Legislature(2017 - 2018)BARNES 124

04/17/2017 03:15 PM LABOR & COMMERCE

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
-- Public Testimony --
Heard & Held
-- Public Testimony --
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved HB 195 Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                         April 17, 2017                                                                                         
                           3:19 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Sam Kito, Chair                                                                                                  
Representative Adam Wool, Vice Chair                                                                                            
Representative Andy Josephson                                                                                                   
Representative Louise Stutes                                                                                                    
Representative Chris Birch                                                                                                      
Representative Colleen Sullivan-Leonard                                                                                         
MEMBERS ABSENT                                                                                                                
Representative Gary Knopp                                                                                                       
Representative Mike Chenault (alternate)                                                                                        
Representative Bryce Edgmon (alternate)                                                                                         
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 195                                                                                                              
"An Act relating  to insurer actions based on  credit history and                                                               
insurance scores  at insurance policy renewal;  and providing for                                                               
insurer  consideration of  consumer  requests  for exceptions  of                                                               
credit history or insurance scores."                                                                                            
     - MOVED HB 195 OUT OF COMMITTEE                                                                                            
HOUSE BILL NO. 222                                                                                                              
"An  Act  relating to  the  licensure  of nail  technicians;  and                                                               
providing for an effective date."                                                                                               
     - HEARD & HELD                                                                                                             
SENATE BILL NO. 93                                                                                                              
"An Act  relating to  security freezes on  the credit  reports or                                                               
records of incapacitated persons and certain minors."                                                                           
     - HEARD & HELD                                                                                                             
SENATE BILL NO. 64                                                                                                              
"An  Act  adopting  the   Uniform  Environmental  Covenants  Act;                                                               
relating to environmental real property  covenants and notices of                                                               
activity and use  limitation at contaminated sites  to ensure the                                                               
protection of human health, safety, and welfare, and the                                                                        
environment; and providing for an effective date."                                                                              
     - HEARD & HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 195                                                                                                                  
SHORT TITLE: INSURER'S USE OF CREDIT HISTORY/SCORES                                                                             
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
03/24/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/24/17       (H)       L&C                                                                                                    
04/05/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/05/17       (H)       Heard & Held                                                                                           
04/05/17       (H)       MINUTE(L&C)                                                                                            
04/14/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
04/14/17       (H)       Scheduled but Not Heard                                                                                
04/17/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
BILL: HB 222                                                                                                                  
SHORT TITLE: LICENSURE OF MANICURISTS/NAIL TECHS                                                                                
SPONSOR(s): CLAMAN                                                                                                              
04/08/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/08/17       (H)       L&C                                                                                                    
04/17/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
BILL: SB  93                                                                                                                  
SHORT TITLE: CREDIT REPORT SECURITY FREEZE                                                                                      
SPONSOR(s): COGHILL                                                                                                             
03/13/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/13/17       (S)       L&C                                                                                                    
03/28/17       (S)       L&C AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
03/28/17       (S)       Bill Postponed to 1:30 p.m. 3/28/17                                                                    
03/28/17       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/28/17       (S)       Heard & Held                                                                                           
03/28/17       (S)       MINUTE(L&C)                                                                                            
04/04/17       (S)       L&C RPT  5DP                                                                                           
04/04/17       (S)       DP: COSTELLO, HUGHES, STEVENS, MEYER,                                                                  
04/04/17       (S)       L&C AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
04/04/17       (S)       Moved SB 93 Out of Committee                                                                           
04/04/17       (S)       MINUTE(L&C)                                                                                            
04/10/17       (S)       TRANSMITTED TO (H)                                                                                     
04/10/17       (S)       VERSION: SB  93                                                                                        
04/11/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/11/17       (H)       L&C                                                                                                    
04/17/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
BILL: SB  64                                                                                                                  
SHORT TITLE: UNIFORM ENVIRONMENTAL COVENANTS ACT                                                                                
SPONSOR(s): MICCICHE                                                                                                            
02/17/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/17/17       (S)       CRA, L&C                                                                                               
02/28/17       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
02/28/17       (S)       Heard & Held                                                                                           
02/28/17       (S)       MINUTE(CRA)                                                                                            
03/07/17       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
03/07/17       (S)       Moved SB 64 Out of Committee                                                                           
03/07/17       (S)       MINUTE(CRA)                                                                                            
03/08/17       (S)       CRA RPT  2DP 2NR                                                                                       
03/08/17       (S)       DP: BISHOP, HOFFMAN                                                                                    
03/08/17       (S)       NR: MACKINNON, STEDMAN                                                                                 
03/14/17       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/14/17       (S)       Heard & Held                                                                                           
03/14/17       (S)       MINUTE(L&C)                                                                                            
03/16/17       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/16/17       (S)       Moved SB 64 Out of Committee                                                                           
03/16/17       (S)       MINUTE(L&C)                                                                                            
03/20/17       (S)       L&C RPT  1DP 3NR                                                                                       
03/20/17       (S)       NR: COSTELLO, HUGHES, GARDNER                                                                          
03/20/17       (S)       DP: STEVENS                                                                                            
03/27/17       (S)       TRANSMITTED TO (H)                                                                                     
03/27/17       (S)       VERSION: SB  64                                                                                        
03/29/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/29/17       (H)       CRA, L&C                                                                                               
04/11/17       (H)       CRA AT 8:00 AM BARNES 124                                                                              
04/11/17       (H)       Heard & Held                                                                                           
04/11/17       (H)       MINUTE(CRA)                                                                                            
04/13/17       (H)       CRA RPT 4DP 1NR                                                                                        
04/13/17       (H)       DP: WESTLAKE, TALERICO, FANSLER, PARISH                                                                
04/13/17       (H)       NR: RAUSCHER                                                                                           
04/13/17       (H)       CRA AT 8:00 AM BARNES 124                                                                              
04/13/17       (H)       Moved SB 64 Out of Committee                                                                           
04/13/17       (H)       MINUTE(CRA)                                                                                            
04/17/17       (H)       L&C AT 3:15 PM BARNES 124                                                                              
WITNESS REGISTER                                                                                                              
LORI WING-HEIER, Director                                                                                                       
Division of Insurance                                                                                                           
Department of Commerce, Community, and Economic Development                                                                     
State of Alaska                                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions related to HB 195.                                                                    
OWEN PHILLIPS, Staff                                                                                                            
Representative Matt Claman                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  On behalf of Representative Claman, prime                                                                
sponsor, introduced HB 222.                                                                                                     
JEANNINE JABAAY                                                                                                                 
Hope, Alaska                                                                                                                    
POSITION STATEMENT:  Testified in support of HB 222.                                                                        
RACHEL LAUESEN, Attorney                                                                                                        
Fortier & Mikko, P.C.                                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 222.                                                                        
BEVERLY HARPER                                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 222.                                                                          
KEVIN MCKINLEY, Chair                                                                                                           
Board of Barbers and Hairdressers                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 222.                                                                          
RYNNIEVA MOSS, Staff                                                                                                            
Senator John Coghill                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  On behalf of Senator Coghill, prime                                                                      
sponsor, introduced SB 93.                                                                                                      
CARLIE CHRISTENSEN, Director of Government Relations                                                                            
Equifax Inc.                                                                                                                    
Atlanta, Georgia                                                                                                                
POSITION STATEMENT:  Testified in support of SB 93.                                                                           
SARAH LASHFORD, Manager of Government Relations                                                                                 
Consumer Data Industry Association (CDIA)                                                                                       
Washington D.C.                                                                                                                 
POSITION STATEMENT:  Testified in support of SB 93.                                                                           
SENATOR PETER MICCICHE                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  As prime sponsor introduced SB 64.                                                                       
KRISTIN RYAN, Director                                                                                                          
Division of Spill Prevention & Response                                                                                         
Department of Environmental Conservation (DEC)                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of SB 64.                                                                           
JENNIFER CURRIE, Senior Assistant Attorney General                                                                              
Environmental Section                                                                                                           
Civil Division (Anchorage)                                                                                                      
