Legislature(2003 - 2004)

05/05/2003 03:30 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                          May 5, 2003                                                                                           
                           3:30 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Tom Anderson, Chair                                                                                              
Representative Bob Lynn, Vice Chair                                                                                             
Representative Nancy Dahlstrom                                                                                                  
Representative Carl Gatto                                                                                                       
Representative Norman Rokeberg                                                                                                  
Representative Harry Crawford                                                                                                   
Representative David Guttenberg                                                                                                 
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
CS FOR SENATE BILL NO. 64(JUD)                                                                                                  
"An  Act   relating  to  a  requirement   that  certain  consumer                                                               
reporting agencies  provide individuals with  certain information                                                               
without charge."                                                                                                                
     - WAIVED FROM COMMITTEE                                                                                                    
HOUSE BILL NO. 270                                                                                                              
"An Act relating  to the licensure of  pharmacists; and providing                                                               
for an effective date."                                                                                                         
     - HEARD AND HELD                                                                                                           
HOUSE BILL NO. 247                                                                                                              
"An Act repealing  statutes pertaining to the  Alaska Science and                                                               
Technology Foundation and transferring  money in the foundation's                                                               
endowment; repealing  statutes relating  to the  BIDCO assistance                                                               
program;  repealing  statutes  pertaining  to  the  international                                                               
trade  and  business  endowment and  transferring  money  in  the                                                               
international   trade   and  business   endowment;   transferring                                                               
oversight  administration  of   outstanding  Alaska  Science  and                                                               
Technology Foundation  loans and grants to  the Alaska Industrial                                                               
Development and  Export Authority;  establishing an  Alaska BIDCO                                                               
assistance  program  to  be administered  by  the  Department  of                                                               
Community   and    Economic   Development;    making   conforming                                                               
amendments; and providing for an effective date."                                                                               
     - MOVED HB 247 OUT OF COMMITTEE                                                                                            
HOUSE BILL NO. 272                                                                                                              
"An Act relating to motor vehicle dealers."                                                                                     
     - HEARD AND HELD                                                                                                           
PREVIOUS ACTION                                                                                                               
BILL: SB 64                                                                                                                   
SHORT TITLE:CREDIT INFORMATION                                                                                                  
SPONSOR(S): SENATOR(S) FRENCH                                                                                                   
Jrn-Date   Jrn-Page                     Action                                                                                  
02/07/03     0133       (S)        READ THE FIRST TIME -                                                                        
02/07/03     0133       (S)        L&C, JUD                                                                                     
02/19/03     0228       (S)        COSPONSOR(S): DAVIS                                                                          
02/20/03                (S)        L&C AT 1:30 PM BELTZ 211                                                                     
02/20/03                (S)        Heard & Held                                                                                 
02/20/03                (S)        MINUTE(L&C)                                                                                  
04/03/03                (S)        L&C AT 1:30 PM BELTZ 211                                                                     
04/03/03                (S)        Moved Out of Committee                                                                       
04/03/03                (S)        MINUTE(L&C)                                                                                  
04/03/03                (S)        MINUTE(L&C)                                                                                  
04/04/03     0686       (S)        L&C RPT 2DP 1NR 1AM                                                                          
04/04/03     0686       (S)        NR: BUNDE; DP: DAVIS, FRENCH;                                                                
04/04/03     0686       (S)        AM: SEEKINS                                                                                  
04/04/03     0686       (S)        FN1: ZERO(CED)                                                                               
04/04/03     0686       (S)        FN2: ZERO(LAW)                                                                               
04/16/03                (S)        JUD AT 1:00 PM BELTZ 211                                                                     
04/16/03                (S)        Moved CSSB 64(JUD) Out of                                                                    
                                   Committee -- Permanent Time                                                                  
                                   Change --                                                                                    
04/16/03                (S)        MINUTE(JUD)                                                                                  
04/17/03     0890       (S)        JUD RPT CS 5DP NEW TITLE                                                                     
04/17/03     0890       (S)        DP: SEEKINS, ELLIS, FRENCH,                                                                  
04/17/03     0890       (S)        THERRIAULT, OGAN                                                                             
04/17/03     0890       (S)        FN1: ZERO(CED)                                                                               
04/17/03     0891       (S)        FN2: ZERO(LAW)                                                                               
04/22/03     0920       (S)        RULES TO CALENDAR 4/22/2003                                                                  
04/22/03     0920       (S)        READ THE SECOND TIME                                                                         
04/22/03     0921       (S)        JUD CS ADOPTED UNAN CONSENT                                                                  
04/22/03     0921       (S)        COSPONSOR(S): STEVENS B,                                                                     
04/22/03     0921       (S)        TAYLOR, COWDERY, GUESS,                                                                      
04/22/03     0921       (S)        STEVENS G, LINCOLN, WAGONER,                                                                 
04/22/03     0921       (S)        OLSON                                                                                        
04/22/03     0921       (S)        ADVANCED TO THIRD READING                                                                    
                                   UNAN CONSENT                                                                                 
04/22/03     0921       (S)        READ THE THIRD TIME CSSB
04/22/03     0921       (S)        PASSED Y20 N-                                                                                
04/22/03     0923       (S)        TRANSMITTED TO (H)                                                                           
04/22/03     0923       (S)        VERSION: CSSB 64(JUD)                                                                        
04/23/03     1065       (H)        READ THE FIRST TIME -                                                                        
04/23/03     1065       (H)        L&C, JUD                                                                                     
05/05/03     1327       (H)        L&C REFERRAL WAIVED                                                                          
05/05/03     1327       (H)        REFERRED TO JUDICIARY                                                                        
05/05/03                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
BILL: HB 270                                                                                                                  
SHORT TITLE:PHARMACIST LICENSING                                                                                                
SPONSOR(S): REPRESENTATIVE(S)DAHLSTROM                                                                                          
Jrn-Date   Jrn-Page                     Action                                                                                  
