 Commercial                                                               
 Anchorage, Alaska 99501                                                       
 Telephone:  (907) 276-1640                                                    
 POSITION STATEMENT:  Testified on HB 209.                                     
                                                                               
 CHARLES ELWOOD                                                                
 132 Charles Street                                                            
 Fairbanks, Alaska 99701                                                       
 Telephone:  (907) 451-9155                                                    
 POSITION STATEMENT:  Testified in support of HB 209.                          
                                                                               
 KARL HNILICKA                                                                 
 P.O. Box 7189                                                                 
 Fairbanks, Alaska 99707                                                       
 Telephone:  (907) 457-5205                                                    
 POSITION STATEMENT:  Testified on HB 209.                                     
                                                                               
 PAT REILLY, Owner                                                             
 Rain Proof Roofing Company                                                    
 2201 East 84th Court                                                          
 Anchorage, Alaska 99507                                                       
 Telephone:  (907) 344-5545                                                    
 POSITION STATEMENT:  Testified in support of HB 209.                          
                                                                               
 JOHN MacKINNON, Deputy Mayor                                                  
 City and Borough of Juneau                                                    
 1114 Glacier Avenue                                                           
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 321-2047                                                    
             (907) 58603902                                                    
 POSITION STATEMENT:  Testified on HB 209.                                     
                                                                               
 JASON JACKOVICH, Carpenter                                                    
 Osborne Construction                                                          
 4273 Birch Lane                                                               
 Fairbanks, Alaska 99709                                                       
 Telephone:  (907) 479-2441                                                    
 POSITION STATEMENT:  Testified in support of HB 209.                          
                                                                               
 JOHN BROWN                                                                    
 814 Austin                                                                    
 Fairbanks, Alaska 99701                                                       
 Telephone:  (907) 452-8131                                                    
 POSITION STATEMENT:  Testified on HB 209.                                     
                                                                               
 FLOYD SHEESLEY, Project Engineer                                              
 Osborne Construction                                                          
 P.O. Box 73370                                                                
 fairbanks, Alaska 99707                                                       
 Telephone:  (907) 451-0079                                                    
 POSITION STATEMENT:  Testified in support of HB 209.                          
                                                                               
 HOWARD WILSON                                                                 
 600 Auburn                                                                    
 Fairbanks, Alaska 99701                                                       
 Telephone:  (907) 451-0079                                                    
 POSITION STATEMENT:  Testified in support of HB 209.                          
                                                                               
 GARY DONOFRIO, Project Engineer                                               
 Osborne Construction                                                          
 1246 Richard Berry Drive                                                      
 Fairbanks, Alaska 99709                                                       
 Telephone:  (907) 452-6277                                                    
 POSITION STATEMENT:  Testified in support of HB 209.                          
                                                                               
 GARY NIESE                                                                    
 36 College Road, Suite 2-302                                                  
 Fairbanks, Alaska 99701                                                       
 Telephone:  (907) 458-0503                                                    
 POSITION STATEMENT:  Testified against HB 209.                                
                                                                               
 STEVE HOVENDEN                                                                
 360 Terrace Drive                                                             
 Fairbanks, Alaska 99712                                                       
 Telephone:  (907) 457-8624                                                    
 POSITION STATEMENT:  Testified against HB 209.                                
                                                                               
 DON ETHERIDGE, Representative                                                 
 Alaska State District                                                         
   Council Laborers                                                            
 710 West Ninth Street                                                         
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 586-3707                                                    
 POSITION STATEMENT:  Testified in HB 209.                                     
                                                                               
 ED FLANAGAN, Deputy Commissioner                                              
 Department of Labor                                                           
 P.O. Box 21149                                                                
 Juneau, Alaska 99802-1149                                                     
 Telephone:  (907) 465-2700                                                    
 POSITION STATEMENT:  Testified against HB 209.                                
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 97-49, SIDE A                                                            
 Number 0001                                                                   
                                                                               
 CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce                  
 Standing Committee to order at 3:30 p.m.  Members present at the              
 call to order were Representatives Rokeberg, Ryan, Sanders, Cowdery           
 and Hudson.  Representative Brice arrived at 4:25 p.m. and                    
 Representative Kubina arrived at 5:00 p.m.                                    
                                                                               
 HB 222 - ABANDONED,WRECKED,OR JUNK VEHICLES                                   
                                                                               
 Number 0108                                                                   
                                                                               
 CHAIRMAN ROKEBERG explained that on the House floor he passed out             
 bill packages relating to HB 222, "An Act relating to abandoned,              
 wrecked, or junk vehicles."  He said in the information he gave the           
 committee he requested that the bill be waived from committee if              
 everybody would agree to that.                                                
                                                                               
 REPRESENTATIVE JOHN COWDERY made a motion to waive HB 222 out of              
 the committee.  Hearing no objection, HB 222 was waived from the              
 House Labor and Commerce Committee.                                           
                                                                               
 CSSB 89 - BARBERS AND HAIRDRESSERS                                            
                                                                               
 Number 0178                                                                   
                                                                               
 CHAIRMAN NORMAN ROKEBERG announced the committee would hear CSSB
 89(L&C), "An Act relating to regulation of barbers and                        
 hairdressers; extending the termination date of the Board of                  
 Barbers and Hairdressers; and providing for an effective date."  He           
 stated that the committee had basically heard about this bill                 
 before from the Board of Barbers and Hairdressers.  He indicated              
 the committee has had a hearing on the House version of this                  
 legislation and were waiting for the Senate version to come over.             
 The Senate version is consistent with the activities that happened            
 in House Labor and Commerce Committee.  He asked if there were any            
 questions.  Hearing none, he asked what the will was of the                   
 committee.                                                                    
                                                                               
 REPRESENTATIVE BILL HUDSON moved and asked unanimous consent to               
 move CSSB 89(L&C), Version E, out of committee with individual                
 recommendations and with the accompanying zero fiscal note.                   
 Hearing no objection, CSSB 89(L&C) moved out of the House Labor and           
 Commerce Committee.                                                           
                                                                               
 CSSB 91(STA) AM - PHYSICAL THERAPY AND OCCUPATIONAL THERAPY                   
                                                                               
 Number 0231                                                                   
                                                                               
 CHAIRMAN ROKEBERG announced the next order of business would be               
 CSSB 91(STA) am, "An Act relating to the regulation of physical               
 therapists, physical therapy assistants, occupational therapists,             
 and occupational therapy assistants; extending the termination date           
 of the State Physical Therapy and Occupational Therapy Board; and             
 providing for an effective date."  He noted that the committee has            
 already reviewed this legislation.                                            
                                                                               
 REPRESENTATIVE HUDSON moved and asked unanimous consent to move               
 CSSB 91(STA) am, Version F, out of committee with individual                  
 recommendations and the accompanying zero fiscal note.  Hearing no            
 objection, CSSB 91(STA) am was moved out of the House Labor and               
 Commerce Committee.                                                           
                                                                               
 CHAIRMAN ROKEBERG called for a brief at-ease at 3:35 p.m.  He                 
 called the meeting back to order at 3:40 p.m.                                 
                                                                               
 HB 178 - UNIFORM COMMERCIAL CODE:LETTERS OF CREDIT                            
                                                                               
 Number 0311                                                                   
                                                                               
 CHAIRMAN ROKEBERG announced the committee would address HB 178                
 "An Act relating to letters of credit under the Uniform Commercial            
 Code; and providing for an effective date."  He said Representative           
 Ryan was the chairman of an informal subcommittee on HB 178.  He              
 asked Representative Ryan to make some recommendations to the                 
 committee.                                                                    
                                                                               
 Number 0331                                                                   
                                                                               
 REPRESENTATIVE JOE RYAN said the first amendment would be on page             
 5, line 2, of Version A.  Section 45.05.106(d) would be deleted               
 which reads, "Notwithstanding a modification or revocation of a               
 revocable credit, a person authorized to honor or negate, under the           
 terms of the original credit, is entitled to reimbursement for or             
 honor of a draft or demand for payment duly honored or negotiated             
 before receipt of notice of the modification or revocation, and the           
 issuer, in turn, is entitled to reimbursement from its customer."             
                                                                               
 REPRESENTATIVE RYAN said, "The way that is set up here, except with           
 the subsections of this, we've allowed a person to, in effect,                
 arbitrarily go ahead and decide that they don't want to pay the               
 letter of credit.  What we want is these things if the documents              
 are presented the way they're supposed to, they have the proper               
 signatures, they have the stamps from the government authorities              
 that require they have -- you have a document that's subject to               
 payment.  And this is the whole purpose in international trade of             
 being able to get your money because the time value of money being            
 what it is, someone holding you up can cause you to have the                  
 biggest problem you've had and for going out of business."                    
                                                                               