Department of Law                                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions related to SB 64.                                                                     
ACTION NARRATIVE                                                                                                              
3:19:53 PM                                                                                                                    
CHAIR  SAM KITO  called  the House  Labor  and Commerce  Standing                                                             
Committee meeting  to order at  3:19 p.m.   Representatives Kito,                                                               
Sullivan-Leonard,  Stutes,   Birch,  Josephson,  and   Wool  were                                                               
present at the call to order.                                                                                                   
         HB 195-INSURER'S USE OF CREDIT HISTORY/SCORES                                                                      
3:20:30 PM                                                                                                                    
CHAIR KITO  announced that the  first order of business  would be                                                               
HOUSE BILL NO. 195, "An Act  relating to insurer actions based on                                                               
credit history and insurance scores  at insurance policy renewal;                                                               
and providing for insurer consideration  of consumer requests for                                                               
exceptions of credit history or insurance scores."                                                                              
CHAIR  KITO noted  public testimony  was  still open  on HB  195.                                                               
After  ascertaining that  no  one wished  to  testify, he  closed                                                               
public testimony.                                                                                                               
3:21:31 PM                                                                                                                    
REPRESENTATIVE WOOL  stated he wanted  to offer an  amendment but                                                               
didn't  have time  and that  he personally  opposes using  credit                                                               
scores  to assess  insurance fees  and  rates.   He related  that                                                               
studies  by  the Federal  Reserve  and  others show  that  credit                                                               
scores disproportionately  affect people of color  and minorities                                                               
who tend to  have poor credit and so get  assessed a higher rate,                                                               
which is his problem with the bill.                                                                                             
REPRESENTATIVE  STUTES said  she doesn't  have affection  for the                                                               
bill  either way.   She  asked Representative  Wool what  type of                                                               
amendment he was considering.                                                                                                   
REPRESENTATIVE  WOOL responded  that  when someone  is offered  a                                                               
policy the  insurance company may  use the person's  credit score                                                               
and  then  after one  year  the  company needs  authorization  to                                                               
continue to use  a credit score.  He said  his understanding that                                                               
"may" use credit score is often  that the company does use credit                                                               
score and  the applicant  doesn't have a  choice.   Therefore, he                                                               
would  like a  possibility to  opt  out.   He surmised  insurance                                                               
companies wouldn't want that because  it is to their advantage to                                                               
have  this  tool  at  their   disposal.    Nowadays  with  people                                                               
undergoing  more  economic  hardship,  studies  often  show  that                                                               
people put  medical expenses on  their credit card and  these are                                                               
people that have insurance but  are incurring medical bills while                                                               
costs are going  up all the time.  As  people incur more balances                                                               
on  more cards,  they have  a lower  credit rating.   He  said he                                                               
wanted to  discuss whether the  option to opt out  entirely would                                                               
be possible.                                                                                                                    
3:24:08 PM                                                                                                                    
REPRESENTATIVE BIRCH  spoke in support of  HB 195.  He  related a                                                               
personal  experience when  his insurance  went  up because  under                                                               
current state  law access to  credit scores is not  permitted for                                                               
purposes  of  policy renewal  for  automobile  insurance.   As  a                                                               
practical matter, he  said, credit score is used  routinely.  For                                                               
example, he  spent nine  years on the  board of  Chugach Electric                                                               
Association where  it was routinely  used instead of  requiring a                                                               
deposit  for determining  whether  someone was  a  good risk  for                                                               
advancing  a month's  worth of  utilities.   It  is a  reasonable                                                               
approach, he  opined.   Credit score is  a mechanism  to mitigate                                                               
risk in  the commercial world.   The use of credit  score in this                                                               
proposal is balanced  and reasonable and is  widely accepted from                                                               
an industry standpoint, and therefore he is a yes vote.                                                                         
3:25:28 PM                                                                                                                    
REPRESENTATIVE STUTES related that  she called the main insurance                                                               
carrier  in  Kodiak  to  ask  about [HB  195],  and  [the  agent]                                                               
responded that of course the  companies he represented wanted it,                                                               
but that he  didn't have a preference.  She  further related that                                                               
when she asked [the agent] how  he would vote on it, he hesitated                                                               
for a while  and then said he  didn't really know.   She said she                                                               
found this  interesting because she  had thought that  being from                                                               
the industry  [the agent] would have  been in favor of  the bill.                                                               
Based  on that  experience, she  said,   I'm not  crazy about  it                                                               
either way.  She stated she is at the will of the chair.                                                                        
3:26:19 PM                                                                                                                    
REPRESENTATIVE      SULLIVAN-LEONARD,     regarding      people's                                                               
consideration of  updating their  information on a  yearly basis,                                                               
remarked  that an  annual  check on  credit  score for  insurance                                                               
renewal  affects  a  person's  score, and  she  said  she  thinks                                                               
 that's where people  have heartburn.   She said if  there were a                                                               
process that  could show that  having the forms  pre-signed ready                                                               
to go  on a  yearly basis  was a  good thing  and may  not affect                                                               
someone personally,  then she may support  it, but she has  a lot                                                               
of questions on that.                                                                                                           
REPRESENTATIVE  STUTES  related  that  she  asked  her  insurance                                                               
carrier that very  question on checking the credit  score and was                                                               
told that it  is called a soft credit check,  which has no effect                                                               
on someone's credit score.                                                                                                      
3:28:12 PM                                                                                                                    
CHAIR KITO  asked whether the  use of credit scores  by insurance                                                               
companies   to  determine   a  person's   insurance  rate   would                                                               
[adversely] effect a person's credit score.                                                                                     
LORI WING-HEIER,  Director, Division of Insurance,  Department of                                                               
Commerce, Community,  and Economic Development, State  of Alaska,                                                               
replied that it should not [affect a person's credit score].                                                                    
MS. WING-HEIER  further commented  that after the  committee last                                                               
heard  the  bill,  she  researched   the  matter  brought  up  by                                                               
Representative Wool about the medical  industry or medical codes.                                                               
She found that  Alaska Statute (AS) 21.36.960  would prohibit the                                                               
use of  medical for  credit scoring for  this bill  for insurance                                                               
CHAIR KITO inquired as to  how an insurance company would present                                                               
using credit score for a rate calculation.                                                                                      
MS. WING-HEIER  replied that according to  insurance underwriting                                                               
guidelines the insurance company  would ask [an applicant/client]                                                               
questions  regarding  type  of  auto,  driving  history,  driving                                                               
record, place  of residence,  and distance driven  to work.   The                                                               
insurance company would  also ask and provide in  writing that it                                                               
is going to order  up credit history.  A person  has the right to                                                               
say no and  does not have to  allow the use of his  or her credit                                                               
score, and can  opt out in the very beginning,  although this may                                                               
result  in not  being given  a preferred  rate.   If there  is an                                                               
adverse  reaction   that  the  company  would   take  because  it                                                               
determines  a person's  credit score  is not  positive or  it was                                                               
going to impact the person's  insurance premium, then the company                                                               
is required to advise the  person, in writing, what that decision                                                               
was based on, and that is part of what this bill is doing.                                                                      
3:30:21 PM                                                                                                                    
CHAIR KITO  offered his understanding  that HB 195  would provide                                                               
that a person  could opt out at the beginning  of what is already                                                               
the law.  This bill would say that  if credit score is used for a                                                               
 re-up   and that  changes in  a dispositive  way the  company is                                                               
required to notify the person that that took place.                                                                             
MS.  WING-HEIER  answered that  HB  195  clarifies for  both  new                                                               
business and  renewal business that  [the insurance  company] has                                                               
to tell a person in writing  why he or she is materially impacted                                                               
by the  ordering of  his or  her credit score,  what it  was, and                                                               
that the  person has the  right to appeal  it to the  Division of                                                               
Insurance through the extenuating life circumstances provision.                                                                 
3:31:02 PM                                                                                                                    
REPRESENTATIVE WOOL  offered his understanding that  a person who                                                               
opts out  of the credit  score option  would not get  a preferred                                                               
rate and would be charged more.   He asked whether a person would                                                               
be able  to also look  at what his  or her  rate would be  if the                                                               
company did do a credit score  analysis and then compare the two,                                                               
or would it just be a matter of rolling the dice.                                                                               
MS. WING-HEIER offered her belief that  it would be a roll of the                                                               
dice   a person either allows or  disallows the use of his or her                                                               
credit score.   She added that  once the credit score  was given,                                                               
she doesn't know how it would be taken back.                                                                                    
REPRESENTATIVE WOOL  posed a scenario  where on the first  year a                                                               
person chooses not  to allow the insurance company to  use his or                                                               
her  credit score.   He  inquired whether  upon year  one rolling                                                               