04/15/03     0986       (H)        READ THE FIRST TIME -                                                                        
04/15/03     0986       (H)        HES, L&C                                                                                     
04/24/03                (H)        HES AT 3:00 PM CAPITOL 106                                                                   
04/24/03                (H)        Moved Out of Committee                                                                       
04/25/03     1124       (H)        HES RPT 4DP                                                                                  
04/25/03     1124       (H)        DP: CISSNA, SEATON, WOLF,                                                                    
04/25/03     1124       (H)        FN1: ZERO(CED)                                                                               
05/05/03                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
BILL: HB 247                                                                                                                  
SHORT TITLE:SCIENCE & TECH FOUNDATION/BIDCO/INT.TRADE                                                                           
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR                                                                                      
Jrn-Date   Jrn-Page                     Action                                                                                  
04/04/03     0784       (H)        READ THE FIRST TIME -                                                                        
04/04/03     0784       (H)        L&C, FIN                                                                                     
04/04/03     0785       (H)        FN1: (CED)                                                                                   
04/04/03     0785       (H)        GOVERNOR'S TRANSMITTAL LETTER                                                                
05/05/03                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
BILL: HB 272                                                                                                                  
SHORT TITLE:MOTOR VEHICLE DEALERS                                                                                               
SPONSOR(S): REPRESENTATIVE(S)WEYHRAUCH                                                                                          
Jrn-Date   Jrn-Page                     Action                                                                                  
04/16/03     1009       (H)        READ THE FIRST TIME -                                                                        
04/16/03     1009       (H)        L&C, STA                                                                                     
04/28/03                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
04/28/03                (H)        Scheduled But Not Heard                                                                      
04/30/03                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
04/30/03                (H)        Scheduled But Not Heard                                                                      
05/01/03                (H)        STA AT 8:00 AM CAPITOL 102                                                                   
05/01/03                (H)        Scheduled But Not Heard --                                                                   
                                   Recessed to Mon. 5/5 8:00 AM                                                                 
05/05/03                (H)        L&C AT 3:15 PM CAPITOL 17                                                                    
WITNESS REGISTER                                                                                                              
REPRESENTATIVE NANCY DAHLSTROM                                                                                                  
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Spoke as the sponsor of HB 270.                                                                            
CINDY AUDET, Pharmacist                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Announced her support of the passage of HB
EDGAR BLATCHFORD, Commissioner                                                                                                  
Department of Community & Economic Development                                                                                  
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  On behalf of the governor, presented HB
247, sponsored by the House Rules Standing Committee by request                                                                 
of the governor.                                                                                                                
TOM LAWSON, Director                                                                                                            
Division of Administrative Services                                                                                             
Department of Community & Economic Development                                                                                  
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  During discussion of HB 247, answered                                                                      
LINDA SYLVESTER, Staff                                                                                                          
to Representative Bruce Weyhrauch                                                                                               
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Presented HB 272 on behalf  of the sponsor,                                                               
Representative Weyhrauch.                                                                                                       
LORRIE URBAN                                                                                                                    
North American Automobile and Trade Association                                                                                 
POSITION STATEMENT:    Testified that Section 1 of  HB 272 should                                                               
be deleted.                                                                                                                     
DARRELL FRIESS                                                                                                                  
Budget Car and Truck Sales                                                                                                      
Budget Rent-A-Car                                                                                                               
POSITION STATEMENT:   Testified that  Section 1 of HB  272 should                                                               
be deleted.                                                                                                                     
JIM ARPINO, General Manager                                                                                                     
Affordable Used Cars                                                                                                            
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Expressed concern with HB 272.                                                                             
DAN SHERMAN                                                                                                                     
Variety Motors                                                                                                                  
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified on HB 272.                                                                                       
PHIL HAWS                                                                                                                       
Phil Haws Auto Outlet                                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on HB 272.                                                                                       
JOHN LYBERGER                                                                                                                   
Lyberger's Car & Truck Sales                                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Related the need to delete Section  1 of HB
ACTION NARRATIVE                                                                                                              
TAPE 03-47, SIDE A                                                                                                            
Number 0001                                                                                                                     
CHAIR TOM ANDERSON  called the House Labor  and Commerce Standing                                                             
Committee  meeting   to  order   at  3:30   p.m.  Representatives                                                               
Anderson,  Dahlstrom,   Gatto,  Crawford,  and   Guttenberg  were                                                               
present at the  call to order.  Representative  Lynn and Rokeberg                                                               
arrived as the meeting was in progress.                                                                                         
SB 64 - CREDIT INFORMATION                                                                                                    
CHAIR  ANDERSON  began  by  addressing CS  FOR  SENATE  BILL  NO.                                                               
64(JUD), "An Act relating to  a requirement that certain consumer                                                               
reporting agencies  provide individuals with  certain information                                                               
without charge."   He noted  that SB 64 is  substantively similar                                                               
to  Representative  Crawford's  legislation,  and  therefore  all                                                               
committee members have  signed a letter requesting that  SB 64 be                                                               
waived from the House Labor and Commerce Standing Committee.                                                                    
HB 270 - PHARMACIST LICENSING                                                                                                 
CHAIR ANDERSON announced  that the first order  of business would                                                               
be  HOUSE BILL  NO. 270,  "An Act  relating to  the licensure  of                                                               
