Legislature(2017 - 2018)BARNES 124

03/24/2017 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 170 AK SECURITIES ACT; PENALTIES; CRT. RULES TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 144 EXTEND BOARD OF VETERINARY EXAMINERS TELECONFERENCED
Moved HB 144 Out of Committee
-- Public Testimony --
+= HB 86 STUDENT LOAN DEFAULT/OCC. LICENSE RENEWAL TELECONFERENCED
Moved HB 86 Out of Committee
-- Public Testimony --
+= HB 132 TRANSPORTATION NETWORK COMPANIES TELECONFERENCED
Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                         March 24, 2017                                                                                         
                           3:17 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Sam Kito, Chair                                                                                                  
Representative Adam Wool, Vice Chair                                                                                            
Representative Andy Josephson                                                                                                   
Representative Louise Stutes                                                                                                    
Representative Chris Birch                                                                                                      
Representative Gary Knopp                                                                                                       
Representative Colleen Sullivan-Leonard                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Chenault (alternate)                                                                                        
Representative Bryce Edgmon (alternate)                                                                                         
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 144                                                                                                              
"An  Act  extending   the  termination  date  of   the  Board  of                                                               
Veterinary Examiners; and providing for an effective date."                                                                     
                                                                                                                                
     - MOVED HB 144 OUT OF COMMITTEE                                                                                            
                                                                                                                                
HOUSE BILL NO. 86                                                                                                               
"An  Act  relating to  nonrenewal  of  occupational licenses  for                                                               
default on a student loan."                                                                                                     
                                                                                                                                
     - MOVED HB 86 OUT OF COMMITTEE                                                                                             
                                                                                                                                
HOUSE BILL NO. 170                                                                                                              
"An Act relating to  securities, registration, exempt securities,                                                               
exempt transactions,  broker-dealers, agents,  investment advice,                                                               
investment advisers, investment  adviser representatives, federal                                                               
covered   securities,   federal  covered   investment   advisers,                                                               
viatical   settlement   interests,  small   intrastate   security                                                               
offerings,   Canadian   broker-dealers,  and   Canadian   agents;                                                               
relating  to  administrative,  civil,  and  criminal  enforcement                                                               
provisions,  including   restitution  and  civil   penalties  for                                                               
violations; relating  to an investor training  fund; establishing                                                               
increased  civil   penalties  for   harming  older   persons  and                                                               
vulnerable adults;  relating to corporations organized  under the                                                               
Alaska Native  Claims Settlement  Act; amending  Rules 4,  5, 54,                                                               
65, and 90, Alaska Rules of Civil Procedure, and Rule 602,                                                                      
Alaska Rules of Appellate Procedure; and providing for an                                                                       
effective date."                                                                                                                
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 132                                                                                                              
"An Act relating to transportation network companies and                                                                        
transportation network company drivers."                                                                                        
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 144                                                                                                                  
SHORT TITLE: EXTEND BOARD OF VETERINARY EXAMINERS                                                                               
SPONSOR(s): REPRESENTATIVE(s) KITO                                                                                              
                                                                                                                                
02/24/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/24/17       (H)       L&C, FIN                                                                                               
03/22/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/22/17       (H)       Heard & Held                                                                                           
03/22/17       (H)       MINUTE(L&C)                                                                                            
03/24/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 86                                                                                                                   
SHORT TITLE: STUDENT LOAN DEFAULT/OCC. LICENSE RENEWAL                                                                          
SPONSOR(s): REPRESENTATIVE(s) CLAMAN                                                                                            
                                                                                                                                
01/27/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/27/17       (H)       EDC, L&C                                                                                               
03/01/17       (H)       EDC RPT 7DP                                                                                            
03/01/17       (H)       DP: TALERICO, PARISH, KOPP, SPOHNHOLZ,                                                                 
                         JOHNSTON, FANSLER, DRUMMOND                                                                            
03/01/17       (H)       EDC AT 8:00 AM CAPITOL 106                                                                             
03/01/17       (H)       Moved HB 86 Out of Committee                                                                           
03/01/17       (H)       MINUTE(EDC)                                                                                            
03/22/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/22/17       (H)       Heard & Held                                                                                           
03/22/17       (H)       MINUTE(L&C)                                                                                            
03/24/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 170                                                                                                                  
SHORT TITLE: AK SECURITIES ACT; PENALTIES; CRT. RULES                                                                           
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
03/10/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/10/17       (H)       L&C, JUD                                                                                               
03/24/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 132                                                                                                                  
SHORT TITLE: TRANSPORTATION NETWORK COMPANIES                                                                                   
SPONSOR(s): WOOL                                                                                                                
                                                                                                                                
02/15/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/15/17       (H)       TRA, L&C                                                                                               
02/23/17       (H)       TRA AT 1:30 PM BARNES 124                                                                              
02/23/17       (H)       <Bill Hearing Canceled>                                                                                
02/28/17       (H)       TRA AT 1:30 PM BARNES 124                                                                              
02/28/17       (H)       Heard & Held                                                                                           
02/28/17       (H)       MINUTE(TRA)                                                                                            
03/02/17       (H)       TRA AT 1:30 PM BARNES 124                                                                              
03/02/17       (H)       Heard & Held                                                                                           
03/02/17       (H)       MINUTE(TRA)                                                                                            
03/06/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/06/17       (H)       Scheduled but Not Heard                                                                                
03/07/17       (H)       TRA AT 1:30 PM BARNES 124                                                                              
03/07/17       (H)       Moved CSHB 132(TRA) Out of Committee                                                                   
03/07/17       (H)       MINUTE(TRA)                                                                                            
03/08/17       (H)       TRA RPT CS(TRA) 1DP 4NR 2AM                                                                            
03/08/17       (H)       DP: WOOL                                                                                               
03/08/17       (H)       NR: SULLIVAN-LEONARD, NEUMAN, DRUMMOND,                                                                
                         STUTES                                                                                                 
03/08/17       (H)       AM: CLAMAN, KOPP                                                                                       
03/10/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/10/17       (H)       Heard & Held                                                                                           
03/10/17       (H)       MINUTE(L&C)                                                                                            
03/17/17       (H)       L&C AT 3:15 PM CAPITOL 106                                                                             
03/17/17       (H)       Heard & Held                                                                                           
03/17/17       (H)       MINUTE(L&C)                                                                                            
03/18/17       (H)       L&C AT 12:30 AM CAPITOL 106                                                                            
03/18/17       (H)       -- Continued from 3/17/17 --                                                                           
03/22/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/22/17       (H)       Heard & Held                                                                                           
03/22/17       (H)       MINUTE(L&C)                                                                                            
03/24/17       (H)       L&C AT 3:15 PM BARNES 124^                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
CHRYSTAL KOENEMAN, Staff                                                                                                        
Representative Sam Kito, III                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   During  the hearing of  HB 144,  offered an                                                             
overview of the legislation.                                                                                                    
                                                                                                                                
DOCTOR RACHAEL BERNGARTT, Veterinarian                                                                                          
Alaska Board of Veterinary Examiners                                                                                            
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   During  the hearing  of  HB 144,  answered                                                             
questions.                                                                                                                      
                                                                                                                                
DOCTOR ERIC JAYNE, Veterinarian                                                                                                 
Unknown City, Hawaii                                                                                                            
POSITION STATEMENT:   During the hearing of HB  144, testified as                                                             
a veterinarian who previously worked in rural Alaska.                                                                           
                                                                                                                                
OWEN PHILLIPS, Staff                                                                                                            
Representative Matt Claman                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   During the  hearing of HB 86,  presented an                                                             
overview of the legislation.                                                                                                    
                                                                                                                                
JANEY HOVENDEN, Director                                                                                                        
Corporations, Business, and Professional Licensing (CBPL)                                                                       
Department of Commerce, Community & Economic Development (DCCED)                                                                
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   During  the  hearing  of HB  86,  answered                                                             
questions.                                                                                                                      
                                                                                                                                
KEVIN ANSELM, Director                                                                                                          
Division of Banking & Securities                                                                                                
Department of Commerce, Community & Economic Development (DCCED)                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   During the  hearing of HB 170,  presented a                                                             
PowerPoint titled, Alaska Securities Act, HB 170.                                                                               
                                                                                                                                
DEB ETHERIDGE, Deputy Director                                                                                                  
Central Office                                                                                                                  
Division of Senior and Disabilities Services                                                                                    
Department of Health and Social Services (DHSS)                                                                                 
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   During  the hearing  of  HB 170,  answered                                                             
questions.                                                                                                                      
                                                                                                                                
ANNABEL CHANG, West Coast Director                                                                                              
Public Policy                                                                                                                   
Lyft                                                                                                                            
San Francisco, California                                                                                                       
POSITION  STATEMENT:   During  the hearing  of  HB 132,  answered                                                             
questions.                                                                                                                      
                                                                                                                                
MITCHEL MATTHEWS, Senior Global Operations Manager                                                                              
Uber                                                                                                                            
San Francisco, California                                                                                                       
POSITION  STATEMENT:   During  the hearing  of  HB 132,  answered                                                             
questions.                                                                                                                      
                                                                                                                                
JARED EBER, Associate Counsel                                                                                                   
Uber                                                                                                                            
San Francisco, California                                                                                                       
POSITION  STATEMENT:   During  the hearing  of  HB 132,  answered                                                             
questions.                                                                                                                      
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:17:53 PM                                                                                                                    
                                                                                                                                
CHAIR  SAM KITO  called  the House  Labor  and Commerce  Standing                                                             
Committee meeting  to order at  3:17 p.m.   Representatives Kito,                                                               
Stutes, Josephson, Wool, Birch,  Knopp, and Sullivan-Leonard were                                                               
present at the call to order.                                                                                                   
                                                                                                                                
          HB 144-EXTEND BOARD OF VETERINARY EXAMINERS                                                                       
                                                                                                                                
3:19:19 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that the  first order of business  would be                                                               
HOUSE BILL  NO. 144,  "An Act extending  the termination  date of                                                               
the  Board   of  Veterinary  Examiners;  and   providing  for  an                                                               
effective date."                                                                                                                
                                                                                                                                
3:19:35 PM                                                                                                                    
                                                                                                                                
CHRYSTAL KOENEMAN,  Staff, Representative  Sam Kito,  III, Alaska                                                               
State  Legislature, advised  that  HB 144  extends  the Board  of                                                               
Veterinarian  Examiners  eight  full  years until  2020,  at  the                                                               
request of the Division of Legislative Audit.                                                                                   
                                                                                                                                
3:20:22 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 3:19 p.m. to 3:21:21 p.m.                                                                    
                                                                                                                                
3:21:03 PM                                                                                                                    
                                                                                                                                
CHAIR KITO, after  ascertaining no one wished  to testify, closed                                                               
public testimony on HB 144.                                                                                                     
                                                                                                                                