around, and  if HB  195 is enacted,  the insurance  company could                                                               
use the person's credit score without his or her approval.                                                                      
MS. WING-HEIER replied no, at  the time of applying for insurance                                                               
a person  must give the  insurance company permission to  use his                                                               
or her credit  score forever.  Permission either is  given or not                                                               
given.   Upon renewal a  person could go  back to the  broker and                                                               
give permission to begin using  his or her credit score beginning                                                               
now.   But,  if permission  is not  given, the  insurance company                                                               
cannot use a person's credit score at any time.                                                                                 
REPRESENTATIVE WOOL  offered his understanding that  when someone                                                               
initiates an  insurance policy, they  either give  permission for                                                               
use of their  credit score or don't and won't  know whether their                                                               
credit score would  have given them a lower rate.   He asked what                                                               
the formula is  for coming up with the credit  score or insurance                                                               
number and whether  the division is informed of  what the formula                                                               
MS. WING-HEIER  responded that  in some  cases the  division does                                                               
see where the credit  score is, but in most cases,  it is part of                                                               
the insurance company's confidential  underwriting as to where it                                                               
is.  The division  does see where it is put  into the formula for                                                               
underwriting, the  division does  see that they  use it,  and the                                                               
division does  see in  some companies the  percentage of  what it                                                               
qualifies for,  such as  whether it  is a 10,  20, or  30 percent                                                               
determination factor  depending on  the individual company.   For                                                               
example, she continued, Geico doesn't use  it at all at this time                                                               
in  Alaska.   The division  knows that  State Farm,  Liberty, and                                                               
Safeco rely heavily  on it.  So, some companies  use it, and some                                                               
don't, and to say exactly how much  they rely on it as opposed to                                                               
other factors, she would have  to pull the individual filings and                                                               
talk to all the companies that are in Alaska.                                                                                   
3:34:33 PM                                                                                                                    
CHAIR KITO  stated that there  are differences  between causation                                                               
and correlation.  He said one  of the things used by actuaries is                                                               
a correlation  and correlations can be  identified without having                                                               
causation.   Actuaries  run numbers  on statistics  every day  to                                                               
find out what  correlates to higher risk or lower  risk or higher                                                               
expense or  lower expense  and companies  have found  that credit                                                               
score is  not a causative  factor, but a correlative  factor, for                                                               
insurance  risk.   It  might  be  counterintuitive that  using  a                                                               
credit score  can lower a  person's rates, he continued,  but for                                                               
the vast majority of those who are  insured that is the case.  He                                                               
recalled from  earlier testimony  that the  assignment of  a poor                                                               
credit score  does not belong to  any one class of  person - that                                                               
people  with higher  incomes  can have  just as  much  of a  poor                                                               
credit history  as people  with lower  incomes.   That is  one of                                                               
those other  things, he  cautioned, where care  must be  taken in                                                               
utilizing stereotypical beliefs on some of these actions.                                                                       
CHAIR  KITO opined  that in  this  bill, the  department and  the                                                               
governor  have a  vested interest  in  trying to  provide for  an                                                               
insurance  system  that  works  best for  the  vast  majority  of                                                               
Alaskans.   California has not  used credit scores, he  said, but                                                               
he  doesn't know  what the  impact is  on that  state's insurance                                                               
rates.   California creates  its own  weather, he  continued, and                                                               
given its  [large] population costs  can be amortized over  a lot                                                               
broader  expanse  than  Alaska  would  be able  to  do  over  its                                                               
population of 700,000.  So, while  it might not make a difference                                                               
[in California],  he continued,  he believes that  it can  make a                                                               
difference in Alaska and is therefore good policy.                                                                              
CHAIR  KITO stated  he would  like to  move HB  195 forward,  but                                                               
allowed it sounds  like there are going to be  issues with trying                                                               
to get the bill  further along in the system.   He said he thinks                                                               
the committee has  done what it can with the  bill and he doesn't                                                               
see other things that can be  done to alleviate the concerns that                                                               
have  been expressed  so far.   He  offered his  belief that  the                                                               
committee is  at a policy point  where a member either  agrees or                                                               
disagrees with  this policy and  it is time  to move the  bill to                                                               
the next level of scrutiny.                                                                                                     
3:37:46 PM                                                                                                                    
REPRESENTATIVE  BIRCH stated  that the  bill is  good legislation                                                               
and went through both chambers last  year.  The governor had some                                                               
issues with it, he recounted,  but after some tweaks the governor                                                               
brought  it back  before the  legislature.   The bill  is a  good                                                               
effort to square  things up and recognize  reality, he continued.                                                               
While a person doesn't have to  give permission to use his or her                                                               
credit  score,  credit  history  is relevant  when  it  comes  to                                                               
insurance or consumer loans.  He said he supports the bill.                                                                     
3:38:29 PM                                                                                                                    
REPRESENTATIVE  WOOL  agreed  that   California   makes  its  own                                                               
weather  in  that it is the  fifth largest economy in  the world.                                                               
But, he noted, the states  of Hawaii, Massachusetts, and Maryland                                                               
also don't allow  the use of credit  scores.  As far  as the vast                                                               
majority  of people  getting a  benefit from  a credit  score, he                                                               
said  he  thinks  that  in  the act  of  business  if  a  company                                                               
instituted  a policy  that caused  it  to receive  less money  he                                                               
would see  the company as not  wanting to pursue it  and they all                                                               
would go the way California is  going if it saved the majority of                                                               
people money.   He cited a report from the  Federal Reserve Board                                                               
to  the  U.S.  Congress  which states  that  according  to  self-                                                               
reported data on race or  ethnicity, the mean TransRisk Score for                                                               
Asians  is  54.8, non-Hispanic  whites  54,  Hispanics 38.2,  and                                                               
blacks  25.6.   While  he  is  not  saying  it is  causation,  he                                                               
continued, there  may be a  correlation to credit score  and race                                                               
and  ethnicity   and  he  doesn't   think  a  bad   credit  score                                                               
necessarily makes  someone a  bad driver.   He said  he therefore                                                               
categorically opposes this type of legislation.                                                                                 
3:40:22 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON moved to report  HB 195 out of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
REPRESENTATIVE WOOL objected.                                                                                                   
3:40:38 PM                                                                                                                    
A roll  call vote was  taken.  Representatives  Josephson, Birch,                                                               
Stutes, and Kito voted in favor  of it.  Representatives Wool and                                                               
Sullivan-Leonard  voted  against  it.    Therefore,  HB  195  was                                                               
reported out of  the House Labor and  Commerce Standing Committee                                                               
by a vote of 4-2.                                                                                                               
3:41:06 PM                                                                                                                    
The committee took an at-ease from 3:41 p.m. to 3:43 p.m.                                                                       
           HB 222-LICENSURE OF MANICURISTS/NAIL TECHS                                                                       
3:43:27 PM                                                                                                                    
CHAIR KITO announced  that the second order of  business would be                                                               
HOUSE BILL  NO. 222, "An  Act relating  to the licensure  of nail                                                               
technicians;  relating   to  the  practice  of   manicuring;  and                                                               
providing for an effective date."                                                                                               
3:43:53 PM                                                                                                                    
REPRESENTATIVE  WOOL  moved  to   adopt  the  proposed  committee                                                               
substitute (CS) for HB 222,  Version 30-LS0803\O, Bruce, 4/17/17,                                                               
as the  working document.   There being  no objection,  Version O                                                               
was before the committee.                                                                                                       
3:44:15 PM                                                                                                                    
OWEN PHILLIPS,  Staff, Representative  Matt Claman,  Alaska State                                                               
Legislature, on  behalf of Representative Claman,  prime sponsor,                                                               
introduced HB  222.  In  2015, he stated, the  legislature passed                                                               
House Bill  131 in hopes  of improving  the health and  safety of                                                               
nail salon  patrons.   House Bill  131 outlined  new regulations,                                                               
including 250 hours  of education and an examination  to become a                                                               
licensed nail  technician.   Prior to that  bill, a  person could                                                               
receive  a  manicurist's  license   by  completing  12  hours  of                                                               
training, though many people received  many more hours outside of                                                               
the state  of Alaska.  In  2015, he explained, the  House made an                                                               
amendment on  the floor that  brought unintended  consequences on                                                               
existing licensees seeking renewal in  2017.  The floor amendment                                                               
added  a grandfather  clause, but  the clause  was unclear.   The                                                               
Board of  Barbers and Hairdressers consultant  consulted with the                                                               
Department  of Law  and interpreted  the  new statute  to have  a                                                               
temporary  and confusing  grandfather clause.   Therefore  HB 222                                                               
seeks  to remedy  the  onerous renewal  process  enacted in  2015                                                               
while protecting the health and safety of Alaskans.                                                                             
MR. PHILLIPS  outlined what is currently  required of experienced                                                               
manicurists seeking to renew their  license:  by August 31, 2017,                                                               
