Legislature(2017 - 2018)BARNES 124

04/02/2018 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 108 MEDICAL CARE/LICENSING/MEDICAL BOARD TELECONFERENCED
Heard & Held
-- Public Testimony --
+ SB 155 REAL ESTATE APPRAISAL MNGMT. COMPANIES TELECONFERENCED
Moved HCS CSSB 155(L&C) Out of Committee
-- Public Testimony --
+ HB 136 MOTOR VEHICLE DEALER FRANCHISES TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                         April 2, 2018                                                                                          
                           3:17 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Sam Kito, Chair                                                                                                  
Representative Adam Wool, Vice Chair                                                                                            
Representative Andy Josephson                                                                                                   
Representative Louise Stutes                                                                                                    
Representative Chris Birch                                                                                                      
Representative Gary Knopp                                                                                                       
Representative Colleen Sullivan-Leonard                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Chenault (alternate)                                                                                        
Representative Bryce Edgmon (alternate)                                                                                         
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CS FOR SENATE BILL NO. 155(FIN)                                                                                                 
"An  Act relating  to  the registration  and  regulation of  real                                                               
estate   appraisal   management   companies;  relating   to   the                                                               
establishment of  fees by the Department  of Commerce, Community,                                                               
and  Economic Development;  relating  to the  Board of  Certified                                                               
Real Estate  Appraisers; relating to real  estate appraisers; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - MOVED HCS CSSB 155(L&C) OUT OF COMMITTEE                                                                                 
                                                                                                                                
CS FOR SS FOR SENATE BILL NO. 108(FIN)                                                                                          
"An  Act relating  to the  State Medical  Board; relating  to the                                                               
licensing  of physicians,  osteopaths, and  podiatrists; relating                                                               
to  the  certification of  medical  assistants;  relating to  the                                                               
practice  of  medicine; relating  to  the  practice of  podiatry;                                                               
relating to the practice of  osteopathy; relating to assault of a                                                               
medical professional; and providing for an effective date."                                                                     
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
CS FOR HOUSE BILL NO. 136(TRA)                                                                                                  
"An  Act  relating to  motor  vehicle  franchises, motor  vehicle                                                               
dealers,   motor  vehicle   manufacturers,   and  motor   vehicle                                                               
distributors."                                                                                                                  
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 155                                                                                                                  
SHORT TITLE: REAL ESTATE APPRAISAL MNGMT. COMPANIES                                                                             
SPONSOR(s): SENATOR(s) MEYER                                                                                                    
                                                                                                                                
01/24/18       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/24/18       (S)       L&C, FIN                                                                                               
02/08/18       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/08/18       (S)       Moved SB 155 Out of Committee                                                                          
02/08/18       (S)       MINUTE(L&C)                                                                                            
02/09/18       (S)       L&C RPT  1DP 2NR 2AM                                                                                   
02/09/18       (S)       AM: COSTELLO, MICCICHE                                                                                 
02/09/18       (S)       DP: MEYER                                                                                              
02/09/18       (S)       NR: STEVENS, GARDNER                                                                                   
02/21/18       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
02/21/18       (S)       Heard & Held                                                                                           
02/21/18       (S)       MINUTE(FIN)                                                                                            
03/06/18       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/06/18       (S)       Heard & Held                                                                                           
03/06/18       (S)       MINUTE(FIN)                                                                                            
03/20/18       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/20/18       (S)       Moved CSSB 155(FIN) Out of Committee                                                                   
03/20/18       (S)       MINUTE(FIN)                                                                                            
03/21/18       (S)       FIN RPT CS  6DP   NEW TITLE                                                                            
03/21/18       (S)       DP: HOFFMAN, MACKINNON, BISHOP, VON                                                                    
                         IMHOF, STEVENS, MICCICHE                                                                               
03/23/18       (S)       TRANSMITTED TO (H)                                                                                     
03/23/18       (S)       VERSION: CSSB 155(FIN)                                                                                 
03/26/18       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/26/18       (H)       L&C, FIN                                                                                               
04/02/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: SB 108                                                                                                                  
SHORT TITLE: MEDICAL CARE/LICENSING/MEDICAL BOARD                                                                               
SPONSOR(s): SENATOR(s) GIESSEL                                                                                                  
                                                                                                                                
04/07/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/07/17       (S)       L&C, FIN                                                                                               
01/18/18       (S)       SPONSOR SUBSTITUTE INTRODUCED-REFERRALS                                                                
01/18/18       (S)       L&C, FIN                                                                                               
02/13/18       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/13/18       (S)       Moved SSSB 108 Out of Committee                                                                        
02/13/18       (S)       MINUTE(L&C)                                                                                            
02/14/18       (S)       L&C RPT  5DP                                                                                           
02/14/18       (S)       DP: COSTELLO, STEVENS, MICCICHE, MEYER,                                                                
                         GARDNER                                                                                                
02/27/18       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
02/27/18       (S)       Heard & Held                                                                                           
02/27/18       (S)       MINUTE(FIN)                                                                                            
03/13/18       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/13/18       (S)       Moved CSSSSB 108 Out of Committee                                                                      
03/13/18       (S)       MINUTE(FIN)                                                                                            
03/14/18       (S)       FIN RPT CS  5DP 1NR   SAME TITLE                                                                       
03/14/18       (S)       DP: HOFFMAN, MACKINNON, BISHOP, VON                                                                    
                         IMHOF, STEVENS                                                                                         
03/14/18       (S)       NR: OLSON                                                                                              
03/21/18       (S)       TRANSMITTED TO (H)                                                                                     
03/21/18       (S)       VERSION: CSSSSB 108(FIN)                                                                               
03/22/18       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/22/18       (H)       HSS, L&C, FIN                                                                                          
03/27/18       (H)       HSS AT 3:00 PM CAPITOL 106                                                                             
03/27/18       (H)       -- MEETING CANCELED --                                                                                 
03/29/18       (H)       HSS AT 3:00 PM CAPITOL 106                                                                             
03/29/18       (H)       Moved CSSSSB 108(FIN) Out of Committee                                                                 
03/29/18       (H)       MINUTE(HSS)                                                                                            
03/30/18       (H)       HSS RPT 4DP 2NR 1AM                                                                                    
03/30/18       (H)       DP: JOHNSTON, TARR, SULLIVAN-LEONARD,                                                                  
                         SPOHNHOLZ                                                                                              
03/30/18       (H)       NR: ZULKOSKY, KITO                                                                                     
03/30/18       (H)       AM: EASTMAN                                                                                            
04/02/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 136                                                                                                                  
SHORT TITLE: MOTOR VEHICLE DEALER FRANCHISES                                                                                    
SPONSOR(s): REPRESENTATIVE(s) CLAMAN                                                                                            
                                                                                                                                
