Legislature(2015 - 2016)BARNES 124

03/20/2015 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 120 TRANSPORT NETWORK SVES. & WORKERS COMP TELECONFERENCED
Heard & Held
+ HB 58 ELIGIBILITY FOR AK ENERGY EFFIC LOANS TELECONFERENCED
Moved CSHB 58(L&C) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 123 ESTABLISH MARIJUANA CONTROL BOARD TELECONFERENCED
Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                         March 20, 2015                                                                                         
                           3:22 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Shelley Hughes, Vice Chair                                                                                       
Representative Jim Colver                                                                                                       
Representative Cathy Tilton                                                                                                     
Representative Andy Josephson                                                                                                   
Representative Sam Kito                                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Kurt Olson, Chair                                                                                                
Representative Gabrielle LeDoux                                                                                                 
Representative Mike Chenault (alternate)                                                                                        
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 123                                                                                                              
"An  Act establishing  the Marijuana  Control  Board; relating  to                                                              
the powers  and duties  of the Marijuana  Control Board;  relating                                                              
to the  appointment, removal,  and duties of  the director  of the                                                              
Marijuana  Control  Board;  relating  to  the  Alcoholic  Beverage                                                              
Control Board; and providing for an effective date."                                                                            
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 120                                                                                                              
"An  Act  relating to  workers'  compensation  and  transportation                                                              
network companies; and providing for an effective date."                                                                        
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 58                                                                                                               
"An Act  making an  entity that  is exempt  from federal  taxation                                                              
under  26   U.S.C.  501(c)(3)  (Internal   Revenue  Code)   and  a                                                              
federally recognized  tribe eligible  for a  loan from  the Alaska                                                              
energy  efficiency  revolving loan  fund;  and relating  to  loans                                                              
from the Alaska energy efficiency revolving loan fund."                                                                         
                                                                                                                                
     - MOVED CSHB 58(L&C) OUT OF COMMITTEE                                                                                      
                                                                                                                                
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 123                                                                                                                  
SHORT TITLE: ESTABLISH MARIJUANA CONTROL BOARD                                                                                  
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
02/23/15       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/23/15       (H)       L&C, JUD, FIN                                                                                          
03/04/15       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/04/15       (H)       Heard & Held                                                                                           
03/04/15       (H)       MINUTE(L&C)                                                                                            
03/11/15       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/11/15       (H)       Heard & Held                                                                                           
03/11/15       (H)       MINUTE(L&C)                                                                                            
03/16/15       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/16/15       (H)       Heard & Held                                                                                           
03/16/15       (H)       MINUTE(L&C)                                                                                            
03/20/15       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 120                                                                                                                  
SHORT TITLE: TRANSPORT NETWORK SVES. & WORKERS COMP                                                                             
SPONSOR(s): SADDLER                                                                                                             
                                                                                                                                
02/20/15       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/20/15       (H)       L&C                                                                                                    
03/20/15       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 58                                                                                                                   
SHORT TITLE: ELIGIBILITY FOR AK  ENERGY EFFIC LOANS                                                                             
SPONSOR(s): KREISS-TOMKINS, MILLETT                                                                                             
                                                                                                                                
01/21/15       (H)       PREFILE RELEASED 1/16/15                                                                               
01/21/15       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/15       (H)       ENE, L&C, FIN                                                                                          
02/10/15       (H)       ENE AT 10:15 AM CAPITOL 17                                                                             
02/10/15       (H)       Heard & Held                                                                                           
02/10/15       (H)       MINUTE(ENE)                                                                                            
02/26/15       (H)       ENE AT 10:15 AM CAPITOL 17                                                                             
02/26/15       (H)       Heard & Held                                                                                           
02/26/15       (H)       MINUTE(ENE)                                                                                            
03/05/15       (H)       ENE AT 10:15 AM CAPITOL 106                                                                            
03/05/15       (H)       Moved  CSHB 58(ENE) Out of Committee                                                                   
03/05/15       (H)       MINUTE(ENE)                                                                                            
03/09/15       (H)       ENE RPT CS(ENE) NT 4DP 1NR                                                                             
03/09/15       (H)       DP: CLAMAN, TALERICO, WOOL, VAZQUEZ                                                                    
03/09/15       (H)       NR: TILTON                                                                                             
03/20/15       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
KONRAD JACKSON, Staff                                                                                                           
Representative Kurt Olson                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on behalf of the House Labor &                                                                 
Commerce Committee, Representative Kurt Olson, Chair, on the                                                                    
changes to HB 123, Version W.                                                                                                   
                                                                                                                                
CYNTHIA FRANKLIN, Executive Director                                                                                            
Alcoholic Beverage Control Board (ABC Board)                                                                                    
Department of Commerce, Community & Economic Development (DCCED)                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified and answered questions during the                                                              
discussion of HB 123.                                                                                                           
                                                                                                                                
REPRESENTATIVE DAN SADDLER                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as prime sponsor of HB 120.                                                                    
                                                                                                                                
MICHAEL MONAGLE, Director                                                                                                       
Central Office                                                                                                                  
Division of Workers' Compensation                                                                                               
Department of Labor & Workforce Development (DLWD)                                                                              
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified and answered questions during the                                                              
discussion of HB 120.                                                                                                           
                                                                                                                                
SHELDON WINTERS, Lobbyist                                                                                                       
State Farm Insurance                                                                                                            
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified during the discussion of HB 120.                                                               
                                                                                                                                
BRYCE BENNETT, Senior Operations Manager                                                                                        
Uber                                                                                                                            
Seattle, Washington                                                                                                             
POSITION STATEMENT:  Testified during the discussion of HB 120.                                                               
                                                                                                                                
ARMAND FELICIANO, Vice-President                                                                                                
Property Casualty Insurers Association of America (PCI)                                                                         
Sacramento, California                                                                                                          
POSITION STATEMENT:  Testified in opposition to HB 120.                                                                       
                                                                                                                                
SUSAN GORSKI, Executive Director                                                                                                
Chugiak-Eagle River Chamber of Commerce                                                                                         
Eagle River, Alaska                                                                                                             
POSITION STATEMENT:  Testified during the discussion of HB 120.                                                               
                                                                                                                                
REPRESENTATIVE KREISS-TOMKINS                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Testified   as  one  of  the  joint  prime                                                            
sponsors of HB 58.                                                                                                              
                                                                                                                                
DANIEL POWERS, Coordinator                                                                                                      
Fairbanks Nonprofit Retrofit Pilot Program                                                                                      
Cold Climate Housing Research Center (CCHRC)                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support HB 58.                                                                              
                                                                                                                                
VICTORIA MOROZOVA, Chair                                                                                                        
Alaska Youth for Environmental Action                                                                                           
Anchorage Chapter                                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 58.                                                                           
                                                                                                                                
CARMELA FLYNN, Member                                                                                                           
Alaska Youth for Environmental Action (AYFEA)                                                                                   
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 58.                                                                           
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:22:04 PM                                                                                                                    
                                                                                                                                
VICE  CHAIR SHELLEY  HUGHES called  the House  Labor and  Commerce                                                            
Standing    Committee   meeting    to   order    at   3:22    p.m.                                                              
Representatives Colver,  Tilton, Josephson, Kito, and  Hughes were                                                              
present at the call to order.                                                                                                   
                                                                                                                                
            HB 123-ESTABLISH MARIJUANA CONTROL BOARD                                                                        
                                                                                                                                
3:22:45 PM                                                                                                                    
                                                                                                                                
VICE  CHAIR  HUGHES announced  that  the  only order  of  business                                                              
would be  HOUSE BILL NO. 123,  "An Act establishing  the Marijuana                                                              
Control  Board;   relating  to  the  powers  and   duties  of  the                                                              
Marijuana  Control Board;  relating to  the appointment,  removal,                                                              
and  duties  of  the director  of  the  Marijuana  Control  Board;                                                              
relating to  the Alcoholic Beverage  Control Board;  and providing                                                              
for an effective date."                                                                                                         
                                                                                                                                
3:23:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TILTON  moved  to  adopt  the  proposed  committee                                                              
substitute  (CS)   for  HB   123,  labeled  29-GH1110\W,   Martin,                                                              
3/14/15, as the working document.                                                                                               
                                                                                                                                
VICE CHAIR HUGHES objected for the purpose of discussion.                                                                       
                                                                                                                                
3:23:39 PM                                                                                                                    
                                                                                                                                
KONRAD  JACKSON, Staff,  Representative Kurt  Olson, Alaska  State                                                              
Legislature,   on  behalf   of   the  House   Labor  &   Commerce,                                                              
Representative  Kurt Olson,  Chair, explained  the changes  in the                                                              
proposed  committee substitute  (CS) for  HB 123,  Version W.   He                                                              
directed attention  to page 2, line  8, and stated this  would add                                                              
additional   language,  "as   a   regulatory  and   quasi-judicial                                                              
agency."   He  explained  that this  language  was  taken from  AS                                                              
04.08  related  to  the  Alcoholic  Beverage  Control  Board  (ABC                                                              
Board) since the  department envisions the marijuana  program will                                                              
be similar to the laws for regulating alcoholic beverages.                                                                      
                                                                                                                                
3:25:31 PM                                                                                                                    
                                                                                                                                
MR. JACKSON  referred to  page 2, lines  20, which would  reformat                                                              
language,  such that the  language from  proposed AS  17.38.080(b)                                                              
and  (c) was  combined into  subsection (b)  and definitions  were                                                              
added to subsection (h) [on page 3].                                                                                            
                                                                                                                                
MR. JACKSON  stated that  technical amendments  were made  on page                                                              
2, lines  21-29, including  renumbering.   In addition,  technical                                                              
changes were  made on page  3, lines 3-5,  to subsection  (g), and                                                              
on  page  3,  line  8, "title"  was  replaced  with  "chapter"  to                                                              
reflect that Title 38 contains other sections of law.                                                                           
                                                                                                                                