proof of 250  hours of work as a manicurist;  by August 31, 2017,                                                               
take and  pass a written  or oral examination; after  one renewal                                                               
period,  however,  an   experienced  manicurist  is  nevertheless                                                               
required to take 250 hours  of additional coursework to receive a                                                               
nail technician  license after  the two-year  grandfather license                                                               
that  does not  require any  coursework.   He said  HB 222  would                                                               
remove  the  education requirement  for  people  who are  already                                                               
licensed and working  under statutes prior to  December 31, 2015.                                                               
He pointed out  that requiring 250 hours of  coursework, which is                                                               
six  to  eight  weeks  of  full-time  effort,  could  mean  these                                                               
experienced  working  manicurists  might  not be  able  to  work.                                                               
Affected  individuals include  small business  owners and  single                                                               
mothers, he continued.   Requiring this training  for persons who                                                               
have   been  successfully   practicing  for   years  could   have                                                               
detrimental impacts on their finances and their families.                                                                       
3:46:46 PM                                                                                                                    
MR.  PHILLIPS provided  a sectional  analysis of  Version O.   He                                                               
said  Section 1  adds legislative  intent to  the uncodified  law                                                               
that the Board of Barbers  and Hairdressers allow an applicant to                                                               
use a foreign language translator  during an exam.  Currently, he                                                               
noted, the exam is only  offered in English, Spanish, Vietnamese,                                                               
and Korean.   Section 2, he explained,  clarifies the grandfather                                                               
clause by  stating that  the board may  not require  an applicant                                                               
applying  for or  renewing a  license  to complete  250 hours  of                                                               
instruction in manicuring if the  applicant holds a valid license                                                               
that was  issued on or before  December 31, 2015.   Section 3, he                                                               
stated,  amends  Section  13(a),   ch.  27,  SLA  2015,  allowing                                                               
manicurists  who hold  a valid  license  on January  1, 2016,  to                                                               
continue  practicing  manicuring  until  their  license  normally                                                               
expires.   [Paragraph]  (1) provides  that manicurists  can renew                                                               
their license before  August 31, 2017, if  they meet pre-existing                                                               
requirements under AS 08.13 as  it existed prior to January 2016.                                                               
[Paragraph] (2)  states that manicurists may  renew their license                                                               
for an additional  period before August 31, 2019,  if they submit                                                               
proof  of 250  hours  of satisfactory  work  experience and  have                                                               
taken and  passed the  written or oral  exam under  AS 08.13.090.                                                               
Section 4, he  said, retroactively amends Section  13(a), ch. 27,                                                               
SLA 2015,  as amended by  Section 3 of this  Act.  Section  5, he                                                               
continued, sets an immediate effective date for this bill.                                                                      
MR. PHILLIPS added that the intention  of HB 222 is to remove the                                                               
unnecessary   burden  of   education  and   training  hours   for                                                               
experienced  manicurists  who  practiced prior  to  December  31,                                                               
2015, and  to extend equal  opportunities to individuals  who may                                                               
have a difficulty with a language barrier.                                                                                      
3:49:17 PM                                                                                                                    
CHAIR KITO opened public testimony on HB 222.                                                                                   
3:49:33 PM                                                                                                                    
JEANNINE  JABAAY testified  in support  of HB  222.   She related                                                               
that she was  a former public member of the  Board of Barbers and                                                               
Hairdressers  and an  advocate of  House Bill  131 in  2015.   As                                                               
outlined  by  Mr. Phillips,  she  stated,  it was  [the  board's]                                                               
understanding that  for Alaska's nearly 1,000  current licensees,                                                               
those   250   hours  required   for   new   licensees  would   be                                                               
grandfathered hour for hour for the  hours they worked on the job                                                               
and  incurred  incumbently.     However,  the  [floor]  amendment                                                               
changed that  accidentally, she continued, and  [the board] would                                                               
like to see that fixed, which HB 222 would do.                                                                                  
MS. JABAAY recalled that regarding  the testing requirement, [the                                                               
board] was asked directly by a  legislator whether it came in the                                                               
Hmong language.   She said she doesn't remember  the exact answer                                                               
given by the decision, but it  was her understanding that it came                                                               
in nine languages and now it is  down to only four.  The State of                                                               
Alaska uses  the National-Interstate  Council of State  Boards of                                                               
Cosmetology,  Inc.   (NIC)  test,  she  continued,   which  is  a                                                               
proprietary  test  that  cannot   be  translated  or  interpreted                                                               
according to  the NIC  regulations.  A  person who  doesn't speak                                                               
one  of the  four  languages  outlined by  Mr.  Phillips will  be                                                               
unable  to understand  the questions  being  asked.   There is  a                                                               
large  population  of  licensees   in  Alaska's  nail  technician                                                               
industry who don't  speak any of those four languages.   She said                                                               
HB 222 would  correct that by allowing the test  to be translated                                                               
or interpreted  and would give  the board that discretion.   This                                                               
bill does a good job  addressing those things that are confusing,                                                               
she added,  and would bring House  Bill 131 back to  its original                                                               
intention  of  increasing  public  safety  without  removing  the                                                               
livelihood of the current 1,000 licensees.                                                                                      
3:51:36 PM                                                                                                                    
REPRESENTATIVE  SULLIVAN-LEONARD asked  whether  Ms. Jabaay  said                                                               
she currently serves on the Board of Barbers and Hairdressers.                                                                  
MS. JABAAY replied  she served for four years and  her term ended                                                               
March 31,  so she is no  longer on the  board.  She said  she was                                                               
part of  House Bill 131  two years  ago and has  been approaching                                                               
legislators since January while she was still on the board.                                                                     
REPRESENTATIVE  SULLIVAN-LEONARD inquired  whether  it seemed  at                                                               
that time  that 250 hours  of instruction was important  to teach                                                               
the safety  of instruments being  sterilized and the  safety with                                                               
patients or  whether it seemed  that maybe  it could have  been a                                                               
smaller field of time utilized for teaching manicurists.                                                                        
MS. JABAAY  responded that the  board spent  quite a bit  of time                                                               
debating the  number of hours.   Alaska had the lowest  number of                                                               
hours and only had 12 hours  of sanitation, she said, so not even                                                               
two  days of  bookwork  and no  testing.   But  the industry  has                                                               
changed, she  continued.  She stated  that the 12 hours  was back                                                               
from  the 1970s.    She  added,   ut  now  they're using  drills;                                                               
they're using  files, cheese graters; they  have ... transference                                                               
of   [acquired    immune   deficiency   syndrome]    (AIDS)   and                                                               
[Methicillin-resistant  Staphylococcus  aureus]  (MRSA)      [The                                                               
board] looked at the standards in  all the states across the U.S.                                                               
and found that 250 hours  brought reciprocity for the licensees -                                                               
they  could  take their  livelihood  from  one state  to  another                                                               
without being  overly burdened.   She noted that Alaska  is still                                                               
in  the bottom  one-third of  those hours,  meaning that  another                                                               
two-thirds  of the  states require  more hours  than does  Alaska                                                               
even after passage  of 250 hours.   The board felt it  was a good                                                               
number going  from 12  hours to  250 and  the legislature  at the                                                               
time agreed.                                                                                                                    
REPRESENTATIVE  SULLIVAN-LEONARD,  regarding language,  said  she                                                               
wants to  know that a  manicurist understands what she  is asking                                                               
and  vice  versa.    She  asked  whether  that  came  up  in  the                                                               
discussions  when   the  board  was  looking   at  the  different                                                               
languages that it wanted to assist in accommodating.                                                                            
MS. JABAAY answered that the board  did not, and does not, try to                                                               
regulate people  being necessarily good  at their practice.   The                                                               
board  wants to  ensure that  [manicurists] are  safe, she  said.                                                               
When a  customer specifically  requests a  rounded nail  versus a                                                               
square  nail, that's  between the  customer and  the practitioner                                                               
and the  board thinks  that will get  regulated just  by commerce                                                               
and economy.  The board's  responsibility is to ensure that those                                                               
who  are licensed  by  the state  and governed  by  the board  to                                                               
practice can  do so safely.   [The board] felt that  12 hours did                                                               
not accrue  that safety, but 250  hours did, she continued.   So,                                                               
if [a  manicurist] uses an electric  drill and brings it  down to                                                               
the meat  the customer  will know  he or she  is protected  as an                                                               
individual because [the  manicurist] will know how  to respond to                                                               
that, but if  a customer doesn't like the paint  polish that [the                                                               
manicurist]  did, that  would be  between the  customer and  [the                                                               
manicurist]  to  determine.   The  board  doesn't try  to  govern                                                               
someone being good at their field, just safe at their field.                                                                    
3:55:09 PM                                                                                                                    
REPRESENTATIVE SULLIVAN-LEONARD  said that  was not what  she was                                                               
trying to get at; rather, she  was trying to clarify the issue of                                                               
communication.   She asked, "So, if  you're seeking communication                                                               
with regard to the testing aspect  of being a manicurist, and you                                                               
need someone there to help  make sure they understand the testing                                                               
based on different  languages, then how ... does  that pertain to                                                               
the business?    She added, "If English is not  a second language                                                               
for them, is there difficulty then in the workplace?"                                                                           