02/20/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/20/17       (H)       TRA, L&C                                                                                               
03/16/17       (H)       TRA AT 1:00 PM CAPITOL 17                                                                              
03/16/17       (H)       <Bill Hearing Canceled>                                                                                
03/21/17       (H)       TRA AT 1:00 PM BARNES 124                                                                              
03/21/17       (H)       Heard & Held                                                                                           
03/21/17       (H)       MINUTE(TRA)                                                                                            
04/13/17       (H)       TRA AT 1:00 PM BARNES 124                                                                              
04/13/17       (H)       -- MEETING CANCELED --                                                                                 
03/27/18       (H)       TRA AT 1:15 PM BARNES 124                                                                              
03/27/18       (H)       Heard & Held                                                                                           
03/27/18       (H)       MINUTE(TRA)                                                                                            
03/29/18       (H)       TRA AT 1:15 PM BARNES 124                                                                              
03/29/18       (H)       Moved CSHB 136(TRA) Out of Committee                                                                   
03/29/18       (H)       MINUTE(TRA)                                                                                            
03/30/18       (H)       TRA RPT CS(TRA) NT 5DP                                                                                 
03/30/18       (H)       DP: SULLIVAN-LEONARD, DRUMMOND, CLAMAN,                                                                
                         KOPP, WOOL                                                                                             
04/02/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SENATOR KEVIN MEYER                                                                                                             
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented SB 115 as prime sponsor.                                                                       
                                                                                                                                
DAVID DERRY, Chair                                                                                                              
Alaska Board of Real Estate Appraisers                                                                                          
Soldotna, Alaska                                                                                                                
POSITION STATEMENT:  Testified in support of SB 155.                                                                          
                                                                                                                                
MARK SCHIFFMAN                                                                                                                  
Real Estate Valuation Advocacy Association (REVAA)                                                                              
Minneapolis, Minnesota                                                                                                          
POSITION STATEMENT:  Testified in support of SB 155.                                                                          
                                                                                                                                
SARA CHAMBERS, Deputy Director                                                                                                  
Division of Insurance                                                                                                           
Department of Commerce, Community & Economic Development (DCCED)                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions in the hearing on SB                                                                  
155.                                                                                                                            
                                                                                                                                
THOMAS ATKINSON, Staff                                                                                                          
Representative Andy Josephson                                                                                                   
Alaska State Legislature                                                                                                        
POSITION STATEMENT:  Presented Amendments 1, 2, and 3 on behalf                                                               
of Representative Josephson.                                                                                                    
                                                                                                                                
EDRA MORLEDGE, Staff                                                                                                            
Senator Kevin Meyer                                                                                                             
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions in the hearing on SB                                                                  
155.                                                                                                                            
                                                                                                                                
SENATOR CATHY GIESSEL                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented SB 108 as prime sponsor.                                                                       
                                                                                                                                
FRED PARADY, Deputy Commissioner                                                                                                
Department of Commerce, Community & Economic Development (DCCED)                                                                
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Answered questions  in the  hearing on  SB                                                             
108.                                                                                                                            
                                                                                                                                
DEBORA STOVERN, Executive Secretary                                                                                             
State Medical Board                                                                                                             
Division  of Corporations,  Businesses, and  Profession Licensing                                                               
(DCBPL)                                                                                                                         
Department of Commerce, Community & Economic Development (DCCED)                                                                
POSITION  STATEMENT:   Answered questions  in the  hearing on  SB                                                             
108.                                                                                                                            
                                                                                                                                
JEANNIE MONK                                                                                                                    
Alaska State Hospital and Nursing Home Association (ASHNA)                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of SB 108.                                                                          
                                                                                                                                
REPRESENTATIVE MATT CLAMAN                                                                                                      
Alaska State Legislation                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 136 as prime sponsor.                                                                       
                                                                                                                                
GARY SLEEPER, Attorney                                                                                                          
Alaska Auto Dealer Association                                                                                                  
POSITION STATEMENT:  Testified in support of HB 136.                                                                          
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:17:46 PM                                                                                                                    
                                                                                                                                
CHAIR  SAM KITO  called  the House  Labor  and Commerce  Standing                                                             
Committee meeting to order at  3:17 p.m. All members were present                                                               
at the call to order.                                                                                                           
                                                                                                                                
          SB 155-REAL ESTATE APPRAISAL MNGMT. COMPANIES                                                                     
                                                                                                                                
3:18:58 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that the  first order of business  would be                                                               
CS  FOR  SENATE  BILL  NO.  155(FIN), "An  Act  relating  to  the                                                               
registration and  regulation of real estate  appraisal management                                                               
companies;  relating   to  the  establishment  of   fees  by  the                                                               
Department  of  Commerce,  Community, and  Economic  Development;                                                               
relating  to  the  Board of  Certified  Real  Estate  Appraisers;                                                               
relating  to  real  estate  appraisers;   and  providing  for  an                                                               
effective date."                                                                                                                
                                                                                                                                