 Number 0490                                                                   
                                                                               
 REPRESENTATIVE RYAN said to insert 45.05.105(c) which reads,                  
 "Unless otherwise agreed, after a revocable credit is established,            
 it may be modified or revoked by the issuer without notice to or              
 consent from the customer or beneficiary."  Representative Ryan               
 said, "The person who would revokes the letter of credit if they              
 haven't met the criteria -- you've established this thing and the             
 banker is sending millions of dollars across for something and you            
 don't get the paperwork back the way it's supposed to be, you sure            
 don't want to pay because then you have to sue, internationally, to           
 try to get your money back."  He indicated this would ensure that             
 these people are going to get paid in a timely manner when they're            
 supposed to.                                                                  
                                                                               
 Number 0556                                                                   
                                                                               
 REPRESENTATIVE COWDERY asked if this would still allow in the                 
 letter of credit to the issuer to the letter of credit to stop                
 payment for legitimate reasons.                                               
                                                                               
 REPRESENTATIVE RYAN said after a revocable credit is established,             
 it may be modified or revoked by the issuer without notice to or              
 consent from the customer or beneficiary which would allow you to             
 make the stop payment.  He explained you don't have to go to the              
 person and say, "Do you agree that I stop this letter?"  This                 
 basically allows a stop payment.                                              
                                                                               
 Number 0608                                                                   
                                                                               
 REPRESENTATIVE RYAN indicated the next amendment would be on page             
 5, line 14, following the word "Formal" insert "and other."  He               
 explained this is about formal requirements and read, "A letter of            
 credit, confirmation, advice, transfer, amendment or cancellation             
 may be issued in any form that is record and is authenticated by a            
 signature or under the agreements and so forth."  He informed the             
 committee that besides the original agreement, there may be other             
 agreements.  There may be side agreements.  He said we want the               
 latitude for the person making the letter of credit to put whatever           
 agreements that are necessary in that letter.  This gives them the            
 flexibility rather than sticking with a formal agreement.                     
 Representative Ryan said not all situations are dealt with on a               
 formal basis.  He said following "requirements" insert "(a)."                 
                                                                               
 Number 0700                                                                   
                                                                               
 REPRESENTATIVE RYAN informed the committee that the next amendment            
 is on page 5, line 15, following "authenticated" insert, "by the              
 signature of the issuer, the signature of the beneficiary, the                
 signatures of two bank officers of the issuer if the issuer is a              
 bank, and the signature of the issuer if the issuer is not a bank."           
 He explained it says the form is a record, it's authenticated and             
 we're trying to show them how this is authenticated by the person             
 who is issuing it, beneficiary of the issuer or two bank officers             
 acting on behalf of the issuer.                                               
                                                                               
 Number 0745                                                                   
                                                                               
 REPRESENTATIVE COWDERY questioned who other than a bank issues                
 letters of credit.                                                            
                                                                               
 REPRESENTATIVE RYAN responded, "Trading houses who deal in                    
 international trading, brokerage houses who deal with vast                    
 commodities of (indisc.) and/or petroleum, gold, diamonds,                    
 currencies, people who actually have the things themselves and have           
 the financial resources."                                                     
                                                                               
 REPRESENTATIVE COWDERY questioned who issues the common letter of             
 credit.                                                                       
                                                                               
 REPRESENTATIVE RYAN said it's usually a bank, but there are other             
 people, especially those who deal in gold.  They change currency              
 for gold.                                                                     
                                                                               
 Number 0810                                                                   
                                                                               
 REPRESENTATIVE RYAN indicated the next amendment is on page 5,                
 delete lines 17 through 19.  He explained that what is being                  
 deleted are the provisions by a signature or under the agreement.             
 He said this is covered in the previous part of the amendment.                
                                                                               
 REPRESENTATIVE RYAN said, "Now we're talking about talking about              
 the time limits when we insert this, `A letter of credit must                 
 contain a provision that if an issuer does not honor a letter of              
 credit within the time established under AS 45.05.108(b), even if             
 a notice  of discrepancy is given, an impartial third party shall             
 determine the amount of any interest and damages that are owed to             
 the beneficiary.  The provision must also establish procedures for            
 carrying out the provision, including how the third party is                  
 selected.'"  He pointed out that this is similar to a dispute                 
 resolution and a lot of contracts that are done under an                      
 international basis, you have to find out a law that is common to             
 all the jurisdictions to resolve the dispute and it's usually added           
 in a contractual arrangement.  He said, "If you do not redeem this            
 letter and you've received the funds and you don't honor it, you're           
 sitting with the money and the longer you can keep from honoring              
 that, the more money you're going to make on the float from the               
 money you're keeping.  So this gives a person a basis to have an              
 impartial third party decide whether you're claim is justified or             
 not, you should be paid and then you get to find out that -- keep             
 the interest and/or the damages that were caused by this person not           
 honoring this letter of credit."  He noted most of these things are           
 done by electronic transfer and the person has the money.  They               
 just want to sit on it awhile and tell you why they don't want to             
 honor the letter and in the meantime, they're making a lot of money           
 by doing that.  He said this would be a little more equitable for             
 people to get prompt payments so they can continue to conduct                 
 business.                                                                     
                                                                               
 Number 0959                                                                   
                                                                               
 REPRESENTATIVE RYAN informed the committee the next amendment would           
 be to delete page 5, line 27, through page 6, line 2, which reads             
 "(b) After a letter of credit is issued, rights and obligations of            
 a beneficiary, applicant, confirmer, and issuer are not affected by           
 an amendment or cancellation to which the beneficiary, applicant,             
 confirmer, or issuer has not consented, except to the extent the              
 letter of credit provides that the letter of credit is revocable or           
 that the issuer may amend or cancel the letter of credit without              
 the consent."  He informed the committee that is not a good                   
 business practice.  When you set up a letter of credit, it is                 
 usually set up on terms that have previously been negotiated.  He             
 again read the amendment and said it only leaves one thing saying             
 it provides that it is revokable.  Representative Ryan said a lot             
 of the times there are a lot of amendments made to the disposition            
 afterwards because situations change.  I could be a large commodity           
 purpose and all the commodities can't be delivered at one time such           
 as with large amounts of currencies.  He said these things are paid           
 for in what is called a "tronch."  You may have a $1 billion                  
 currency transaction, most banks don't have a liquidity to come up            
 with $1 billion at one time, so they will do it in tronches of                
 perhaps $250 million.  Representative Ryan said there are access              
 and confirmation codes.  There are a number of things that have to            
 happen in a sequence.  By doing this in tronches, it may take three           
 or four months to make everything work.  He said, "Then you would             
 modify, you would make an agreement.  And what they're saying here            
 is that you're rights and so forth are going to be -- once that's             
 issued you're rights are going to be -- unless a letter is                    
 revokable, the issuer may amend or cancel a letter of credit                  
 without consent.  Well, if I've got all this money hanging out                
 there and it's half in process of being - the deal being completed,           
 I don't want anybody revoking that letter of credit.  I want to be            
 able to have the ability to make what adjustments are necessary to            
 make this deal go through."                                                   
                                                                               
 Number 1176                                                                   
                                                                               
 REPRESENTATIVE RYAN indicated the next change is on page 7, line 7            
 through 14, delete, "An issuer has a reasonable time after                    
 presentation, but not beyond the end of the seventh business day of           
 the issuer after the day of the issuer's receipt of documents to              
 honor the presentation;".  He gave the following example, "I would            
 personally love to be able to resign from this legislature and to             
 receive the amounts of money that are received in letters of credit           
 and hold on to them for seven days and invest that money for seven            
 days and I wouldn't have to do anything for the rest of my life               
 except sail around in my 100 foot sailboat - green water, white               
 beaches."  He said holding someone's money for seven days without             
 paying them for it is outright theft.  This would make sure that              
 the banks dealing with this are able to make their interest                   
 payments to their depositors and, therefore, to keep all the rest             
 of the return they make on the money, because on the side business            
 of (indisc.) letters of credit, they're sitting there getting the             
 interest.  Representative Ryan said domestically, the money has               
 been wire transferred and when you make the presentation of                   
 documents, there is no reason for anybody to hold on to your money            
 for seven days.  In international transactions, federal                       
 requirements are three days and anything longer than three days,              
 you should be able to present the documents and receive the money             
 without the bank having a period of time above those three days to            
 hold you're money.  He indicated wording should be inserted which             
 would read, "(b) Unless the letter of credit provides for a                   
 different time, after receipt of documents, an issuer shall honor             
 the presentation, or give notice to the presenter of discrepancies            
 in the presentation, when demand is made for honor of the issuer is           
 located in the United States, or within three days after receipt of           
 the documents if the issuer is not located in the United States."             
 He said the subcommittee felt this was reasonable as you want to be           
 paid when you want to be paid.                                                
                                                                               