MS. JABAAY replied there probably  is going to be some difficulty                                                               
if English isn't [a manicurist's]  primary or secondary language.                                                               
The testing  would be  confusing and  so could be  the job.   She                                                               
said she  imagines that  commerce would regulate  some of  that                                                                 
[customers] who feel they don't  have good ability to communicate                                                               
with  their  practitioners probably  won't  go  back.   But,  she                                                               
added,  the board  would  hope  to govern  the  safety.   If  the                                                               
question  is  whether [applicants]  who  don't  speak English  as                                                               
their primary  or secondary  language should  be allowed  to have                                                               
their  tests  translator  interpreted, she  said  she  personally                                                               
believes they should,  and HB 222 would  allow that accommodation                                                               
so that [these applicants] are able to work in Alaska.                                                                          
3:56:52 PM                                                                                                                    
RACHEL  LAUESEN,  Attorney,  Fortier  &  Mikko,  P.C.  Anchorage,                                                               
Alaska, testified  in support of HB  222.  She said  she wrote an                                                               
extensive letter  to various representatives, has  also contacted                                                               
some senators, and has provided  supporting documents relating to                                                               
the flaws of House  Bill 131.  She stated that  Ms. Jabaay did an                                                               
excellent  job   explaining  the   history  and  intent   of  the                                                               
legislature behind passing  House Bill 131 as well  as the intent                                                               
of the board, but she thinks  it was misunderstood.  She said her                                                               
testimony today is in support of HB 222.                                                                                        
MS. LAUESEN noted  that she represents a  licensed manicurist who                                                               
wishes to  remain anonymous because  she has some  concerns about                                                               
retaliation.   She added that she  has spent quite a  bit of time                                                               
delving into  House Bill 131  and the legislative  history behind                                                               
it,  as well  as  the  history of  the  meetings  with the  board                                                               
reflecting the  board's intent.   She stressed the  importance of                                                               
passing HB  222 because of  the inherent flaws with  the existing                                                               
bill  and  the  threat  it  serves  to  this  group  of  existing                                                               
professionals.   There is  simply not enough  time by  August 31,                                                               
2017,  she explained,  for these  individuals to  pass the  test,                                                               
particularly where  many of them are  unable to take it  in their                                                               
native language; the  only language that is offered  for the oral                                                               
test is English.                                                                                                                
MS.  LAUESEN stated  it is  important  to clarify  that there  is                                                               
nothing in the legislation that  has passed that says individuals                                                               
with 250 hours  of documented work experience but  can't pass the                                                               
test are  then eligible for  a nail technician license,  but they                                                               
are  not  required to  attend  250  hours of  school  afterwards.                                                               
However,  she said,  that is  how the  Division of  Corporations,                                                               
Business and Professional Licensing  has interpreted it, and it's                                                               
an erroneous interpretation.  All  the existing legislation says,                                                               
she continued,  is that to sit  for the exam, an  applicant for a                                                               
nail technician  license must  have satisfactorily  completed 250                                                               
hours  of  schooling from  a  licensed  manicurist school.    The                                                               
legislature already previously determined  that 250 hours of work                                                               
experience  would  qualify somebody  to  sit  for the  exam,  but                                                               
somehow the  Division of Corporations, Business  and Professional                                                               
Licensing  has determined  that  to receive  the nail  technician                                                               
license even  with 250  hours of  documented work  experience and                                                               
with passing the exam, [the  applicant] still needs to afterwards                                                               
complete  250  hours of  schooling,  which  can cost  upwards  of                                                               
$4,000.    It  is  an  additional  step  that  was  not  required                                                               
previously  of the  holders of  the advanced  manicurist license,                                                               
she pointed out.   She recommended that HB 222  be adopted to fix                                                               
the many problems with [House Bill 131].                                                                                        
4:00:57 PM                                                                                                                    
BEVERLY HARPE testified  in support of HB 222.   She related that                                                               
she  has  a  close  family  member who  has  been  working  as  a                                                               
manicurist for  the last  five years.   This family  member would                                                               
have had the  total hours license prior to the  2015 deadline and                                                               
was notified  then that  she needed  to pass  a written  exam and                                                               
then  obtain education.    English is  not  this family  member's                                                               
first language,  and it  was confusing to  the family  member, as                                                               
well  as  to herself,  as  to  why  examination would  be  before                                                               
education since it is typically the other way around.                                                                           
MS. HARPE stated she did  research and worked with Representative                                                               
Claman, and  that she  and many others  noticed that  the statute                                                               
and regulations  simply did not  match up.   She said  the family                                                               
member  did  take and  pass  the  exam,  but  it was  a  terrible                                                               
financial  burden to  take  off 250  hours of  work  for the  in-                                                               
classroom education because in-classroom is  how it is offered in                                                               
Anchorage.   The cost is $3,500,  she noted, and the  person must                                                               
attend in-classroom during  the day every day, five  days a week,                                                               
until reaching 250  hours.  It is very burdensome,  she added, to                                                               
expect someone  who has  met all the  requirements, proved  to be                                                               
proficient  and competent  by  the testing,  and  passed all  the                                                               
safety  portions  to then  pay  $3,500  for education  for  which                                                               
they've already  proven they have  the information and  to forego                                                               
all income  for one and a  half months.  Ms.  Harpe expressed her                                                               
support for HB 222.                                                                                                             
4:03:36 PM                                                                                                                    
KEVIN  MCKINLEY,  Chair,  Board   of  Barbers  and  Hairdressers,                                                               
testified in support  of HB 222.  He said  the previous witnesses                                                               
did a good job explaining HB 222  and as chair of the board he is                                                               
stating support for the bill.                                                                                                   
4:04:21 PM                                                                                                                    
CHAIR KITO closed  public testimony on HB  222 after ascertaining                                                               
no one else wished to testify.                                                                                                  
CHAIR KITO held over HB 222.                                                                                                    
              SB  93-CREDIT REPORT SECURITY FREEZE                                                                          
4:04:32 PM                                                                                                                    
CHAIR KITO  announced that the  third order of business  would be                                                               
SENATE BILL NO.  93, "An Act relating to security  freezes on the                                                               
credit reports  or records of  incapacitated persons  and certain                                                               
4:04:47 PM                                                                                                                    
RYNNIEVA  MOSS,   Staff,  Senator  John  Coghill,   Alaska  State                                                               
Legislature,  on  behalf  of   Senator  Coghill,  prime  sponsor,                                                               
introduced SB 93.  She said  the bill looks familiar because last                                                               
year [Twenty-Ninth Alaska State  Legislature] the House addressed                                                               
Senate Bill  121, which created  a security freeze on  minors and                                                               
incapacitated  consumers,  or   protected  consumers,  which  are                                                               
consumers who may  be over age 16  or 18 but unable  to take care                                                               
of themselves.  She stated that  SB 93 takes up where Senate Bill                                                               
121  left  off.   In  the  last  hours  of last  year's  session,                                                               
Representative Claman tried  to add this language  to Senate Bill                                                               
121, but it was just too late in the process to happen.                                                                         
MS. MOSS  stated that  SB 93 would  set up a  system to  freeze a                                                               
minor's  or  incapacitated  person's  credit  report.    This  is                                                               
important, she pointed  out, because it is  never considered that                                                               
children  could be  victims of  identity theft  and that  is what                                                               
this  bill is  about.   About 1.3  million kids  in the  U.S. are                                                               
victims of  identity theft annually and  approximately 50 percent                                                               
of them are children six years  old or younger.  This addresses a                                                               
system to set this up because  it is much different than freezing                                                               
an adult's credit  report.  An adult already has  a credit report                                                               
and a  credit history.   A minor or incapacitated  person usually                                                               
doesn't, so there is nothing to freeze.                                                                                         
MS.  MOSS explained  that to  freeze a  minor's or  incapacitated                                                               
person's  credit  report  -  which  doesn't  exist  -  a  parent,                                                               
guardian, or legal  representative must go to  a credit reporting                                                               
agency and  request that freeze.   If there  isn't a record  or a                                                               
report, the credit-reporting agency will  create what is called a                                                               
credit record  and to  do that  the credit-reporting  agency will                                                               
have to  make verification on  many pieces of information.   When                                                               
an adult goes into a  credit-reporting agency this happens almost                                                               
instantaneously,  she  noted,  because  an  adult  has  a  credit                                                               
report.   However, she  continued, when dealing  with a  minor or                                                               
someone who doesn't have a  credit report, the credit report must                                                               
be  established.   This  is  done  by  the parent  or  [personal]                                                               
representative  asking   that  the  credit  report   be  secured,                                                               
reporting  certain information,  and proving  that they  have the                                                               
authority to make that request, which  could be a court order for                                                               
a   personal   representative   or  a   birth   certificate   and                                                               
identification  (ID) for  both the  minor  and the  parent.   The                                                               
consumer agency then creates a credit  record for a fee of $5.00.                                                               