3:19:17 PM                                                                                                                    
                                                                                                                                
SENATOR KEVIN  MEYER, Alaska State Legislature,  presented SB 155                                                               
as  prime   sponsor.    He  paraphrased   the  sponsor  statement                                                               
[included in committee packet],  which reads as follows [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     An  Appraisal   Management  Company,  or  AMC,   is  an                                                                    
     independent  entity  through   which  mortgage  lenders                                                                    
     order  residential real  estate valuation  services for                                                                    
     properties  on  which  they are  considering  extending                                                                    
     loans  to homebuyers.  AMCs  fulfill an  administrative                                                                    
     function in the  appraisal process, including selecting                                                                    
     an  appraiser and  delivering the  appraisal report  to                                                                    
     the  lender. Individual  appraisers who  work for  AMCs                                                                    
     provide the actual property valuation services.                                                                            
                                                                                                                                
     AMCs  existed well  before  the  2008 global  financial                                                                    
     crisis, and  today they play an  increasingly important                                                                    
     role as a third-party  service provider in the consumer                                                                    
     mortgage   process.  AMCs   have  become   increasingly                                                                    
     popular  by  lenders  across   the  country  to  ensure                                                                    
     federal   and    state   regulatory    compliance   and                                                                    
     independence   between   lenders  and   appraisers   as                                                                    
     required  by  the  Dodd-Frank Wall  Street  Reform  and                                                                    
     Consumer  Protection Act  of 2010.  Dodd-Frank requires                                                                    
     that  states that  choose to  regulate  this sector  of                                                                    
     industry   enact   comprehensive  AMC   oversight   and                                                                    
     registration   programs  with   an  August   10,  2018,                                                                    
     deadline.                                                                                                                  
                                                                                                                                
     SB  155  aims  to  promote public  trust  and  consumer                                                                    
     protection  and  establish  oversight  and  enforcement                                                                    
     where there is none today.                                                                                                 
                                                                                                                                
SENATOR  MEYER added  that  Alaska  is one  of  only four  states                                                               
without  the legislation  in place.    He said  that states  vary                                                               
regarding the  surety bond.  He  added that due to  the deadline,                                                               
the department requested  a waiver.  The original  version of the                                                               
proposed  bill contains  contingency language  in the  event that                                                               
the  waiver  was  not  granted.   He  stated  the  version  would                                                               
establish  a  firm  effective  date  on 1  January  2019,  and  a                                                               
registration date of 1 March 2019.                                                                                              
                                                                                                                                
3:24:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE STUTES stated there  is confusion over whether the                                                               
state will be able to transact  with "Freddie May and Fannie Mac"                                                               
without the proposed legislation in place.                                                                                      
                                                                                                                                
SENATOR MEYER  said there  is some concern  that it  would impact                                                               
some of the loans.                                                                                                              
                                                                                                                                
3:25:00 PM                                                                                                                    
                                                                                                                                
CHAIR KITO stated the difference in  the CS is only to update the                                                               
effective date.                                                                                                                 
                                                                                                                                
3:25:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL moved  to adopt  House committee  substitute                                                               
(HCS)  for CSSB  155(FIN),  Version R  as  the working  document.                                                               
There being  no objection, Version  R was adopted as  the working                                                               
document.                                                                                                                       
                                                                                                                                
3:25:52 PM                                                                                                                    
                                                                                                                                
DAVID  DERRY,  Chair, Alaska  Board  of  Real Estate  Appraisers,                                                               
testified in support of  SB 155.  He said the  board thinks it is                                                               
a key  to have  the maximum available  mortgage for  residents in                                                               
Alaska, and it  provides a basis for oversight  of AMCs operating                                                               
in Alaska.   He said the board  requests a change on  page 5 line                                                               
25 about  the control  person is  effectively established  as the                                                               
responsible  person. The  board  requesting it  be  changed to  a                                                               
certified appraiser  in the  state of Alaska.   He  indicated the                                                               
original bill version  had contained the detail, but  it had been                                                               
changed.   He  said the  objection to  the change  is that  other                                                               
states don't  make that requirement.   He suggested  the mortgage                                                               
meltdown 2010 had created problems  in other states, while Alaska                                                               
wasn't hit with the  meltdown.  He added it may  be why there was                                                               
no AMC legislation enacted in the state previously.                                                                             
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked whether the  federal subcommittee                                                               
expressed a preference that the  designated controlling person be                                                               
in Alaska.                                                                                                                      
                                                                                                                                
MR. DERRY answered  that the term controlling person  is not even                                                               
addressed  by   the  federal  subcommittee,   so  there   was  no                                                               
preference expressed.                                                                                                           
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked for  confirmation that the federal                                                               
subcommittee could not take a position on it in any case.                                                                       
                                                                                                                                
MR DERRY answered that is correct.                                                                                              
                                                                                                                                
3:32:18 PM                                                                                                                    
                                                                                                                                
MARK  SCHIFFMAN,  Real   Estate  Valuation  Advocacy  Association                                                               
(REVAA), testified  in support of SB  155.  He stated  that there                                                               
is  not  a uniqueness  to  Alaska  that  would require  that  the                                                               
designated person be in Alaska.                                                                                                 
                                                                                                                                
REPRESENTATIVE WOOL  mentioned hiring  an extra person  and asked                                                               
for confirmation that the cost would be spread around programs.                                                                 
                                                                                                                                
3:34:47 PM                                                                                                                    
                                                                                                                                
SARA   CHAMBERS,   Deputy   Director,  Division   of   Insurance,                                                               
Department   of  Commerce,   Community  &   Economic  Development                                                               
(DCCED),  answered questions  in  the  hearing on  SB  155.   She                                                               
stated  there would  be a  new  person required,  but their  time                                                               
would be charged on a 15-minute  increments to this program.  She                                                               
added that they  may work part-time on another  program, and that                                                               
program would cover those costs.                                                                                                
                                                                                                                                
3:35:42 PM                                                                                                                    
                                                                                                                                
CHAIR KITO opened public testimony  on SB 155.  Upon ascertaining                                                               
that  no  one   was  available  to  testify,   he  closed  public                                                               
testimony.                                                                                                                      
                                                                                                                                