 Number 1315                                                                   
                                                                               
 REPRESENTATIVE RYAN explained the next amendment is on page 11,               
 line 10, following "transferable" insert "or assignable, which may            
 include assignment of proceeds under AS 45.05.114,".  He referred             
 to any document that has a value and said you can assign it to                
 another individual for payment and move on about your business.  He           
 said they wanted the flexibility of transferrable or assignable.              
 Representative Ryan read from 45.05.114, "Issuer's duty and                   
 privilege to honor; right to reimbursement.  (a) An issuer must               
 honor a draft or demand for payment which complies with the terms             
 of the relevant credit regardless of whether the goods or documents           
 conform to the underlying contract for sale or other contract                 
 between the customer and the beneficiary.  The issuer is not                  
 excused from honor of the draft or demand by reason of an                     
 additional general term that all documents must be satisfactory to            
 the issuer, but an issuer may require that specified documents must           
 be satisfactory to it."  Representative Ryan explained another                
 common way to hang onto money and keep it from being paid is to               
 say, "Well, you're paperwork is not quite right, you're going to              
 have to go and do something else."                                            
                                                                               
 Number 1436                                                                   
                                                                               
 REPRESENTATIVE RYAN explained the next change is on page 11, line             
 14, after the word "if" insert "the transfer or assignment would              
 violate applicable law."                                                      
                                                                               
 Number 1450                                                                   
                                                                               
 REPRESENTATIVE RYAN referred the committee members to page 11,                
 lines 15 through 20.  He said, "Since we put this extra language in           
 there, we don't feel that this stuff is necessary.  So it cleans up           
 that portion."                                                                
                                                                               
 Number 1468                                                                   
                                                                               
 REPRESENTATIVE RYAN said on page 11, line 22, following "(a)"                 
 delete "A", which is a subsection, and insert "If allowed by the              
 letter of credit under AS 45.05.112, a".                                      
                                                                               
 Number 1502                                                                   
                                                                               
 REPRESENTATIVE RYAN informed the committee the last change is on              
 page 12, line 3, following "issuer" insert "and the beneficiary".             
 He said this protects the issuer and the beneficiary.                         
                                                                               
 Number 1538                                                                   
                                                                               
 CHAIRMAN ROKEBERG said it is not his intention to move the bill as            
 the committee members just received the proposed amendment and he             
 would like everybody to have an opportunity to understand it.  He             
 said it is his intent to bring the bill back up the following                 
 Wednesday.                                                                    
                                                                               
 Number 1637                                                                   
                                                                               
 ART PETERSON, Uniform Law Commissioner, State of Alaska, came                 
 before the committee to testify.  He noted he is also an attorney             
 in private practice.  Mr. Peterson indicated Representative Ryan              
 didn't contact him, any of the other uniform law commissioners or             
 the director of the Division of Banking.  He said HB 178 is a major           
 piece of legislation of significance around the country and it is             
 currently being enacted regularly throughout the country.  Mr.                
 Peterson said, "For Alaska to go off in its own tangent when we are           
 not simply addressing unique about Alaska - something to address              
 our own situation - is probably not a good idea.  I have kind of a            
 negative attitude toward a set of amendments like this."                      
                                                                               
 MR. PETERSON continued, "I noticed that Representative Ryan was               
 checking the statute book to read to you some of the provisions               
 when there was a cross-reference to some other section.  In fact,             
 the sections referred to are sections in this like that Section 114           
 that we were just looking at, for example, is repealed and                    
 reenacted in the bill.  So you don't want to read the text that's             
 in the book when you read the cross-reference that's in the bill,             
 to the other section that's in the bill.  You want to read that               
 section for the current text.  And that's subsection `(C)' versus             
 `(D)' that we started out with in this set of amendments - same               
 situation there.  The cross-reference is in the bill, not in the              
 book.  So with that warning, as you study this matter, you might              
 want to keep that in mind."  Mr. Peterson said he would like to               
 defer to Mr. Kurtz or Mr. Kirkpatrick.                                        
                                                                               
 Number 1783                                                                   
                                                                               
 L. S. "JERRY" KURTZ, JR., Uniform Law Commissioner, State of                  
 Alaska, testified via teleconference from Anchorage.  He informed             
 the committee members he practices law maybe 10 percent of the                
 time, but he is otherwise retired.  Mr. Kurtz said he hasn't seen             
 the amendments.  He said he would second the comments of Mr.                  
 Peterson.  Mr. Kurtz said it sounds to him that a number of the               
 provisions are founded upon very good ideas that Representative               
 Ryan has in recognition of real problems.  He said, "That drawing             
 of -- in the fashion they've drawn will simply make credit more               
 expensive and harder to get for anybody in Alaska seeking a letter            
 of credit.  I think I've heard enough about the amendments to know            
 that if I were representing any bank, which I no longer do but did            
 for 25 years, that I would advise them to oppose the amendments.              
 And if they were involved in trying to issue a letter of credit               
 under them, I would be telling them to be a whole lot more cautious           
 and charge more for the letter of credit and be sure they had an              
 attorney looking at the terms of the situation very carefully since           
 Alaska no longer had the uniform act."                                        
                                                                               
 Number 1872                                                                   
                                                                               
 CHAIRMAN ROKEBERG asked Mr. Kurtz if the bill was brought before              
 the committee the following Wednesday, would that be adequate time            
 for him to review the amendments.                                             
                                                                               
 MR. KURTZ indicated he would have time to review the amendments by            
 that time.  He noted that Mr. Peterson's suggestion to have direct            
 contact with whoever put the amendments together is a very good               
 suggestion.                                                                   
                                                                               
 Number 1913                                                                   
                                                                               
 CHAIRMAN ROKEBERG asked Mr. Kurtz if he could make any                        
 recommendations of any banking institutions and a specific person             
 the committee could speak to that may have a vested interest in the           
 legislation.                                                                  
                                                                               
 MR. KURTZ suggested the committee speak to Wes Coyner who                     
 represents banks.  Also, the committee may want to speak to John              
 Beard, Attorney, who does most a lot of work for the First National           
 Bank of Anchorage.                                                            
                                                                               
 Number 1984                                                                   
                                                                               
 DOUGLAS LOTTRIDGE, Assistant Attorney General, Commercial Section,            
 Civil Division, Department of Law, spoke to the committee via                 
 teleconference from Anchorage.  He said he is working with Mr.                
 Kurtz on the issue and has been in touch with Mr. Peterson.  Mr.              
 Lottridge said in his review of the bill, there has been a                    
 considerable amount of time spent by the drafters trying to balance           
 the interests of both the issuers and the beneficiaries under the             
 letters of credit.  For instance, the time period of seven days was           
 balanced.  In an earlier bill there was a time period of three                
 days, but there wasn't a specific requirement that the notice be              
 given by the issuer of what was wrong with it.  Mr. Lottridge said,           
 "In the commentary of that particular section, the commentator                
 suggests whether it's a practical matter or not the banks are not             
 automatically or the issuers are not automatically allowed to hold            
 it for seven days.  It says, `Whatever is a reasonable time or                
 seven days.'  And something much less than seven may be reasonable.           
 I understand the practicalities."  Mr. Lottridge said he would take           
 time to review the amendments.                                                
                                                                               
 CHAIRMAN ROKEBERG asked Mr. Lottridge to provide some written                 
 comments relating to the Uniform Act and the commentary as to the             
 issue of the three-day period.                                                
                                                                               
 Number 2090                                                                   
                                                                               
 WILLIS KIRKPATRICK, Director, Division of Banking, Securities and             
 Corporations, Department of Commerce and Economic Development, came           
 before the committee.  He indicated he doesn't have any definite              
 comments to make on letters of credit other than to say as far as             
 financial institution regulation, his division examines letters of            
 credit probably more indepth than the loans that banks have on                
 their books.  He stated one of the reasons that letters of credit             
 are so important to the division is that in a lending obligation,             
 a borrower will draw down on a loan as whatever he's borrowing his            
 money for progresses.  In a letter of credit, especially if they              
 exceed a year, a lot of things can happen within that year -                  
 collateral can move, economies can change, borrowers can go broke.            
 Mr. Kirkpatrick said, "One bank I can talk about because it doesn't           
 exist, United Bank of Alaska that issued a letter of credit in the,           
 I believe it was in the reconstruction of World War II fighter                
 planes in Japan.  And management changed at the bank and the new              
 management came to realize that they had made a mistake on that               
 issuance of a letter of credit, their collateral was out of the               
 country at that particular time.  And the bank lost it, the bank              
 refused to honor the letter of credit.  The court said, `Sorry                
 Charlie, you made the obligation.  The obligation was on good                 
 faith.  You need to disburse on it,' and they did.  And it was a              
 loss."                                                                        
                                                                               
 MR. KIRKPATRICK said based on contingencies that are not always at            
 the control of the financial institution, he would take a very                
 close look at those obligations.  He indicated it's in the                    
 department's regulations, so that there won't be a                            
 misunderstanding, they will examine and charge those off as they              
 see fit as to whether they are substandard, doubtful or lost.  As             
 regulators, they take a close look at those types of obligations.             
 They look at the instruments on a basis as far as an obligation               
 contract.  In that light, they rely on the Uniform Commercial Code            
 for those types of readings as to what is an obligation on a                  
 contract.                                                                     
                                                                               
 Number 2227                                                                   
                                                                               
 REPRESENTATIVE RYAN asked if it is not common practice when people            
 are setting up these kinds of transactions that they exercise due             
 diligence as far as with whom they're setting up the contracts in             
 that the person is capable of performing.                                     
                                                                               