MR.  JACKSON directed  attention  to page  3, lines  10-13 to  the                                                              
definition added to subsection (h) for "marijuana industry."                                                                    
                                                                                                                                
3:27:15 PM                                                                                                                    
                                                                                                                                
MR. JACKSON  turned to page  3, lines 28-29,  which would  add the                                                              
language "...  within 30 days by  appointment of the  governor for                                                              
the unexpired  portion of  the vacated term."   The  intention was                                                              
to  have the  governor fill  any  vacant positions  as quickly  as                                                              
possible, he said.                                                                                                              
                                                                                                                                
3:27:36 PM                                                                                                                    
                                                                                                                                
MR.  JACKSON referred  to page  4,  lines 6-9,  to language  added                                                              
from AS 04.06.050  that would require  the board to meet  at least                                                              
once  each year  in each  judicial  district.   This language  was                                                              
necessary  in  order  to  consider the  need  to  modify  existing                                                              
regulations  with respect  to local issues  in each  jurisdiction,                                                              
he said.                                                                                                                        
                                                                                                                                
MR. JACKSON  directed attention to  page 4, lines 11-13  and lines                                                              
29-31, which  would incorporate  several technical drafting  style                                                              
changes.  In addition, on line 11 the word "all" was deleted.                                                                   
                                                                                                                                
MR. JACKSON  turned to page 5, lines  14, which would  add two new                                                              
subsections, noting  that subsection  (f) would require  notifying                                                              
municipalities and licensees of regulations and statute changes.                                                                
                                                                                                                                
MR.  JACKSON directed  attention  to page  5,  lines 21-24,  which                                                              
would  add  new language  to  allow  the Marijuana  Control  Board                                                              
(MCB)   the  authority   to  deal   with   prostitution  and   sex                                                              
trafficking.                                                                                                                    
                                                                                                                                
MR.  JACKSON referred  to page  6,  line 5,  a technical  drafting                                                              
style  change.   He directed  attention  to page  6, lines  22-23,                                                              
which would add  a sunset date for the proposed  Marijuana Control                                                              
Board (MCB)  of June 30,  2018 to match  the proposed  sunset date                                                              
for the Alcoholic Beverage Control Board (ABC Board).                                                                           
                                                                                                                                
3:31:27 PM                                                                                                                    
                                                                                                                                
MR.  JACKSON referred  to page  7,  lines 1-15,  to language  that                                                              
would require membership  of the proposed Marijuana  Control Board                                                              
(MCB).  This  provision would require the governor  to appoint two                                                              
members from people  who have alcohol industry  experience, retail                                                              
or wholesale,  whose terms  would end  in two  years.   He related                                                              
the rationale used,  that the people in the alcohol  industry have                                                              
sufficient  knowledge  of  the regulatory  process  and  oversight                                                              
activities  of the  ABC Board  and  since the  two industries  and                                                              
boards  parallel one  another,  it  made sense  to  allow them  to                                                              
serve.   Another  concern  was that  the  bill allowed  membership                                                              
from  the lawful  practice  in  the  marijuana industry,  yet  the                                                              
state  doesn't have  a "lawful"  practice.   He expressed  concern                                                              
that the proposed  Marijuana Control Board (MCB) might  not have a                                                              
sufficient pool of appointees to choose from.                                                                                   
                                                                                                                                
MR.  JACKSON  referred to  page  7,  line  10-13, to  a  technical                                                              
drafting  style changes  to conform  to  the legislative  drafting                                                              
manual style.                                                                                                                   
                                                                                                                                
3:33:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KITO,   in  reference  to  the  meetings   in  the                                                              
judicial  districts, asked  how many board  meetings the  proposed                                                              
Marijuana  Control Board  (MCB) anticipated  it will  hold and  if                                                              
the meetings  would be  monthly or quarterly  meetings.   He asked                                                              
whether  it would  adequately provide  opportunities for  everyone                                                              
to  participate.   He related  his understanding  there were  four                                                              
judicial  districts  and  wondered   if  there  will  be  standing                                                              
meetings  in each  one  of the  judicial  districts the  quarterly                                                              
meetings or if the board anticipated it will meet monthly.                                                                      
                                                                                                                                
MR. JACKSON  deferred to the  executive director of  the Alcoholic                                                              
Beverage Control Board (ABC Board) to answer.                                                                                   
                                                                                                                                
3:35:26 PM                                                                                                                    
                                                                                                                                
CYNTHIA FRANKLIN,  Executive Director, Alcoholic  Beverage Control                                                              
Board (ABC  Board), Department of  Commerce, Community  & Economic                                                              
Development (DCCED),  stated that  the Alcoholic Beverage  Control                                                              
Board  (ABC Board)  currently meets  five  times a  year, once  in                                                              
each of  the [judicial] districts,  with an additional  meeting in                                                              
Anchorage  due to the  volume of  liquor licenses.   She  said the                                                              
meetings are roughly  quarterly meetings that are  held in Juneau,                                                              
Anchorage,  Fairbanks, and  Western  Alaska -  generally in  Nome,                                                              
followed  by the  additional  meeting  in Anchorage  on  December.                                                              
These  meetings are  set  at the  previous  meeting  so the  times                                                              
vary,  depending on  the schedules  of the five  volunteers.   She                                                              
stated  that  the meetings  are  adequate  for  the ABC  Board  to                                                              
address  any issues  that have  arisen  as well  as any  community                                                              
needs.  She anticipated  that if HB 123 passes  that the Marijuana                                                              
Control Board  will meet  in conjunction  with the  ABC Board  - a                                                              
one-day meeting  for the ABC Board  followed by a  one-day meeting                                                              
for the Marijuana  Control Board (MCB) - to save  travel funds for                                                              
staff travel.  For  the past three meetings the ABC  Board has had                                                              
two-day  meetings  to  address some  of  anticipated  issues,  she                                                              
said.                                                                                                                           
                                                                                                                                
3:37:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KITO asked  whether there  may be a  significantly                                                              
larger  number of  marijuana  license  requests that  may  require                                                              
additional meetings.                                                                                                            
                                                                                                                                
MS. FRANKLIN  answered that  at this time  it was uncertain  as to                                                              
how  many  licenses  will  be  requested;  however,  the  division                                                              
anticipates  the potential  need  for additional  meetings in  the                                                              
first year or two.   Certainly, to initially set  up a program may                                                              
require  more  frequent  board   meetings.    She  said  that  the                                                              
statutory language  in Title 4  does allow the Alcoholic  Beverage                                                              
Control Board to  meet at the call of the chair.   She anticipated                                                              
the   division  would   either  promulgate   regulations  or   the                                                              
Alcoholic  Beverage  Control  Board  (ABC  Board)  will  call  for                                                              
additional meetings, if necessary.                                                                                              
                                                                                                                                
3:38:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON,  referring to  Version  W, related  his                                                              
understanding that  the proposal was to postpone  a representative                                                              
from  the marijuana  industry for  a time,  perhaps up  to two  or                                                              
three years.   He asked  for her  opinion since regulations  would                                                              
be formed  during that time.   Further, he asked whether  any loss                                                              
of  expertise  would  result  as   a  consequence.    He  directed                                                              
attention  to the  powers  and duties  of the  board  [on page  4,                                                              
beginning on  line 14], which read,  "(a) The board  shall control                                                              
6  the cultivation,  manufacture,  and sale  of  marijuana in  the                                                              
state. The  board is vested with  the powers and  duties necessary                                                              
to enforce  this chapter."   He  asked whether  any benefit  could                                                              
result  from  having  people  who have  studied  these  issues  to                                                              
immediately serve on the board.                                                                                                 
                                                                                                                                
MS. FRANKLIN  answered that the  Alcoholic Beverage  Control Board                                                              
(ABC  Board)  supports   having  a  voice  on   the  board  chosen                                                              
specifically for  marijuana knowledge; however, the  board was not                                                              
opposed  to having  a  voice from  the  alcohol  industry, with  a                                                              
regulatory perspective,  serve in the  first two years.   In fact,                                                              
the   board  recognized   that  someone   with  alcohol   industry                                                              
experience  will  understand  the  unique  position  of  operating                                                              
businesses  in   a  highly  regulated  atmosphere,   but  she  has                                                              
encountered  people  who  clearly have  significant  knowledge  of                                                              
marijuana.   Certainly the  cultivation aspects  of marijuana  was                                                              
different from the alcohol industry, she said.                                                                                  
                                                                                                                                
3:41:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  whether  someone could  be a  law                                                              
abiding  citizen but  still  know a  tremendous  amount about  the                                                              
industry,   in   particular,  due   to   significant   information                                                              
available on  the Internet  or by  having attended conferences  in                                                              
the Lower 48.                                                                                                                   
                                                                                                                                
MS.  FRANKLIN agreed  that  a lot  of information  was  available.                                                              
She  pointed  out that  personal  cultivation  has been  legal  in                                                              
Alaska   since   1975   so  some   individuals   in   Alaska   are                                                              
knowledgeable   about  marijuana   cultivation  since   they  have                                                              
personally grown it.   In response to a question,  she stated that                                                              
the Alcoholic  Beverage Control  Board (ABC Board)  has been  on a                                                              
three-year sunset  rotation, that the  ABC Board is due  to sunset                                                              
June 30,  2015, and HB  116 provides for  an extension  until June                                                              
30, 2018.                                                                                                                       
                                                                                                                                
3:42:09 PM                                                                                                                    
                                                                                                                                
VICE CHAIR HUGHES  asked for further clarification  on whether the                                                              
sunset date  was set in  statute and if  it is always  three years                                                              
or if it changes.                                                                                                               
                                                                                                                                
MS. FRANKLIN  answered that a new  date was set each time  the ABC                                                              
Board is up  for renewal, but the  pattern has been to  extend the                                                              
board three years.                                                                                                              
                                                                                                                                