3:36:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES asked  whether not  enacting the  proposed                                                               
legislation would prohibit all institution  from giving FHA loans                                                               
or  prohibit only  certain  institutions  from providing  federal                                                               
loans to Alaskans.                                                                                                              
                                                                                                                                
MR.  DERRY answered  the  loans  could still  be  carried out  by                                                               
lenders.   He named  banks that  don't use AMCs.   He  said there                                                               
would   be   complications   with  handling   federally   related                                                               
transactions.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  STUTES asked  whether not  enacting the  proposed                                                               
legislation  would  prohibit   certain  lending  institutes  from                                                               
lending Freddie Mac, Fannie May, and FHA funds to buyers.                                                                       
                                                                                                                                
MR.  DERRY  said  the  question   is  what  a  federally  related                                                               
transaction is.   He said that without AMC  legislation, a lender                                                               
would not be prohibited from working through a federal loan.                                                                    
                                                                                                                                
3:40:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  asked whether it  is up to the  bank whether                                                               
to  use AMCs  or not.   He  asked whether  an appraiser  can work                                                               
independently and for an AMC at the same time.                                                                                  
                                                                                                                                
MR. DERRY  answered in  the affirmative.   He said  it is  more a                                                               
matter of convenience.   He said an appraiser could  sign up with                                                               
an AMC and also serve as an independent appraiser.                                                                              
                                                                                                                                
3:41:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON moved Amendment 1.                                                                                     
                                                                                                                                
     Page 5, line 25:                                                                                                           
     Delete "a state"                                                                                                           
     Insert "the state under this chapter"                                                                                      
                                                                                                                                
3:42:45 PM                                                                                                                    
                                                                                                                                
THOMAS ATKINSON, Staff,  Representative Andy Josephson, presented                                                               
Amendment 1  on behalf  of Representative  Josephson.   He stated                                                               
there  are no  homegrown  AMCs.   He said  the  suggestion is  to                                                               
support  small  Alaska  businesses rather  than  larger  national                                                               
businesses.                                                                                                                     
                                                                                                                                
CHAIR KITO  asked whether the  amendment would  prohibit national                                                               
businesses from using their AMC in Alaska.                                                                                      
                                                                                                                                
MR. ATKINSON answered that it would  not.  He underlined that the                                                               
provision  would not  require that  the designated  person be  in                                                               
Alaska, only  that they be  certified as an appraiser  in Alaska.                                                               
He added this could be done through reciprocity.                                                                                
                                                                                                                                
CHAIR KITO suggested  if someone is working on  a lending project                                                               
and the appraiser  does not meet the  licensure requirements, the                                                               
loan   would  be   on  hold   until  the   appraiser  met   those                                                               
requirements.                                                                                                                   
                                                                                                                                
MR. ATKINSON  answered in  the affirmative.   He deferred  to the                                                               
invited testimony.                                                                                                              
                                                                                                                                
3:45:47 PM                                                                                                                    
                                                                                                                                
CHAIR KITO asked  whether passing the amendment  would impede the                                                               
ability of  the state to  allow appraiser to provide  services in                                                               
the state.                                                                                                                      
                                                                                                                                
MS.  CHAMBERS  answered  that the  amendment  would  require  the                                                               
controlling person  - the person  the board would work  with that                                                               
is in a management roll -  to have understanding and awareness of                                                               
Alaska.   She  explained that  person would  have decision-making                                                               
authority, but  that person may or  may not be the   boots on the                                                               
ground  appraiser.   She said  the board stated it  was important                                                               
to  them  because of  Alaska's  unique  geography. She  clarified                                                               
that,  should  this  amendment be  adopted,  it  wouldn't  change                                                               
anything for the boots on the ground appraiser.                                                                                 
                                                                                                                                
CHAIR KITO  asked whether it  is anticipated that a  large number                                                               
of individuals would want licensure through reciprocity.                                                                        
                                                                                                                                
MS.  CHAMBERS said  it was  estimated about  200 AMCs  and it  is                                                               
expected  the  controlling  person  for each  of  them  would  be                                                               
seeking licensure to operate in the state.                                                                                      
                                                                                                                                
3:50:06 PM                                                                                                                    
                                                                                                                                
EDRA  MORLEDGE,   Staff,  Senator   Kevin  Meyer,   Alaska  State                                                               
Legislature,  answered questions  in  the hearing  on  SB 155  on                                                               
behalf of  Senator Meyer, prime  sponsor. She stated  the sponsor                                                               
was not supportive of the amendment.                                                                                            
                                                                                                                                
3:51:10 PM                                                                                                                    
                                                                                                                                
A roll call  vote was taken.   Representatives Stutes, Josephson,                                                               
and Knopp voted  in favor of Amendment 1.   Representatives Wool,                                                               
Birch, Kito,  and Sullivan-Leonard voted against  it.  Therefore,                                                               
Amendment 1 failed by a vote of 4-3.                                                                                            
                                                                                                                                
3:52:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON offered Amendment 2.                                                                                   
                                                                                                                                
     Page 9, line 31:                                                                                                           
     Delete "includes"                                                                                                          
     Insert "means"                                                                                                             
                                                                                                                                
     Page 10, lines 2 - 3:                                                                                                      
       Delete "or an officer or director of a real estate                                                                       
     appraisal management company"                                                                                              
                                                                                                                                
     Page 10, following line 3:                                                                                                 
     Insert a new subparagraph to read:                                                                                         
        "(B)  is an officer or director of a real estate                                                                        
     appraisal management company;"                                                                                             
                                                                                                                                
     Reletter the following subparagraphs accordingly.                                                                          
                                                                                                                                
     Page 10, line 7:                                                                                                           
     Delete "and"                                                                                                               
     Insert "or"                                                                                                                
                                                                                                                                
3:52:12 PM                                                                                                                    
                                                                                                                                
MR. ATKINSON  explained Amendment  2 on behalf  of Representative                                                               
Josephson.  He  said without the amendment,  a controlling person                                                               
would have to meet all three  definitions.  He said, "It would be                                                               
a strange arrangement to be both the owner and employee."                                                                       
                                                                                                                                