pharmacists; and providing for an effective date."                                                                              
Number 0100                                                                                                                     
REPRESENTATIVE NANCY  DAHLSTROM, Alaska State  Legislature, spoke                                                               
as the  sponsor of  HB 270.   She  explained that  basically, the                                                               
Board of  Pharmacy can't deny  a license  to an applicant  with a                                                               
"checkered  background," such  as  an individual  with a  felony,                                                               
drug conviction, or  drug abuse problem.   However, public safety                                                               
and  the  pharmacy  profession   are  both  compromised  in  this                                                               
situation.   This  right to  deny a  license was  unintentionally                                                               
left  out  of   the  statute  when  originally   drafted.    This                                                               
legislation provides a  fix by allowing the Board  of Pharmacy to                                                               
deny a license  to an applicant with a criminal  background.  She                                                               
informed the committee  that all members involved  agree with the                                                               
proposed changes to  this statute.  She noted  that the committee                                                               
packet  should  include letters  of  support  from the  Board  of                                                               
Pharmacy  and   the  Alaska  Pharmaceutical  Association.     She                                                               
concluded by urging the committee's support for HB 270.                                                                         
Number 0226                                                                                                                     
CINDY AUDET, Pharmacist, announced her  support of the passage of                                                               
HB  270.    Adding  the   proposed  language  would  provide  the                                                               
authority the  Board of Pharmacy  needs to protect  public safety                                                               
when reviewing applications.                                                                                                    
REPRESENTATIVE CRAWFORD asked  if there was actually  a case that                                                               
precipitated this legislation.                                                                                                  
MS. AUDET related her belief that  there was a case, although she                                                               
specified that she isn't a member  of the Board of Pharmacy.  She                                                               
related her  understanding that there  was confusion  with regard                                                               
to an application that the Board  of Pharmacy felt needed to have                                                               
had more  questions.  It  wasn't clear when more  questions would                                                               
automatically occur and when they wouldn't.                                                                                     
Number 0323                                                                                                                     
REPRESENTATIVE  DAHLSTROM agreed  that  there was  an issue  that                                                               
could have  potentially become a  serious problem,  and therefore                                                               
this legislation is preventative.                                                                                               
REPRESENTATIVE GATTO  asked if, prior  to the passage of  HB 270,                                                               
an   individual   could've   used   the   application   procedure                                                               
fraudulently to  obtain a  license, although  the board  may have                                                               
felt the individual was fraudulent.                                                                                             
MS. AUDET  answered that  the way the  language read  it could've                                                               
happened as described  above, although she didn't  believe such a                                                               
situation has occurred.                                                                                                         
REPRESENTATIVE GATTO  asked if  a situation  ever arose  in which                                                               
the  Board  of Pharmacy  felt  an  applicant was  fraudulent  and                                                               
didn't  give  the  applicant  a   license,  and  the  matter  was                                                               
MS. AUDET  related her belief that  it was the other  way around.                                                               
She recalled  that someone pointed  out that the board  was being                                                               
more  judicious  [with  the  review  process]  than  the  statute                                                               
Number 0402                                                                                                                     
REPRESENTATIVE GUTTENBERG  asked, "Do you  know if there  are any                                                               
people that  would become  covered under ...  this change  of the                                                               
bill,  that people  would be  looking to  ... have  their license                                                               
MS. AUDET pointed out that  the application language for licensed                                                               
pharmacists has always  existed.  Therefore, she  said she didn't                                                               
know of  any threat  this proposal  would create  for any  of the                                                               
current  licensees.   In response  to  Representative Gatto,  Ms.                                                               
Audet  related  her belief  that  the  existing regulations  have                                                               
existed 10  years or less  because the  last revision was  in the                                                               
early 1990s.                                                                                                                    
Number 0476                                                                                                                     
MARGARET  SODEN,  President,  Board  of  Pharmacy,  informed  the                                                               
committee that  a couple of years  of ago there was  an applicant                                                               
seeking licensure  in Alaska  and the board  wanted to  deny that                                                               
license.   However, the  board discovered  that it  didn't really                                                               
have the  authority to do  so.  The  board was lucky  because the                                                               
applicant had lied  on the application and thus  the board didn't                                                               
license  the applicant  based on  false application.   After  the                                                               
aforementioned  case, the  process to  add the  language "deny  a                                                               
license" to  the board's  statute began.   She confirmed  that in                                                               
the 1990s  the statutes  were written  and that  authority wasn't                                                               
given to the board.  Therefore,  the Board of Pharmacy wants this                                                               
language added.   Currently, there could be a  situation in which                                                               
a felon or an individual with  a revoked license in another state                                                               
would have to  be granted a license as long  as the applicant was                                                               
truthful on his/her application.   In such a situation, the board                                                               
would   have  to   take  the   applicant's   license  through   a                                                               
disciplinary sanction  process.  Ms.  Soden pointed out  that the                                                               
Board of  Pharmacy is only requesting  that it be able  to deny a                                                               
license of  an applicant based  on the same criteria  under which                                                               
the  board can  sanction a  license.   She  highlighted that  the                                                               
prolonged  period  for   disciplinary  sanctions  is  problematic                                                               
because a  person could continue  to have a license  and practice                                                               
while the disciplinary sanctions are in place.                                                                                  
CHAIR ANDERSON, upon  determining no one else  wished to testify,                                                               
announced that public testimony was closed.                                                                                     
REPRESENTATIVE CRAWFORD related his  understanding that Ms. Soden                                                               
was saying  that the  legislation would speed  up the  process of                                                               