3:43:34 PM                                                                                                                    
                                                                                                                                
MR. JACKSON  offered  that all boards  are subject  to sunset  and                                                              
prior to  the sunset date the  legislative audit reviews  how well                                                              
the  board  is  functioning  and   makes  recommendations  to  the                                                              
legislature.  In  some instances, boards are extended  up to eight                                                              
years, but  the sunset date  varies on  a case-by-case basis.   He                                                              
suggested  that  although the  ABC  Board  has been  extended  for                                                              
three years, it may not always be extended for three years.                                                                     
                                                                                                                                
3:44:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  COLVER referred  to page 5,  line 15,  to proposed                                                              
Section 17.38.085, enforcement powers, which read:                                                                              
                                                                                                                                
     The   director  and   the  persons   employed  for   the                                                                   
     administration  and  enforcement  of this  chapter  may,                                                                   
     with  the  concurrence  of the  commissioner  of  public                                                                   
     safety,  exercise  the  powers of  peace  officers  when                                                                   
     those powers are specifically granted by the board.                                                                        
                                                                                                                                
REPRESENTATIVE COLVER  said this proposed  section goes on  to say                                                              
the  board  can enforce  sex  trafficking  and prostitution.    He                                                              
asked  whether it  was typical  in  [Title 4]  statues related  to                                                              
alcohol  to  grant powers  of  peace  officers to  the  division's                                                              
staff.                                                                                                                          
                                                                                                                                
MR. JACKSON  answered yes.   He stated  that the language  on page                                                              
5, lines 21-24 in  Version W was language taken  straight from the                                                              
statutes governing alcoholic beverages.                                                                                         
                                                                                                                                
3:46:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  COLVER asked whether  that was  at request  of the                                                              
department or if it was language developed by the committee.                                                                    
                                                                                                                                
MR. JACKSON answered  that the language was added in  Version W by                                                              
comparing the statutes  pertaining to the ABC Board  and drawing a                                                              
parallel between  the alcohol statutes and the  proposed marijuana                                                              
statutes.                                                                                                                       
                                                                                                                                
3:46:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   COLVER   assumed   standards   since   the   only                                                              
qualifications of  the enforcement staff was the  language in this                                                              
proposed section,  " ... with the concurrence  of the commissioner                                                              
of public safety  ...."  He assumed this language  did not empower                                                              
a security  guard  with the  ability to  enforce state  laws.   He                                                              
said he  would feel more comfortable  with enforcement  being done                                                              
by enforcement  officers with  qualifications using  the standards                                                              
for certified police  officers.  He suggested that  this provision                                                              
might need to be tweaked.                                                                                                       
                                                                                                                                
MR. JACKSON deferred to Ms. Franklin.                                                                                           
                                                                                                                                
MS.   FRANKLIN  answered   that  the   five  enforcement   officer                                                              
currently employed  by the ABC  Board are licensed  peace officers                                                              
commissioned by the  commissioner of public safety  to enforce the                                                              
alcoholic beverage  laws.  The requirements  are set in  the State                                                              
of Alaska's  job description for  Investigator III and IV.   These                                                              
officers receive  a commission in  connection with this  job since                                                              
they  are not  granted general  police officer  powers granted  to                                                              
local law enforcement  officers or troopers.  She  agreed with Mr.                                                              
Jackson, that  this language was  derived from language in  AS 04,                                                              
more  specifically from  AS 04.06.110,  which has  been in  effect                                                              
since  1980.   She characterized  the five  officers as  extremely                                                              
professional  and these  officers  tend  to come  from  a pool  of                                                              
retired active duty police officers.                                                                                            
                                                                                                                                
3:49:51 PM                                                                                                                    
                                                                                                                                
VICE CHAIR  HUGHES said she  maintained her objection  to adopting                                                              
the proposed committee substitute for HB 123, Version W.                                                                        
                                                                                                                                
VICE CHAIR HUGHES announced that HB 123 would be held over.                                                                     
                                                                                                                                
         HB 120-TRANSPORT NETWORK SVES. & WORKERS COMP                                                                      
                                                                                                                                
3:50:09 PM                                                                                                                    
                                                                                                                                
VICE CHAIR  HUGHES announced the  next order of business  would be                                                              
HOUSE  BILL NO.  120, "An  Act relating  to workers'  compensation                                                              
and  transportation  network  companies;   and  providing  for  an                                                              
effective date."                                                                                                                
                                                                                                                                
3:51:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  DAN SADDLER,  Alaska  State Legislature,  speaking                                                              
as the  sponsor of HB  120, stated that  Chugiak-Eagle River  is a                                                              
growing community  of approximately  35,000 people about  10 miles                                                              
north  of  the  core  of  the  Municipality  of  Anchorage  (MOA).                                                              
Although Chugiak-Eagle  River is a thriving community,  it has had                                                              
ongoing challenges  in obtaining transportation services  with its                                                              
municipal bus system  and local taxicab industry.   Apparently the                                                              
community lies too  far from the MOA's core to  receive consistent                                                              
and timely  taxi service.   It requires  scheduling in  advance or                                                              
waiting 30  minutes or longer  for a cab,  plus it can  be costly.                                                              
The  municipal bus  system has  continually  been threatened  with                                                              
reduced hours, routes, and service.                                                                                             
                                                                                                                                
REPRESENTATIVE   SADDLER  said   that   the  Chugiak-Eagle   River                                                              
community  hopes  to  get  some  relief  from  the  transportation                                                              
issues  by the  new technology  trends,  such as  Uber, Lyft,  and                                                              
Sidecar,  which are  known as  "transportation network  companies"                                                              
or TNCs.   The transportation  network companies (TNCs)  use smart                                                              
phone  applications and  software  to connect  people  who want  a                                                              
ride with  available drivers willing  to provide the service  in a                                                              
relatively short amount of time.                                                                                                
                                                                                                                                
REPRESENTATIVE  SADDLER explained  that drivers connected  through                                                              
"transportation  network companies"  are independent  contractors.                                                              
They  obtain  business  licenses,   operate  their  own  vehicles,                                                              
establish operating  hours, and  decide for themselves  whether to                                                              
accept  or decline  an available  ride  request.   He stated  that                                                              
Uber   entered  the   Anchorage   market  in   2014  and   created                                                              
transportation options  for his community and for  Girdwood, south                                                              
of Anchorage.   He stated that  Uber was currently in  the process                                                              
of  negotiating  with  the  MOA  on  how  to  operate  inside  the                                                              
municipality.   This bill would  address several issues  that will                                                              
help his  community.   He said  that HB  120 would essentially  do                                                              
two  things.   First,  it  would  define  "transportation  network                                                              
company"  and   "transportation   network  company  services."   A                                                              
"transportation  network company" would  mean an entity  that uses                                                              
a digital  network or software  application to connect  passengers                                                              
to  drivers.    It  would  specify   that  transportation  network                                                              
company  services  are provided  from  the  moment that  a  driver                                                              
accepts  a request  for  services  for a  ride  to  the point  the                                                              
passenger  exits their  vehicle.   In  addition,  this bill  would                                                              
offers transportation  network company drivers the  same exemption                                                              
from  workers'  compensation insurance  coverage  requirements  as                                                              
enjoyed by  other people  in Alaska,  including babysitters,  real                                                              
estate professionals,  certain sports referees and  officials, and                                                              
taxicab  drivers since  these people  are not  employees, but  are                                                              
independent  contractors.    The   Chugiak-Eagle  River  area  has                                                              
expressed a strong  desire for more choice, more  competition, and                                                              
more  opportunities  for  transportation  services.   He  directed                                                              
attention  to  documents  in  members'   packets  from  the  local                                                              
chamber of commerce.   He offered his belief that  HB 120 provides                                                              
one step toward  addressing the changing market  in transportation                                                              
needs in underserved communities in Alaska.                                                                                     
                                                                                                                                
3:55:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked whether there was a  way to ensure                                                              
to transportation  network companies (TNCs) could  operate, but to                                                              
also  ensure that  all participants  in the  enterprise are  fully                                                              
insured.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  SADDLER answered  that his  intent was to  address                                                              
some  of  the  fundamental  issues  involved  with  transportation                                                              
network company operations;  however, he also desires  to focus on                                                              
this aspect and not be "everything to all people."                                                                              
                                                                                                                                
3:55:59 PM                                                                                                                    
                                                                                                                                
VICE CHAIR HUGHES opened public testimony on HB 120.                                                                            
                                                                                                                                
3:56:09 PM                                                                                                                    
                                                                                                                                
MICHAEL MONAGLE,  Director, Central  Office, Division  of Workers'                                                              
Compensation,   Department  of   Labor  &  Workforce   Development                                                              
(DLWD),  stated  that  he  was not  an  expert  on  transportation                                                              
network services.   He said that the department is  neutral on the                                                              
bill.  He advised  members that there was a companion  bill in the                                                              
other body,  [SB 58] and he  testified in opposition to  the bill;                                                              
however, that  is incorrect.   The bills are currently  identical,                                                              
he said,  apologizing  for any confusion.   He  said the  official                                                              
position of  the Department  of Labor  & Workforce Development  is                                                              
that it is neutral on both bills.                                                                                               
                                                                                                                                
MR. MONAGLE  referred to  page 2,  line 25,  noting that  the bill                                                              
would  exempt a  transportation  network company  driver from  the                                                              
moment  the  driver  picks  up a  passenger  until  the  passenger                                                              
disembarks.    He  highlighted   that  what  was  unclear  to  the                                                              
department  is how  the exemption  would apply  to someone  at the                                                              
curbside waiting for  a passenger and something happens  or if the                                                              
driver  was waiting  for  a passenger  to  contact  him/her and  a                                                              
crash happened.   He  asked for  further clarification  on whether                                                              
that  person  was   considered  an  employee  or   if  he/she  was                                                              
considered an independent contractor.                                                                                           
                                                                                                                                