 MR. KIRKPATRICK indicated that is a common practice and that is               
 what his division examines.  He said they like to see letters of              
 credit backed by cash or better.  It is always nice to have a                 
 certificate of deposit for the same amount of money that is issued            
 in a letter of credit.  Mr. Kirkpatrick said they run into problems           
 with the larger financial institutions.  He said it could be very             
 complex and involved as you get down to the purpose that an                   
 obligation has created.  Generally, the businesses are well                   
 established and as a normal course of business, it normally has a             
 history behind it.  He noted he would forward some names to the               
 committee of people in Alaska who deals with letters of credit on             
 a more of a day to day basis.                                                 
                                                                               
 Number 2364                                                                   
                                                                               
 CHAIRMAN ROKEBERG said the bill would be held over and discussed              
 again the following Wednesday.                                                
                                                                               
 HB 209 - PROJECT LABOR AGREEMENTS ON PUB CONSTR.                              
                                                                               
 Number 2380                                                                   
                                                                               
 CHAIRMAN ROKEBERG announced the committee would address HB 209,               
 "An Act regulating the use of pre-hire project labor agreements for           
 public construction projects by the state and political                       
 subdivisions of the state."                                                   
                                                                               
 Number 2422                                                                   
                                                                               
 REPRESENTATIVE AL VEZEY, sponsor of HB 209, said he introduced the            
 bill because we are dealing with an area of the labor law that is             
 still evolving in the country and courts.  It is a trend that                 
 started in the 1980s with a case that became known as the Boston              
 Harbor case.  There have been other cases since that time and there           
 are still matters that are being adjudicated in the courts.                   
 Representative Vezey said, "In essence, what we saw over the decade           
 since World War II is that labor unions found themselves losing               
 market share.  And like all economic institutions, they came to the           
 realization that if they couldn't win in the market place, that it            
 is much easier to compete if you get a legislative grant of limited           
 competition.  This is what they succeeded in doing in the Boston              
 Harbor case involving a public work's project.  Since this time,              
 this sort of subject of where political subdivisions mandate that             
 work be performed under a...."                                                
                                                                               
 TAPE 97-49, SIDE B                                                            
 Number 0001                                                                   
                                                                               
 REPRESENTATIVE VEZEY continued, "...bill was put together to                  
 address the supreme court's decision in the Boston Harbor case and            
 that is that a political entity may enter into a project labor                
 agreement (PLA).  That is an agreement that requires a collective             
 bargaining agreement with a bargaining unit, such as typically                
 referred to as a labor union, if there was a legitimate public                
 purpose."                                                                     
                                                                               
 REPRESENTATIVE VEZEY said what he is attempting to do by                      
 introducing the bill is to lay out what criteria has to be                    
 evaluated to determine that it is in the public's best interest to            
 limit competition in this manner.  He explained the bill is very              
 generic and wide open.  There are some very simple requirements               
 that an elected or government body would have to show were being              
 met before they could say, "It is in the public's interest to                 
 require that this be done under a project labor agreement."  He               
 noted the requirements are laid out in the bill and he would be               
 happy to review them if the committee wishes.                                 
                                                                               
 Number 0105                                                                   
                                                                               
 DONNA C. WILLARD, Attorney, came before the committee to testify on           
 HB 209.  She noted she has been involved in matters concerning                
 project labor agreements (PLAs) in Alaska for at least the last               
 four years.  Ms. Willard indicated there are both good and bad                
 PLAs.  She said one of the good ones was utilized for the building            
 of the Denver International Airport where union and nonunion                  
 workers negotiated with the city and county of Denver and produced            
 an agreement where labor lived amicably.  Nonunion workers were not           
 forced to join unions in order to hold jobs on that project and               
 nonunion contractors were not forced to sign labor agreements in              
 order to prosecute work on the project.                                       
                                                                               
 MS. WILLARD said the bad PLAs have been seen surfacing in Alaska              
 over the last five or six years.  Basically, what they generally              
 provide is that in order for a nonunion contractor, if he becomes             
 the low bidder, to work on a public construction project in this              
 state he must sign a labor agreement, which is a PLA, with the                
 effective unions.  He is generally not allowed to hire his own                
 wealth of employees other than a few top senior managers and he               
 must go to the union hiring halls in order to get his labor for               
 that project.  Ms. Willard explained this not only disadvantages              
 the nonunion contractor who is unfamiliar with union labor rules              
 and other aspects of unionism, but also saddles him with an                   
 ineffective unknown labor force for the particular project.  She              
 said what it does is stifle competition.                                      
                                                                               
 Number 0212                                                                   
                                                                               
 MS. WILLARD pointed out a case which is currently before the                  
 supreme court, which was won in the lower court, is entitled                  
 Lampkin v. Fairbanks North Star Borough.  In that case, the court             
 ruled that the PLA was unconstitutional as it violates the equal              
 protection clause of the Alaska Constitution and it constituted a             
 taking by requiring nonunion workers to join a union and pay into             
 pension funds from which they would never recoup any benefits.  She           
 said such agreements that contain these provisions violate the                
 procurement codes of the state of Alaska and, in this case, the               
 Fairbanks North Star Borough.  Ms. Willard explained the whole idea           
 of procurement codes is to ensure that maximum open competition be            
 allowed for public construction projects in order to promote public           
 interest, to get the best bid and lowest bid from the most                    
 responsible bidder.  When these types of provisions are                       
 incorporated into specifications for construction contracts, you              
 generally drive away the nonunion contractor which lowers the level           
 of competition.  She said the courts that have considered this from           
 the aspect of the procurement codes in respective states, have                
 generally found that, except in exceptional circumstances, such               
 agreements violate the procurement codes and only in exceptional              
 circumstances should they be allowed to override the procurement              
 code provisions concerning maximum competition.                               
                                                                               
 MS. WILLARD said it seems to her that in a state, out of all of the           
 states in the union, we pride ourselves in the right and freedom of           
 the individual to the maximum extent possible.  It is absolutely an           
 anathema to say, with respect to the expenditure of public funds,             
 that there is condition that if you want work on a public                     
 construction contract, you must join a union even though you long             
 ago exercised your free choice and decided not to do so.                      
                                                                               
 MS. WILLARD said all HB 209 does is level the playing field.  It              
 make it fair from both sides.  Everyone gets to bid and may the               
 best person win, whether it is a union or nonunion contractor,                
 whether they employ union workers or nonunion workers.  It is a               
 uniform set of rules which is in the best interest and uphold the             
 highest standards that we have in Alaska.                                     
                                                                               
 Number 0360                                                                   
                                                                               
 REPRESENTATIVE COWDERY asked Ms. Willard to define "state and                 
 political subdivisions."                                                      
                                                                               
 MS. WILLARD said, "Literally it means the state, the boroughs, the            
 school districts, the public components in this state and it goes             
 no further."                                                                  
                                                                               
 Number 391                                                                    
                                                                               
 REPRESENTATIVE COWDERY asked if the legislation has a bearing on              
 the interties.                                                                
                                                                               
 MS. WILLARD said it appears that somehow the municipality of                  
 Anchorage has, without public notice or assembly input, just signed           
 a memorandum of understanding with the International Brotherhood of           
 Electrical Workers (IBEW) agreeing, in terms of its rule with                 
 respect of the intertie, to have the IBEW as the exclusive union-             
 only contractor.  She noted that both the Chugach Electric                    
 Association and Matanuska Electric Association have revoked those             
 agreements because they have determined, through their own studies,           
 that if the intertie projects go union only, we are talking about             
 millions of dollars in added expense to get the north and south               
 interties built.                                                              
                                                                               
 Number 0484                                                                   
                                                                               
 REPRESENTATIVE COWDERY asked Ms. Willard that if the municipality's           
 agreement were to be challenged, would it hold up through the                 
 system.                                                                       
                                                                               
 MS. WILLARD said, "My understanding of the way that the boroughs              
 operate, and I did a fair amount of research in this because of the           
 situation I ran into in Fairbanks, that I don't see where the mayor           
 got the authority under the state statutes with respect to borough            
 powers to without assembly approval enter into such an agreement,             
 but I guess that's going to be litigated."                                    
                                                                               
 REPRESENTATIVE COWDERY asked if the bill would restrict anybody               
 involved in the construction business from bidding or procuring               
 jobs.                                                                         
                                                                               
 MS. WILLARD indicated it wouldn't restrict anybody.  She said it              
 sets up a uniform set of standards that everyone will abide by on             
 public construction contracts in Alaska, be it union or nonunion.             
                                                                               
 Number 0539                                                                   
                                                                               
 JOHN BITNEY, Alaska Housing Finance Corporation (AHFC), came before           
 the committee to testify.  He said AHFC is brought in under the               
 bill by the definition section where public corporations are                  
 included in the definition of "state," on page 3, line 15.                    
                                                                               