3:53:47 PM                                                                                                                    
                                                                                                                                
MS. MORLEGE stated the sponsor had no opposition to the proposed                                                                
amendment.                                                                                                                      
                                                                                                                                
3:53:58 PM                                                                                                                    
                                                                                                                                
CHAIR KITO removed his objection. There being no other                                                                          
objection, Amendment 2 was adopted.                                                                                             
                                                                                                                                
3:54:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 3.                                                                            
                                                                                                                                
     Page 3, line 29, following "chapter":                                                                                      
     Insert ";                                                                                                                  
     (4)  conduct background investigations as provided in                                                                      
     AS 08.87.135(c)"                                                                                                           
                                                                                                                                
     Page 5, line 21:                                                                                                           
     Delete "and"                                                                                                               
                                                                                                                                
     Page 5, line 23, following "$50,000":                                                                                      
     Insert "; and                                                                                                              
       (9)  is owned by persons who meet the requirements                                                                       
     under (c) of this section"                                                                                                 
                                                                                                                                
     Page 5, following line 31:                                                                                                 
     Insert a new subsection to read:                                                                                           
     "(c)  A  person who owns at least 10  percent of a real                                                                    
     estate  appraisal  management  company required  to  be                                                                    
     registered  under this  chapter must  be of  good moral                                                                    
     character as  determined by the board  and shall submit                                                                    
     to a background investigation conducted by the board."                                                                     
                                                                                                                                
     Reletter the following subsections accordingly.                                                                            
                                                                                                                                
     Page 6, line 5:                                                                                                            
     Delete "of (a) and (b)"                                                                                                    
     Insert "under (a) - (c)"                                                                                                   
                                                                                                                                
3:54:13 PM                                                                                                                    
                                                                                                                                
MR. ATKINSON  explained Amendment  3 on behalf  of Representative                                                               
Josephson.  He said  it is clear that if a  person owns more than                                                               
ten percent of an AMC, they  would need a state background check.                                                               
He said he had confirmation that it is required in statute.                                                                     
                                                                                                                                
REPRESENTATIVE WOOL asked about background investigations.                                                                      
                                                                                                                                
MR.  ATKINSON  answered  that the  details  of  what  constitutes                                                               
background checks are not stipulated by the state.                                                                              
                                                                                                                                
REPRESENTATIVE WOOL asked  what the state would plan  on doing if                                                               
it were left to the states.                                                                                                     
                                                                                                                                
MR.  ATKINSON answered  that he  thinks they  would run  the same                                                               
background check that they run on appraisers.                                                                                   
                                                                                                                                
3:56:12 PM                                                                                                                    
                                                                                                                                
MS.  MORLEDGE  stated that  the  sponsor  is  in support  of  the                                                               
amendment.                                                                                                                      
                                                                                                                                
3:56:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL suggested  if there were 200  AMCs who wanted                                                               
to do business  in Alaska, all would have  to submit fingerprints                                                               
to the state.                                                                                                                   
                                                                                                                                
MR. ATKINSON answered that he did not know the answer.                                                                          
                                                                                                                                
3:57:32 PM                                                                                                                    
                                                                                                                                
MS. CHAMBERS  answered that currently for  real estate appraisers                                                               
the   department  does   not  have   the  authority   to  require                                                               
fingerprints.  She said the  supposition that those owners of ten                                                               
percent or more of an AMC  would have to submit an application is                                                               
correct.                                                                                                                        
                                                                                                                                
REPRESENTATIVE WOOL spoke  to the fiscal note.   He asked whether                                                               
the  one  person  to  be  hired  would  be  able  to  handle  500                                                               
applications with background checks.                                                                                            
                                                                                                                                
MS. CHAMBERS answered  that, should this amendment  become a part                                                               
of the  bill, the department  may allocate more of  that person's                                                               
time to the program.                                                                                                            
                                                                                                                                
3:59:32 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL objected to Amendment 3.                                                                                    
                                                                                                                                
A roll  call vote was  taken.   Representatives Sullivan-Leonard,                                                               
Stutes, Josephson, Birch,  and Knopp voted in  favor of Amendment                                                               
3.  Representatives  Wool and Kito voted against  it.  Therefore,                                                               
Amendment 3 passed by a vote of 5-2.                                                                                            
                                                                                                                                
4:00:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  STUTES  expressed  her concerns  about  increased                                                               
costs as a result of the proposed bill.                                                                                         
                                                                                                                                
4:01:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH stated he supports the proposal.                                                                           
                                                                                                                                
4:01:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL  moved to report  HCS CSSB  155(FIN), Version                                                               
R, as  amended, out of committee  with individual recommendations                                                               
and the accompanying fiscal notes.   There being no objection, it                                                               
was so ordered.                                                                                                                 
                                                                                                                                
4:02:10 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 4:02 p.m. to 4:05 p.m.                                                                       
                                                                                                                                
[CHAIR KITO passed the gavel to Vice Chair Wool.]                                                                               
                                                                                                                                
          SB 108-MEDICAL CARE/LICENSING/MEDICAL BOARD                                                                       
                                                                                                                                
4:05:27 PM                                                                                                                    
                                                                                                                                
VICE CHAIR WOOL  announced that the next order  of business would                                                               
be CS  FOR SPONSOR SUBSTITUTE  FOR SENATE BILL NO.  108(FIN), "An                                                               
Act  relating  to  the  State  Medical  Board;  relating  to  the                                                               
licensing  of physicians,  osteopaths, and  podiatrists; relating                                                               
to  the  certification of  medical  assistants;  relating to  the                                                               
practice  of  medicine; relating  to  the  practice of  podiatry;                                                               
relating to the practice of  osteopathy; relating to assault of a                                                               
medical professional; and providing for an effective date."                                                                     
                                                                                                                                