This fee is under statute and is  the same fee that is paid by an                                                               
adult  to get  a  credit report  frozen.   The  placement of  the                                                               
freeze could  take up  to a  month for  a child  or incapacitated                                                               
person because of that verification and checking of the records.                                                                
MS.  MOSS pointed  out that  the  length of  the security  report                                                               
would last for  as long as the parent  or personal representative                                                               
requests.  It could  be lifted it at any time and  to lift it the                                                               
parent or representative  would have to verify who  they say they                                                               
are and that  they have the legal  authority to do so.   She said                                                               
the exception  to that would  be when a  minor turns 16  years of                                                               
age and  has a  job, a car,  or a cell  phone, and  has basically                                                               
created a  credit report, at which  point the minor can  lift the                                                               
freeze,  if desired.   Another  exception, she  stated, is  if an                                                               
incapacitated person  becomes self-sufficient and can  prove with                                                               
a court  record that  they are no  longer incapacitated  and then                                                               
the freeze  could be lifted.   Another exception to  lifting that                                                               
freeze, she noted, would be if  the information that was given to                                                               
the  credit  reporting  agency was  misrepresented,  which  would                                                               
allow  the credit  reporting agency  to lift  the freeze  itself.                                                               
Lifting the freeze would cost  $5.00, she continued, except there                                                               
would be no fee in the case  of identity theft for which a police                                                               
report or court document can be produced.                                                                                       
MS.  MOSS added  that there  are a  few exceptions  in the  bill.                                                               
There are people  who collect data secondhand;  they don't create                                                               
that  data.   That would  be, say,  a government  agency that  is                                                               
collecting  back  taxes  or  child support  or  a  department  of                                                               
revenue, and they would not  be required to freeze credit reports                                                               
because they  do not create  credit reports, they  collect credit                                                               
4:10:41 PM                                                                                                                    
REPRESENTATIVE  SULLIVAN-LEONARD asked  what  prompted the  bill;                                                               
for example,  whether something happened  when someone  turned 18                                                               
and tried getting credit cards  but couldn't because their Social                                                               
Security number had been compromised.                                                                                           
MS.  MOSS  replied  that  the   credit  reporting  agencies  have                                                               
requested  this.   She  said  27 states  other  than Alaska  have                                                               
adopted these  statutes because identity  theft in children  is a                                                               
growing concern.   Children  are easy  targets and  it is  a very                                                               
easy  way for  people  who create  false  credit, collect  credit                                                               
cards  under false  credit, or  file false  tax returns  with the                                                               
Internal Revenue Service using minors' Social Security numbers.                                                                 
4:11:53 PM                                                                                                                    
REPRESENTATIVE  BIRCH stated  he likes  this idea.   He  inquired                                                               
whether Social Security numbers are nowadays assigned at birth.                                                                 
MS. MOSS  responded that there  are exceptions; for  example, her                                                               
children  didn't get  their Social  Security  numbers until  they                                                               
were  13 years  old.   However,  she continued,  she thinks  most                                                               
people do get a Social Security number at birth.                                                                                
CHAIR KITO opened invited testimony.                                                                                            
4:13:12 PM                                                                                                                    
CARLIE  CHRISTENSEN, Director  of  Government Relations,  Equifax                                                               
Inc., testified  that Equifax  supports SB  93.   She said  SB 93                                                               
would  specify  the  manner  in   which  a  protected  consumer's                                                               
representative  must  submit  a  request to  a  credit  reporting                                                               
agency,   including  sufficient   proof  of   identification  and                                                               
authority  to  act on  behalf  of  the  protected consumer.    By                                                               
incorporating  these  specific  requirements  into  the  existing                                                               
Alaska credit report security  screen statute, affected consumers                                                               
will  be more  protected  from  the risk  of  their freeze  being                                                               
either unduly  placed on their  credit file or unduly  removed by                                                               
someone  who   isn't  authorized  to   act  on  behalf   of  that                                                               
individual.   This would bring Alaska  law more in line  with the                                                               
other states  that have minor  freeze statutes specifying  how to                                                               
handle these requests and to do it consistently, she added.                                                                     
4:14:34 PM                                                                                                                    
REPRESENTATIVE BIRCH  offered his  recognition that Equifax  is a                                                               
private entity  and asked whether  Equifax or others in  the same                                                               
business of credit scoring keep  digital copies of things such as                                                               
proof  of identification  authority, Social  Security, and  birth                                                               
certificates.   He further  asked whether Equifax  has a  copy of                                                               
his birth certificate.                                                                                                          
MS. CHRISTENSEN  answered that if  it is something for  placing a                                                               
security freeze on behalf of a  minor, Equifax may have to retain                                                               
that.   But, she added, she  doesn't know the exact  specifics of                                                               
Equifax retaining  that information  or if  it something  that is                                                               
just presented to  Equifax.  She said she would  have to get back                                                               
to the committee with the specifics.                                                                                            
4:16:20 PM                                                                                                                    
SARAH LASHFORD,  Manager of  Government Relations,  Consumer Data                                                               
Industry Association (CDIA), testified in  support of SB 93.  She                                                               
said CDIA is  an international trade association  founded in 1906                                                               
with more than  130 corporate members.  Its mission  is to enable                                                               
consumers, media,  legislators, and regulators to  understand the                                                               
benefits  of  responsible use  of  consumer  data, which  creates                                                               
opportunities for consumers and the  economy.  She explained that                                                               
the  members of  CDIA provide  businesses with  the data  and the                                                               
analytical tools necessary  to manage risk and  that CDIA members                                                               
help  ensure   fair  and  safe  transactions   for  consumers  to                                                               
facilitate  competition  and  expand  consumer's  access  to  the                                                               
market,  which is  innovative and  focused on  their needs.   She                                                               
stated that the products of CDIA  members are used in more than 9                                                               
billion transactions each year.                                                                                                 
MS. LASHFORD said  SB 93 would provide  additional protection for                                                               
identity  theft.   She recounted  that in  2016 the  Alaska State                                                               
Legislature passed Senate  Bill 121 to offer a  credit freeze for                                                               
the consumer records  of minors.  Providing  protection for those                                                               
exposed to the dangers of identity  theft was a step in the right                                                               
direction.   However, she advised,  by placing  the authorization                                                               
in the  same section of statute  as that for adults,  the statute                                                               
lacks  additional  protection  that  27  other  states  have  now                                                               
adopted.   These  additional measures  help to  safeguard against                                                               
fraud  and identity  theft as  well as  ensure consistency.   She                                                               
said SB  93 provides  clear guidance  and standards  for handling                                                               
minors' credit.   She offered CDIA's belief that  SB 93 maintains                                                               
the  original  intent  of  the   2016  legislation  while  adding                                                               
uniformity and  consistency with other  states' laws.   She urged                                                               
committee members to  support SB 93 to provide the  same level of                                                               
protection as the other 27 states  that have adopted a freeze for                                                               
minors and incapacitated adults.                                                                                                
4:18:35 PM                                                                                                                    
REPRESENTATIVE  BIRCH stated  that SB  93  appears to  be a  good                                                               
measure and offered his appreciation  for learning more about how                                                               
to protect children with this opportunity.                                                                                      
4:19:07 PM                                                                                                                    
CHAIR KITO kept public testimony  open after ascertaining that no                                                               
one else wished to testify on the bill at this time.                                                                            
CHAIR KITO held over SB 93.                                                                                                     
REPRESENTATIVE BIRCH asked why the chair is holding the bill.                                                                   
CHAIR KITO replied  that he typically likes to  have two meetings                                                               
for  each bill  that  is  before the  committee  so  there is  an                                                               
opportunity to address any questions  that are not fully answered                                                               
and to give an opportunity for amendments to come forward.                                                                      
           SB 64-UNIFORM ENVIRONMENTAL COVENANTS ACT                                                                        
4:19:56 PM                                                                                                                    
CHAIR KITO  announced that the  final order of business  would be                                                               
SENATE BILL  NO. 64, "An  Act adopting the  Uniform Environmental                                                               
Covenants Act; relating to  environmental real property covenants                                                               
and notices of activity and  use limitation at contaminated sites                                                               
to ensure  the protection of  human health, safety,  and welfare,                                                               
and the environment; and providing for an effective date."                                                                      
4:20:11 PM                                                                                                                    
SENATOR  PETER  MICCICHE,  Alaska  State  Legislature,  as  prime                                                               
sponsor introduced  SB 64.   He said the goal  of the bill  is to                                                               
return unused  brownfields to  the stream of  commerce.   In 2003                                                               
the  Uniform  Law  Commission  created  a  Uniform  Environmental                                                               
Covenants  Act.     The  bill,  he  explained,   would  allow   a                                                               
challenged  piece of  property that  is contaminated  to transfer                                                               
the  liability for  that contamination  to the  next owner.    It                                                               