taking a license.                                                                                                               
REPRESENTATIVE DAHLSTROM  said she  understood that  the language                                                               
would  allow  the  board  to move  more  succinctly  through  the                                                               
process of  reviewing an application and  informing the applicant                                                               
that  he/she  doesn't  qualify  for  a  license  in  this  state.                                                               
However, under  the [current environment] the  applicant could be                                                               
hired or have  their own business and a lengthy  process [to take                                                               
the license] would ensue.                                                                                                       
CHAIR  ANDERSON  directed  attention  to  page  1,  line  4,  and                                                               
explained that  the language  allows the denial  of a  license at                                                               
the onset of the application.                                                                                                   
REPRESENTATIVE GUTTENBERG,  in relation  to the language  on page                                                               
1, line 4, asked if the applicant would receive a hearing.                                                                      
CHAIR ANDERSON  reiterated that the  new language  specifies that                                                               
the board  can initially deny an  applicant or can do  so after a                                                               
hearing,  which is  the existing  law.   Therefore, allowing  the                                                               
denial  at  the  beginning  of   the  application  process  would                                                               
expedite the process.                                                                                                           
MS. SODEN noted her agreement.                                                                                                  
Number 0875                                                                                                                     
REPRESENTATIVE CRAWFORD asked if  those applicants who are denied                                                               
during the initial stages would have an opportunity to appeal.                                                                  
MS. SODEN  replied yes,  and clarified  that the  applicant would                                                               
have to show  why he/she should be granted a  license.  She noted                                                               
that the applicant would have the ability to appeal.                                                                            
REPRESENTATIVE  GUTTENBERG asked  if the  statute that  discusses                                                               
having  a hearing  refers to  an  "applicant" as  compared to  an                                                               
individual already holding a license.                                                                                           
MS. SODEN  answered that under the  disciplinary regulations, the                                                               
board can sanction  the license of an individual  who has already                                                               
registered  in this  state.    She clarified  that  the Board  of                                                               
Pharmacy  already has  the ability  to  sanction an  individual's                                                               
existing  license,  but  doesn't  have the  ability  to  deny  an                                                               
applicant.    Therefore,  the applicant  would  have  to  receive                                                               
his/her  license as  long as  there was  no falsification  of the                                                               
REPRESENTATIVE GUTTENBERG  turned to  the statutes for  a hearing                                                               
and asked if there is reference  to an individual who has already                                                               
had his/her license  denied or is it just those  who already have                                                               
a license that the board wants to address.                                                                                      
REPRESENTATIVE CRAWFORD  asked if the language  "applicant" would                                                               
have to be added to the hearing statute as well.                                                                                
MS.  SODEN  said  that the  Division  of  Occupational  Licensing                                                               
regulation   specialists   actually   developed   the   language.                                                               
Therefore,  she assumed  that  the board  has  the authority  [to                                                               
provide a hearing process for  an applicant] without changing any                                                               
other language.                                                                                                                 
Number 1064                                                                                                                     
REPRESENTATIVE GUTTENBERG  commented that he didn't  want to pass                                                               
this  and  find  out  that  an individual  who  has  had  his/her                                                               
application denied  has no  rights for a  hearing because  of the                                                               
lack  of  a  statutory  reference  for an  applicant  to  have  a                                                               
CHAIR  ANDERSON  said  that  he  guessed  that  there  is  always                                                               
recourse,  the  ability to  appeal,  and  the possibility  for  a                                                               
Number 1144                                                                                                                     
ROBIN PHILLIPS,  Staff to Representative Dahlstrom,  Alaska State                                                               
Legislature,  clarified that  the applicant  will have  an appeal                                                               
process while the licensee has a hearing process.                                                                               
REPRESENTATIVE GUTTENBERG  said that  he wanted  to be  sure that                                                               
this legislation isn't [inadvertently]  denying the ability of an                                                               
applicant to have  a hearing.  He asked if  Ms. Phillips actually                                                               
reviewed [the statutes] to know that it's consistent.                                                                           
MS.  PHILLIPS  replied  no.    However,  she  explained  that  an                                                               
applicant wouldn't  have a hearing  because an applicant  isn't a                                                               
licensee.  However,  the applicant can appeal the process.   In a                                                               
sense, the aforementioned is the applicant's hearing.                                                                           
REPRESENTATIVE GUTTENBERG  asked if  the appeal  process statutes                                                               
refer to an applicant.                                                                                                          
MS. SODEN related her belief that  this was all covered under the                                                               
Administrative  Procedures [Act  (APA)] for  licensing regardless                                                               
of the profession.                                                                                                              
CHAIR ANDERSON related his belief that this is appealable.                                                                      
MS.  SODEN  pointed  out  that  under  the  Board  of  Pharmacy's                                                               
section, AS 08.80.050 specifies that  the board shall comply with                                                               
the  APA.   In  further  response to  Chair  Anderson, Ms.  Soden                                                               
explained that a graduate from  pharmacological school would have                                                               
to have a certain number of  hours internship, be a graduate from                                                               
an accredited college, answer background  questions, and submit a                                                               
license  application.   The Board  of Pharmacy  would review  the                                                               
applicant's license  information.  Occasionally, there  are times                                                               
when an individual has something  "bad" in his/her background and                                                               
currently  the board  can't deny  the individual  the license  if                                                               
this applicant told the truth.   The individual would receive the                                                               
license  and  then  the  board  would  take  action  against  the                                                               
individual.   Until the denial  happens, the individual  could be                                                               
REPRESENTATIVE  CRAWFORD surmised  that everyone  agrees that  to                                                               
deny  a license  to an  applicant is  appropriate.   However, the                                                               
question is  whether the  term "applicant" needs  to be  added to                                                               