4:05:43 PM                                                                                                                    
                                                                                                                                
SENATOR  CATHY GIESSEL,  Alaska State  Legislature, presented  SB                                                               
108 as prime sponsor.   She indicated her PowerPoint presentation                                                               
would also serve a sectional analysis of the proposed bill.                                                                     
                                                                                                                                
4:06:58 PM                                                                                                                    
                                                                                                                                
SENATOR GIESSEL pointed to slide 2, "Purpose":                                                                                  
                                                                                                                                
     1. Streamline Physician Licensing                                                                                          
     2. Need for office assistants                                                                                              
          a. Unlicensed                                                                                                         
          b. Licensed                                                                                                           
                                                                                                                                
     1. Streamline MD licensing                                                                                                 
          Section 1, 2, 8, 9, 10                                                                                                
          State Medical Board to write regulations to                                                                           
          delegate to EXECUTIVE SECRETARY:                                                                                      
          1. review applications and grant license if                                                                           
          requirements are met                                                                                                  
          2. review applications and issue temporary                                                                            
          license if requirements are met                                                                                       
         3. grant certification if requirements are met                                                                         
          4. spells out prohibitions to this delegate                                                                           
          authority                                                                                                             
                                                                                                                                
SENATOR   GIESSEL  explained   that  the   documentation  is                                                                    
maintained  until the  state Medical  Board  meets, but  the                                                                    
board  only  meets four  times  per  year.   She  said  this                                                                    
creates a backlog.  She said  that one the examiner looks at                                                                    
the documentation,  it would be  forwarded to  the executive                                                                    
secretary  who  would  review   the  applications  and  make                                                                    
appropriate action.                                                                                                             
                                                                                                                                
4:09:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KNOPP asked why it is not the responsibility of                                                                  
the executive secretary to prepare the documentation for the                                                                    
board.                                                                                                                          
                                                                                                                                
SENATOR GIESSEL reviewed the application process.  She stated                                                                   
the applications could be approved immediately or go to the                                                                     
board if there were issues with an application.                                                                                 
                                                                                                                                
SENATOR GIESSEL continued to slide 4, "Streamline MD Licensing":                                                                
                                                                                                                                
     Section 10, 11                                                                                                             
     1. Allows another person, designated by the board, to                                                                      
     help the Executive Secretary to issue temporary                                                                            
     license.                                                                                                                   
     2. Outlines when this could happen                                                                                         
                                                                                                                                
SENATOR GIESSEL shared that the process is used by the                                                                          
largest licensing board in the state.                                                                                           
                                                                                                                                
4:14:29 PM                                                                                                                    
                                                                                                                                
SENATOR GIESSEL moved to slide 5-6, "2.a. Unlicensed Assistive                                                                  
Personnel":                                                                                                                     
                                                                                                                                
        Unlicensed personnel trained in "routine medical                                                                        
     tasks"                                                                                                                     
                                                                                                                                
     Section 3 Regulations will                                                                                                 
     o authorize delegation to unlicensed person                                                                                
     o prohibit delegation of pain management or                                                                                
     opioid related activities                                                                                                  
     o define "routine medical tasks"                                                                                           
                                                                                                                                
     Section 6                                                                                                                  
          adds   person,   performing   delegated   "routine                                                                    
          medical duties" to exception under "License to                                                                        
          practice medicine, podiatry, or osteopathy"                                                                           
                                                                                                                                
     Section 12                                                                                                                 
          Adds "medical assistant" to list to practice                                                                          
          medicine                                                                                                              
                                                                                                                                
     Section 14                                                                                                                 
          adds "medical assistants" to definition of                                                                            
          "medical professional" under Title 12 Criminal                                                                        
          Procedure                                                                                                             
                                                                                                                                
SENATOR GIESSEL said the bill would  correct a gap in the board's                                                               
laws.                                                                                                                           
                                                                                                                                
4:17:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked  whether there would be  a need to                                                               
ensure that the unlicensed people have specific training.                                                                       
                                                                                                                                
SENATOR  GIESSEL answered  that initially  all that  was required                                                               
was  a high  school  diploma  but now  there  was some  education                                                               
available. She added  there would be a higher  level of education                                                               
required.                                                                                                                       
                                                                                                                                
REPRESENTATIVE WOOL asked for confirmation  that this first group                                                               
of medical  assistants won't  need a license  in the  future, but                                                               
the physician will be able to delegate to them.                                                                                 
                                                                                                                                
SENATOR GIESSEL answered in the affirmative.                                                                                    
                                                                                                                                
SENATOR   GIESSEL  progressed   to  slide   7-8,  "2.b.   medical                                                               
Assistants - license/certification":                                                                                            
                                                                                                                                
     Why?                                                                                                                       
          Prescription Drug Monitoring Program (PDMP)                                                                           
          ~prohibits access by any unlicensed person                                                                            
          ~envisioned clinician delegates "look up" before                                                                      
          prescribing                                                                                                           
                                                                                                                                
     Problem                                                                                                                    
          ~No licensed people in MD clinic, other than the                                                                      
          MD                                                                                                                    
          ~Frequent need to check PDMP (AS 17.30.200                                                                            
          requires license).                                                                                                    
                                                                                                                                
     Solution  recognize training and certification                                                                             
     Training programs accredited by                                                                                            
          o Commission on Accreditation of Allied Health                                                                        
          Education Programs (CAAHEP)                                                                                           
          o Accrediting Bureau of Health Education Schools                                                                      
          (ABHES)                                                                                                               
     National exams for Certification                                                                                           
     Alaska's community colleges training programs                                                                              
     Recognized in many other states/territories.                                                                               
     WA, CA, TX, FL, PA, OH, IL, MT, MS, ND, SD, WY                                                                             
                                                                                                                                
4:21:17 PM                                                                                                                    
                                                                                                                                
SENATOR GIESSEL addressed slide 9, "2.b. Medical assistant with                                                                 
certification process":                                                                                                         
                                                                                                                                