protects the  buyer and the  seller of the  contaminated property                                                               
while allowing the  fullest and best use  until the contamination                                                               
reaches  safe levels.   The  bill  creates a  legal mechanism  to                                                               
safely  transfer contaminated  property through  an environmental                                                               
covenant.  The  covenant has no financial interest; it  is just a                                                               
recordable  interest  on  the  property  that  travels  with  the                                                               
property until the contamination no longer exists.                                                                              
SENATOR MICCICHE,  to provide  an understanding  of the  value of                                                               
the  bill's  provisions,  related  the story  of  a  contaminated                                                               
property in his  community.  He said this  multi-acre property on                                                               
the river  had at one  point a  dry-cleaning facility.   The "mom                                                               
and pop"  property owners  cannot afford  the cleanup,  but there                                                               
are interested developers that want  that property and can afford                                                               
the cleanup.   This  allows the contamination  to be  recorded on                                                               
the deed, the  new owners can come in and  clean up the property,                                                               
the  contamination can  be  erased  from the  deed,  and the  new                                                               
owners can  go about  their business.   It  provides transparency                                                               
throughout  the  life  of  the  property,  he  pointed  out,  and                                                               
provides assurances to buyers and  sellers that the risks will be                                                               
managed.   It is voluntary.   Other states, he added,  have found                                                               
that the  covenants help communities transform  blighted property                                                               
into marketable assets.                                                                                                         
SENATOR MICCICHE  stated that there  is support for SB  64 except                                                               
from the federal  government.  About 51 percent  of the currently                                                               
contaminated properties  are on  federal lands,  he noted,  and a                                                               
letter is  expected from the  federal government stating  that it                                                               
doesn't support  the bill.   However,  he continued,  [the bill's                                                               
sponsors] feel that  the federal government should  meet the same                                                               
requirements  as  Alaskans in  the  cleaning  up of  contaminated                                                               
property.   Alaska presently has 2,258  active contaminated sites                                                               
and 1,048 of them are federally  owned.  Based on current trends,                                                               
he  said,  the  Department of  Environmental  Conservation  (DEC)                                                               
projects that  about 835 of  the current sites would  be impacted                                                               
and likely to  have the benefit of environmental  covenant if the                                                               
bill is passed.                                                                                                                 
4:23:34 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  surmised that the previous  owner would                                                               
be  essentially immunized  from  any litigation.   He  questioned                                                               
whether this could be done  given the Comprehensive Environmental                                                               
Response, Compensation, and Liability Act (CERCLA).                                                                             
SENATOR  MICCICHE replied  that his  understanding is  that there                                                               
can be  an agreement  between [the  seller] and  the buyer  for a                                                               
negotiated  proportion of  responsibility.   He  added, "I'm  not                                                               
saying it has to transfer; I'm  saying what has to happen in this                                                               
voluntary program is  that it is recorded on the  deed."  How the                                                               
seller  and   buyer  decide  to   negotiate  the   proportion  of                                                               
responsibility is  a secondary process that  can certainly occur.                                                               
He said he thinks  in the vast majority of the  cases it is going                                                               
to  be someone  wanting  [to  buy] that  filling  station on  the                                                               
corner  and is  willing to  take  on the  responsibility of  that                                                               
contamination and cleanup.                                                                                                      
REPRESENTATIVE JOSEPHSON  referenced the  situation of  the sulfa                                                               
line  leak  with nine  square  miles  of contamination  in  which                                                               
[Williams  Alaska Petroleum,  Inc.  ("Williams")] is  one of  two                                                               
likely  responsible parties.   He  inquired whether  SB 64  would                                                               
allow Williams  to push off  its liability to someone  willing to                                                               
accept it.                                                                                                                      
SENATOR  MICCICHE deferred  to Ms.  Kristin  Ryan of  DEC for  an                                                               
answer.  However, he continued,  he doesn't believe that would be                                                               
the case.                                                                                                                       
4:25:58 PM                                                                                                                    
KRISTIN RYAN, Director, Division  of Spill Prevention & Response,                                                               
Department of Environmental Conservation  (DEC), on behalf of DEC                                                               
testified in  support of SB 64.   She said the  department thinks                                                               
this  is  something  that  would  help  Alaska  and  help  Alaska                                                               
transfer  land that  has been  contaminated  back into  commerce.                                                               
Rather than the  land being considered blighted  and unusable, SB
64 would allow [DEC] to say  the land is completely usable except                                                               
for certain  purposes such  as a daycare,  well, or  whatever the                                                               
restriction  needs  to be.    The  bill  provides a  process  for                                                               
amending a covenant in the future,  she noted, so when it gets to                                                               
a  point where  the  contamination  is no  longer  a problem  the                                                               
current  holder  of  the  property  can ask  DEC  to  remove  the                                                               
covenant.    If  the  department  agrees,  it  would  remove  the                                                               
covenant.   If the  department doesn't agree,  there would  be an                                                               
administrative appeal  process for the property  holder to appeal                                                               
DEC's decision.  There is no  fiscal note, she noted, because the                                                               
department is already performing this work.                                                                                     
MS. RYAN  explained that  DEC puts  restrictions on  property all                                                               
the time, but that it  is not necessarily communicated to buyers.                                                               
The  department maintains  a database  that can  be found  in its                                                               
office and on  its website.  The public can  look on the website.                                                               
Some  realtors  do,   and  some  title  companies   do,  but  not                                                               
everybody.  This bill would  just ensure that that's communicated                                                               
on the title, so the title  search company would be guaranteed to                                                               
find that information  when it does a title search.   There is no                                                               
fiscal impact to DEC, she added,  it is just a transparency and a                                                               
communication  about  restrictions  that  DEC  is  placing  on  a                                                               
MS. RYAN addressed  Representative Josephson's question regarding                                                               
liability, stating  that Alaska's statutes mimic  CERCLA.  Alaska                                                               
has  CERCLA-like statutes  and,  yes, the  current  owner is  the                                                               
responsible party  that DEC would  first approach like it  did in                                                               
the Flint  Hills situation [with  Williams].  She  explained that                                                               
DEC was  working with Flint  Hills and the Koch  brothers because                                                               
they owned  the property  and DEC  settled with  them.   But, she                                                               
continued,  DEC is  pursuing litigation  against Williams  as the                                                               
other responsible  party to contribute  to that remedy.   So, she                                                               
advised, the  state would still  have the capacity to  pursue all                                                               
responsible parties for a release as  this bill does not have any                                                               
impact on Alaska's liability statutes.                                                                                          
REPRESENTATIVE  JOSEPHSON requested  further confirmation  on Ms.                                                               
Ryan's statement  that SB 64  would have absolutely no  impact on                                                               
Alaska's liability statutes.                                                                                                    
MS. RYAN responded correct.                                                                                                     
4:28:14 PM                                                                                                                    
REPRESENTATIVE  BIRCH  said  SB  64   is  heading  in  the  right                                                               
direction and is  good legislation.  He noted that  a home seller                                                               
must provide  a disclosure document  regarding any  problems with                                                               
the home.  He asked whether  disclosure for a home with some sort                                                               
of an  environmental concern would  tie in with the  title rather                                                               
than the real estate disclosure.   He further asked whether there                                                               
is any overlap of those two things.                                                                                             
MS. RYAN answered that Alaska  has a disclosure law that requires                                                               
disclosure of contamination on a  property when it is being sold,                                                               
but DEC has found that that  doesn't always happen.  The property                                                               
may have been  contaminated several owners back and  it gets lost                                                               
in the shuffle and it  isn't communicated as people move forward.                                                               
She related  a situation  with a gas  station in  Anchorage where                                                               
the tanks  were pulled.   Fuel that was  left in the  dirt around                                                               
the tanks spread and went  around the foundation of the building.                                                               
Because the  only way  to remove the  fuel around  the foundation                                                               
would  be to  remove the  foundation,  DEC agreed  to leaving  it                                                               
until  the  foundation  could  be removed  as  the  property  was                                                               
transferred from person to person.   However, she continued, that                                                               
restriction was  not communicated,  and the current  owner pulled                                                               
that building out  and spread the dirt everywhere.   Had he known                                                               
he would have managed the  dirt appropriately when he removed the                                                               
foundation.    Now  there  is  contamination  on  his  neighbor's                                                               
property  that would  have been  avoided had  he understood  that                                                               
restriction  was  in  place.     The  restriction  was  in  DEC's                                                               
database, but he didn't know it was there.                                                                                      
4:30:14 PM                                                                                                                    
REPRESENTATIVE   STUTES   noted   that   regarding   contaminated                                                               
properties,  the   federal  government   is  one  of   the  worst                                                               
offenders,  and  one  of  the worst  contaminated  areas  in  the                                                               
country is on  the U.S. Coast Guard base at  Kodiak.  She offered                                                               
her understanding  that SB 64  would have no effect  in requiring                                                               
any  kind  of  cleanup;  it  would  only  apply  if  the  federal                                                               