 MR. BITNEY referred to page 2, lines 2 through 23, and said there             
 are six provisions that requires them to do a findings and analysis           
 section before they do any kind of a project labor agreement.  He             
 explained that in projects they do through financing, where they              
 have a private developer or are basically paying for the cost to do           
 an upgrade or construction with the use of AHFC money or housing              
 and urban development (HUD) money on a public housing project, one            
 of the things they've been doing is awarding points during the                
 procurement process for bidders who are coming in with PLAs to                
 provide some job training aspects.  For example, AHFC is trying to            
 seek a federal grant to allow a contractor to partner up with the             
 Private Industry Council in Fairbanks to provide job training                 
 opportunities for people who are going to be working on a public              
 housing project.  He noted they are also doing the same thing in              
 Anchorage with two projects that are financed with a private                  
 developer where AHFC has asked them, as part of their financing               
 agreement, to provide that a PLA to team up with the YMCA and the             
 carpenter's union to offer job training placement on a pre-                   
 apprenticeship program.  Mr. Bitney said AHFC would like to                   
 continue to be able to provide these kinds of things with their               
 projects.                                                                     
                                                                               
 Number 0659                                                                   
                                                                               
 MR. BITNEY referred to the first provision on page 2, line 8, and             
 said AHFC would be required, before they could do a PLA, to show              
 that the agreement would result in greater employment                         
 opportunities.  He said they could easily do that for each of the             
 cases, however, in the second provision on line 12, they would be             
 required to show that this would result in significant identifiable           
 cost savings.  He stated job training costs money and they believe            
 that with those two items in the bill, it would prohibit or                   
 extremely limit AHFC's ability to do those kinds of programs.                 
                                                                               
 Number 0690                                                                   
                                                                               
 MR. BITNEY referred to page 2, line 20, item 5, and said they could           
 only do a PLA if the size and complexity of the project is                    
 significantly greater than public projects ordinarily constructed             
 by the state, which would be AHFC.  He said the language appears to           
 be ambiguous.  Mr. Bitney noted their projects regularly and                  
 annually range in size from thousands of dollars to millions of               
 dollars.  He state that AHFC is opposed to HB 209 as it is                    
 currently written.                                                            
                                                                               
 Number 0722                                                                   
                                                                               
 REPRESENTATIVE COWDERY said it would seem to him that the best                
 qualified contractor that gives the state the best benefit, in hard           
 dollars, should be the one that gets the bid, whether or not they             
 have a social program that AHFC's chosen contractor abides to or              
 doesn't abide to.                                                             
                                                                               
 Number 0823                                                                   
                                                                               
 MR. BITNEY said it is his understanding that in terms of the                  
 contractor for the projects, they don't necessarily have to be                
 union.  He said there is a criteria in AHFC's award process where             
 they receive additional points if they have this job training                 
 piece.  Mr. Bitney noted it is not a requirement that it                      
 necessarily be union, but in these cases that is what is happening.           
                                                                               
 REPRESENTATIVE COWDERY referred to the point process that AHFC uses           
 to evaluate the bids and said it seems to him that is not really a            
 level playing field.                                                          
                                                                               
 Number 0881                                                                   
                                                                               
 REPRESENTATIVE VEZEY said he doesn't believe Mr. Bitney described             
 pre-hire agreement or a PLA.  He said there is a training program             
 as part of AHFC's procurement.                                                
                                                                               
 MR. BITNEY responded, "I will immediately seek legal council if               
 that is indeed the case, but our understanding in reading the bill            
 and looking at it -- just my looking at it was I assumed, and I               
 will check that, that those kinds of things as far as our process             
 coming in and being submitted as part of the application that that            
 would fall under this definition, but I will double check that                
 immediately."                                                                 
                                                                               
 Number 0958                                                                   
                                                                               
 CHAIRMAN ROKEBERG said Mr. Bitney indicated that within the                   
 financial terms of their lending agreements on particular projects            
 that they will design job training programs.                                  
                                                                               
 MR. BITNEY indicated that is correct.                                         
                                                                               
 CHAIRMAN ROKEBERG said, "I'm really rather disturbed to hear that             
 because it seems to me that there is an extraordinary problem for             
 potential abuse if you're going to be inserting any kind of a                 
 refinancing requirement -- financing agreement that requires job              
 training.  That could really be subject to quite a bit of                     
 discussion and it leaves a lending institution an incredible amount           
 to dictate what has to be done as a condition of a loan.  Could you           
 expand on that a little bit?"                                                 
                                                                               
 MR. BITNEY explained that Brighten Park in Anchorage is a 80 unit             
 multifamily complex that is being constructed at Bragaw Street and            
 the Glen Highway.  He told the committee members that a                       
 representative of AHFC went to the community council meetings in              
 the area before the loan was approved.  They received a lot of                
 public input.  There was concern about adding more multifamily                
 units in the Mountain View area of Anchorage.  Mr. Bitney said the            
 agreement to try and provide some job training as part of the                 
 project was something that came up and it was taken to the board              
 for approval and was done so per an agreement with the developer.             
                                                                               
 CHAIRMAN ROKEBERG asked if that was the only project where this has           
 been done.                                                                    
                                                                               
 MR. BITNEY responded, "Mr. Chairman, in the situation where it's a            
 financing, that is correct."                                                  
                                                                               
 Number 1091                                                                   
                                                                               
 SAM KITO III, Special Assistant, Office of the Commissioner,                  
 Department of Transportation and Public Facilities (DOT/PF), came             
 before the committee to testify.  He said DOT/PF currently is not             
 entered into nor have they worked with any PLAs.  The department's            
 interest in HB 209 is to preserve the ability to, in the future,              
 work with PLAs if that becomes a viable option in project                     
 contracting for the department.                                               
                                                                               
 MR. KITO pointed out that a concern DOT/PF has with the legislation           
 is on page 2.  As Mr. Bitney commented, the department believes               
 those sections would be extremely subjective and potentially                  
 restrictive.  It would be difficult to adequately demonstrate                 
 greater employment opportunities, significant identifiable cost               
 savings, greater safety, significant labor unrest and items such as           
 size and complexity of a project.  He noted the size and complexity           
 is independent.  Subsection (a) would make it extremely difficult             
 to ever enter into a project labor agreement.                                 
 Number 1224                                                                   
                                                                               
 MICHAEL SAMSON, President, Samson Electric, testified via                     
 teleconference from Fairbanks in support of HB 209.  He informed              
 the committee he has reviewed the bill, it is a well written bill             
 and is very fair.  He said the PLAs he has run into up to this                
 point are completely one-sided.  They are nothing more than                   
 political paybacks for organized labor in this state for their                
 election contributions.  They serve nothing more than to line the             
 pockets of the unions and they do not help the union workers.  Mr.            
 Samson pointed out that his company is nonunion and employs between           
 20 to 80 electricians.  He said they do not discriminate as they              
 hire union or nonunion.  Mr. Samson explained the nonunion workers            
 that he employs have had the opportunity to join the union and                
 chose not to.  They choose to deal with their wages as they see fit           
 and the pension money they receive from the Davis-Bacon Act is                
 theirs.  If they work one week and leave, they get their money.               
 The only law that would restrict that is if you are a union worker.           
                                                                               
 Number 1372                                                                   
                                                                               
 JEFF ALLING, President, Alcan Builders, Incorporated, testified via           
 teleconference from Fairbanks in support of HB 209.  He informed              
 the committee his business happens to be a member of the Associated           
 General Contractors and has been for many years.  Mr. Alling                  
 explained he supports the bill because he is against bad PLAs                 
 altogether as they restrict our constitutional rights of equal                
 access and freedom of association.  He said they have a right to do           
 business with whoever they choose to do business with.  Mr. Alling            
 stated he is not against or opposed to unions.  Unions have a                 
 potential to provide a skilled workforce.  His firm employed over             
 99 union employees last year.  Mr. Alling said bad PLAs cater a               
 union only group restricting access of the nonunion skilled tax               
 payers.  He said bad PLAs are (indisc.) to taxation without                   
 representation.  Mr. Samson informed the committee that he and his            
 business partner are not willing to give up their employees because           
 of restricted PLA legislation.  House Bill 209 would restrict PLAs            
 and allow for a more competitive atmosphere resulting in cost                 
 savings in tough budget times to the state of Alaska and local                
 governments.  Mr. Alling said there is one thing missing out of               
 Representatative Vezey's bill as he believes PLAs should be                   
 outlawed altogether.                                                          
                                                                               
 Number 1521                                                                   
                                                                               
 RUSS SCHWARTZ, President, Associated General Contractors of Alaska;           
 Senior Manager, Osborne Construction Company, testified via                   
 teleconference from Anchorage in support of HB 209.  He informed              
 the committee his company currently employs over 700 Alaskans.  He            
 read the following statement into the record:                                 
                                                                               
 "I've been actively engaged in the construction industry for over             
 35 years.  It is my experience that project labor agreements on               
 taxpayer funded projects are bad public policy.  However, if a                
 project labor agreement can be shown to be in the best interest of            
 Alaskans, through clear convincing evidence that would be required            
 by this bill, then I would not voice opposition.                              
                                                                               