the statute referring to the appeal process.                                                                                    
CHAIR ANDERSON announced that HB 270  would be held over in order                                                               
to  determine  whether  the  statutes  are  consistent  with  the                                                               
language being proposed.                                                                                                        
REPRESENTATIVE  ROKEBERG   requested  having  someone   from  the                                                               
Division  of  Occupational  Licensing  testify  as  to  why  this                                                               
legislation is  necessary because sometimes there  is boilerplate                                                               
licensing  procedures  [in  division  statutes  that]  allow  for                                                               
REPRESENTATIVE DAHLSTROM agreed to research these questions.                                                                    
[HB 270 was held over.]                                                                                                         
HB 247 - SCIENCE & TECH FOUNDATION/BIDCO/INT.TRADE                                                                            
CHAIR ANDERSON  announced that the  next order of  business would                                                               
be HOUSE BILL  NO. 247, "An Act repealing  statutes pertaining to                                                               
the  Alaska Science  and Technology  Foundation and  transferring                                                               
money in the foundation's  endowment; repealing statutes relating                                                               
to the  BIDCO assistance  program; repealing  statutes pertaining                                                               
to   the  international   trade   and   business  endowment   and                                                               
transferring  money  in  the  international  trade  and  business                                                               
endowment; transferring  oversight administration  of outstanding                                                               
Alaska Science and Technology Foundation  loans and grants to the                                                               
Alaska Industrial Development  and Export Authority; establishing                                                               
an  Alaska BIDCO  assistance program  to be  administered by  the                                                               
Department   of  Community   and  Economic   Development;  making                                                               
conforming amendments; and providing for an effective date."                                                                    
Number 1630                                                                                                                     
EDGAR  BLATCHFORD,   Commissioner,  Department  of   Community  &                                                               
Economic  Development   (DCED),  paraphrased  from   his  written                                                               
testimony, which read:                                                                                                          
   The bill repeals the existing AS 37.17 statutes that                                                                         
   create the Alaska Science and Technology Foundation                                                                          
   (ASTF) and  programs it  administers:   foundation grants                                                                    
   and  the  BIDCO  (Business   and  Industrial  Development                                                                    
   Corporation) assistance program.                                                                                             
   The statute creating the international trade and business                                                                    
   endowment in the ASTF is also repealed.                                                                                      
   Subject to  appropriation,  the  bill  provides  for  the                                                                    
   transfer to the  general fund of  the money  remaining in                                                                    
   the ASTF [foundation] fund and in the international trade                                                                    
   and business endowment.                                                                                                      
   Oversight administration  of  existing  ASTF  grants  and                                                                    
   BIDCO  assistance  program  loans   and  other  financial                                                                    
   assistance would be transferred to  the Alaska Industrial                                                                    
   [Development] and Export Authority (AIDEA).                                                                                  
   A new  BIDCO  assistance  program,  very similar  to  the                                                                    
   repealed BIDCO  assistance  program  is  established  and                                                                    
   administered by the Department of  Community and Economic                                                                    
   Development (DCED).                                                                                                          
   ASTF was created in  1988 with an endowment  of more than                                                                    
   $100 million to  support grants for  technology projects,                                                                    
   knowledge projects,  small  business innovation  research                                                                    
   bridging grants and direct  grants to teachers.   Through                                                                    
   its endowment, ASTF has  generated about $126  million in                                                                    
   income for distribution.  Between 1988 and 2002, one half                                                                    
   the endowment income, $63 million,  has been appropriated                                                                    
   and spent for "non-ASTF purposes":                                                                                           
     $35  million  for   University  of  Alaska  operations,                                                                    
     Alaska   Aerospace   Development   Corporation   (AADC)                                                                    
    operations, and Trade and Development operations;                                                                           
     $17  million  was  appropriated to  the  state  general                                                                    
    fund; and                                                                                                                   
     $11  million  was used  to  match  federal funding  for                                                                    
     construction  of  AADC's   $39  million  Kodiak  Launch                                                                    
   The remaining  $63 million  was distributed  by the  ASTF                                                                    
   board over the last 14 years:                                                                                                
    $25 million in technology project grants;                                                                                   
    $10 million in knowledge project grants;                                                                                    
    $8 million to partners;                                                                                                     
     $5 million  to wiring K-12 schools  and science museums                                                                    
    or internet connectivity;                                                                                                   
    $2 million in K-12 science and math teacher grants;                                                                         
     Contributions to  the principal  of the  ASTF endowment                                                                    
    (less than $500,000); and                                                                                                   
    $13 million in ASTF operations.                                                                                             
   In mid-March  the  Legislature  passed and  the  Governor                                                                    
   signed into  law  a  supplemental appropriation  reducing                                                                    
   ASTF FY 2003 operations to amounts spent and obligated to                                                                    
   date and included  intent language to  ASTF to  wind down                                                                    
   operations by May 15,  2003.  The Governor's  FY04 budget                                                                    
   provided no funding for ASTF.                                                                                                
   Thank you for the  opportunity to speak before  you today                                                                    
   and I urge you to support passage of HB 247.                                                                                 
REPRESENTATIVE ROKEBERG  asked if HB  247 needs to pass  in order                                                               
for the governor to access the corpus of ASTF's endowment.                                                                      
COMMISSIONER BLATCHFORD replied no.                                                                                             
Number 1775                                                                                                                     
TOM  LAWSON,  Director,   Division  of  Administrative  Services,                                                               