government chose to transfer that property to another owner.                                                                    
MS.  RYAN  replied   that  DEC's  first  goal   is  cleanup;  the                                                               
department  wants people  to  clean up  things  to DEC's  cleanup                                                               
levels.    She said the Environmental Protection  Agency (EPA) is                                                               
also  involved  because  of  the  way  that  site  is  regulated.                                                               
Sometimes there are legitimate  reasons for leaving contamination                                                               
in place, she  pointed out, such as the  previously mentioned gas                                                               
station.    This would only come into play  when contamination is                                                               
left  above a  cleanup  level and  that is  a  decision that  the                                                               
responsible  party and  DEC  would  make together.    If it  were                                                               
decided to  leave the contamination,  then the  responsible party                                                               
would need to do a covenant.   The party always has the option to                                                               
clean it all the way up and then this becomes a moot point.                                                                     
SENATOR MICCICHE added  that just because a  site is contaminated                                                               
doesn't mean  it can't be  used for  other things.   The covenant                                                               
would be  specific to the  risks at  a particular site  and would                                                               
restrict certain activities.  For  example, an ex-filling station                                                               
may be  a great site  for an auto  parts store  but may not  be a                                                               
great site  for a daycare  center.   The transfer can  still take                                                               
place  even  though  it  remains   contaminated  and  remains  in                                                               
commerce, he said.  If at some point  it is decided to use it for                                                               
one  of the  restricted  activities, then  the responsible  party                                                               
would have to clean it up to that level.                                                                                        
4:32:36 PM                                                                                                                    
REPRESENTATIVE WOOL  stated he supports the  legislation and that                                                               
it  looks like  it  is solving  a  problem.   He  asked what  the                                                               
situation  is regarding  the  dry-cleaning  property in  Soldotna                                                               
that was  mentioned by the  sponsor and whether the  property can                                                               
be sold under current law.                                                                                                      
SENATOR  MICCICHE  deferred  to  Ms.   Ryan  for  an  answer  and                                                               
requested that Representative Wool pose a hypothetical scenario.                                                                
REPRESENTATIVE  WOOL posed  a hypothetical  scenario  in which  a                                                               
property  is  contaminated  and  asked  what  must  happen  under                                                               
current law if someone wants to purchase the property.                                                                          
MS. RYAN  responded that under  current law if someone  knows the                                                               
property  is contaminated  and  wants to  purchase  it, there  is                                                               
something that  is called prospective purchaser  agreement, which                                                               
is an  arrangement made  between the seller  and the  buyer where                                                               
they negotiate  those risks and  agree on who is  responsible for                                                               
what.   It  provides  some  protection for  liability  and is  an                                                               
upfront negotiation between a buyer and a seller.                                                                               
SENATOR MICCICHE noted that the  aforementioned doesn't allow for                                                               
that to  be placed  on a deed  and recorded.   So, if  it changes                                                               
hands in  the future, then  an unwary buyer  may not be  aware of                                                               
the previous contamination  and could be buying  into a nightmare                                                               
that may  be well above  the costs that  the buyer can  afford to                                                               
develop the  property.  The bill  would just clean it  all up, he                                                               
said, and  protect the seller so  that the seller can  transfer a                                                               
property with the  knowledge of contamination by  both the seller                                                               
and  buyer on  that  piece  of property.    The  bill would  also                                                               
protect the  buyer in having  full knowledge  of what is  on that                                                               
piece  of property.    It would  remain on  the  deed until  that                                                               
contamination no longer exists.                                                                                                 
4:34:49 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON referenced  the negotiations  mentioned                                                               
by  Ms. Ryan  and said  his main  concern with  SB 64  is whether                                                               
someone could shift liability.                                                                                                  
MS. RYAN  offered her understanding  that SB 64 would  not change                                                               
Alaska's liability statutes in any way.   An example would be the                                                               
gas  station in  Anchorage that  she discussed.   The  person the                                                               
department is asking  to clean it up is the  person who moved the                                                               
dirt around,  but that person  has the  capacity to go  after the                                                               
original person who caused the  contamination and DEC would still                                                               
have the  statutory authority  to go  after the  original person.                                                               
She  deferred to  DEC's attorney  with the  Department of  Law to                                                               
provide an answer in legal terms.                                                                                               
JENNIFER    CURRIE,    Senior   Assistant    Attorney    General,                                                               
Environmental Section, Civil  Division (Anchorage), Department of                                                               
Law  (DOL), in  response to  Representative Josephson's  question                                                               
explained that  private parties to  a sale of either  a residence                                                               
or industrial piece  of property could negotiate on  their own to                                                               
shift  liability.   But, she  continued, those  private contracts                                                               
are not  valid when  looking at  Alaska's liability  statutes for                                                               
Alaska's mini-CERCLA  statute that is  just like CERCLA.   So, it                                                               
would not affect  the liability for which the  state could pursue                                                               
the buyer and the seller.                                                                                                       
REPRESENTATIVE JOSEPHSON  assumed that the disclosure  would have                                                               
to be comprehensive  and complete so that the  purchaser would be                                                               
fully informed of a toxic leak or other form of contamination.                                                                  
MS. CURRIE replied  yes.  The goal of the  covenant, she said, is                                                               
to have details  about the past contamination that  is located at                                                               
the  site,   whatever  cleanup  took   place,  and   the  current                                                               
restrictions  that are  placed  on the  property,  and those  are                                                               
intended to be comprehensive.                                                                                                   
4:37:27 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON recalled two  notorious leaks in Alaska.                                                               
One was  some sort of gas  leak along the rail  corridor at Crown                                                               
Point near Moose  Pass and one was a railroad  leak in Gold Creek                                                               
near Curry  in the Talkeetna  area.  He asked  whether situations                                                               
like those are lost to history  or whether DEC flags and monitors                                                               
them as areas of concern such that they are not just footnoted.                                                                 
MS. RYAN answered that before  the time of the railroad situation                                                               
in  Talkeetna,  DEC  did  not  have  contingency  plans  for  the                                                               
railroad.   A big change resulting  from that was that  DEC added                                                               
the  railroad as  now an  organization that  is required  to have                                                               
contingency plans  when hauling  fuel, meaning the  railroad must                                                               
have the  capacity to clean up  an accident like that.   Learning                                                               
from  larger  spills  usually  results  in  changes  to  Alaska's                                                               
statutes.   Additionally,  all contaminated  sites, even  if they                                                               
are cleaned  up, remain in  DEC's database and are  accessible by                                                               
anybody as closed.   So, she said, that information  is out there                                                               
and is often utilized by individuals doing research.                                                                            
4:39:16 PM                                                                                                                    
SENATOR  MICCICHE noted  that  the shift  of  liability does  not                                                               
formally occur.   Through  capture in  a deed,  SB 64  allows the                                                               
voluntary acceptance  of the  cost of the  cleanup by  the person                                                               
purchasing  the property.    That is  probably  less likely  with                                                               
commercial and  industrial spills,  he said,  and he  is thinking                                                               
more of a  "mom and pop" where a $40,000-$100,000  cleanup may be                                                               
well outside  of their  budget, but someone  who really  wants to                                                               
develop a piece of property may  be more than willing and able to                                                               
afford that  cost of  cleanup.   So, he  continued, he  sees some                                                               
real benefits  and can think of  many pieces of property.   There                                                               
is likely  property in  each district  in the  state where  SB 64                                                               
would help bring that property back into productive condition.                                                                  
4:40:19 PM                                                                                                                    
CHAIR KITO held over SB 64.                                                                                                     
4:40:26 PM                                                                                                                    
There being no further business before the committee, the House                                                                 
Labor and Commerce Standing Committee meeting was adjourned at                                                                  
4:40 p.m.                                                                                                                       

Document Name Date/Time Subjects
HB222 Fiscal Note DCCED-DCBPL 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
HB 222
HB222 Supporting Document Bev Harper 04.10.17.pdf HL&C 4/17/2017 3:15:00 PM
HB 222
HB222 Supporting Documents-DCCED Letter to Manicurists 4.10.17.pdf HL&C 4/17/2017 3:15:00 PM
HB 222
HB222 Supporting Documents-Fortier and Mikko Letter 4.10.17.pdf HL&C 4/17/2017 3:15:00 PM
HB 222
HB222 Supporting Documents-HLAC 4.10.15 Minutes 4.10.17.pdf HL&C 4/17/2017 3:15:00 PM
HB 222
SB064 Sectional Analysis version J 4.11.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Fiscal Note DNR-MLW 2.24.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Fiscal Note DEC-SPAR 2.24.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Sponsor Statement 4.11.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Supporting Documents - DEC Fact Sheet 4.11.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Supporting Documents - DOD Response 4.11.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Supporting Documents - Uniform Law Commission 4.11.17.PDF HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Supporting Documents-Letter of Opposition 4.11.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Supporting Documents-Letters of Support 4.11.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB093 Sponsor Statement version O 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 93
SB093 Fiscal Note DOL-CIV 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 93
SB093 Sectional Analysis version O 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 93
SB093 Supporting Documents-CDIA Summary Statutes of Select States 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 93
SB093 Supporting Documents-Letters of Support 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 93
SB093 Supporting Documents-Power Point 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 93
SB064 Supporting Documents-DEC Response to DoD Supplemental 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
SB064 Supporting Documents-DoD Supplemental 4.14.17.pdf HL&C 4/17/2017 3:15:00 PM
SB 64
HB222 Supporting Documents-HB131 29th Legislature 4.17.17.pdf HL&C 4/17/2017 3:15:00 PM
HB 222
HB222 Sponsor Statement 4.16.17.pdf HL&C 4/17/2017 3:15:00 PM
HB 222