3:21:38 PM                                                                                                                    
                                                                                                                                
DOCTOR   RACHAEL  BERNGARTT,   Veterinarian,   Alaska  Board   of                                                               
Veterinary Examiners, said she was available for questions.                                                                     
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  what  the board  could do  about                                                               
improving veterinary medicine in rural Alaska.                                                                                  
                                                                                                                                
DR.  BURNGARTT  answered  that the  Alaska  Board  of  Veterinary                                                               
Examiners are charged  with regulating licensees and  it does not                                                               
specifically know  where licensees will practice.   She suggested                                                               
that  an   appropriate  resource  to  work   with  in  increasing                                                               
veterinary  care  in  rural  Alaska would  be  the  Alaska  State                                                               
Veterinary   Medical    Association,   which   speaks    to   all                                                               
veterinarians.   Historically,  people submit  their credentials,                                                               
the  board reviews  it, "and  that's it."   She  opined that  the                                                               
board has  never denied  a courtesy  license, commenting  that it                                                               
recently completed more than 20,  less than 50, courtesy licenses                                                               
for the Iditarod  and veterinarians were stretched  out into very                                                               
remote areas  of Alaska.   She reiterated  that the  board simply                                                               
looks at credentials  to be certain license  applicants adhere to                                                               
the regulations, and  while she understands the  need to increase                                                               
veterinary assess  in rural  Alaska, she  expressed that  that is                                                               
not the job of the Alaska Board of Veterinary Examiners.                                                                        
                                                                                                                                
3:24:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES  asked Dr. Burngartt to  explain a courtesy                                                               
license.                                                                                                                        
                                                                                                                                
DR.  BURNGARTT answered  that a  courtesy license  is issued  for                                                               
special events  such as,  the Iditarod,  a spay/neuter  clinic, a                                                               
marine mammal conference,  and such, where the desire  is to draw                                                               
in outside  experts or  more manpower.   The courtesy  license is                                                               
issued for  a specific  event only,  at a  reduced rate,  with an                                                               
Alaskan  veterinarian  as  a  sponsor.   The  board  also  offers                                                               
temporary licenses  up to  60 days  to help  folks that  may only                                                               
need short-term coverage.                                                                                                       
                                                                                                                                
3:26:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES surmised that  courtesy licenses are issued                                                               
to existing veterinarians, who may not be Alaskan residents.                                                                    
                                                                                                                                
DR.  BURNGARTT responded  that the  veterinarians who  are issued                                                               
courtesy licenses are not Alaska residents.                                                                                     
                                                                                                                                
3:26:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP asked whether  the people who have expressed                                                               
opposition to HB 144 believe the  role of the board is other than                                                               
what it is, that maybe  the board's role should provide services,                                                               
or whether they  oppose HB 144 because they view  the board as an                                                               
impediment to more rural services.                                                                                              
                                                                                                                                
DR. BURNGARTT  responded that  she could  not speculate  why they                                                               
are  unhappy, but  the  board has  not denied  a  license to  any                                                               
veterinarian meeting the credentials.                                                                                           
                                                                                                                                
3:27:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP asked  whether it would be fair  to say [the                                                               
unhappy people]  were unsure  of the board's  role, which  is not                                                               
uncommon.                                                                                                                       
                                                                                                                                
DR. BURNGARTT speculated,  "Yes," and commented that  they do not                                                               
understand the  role of the board  and the folks living  in rural                                                               
Alaska want care for their pets.   She said she would like to see                                                               
a cardiologist in  rural Alaska, and many other  things, but that                                                               
is not the job of the Alaska Board of Veterinary Examiners.                                                                     
                                                                                                                                
CHAIR  KITO   advised  Representative  Knopp  that   one  of  the                                                               
challenges is  that there  does not  appear to  be a  place where                                                               
people can  call when they do  not receive adequate service.   He                                                               
further  advised  that that  issue  is  definitely something  his                                                               
office is interested  in working on over the  interim and invited                                                               
the  members  of  the  committee  to  participate  in  collecting                                                               
information as to different ways  the state could help facilitate                                                               
additional care for animals in rural Alaska.                                                                                    
                                                                                                                                
CHAIR KITO reopened public testimony on HB 144.                                                                                 
                                                                                                                                
3:29:23 PM                                                                                                                    
                                                                                                                                
DOCTOR ERIC  JAYNE, Veterinarian, advised he  is the veterinarian                                                               
who worked throughout  rural Alaska for 10  years, 1999-2009, and                                                               
is intimately  knowledgeable about the  issues.  He  advised that                                                               
he  prepared  a 2004  survey  through  the University  of  Alaska                                                               
Fairbanks,  looking at  veterinary  needs and  asking people  for                                                               
solutions.  One recommendation was  to increase education because                                                               
people  in  the  villages  were performing  veterinary  care  for                                                               
animals  with  zero  training  and   simply  guessing  about  the                                                               
procedures.  The  University of Alaska tried to  start a training                                                               
program  and even  though  the board's  only  described role  was                                                               
approving or denying  of licenses, he pointed out  that the board                                                               
actually did  intervene in that  training.  He stressed  that the                                                               
board will  intervene in issues, and  the issue at that  time was                                                               
training people how to perform  emergency care, and the board did                                                               
not feel  the training  was appropriate.   The 2004  survey found                                                               
that a "crazy number" of animals  died every year in rural Alaska                                                               
due to the  lack of veterinary care, and he  estimated the number                                                               
was  in excess  of 50,000  animals dying  from lack  of care,  or                                                               
being shot.   He  explained that  a huge issue  for him  in these                                                               
small  isolated  villages  is that  the  individuals  caring  for                                                               
animals have  no choice, and when  there is an excess  of strays,                                                               
or animals  that cannot  be treated,  the animal  are shot.   The                                                               
call goes  out in the villages  for people to tie  up their dogs,                                                               
which means  any loose dogs will  be shot.  During  that time, he                                                               
articulated, the  children may  not actually  see the  dogs being                                                               
shot, but they hear the gunshots  which is a source of trauma for                                                               
the children in villages.  He  expressed that the board should be                                                               
more involved because  there is a rule in  the veterinarian board                                                               
regulations calling  for the  board to  perform surveys,  and the                                                               
board has  never performed  a survey.   Also,  he pointed  out, a                                                               
rural member  should be admitted  to the  board, so the  needs of                                                               
rural Alaskans can  be heard, except there are  policies now that                                                               
are tweaked  against rural veterinarians.   He clarified  that by                                                               
rural veterinarians, he meant non-profit veterinarians.                                                                         
                                                                                                                                
3:31:42 PM                                                                                                                    
                                                                                                                                
DR. JAYNE related that there is  a real hesitation on the part of                                                               
Alaska to allow outside non-profit  veterinarians into the state,                                                               
which  is happening  all across  America, and  whether the  board                                                               
wants  to  admit  it  or  not, it  is  a  resource  being  denied                                                               
Alaskans.    He   acknowledged  that  the  board   is  fine  with                                                               
everything up  to a  point, except the  survey suggested  that at                                                               
least  10,000 spays  and neuters  are necessary  in rural  Alaska                                                               
just to  stay even, and  when rising up  to that number  of spays                                                               
and  neuters,  a  lot  of   veterinarians  will  feel  threatened                                                               
economically.    The  manner  in  which  the  board's  rules  are                                                               
interpreted   currently,  "allows   easy  access   to  harass   a                                                               
veterinarian,  which  is  exactly  what  happened  to  me."    He                                                               
explained  that he  recently withdrew  his  application "so  this                                                               
could be  talked about, I guess  this was keeping the  issue from                                                               
being talked about,  and I'd be happy to talk  with anybody about                                                               
what has happened  to me," and there are many  things in the "vet                                                               
board rules"  allowing the problems  to happen.  For  example, he                                                               
said,  there  is no  time  limit  to  file  a complaint,  and  in                                                               
reapplying for  a license,  he actually  had a  complaint brought                                                               
forward from  12-years prior and he  was asked to respond  to the                                                               
complaint, "which is crazy," he expressed.                                                                                      
                                                                                                                                
3:33:08 PM                                                                                                                    
                                                                                                                                
DR. JAYNE explained that among  the many things that are actually                                                               
legal in Alaska,  the state allows a veterinarian  to euthanize a                                                               
pet if  the owner cannot  pay the bill, which  happens oftentimes                                                               
in rural Alaska.   For example, in Chalkyitsik,  an elderly woman                                                               
sent  her little  white dog  into town  to have  one small  front                                                               
tooth  removed, the  veterinarian removed  it, and  told her  the                                                               
cost would be $500 or they would  euthanize the dog.  She came up                                                               
with the  money, paid  the fee  and paid for  both flights.   The                                                               
veterinarian put  one stitch  in that tooth  - the  empty socket,                                                               
and  Dr. Jayne  said  he had  never  seen a  stitch  put in  that                                                               
location.   The veterinarian  "literally told  her she  could not                                                               
take the stitch out herself, that  that was against the law, that                                                               
she  had to  fly the  dog back  in to  have the  stitch removed."                                                               
Fortunately,  he said,  he was  in  Chalkyitsik at  the time  and                                                               
removed the  stitch, the elder  was frantic and almost  in tears,                                                               
he related.  There are stories  such as that happening all of the                                                               
time.   Also,  he advised,  he has  seen many  cases where  rural                                                               
Alaskans do  not feel  protected by the  board because  they have                                                               
received  poor  quality medicine,  were  sent  drugs without  the                                                               
correct labeling, and  such.  Dr. Jayne stressed  that there were                                                               
so  many things  the board  could do  if it  took an  interest in                                                               
rural Alaska,  and the best  way to accomplish that  result would                                                               
be to add a true rural Alaska member.                                                                                           
                                                                                                                                
3:34:50 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  encouraged Dr. Jayne  to allow Chair Kito's  staff to                                                               
work with him  over the interim to try to  come up with different                                                               
ideas to bring back before the committee next year.                                                                             
                                                                                                                                
DR.  JAYNE said,  "That would  be  great," and  advised that  the                                                               
reason  he  reapplied was  absolutely  to  bring this  issue  out                                                               
because he  is "haunted by  the memory  of the children  in rural                                                               
Alaska and the effect this has on them."                                                                                        
                                                                                                                                
CHAIR KITO closed public testimony on HB 144.                                                                                   
                                                                                                                                
3:35:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL moved to report  HB 144, Version 30-LS0596\A,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying fiscal notes.  There  being no objection, HB 144 was                                                               
moved from the House Labor and Commerce Standing Committee.                                                                     
                                                                                                                                
3:35:58 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 3:35 p.m. to 3:39 p.m.                                                                       
                                                                                                                                