3:58:21 PM                                                                                                                    
                                                                                                                                
MR.  MONAGLE  directed  attention  to the  current  exemption  for                                                              
taxicabs; however,  he offered  his belief  that the language  [on                                                              
page 2, lines 21-22  in HB 120 [in paragraph  (11)] seemed broader                                                              
than just taxi services.   He read, "(11) a person  who operates a                                                          
motor vehicle  that is  (A) owned, leased,  or authorized  for use                                                          
by  the  person;   ...."    Under  the  definition   of  having  a                                                          
technology platform,  a smart  phone, to connect  the driver  to a                                                              
passenger, it  would seem that  tour operators that  treated their                                                              
drivers as  independent operators with  a smart phones  could take                                                              
advantage   of  the   same  language.      While  the   department                                                              
acknowledged an  exemption exists  for taxi drivers  and limousine                                                              
services,  expanding  the  industry  further -  into  the  tourism                                                              
business - would be of concern to the department.                                                                               
                                                                                                                                
3:59:33 PM                                                                                                                    
                                                                                                                                
MR.  MONAGLE directed  attention  to proposed  Sections  3 and  4,                                                              
which are  retroactive to January  1, 2014.  He  expressed concern                                                              
that  an  injured  worker  or  an   ongoing  proceeding  could  be                                                              
nullified by the retroactive clause.                                                                                            
                                                                                                                                
3:59:57 PM                                                                                                                    
                                                                                                                                
VICE  CHAIR HUGHES,  in  reference to  the  concern about  drivers                                                              
waiting on  the curb  for passengers,  directed attention  to page                                                              
2, [line  27] which  indicates service starts  at the  point "when                                                              
the person accept  a request."  She suggested that  a person would                                                              
open his/her  smart phone application,  "app," and click on  it to                                                              
make a payment.   She said that  the Uber car sitting  by the curb                                                              
waiting  for  someone who  has  accepted  the request  would  fall                                                              
under this language.   She asked for further  clarification on his                                                              
concern that there would be a "gap."                                                                                            
                                                                                                                                
4:00:40 PM                                                                                                                    
                                                                                                                                
MR. MONAGLE  referred  to page  2, line  25 which  read, "...  ; a                                                          
person  is  performing  transportation  network  company  services                                                          
under  this subparagraph  when the  person accepts  a request  for                                                          
transportation  ...."    He  suggested  that  the  department  was                                                          
concerned about  a driver who was  "in between" requests,  who had                                                              
not  yet received  a  text or  other  communication  for the  next                                                              
passenger.   He clarified  he was interested  in what  happened to                                                              
the driver in between calls.                                                                                                    
                                                                                                                                
VICE CHAIR HUGHES said she had misunderstood his concern.                                                                       
                                                                                                                                
4:01:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON   asked  whether  he   considered  these                                                              
drivers  as  employees   and  not  as  contractors;   further,  to                                                              
consider the policy decision being made by this language.                                                                       
                                                                                                                                
MR. MONAGLE answered  if a dispute arose as to  whether the driver                                                              
was  an   independent  contractor   or  an   employee,  that   the                                                              
department would  use the  "relative nature of  the work  test" to                                                              
make  the  determination,   which  would  consider   a  series  of                                                              
questions.  For  example, one of the primary  considerations would                                                              
be whether this  was a separate calling or in other  words whether                                                              
the work  being done  was independent  of the  employer or  if the                                                              
employer  gained   significantly  from   the  activities   of  the                                                              
employee.   He  characterized  the "relative  nature  of the  work                                                              
test"  as  consisting  of  a series  of  questions,  such  as  who                                                              
provides  the tools  and equipment,  who sets  the hours,  whether                                                              
the employee has  the right to hire others, and  if the conditions                                                              
of employment  were set  by the independent  contractor or  by the                                                              
employer.    He   said  this  type  of  analysis   will  help  the                                                              
department  make the  determination  on whether  the person  truly                                                              
was an employee or is an independent contractor.                                                                                
                                                                                                                                
4:03:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked what the ramifications  to the law                                                              
would be if the exemption was adopted.                                                                                          
                                                                                                                                
MR.  MONAGLE said  that  ultimately whether  to  exempt the  party                                                              
would be  a policy decision  by the legislature.   Of  course, the                                                              
department  always  has  concerns  about  exemptions  since  there                                                              
seems  to  be  a  growing  movement   nationally  to  classify  as                                                              
employees  as  independent  contractors,  he  said.   One  of  the                                                              
common  complaints specific  to the  construction industry  occurs                                                              
when   employers   classify  their   carpenters   as   independent                                                              
contractors instead  of as employees.  The department  has a staff                                                              
of investigators  who delve  into these complaints,  he said.   He                                                              
recalled a  national delivery company  had classified  its drivers                                                              
as  independent   contractors  since  their  drivers   leased  the                                                              
vehicles; however,  the California  district court ruled  that the                                                              
drivers were employees  and not independent contractors.   He said                                                              
the  department  has  had  some concern  about  the  growing  push                                                              
toward independent  contractors, but  their concern  was primarily                                                              
to ensure  that workers  are covered in  the event that  something                                                              
happens to  them.  The department  wants to ensure  that employees                                                              
have medical  coverage and wage  replacement covered in  the event                                                              
injuries are sustained on the job.                                                                                              
                                                                                                                                
4:04:56 PM                                                                                                                    
                                                                                                                                
VICE  CHAIR HUGHES  asked  for  further clarification  on  whether                                                              
taxicab drivers are considered independent contractors.                                                                         
                                                                                                                                
MR. MONAGLE answered yes.                                                                                                       
                                                                                                                                
4:05:10 PM                                                                                                                    
                                                                                                                                
SHELDON  WINTERS,  Lobbyist,  State Farm  Insurance,  stated  that                                                              
State  Farm  Insurance   was  the  largest  insurer   of  personal                                                              
automobiles  in the country  and in  Alaska.   He said  that State                                                              
Farm   Insurance   does   not   have   any   objection   to   TNCs                                                              
[transportation  network companies]  or any  position on  the gist                                                              
of  the  bill,  which  was  to   exempt  TNCs  from  the  workers'                                                              
compensation  requirements.   However,  State  Farm Insurance  has                                                              
expressed concerned  about the narrow  definition of  TNC services                                                              
in  HB  120,  which  could  have   dire  consequences  if  applied                                                              
elsewhere.                                                                                                                      
                                                                                                                                
4:06:15 PM                                                                                                                    
                                                                                                                                
MR. WINTERS  offered to  read some snippets  from the  Division of                                                              
Insurance's  consumer warning  posted on  the division's  website.                                                              
He  read, "Alaska  Division  of  Insurance  (DOI) joins  14  other                                                              
states  in issuing  a warning  about  the risks  of rideshare  and                                                              
vehicle-sharing programs  ...."  He stated that figure  was now 22                                                              
states that have  issued similar warning.  He  read, "Ride-sharing                                                              
programs,  or   transportation  network  companies/TNCs,   use  an                                                              
online service  to connect passengers  with drivers who  use their                                                              
personal  vehicles   for  pre-arranged  taxi-like   transportation                                                              
services  for hire.   The  Division  wants Alaskans  to know  that                                                            
these  programs   may  result  in   a  denial  of   insurance  for                                                            
participating vehicle owners, drivers, and passengers."                                                                       
                                                                                                                                
4:07:20 PM                                                                                                                    
                                                                                                                                
MR. WINTERS  continued to  read, "Personal  auto insurance  is not                                                              
intended  to  cover   individuals  who  use  their   vehicles  for                                                              
commercial purposes.   Most personal auto policies  will not cover                                                            
an  accident  that   occurs  when  someone  uses   their  personal                                                              
vehicles for commercial purposes."                                                                                              
                                                                                                                                
MR. WINTERS said  that other regulators refer to  various "gaps in                                                              
insurance" that  exist with  this new emerging  industry.   One of                                                              
the gaps is  of concern in this  bill.  He stated  that commercial                                                              
activities  of a TNC  driver do  not begin  when the passenger  is                                                              
picked  up  or  when  the  passenger  calls;  instead,  commercial                                                              
activities that  are not intended  to be covered by  personal auto                                                              
insurance  begin  the  moment  that   "app"  is  turned  on.    He                                                              
suggested that  typically the  TNC driver turns  the "app"  on and                                                              
either drives around  or sits on the side of  the street "roaming"                                                              
for  customers.   He offered  his belief  that the  aforementioned                                                              
period  of  time was  not  contained  in  the definition  [in  the                                                              
bill].   He characterized it  as being  similar to when  a taxicab                                                              
driver turns  on his light  to indicate the  cab is for hire.   At                                                              
that  point,  the  taxicab  driver   does  not  have  a  customer;                                                              
however,  he is  engaged in  a commercial  activity,  just as  any                                                              
Uber  driver or  TNC driver  who has turned  on the  "app" and  is                                                              
roaming around for passengers.                                                                                                  
                                                                                                                                
4:08:58 PM                                                                                                                    
                                                                                                                                
MR. WINTERS  suggested for  TNC drivers it  was arguably  the most                                                              
dangerous time  because they are  engaged in the app,  roaming for                                                              
customers  and some  tragic accidents  have  occurred during  this                                                              
time; for  example, the  death of  a six-year-old  in which  a TNC                                                              
driver did  not have a  passenger, but the  "app" was on  when the                                                              
driver ran  into a family and the  young daughter was  killed.  He                                                              
stated  that  in that  high-profile  accident,  the TNC  took  the                                                              
position that since  a passenger connection had not  yet been made                                                              
the TNC was not responsible.                                                                                                    
                                                                                                                                
4:09:42 PM                                                                                                                    
                                                                                                                                
MR.  WINTERS   expressed  concern  that  "transportation   network                                                              
services" are defined  too narrowly.  He referred to  page 3, line                                                              
6, to  paragraph  (5), "transportation  network company  services"                                                              
means transportation  of a passenger between points  chosen by the                                                              
passenger and prearranged  with a transportation  network company-                                                              
endorsed  driver  through  the use  of  a  transportation  network                                                              
company's  digital network  or software application."   He  stated                                                              
that it  was unclear if  TNS starts when  passenger is  picked up,                                                              
or is engaged, but it doesn't include the "roaming" period.                                                                     
                                                                                                                                