     Section 4                                                                                                                  
     Certifying process defined in regulation by Board                                                                          
     Section 5                                                                                                                  
     Limits use of term "certified"                                                                                             
     Section 13                                                                                                                 
     Certification is equivalent to a license                                                                                   
                                                                                                                                
4:22:41 PM                                                                                                                    
                                                                                                                                
VICE CHAIR  WOOL suggested the  licensure is simply to  check the                                                               
PDMP and maybe  enters the new data.  He  suggested this would be                                                               
creating  another  licensed  person   who  would  need  training,                                                               
licensure, and a background check.                                                                                              
                                                                                                                                
SENATOR  GIESSEL corrected  that the  pharmacist enters  the data                                                               
into the PDMP.  She said the other statement was correct.                                                                       
                                                                                                                                
VICE  CHAIR WOOL  suggested a  physician could  remove themselves                                                               
from  vulnerability  to revocation  of  their  license by  having                                                               
another licensed person in the office.                                                                                          
                                                                                                                                
SENATOR   GIESSEL  answered   that   each   licensed  person   is                                                               
accountable for their actions under their license.                                                                              
                                                                                                                                
4:25:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  suggested  that  the  physician  would                                                               
still be held responsible [from a legal standpoint].                                                                            
                                                                                                                                
4:25:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BIRCH  asked how many applications  are rejected a                                                               
year.                                                                                                                           
                                                                                                                                
SENATOR GIESSEL deferred  to the department and  to the executive                                                               
secretary of the state medical board.                                                                                           
                                                                                                                                
REPRESENTATIVE  BIRCH said  there  are a  lot of  confidentiality                                                               
issues in  a medical office.   He asked whether the  proposal was                                                               
to certify everyone in a medical office.                                                                                        
                                                                                                                                
SENATOR  GIESSEL answered  that the  provision would  not include                                                               
the bookkeepers.                                                                                                                
                                                                                                                                
4:28:12 PM                                                                                                                    
                                                                                                                                
SENATOR GIESSEL  briefly addressed  "Urgent need  for SB  108" on                                                               
slide 10-11.                                                                                                                    
                                                                                                                                
     Efficient, expeditious and effective licensing of MDs                                                                      
        Legal clarity for delegation of "routine medical                                                                        
     duties" to unlicensed personnel (medical assistants)                                                                       
         More legally stringent delegated activities to                                                                         
     licensed entity, a medical assistant who has achieved                                                                      
     certification                                                                                                              
                                                                                                                                
     These changes needed this session                                                                                          
                                                                                                                                
     SUPPORT:                                                                                                                   
     State Medical Board (requested)                                                                                            
     Dept of Commerce                                                                                                           
     Alaska State Hospital and Nursing Home Association                                                                         
     Alaska State Medical Association                                                                                           
     Foundation Health Partners (Fairbanks)                                                                                     
                                                                                                                                
     No opposition                                                                                                              
                                                                                                                                
                                                                                                                                
4:30:35 PM                                                                                                                    
                                                                                                                                
FRED  PARADY,   Deputy  Commissioner,  Department   of  Commerce,                                                               
Community &  Economic Development (DCCED), answered  questions in                                                               
the  hearing on  SB 108.    He said  his department  had seen  an                                                               
increase in requests for licensure.    He said the department had                                                               
an  initiative  to  streamline   the  application  process.    He                                                               
indicated   the  issues   that  slowed   the  process   had  been                                                               
identified.    He added  that  only  around  ten percent  of  the                                                               
applications were complete when they  were sent it.  He described                                                               
changes to the online process that would be implemented.                                                                        
                                                                                                                                
4:34:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD  shared her  understanding  that                                                               
the  aim  was to  streamline  the  process.   She  asked  whether                                                               
licensure could be invoked when the coursework is completed.                                                                    
                                                                                                                                
MR. PARADY said he had not  heard that suggestion before but that                                                               
it seemed interesting.                                                                                                          
                                                                                                                                
REPRESENTATIVE  SULLIVAN-LEONARD shared  that  her hesitation  to                                                               
fully support the proposal was  due to the apparent "double duty"                                                               
in the process.                                                                                                                 
                                                                                                                                
MR. PARADY answered  that he thought the school would  be quite a                                                               
logical location for the online process.                                                                                        
                                                                                                                                
4:36:26 PM                                                                                                                    
                                                                                                                                
VICE  CHAIR WOOL  asked  whether the  licensure  was a  statutory                                                               
responsibility of the state licensing board.                                                                                    
                                                                                                                                
MR.  PARADY deferred  to  the  sponsor.   He  said  he thinks  it                                                               
recognizes  the limited  board meeting  schedule  and ability  to                                                               
address problem-free applications.                                                                                              
                                                                                                                                
4:37:33 PM                                                                                                                    
                                                                                                                                
DEBORA  STOVERN,   Executive  Secretary,  State   Medical  Board,                                                               
Division  of Corporations,  Businesses, and  Profession Licensing                                                               
(DCBPL), answered questions  in the hearing on SB 108.   She said                                                               
it is important  to note that the board is  allowed to grant that                                                               
limited  authority  to  the executive  secretary  under  specific                                                               
conditions.     She  added  the  any   application  with  adverse                                                               
information would still require the  board to review for approval                                                               
of temporary  or permanent licenses.  She said it  would continue                                                               
to require specific delegation by the board on an annual basis.                                                                 
                                                                                                                                
REPRESENTATIVE BIRCH asked how many applicants are rejected.                                                                    
                                                                                                                                
MS.  STOVERN  answered that  the  board  actually denies  only  a                                                               
couple of applications per year as  an outright denial.  She said                                                               
other applications  that have adverse information  or information                                                               
of concern would be asked to come into an in-person interview.                                                                  
                                                                                                                                
REPRESENTATIVE BIRCH said it seemed like a low-risk proposal.                                                                   
                                                                                                                                
4:42:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked what is  being licensed.  He asked                                                               
if someone has done an internship  and a residency, what is being                                                               
granted with licensure.                                                                                                         
                                                                                                                                