Department of  Community & Economic  Development, in  response to                                                               
Representative  Rokeberg, specified  that the  BIDCO program  has                                                               
been used  once.  There is  one licensed BIDCO in  the state, the                                                               
Alaska Growth Capital Program, which will remain in business.                                                                   
REPRESENTATIVE  GATTO turned  to the  fiscal notes  and mentioned                                                               
that there would've been funds  appropriated for the current year                                                               
as well as  funds that some of these ventures  would've earned in                                                               
future years.  Therefore, he asked  if the future funds that will                                                               
never be realized are accounted for in the fiscal notes.                                                                        
MR.  LAWSON explained  that  this legislation  sets  up AIDEA  to                                                               
monitor  any payments  that are  due to  the state.   One  of the                                                               
categories of  grants is  the technology  grant, for  which there                                                               
were up to $25  million of grants that were granted.   All of the                                                               
technology  grants have  a repayment  clause,  and therefore  the                                                               
purpose of the  staff in AIDEA would be to  ensure that the state                                                               
receives  its repayments.   However,  Mr.  Lawson specified  that                                                               
there will be no new grant funds issued at the end of FY03.                                                                     
REPRESENTATIVE GATTO restated  his question as follows:   "Is the                                                               
fiscal  note understated  in that  there  is additional  funding,                                                               
beyond the  current, that we  will see  as a revenue  source; and                                                               
therefore, the  fiscal note is saying  look at how much  money we                                                               
get by eliminating  the program and yet there's even  more that I                                                               
don't know if it's been accounted for."                                                                                         
MR. LAWSON  answered that  [the department]  isn't sure  how much                                                               
money will return  because part of that relates to  the health of                                                               
the  company that  received the  grant.   The state  felt it  was                                                               
important  to have  someone monitor  the repayments  in order  to                                                               
ensure that when repayments are due, they are made.                                                                             
REPRESENTATIVE   GATTO  asked   if   this   revenue  stream   [of                                                               
repayments] was accounted for in the fiscal note.                                                                               
MR. LAWSON  responded that  the fiscal  note doesn't  account for                                                               
the  amount of  revenue  that's coming  in [through  repayments].                                                               
The fiscal note  specifies that around $300,000 has  come in thus                                                               
far and more is anticipated.                                                                                                    
Number 1954                                                                                                                     
REPRESENTATIVE  GUTTENBERG  related  his understanding  that  the                                                               
governor's intent is to take ASTF and  the funds in it and HB 247                                                               
establishes a vehicle  to monitor the funds and the  returns.  He                                                               
inquired as to why ASTF  is being eliminated from statute [rather                                                               
than just not funding it].                                                                                                      
COMMISSIONER  BLATCHFORD  said  that "we"  didn't  consider  that                                                               
question.   He related his  belief that this  legislation appears                                                               
to be much cleaner.                                                                                                             
REPRESENTATIVE  CRAWFORD  remarked   that  he  didn't  understand                                                               
eliminating endowments.   He pointed out that  ASTF has generated                                                               
over $126 million in income  over the $100 million endowment that                                                               
was  used to  establish  the program.   He  likened  this to  the                                                               
plantations  where he  grew up;  people would  do various  things                                                               
with the  earnings from the  plantation but would never  sell the                                                               
land.  This [legislation] is like  selling the land, he said.  He                                                               
questioned  why one  wouldn't place  the funds  in the  endowment                                                               
somewhere else to generate income.                                                                                              
Number 2058                                                                                                                     
COMMISSIONER  BLATCHFORD replied,  "The state  needs the  money."                                                               
After reviewing  all the projects  in depth, it was  decided that                                                               
ASTF   wasn't  following   the   intent   behind  its   creation.                                                               
Therefore,  it was  decided it  should wind  down.   Commissioner                                                               
Blatchford   indicated  his   disagreement  with   Representative                                                               
Crawford's analogy.                                                                                                             
REPRESENTATIVE GATTO  asked if  it was  Commissioner Blatchford's                                                               
decision to dissolve ASTF.                                                                                                      
COMMISSIONER  BLATCHFORD  answered  that   it  was  a  collective                                                               
REPRESENTATIVE GATTO  specified that  he was trying  to determine                                                               
whether Commissioner  Blatchford was directed  to do this  or was                                                               
actually a part of it.                                                                                                          
CHAIR   ANDERSON   interjected   that  it's   difficult   for   a                                                               
commissioner  to  say that  he  isn't  part  of such  a  decision                                                               
because   the   governor   is  his   boss.      Conversely,   the                                                               
commissioner's have to counsel the governor.                                                                                    
Number 2115                                                                                                                     
REPRESENTATIVE  CRAWFORD acknowledged  the  need  for money,  but                                                               
highlighted that ASTF  has generated income that  far exceeds the                                                               
original  investment.   Therefore, he  said he  didn't understand                                                               
why [the  entire endowment] would be  taken in one year  and thus                                                               
in  the coming  years the  state wouldn't  have [the  revenue] on                                                               
which to fall  back.  If there is dissatisfaction  with regard to                                                               
where the  earnings are  going, that can  be changed,  he pointed                                                               
REPRESENTATIVE  GUTTENBERG noted  that  over the  past couple  of                                                               
days some  in the  legislature had the  opportunity to  listen to                                                               
Red  Boucher  discuss  e-commerce.   According  to  Mr.  Boucher,                                                               
science  and  technology  could  be  a  vehicle  for  e-commerce.                                                               
Therefore, he asked  if there is any other  vehicle to e-commerce                                                               
and economic development besides this legislative process.                                                                      
COMMISSIONER  BLATCHFORD  pointed out  that  within  DECD is  the                                                               
Division of  Community Advocacy, which  he views as  an incubator                                                               
for entrepreneurial ideas.  This  division works closely with all                                                               
of the communities  in Alaska and many  suggestions regarding how                                                               