MR. WINTERS  characterized  this bill as  a workers'  compensation                                                              
bill.  He expressed  concern that this narrow  definition would be                                                              
used to  preclude the  injured party.   The concern  was two-fold;                                                              
first, because that  was what TNCs have argued in  the past, which                                                              
is that  even though  the app is  on, it  is before any  passenger                                                              
was  engaged, and  thus would  not  be a  TNC activity.   If  this                                                              
legislation  passes,  it will  be  the  only  law in  Alaska  that                                                              
defines  TNCs.   From his  experience  as a  defense attorney,  he                                                              
opined that the  courts will look at this definition  to determine                                                              
whether workers' compensation  will apply or not.   He said he was                                                              
working  with  the sponsor  on  language  that would  broaden  the                                                              
definition  to include "app  on."   When the app  was on  it would                                                              
become a TNC enterprise, he said.                                                                                               
                                                                                                                                
4:11:41 PM                                                                                                                    
                                                                                                                                
MR. WINTERS  said that TNC's  are evolving,  which he viewed  as a                                                              
good  thing.     Certainly  legislation  can  evolve   over  time;                                                              
however,  what must  be  "gotten  right" from  the  start was  the                                                              
definition of  the TNC.  He  asked members to  consider broadening                                                              
the  definition  in  this workers'  compensation  bill.    Lastly,                                                              
although  he agreed  he  is not  a workers'  compensation  expert,                                                              
when  an industry  attempts to  put  in statute  an exemption  for                                                              
workers'  compensation responsibility,  the  industry should  want                                                              
it to be as  broad as possible, therefore, he  found the liability                                                              
aspects in the bill to be very troubling.                                                                                       
                                                                                                                                
4:13:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON said Mr.  Winter's proposal  seemed like                                                              
a "win-win"  situation.   He noted  that Uber  was very  effective                                                              
since  its service  is cheaper,  but the  externalities not  being                                                              
absorbed by  the transaction.   He related his understanding  that                                                              
the insurance industry  wants to make money, but it  is willing to                                                              
cover people for  injuries.  He suggested that  under Mr. Winter's                                                              
proposal  drivers of  Uber cars  would have  more protection  from                                                              
the courts  and their  passengers would  be better protected,  but                                                              
the whole enterprise would cost more.                                                                                           
                                                                                                                                
MR.  WINTERS answered  that he  thinks  that characterization  was                                                              
accurate,  but  added that  if  personal  auto insurance  were  to                                                              
cover the commercial  policy and activities, everyone  would be in                                                              
the  "pool" and  it will  cost everyone  more  for that  coverage.                                                              
Instead,  the cost  of coverage  should rest  with the  enterprise                                                              
engaged  in  the  commercial  activity,  which  is the  TNC.    He                                                              
recalled  earlier  testimony  that  stated part  of  the  business                                                              
model  was to  leverage the  use of  the personal  auto policy  to                                                              
avoid  having  to  pay  for  insurance.     He  acknowledged  that                                                              
highlighted the  issue.  He said  a person's personal  auto policy                                                              
does  not cover  commercial activity  and  the insurance  industry                                                              
wants  to  fill  that  gap.    At the  end  of  the  day,  a  more                                                              
comprehensive  liability  bill  has  been  passed  in  four  other                                                              
states,  which states  that  from moment  the  "app" is  on it  is                                                              
clear that  the personal auto policy  does not apply.   This would                                                              
it require the  TNCs to basically obtain commercial  insurance for                                                              
their activities at that point.                                                                                                 
                                                                                                                                
4:16:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KITO said  Mr. Winters mentioned  ride-share.   It                                                              
made him  think about carpooling in  which people pay $5  for gas.                                                              
He said as  the vehicle owner, he  has provided rides  to work and                                                              
was  reimbursed   for  gas.    He  asked  whether   personal  auto                                                              
insurance  covers  that activity  since  it  happens five  days  a                                                              
week.                                                                                                                           
                                                                                                                                
MR.  WINTERS answered  that carpooling  does not  put the  vehicle                                                              
"out for  hire."  He  offered his belief  that the  activity would                                                              
be covered  under the personal auto  policy.  The  distinction was                                                              
that  the TNCs  are  commercial enterprises  that  make money  and                                                              
carpooling does not.                                                                                                            
                                                                                                                                
4:17:45 PM                                                                                                                    
                                                                                                                                
BRYCE BENNETT, Senior  Operations Manager, Uber,  stated that this                                                              
bill has a  much narrower scope, which specifically  addresses the                                                              
workers' compensation piece being evaluated.                                                                                    
                                                                                                                                
MR.  BENNETT explained  that  Uber was  a  platform that  connects                                                              
drivers and  riders through a mobile  application [or "app"].   He                                                              
stated that Uber  brings an unprecedented level  of accountability                                                              
to the  transportation industry  since riders  know who  will come                                                              
to pick  them up.   The system  is a  cashless system  with riders                                                              
paying  for the  service with  their credit  cards, which  removes                                                              
danger for  drivers.  On  top of that  Uber provides  a continuous                                                              
feedback look  and a rating  system after  every single trip.   He                                                              
described  Uber   drivers  as  independent  contractors   who  may                                                              
provide  a couple of  trips a  week to  30 or  40 trips per  week.                                                              
These  drivers  must  apply  on   line,  submit  basic  documents,                                                              
including   registration,   proof   of  insurance   and   driver's                                                              
licenses.  Driver  must obtain a 19-point vehicle  inspection at a                                                              
local  certified mechanic,  such  as a  Midas shop.   The  drivers                                                              
must  submit to  a stringent  and thorough  background check  that                                                              
spans seven  years and considers  motor vehicle records,  criminal                                                              
background  check, sex offender  data base  registry check,  and a                                                              
social  security  trace that  pulls  local and  multi-state  court                                                              
records.   Only after  taking all  of these  steps can  any driver                                                              
have  access to  the platform.   One  of the  things that  drivers                                                              
said when  polled was that one  of the greatest things  about Uber                                                              
was  the  flexibility  that  it provided  them,  rather  than  the                                                              
money.  They can come and go as they please, he said.                                                                           
                                                                                                                                
4:20:29 PM                                                                                                                    
                                                                                                                                
MR.  BENNETT stated  that drivers  could sign  on once  a week  or                                                              
choose  to offer  services  on Friday  and  Saturday  nights.   He                                                              
characterized the  drivers as part-time  drivers or "stay  at home                                                              
moms,"  but  the main  theme  was  the complete  flexibility  Uber                                                              
drivers have.   He said that  Uber drivers own their  own personal                                                              
vehicles and  drive an average of  20 hours a month with  the "app                                                              
on", which  he contrasted  with taxicab  companies, whose  drivers                                                              
are dispatched,  often working on  a set shift, and  leasing their                                                              
vehicles  from permanent  owners.   In the case  of Uber,  drivers                                                              
have an  option to  receive a  request.   These drivers  receive a                                                              
request via  their smart  phones, and can  decide whether  to pick                                                              
up the passengers  or not.  It depends on the  city, but typically                                                              
drivers are  required to  obtain business  licenses.   Drivers are                                                              
not furnished  any equipment.  He  offered his belief that  one of                                                              
the conditions  for exemptions  for taxicab  companies was  due to                                                              
the rate-based fare  by mile or minute, which is  also how Uber is                                                              
calculated.   He  stated that  the  [drivers] take  80 percent  of                                                              
share and do not work any shifts or for any hourly rates.                                                                       
                                                                                                                                
4:22:35 PM                                                                                                                    
                                                                                                                                
MR. BENNETT  stated  that the partners  receive  an IRS 1099  form                                                              
each  year  since there  isn't  any  tax  withholding.   In  other                                                              
cities  that  have  Lyft  and  Sidecar,   Uber  doesn't  have  any                                                              
exclusivity.   The Uber  drivers can  have all three  applications                                                              
on their phone and can be affiliated with all three companies.                                                                  
                                                                                                                                
MR. BENNETT  said that  this bill  looks at workers'  compensation                                                              
portion.    He  said  that no  other  state  has  classified  Uber                                                              
affiliated partners,  or drivers,  as employees.   He acknowledged                                                              
that other states,  including Arkansas and Florida  are evaluating                                                              
workers' compensation.   In terms of insurance, there  are not any                                                              
gaps.  He directed  attention to a chart in members'  packets that                                                              
describes every  level of insurance,  beginning with period  1, in                                                              
which  the application  is  on, but  there  isn't any  transaction                                                              
taking place and the rider is not connected to the driver.                                                                      
                                                                                                                                
4:24:18 PM                                                                                                                    
                                                                                                                                
MR.  BENNETT  referred to  the  tragic  case that  was  previously                                                              
mentioned  that occurred  in San  Francisco.   He stated that  the                                                              
accident  occurred during  period  1 and  personal auto  insurance                                                              
settled  by offering  to pay  up to  the limits  of the  insurance                                                              
policy.  He explained  that period 2 will cover  the timeframe one                                                              
the  driver receives  a beep  and taps  the screen  to accept  the                                                              
ride, which  is the point when  the driver is considered  en route                                                              
to pick up the  rider.  At that point, period  2, the Uber primary                                                              
$1 million insurance  starts and continues through  period 3, when                                                              
the rider  is in  the car.   This $1  million coverage  extends to                                                              
uninsured motorists,  underinsured motorists,  and collision.   He                                                              
said that  Uber hoped  to address  narrow scope  addressed  by the                                                              
bill.   Uber  has  been  working  with the  MOA  to reach  a  more                                                              
comprehensive  solution  that  will   allow  Uber  to  operate  in                                                              
Alaska,  he said,  noting that  Uber paused  its operations  after                                                              
providing  five  months  of  free rides  in  the  Anchorage  area,                                                              
partnering with  almost 100 small  businesses and  providing rides                                                              
to thousands of people.                                                                                                         
                                                                                                                                