        HB 86-STUDENT LOAN DEFAULT/OCC. LICENSE RENEWAL                                                                     
                                                                                                                                
3:39:09 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that  the next order  of business  would be                                                               
HOUSE  BILL   NO.  86,   "An  Act   relating  to   nonrenewal  of                                                               
occupational licenses for default on a student loan."                                                                           
                                                                                                                                
3:39:43 PM                                                                                                                    
                                                                                                                                
OWEN PHILLIPS,  Staff, Representative  Matt Claman,  Alaska State                                                               
Legislature,  advised   that  HB  86  repeals   current  statutes                                                               
allowing the Alaska Commission  on Postsecondary Education (ACPE)                                                               
to threaten non-renewal of  occupational licenses for individuals                                                               
who have  defaulted on student  loans.  Repealing  this authority                                                               
will allow licensed  individuals to continue their  work in order                                                               
to  earn an  income and  pay back  their defaulted  loans without                                                               
fear of losing their license.                                                                                                   
                                                                                                                                
3:40:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KNOPP   noted  that   the  bill  read   that  the                                                               
commission  must notify  the Division  of Corporations,  Business                                                               
and Professional  Licensing that  a loan was  in default  and, AS                                                               
14.43.148 actually denies renewal and  does not revoke a license.                                                               
He noted  this provision  had not been  utilized in  eight years,                                                               
and asked  whether the  commission had  notified the  Division of                                                               
Corporations, Business,  and Professional Licensing at  any point                                                               
in the last eight years as  to the amount of default, and whether                                                               
it was an issue.                                                                                                                
                                                                                                                                
3:41:42 PM                                                                                                                    
                                                                                                                                
JANEY   HOVENDEN,    Director,   Corporations,    Business,   and                                                               
Professional  Licensing,  Department  of  Commerce,  Community  &                                                               
Economic  Development  (DCCED),  responded that  she  could  only                                                               
speak   to  how   the  legislation   impacts   the  Division   of                                                               
Professional Licensing under Title 08.   The Alaska Commission on                                                               
Postsecondary  Education  (ACPE)  had  not provided  a  list  [of                                                               
default]  since  2002,  and  there  had been  no  impact  on  the                                                               
division from this law.                                                                                                         
                                                                                                                                
REPRESENTATIVE KNOPP  asked Mr. Phillips whether  the list exists                                                               
and ACPE had not notified the  division, or whether the list does                                                               
not exist.                                                                                                                      
                                                                                                                                
MR. PHILLIPS  commented that as  Ms. Hovenden had not  received a                                                               
list,  he offered  his understanding  that there  was not  a list                                                               
because current statute  read that if the  commission reaches out                                                               
with  a list,  then  the  license must  be  revoked through  this                                                               
department.                                                                                                                     
                                                                                                                                
3:43:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH  advised  that  it appears  the  state  has                                                               
approximately  $240  million  in  outstanding  debt,  and  17,000                                                               
borrowers at  approximately $14,000 a  piece, out of  that number                                                               
there are only 46 individuals  with an occupational license hold,                                                               
and  commented   that  it  sounded   like  an   incredibly  small                                                               
percentage of the  17,000 borrowers.  He asked  whether the State                                                               
of Alaska can recover student  debt owed by an individual out-of-                                                               
state.                                                                                                                          
                                                                                                                                
MR. PHILLIPS advised  that Ms. Butler was not  available for this                                                               
hearing, and he did not know the answer to that question.                                                                       
                                                                                                                                
REPRESENTATIVE BIRCH said  he was curious as to how  much of that                                                               
$240 [million] in liability is  recoverable if someone lives out-                                                               
of-state.                                                                                                                       
                                                                                                                                
CHAIR KITO responded that that debt  is still owed, and this is a                                                               
matter of  whether the state has  the tools to collect,  which is                                                               
definitely a question for the  Alaska Commission on Postsecondary                                                               
Education (ACPE).                                                                                                               
                                                                                                                                
CHAIR KITO, after  ascertaining no one wished  to testify, closed                                                               
public testimony on HB 86.                                                                                                      
                                                                                                                                
3:45:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  moved to report HB  86, Version 30-LS0382\A,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying  fiscal  notes. There  being  no  objections, HB  86                                                               
moved from the House Labor and Commerce Standing Committee.                                                                     
                                                                                                                                
3:45:28 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 3:45 p.m. to 3:52 p.m.                                                                       
                                                                                                                                
        HB 170-AK SECURITIES ACT; PENALTIES; CRT. RULES                                                                     
                                                                                                                                
3:51:51 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that  the next order  of business  would be                                                               
HOUSE   BILL   NO.  170,   "An   Act   relating  to   securities,                                                               
registration,  exempt  securities, exempt  transactions,  broker-                                                               
dealers,   agents,   investment  advice,   investment   advisers,                                                               
investment adviser  representatives, federal  covered securities,                                                               
federal   covered   investment  advisers,   viatical   settlement                                                               
interests, small intrastate  security offerings, Canadian broker-                                                               
dealers, and Canadian agents;  relating to administrative, civil,                                                               
and  criminal enforcement  provisions, including  restitution and                                                               
civil penalties for violations;  relating to an investor training                                                               
fund; establishing  increased civil  penalties for  harming older                                                               
persons   and  vulnerable   adults;   relating  to   corporations                                                               
organized  under   the  Alaska  Native  Claims   Settlement  Act;                                                               
amending  Rules 4,  5,  54, 65,  and 90,  Alaska  Rules of  Civil                                                               
Procedure,  and Rule  602, Alaska  Rules of  Appellate Procedure;                                                               
and providing for an effective date."                                                                                           
                                                                                                                                
3:52:33 PM                                                                                                                    
                                                                                                                                
KEVIN  ANSELM,  Director,  Division   of  Banking  &  Securities,                                                               
Department   of  Commerce,   Community  &   Economic  Development                                                               
(DCCED),  presented  PowerPoint presentation  "Alaska  Securities                                                               
Act, HB  170" and reminded the  committee that she had  spoken to                                                               
the need  to update  the Alaska Securities  Act in  late January.                                                               
While a portion  of the presentation may be a  bit redundant, she                                                               
said  she does  not want  to confuse  anyone by  leaving out  any                                                               
steps.                                                                                                                          
                                                                                                                                
3:53:08 PM                                                                                                                    
                                                                                                                                
MS. ANSELM  turned to  slides 2-3,  and explained  the Securities                                                               
Act  provides  the  legal  framework  for  offering  and  selling                                                               
securities to  Alaskans, including the registration  of firms and                                                               
sales  persons,   registration  or  filing  of   securities,  and                                                               
enforcement.   Currently, the Securities  Act also  regulates the                                                               
Alaska  Native  Claims  Settlement Act  (ANCSA)  Corporation  and                                                               
shareholder proxy  related provisions.  Securities,  she offered,                                                               
is  the  largest  of  the division's  12  programs  and  includes                                                               
registering  and  monitoring  over 95,000  securities  registered                                                               
salespersons,  over 1,000  firms which  are mostly  out-of-state.                                                               
She referred to  HB 170, [Sec. 45.56.900(32), page  103, lines 9-                                                               
31,  and  page  104,  lines  1-8] and  noted  the  definition  of                                                               
security was not changed, it  includes a long list of investments                                                               
including  stocks, bonds,  limited  partnerships, investments  in                                                               
common enterprises, investment contracts, and viaticals.                                                                        
                                                                                                                                
3:54:33 PM                                                                                                                    
                                                                                                                                
MS. ANSELM  turned to slide  4, and  advised that HB  170 updates                                                               
the Alaska  Securities Act  by adopting many  of the  most recent                                                               
model  act   provisions  while   retaining  the   Alaska  centric                                                               
provisions.  The bill proposes  to lift the Alaska Securities Act                                                               
out of  the Native Claims  Settlement Act, the  ANCSA provisions,                                                               
which would  highlight the vast differences  between the programs                                                               
and allow ANCSA constituents a  clear view of the applicable law.                                                               
Also, she  explained, the bill's  new provisions are  included to                                                               
protect   older   and    vulnerable   Alaskans   from   financial                                                               
exploitation  and give  those investment  professionals who  make                                                               
those reports immunity from administrative and civil liability.                                                                 
                                                                                                                                
MS. ANSELM pointed  out that currently, there is  no provision in                                                               
the law  regarding restitution, and  the civil penalty  is capped                                                               
at $25,000.   The  bill asks the  legislature to  designate civil                                                               
penalties funds toward consumer  protection and education because                                                               
currently  there is  no requirement  for continuing  education of                                                               
industry professionals,  and those provisions are  included in HB                                                               
170.                                                                                                                            
                                                                                                                                
3:56:02 PM                                                                                                                    
                                                                                                                                
MS.  ANSELM  turned  to  slide   5,  and  reiterated  that  ANCSA                                                               
provisions  remain unchanged  under AS  45.55.   The new  statute                                                               
would be located  under AS 45.56, the references  to exempt ANCSA                                                               
securities transactions  are also included  in the new  Act under                                                               
AS 45.56.210, Sec. 27.                                                                                                          
                                                                                                                                
MS. ANSELM turned to slide 6,  pointed to the top four highlights                                                               
in HB 170,  and advised as follows:  the  bill eliminates filings                                                               
for  all   Alaska-based  exemptions  from   registration,  except                                                               
crowdfunding; updates  entity and  law references;  includes "bad                                                               
actor"  disqualifiers  (coughing)  basically states  that  anyone                                                               
with certain types  of crimes such as dishonesty  or theft cannot                                                               
be licensed  as an Alaska  salesperson; and  improves enforcement                                                               
and investor protection and education provisions.                                                                               
                                                                                                                                
3:57:27 PM                                                                                                                    
                                                                                                                                
MS. ANSELM  turned to  slide 7, and  explained the  slide depicts                                                               
the general articles of the Alaska  Securities Act.  The first 14                                                               
pages  of the  bill would  change  the statute  number and  other                                                               
statutes  that  reference the  Securities  Act;  and Secs.  15-24                                                               
repeal and modify  statutes under AS 45.55 relating  to the ANCSA                                                               
Corporations and proxy solicitations.                                                                                           
                                                                                                                                
MS.  ANSELM turned  to slides  8-10, and  reminded the  committee                                                               
that the  division does take  enforcement actions: in  FY2016, it                                                               
issued 36  final orders, and  17 of those orders  were securities                                                               
related.  She explained most  of the division's orders are posted                                                               
online, and the division is in  the process of making sure all of                                                               
its  orders are  posted  "back to  the beginning  of  time."   In                                                               
calendar year 2016,  the division issued 27 final  orders, and 13                                                               
of those orders were securities related.                                                                                        
                                                                                                                                