 "Unrestricted open bidding procedures is the best way to serve the            
 public.  Project labor agreements, by definition, restrict those              
 who would otherwise be qualified from bidding, and force those with           
 existing collective bargaining agreements to enter into agreements            
 they did not participate in.  Individuals who make their living in            
 a construction industry are forced, under restricted PLAs, to give            
 up their constitutional rights of equal protection, the right of              
 freedom from forced association, the due process guarantee and                
 their right of equal access.  But if we are to have project labor             
 agreements, lets have them, as limited, under House Bill 209.                 
 Thank you, Mr. Chairman."                                                     
                                                                               
 Number 1627                                                                   
                                                                               
 CHAIRMAN ROKEBERG asked Mr. Schwartz if one of the benefits of PLAs           
 is that they can stipulate local hire.                                        
                                                                               
 MR. SCHWARTZ informed Chairman Rokeberg that as he understands                
 Alaska law, they can't require local hire, but PLAs can be written            
 to show certain restrictions as far as where you live and how long            
 you've been there.  Under federal law, Alaska still has designated            
 certain areas as being under employment duress - high areas of                
 unemployment.                                                                 
                                                                               
 Number 1707                                                                   
                                                                               
 REPRESENTATIVE COWDERY asked, "How many crafts and what different             
 crafts off the top of your head -- could you name some of them that           
 you employ?"                                                                  
                                                                               
 MR. SCHWARTZ responded that they employ operators, carpenters,                
 laborers, teamsters, masons, pipefitters, electricians, et cetera.            
 If it has anything to do with construction, they probably employ              
 them.                                                                         
                                                                               
 Number 1760                                                                   
                                                                               
 JUDY MONTGOMERY, Employee, Associated General Contractors of                  
 Alaska, testified via teleconference from Anchorage in support of             
 HB 209.  She said her organization is a nonprofit trade                       
 organization that represents over 600 contractors and associated              
 businesses in Alaska.  She stated unrestricted uncompetitive                  
 bidding procedures for public works projects are the most prudent             
 way of serving the public's interest in accordance with the state             
 procurement code.  Ms. Montgomery said, "A public sector project              
 labor agreement is a government mandate for the job site contractor           
 and subcontractors employ only members of a union on the project.             
 And like most collective bargaining agreements, the PLA is usually            
 negotiated between the unions and the government procurement agency           
 and is forced upon the contractor."                                           
                                                                               
 MS. MONTGOMERY said government-opposed PLAs limit the competition             
 for public work, increase the cost of public infrastructure and               
 threaten individual rights and freedom.  She stated public sector             
 project labor agreements increase the cost of construction,                   
 including the private work that manufacturers and other American              
 businesses find necessary to maintain their competitive and world             
 economy.  Ms. Montgomery requested the support of the committee.              
                                                                               
 Number 1875                                                                   
                                                                               
 JULIE DUQUETTE, Employee, Osborne Construction, testified via                 
 teleconference from Fairbanks in support of HB 209.  She stated she           
 has lived in Fairbanks since 1953, and has worked on various                  
 construction projects with both union and nonunion contractors.               
 Ms. Duquette said she doesn't feel the state should require a                 
 contractor, on a public construction project, to enter into a pre-            
 hire agreement with a labor organization.  With a competitive                 
 bidding process, all the contractors should be allowed the option             
 to sign a project labor agreement.  The state of Alaska has set               
 wages under the Davis-Bacon Act to ensure fair wages are paid and             
 to make contributions on behalf of the employees for a benefits               
 fund.  She sees no reason why a public or state project should                
 require a contractor to sign a project labor agreement.  Ms.                  
 Duquette said she would recommend a favorable vote on HB 209.                 
                                                                               
 Number 1953                                                                   
                                                                               
 REPRESENTATIVE COWDERY asked Ms. Duquette to elaborate on the                 
 Davis-Bacon Act requirements.                                                 
                                                                               
 MS. DUQUETTE said, "The Davis-Bacon requirements are set on whether           
 it's a high Davis-Bacon project or a low, there is a set wage where           
 when you do competitive bidding, whether you're a union or a                  
 nonunion contractor, you're wages is set and you set up a benefit             
 package that you pay into for your employee - similar to what the             
 union packages are."                                                          
                                                                               
 Number 1993                                                                   
                                                                               
 HAROLD SKELTON testified on behalf of himself via teleconference              
 from Fairbanks.  He noted he is a senior manager for Osborne                  
 Construction.  Mr. Skelton urged the committee to pass HB 209 as              
 all Alaskans should be allowed to work on public projects and not             
 just those who choose to be members of a union.  Furthermore, he              
 supports the open and competitive bidding process.  The past has              
 shown efforts have been made to limit the competitive bidding                 
 process by placing PLAs in the bid documents.  Mr. Skelton said HB
 209 will protect all workers and contractors and stop the waste of            
 public and private funds and time arguing this issue in court.  No            
 government agency should mandate that it's constituents belong to             
 a union to be able to be employed.  He said he supports HB 209.               
                                                                               
 Number 2092                                                                   
                                                                               
 TONY FAZIO, Co-owner and Vice President, Slayden Plumbing and                 
 Heating, testified via teleconference from Fairbanks in support of            
 HB 209.  He said they have had a lot of problems with PLAs.  By               
 passing HB 209, it will allow his company to focus more on the work           
 they need to do.  He thanked the committee.                                   
                                                                               
 Number 2154                                                                   
                                                                               
 KEVIN DOUGHERTY, Alaska Laborers Union, testified via                         
 teleconference from Anchorage.  He said he believes the current law           
 is sufficient.  He referred to the Healy coal project and said it             
 was a project that Governor Hickle and Joe Usibelli put together in           
 1993.  That project was voted on unanimously by the Alaska                    
 Industrial Development and Export Authority (AIDEA) Board to                  
 support the project labor agreement because of what it accomplished           
 for the project.  It accomplished harnessing Alaska labor support             
 for the project in terms of the private, federal and state funding,           
 local hire and the owner's ability to negotiate an effective cost             
 savings process as well as having standardized shift work, overtime           
 and terms of employment.  Mr. Dougherty said he thinks that the               
 wise business practices of Governor Hickle and Mr. Usibelli can               
 probably speak for themselves in Alaska.  He informed the committee           
 of several court cases where PLAs were upheld.  Mr. Dougherty said            
 he thinks it is best to look at projects.  If you go out there,               
 you'll find there are union and nonunion contractors on the                   
 projects and there are union and nonunion members on those                    
 projects.  He thanked the committee for listening.                            
                                                                               
 Number 2360                                                                   
                                                                               
 CHARLES ELWOOD testified on behalf of himself, via teleconference             
 from Fairbanks, in support of HB 209.  He indicated he has worked             
 as a superintendent for Osborne Construction Company.  He also used           
 to be a member of the Carpenters Union for 33 years and resigned a            
 few years ago.  Mr. Elwood said what he sees with the project labor           
 agreements is the union "fat cats" are lining their pockets.  He              
 referred to PLA agreements that are adopted and said 95 percent of            
 the people would never see any of the money or revenue.  Once the             
 project labor agreement is over, the people will probably be                  
 unemployed and their pension funds will probably go right into the            
 general fund of the labor union.  He again stated he supports HB
 209.                                                                          
                                                                               
 TAPE 97-50, SIDE A                                                            
 Number 0002                                                                   
                                                                               
 REPRESENTATIVE JERRY SANDERS questioned who the union "fat cats"              
 are.                                                                          
                                                                               
 MR. ELWOOD indicated he is speaking particularly of the union                 
 bosses.  These people are hired and they work 52 weeks a year at              
 the highest scale the union can pay and he sees very little that              
 they do for their people.                                                     
                                                                               
 Number 0066                                                                   
                                                                               
 KARL HNILICKA was next to testify via teleconference from                     
 Fairbanks.  He informed the committee he is lived in Alaska for               
 over 18 years.  Mr. Hnilicka said although he doesn't believe HB
 209 is perfect, it is a better bill than what is presently out                
 there.  He said what he sees with PLAs is it eliminates a good                
 portion of the workforce that is available.  In the state of                  
 Alaska, where we do experience some high unemployment rates, this             
 is kind of detrimental to certain areas as people will be                     
 eliminated from working on certain projects.  He said anytime there           
 is a tax funded project and you enter into a PLA, it will eliminate           
 a lot of people that should be benefitting from that project if               
 they could work on it.  Mr. Hnilicka referred to safety issues and            
 said he thinks it is prudent to all contractors that they have as             
 high of a safety factor that they can possibly have on any project.           
 He referred to unrest on projects and said the only time he has               
 ever seen unrest is if the unions don't get the project.  He has              
 seen unions picketing projects more so than a nonunion project.               
 Mr. Hnilicka referred to benefits and said the nonunion workers               
 don't work long enough to receive their full benefits that they do            
 acquire during the project.  He said he believes the workers should           
 receive all the benefits they acquire during a project.                       
                                                                               