4:26:04 PM                                                                                                                    
                                                                                                                                
VICE  CHAIR  HUGHES  asked for  further  clarification  that  Uber                                                              
drivers are logged on for an average of 20 hours per month.                                                                     
                                                                                                                                
MR. BENNETT  answered yes; the  average was 5  hours a week  or 20                                                              
hours per month.                                                                                                                
                                                                                                                                
4:26:24 PM                                                                                                                    
                                                                                                                                
VICE CHAIR HUGHES  asked whether people were using  their vehicles                                                              
for other purposes.                                                                                                             
                                                                                                                                
MR.  BENNETT answered  that typically  people  use their  personal                                                              
vehicles as they see fit.                                                                                                       
                                                                                                                                
VICE CHAIR HUGHES said she was surprised the average was so low.                                                                
                                                                                                                                
4:26:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked  for further  clarification  that                                                              
the commercial  transaction starts  when the  driver picks  up the                                                              
passenger.                                                                                                                      
                                                                                                                                
MR. BENNETT  answered that  the commercial  insurance begins  when                                                              
the driver accepts the connection.                                                                                              
                                                                                                                                
4:27:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked how  many instances  of litigation                                                              
have  occurred when  something happens  during period  1 prior  to                                                              
the "app" connection.                                                                                                           
                                                                                                                                
MR.  BENNETT answered  that  there  have not  been  any issues  in                                                              
period 1 in Alaska.                                                                                                             
                                                                                                                                
4:28:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  offered  his  belief  that  each  state                                                              
would  essentially  have a  case  if  their statutes  didn't  make                                                              
period 1  clear or else the  court will need decide  when coverage                                                              
actually began.   He asked whether there was not  any dispute that                                                              
the  insurance  coverage  begins   from  the  time  the  Uber  app                                                              
[application] was  activated, which  was basically the  receipt of                                                              
the trip request until the end of the trip.                                                                                     
                                                                                                                                
MR. BENNETT  answered  that the  period 1 timeframe  was when  the                                                              
Uber driver  has the Uber app on,  but prior to the  request being                                                              
received  by the  potential  passenger.   He  clarified that  this                                                              
timeframe  is the period  for the  contingent liability  coverage.                                                              
He said  the issue is  who provides the  primary coverage,  and in                                                              
this  instance   the  personal  insurance  provides   the  primary                                                              
coverage.      He   reported   that   Illinois   actually   passed                                                              
comprehensive legislation  that aligned with that,  but he offered                                                              
his belief  that most other states  are working on that  aspect as                                                              
well.   Again,  during the  time period  when the  Uber driver  is                                                              
logged  on  and available,  if  there  were  any issues  with  the                                                              
driver's personal  auto insurance,  the Uber contingent  liability                                                              
coverage would  then "kick in."   He added that Uber  has provided                                                              
these  insurance policies  to multiple  cities  and states  around                                                              
the country, including the Municipality of Anchorage.                                                                           
                                                                                                                                
4:29:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KITO related  a  scenario in  which  a driver  has                                                              
multiple  apps on,  including  the Uber  app.   He  asked how  the                                                              
insurance gets  determined if an  incident occurred  during period                                                              
1, prior  to the driver accepting  a trip if three  different apps                                                              
were activated.                                                                                                                 
                                                                                                                                
MR. BENNETT  replied that  there have not  been any  issues during                                                              
period  1.  He  offered to  follow up  with the  legal team  since                                                              
Uber has  been operating  in California  for  a longer period  and                                                              
more competition exists so that specific issue may have arisen.                                                                 
                                                                                                                                
4:30:14 PM                                                                                                                    
                                                                                                                                
VICE  CHAIR  HUGHES  asked  for   further  clarification  that  in                                                              
Illinois  the   commercial  coverage   begins  at  the   point  of                                                              
purchase.                                                                                                                       
                                                                                                                                
MR.  BENNETT  agreed that  was  correct.    He said  the  Illinois                                                              
legislature  passed  legislation  that identified  the  contingent                                                              
coverage  as  well identifying  the  primary  commercial  coverage                                                              
begins  when a  ride  is requested,  which  also  aligns with  the                                                              
language in this bill.                                                                                                          
                                                                                                                                
VICE CHAIR  HUGHES asked whether  any states have passed  that the                                                              
defining moment  was the point at  which the app was  activated or                                                              
"app on."                                                                                                                       
                                                                                                                                
MR. BENNETT answered  that California transitioned to  an "app on"                                                              
and Colorado  also considers  [primary coverage]  when the  app is                                                              
turned on [or "app on."                                                                                                         
                                                                                                                                
VICE  CHAIR HUGHES  recapped  her  understanding  that two  states                                                              
[California  and  Colorado]  consider  "app on"  as  the  defining                                                              
moment  for commercial  coverage and  one considers  it to  be the                                                              
point  of purchase  [Illinois], when  the passenger  pays for  the                                                              
ride via  a credit card.   She asked  whether this issue  was also                                                              
currently being considered in other states.                                                                                     
                                                                                                                                
MR.  BENNETT  answered  that  a  wide  range  of  legislation  was                                                              
currently being considered in multiple states.                                                                                  
                                                                                                                                
4:31:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  said there  was  nothing magical  about                                                              
when  the  clock  begins,  but  states  were  making  pure  policy                                                              
decisions.   Prior to the  existence of Uber, insurance  companies                                                              
such as State  Farm Insurance and Farmers Insurance  did not cover                                                              
this sort  of activity.   He asked  why the  burden be  shifted to                                                              
them during  the period  when the  driver might  be distracted  by                                                              
trying  to identify  whether  a potential  rider  has requested  a                                                              
ride.   He offered that  these drivers  were on the  streets since                                                              
they  were offering  rides.   He asked  for further  clarification                                                              
since  the courts  will ultimately  determine  whether that  would                                                              
constitutes an economic activity absent a statute.                                                                              
                                                                                                                                
MR. BENNETT  answered that  he was not  familiar with  a situation                                                              
in which the  courts made such determinations.   He suggested that                                                              
most states have addressed this in one form or another.                                                                         
                                                                                                                                
4:33:14 PM                                                                                                                    
                                                                                                                                
ARMAND  FELICIANO,  Vice-President,   Property  Casualty  Insurers                                                              
Association   of   America   (PCI),  offered   that   State   Farm                                                              
Insurance's  testimony  was "spot  on."   He  said  that the  real                                                              
issue  was  that  the  transportation   network  companies  (TNCs)                                                              
definition of  service is so narrowly  defined [in the  bill].  He                                                              
related a  scenario in  which an Uber  driver was "roaming"  ["app                                                              
on"] without  a passenger  and was  involved in  an accident.   He                                                              
offered his  belief that the  courts, using the  narrow definition                                                              
of  TNCs,  would  determine  that the  driver  was  not  providing                                                              
transportation  network services  and therefore  Uber is  "off the                                                              
hook."   He asked to next respond to Uber's testimony.                                                                          
                                                                                                                                
4:34:11 PM                                                                                                                    
                                                                                                                                
MR. FELICIANO  directed  attention to  the "gap"  issue.   He said                                                              
that 22  state regulators have  already deemed that  personal auto                                                              
insurance does  not cover the period  described as period  1.  The                                                              
main debate  surrounds  turning the  Uber "app  on," the point  at                                                              
which the  driver is engaging in  commercial activity.   He agreed                                                              
this  was a  matter of  opinion,  but PCI's  opinion is  different                                                              
than  Uber's opinion.    He related  his  understanding that  Uber                                                              
believes period  1 is  considered personal  use, but PCI  believes                                                              
it  falls under  commercial use.    He characterized  this as  the                                                              
"heart  of the  issue."   The  Uber  insurance  was contingent  on                                                              
personal  auto insurance,  but  PCI  disagrees and  believes  that                                                              
personal auto insurance  simply does not cover that  activity.  In                                                              
fact, that  is exactly  what a gap  is, he said.   If  an accident                                                              
happens and  the driver indicates the  Uber app was on  during the                                                              
investigation,  personal   auto  insurance  will   not  cover  it;                                                              
however,  Uber disagrees  with this determination.   He  suggested                                                              
that drivers really  shouldn't want auto insurance  coverage based                                                              
on the  court stepping  in and determining  the coverage.   Having                                                              
Uber services as  an option for transportation  is great; however,                                                              
he  disagreed  that  insurance  law  should  be  so  gray.    Uber                                                              
testified  that incidents  have not  yet happened  in Alaska,  but                                                              
why wait until they do.                                                                                                         
                                                                                                                                
4:35:46 PM                                                                                                                    
                                                                                                                                
MR. FELICIANO  suggested that in  Uber's home state  of California                                                              
an  Uber  driver  did  have  an accident  during  period  1.    He                                                              
reported  that  36 states  are  currently  debating this  type  of                                                              
insurance coverage  today.  He stated  that PCI has  been involved                                                              
in  this nationally,  and California,  Colorado,  the District  of                                                              
Columbia,  and  West  Virginia  have  agreed  that  transportation                                                              
network company  services (TNC) services  begin when the  Uber app                                                              
is turned on [app  on].  He suggested that if  Uber was willing to                                                              
consider that  the service occurs  during "app on"  in California,                                                              
why  not extend  that  same level  of protection  in  Alaska.   He                                                              
offered to work  with Uber on this issue, just as  his company has                                                              
done in California.   He suggested that the California  model will                                                              
work  in  Alaska.    He  remarked  that  Illinois  represents  the                                                              
minority  since it  considers  TNC happens  when  the Uber  driver                                                              
accepts the  rider.  He  said this captures  what is  happening at                                                              
the national level.                                                                                                             
                                                                                                                                