MS. ANSELM  turned to slide  9, and  explained some of  the scams                                                               
and  subsequent orders.   Mr.  Michael  Scow took  money from  an                                                               
Alaskan for  his Arizona-based insurance  firm, wherein  an order                                                               
for $25,000  was issued  by the  division, and  Mr. Scow  has not                                                               
paid the  Alaskan or  the division.   She  advised that  when she                                                               
discussed the  Fortune Oil and  Gas scam during her  testimony in                                                               
January, at  that time the  division was awaiting a  court order.                                                               
She  reminded  the  committee  that people  from  Texas  came  to                                                               
Alaska,  sold  Alaskans  approximately   $3.1  million  worth  of                                                               
worthless  limited partnerships.   The  division issued  an order                                                               
for the maximum amount possible  of $25,000, the judge agreed and                                                               
issued  his order  in March  of 2016,  granting $25,000  in civil                                                               
penalty on losses of $3.1 million.   She commented, "We're out of                                                               
date."  The  SOS Disasterplan.com scam and the  Troy Stafford and                                                               
Patrick Williams scam were two  different sorts of scams, wherein                                                               
SOS  Disasterplan.com  had  a website  and  issued  approximately                                                               
$540,000 in  worthless securities, again, with  the maximum civil                                                               
penalty limit  being $25,000.   She related  that it is  the same                                                               
with Troy Stafford and Patrick  Williams, except their scam was a                                                               
bit  different  because they  were  in  Alaska and  sold  another                                                               
Alaskan a business opportunity with  an employment opportunity in                                                               
a  bogus Alaska  company.   Subsequent to  the division  speaking                                                               
with  the two  men,  the men  agreed to  rescind  and return  the                                                               
money, except they did not return  any money.  She explained that                                                               
there are  provisions in the new  HB 170 that would  resolve some                                                               
of those issues.                                                                                                                
                                                                                                                                
4:00:57 PM                                                                                                                    
                                                                                                                                
MS. ANSELM advised  that the Global Arena Capital Corp.  is a New                                                               
York firm that found Mr. Burk,  a retired halibut fisherman, on a                                                               
call list,  called him at  home, and sold  him junk bonds.   This                                                               
firm  had advised  Mr. Burk  that  he would  make 16-18  percent,                                                               
except he did not.  The division  was able to get his money back,                                                               
but the maximum penalty was $25,000, she said.                                                                                  
                                                                                                                                
4:01:40 PM                                                                                                                    
                                                                                                                                
MS. ANSELM presented  oral testimony from Mr. Burk  who had since                                                               
passed, and noted that, ultimately, the case was settled.                                                                       
                                                                                                                                
[Mr.  Burk's oral  testimony 4:01:40  through 4:03:41.  See pages                                                               
13-15 of the PowerPoint presentation for written testimony.]                                                                    
                                                                                                                                
4:03:41 PM                                                                                                                    
                                                                                                                                
MS.  ANSELM advised  that the  division took  action against  six                                                               
individuals and was able to get  Mr. Burk's money back because it                                                               
found  a  salesperson with  a  conscience.   Stronger  tools  are                                                               
necessary  in order  to deal  with bad  actors and  this type  of                                                               
fraudulent  activity should  make  everyone in  the state  angry.                                                               
She then  described Mr. Burk as  angry and smart because  when he                                                               
received  another  call from  someone  trying  to sell  him  Bio-                                                               
Technology stock, he called the division,  and it was able to put                                                               
another firm in  a different state out of business  and take away                                                               
its license.   As far as fines, she reiterated,  that the maximum                                                               
fine was  $25,000, and the only  way to hurt the  firms that hurt                                                               
Alaskans is usually  in the pocketbook.  She stressed  that it is                                                               
the  division's hope  the legislature  help the  division through                                                               
enacting the new Alaska Securities Act, HB 170.                                                                                 
                                                                                                                                
4:05:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES   asked  how  the  Alaska   Native  Claims                                                               
Settlement Act (ANCSA) Corporations feel about the separation.                                                                  
                                                                                                                                
MS.  ANSELM responded  that the  corporations  have advised  they                                                               
have no objection to separating the statutes.                                                                                   
                                                                                                                                
4:05:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP  referred to  the Troy Stafford  and Patrick                                                               
Williams scenario, and asked how it falls under securities.                                                                     
                                                                                                                                
MS. ANSELM  answered that  the two men  were selling  the Alaskan                                                               
stock in  a company  and the gentleman  would become  part owner;                                                               
therefore,  it was  a common  enterprise.   She said  that for  a                                                               
while he was  not directly involved in that  enterprise, but part                                                               
of the fraud was that he would be a manager of the company.                                                                     
                                                                                                                                
REPRESENTATIVE KNOPP referred to slide  4 and the last two bullet                                                               
points,  noting  concern  about   the  creation  of  an  investor                                                               
education fund,  and asked why it  is the role of  state agencies                                                               
to educate  the public in investments.   He referred to  the last                                                               
bullet point  requiring continuing  education, and  asked whether                                                               
it means the state is  not providing the continuing education for                                                               
investment  advisors.    He  further   asked  whether  there  are                                                               
investment  advisors  registered in  Alaska  who  do not  perform                                                               
continuing education.                                                                                                           
                                                                                                                                
4:07:21 PM                                                                                                                    
                                                                                                                                
MS.  ANSELM  responded  that  as  far as  education,  it  is  not                                                               
required  in  Alaska  currently,  and   there  are  a  number  of                                                               
representatives that do not  perform continuing education whether                                                               
they  are stock  brokers or  investment advisors.   The  division                                                               
would like  to be more synthesized  with the rest of  the nation,                                                               
and the division  would require the continuing  education and not                                                               
provide the continuing  education.  As to why  the division would                                                               
want to  have investor education,  she responded that it  is part                                                               
of the division's mission which read is to:                                                                                     
                                                                                                                                
     Protect  consumers of  financial  services and  promote                                                                    
     safe and  sound financial  systems.  The  division also                                                                    
     supports  the   department's  mission,  which   is  to:                                                                    
     Promote a healthy  economy, support strong communities,                                                                    
     and protect consumers in Alaska.                                                                                           
                                                                                                                                
MS. ANSELM  explained that the  division's mission is  to protect                                                               
consumers  of  financial services,  and  promote  safe and  sound                                                               
financial systems.   In supporting the  department's mission, the                                                               
department  is promoting  a  healthy  economy, supporting  strong                                                               
communities, and protecting consumers  in Alaska.  Therefore, she                                                               
said, when protecting consumers, they  must be given the tools to                                                               
protect  themselves, and  the Investor  Education Funds  would be                                                               
set up  so approximately one-third  of the civil  penalties could                                                               
be put into  another account which would  have consumer education                                                               
on  the  account.    However,  she noted,  it  would  be  at  the                                                               
legislature's behest whether  or not the funds would  be spent on                                                               
consumer education  because the legislature controls  the budget.                                                               
Currently, consumer  education is  performed in  partnership with                                                               
other   states  and   sometimes  federal   organizations.     The                                                               
Securities and  Exchange Commission came to  Alaska and performed                                                               
joint  outreach  events  with  the  division  for  the  military,                                                               
government  workers, and  the  public.   There  have been  joint-                                                               
"scam-jams"  with  the  Department of  Justice,  U.S.  Attorney's                                                               
Office, FBI, Better  Business Bureau, and others to  reach out to                                                               
the public  so it knows  what is going  on and can  be forewarned                                                               
and  forearmed.   She  said  that Alaska  was  able  to use  some                                                               
investor  protection funds  from the  Investor Protection  Trust,                                                               
which  came from  a settlement  with some  large stock  brokerage                                                               
firms in the 1990s.  Those  funds are almost depleted, and Alaska                                                               
used those  funds primarily  to partner with  AARP and  perform a                                                               
series  of  instructive  television  shows on  360  North.    The                                                               
instructive television  shows were on various  topics relating to                                                               
seniors and everyone  in the state in order to  understand how to                                                               
protect themselves  when working  with investments,  knowing what                                                               
they  needed  to know  about  social  security and  other  issues                                                               
affecting  their livelihood.   She  said the  division speaks  in                                                               
schools, speaks at  civic organizations, and will  do pretty much                                                               
anything when  it can  advise people about  how they  can protect                                                               
themselves and hold onto their hard-earned money.                                                                               
                                                                                                                                
REPRESENTATIVE KNOPP acknowledged  that Alaska's aging population                                                               
are targets, and as the economy tightens up people get creative.                                                                
                                                                                                                                
4:11:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked whether there  was a draft  of HB                                                               
170, or  some type  of reform in  the [Twenty-Ninth  Alaska State                                                               
Legislature].                                                                                                                   
                                                                                                                                
MS. ANSELM  responded that within the  [Twenty-Ninth Alaska State                                                               
Legislature] House Bill  194 and Senate Bill 108  were similar to                                                               
HB  170,  there  were  a   couple  of  additions,  including  the                                                               
vulnerable    adult    provisions   for    reporting    financial                                                               
exploitation.                                                                                                                   
                                                                                                                                
4:12:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL  noted  his   surprise  that  the  education                                                               
programs  are  performed through  the  Department  of Health  and                                                               
Social  Services   (DHSS)  and   asked  Ms.  Anselm   to  explain                                                               
navigating  through  the  healthcare  system,  but  also  through                                                               
securities fraud.   He  asked whether the  same people  offer the                                                               
training on health issues and securities fraud.                                                                                 
                                                                                                                                
MS.  ANSELM  explained that  the  new  provision, protection  for                                                               
vulnerable and older Alaskans, read  that if there is a suspicion                                                               
of financial exploitation, a report  is required to be filed with                                                               
the division or  Adult Protective Services.  She  deferred to the                                                               
Division of Senior and Disabilities Services.                                                                                   
                                                                                                                                
4:14:20 PM                                                                                                                    
                                                                                                                                
DEB  ETHERIDGE,  Deputy  Director, Central  Office,  Division  of                                                               
Senior  and  Disabilities  Services, Department  of  Health,  and                                                               
Social  Services  (DHSS),  opined that  Representative  Wool  was                                                               
asking  how  the  system responds  to  allegations  of  financial                                                               
exploitation currently.                                                                                                         
                                                                                                                                
REPRESENTATIVE WOOL  said she was  correct within  the discussion                                                               
of investor education and prevention of fraud.                                                                                  
                                                                                                                                
4:15:23 PM                                                                                                                    
                                                                                                                                
MS.  ETHERIDGE   answered  that   the  Division  of   Senior  and                                                               
Disability Services  oversees the adult protection  unit, and the                                                               
authority and  requirement in adult protection  is to investigate                                                               
all allegations  of financial exploitation.   She explained there                                                               
are  civil investigations,  partnering  with  law enforcement  if                                                               
there is  a crime,  but the adult  protection unit  also receives                                                               
reports of  financial exploitation from a  mandatory reporters or                                                               
citizens, family members, or neighbors.   In the event the person                                                               
is  deemed  a  vulnerable  adult,  through  that  reporting,  the                                                               
division  performs investigations  and makes  findings, and  also                                                               
performs  protective services.   Oftentimes,  she said,  when the                                                               
division receives these reports the  money has already been spent                                                               
and  the  division is  actually  cleaning  up,  and "this  is  an                                                               
opportunity to receive the reports prior to."                                                                                   
                                                                                                                                