to  work with  them to  seize  opportunities in  the private  and                                                               
public  sector  are obtained.    Furthermore,  the University  of                                                               
Alaska system [provides] greater opportunities in this arena.                                                                   
Number 2355                                                                                                                     
REPRESENTATIVE  CRAWFORD  asked  if  Commissioner  Blatchford  is                                                               
saying that DCED would be  able to provide matching funds similar                                                               
to those that made the Kodiak launch facility possible.                                                                         
COMMISSIONER  BLATCHFORD  said  that  the department  has  to  be                                                               
creative  in  working  with local  communities  and  the  federal                                                               
TAPE 03-47, SIDE B                                                                                                            
COMMISSIONER BLATCHFORD  continued by saying that  the department                                                               
would work closely  with the almost two dozen  agencies that have                                                               
impact  on funding  Alaskan projects.    He indicated  that in  a                                                               
situation in  which there  was an  opportunity for  projects with                                                               
requirements for a  match, the state would work  closely with the                                                               
unorganized boroughs to try to match it.                                                                                        
Number 2340                                                                                                                     
CHAIR  ANDERSON, upon  determining  that no  one  else wished  to                                                               
testify, closed the public testimony.                                                                                           
REPRESENTATIVE GUTTENBERG  reiterated his concern with  regard to                                                               
eliminating ASTF from the statute  completely because often times                                                               
there is the need for a vehicle.                                                                                                
REPRESENTATIVE DAHLSTROM moved to report  HB 247 out of committee                                                               
with individual recommendations and  the accompanying zero fiscal                                                               
REPRESENTATIVE  CRAWFORD objected  and said,  "I do  believe that                                                               
even if we were to strip the  money away from this, it doesn't do                                                               
us any good to do away with the  vehicle if we are able to use it                                                               
after we get our fiscal policy in order."                                                                                       
REPRESENTATIVE GUTTENBERG  echoed his earlier  comments regarding                                                               
his concern with completely eliminating ASTF from the statutes.                                                                 
REPRESENTATIVE  ROKEBERG commented,  "It's a  shame we  have this                                                               
bill; it was a great idea  for all the reasons of the technology,                                                               
but it didn't work."                                                                                                            
REPRESENTATIVE CRAWFORD suggested that  then ASTF should be fixed                                                               
so that it does work because  he believes some of the things ASTF                                                               
did were good things.                                                                                                           
Number 2144                                                                                                                     
A roll  call vote  was taken.   Representatives  Lynn, Dahlstrom,                                                               
Gatto,  and Rokeberg  voted in  favor  of reporting  HB 247  from                                                               
committee.   Representatives  Guttenberg, Crawford,  and Anderson                                                               
voted against  it.   Therefore, HB  247 was  reported out  of the                                                               
House Labor and Commerce Standing Committee by a vote of 4-3.                                                                   
The committee took an at-ease from 4:25 p.m. to 4:26 p.m.                                                                       
HB 272 - MOTOR VEHICLE DEALERS                                                                                                
CHAIR ANDERSON announced  that the final order  of business would                                                               
be  HOUSE  BILL  NO.  272,  "An Act  relating  to  motor  vehicle                                                               
LINDA SYLVESTER, Staff to  Representative Bruce Weyhrauch, Alaska                                                               
State  Legislature,  informed the  committee  that  HB 272  is  a                                                               
follow-up to HB 182, omnibus  legislation [offered in the Twenty-                                                               
Second   Alaska   State   Legislature]  that   dealt   with   the                                                               
relationship between manufacturers of  motor vehicles and dealers                                                               
and  franchise  owners  in  the  state.   Section  2  of  HB  272                                                               
addresses  semantic changes  to HB  182.   However, Section  1 is                                                               
more  controversial as  it relates  to  SB 105,  which passed  in                                                               
1993.  Senate Bill 105  addressed consumer protection with regard                                                               
to  how brokers  of automobiles  are  allowed to  operate in  the                                                               
state.   Two provisions in  the statute  [created by SB  105] are                                                               
unenforceable, as  Ed Sniffen,  Assistant Attorney  General, will                                                               
MS. SYLVESTER explained that basically  Section 1 will prohibit a                                                               
dealer from  selling or offering to  sell a motor vehicle  as new                                                               
unless  the vehicle  retains  the  manufacturer's certificate  of                                                               
origin.    Furthermore,  Section  1  prohibits  the  dealer  from                                                               
selling or offering to sell the  vehicle as a current model motor                                                               
vehicle unless the following two  conditions are met:  the dealer                                                               
has a current  sales and service agreement  with the manufacturer                                                               
or the  vehicle is  a current  model used  vehicle received  as a                                                               
trade-in in the normal course of business.                                                                                      
MS.  SYLVESTER  noted that  Mr.  Sniffen  drafted  HB 272.    She                                                               
invited  the  committee  to  assist  in  fixing  Section  1(b)(2)                                                               
because it inadvertently impacts a  common practice of rental car                                                               
companies.   She  explained that  rental  car companies  commonly                                                               
purchase  new  vehicles and  turn  them  over  in under  a  year.                                                               
Therefore,  HB 272  would unintentionally  put  those rental  car                                                               
companies  out  of business.    The  legislation is  intended  to                                                               
address  vehicles  intended  for  the  Canadian  market,  whether                                                               
manufactured  in the  U.S. or  Canada.   There is  a practice  of                                                               
these vehicles  being purchased in  Canada and being sold  in the                                                               
U.S.    Because  of  the   economic  conditions  in  Canada,  the                                                               
manufacturers sell  these cars in  Canada at a  discounted price.                                                               
The manufacturers have  tried to stem the tide  of these vehicles                                                               
entering the U.S., but they have achieved mixed success.                                                                        
Number 1854                                                                                                                     
CLYDE  (ED)  SNIFFEN,  JR.,   Assistant  Attorney  General,  Fair                                                               
Business   Practices   Section,   Civil   Division   (Anchorage),                                                               
Department of Law, offered to  listen to testimony and return for                                                               
Number 1826                                                                                                                     