 Number 0256                                                                   
                                                                               
 PAT REILLY, Owner, Rain Proof Roofing Company, testified via                  
 teleconference from Anchorage in support of HB 209.  He informed              
 the committee that his company is locally owned, has been in                  
 business since 1962, and they do work all over the state of Alaska.           
 He said he has been in Alaska all of his life.  Mr. Reilly said the           
 PLAs he has run up against have excluded his business from                    
 projects.  Prior to the mid 1980s, his business did mostly light              
 commercial and residential work.  Since then, they do public sector           
 and residential work in all phases.  He said the only thing the               
 present PLAs have done is excluded his business from some projects.           
 Mr. Reilly said he supports the passage of HB 209 as it is                    
 presently written.                                                            
                                                                               
 Number 0367                                                                   
                                                                               
 JOHN MacKINNON, Deputy Mayor, City and Borough of Juneau, came                
 before the committee to testify.  He explained the city has a PLA             
 on the River Bend Elementary School in Juneau.  It was put into               
 place for one main reason and that was one of the positive benefits           
 of a PLA is a mechanism that maximizes local hire.  Mr. MacKinnon             
 said the city has found in the past, locally, that on a sizable               
 public works project, one in the order of $2 million, it is                   
 attractive and large enough to bring in contractors from out of               
 state.  Often times, these contractors bring in a significant                 
 number of their own workforce.  Mr. MacKinnon said, "It's very                
 difficult, as a local elected official, to pass the `red face test'           
 where a project that is being paid for out of local tax dollars and           
 a significant amount of labor is out-of-state labor, it becomes               
 difficult for us."  Because of those of situations and because of             
 some criticism along those lines, the city put one in place for the           
 River Bend Elementary School and it has worked very well.  He said            
 if the legislation is passed, he would ask that the political                 
 subdivisions be kept out of it.  Whether PLAs are used or not, it             
 should be a municipal or local decision.  He noted they don't plan            
 to use PLAs on every project.                                                 
                                                                               
 Number 0527                                                                   
                                                                               
 REPRESENTATIVE COWDERY referred to the school project and said                
 local hire could mean that a local contractor, union or nonunion,             
 could participate.  He said, "I don't see as this hindering                   
 anybody."  Representative Cowdery referred to local hire and asked            
 how the city's agreement with the school solved that kind of an               
 issue.                                                                        
                                                                               
 Number 0627                                                                   
                                                                               
 MR. MacKINNON explained the way the local project labor agreement             
 works is the hiring done for the job is done through the local                
 union halls.  The hiring hall's rules are set up through a number             
 of tiers - "A" list, "B" list, "C" list, which is based on the                
 number of years or other criteria that the person has been a                  
 member.  He informed the committee he is also contractor and was              
 the one member on the assembly that brought up the PLA and pushed             
 for it.  He said he saw it as a positive benefit.  The project                
 labor agreement was tailored a little bit different than just a               
 blanket agreement as it was limited to first tier subcontractors.             
 In looking at the way a project is put up, there are a number of              
 tiers of subcontractors and the further down you get, the smaller             
 you are and often times the more difficult it is for a small                  
 operation to be a union operation.  For the larger subcontractors             
 in mechanical/electrical trades and some side work, you end up with           
 a lot more opportunities and availability of contractors to bid on            
 a project.                                                                    
                                                                               
 Number 0804                                                                   
                                                                               
 REPRESENTATIVE TOM BRICE said, "Trying to meet the requirements 1             
 through 6, is that a reasonable request of municipalities to go or            
 these -- I mean the six hoops, are they reasonable for you guys in            
 terms of just making sure that if you want to participate in a PLA,           
 are the six factors that you would point to to make the decision of           
 a PLA?"                                                                       
                                                                               
 MR. MacKINNON explained there would be six things they would look             
 at.                                                                           
                                                                               
 REPRESENTATIVE BRICE asked if they only look at six things.                   
                                                                               
 MR. MacKINNON said they look at a wide range of factors such as the           
 timing of a project.  The local projects are timed out to get the             
 most competitive advantage on projects.  Mr. MacKinnon said he                
 would hate to have too many more hoops to jump through on projects            
 as there are already a number of problems that gives them hoops to            
 jump through.  Some include wet lands and permitting problems.                
                                                                               
 Number 0877                                                                   
                                                                               
 CHAIRMAN ROKEBERG asked if the city stipulated in their bidding               
 process that in order to bid, a contractor had to be a union or               
 nonunion contractor.                                                          
                                                                               
 MR. MacKINNON said the bid didn't make that stipulation.  There was           
 a stipulation that the hiring on the project will be through the              
 local hiring halls.                                                           
                                                                               
 CHAIRMAN ROKEBERG asked if a nonunion contractor can provide his              
 labor force through the hiring halls.                                         
                                                                               
 MR. MacKINNON said he believes that the way it worked out legally             
 in the PLA was if a contractor became signatory prior to the bid,             
 then the contractor was able to bring in a certain number of his              
 own forces to do the project such as superintendents.  If the                 
 agreement took place afterwards, it did limit them.  Mr. MacKinnon            
 noted this was totally dependent on which labor organization you              
 were talking to, whether it be the IBEW, laborers or carpenters.              
                                                                               
 Number 0950                                                                   
                                                                               
 CHAIRMAN ROKEBERG asked if that isn't a de facto method of                    
 disallowing a nonunion contractor.  He asked if signatory means               
 signatory to a collective bargaining agreement.                               
                                                                               
 MR. MacKINNON said, "...or a single job only."  He informed the               
 committee that as a contractor, you can sign blanket agreements               
 that he believes are good for a year at a time.  Contractors may              
 also opt to sign one job agreements, or one particular job - they             
 will sign up and be signatory.                                                
                                                                               
 CHAIRMAN ROKEBERG asked if they would be subject to the typical               
 prevailing contractual wages in that particular area if they're               
 going through the union hall.                                                 
                                                                               
 MR. MacKINNON explained that as part of the Davis-Bacon                       
 requirements for public projects.                                             
                                                                               
 Number 1008                                                                   
                                                                               
 JASON JACKOVICH, Carpenter, Osborne Construction, was next to                 
 testify via teleconference from Fairbanks in support of HB 209.  He           
 informed the committee that he feels an employee should be able to            
 work for a nonunion contractor as it is like freedom.  Mr.                    
 Jackovich said he has worked for unions and he never received any             
 sort of pension as he wasn't there long enough.  He now chooses to            
 work for a nonunion organization.  He has received the Davis-Bacon            
 pension and it really helps to know that you have money that you              
 can draw at any point.  Mr. Jackovich said he believes that PLAs              
 restrict a lot of employees.  If there aren't jobs in a town, you             
 could be forced to join a union.                                              
                                                                               
 Number 0191                                                                   
                                                                               
 JOHN BROWN testified from via teleconference from Fairbanks.  He              
 said he a 20-year union member.  Mr. Brown said, "In my opinion,              
 what were looking at here is Mr. Vezey trying to dictate to state             
 and municipal and their labor relations policies to the detriment             
 of the state and to municipalities, and to the benefit of himself,            
 a contractor and to his political contributors such as Osborne                
 Construction.  Project labor agreements are proven to save money              
 for owners.  They do this through insurance of quality work, stable           
 labor relations, (indisc.) completion of the work and they also               
 effectively provide local hire.  (Indisc.) legal challenges                   
 association with other types of local hire provisions.  This is               
 another blatant attack by Mr. Vezey on union workers.  I would say            
 to any legislator supporting this bill that unless you carved out             
 your own district as Mr. Vezey did, I would think twice before I              
 vote.  He won the election by a very very narrow margin."                     
                                                                               
 Number 1173                                                                   
                                                                               
 FLOYD SHEESLEY, Project Engineer, Osborne Construction, testified             
 in favor of HB 209 via teleconference from Fairbanks.  He said, "In           
 reading it (HB 209), the understanding I get is if in fact it can             
 be proved that something is beneficial or something is beneficial             
 out of it and (indisc.).  I think we've heard statements that                 
 stated it is bad, we've heard statements that it's good.  I think             
 if we've got an option here to support it and that the wording                
 (indisc.) give us a consideration for the PLA.  Thank you."                   
                                                                               
 Number 1224                                                                   
                                                                               
 HOWARD WILSON was next to testify via teleconference from                     
 Fairbanks.  He noted he is a project manager for Osborne                      
 Construction, but would be testifying on behalf of himself.  Mr.              
 Wilson stated that because of the wide varieties of PLAs, both good           
 and bad, and because of the inconsistencies in PLAs, he is in favor           
 of HB 209.  He said he believes it will bring continuity to the               
 process by establishing fair and consistent guidelines that will              
 benefit the state, its construction workforce and the rest of the             
 people that live in Alaska.                                                   
                                                                               
 Number 1230                                                                   
                                                                               
 GARY DONOFRIO, Project Engineer, Osborne Construction, testified              
 via teleconference from Fairbanks.  He said he believes that no               
 organization, be it the state or other organizations, should have             
 any control over which qualified contractor gets a bid on a public            
 construction project.  He stated he is in favor of HB 209, but                
 noted he has a problem with Section 36.90.300 (5).  Mr. Donofrio              
 said he believes the legislation will help keep the free and open             
 market free and open.                                                         
                                                                               