CHAIR KITO opened public testimony on HB 170.                                                                                   
                                                                                                                                
[HB 170 was held over.]                                                                                                         
                                                                                                                                
                                                                                                                                
            HB 132-TRANSPORTATION NETWORK COMPANIES                                                                         
                                                                                                                                
4:17:00 PM                                                                                                                    
                                                                                                                                
CHAIR KITO announced that the final order of business would be                                                                  
HOUSE BILL NO. 132, "An Act relating to transportation network                                                                  
companies and transportation network company drivers."                                                                          
                                                                                                                                
4:17:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 1, Version 30-                                                                
LS0522\J.3, which read as follows:                                                                                              
                                                                                                                                
     Page 10, line 4, following "Records.":                                                                                   
          Insert "(a)"                                                                                                          
                                                                                                                                
     Page 10, following line 11:                                                                                                
          Insert new material to read:                                                                                          
          "(b)  Except for specific information about a                                                                         
     transportation  network  company rider,  including  the                                                                    
     rider's   name,  address,   and  telephone   number,  a                                                                    
     transportation   network   company  shall   provide   a                                                                    
     transportation  network  driver  information  for  each                                                                    
     ride   the    driver   completes,    including   global                                                                    
     positioning data, the  fare and tip paid  by the rider,                                                                    
     and the rate charged.                                                                                                      
          Sec. 28.23.130. Collective bargaining agreement.                                                                    
     To   the   extent   allowed    by   federal   law   and                                                                    
     notwithstanding AS 28.23.080,                                                                                              
               (1)  transportation network company drivers                                                                      
     may  organize  for  the  purpose   of  mutual  aid  and                                                                    
     protection and may designate a bargaining agent;                                                                           
               (2)  a transportation network company and an                                                                     
     organization of transportation  network company drivers                                                                    
     may negotiate, enter into,  and administer a collective                                                                    
     bargaining  agreement concerning  wages, benefits,  and                                                                    
     other terms  and conditions relating to  work performed                                                                    
     by the transportation network company drivers;                                                                             
               (3)  a municipality where a transportation                                                                       
     network company  operates may regulate  conduct allowed                                                                    
     under (1) and (2) of this section.                                                                                         
          Sec. 28.23.140. Prohibitions. A transportation                                                                      
     network company may not                                                                                                    
               (1)  take adverse action against a                                                                               
     transportation   network   company  driver,   including                                                                    
     restricting   the  driver's   tips  or   suspending  or                                                                    
     terminating   the   driver's   participation   in   the                                                                    
     company's digital network, as a result of the driver                                                                       
               (A)  organizing or joining a driver                                                                              
     association   or  labor   organization,  including   an                                                                    
     organization under AS 28.23.130,  or participating in a                                                                    
        driver association or labor organization or the                                                                         
         activities of the driver association or labor                                                                          
     organization;                                                                                                              
               (B)  decreasing the driver's participation                                                                       
     in the company's digital network; or                                                                                       
               (C)  generating less fare or tip income;                                                                         
     (2)  change a compensation  rate or other material term                                                                    
     of  a  contract  with  a driver  without  the  driver's                                                                    
     voluntary prior  consent, if the  contract is  based on                                                                    
     the  driver  providing  a   ride  to  a  transportation                                                                    
     network company rider."                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL objected.                                                                                                   
                                                                                                                                
4:17:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON explained  that he  had consulted  with                                                               
labor lawyers and  the legislature's lawyers, and  although it is                                                               
not  conventional, there  is nothing  prohibiting the  option for                                                               
transportation network  companies (TNC)  workers in the  state to                                                               
organize,  even as  independent contractors.   He  noted a  First                                                               
Amendment right of association, mutual aid, and protection.                                                                     
                                                                                                                                
4:19:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON continued  that  the  National Labor  &                                                               
Relations Act  concerns itself  with employees,  but it  does not                                                               
speak to  independent contractors.   He explained his  concern is                                                               
for  the  TNC  drivers who  may  come  to  learn  it is  not  the                                                               
lucrative profession they may have  believed because they have to                                                               
pay  for gasoline,  any injuries  sustained on  the job,  and any                                                               
repairs.   This amendment  gives drivers  an option  to organize,                                                               
and  there is  the potential  for a  much larger  pool of  people                                                               
statewide  than taxi  drivers.   Frankly, he  said, drivers  need                                                               
authority  to   work  collectively  because   individual  drivers                                                               
working  separately will  have a  hard time  asking the  TNCs for                                                               
anything.                                                                                                                       
                                                                                                                                
4:21:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH spoke against the  amendment noting a lot of                                                               
communication from  AKTeamsters.com objecting to  ridesharing and                                                               
TNCs, and this  effort to propose an  organizational structure is                                                               
a wrench in the  works at this late date.   He described that the                                                               
amendment was  not constructive  because, otherwise,  there would                                                               
be  organized taxi  drivers everywhere.    He said  he could  not                                                               
support   the  amendment   because  it   is  not   reasonable  or                                                               
constructive in the path forward enabling TNCs in Alaska.                                                                       
                                                                                                                                
4:21:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL  related  that   he  does  not  support  the                                                               
amendment   and  opined   that  under   federal  law   collective                                                               
bargaining   with  independent   contractors   is  not   allowed.                                                               
Seattle,  Washington  did pass  an  ordinance  about TNC  drivers                                                               
organizing and  he noted that  the drivers have  not successfully                                                               
organized at this point.                                                                                                        
                                                                                                                                
4:23:00 PM                                                                                                                    
                                                                                                                                
CHAIR KITO commented that the  discussion to organize TNC drivers                                                               
should  encompass a  larger discussion  from actual  drivers, and                                                               
since Alaska does  not have drivers, there is  not an opportunity                                                               
for TNC  drivers, or  possibly taxi  drivers, to  weigh in  as to                                                               
whether or not they would prefer  to organize.  He suggested with                                                               
this  larger discussion  there should  be in  a more  independent                                                               
piece of legislation,  and because there had  not been sufficient                                                               
discussion on this issue, he  does not support this amendment, he                                                               
said.                                                                                                                           
                                                                                                                                
4:23:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES questioned  whether or not it  needed to be                                                               
put  in statute  because drivers  would have  the opportunity  to                                                               
organize if  they chose  to go  that route,  without it  being in                                                               
statute.                                                                                                                        
                                                                                                                                
REPRESENTATIVE WOOL maintained his objection.                                                                                   
                                                                                                                                
4:24:27 PM                                                                                                                    
                                                                                                                                
A roll  call vote was  taken.  Representative Josephson  voted in                                                               
favor  of adopting  Amendment 1.   Representatives  Stutes, Wool,                                                               
Birch,  Knopp,  Sullivan-Leonard,  and  Kito  voted  against  it.                                                               
Therefore, Amendment 1 failed by a vote of 1-6.                                                                                 
                                                                                                                                
4:24:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON moved to  adopt Amendment 2, Version 30-                                                               
LS0522\R.1, which read as follows:                                                                                              
                                                                                                                                
     Page 11, line 25:                                                                                                          
          Delete "or"                                                                                                           
          Insert "and"                                                                                                          
                                                                                                                                
     Page 11, line 27, through page 12, line 13:                                                                                
          Delete all material and insert:                                                                                       
         "* Sec. 8. AS 29.35 is amended by adding a new                                                                       
     section to read:                                                                                                           
          Sec. 29.35.148. Regulation of transportation                                                                        
     network companies. (a) Notwithstanding AS 28.01.010, a                                                                   
     municipality may by ordinance                                                                                              
               (1)  prohibit a transportation network                                                                           
       company or driver from conducting activities under                                                                       
     AS 28.23 within the municipality; or                                                                                       
               (2)      regulate    the   operation   of   a                                                                    
      transportation network company or driver in a manner                                                                      
     that is at least as restrictive as or more restrictive                                                                     
     than the provisions of AS 28.23.                                                                                           
          (b)  This section applies to home rule and                                                                            
     general law municipalities.                                                                                                
          (c)  In this section, "transportation network                                                                         
        company" and "driver" have the meanings given in                                                                        
     AS 28.23.180."                                                                                                             
                                                                                                                                
REPRESENTATIVE WOOL objected                                                                                                    
                                                                                                                                
4:25:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON advised  that less  than 72-hours  ago,                                                               
the  Anchorage Assembly  passed  a 23-page  ordinance with  "much                                                               
more detail  than the  bill," by  a vote of  8-3.   The ordinance                                                               
listed any  manner of things  the assembly wanted to  regulate in                                                               
the  event this  bill does  become law.   The  ordinance requires                                                               
that:  customers would  be informed  when they  are riding  under                                                               
dynamic or  surge pricing;  the Municipality  Inspection Division                                                               
would inspect  cars annually; insurance  would be  cancelled, and                                                               
an application would  cease to operate if any  of the regulations                                                               
promulgated in  the ordinance were  not complied with;  TNC would                                                               
have  an  insurance schedule  comparable  to  the taxi  insurance                                                               
schedule.   In addition, there would  be an agent for  service of                                                               
process,  a  system for  lost  and  stolen  items; a  system  for                                                               
handling complaints,  a system to  handle post-incident  drug and                                                               
alcohol testing,  and issues  of violations  of alcohol  and drug                                                               
testing.  The ordinance requires  that: TNCs would be required to                                                               
check that  the driver is  not included on National  Sex Offender                                                               
Registry;  the city  would receive  a  list of  all TNC  drivers;                                                               
there would be  drug and alcohol testing if there  is an accident                                                               
or incident; the city would be  notified of any report of traffic                                                               
accidents  or injuries;  the city  would  preclude the  use of  a                                                               
vehicle for solicitation or prostitution;  TNCs could not be used                                                               
to tow  or carry a trailer.   The ordinance also  stipulates that                                                               
for vehicles that  can carry more than seven  people, there would                                                               
be  a  higher rate  of  insurance.    Page  20 of  the  ordinance                                                               
describes that in  the event of an accident  or litigation, there                                                               
would automatically "be all this  discovery."  He stated that the                                                               
ordinance: requires a process for  hearings of appeals of denials                                                               
of  licensure; establishes  that disabled  [riders] could  not be                                                               
charged more;  and lists  a 27-item fine  schedule, similar  to a                                                               
bail schedule.                                                                                                                  
                                                                                                                                
4:28:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  offered that local governments,  due to                                                               
its taxis and "boots on the  ground," are in a better position to                                                               
regulate.  Local governments are cut  out and that is the problem                                                               
with the bill, he said.                                                                                                         
                                                                                                                                