MR.  FELICIANO recalled  questions raised  earlier, including  one                                                              
asking what will  happen to insurance rates.   In California, Uber                                                              
agreed  to a hybrid  insurance policy  to make  it affordable,  he                                                              
said,  noting the  hybrid policy  was not  personal or  commercial                                                              
insurance,  but  was  insurance  based  on  metro  mile  provided.                                                              
Another  question   was  raised  about  someone   providing  rides                                                              
[carpooling].    He  said  the distinction  was  that  the  person                                                              
providing  rides and  collecting  money for  gas does  not make  a                                                              
living out  of his/her  car.   The driver  sharing rides  does not                                                              
log  on for  five hours  a day  to make  money.   He concluded  by                                                              
stating that  PCI is  opposed to  HB 120, but  is willing  to work                                                              
with  Uber  on the  insurance  issues,  similar issues  have  been                                                              
settled in  other states  and those  solutions should  be extended                                                              
to Alaska.                                                                                                                      
                                                                                                                                
4:38:06 PM                                                                                                                    
                                                                                                                                
VICE  CHAIR  HUGHES   related  a  scenario  in   which  commercial                                                              
insurance  started at  "app on,"  but it  was a slow  day and  the                                                              
Uber  driver decided  to pick  up  his/her dry  cleaning and  then                                                              
pick  up  his/her  child  from school.    She  asked  whether  the                                                              
commercial  coverage  would cover  any  accident  since it  seemed                                                              
like it  would fall under  personal use  even though the  Uber app                                                              
was turned on.                                                                                                                  
                                                                                                                                
MR. FELICIANO  answered  that was  the reason  a hybrid policy  is                                                              
needed.  He  said that from the  moment of "app on"  that a hybrid                                                              
policy should be  in place to protect the driver.   One suggestion                                                              
was  that it  shouldn't be  difficult  to develop  a kill  switch;                                                              
however, if the  app has been on  for an hour and there  isn't any                                                              
movement, the  Uber driver  is not working,  just hanging  out, he                                                              
said.  He identified  the multiple app issue as one  that needs to                                                              
be  considered, especially  if this  type  of ridesharing  becomes                                                              
popular in  Anchorage, since some  drivers will have  three phones                                                              
on.     This  issue   has  not   yet  been   addressed  in   other                                                              
jurisdictions  and he  characterized  it as  being  a real  "legal                                                              
mess."   He  predicted it  would be  a "legal  mess" if  something                                                              
happened when all three apps were turned on.                                                                                    
                                                                                                                                
4:39:53 PM                                                                                                                    
                                                                                                                                
SUSAN GORSKI, Executive  Director, Chugiak-Eagle River  Chamber of                                                              
Commerce,  said  that  it  has   been  interesting  to  listen  to                                                              
discussion  on the  transportation  network  companies (TNCs)  and                                                              
how they  might safely  operate  in Alaska.   She recognized  that                                                              
these represent  new challenges for everyone since  the technology                                                              
was rapidly changing.   She supported the sponsor's  comments that                                                              
the  community  needs  to  increase  its  transportation  options,                                                              
noting the  Chugiak-Eagle River  community has been  working since                                                              
the 1990s  on various  scenarios.   However, the taxicab  industry                                                              
as it  is regulated  in the  MOA, cannot  serve the  Chugiak-Eagle                                                              
River area  nor it  does it make  any financial  sense.   Thus the                                                              
Chugiak-  Eagle River  area  has been  totally  lacking in  intra-                                                              
community   transportation    and   transportation    within   the                                                              
community.   Transportation network  companies, such as  Uber, are                                                              
innovative  private  sector concepts.    She hoped  the  insurance                                                              
issues  would  be  resolved since  the  Chugiak-Eagle  River  area                                                              
consists  of  35,000 people  without  transportation  networks  in                                                              
place.    She  said  that the  TNCs  are  a  multi-billion  dollar                                                              
industry  that provide  services  in  over 200  cities  and in  47                                                              
countries.   She offered her belief  that Alaska also  needs TNCs,                                                              
which will  bring efficiencies  to the  market.  Some  communities                                                              
have implemented  safety measures  for drivers and  passengers and                                                              
have also  instituted rigorous  background  checks, which  are the                                                              
issues the public  is concerned about.  She encouraged  members to                                                              
work  on this  issue for  a positive  resolution, which  can be  a                                                              
"win-win" situation for all of us.                                                                                              
                                                                                                                                
4:42:20 PM                                                                                                                    
                                                                                                                                
VICE CHAIR HUGHES  said it was clear  that Ms. Gorski is  a fan of                                                              
transportation  network  companies  (TNC).   She  asked  to  leave                                                              
public testimony open on HB 120.                                                                                                
                                                                                                                                
[HB 120 was held over)                                                                                                          
                                                                                                                                
          HB 58-ELIGIBILITY FOR AK ENERGY EFFIC LOANS                                                                       
                                                                                                                                
4:42:54 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that the  final order of business  would be                                                              
HOUSE BILL  NO. 58,"An Act  making an entity  that is  exempt from                                                              
federal  taxation  under  26 U.S.C.  501(c)(3)  (Internal  Revenue                                                              
Code) and  a federally recognized  tribe eligible for a  loan from                                                              
the Alaska  energy efficiency  revolving  loan fund; and  relating                                                              
to loans from the Alaska energy efficiency revolving loan fund."                                                                
[Before the committee was CSHB 58 (ENE)].                                                                                       
                                                                                                                                
4:42:59 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS, Alaska  State Legislature,  stated                                                              
the  proposed   CSHB  58(ENE)   relates   to  the  Alaska   Energy                                                              
Efficiency  Revolving Loan  Fund (AEERLF)  and to the  eligibility                                                              
of  the  fund.    The  intent  of  the  bill  was  to  expand  the                                                              
eligibility  for  the revolving  loan  fund from  public  entities                                                              
such  as  school districts,  municipalities,  or  universities  to                                                              
nonprofit  entities including  churches,  soup kitchens,  American                                                              
Legion halls, chambers of commerce and similar entities.                                                                        
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS explained  the  rationale for  this                                                              
bill.   He explained that  the Alaska Energy Efficiency  Revolving                                                              
Loan Fund  (AEERLF) has  been significantly  under used  since its                                                              
inception a  few years ago.   In fact,  only one loan  application                                                              
has been  filed, but a fully  processed and executed loan  has not                                                              
yet been issued  from the fund.   He said that this  loan fund has                                                              
the authority  to bond  up to  $250 million  so significant  value                                                              
and potential  is inherent in  the AEERLF.   He said his  goal was                                                              
to ensure that  this fund benefits Alaska, Alaskans,  and Alaska's                                                              
buildings   as  much  as   possible.     Expanding  the   AEERLF's                                                              
eligibility  to  institutions  that   that  contribute  to  Alaska                                                              
communities such  as nonprofits  can fulfill  that goal.   He said                                                              
this is timely and  harmonious given the budget climate.   Many of                                                              
these nonprofit  organizations have  an operational  strategy that                                                              
often  revolves around  capital  grants or  "free  money" when  it                                                              
comes  to   making  improvements   to  their  physical   plant  or                                                              
buildings,  but  this  era  is largely  coming  to  an  end  since                                                              
limited  grant funding  is available.   This  bill would create  a                                                              
viable means for nonprofit entities to become more self-                                                                        
sufficient  and   independent  in   terms  of  maintaining   their                                                              
facilities  through low-interest  loans.   He  offered his  belief                                                              
that was  the direction the state  needs to go to  help nonprofits                                                              
become  more  independent  and  self-sufficient  when  less  grant                                                              
money and capital funding is available.                                                                                         
                                                                                                                                
4:45:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE    JOSEPHSON   asked    for    reasons   for    the                                                              
underutilization of the fund.                                                                                                   
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS  explained that  two  years ago  he                                                              
contacted every  municipal government  and school district  in his                                                              
legislative  district once he  became aware  of the Alaska  Energy                                                              
Efficiency Revolving  Loan Fund (AEERLF).  Since  his district was                                                              
rural,  he had  lots  of contacts  with  school administrators  or                                                              
city  administrators to  advise them  that this  program could  be                                                              
helpful, especially  given the high energy costs  in his district.                                                              
For example, residents  in his district can pay $6  per gallon for                                                              
heating  oil   and  $.60  per   kilowatt  hour  for   electricity.                                                              
However, there  was little  interest in the  program since  in the                                                              
last two  years public entities  could reliably turn to  the state                                                              
for capital  grants.   Therefore, these  entities would  not apply                                                              
for low interest  loans since they could obtain  "free money" from                                                              
the state.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS  suggested  that  public  and  non-                                                              
profit  entities will  need  to become  more  self-efficient.   He                                                              
suggested  that more  entities will  look  for low-interest  loans                                                              
since  the spigot  of state  funds "has  been turned  off."   Thus                                                              
this bill could be the vehicle to direct attention to the low-                                                                  
interest loans.                                                                                                                 
                                                                                                                                
VICE CHAIR  HUGHES remarked  that the free  money not going  to be                                                              
available, she  might expect that  more public entities  will step                                                              
up.  She asked  how the applications will be prioritized  if a big                                                              
rush of  public entities  and nonprofit  organizations sought  the                                                              
low-interest loans.                                                                                                             
                                                                                                                                
4:48:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KREISS-TOMKINS  referred to page 5,  lines 10-13 to                                                              
proposed Section  7, subsection (k),  which was language  added by                                                              
the previous  committee.  This  provision would create  a two-tier                                                              
prioritization  or preference  for applications,  for example,  if                                                              
there was  a "gold rush" and  every nonprofit and  public entities                                                              
applied and  the Alaska Housing  Finance Corporation had  too many                                                              
applications, subsection  (k) would  create a priority  for public                                                              
entities.   He  said that  this language  was added  in the  House                                                              
Special  Committee on  Energy and  he fully  endorsed the  change.                                                              
In the  event the AHFC  did not have  enough available  capital or                                                              
administrative  capacity to process  the barrage of  applications,                                                              
the   AHFC   would   give   preference   and   prioritize   public                                                              
applications  over  nonprofit  applications;   however,  if  funds                                                              
remained after public  entities were served, the  nonprofits would                                                              
also be eligible.                                                                                                               
                                                                                                                                