LORRIE URBAN,  North American  Automobile and  Trade Association,                                                               
informed the committee that  she represents independent importers                                                               
and  exporters of  motor  vehicles,  specifically Canadian  motor                                                               
vehicles  to  the American  market.    Mr. Urban  requested  that                                                               
Section 1  be removed from  HB 272 because  it is harmful  to the                                                               
interests of the  consumer.  Furthermore, it is  an illegal trade                                                               
restriction that exposes the state  government to liability under                                                               
the North American  Free Trade Agreement.  Section  1 was crafted                                                               
solely for  the benefit of  franchised dealers who are  trying to                                                               
prevent competition from independent  dealers who import and sell                                                               
Canadian  automobiles.   These automobiles  meet the  U.S. safety                                                               
and emission  standards, the only  difference is the price.   She                                                               
pointed  out that  independent  dealers are  able  to sell  these                                                               
automobiles  to  consumers for  more  competitive  prices.   Laws                                                               
prohibiting  the   sale  of  current   model  year   vehicles  by                                                               
nonfranchise  independent   dealers  is  ridiculous,   she  said.                                                               
Furthermore,  such  action provides  no  benefit  to commerce  in                                                               
Alaska.  Ms.  Urban said she didn't believe  it's appropriate for                                                               
the  government to  eliminate businesses  and companies  that are                                                               
able to  supply identical goods  at lower prices.   She estimated                                                               
that there  are approximately 351  auto dealers and  31 franchise                                                               
dealers  in  this  state.    Many  of  these  dealers,  including                                                               
franchise dealers, do sell Canadian automobiles to consumers.                                                                   
MS.  URBAN acknowledged  that recently,  automobile manufacturers                                                               
have increased  their interest in preventing  imports of Canadian                                                               
automobiles  into the  U.S.   However, this  is legal  trade; the                                                               
[U.S.]   Department   of   Transportation   licenses   registered                                                               
importers   to  import   Canadian  automobiles   into  the   U.S.                                                               
Basically,  the  only  modification necessary  to  an  automobile                                                               
being   imported  from   Canada  is   the  odometer.     Although                                                               
[automobile  manufacturers] are  trying  to prevent  the sale  of                                                               
Canadian  automobiles to  U.S. consumers,  regulatory constraints                                                               
have  been eliminated  to allow  these automobiles  to enter  the                                                               
U.S. from  independent dealers.   Ms. Urban noted  that currently                                                               
there  is a  multi-billion dollar  lawsuit against  manufacturers                                                               
and dealers  which alleges that many  manufacturers are colluding                                                               
with each  other to stop  competition from independents  who sell                                                               
Canadian automobiles.  Furthermore,  the Federal Trade Commission                                                               
(FTC) is investigating the  anti-trust implications for consumers                                                               
and  the  committee  packet should  include  documents  that  she                                                               
provided on this matter.  Ms.  Urban expressed the need to remove                                                               
Section 1 from HB 272 in  order to eliminate the state from being                                                               
part of the scheme.                                                                                                             
Number 1577                                                                                                                     
DARRELL FRIESS,  Budget Car and  Truck Sales,  Budget Rent-A-Car,                                                               
announced his agreement  with Ms. Urban in regard to  the need to                                                               
remove  Section  1  entirely.    As a  whole  tourism  and  local                                                               
consumers  will  be  harmed  if  they  aren't  able  to  purchase                                                               
vehicles at  lower prices that  are offered through  local rental                                                               
car  companies  liquidating  through local  auctions  when  those                                                               
automobiles are purchased by independent dealers.                                                                               
Number 1508                                                                                                                     
JIM ARPINO, General  Manager, Affordable Used Cars,  said that HB
272,  as currently  written, isn't  good for  the customer.   The                                                               
issue  of  rental  car  sales  is one  of  the  reasons  why  the                                                               
legislation  isn't good  for the  customer as  already addressed.                                                               
The normal course of the rental  car business is not only to take                                                               
automobiles in  on trade  but also  to purchase  vehicles through                                                               
various avenues,  such as  auctions.  Mr.  Arpino stated  that HB
272 would essentially give franchise  dealers a monopoly on those                                                               
vehicles  for approximately  15-16  months.   The  aforementioned                                                               
doesn't help  fair trade in  the state.   He predicted  that most                                                               
likely there  will be discussion  [from those supporting  HB 272]                                                               
regarding the laws in the State of Washington.                                                                                  
Number 1351                                                                                                                     
DAN  SHERMAN, Variety  Motors, pointed  out  that both  franchise                                                               
dealers and  used [car dealers]  can purchase at  these auctions.                                                               
"So, it  really doesn't  effect anyone unfairly,"  he said.   Mr.                                                               
Sherman  informed the  committee that  when this  legislation was                                                               
drafted no independent automobile dealers were contacted.                                                                       
PHIL HAWS, Phil Haws Auto  Outlet, informed the committee that he                                                               
worked in  new automobile care  [dealers] for years and  it seems                                                               
like that  group is trying to  corner the market.   Mr. Haws said                                                               
that he didn't  understand [this legislation] because  a used car                                                               
is a used car.                                                                                                                  
Number 1219                                                                                                                     
JOHN LYBERGER, Lyberger's  Car & Truck Sales,  began by informing                                                               
the committee  that he sells  a number of Canadian  vehicles and,                                                               
as  was noted  earlier,  there is  almost  no difference  between                                                               
Canadian and American vehicles.   Mr. Lyberger related his belief                                                               
that  the  rebates,  hold  backs,   advertising,  and  0  percent                                                               
interest  deals  allow all  dealers  to  compete.   He  expressed                                                               
concerns  with regard  to  Section  1 and  suggested  that it  be                                                               
CHAIR ANDERSON announced that HB 272 would be held over.                                                                        
There being no  further business before the  committee, the House                                                               
Labor and  Commerce Standing Committee  meeting was  adjourned at                                                               
4:50 p.m.                                                                                                                       

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