4:30:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH  spoke  against Amendment  2,  noting  that                                                               
while  it   is  encouraging  that  the   Anchorage  Assembly  and                                                               
community  is supportive  of TNCs,  there  was significant  prior                                                               
testimony  pointing out  the problems  in having  a patchwork  of                                                               
different nuances  in every  different community.   He  said that                                                               
during  his ten  years  on  the assembly,  it  had long  standing                                                               
issues   in   trying   to   accommodate   public   transportation                                                               
requirements  into  Chugiak,  Eagle  River,  and  the  Matanuska-                                                               
Susitna areas.   The patchwork  problem comes  to a head  when it                                                               
becomes  necessary to  direct the  service  areas into  different                                                               
nuances on  how services  could be delivered.   He  described the                                                               
bill as a good workable product  to carry forward and stated that                                                               
the  safety   and  security  issues  have   been  addressed,  and                                                               
Amendment 2 would get the committee needlessly "tangled up."                                                                    
                                                                                                                                
4:31:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP spoke in support  of Amendment 2, expressing                                                               
that  unique  issues  arise  in  the  various  communities  "they                                                               
operate in" and there is no better  place to fix the issues.  The                                                               
rules  written  in  the  bill  are  lenient  and  not  especially                                                               
restrictive,  yet  in  reality,  people do  not  get  to  operate                                                               
without  some type  of rules.    He stated  concern about  rating                                                               
passengers, such  as in the instance  of a passenger not  being a                                                               
big tipper and  therefore rated a "one," leading  to those people                                                               
waiting  a long  time for  the next  Uber ride.   Also,  he noted                                                               
concern about the  "mini-suite" application as to  buying 12 cars                                                               
and  putting  drivers  in  them because  now  they  are  actually                                                               
employees and he  stated that he was unsure how  that would work.                                                               
The point, he said, is that  there will be issues that arise, and                                                               
this amendment  provides the opportunity  for those issues  to be                                                               
addressed.                                                                                                                      
                                                                                                                                
4:33:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES spoke  in support of Amendment  2, and that                                                               
she  is  in  favor  of  seeing Uber  come  into  communities  and                                                               
commented  that her  rural  Alaska community  is  confined to  an                                                               
island.  She said that both  the borough manager and city manager                                                               
are "exceedingly  concerned" about  these drivers coming  in with                                                               
no regulation,  when Kodiak's taxi cabs  are seriously regulated.                                                               
She has heard  from many of her constituents, living  in both the                                                               
city and  the borough, who believe  that it is alarming  to think                                                               
there would be  no regulation and they would have  no input as to                                                               
what went on with these drivers, she said.                                                                                      
                                                                                                                                
4:34:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL spoke in opposition  to Amendment 2, and said                                                               
he understands the concern of  municipalities, although, the case                                                               
in  point is  that  three individuals  on  the committee  support                                                               
municipal   regulations,  all   of  which   are  from   different                                                               
municipalities,  and  patchwork  is  part of  the  problem.    He                                                               
referred  to Lyft,  noting  that  it will  not  go  into a  state                                                               
without statewide legislation, and  stressed that Alaska wants to                                                               
be current and  innovative, and this technology  platform is used                                                               
in 49 states,  with 38 or 39 states  under statewide legislation.                                                               
Some  Alaskans  can practice  exceptionalism,  and  not care  how                                                               
things are run outside of Alaska,  and be without the TNC service                                                               
except,  he  said,  most  Alaskans  want the  TNC  service.    He                                                               
referred to the Anchorage ordinance  and advised that the Lyft or                                                               
Uber  contract contains  much of  what was  listed, and  drug and                                                               
alcohol  tests  are performed  by  law  enforcement following  an                                                               
accident.   As far as suites,  he opined, a group  of drivers are                                                               
not allowed to work under a driver.   The rating system is a very                                                               
good system, he  described, because rating makes  the TNC service                                                               
far superior  to the  experience of people  riding in  taxis, and                                                               
pointed out that over many  hours of testimony, not one testifier                                                               
complained about  TNC service.   Historically, larger  cities had                                                               
local control  when the service was  rolled out, but that  is not                                                               
going to happen in Alaska.   He offered that statewide control is                                                               
good and more  language could be added to the  bill in addressing                                                               
some of these concerns, but he  stated that he does not intend to                                                               
make  the bill  basically a  contract for  TNCs.   He asked  that                                                               
Annabel Chang address the issue of suites.                                                                                      
                                                                                                                                
4:39:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP  offered a point  of order, noting  that the                                                               
committee is  addressing the amendment,  and asked  whether Chair                                                               
Kito planned to open it up to public testimony.                                                                                 
                                                                                                                                
CHAIR KITO  ruled that there  is a question  as to the  impact of                                                               
the amendment and Lyft is being asked to respond.                                                                               
                                                                                                                                
4:39:28 PM                                                                                                                    
                                                                                                                                
ANNABEL CHANG,  West Coast Director,  Public Policy,  Lyft, asked                                                               
that the question be repeated.                                                                                                  
                                                                                                                                
REPRESENTATIVE  WOOL  asked  about  drivers  subcontracting  with                                                               
other drivers.                                                                                                                  
                                                                                                                                
MS.  CHANG explained  that  each individual  driver  on the  Lyft                                                               
platform must go through an  individual background check process,                                                               
including the  vehicle they drive.   For example, in the  event a                                                               
family shares a vehicle and the  wife wants to drive for Lyft and                                                               
it is  under her husband's  name, she  must be approved  to drive                                                               
that vehicle  and must be  listed on  the insurance.   The wife's                                                               
husband cannot drive that vehicle  because he was not approved to                                                               
drive  on the  Lyft platform  unless he  goes through  a separate                                                               
background check, driving  record check, and identity  check.  Of                                                               
course, she said,  when opening the app, the photo  of the actual                                                               
approved  driver pops  up so  the passenger  is aware  of who  is                                                               
actually picking them up before they even get into the vehicle.                                                                 
                                                                                                                                
4:41:05 PM                                                                                                                    
                                                                                                                                
CHAIR KITO asked  if an individual is operating as  a Lyft driver                                                               
when  they  activate the  app,  and  whether  there is  a  policy                                                               
regarding whether  or not that has  to be the individual  that is                                                               
authorized.                                                                                                                     
                                                                                                                                
MS. CHANG agreed,  and she said it would be  against the terms of                                                               
service  to have  anyone not  approved to  drive on  the platform                                                               
using  the   platform,  and  the   approved  person   would  risk                                                               
deactivation at  that point.   Of  course, she  noted, passengers                                                               
would have  notification because  they would  know when  they are                                                               
picked  up whether  the driver  matches the  photo on  the mobile                                                               
app.                                                                                                                            
                                                                                                                                
4:42:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP referred  to the last time she  spoke to the                                                               
committee when the issue of  "mini-suites" was brought up and Ms.                                                               
Chang had  agreed that it  was possible,  and asked how  it would                                                               
work if someone was to buy six cars and put drivers in the cars.                                                                
                                                                                                                                
MS. CHANG  responded that Lyft  partners with General  Motors and                                                               
Enterprise   wherein  they   actually  lease   out  vehicles   in                                                               
partnership  with Lyft.   In  that situation,  she explained,  an                                                               
individual can lease out  a vehicle for a few weeks  at a time to                                                               
drive on the Lyft platform, and  prior to their approval to drive                                                               
on the  Lyft platform, they  must go through a  background check,                                                               
driving record check,  and their name and face must  be linked to                                                               
that vehicle  on the mobile  app.   There is always  a connection                                                               
between the approved  individual and the vehicle  before a person                                                               
is  allowed to  drive and  be activated  on the  mobile app,  she                                                               
explained.                                                                                                                      
                                                                                                                                
4:43:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP offered a scenario  wherein someone leases a                                                               
car from Hertz, Budget, or Enterprise  and their names are not on                                                               
the title or with the insurance company.                                                                                        
                                                                                                                                
MS.  CHANG  answered  that  the   individual  is  listed  on  the                                                               
insurance, and  insurance is provided  through General  Motors or                                                               
Hertz.                                                                                                                          
                                                                                                                                
4:44:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD said  she echoes  Representative                                                               
Birch's comments  because in the  taxi industry their  ability to                                                               
travel through  the Matanuska-Susitna  Valley, as an  example, is                                                               
rather  limited.   As  to the  arrival of  TNCs,  its freedom  of                                                               
movement and  moving passengers in  and around  the south-central                                                               
area  is an  important  component, and  the  thought of  actually                                                               
delineating between each municipality  is an incredible patchwork                                                               
that  should be  avoided, she  said.   The current  bill contains                                                               
regulations in  place, there will  be a requirement  for business                                                               
licensing, sales  tax collection, and disbursement  to the cities                                                               
requiring  those  collections  and,  she  stated,  she  does  not                                                               
support Amendment 2.                                                                                                            
                                                                                                                                
4:45:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES  acknowledged  that she  was  mistaken  in                                                               
thinking there was  an opt-in clause for a  municipality and have                                                               
the  opportunity for  local control.   She  suggested a  friendly                                                               
amendment adding an opt-in clause.                                                                                              
                                                                                                                                
REPRESENTATIVE  JOSEPHSON advised  that Amendment  2 would  allow                                                               
municipalities to  opt-in and  referred to  Amendment 2,  page 1,                                                               
lines 8-9, which read as follows:                                                                                               
                                                                                                                                
          Sec. 29.35.148. Regulation of transportation                                                                        
     network companies.  (a) Notwithstanding AS 28.01.010,                                                                    
     a municipality may by ordinance                                                                                            
                                                                                                                                
4:46:58 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO referred  to Amendment  2, page  1, lines  8-11, Sec.                                                               
29.35.148, which read as follows:                                                                                               
                                                                                                                                
        (a) Notwithstanding AS 28.01.010, a municipality                                                                        
     may be ordinance                                                                                                           
         (1)   prohibit   a   transportation   network                                                                          
     company or driver from conducting activities under AS                                                                      
     28.23 within the municipality; or                                                                                          
                                                                                                                                
CHAIR KITO described that Amendment  2 would allow a municipality                                                               
to opt-out.                                                                                                                     
                                                                                                                                
REPRESENTATIVE STUTES  asked whether  that is opposed  to opting-                                                               
in.                                                                                                                             
                                                                                                                                
CHAIR KITO answered in the affirmative.                                                                                         
                                                                                                                                
4:47:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH commented  that  while  he appreciates  the                                                               
testimony of Ms. Chang, his  concern still stands when looking no                                                               
farther  than the  language  in this  amendment  which speaks  to                                                               
prohibiting  and  regulating  a  TNC.    He  opined  that  it  is                                                               
commendable  that  there is  support  for  the  TNC, and  if  the                                                               
committee wants  TNCs to operate in  Alaska, it needs to  be in a                                                               
uniform manner.   That responsibility rests  with the legislature                                                               
and  the oversight  and regulation  would be  incumbent upon  the                                                               
legislature, and he  does not believe this  amendment adds value,                                                               
he advised.                                                                                                                     
                                                                                                                                