4:49:37 PM                                                                                                                    
                                                                                                                                
VICE CHAIR  HUGHES asked whether  the sponsor had  been approached                                                              
by nonprofits or how this bill came about.                                                                                      
                                                                                                                                
REPRESENTATIVE  KREISS-TOMKINS answered  that this  came about  in                                                              
part since  he was  schlepping around  the district  to point  out                                                              
this great  program.   He talked to  a nonprofit administrator  in                                                              
Sitka, but  like most nonprofits,  every $500 was  very important.                                                              
This organization  had  a lot of  physical assets,  many of  which                                                              
had single  pane windows and were  built without insulation.   The                                                              
nonprofit  organization expressed  an interest  in insulating  the                                                              
buildings  since the  return  on investment  is  amazing, but  the                                                              
organization did not  have enough access to cash to  do so.  Thus,                                                              
the  problem  was access  to  capital.    He recalled  the  Alaska                                                              
Energy  Efficiency  Revolving  Loan   Fund  (AEERLF)  had  a  $250                                                              
million  balance for  this very  purpose.   He  suggested that  it                                                              
made  sense to  connect "A"  and "B."   He  researched this  issue                                                              
further by  e-mailing the Foraker Group  since it tends  to be the                                                              
authority  on nonprofit  administration.   He  said he  discovered                                                              
the  Foraker  Group  had  been  working  on  a  pilot  project  in                                                              
Fairbanks  connecting a  nonprofit entity  to low-interest  loans.                                                              
He described  the aforementioned  project  that was a  partnership                                                              
between  the  Foraker Group,  Rasmuson  Foundation,  Cold  Climate                                                              
Housing Research Center,  and the Denali Commission.   This led to                                                              
collaborating and drafting the bill.                                                                                            
                                                                                                                                
4:53:12 PM                                                                                                                    
                                                                                                                                
VICE CHAIR HUGHES opened public testimony on HB 58.                                                                             
                                                                                                                                
4:53:26 PM                                                                                                                    
                                                                                                                                
DANIEL  POWERS, Coordinator,  Fairbanks  Nonprofit Retrofit  Pilot                                                              
Program,  Cold Climate  Housing  Research  Center (CCHRC),  stated                                                              
that  he  has  been the  project  coordinator  for  the  Fairbanks                                                              
Nonprofit  Retrofit  Pilot  Program.     He  explained  that  this                                                              
project  will retrofit  14  buildings for  10  building owners  to                                                              
assist   tribal  and   nonprofit   organizations  improve   energy                                                              
efficiency   through   energy  and   facility   planning,   energy                                                              
auditing,  scoping and  design.   Many elements  are necessary  to                                                              
bring  an energy  efficiency  project  from  an idea  through  the                                                              
lending  process,  which  HB  58   addresses,  to  completion  and                                                              
monitoring.   He offered his  belief that HB  58 was a  great step                                                              
in direction  of helping  nonprofits capitalize  their own  energy                                                              
efficiency  resources, especially  since these nonprofits  provide                                                              
essential  services for some  of the  most vulnerable  populations                                                              
in Alaska.  He  characterized HB 58 as a great  idea that can help                                                              
reduce  the state's  historical  grants to  nonprofits and  change                                                              
the culture for  energy efficiency improvements.   This bill could                                                              
enable tribal  entities and  nonprofits an  opportunity to  reduce                                                              
operational  costs.   He  concluded  by  stating  he is  a  strong                                                              
supporter of HB 58.                                                                                                             
                                                                                                                                
4:55:48 PM                                                                                                                    
                                                                                                                                
VICTORIA MOROZOVA,  Chair, Alaska Youth for  Environmental Action,                                                              
Anchorage  Chapter,  stated  that  she  is a  student  at  Stellar                                                              
Secondary School  and would like to  testify in support  of HB 58.                                                              
She  asked   members  to   consider  the   importance  of   energy                                                              
efficiency  to lower  the carbon  footprint, but  to decrease  the                                                              
amount  of  money  going  to  waste  [due  to  a  lack  of  energy                                                              
efficiency].   Further,  she  asked to  emphasize  the success  of                                                              
Alaska  Energy Efficiency  Revolving  Loan Fund  (AEERLF) and  the                                                              
benefits the  fund could bring  to tribal and nonprofit  entities.                                                              
For example,  the faculty  at Stellar  Secondary School  said they                                                              
could  use  the  loan  fund  to   invest  in  more  efficient  LED                                                              
lighting,  replace windows  with more energy  efficient ones,  and                                                              
could  install a  better  heating  system to  save  money for  the                                                              
Anchorage School  District.  She suggested that  those funds could                                                              
be better used for  education, which as a student  she believes is                                                              
very important.  She urged members to please pass HB 58.                                                                        
                                                                                                                                
4:57:48 PM                                                                                                                    
                                                                                                                                
CARMELA  FLYNN,  Member,  Alaska Youth  for  Environmental  Action                                                              
(AYFEA),  stated  that she  was  a  sophomore at  Hutchinson  High                                                              
School in  Fairbanks.  She  asked to testify  in support of  HB 58                                                              
since it  could upgrade  energy systems to  many of  the buildings                                                              
she regularly uses,  including her church, library,  and hospital.                                                              
She suggested  that having the loans  to upgrade her  school could                                                              
help  them upgrade  equipment.   She  said that  the AEERLF  loans                                                              
also help  to raise awareness of  the more efficient ways  to save                                                              
energy, reduce fuel  emissions and aid climate change.   She urged                                                              
members to pass HB 58.                                                                                                          
                                                                                                                                
4:58:51 PM                                                                                                                    
                                                                                                                                
VICE  CHAIR  HUGHES, after  first  determining  no one  wished  to                                                              
testify, closed public testimony on HB 58.                                                                                      
                                                                                                                                
4:59:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TILTON  moved  to  adopt  the  proposed  committee                                                              
substitute (CS)  for HB 58, labeled 29-LS0254\F,  Nauman, 3/10/15,                                                              
as the  working document.   There  being no  objection, Version  F                                                              
was before the committee.                                                                                                       
                                                                                                                                
4:59:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TILTON  moved the  proposed  committee  substitute                                                              
(CS)  for HB  58,  Version F,  out  of committee  with  individual                                                              
recommendations  and the  accompanying fiscal  note.  There  being                                                              
no objection, CSHB  58(L&C) was reported from the  House Labor and                                                              
Commerce Standing Committee.                                                                                                    
                                                                                                                                
4:59:58 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being  no further business  before the committee,  the House                                                              
Labor and  Commerce Standing  Committee meeting  was adjourned  at                                                              
5:00 p.m.                                                                                                                       

Document Name Date/Time Subjects
HB123 Draft Proposed Blank CS ver W .pdf HL&C 3/20/2015 3:15:00 PM
HB 123
HB123 Draft Proposed Amendment ver W.1.pdf HL&C 3/20/2015 3:15:00 PM
HB 123
HB123 Draft Proposed Amendment ver W.2.pdf HL&C 3/20/2015 3:15:00 PM
HB 123
HB123 Draft Proposed Amendment-Josephson.PDF HL&C 3/20/2015 3:15:00 PM
HB 123
HB123 Follow-up from DCCED-Marijuana Agencies Other States.pdf HL&C 3/20/2015 3:15:00 PM
HB 123
HB123 Supporting Documents-ABC Board Recommendations for Implementation of AS 17.38.pdf HL&C 3/20/2015 3:15:00 PM
HB 123
HB120 ver A.pdf HL&C 3/20/2015 3:15:00 PM
HB 120
HB120 Sponsor Statement.pdf HL&C 3/20/2015 3:15:00 PM
HB 120
HB120 Fiscal Note-DOLWD-WC-02-27-15.pdf HL&C 3/20/2015 3:15:00 PM
HB 120
HB120 Supporting Document - Chugiak-Eagle River Chamber of Commerce.pdf HL&C 3/20/2015 3:15:00 PM
HB 120
HB120 Supporting Documents-UBER Driver Screening.PDF HL&C 3/20/2015 3:15:00 PM
HB 120
HB120 Opposing Documents-Letter NAMIC 2-26-2015.pdf HL&C 3/20/2015 3:15:00 PM
HB 120
HB58 ver S.pdf HL&C 3/20/2015 3:15:00 PM
HB 58
HB58 Sponsor Statement.pdf HL&C 3/20/2015 3:15:00 PM
HB 58
HB58 Sectional Analysis.pdf HL&C 3/20/2015 3:15:00 PM
HB 58
HB58 Fiscal Note-DOR-AHFC-02-10-15.pdf HL&C 3/20/2015 3:15:00 PM
HB 58
HB58 Summary of Changes ver W to ver S.pdf HL&C 3/20/2015 3:15:00 PM
HB 58
HB58 Supporting Documents-Letter Joel Neimeyer 2-9-2015.pdf HL&C 3/20/2015 3:15:00 PM
HB 58
HB58 Supporting Documents-Letter Tanana Chiefs Conference.PDF HL&C 3/20/2015 3:15:00 PM
HB 58
HB58 Supporting Documents-Report Energy Efficiency of Public Buildings-Rural Retrofits 11-21-14.pdf HL&C 3/20/2015 3:15:00 PM
HB 58
HB58 Supporting Documents-Whitepaper Public Facilities 11-7-2012.pdf HL&C 3/20/2015 3:15:00 PM
HB 58
HB58 Supporting Documents-Guide AEERLFP Oct 2014.pdf HL&C 3/20/2015 3:15:00 PM
HB 58
HB58 Supporting Documents-Letter CCS, Catholic Diocese of Juneau 2-9-2015.pdf HL&C 3/20/2015 3:15:00 PM
HB 58
HB58 Supporting Documents-Letter Gavin Dixon 2-9-2015.pdf HL&C 3/20/2015 3:15:00 PM
HB 58
HB58 Draft Proposed Blank CS ver F.pdf HL&C 3/20/2015 3:15:00 PM
HB 58