 Number 1314                                                                   
                                                                               
 GARY NIESE testified via teleconference from Fairbanks.  He                   
 informed the committee he is testifying on behalf of himself, but             
 noted he works out of the labor union.  He has been in Alaska since           
 1973.  Mr. Niese informed the committee he is raising a handicapped           
 child and has spent $1.5 million in medical bills, which have been            
 covered by organized labor.  Less than 10 percent of the $1.5                 
 million has been paid for by the federal government or the state.             
 Mr. Niese said, "My back is against the wall here and if I lose               
 much more I'm going to be bankrupt.  I'll be back working for one             
 of these nonunion companies that have the insurance plans that have           
 all these preexisting causes and I'm going to be putting the burden           
 of my burden back on the people of this state.  Now do you want               
 organized labor to pay for some of these major medical bills or do            
 you want to put it back on the community?  I need your help and               
 I'll be in your front yard with my kid asking for it and that's               
 just the way it's going to be.  My back is against the wall.  I've            
 lost as much as I can lose here.  Thank you."                                 
                                                                               
 CHAIRMAN ROKEBERG asked Mr. Niese which union he belongs to.                  
                                                                               
 MR. NIESE responded, "Operating Engineers, Local 302."  He added              
 that it has been very difficult raising a handicapped child and the           
 community has been very supportive, both union and nonunion.  Mr.             
 Niese said the recent attack on the laborers unions impacts a lot             
 of longtime residents.  He said he is against HB 209.                         
                                                                               
 Number 1489                                                                   
                                                                               
 STEVE HOVENDEN testified via teleconference from Fairbanks.  He               
 informed the committee he is a surveyor and truck driver by trade.            
 Mr. Hovenden said he has read HB 209 and said it outlaws PLAs.  It            
 is a discriminatory set of standards and nobody can meet the                  
 specifications in the bill.  He said it is his personal opinion               
 that this is political payback to those people that Representative            
 Vezey perceives as his enemies.  He state HB 209 is not in the best           
 interest of the state and it is an anti-union bill and is union               
 busting.  The bill particularly discriminates against workers who             
 have organized.  Mr. Hovenden said project labor agreements are the           
 only way to guarantee local resident hire.  Mr. Hovenden said, "The           
 public money that comes into these PLAs are Davis-Bacon wages and             
 those wages are established by union negotiated contracts.  When              
 PLAs and unions are outlawed, as House Bill 209 is the sure                   
 (indisc.), there won't be Davis-Bacon jobs."                                  
                                                                               
 Number 1628                                                                   
                                                                               
 DON ETHERIDGE, Representative, Alaska State District Council                  
 Laborers, came before the committee to testify.  He said he wanted            
 to make the comment that as one of the "fat cat" union guys, he               
 didn't put one dime from the Juneau PLA project into his pocket.              
 He said, "We worked with city for almost three months putting that            
 project together and we worked out agreements with everybody that             
 was involved that if it did go to a nonunion contractor, that we              
 would work with them to put their folks on the jobs.  We had a lot            
 of concessions that we made from the unions that would help this              
 project along and make it work out fine for them."                            
                                                                               
 Number 1672                                                                   
                                                                               
 REPRESENTATIVE COWDERY asked Mr. Etheridge if he believes the bill            
 discriminates.                                                                
                                                                               
 MR. ETHERIDGE stated he doesn't feel that HB 209 discriminates.  He           
 said he believes that the different entities should be able to do             
 what they want to without having to go through all the hoops.                 
                                                                               
 Number 1707                                                                   
                                                                               
 ED FLANAGAN, Deputy Commissioner, Department of Labor, came before            
 the committee to testify.  He said the department is opposed to HB
 209 in that it removes an option from political subdivisions and              
 state agencies.  He said he doesn't believe there has been any PLAs           
 formally entered into by any state agencies.  Mr. Flanagan said               
 there was the decision by AIDEA on the Healy project to allow a PLA           
 and then one was not successfully negotiated with the agency and              
 the building trade.  He said, "The requirement for a finding of               
 resident hire in the PLA is almost a poison pill.  It has come out            
 in the testimony on the Fairbanks and the Juneau PLAs that while              
 resident hire is a goal and a - best be described as a welcome side           
 effect because that can undermine the validity of the project labor           
 agreement in court.  They have been upheld, as was said, and Boston           
 Harbor - Ms. Willard's comments notwithstanding, Boston Harbor --             
 the Massachusetts Water Resources Authority versus the ABC, the               
 Associate Building Contractors, did go all the way to the supreme             
 court and the issue was whether project labor agreements in the               
 public sector were legal.  It found that they were."                          
                                                                               
 MR. FLANAGAN continued, "Republican governors such as Patackie                
 (ph), not to get partisan, but Governor Patackie and Governor                 
 Whitman have utilized or promoted project labor agreements on                 
 certain projects in their states, where appropriate.  It can                  
 accomplish, as seems to be the case in Fairbanks and Juneau, some             
 valid public policy purposes.  And while they differ from one to              
 the next -- I'm aware of accommodations that were made and many               
 nonunion workers have gone to work through the project labor                  
 agreement on the Fairbanks project and I believe the Juneau project           
 as well.  So basically, it certainly isn't appropriate for every              
 project, but it's maybe one more tool in the arsenal of the                   
 political subdivisions and possibly at some point of the state                
 agencies that would effectively, we feel, be precluded by this                
 bill.  And I also just want to correct one other thing.  The                  
 Superior Court Judge Bisline (ph), in the case of the Fairbanks               
 project labor agreement in case Ms. Willard gave the impression,              
 did uphold that the PLA was legal.  He did find some things                   
 problematic such as the use of the hiring hall - the exclusive use            
 of the hiring hall and the borough adjusted the terms of the PLA to           
 accommodate Judge Bisline's concerns.  And I believe it is Ms.                
 Willard actually who is appealing and her plaintiffs is appealing             
 to the supreme court as the project is underway, under the project            
 labor agreement, with so far from what we hear of good results."              
                                                                               
 Number 1853                                                                   
                                                                               
 REPRESENTATIVE SANDERS asked Mr. Flanagan if he feels that there is           
 more local hire under a PLA agreement than there is without a PLA             
 agreement.                                                                    
                                                                               
 MR. FLANAGAN said he believes there is more local hire.  He said              
 there is a very limited universe of PLAs in the public sector that            
 have been utilized.  He said, "I was the resident hire enforcement            
 for the Alaska Power Authority on the Bradley Lake project which              
 had an `after the fact' project labor agreement.  The low bidder              
 was a signatory contractor.  There was a project labor agreement so           
 that all subcontractors came under it and we have over 90 percent             
 Alaska hire on a project that was massive and had a lot of                    
 specialized skill work.  And the local hire law had an affect too,            
 I got to say.  I was associated with probably what was the first              
 public sector PLA, although we didn't even call it that at the                
 time, with Nome school district in 1990.  At the time, I was                  
 working for the laborers training school and the school board                 
 president in Nome and laborers representative up there called up              
 and said, `We've got a asbestos contract coming up here and if the            
 union comes up and trains people, we'll make sure whoever gets the            
 job signs the union agreement and uses the local people to go to              
 work.  This was before Boston Harbor and I said, `I don't know if             
 you can do that, guys.'  And they said `Don't worry about it, this            
 is Nome.  We'll take care of it, you get up here.'  And we went up,           
 we trained probably 3 union members and 12 or 13 people that                  
 weren't - have never been in the union.  A nonunion contractor got            
 the job and signed a one job agreement, brought in three or four of           
 his own people and used local people exclusively for three seasons            
 on that project.  And it led to other work, other contractors that            
 went up there, the local community was able to say, `We've got                
 local people here.'  And a lot of those people have since gone on             
 to work in hazardous waste and work on the environmental cleanups             
 for IT.  By now, well they are not vested yet, although I believe             
 unions are changing their vesting requirements to five years."                
                                                                               
 Number 1966                                                                   
                                                                               
 REPRESENTATIVE COWDERY explained he has worked both union and                 
 nonunion and he has found that it was to his benefit to hire all              
 the local qualified people wherever he was as he wouldn't have camp           
 expenses.  He said they probably hired 75 percent to 80 percent               
 locally.  He didn't want to transport people from Anchorage if the            
 jobs could be done by local people.                                           
                                                                               
 MR. FLANAGAN said it certainly does seem counter-intuitive to not             
 hire locals, but unfortunately that does seem to be what happens.             
 It kind of defies logic, but it does seem to be a problem                     
 throughout the state.                                                         
                                                                               
 CHAIRMAN ROKEBERG said he has other questions, but would contact              
 Mr. Flanagan.  He said HB 209 is extraordinarily interesting and              
 controversial.  Chairman Rokeberg stated the bill deserves                    
 additional review by the committee and, as a result, he said will             
 hold HB 209 over.                                                             
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 Number 2232                                                                   
                                                                               
 CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Committee            
 meeting at 5:50 p.m.                                                          
                                                                               

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