4:48:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL  referred  to  the  opt-out  provision,  and                                                               
advised that Fairbanks is a city  and a borough, and the city and                                                               
borough  are  sandwiched  on  top  of each  other,  it  would  be                                                               
complicated  if the  city  chose  to opt-out.    For example,  he                                                               
explained, he lives in the City  of Fairbanks and if he wanted to                                                               
be picked up by a TNC, he must  then walk to the city border.  He                                                               
expressed   that  for   that  reason   alone  the   amendment  is                                                               
unacceptable, on top of the other previously stated reasons.                                                                    
                                                                                                                                
4:49:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP remarked that he did  not view it as an opt-                                                               
out, but  rather an opt-in  because it read, "a  municipality may                                                               
by  ordinance  regulate  or  prohibit."   Therefore,  it  is  not                                                               
inclusive  until  adopting  an  ordinance, it  does  provide  the                                                               
option to address issues when they  come up, that is all it does,                                                               
he said.                                                                                                                        
                                                                                                                                
4:50:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   JOSEPHSON   expressed   frustration   with   the                                                               
legislation because  this could be  a great victory  for everyone                                                               
and opined that  most cities would not prohibit it  and would opt                                                               
for paragraph (a)(2)  in the amendment, and  would want something                                                               
more  restrictive.   Although,  he noted,  cities  could opt  for                                                               
paragraph  (a)(1)   and  be  able   to  prohibit  a   TNC,  local                                                               
governments  want more  local  control as  was  reflected in  the                                                               
Anchorage ordinance.                                                                                                            
                                                                                                                                
[The committee treated the objection as maintained.]                                                                            
                                                                                                                                
4:51:09 PM                                                                                                                    
                                                                                                                                
A roll call  vote was taken.   Representatives Stutes, Josephson,                                                               
and   Knopp   voted   in   favor   of   adopting   Amendment   2.                                                               
Representatives  Sullivan-Leonard, Wool,  Birch,  and Kito  voted                                                               
against it.   Therefore, Amendment  2 failed  to be adopted  by a                                                               
vote of 3-4.                                                                                                                    
                                                                                                                                
4:51:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 3, Version 30-                                                                
LS0522\R.2, which read as follows:                                                                                              
                                                                                                                                
     Page 10, line 14:                                                                                                          
          Delete "one year"                                                                                                     
          Insert "two years"                                                                                                    
                                                                                                                                
     Page 10, line 17:                                                                                                          
          Delete "one year"                                                                                                     
          Insert "two years"                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL objected for the purposes of discussion.                                                                    
                                                                                                                                
4:52:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  remarked that  under the  bill, records                                                               
are  to be  retained for  one  year, yet  there is  a statute  of                                                               
limitations in  tort law,  or personal injury,  of two  years and                                                               
the bill  should match that statute.   For example, let  us say a                                                               
TNC driver assaulted a passenger by  hitting them on the jaw, the                                                               
passenger believed  he would  heal; except one  year and  one day                                                               
passed and  the passenger required  jaw surgery.   That passenger                                                               
would not  have access to  the records that otherwise  would have                                                               
been available,  yet he would be  allowed to sue for  another 364                                                               
days  because the  statute of  limitations  runs for  a full  two                                                               
years.  The records could  be information that would exculpate or                                                               
exonerate the  driver, records are  retained in other  cities for                                                               
three years, and the TNCs would accommodate, he opined.                                                                         
                                                                                                                                
4:54:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL commented  that Representative Josephson made                                                               
good points and he removed his objection.                                                                                       
                                                                                                                                
MS.  CHANG, in  response  to Representative  Birch, advised  that                                                               
Lyft has no objection to this amendment.                                                                                        
                                                                                                                                
4:55:10 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO noted  that  the objection  had  been removed,  there                                                               
being no objection, Amendment 3 was adopted.                                                                                    
                                                                                                                                
4:55:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON moved to  adopt Amendment 4, Version 30-                                                               
LS0522\R.3, which read as follows:                                                                                              
                                                                                                                                
     Page 11, lines 11 - 12:                                                                                                    
          Delete "and related services"                                                                                         
                                                                                                                                
REPRESENTATIVE WOOL objected.                                                                                                   
                                                                                                                                
4:55:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  referred to  CSHB 132, Version  R, page                                                               
11, lines  11-12, and said  some stakeholders are  concerned that                                                               
the language "and  related services" is vague.   As written, TNCs                                                               
could  work in  connection  to potential  passengers and  related                                                               
services and,  he said, stakeholders  do not know the  meaning of                                                               
that language.   For example,  could a person with  a semi-truck,                                                               
without a CDL, be hired at  a reduced rate because this becomes a                                                               
pebble  thrown  in the  preverbal  pond  that moves  further  and                                                               
further into the workplace.                                                                                                     
                                                                                                                                
4:56:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH remarked that  there was testimony regarding                                                               
passengers  potentially ordering  up a  driver, for  instance, to                                                               
deliver  a  teen-age  child  from  a junior  high  school  to  an                                                               
appointment.    In this  instance,  the  person  may not  be  the                                                               
passenger but they have ordered up  the TNC to provide a service.                                                               
One  of  the benefits  of  ridesharing  is  the potential  for  a                                                               
scheduled and known  person and vehicle to  transport someone who                                                               
may not be  "yourself" to an appointment.  Therefore,  he said he                                                               
has concerns and is not comfortable with Amendment 4.                                                                           
                                                                                                                                
4:58:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD reminded  the committee that this                                                               
issue was discussed previously with  Ms. Chang, and she asked Ms.                                                               
Chang  to  reiterate aspects  of  what  "other related  services"                                                               
would be with regard to a TNC.                                                                                                  
                                                                                                                                
MS.  CHANG reiterated  that Lyft  often works  with hospitals  or                                                               
senior  centers and  someone at  the front  desk who  is not  the                                                               
passenger will  order a Lyft  for a patient  or a resident.   For                                                               
instance,  an 85-year-old  grandmother, not  familiar with  smart                                                               
phones, can  receive a ride through  a Lyft ordered by  the front                                                               
desk attendant, or her granddaughter, for instance.                                                                             
                                                                                                                                
4:59:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL noted other  services in ridesharing, such as                                                               
carpooling and  such.   He referred to  the concern  about trucks                                                               
and hauling freight  being considered part of  the "other related                                                               
services" and  stressed that  that certainly  was not  his intent                                                               
with this  legislation.   In the  event that  were to  happen, he                                                               
described that he  would certainly draft a new bill  to make sure                                                               
that did not happen, but at this point that is a bit preemptive.                                                                
                                                                                                                                
CHAIR KITO  turned to Mr.  Matthews of Uber, referred  to related                                                               
services,  and asked  whether calling  a  ridesharing service  to                                                               
deliver a  birthday cake  from one  location to  another location                                                               
and  not actually  carrying a  passenger, was  possible with  the                                                               
Uber platform.                                                                                                                  
                                                                                                                                
5:00:57 PM                                                                                                                    
                                                                                                                                
MITCHEL  MATTHEWS,   Senior  Global  Operations   Manager,  Uber,                                                               
responded  that  Chair  Kito's scenario  was  possible,  but  not                                                               
intended.  From Uber's perspective,  the "other related services"                                                               
relates  more to  activities relating  to  the transportation  of                                                               
passengers.   For  example, Uber's  view on  related services  is                                                               
that  TNCs  help  facilitate the  payment  stream  or  facilitate                                                               
communication between  riders and drivers through  its anonymized                                                               
channels.                                                                                                                       
                                                                                                                                
CHAIR KITO surmised  that Uber's related services  are related to                                                               
what  the  app  provides  in facilitating  passenger  and  driver                                                               
activity.                                                                                                                       
                                                                                                                                
MR. MATTHEWS answered in the  affirmative, and he reiterated that                                                               
it  would be  helping  to facilitate  payments or  communications                                                               
between rider  and driver at the  time they were connected  for a                                                               
trip.                                                                                                                           
                                                                                                                                
REPRESENTATIVE WOOL maintained his objection.                                                                                   
                                                                                                                                
5:02:39 PM                                                                                                                    
                                                                                                                                
A roll  call vote was  taken.  Representative Josephson  voted in                                                               
favor of adopting Amendment 4.   Representatives Knopp, Sullivan-                                                               
Leonard,  Stutes,  Wool,  Birch,   and  Kito  voted  against  it.                                                               
Therefore, Amendment 4 failed to be adopted by a vote of 1-6.                                                                   
                                                                                                                                
5:03:04 PM                                                                                                                    
                                                                                                                                
CHAIR KITO clarified that Amendment  5, Version 30-LS0522\R.4 had                                                               
been noticed but was not being offered at this time.                                                                            
                                                                                                                                
5:03:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 6, Version 30-                                                                
LS0522\R.6 which read as follows:                                                                                               
                                                                                                                                
     Page 6, line 17:                                                                                                           
          Delete "$50,000"                                                                                                      
          Insert "$100,000"                                                                                                     
          Delete "$100,000"                                                                                                     
          Insert "$300,000"                                                                                                     
                                                                                                                                
     Page 6, line 18:                                                                                                           
          Delete "$25,000"                                                                                                      
          Insert "$50,000"                                                                                                      
                                                                                                                                
     Page 6, lines 19 - 20:                                                                                                     
          Delete "as required under AS 21.96.020 and                                                                            
     AS 28.20.440"                                                                                                              
          Insert "in the amount of at least $100,000 for                                                                        
     death and bodily injury for each person, $300,000 for                                                                      
     death and bodily injury for each incident, and $25,000                                                                     
     for property damage"                                                                                                       
                                                                                                                                
     Page 6, line 31, through page 7, line 1:                                                                                   
          Delete "as required under AS 21.96.020 and                                                                            
     AS 28.20.440"                                                                                                              
     Insert "in the amount of  at least $1,000,000 for death                                                                    
     and  bodily  injury  for each  person,  $1,000,000  for                                                                    
     death and bodily injury for  each incident, and $25,000                                                                    
     for property damage"                                                                                                       
                                                                                                                                
REPRESENTATIVE WOOL objected.                                                                                                   
                                                                                                                                
5:03:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  explained that the amendment  read that                                                               
a driver will  pick up a passenger who presumably  the driver has                                                               
no  relationship.    "But,  remember,   we're  not  calling  them                                                               
commercial  carriers  so it's  a  whole  new relationship."    He                                                               
opined  that  during  period  one,  the driver  is  not  at  home                                                               
thinking  about  engaging  the   application,  the  driver  could                                                               
actually be  driving and looking  for the next ride.   Therefore,                                                               
the driver could be a  distracted driver, except the insurance in                                                               
that period is  the same as for private individuals  in the State                                                               
of Alaska,  and yet the legal  duty is there.   The vehicle could                                                               
be moving and passenger-less and,  he explained the first part of                                                               
Amendment 6 mirrors the $100,000  for each injury and$300,000 for                                                               
aggregate injuries, of  which is located in the taxi  code of the                                                               
municipality.   He  said that  taxi cab  drivers are  independent                                                               
contractors,  TNC drivers  are  independent  contractors, "so  do                                                               
that for  the insurance as  well."  The  $25,000/$50,000 reflects                                                               
property  damage  which  mirrors   the  taxi  rates  required  in                                                               
Anchorage.   He  referenced  uninsured motorists  and noted  that                                                               
rather than  defaulting to the  statute, which would  only mirror                                                               
this  smaller   $50,000/$100,000  number,  the  latter   part  of                                                               
Amendment 6 language would instead  mirror what Uber itself wants                                                               
to offer, $1 million for periods  two and three, and $100,000 and                                                               
$300,000 for period one.   Essentially, he said, this is designed                                                               
to insure  people in  a more legitimate  manner, noting  that the                                                               
$50,000  and  $100,000 numbers  had  not  increased over  a  long                                                               
period  of time.    There will  be accidents,  he  said, and  the                                                               
Anchorage ordinance  read that if  there are seven  passengers in                                                               
the vehicle  the insurance would  be even higher,  stressing that                                                               
he wants this "new thing" properly insured.                                                                                     
                                                                                                                                
5:07:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL   referred  to   Representative  Josephson's                                                               
statement that a  TNC driver might be driving  around looking for                                                               
a  fare  and explained  that  TNC  drivers  do not  drive  around                                                               
looking for  fares.  He  further explained that according  to the                                                               
contract, fares  only arrive  to the  driver through  their phone                                                               
app; he  expounded that a  forthcoming committee  substitute will                                                               
state that the  only way a passenger  can get a ride on  a TNC is                                                               
through a phone app, and not  through a phone call or being waved                                                               
down on the  street.  He pointed out that  during period one, the                                                               
driver  could  be  doing  anything,  such  as  being  parked  and                                                               
drinking a  cup of  coffee.  Basically,  he remarked,  the limits                                                               
set in the proposed statute are as  high as any other area in the                                                               
country, and as high as required  by the state for any individual                                                               
driving in the  State of Alaska.  The $1  million requirement far                                                               
exceeds  what  the  state  requires   of  taxi  drivers,  and  he                                                               
commented  that the  committee has  already  had this  discussion                                                               
many times and he maintained his objection.                                                                                     
                                                                                                                                
5:09:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP  surmised the numbers  in the draft  are the                                                               
state  minimum  requirements, and  between  his  work trucks  and                                                               
personal vehicles he  probably has 13, maybe  14 vehicles covered                                                               
in damages.  He related that  he has never had an insurance agent                                                               
recommend  the  minimum the  state  requires  because the  agents                                                               
advise it is  just too low, and the amount  is not anywhere close                                                               
to what  would truly be necessary.   He referred to  Amendment 6,                                                               
page 1, line 14 and line  19, and suggested deleting $25,000, and                                                               
inserting $50,000  for property damage  on both lines.   He asked                                                               
whether that was Representative Josephson's intent.                                                                             
                                                                                                                                
5:10:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON moved  to adopt  Representative Knopp's                                                               
Conceptual Amendment 1  to Amendment 6, page 1, line  14 and line                                                               
19, to delete $25,000 and insert $50,000 on both lines.                                                                         
                                                                                                                                
CHAIR  KITO   noted  there  being  no   objection  to  Conceptual                                                               
Amendment 1 to Amendment 6, Conceptual Amendment 1 was adopted.                                                                 
                                                                                                                                
5:12:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL  noted that  he  owns  vehicles through  his                                                               
business and insures them for  more than the minimum requirement,                                                               
and anyone driving  for a TNC can certainly insure  their car for                                                               
more than  the minimum.   In  the event the  vehicle is  new, the                                                               
driver has  to have full  coverage, and  this is just  a fallback                                                               
because in  the event  someone does not  have insurance,  the TNC                                                               
will cover everyone in all phases.                                                                                              
                                                                                                                                
5:13:09 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  clarified that  the discussion  now is  regarding the                                                               
three periods  of operation  as follows: period  one is  when the                                                               
driver is in  the vehicle and the app is  not engaged; period two                                                               
is when the driver  is in the vehicle and the  app is engaged but                                                               
no passengers  are being  transported; and  period three  is when                                                               
the driver  has accepted a fare  and is engaged in  the transport                                                               
of  that  individual.    He  noted  that  the  insurance  changes                                                               
recommended by Amendment 6 appear to  be for period two, when the                                                               
vehicle is not occupied by a passenger but the app is engaged.                                                                  
                                                                                                                                
REPRESENTATIVE   SULLIVAN-LEONARD  advised   that  Chair   Kito's                                                               
clarification was incorrect.                                                                                                    
                                                                                                                                
5:14:48 PM                                                                                                                    
                                                                                                                                
JARED  EBER,  Associate  Counsel,  Uber,  responded  as  follows:                                                               
during period one,  the driver is engaged in the  app but has not                                                               
yet accepted a  ride; period two is when the  driver has accepted                                                               
the ride until  the point they pick up the  passenger; and period                                                               
three  is when  the passenger  is actually  in the  vehicle until                                                               
they exit  the vehicle.   Amendment 6  would raise  the insurance                                                               
limits  for  period one  when  there  are  no passengers  in  the                                                               
vehicle and  the driver  has the  app turned on  but has  not yet                                                               
accepted  a ride.   He  noted that  during that  period, over  40                                                               
states have adopted statewide legislation  for insurance being at                                                               
the same  limits as  in the  bill, $50,000 for  an injury  to one                                                               
individual,  $100,000  for more  than  one  individual, which  is                                                               
third-party liability,  and $25,000  for property damage.   Other                                                               
than  the States  of Alaska  and Vermont,  every other  state has                                                               
significantly  less  limits, at  roughly  $15,000  - $20,000  per                                                               
injury   for  one   person,  $25,000   -  $40,000   for  multiple                                                               
individuals  per accident,  and  $15,000 -  $25,000 for  property                                                               
damage.  He  pointed out that the limits listed  in the bill have                                                               
been   accepted  by   the   National   Conference  of   Insurance                                                               
Legislatures together with the largest  insurance trade groups in                                                               
the country agreeing that those  limits are sufficient for period                                                               
one.  He said that someone drinking  a cup of coffee with the app                                                               
on is one piece, but the  other piece is the moral hazard wherein                                                               
if raising  limits that are  not the minimum limits  in Amendment                                                               
6, then the driver  can turn the app on 100  percent of time they                                                               
are in their  vehicle, even if they have  no intention whatsoever                                                               
of  accepting  a ride.    The  would  put  the liability  on  the                                                               
transportation network  company (TNC)  regardless of  whether the                                                               
driver  actually   has  any  intention   of  accepting   a  ride.                                                               
Therefore, the driver knows they  have higher limits they are not                                                               
paying for which, inherently, makes  them a more dangerous driver                                                               
because they have no risk.                                                                                                      
                                                                                                                                
5:19:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  remarked that another way  to view this                                                               
is that a  driver could transport a passenger to  Eagle River and                                                               
not have  a passenger driving  back to Anchorage and  this driver                                                               
could be  under a great incentive  to make a living,  and in that                                                               
window of  time hurry back up  the Glenn Highway just  as fast as                                                               
they  can travel.    He  described that  "You're  taking on  this                                                               
mantle" of  effectively being a  commercial carrier, and  even if                                                               
the  committee carved  out  and pretended  that  drivers are  not                                                               
really  commercial carriers,  "they are  this other  thing."   He                                                               
commented  that  the drivers  and  passengers  do not  know  each                                                               
other,  but  the  drivers are  making  money  driving  passengers                                                               
around and it  appears reasonable to charge the same  rate as the                                                               
Municipality  of Anchorage.   He  argued that  the limits  in the                                                               
bill are not sufficient.                                                                                                        
                                                                                                                                
5:20:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH   spoke  against  the  amendment,   and  he                                                               
referred   to   prior   discussions  regarding   an   established                                                               
acceptable  base  rate.   There  was  a  comment about  a  driver                                                               
transporting  a  passenger  from  Eagle River  to  Anchorage  and                                                               
driving  back without  a  passenger  and, he  said,  that is  the                                                               
current practice  which is  part of  the problem.   In  the event                                                               
someone drives  to Anchorage  from the  Matanuska-Susitna Valley,                                                               
they are prohibited  from "a back haul."   Certainly, he offered,                                                               
the TNC option preserves that  ridesharing and makes good use and                                                               
utility of the equipment and resources available.                                                                               
                                                                                                                                
REPRESENTATIVE WOOL maintained his objection.                                                                                   
                                                                                                                                
5:22:10 PM                                                                                                                    
                                                                                                                                
A roll call vote was  taken.  Representatives Knopp and Josephson                                                               
voted  in favor  of  the  adoption of  Amendment  6, as  amended.                                                               
Representatives Birch,  Sullivan-Leonard, Stutes, Wool,  and Kito                                                               
voted against  it.  Therefore,  Amendment 6 failed to  be adopted                                                               
by a vote of 2-5.                                                                                                               
                                                                                                                                
[HB 132 was held over.]                                                                                                         
                                                                                                                                
5:23:11 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Labor and  Commerce Standing Committee  meeting was  adjourned at                                                               
5:23 p.m.                                                                                                                       

Document Name Date/Time Subjects
HB170 DCCED Presentation 3.23.17.pdf HL&C 3/24/2017 3:15:00 PM
HB 170
HB170 Fiscal Note DHSS-SDSA 3.17.17.pdf HL&C 3/24/2017 3:15:00 PM
HB 170
HB170 Fiscal Note DCCED-DBS 3.13.17.pdf HL&C 3/24/2017 3:15:00 PM
HB 170
HB170 Repealers List 3.21.17.pdf HL&C 3/24/2017 3:15:00 PM
HB 170
HB170 Sectional Analysis 3.21.17.pdf HL&C 3/24/2017 3:15:00 PM
HB 170
HB170 Sponsor Statement 3.21.17.pdf HL&C 3/24/2017 3:15:00 PM
HB 170
HB086 ACPE Response HLAC 3.23.17.pdf HL&C 3/24/2017 3:15:00 PM
HB 86
HB141 DOLWD Response HLAC 3.10.17.pdf HL&C 3/24/2017 3:15:00 PM
HB 141
HB170 DCCED Whitepaper 3.20.17.pdf HL&C 3/24/2017 3:15:00 PM
HB 170
HB170 DCCED Presentation 3.23.17.pdf HL&C 3/24/2017 3:15:00 PM
HB 170