MS.  STOVERN  answered  the board  issues  licenses  to  practice                                                               
medicine in the state.                                                                                                          
                                                                                                                                
4:43:45 PM                                                                                                                    
                                                                                                                                
JEANNIE MONK, Alaska State Hospital  and Nursing Home Association                                                               
(ASHNA), testified  in support of SB  108.  She said  ASHNA is in                                                               
support of  fixing the statutory  deficiency to  allow physicians                                                               
to delegate the tasks.                                                                                                          
                                                                                                                                
VICE  CHAIR  WOOL asked  about  the  Certified Medical  Assistant                                                               
license.                                                                                                                        
                                                                                                                                
MS.  MONK answered  there are  some concerns  about creating  new                                                               
certified personnel,  but it was  not enough to  avoid supporting                                                               
the proposed bill.                                                                                                              
                                                                                                                                
VICE CHAIR  WOOL asked whether  the medical assistant  would have                                                               
to acquire a new range of skills.                                                                                               
                                                                                                                                
MS. MONK  answered that would  be left to  the board.   She added                                                               
that  she   thinks  other  states   do  have   certified  medical                                                               
assistants.                                                                                                                     
                                                                                                                                
4:46:38 PM                                                                                                                    
                                                                                                                                
VICE CHAIR WOOL opened public testimony on SB 108.                                                                              
                                                                                                                                
4:46:52 PM                                                                                                                    
                                                                                                                                
VICE CHAIR  WOOL asked whether  Certified Medical Assistant  is a                                                               
one-off certification.                                                                                                          
                                                                                                                                
SENATOR  GIESSEL  answered  that  the  position  requirement  may                                                               
expand.  She suggested  that if a person is going  to pay for the                                                               
licensing exam and fees, they may cost more to hire.                                                                            
                                                                                                                                
VICE CHAIR WOOL held over SB 108.                                                                                               
                                                                                                                                
             HB 136-MOTOR VEHICLE DEALER FRANCHISES                                                                         
                                                                                                                                
4:50:01 PM                                                                                                                    
                                                                                                                                
VICE CHAIR WOOL announced that  the final order of business would                                                               
be  HOUSE  BILL  NO.  136,  "An Act  relating  to  motor  vehicle                                                               
franchises, motor vehicle transactions, motor vehicle dealers,                                                                  
motor vehicle manufacturers, and motor vehicle distributors."                                                                   
                                                                                                                                
4:50:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MATT  CLAMAN, Alaska State  Legislation, presented                                                               
HB 136  as prime sponsor.   He paraphrased the  sponsor statement                                                               
to the  CS to HB 136,  Version R, [included on  committee packet}                                                               
which reads as follows [original punctuation provided]:                                                                         
                                                                                                                                
     House  Bill 136  updates Alaska  statutes dealing  with                                                                    
     franchise agreements between  Alaska's auto-dealers and                                                                    
     the  automobile  manufacturers  and  distributors.  The                                                                    
     need  for  a  change  in  franchise  agreements  became                                                                    
     apparent  after  the  2008 market  crash  when  General                                                                    
     Motors   and   Chrysler    terminated   roughly   2,000                                                                    
     dealerships.  As of  2016, Alaska  dealerships directly                                                                    
     or indirectly employed 6,876 people.  In the same year,                                                                    
     car sales accounted for 14.1%  of total retail sales in                                                                    
     Alaska. House Bill 136  recognizes the contributions of                                                                    
     auto-dealers and manufacturers  to Alaska's economy and                                                                    
     updates Alaska statute to update protections for both.                                                                     
                                                                                                                                
     The work draft   CS HB 136  Version R - is a product of                                                                    
     extensive  negotiations between  the Alaska  Automobile                                                                    
     Dealers  Association  and  the Alliance  of  Automobile                                                                    
     Manufacturers.  Both  groups  have worked  together  to                                                                    
     find solutions  that protect the consumer,  protect the                                                                    
     investments of Alaska's  auto-dealers, and maintain the                                                                    
     brands of the manufacturers.                                                                                               
                                                                                                                                
     House Bill  136 updates  statutes relating  to warranty                                                                    
     repair  work,  requiring  a   manufacture  to  pay  for                                                                    
     warranty work at a competitive  rate that is consistent                                                                    
     with  the retail  rate for  non-warranty work.  It also                                                                    
     outlines  the  requirements  for warranty  repairs  for                                                                    
     consumers  who  are  100  miles or  more  away  from  a                                                                    
     dealership.   The   bill    expands   upon   dealership                                                                    
     terminations. It  sets out good cause  for terminations                                                                    
     and  sets  out   the  manufacturers  and  auto-dealers'                                                                    
     financial  responsibilities  during  terminations.  The                                                                    
     bill  also   updates  the  provisions  and   terms  for                                                                    
     transferring or selling  a dealership. Manufactures may                                                                    
     not unreasonably  prevent the transfer of  a dealership                                                                    
     to  someone who  meets  their standards.  Manufacturers                                                                    
     may  use   the  right   of  first  refusal   except  in                                                                    
     circumstances  involving the  transfer of  a dealership                                                                    
     to  family members  or managing  employees owning  more                                                                    
     than 15%  of the  dealership. Lastly, the  bill defines                                                                    
     certain unfair practices.                                                                                                  
                                                                                                                                
     House  Bill  136  brings   the  auto  dealer  franchise                                                                    
     agreements in-line  with similar laws in  other states.                                                                    
     It is  the intent  that with  this legislation,  we may                                                                    
     provide  support  for  an industry  that  services  and                                                                    
     employs thousands of Alaskans.                                                                                             
                                                                                                                                
4:52:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CLAMAN addressed the sectional analysis, which                                                                   
reads as follows:                                                                                                               
                                                                                                                                
     Section 1                                                                                                                  
     Adds legislative intent language to uncodified law:                                                                        
     It is in  the public interest to  protect have warranty                                                                    
     service  for  new  motor  vehicles  and  maintain  fair                                                                    
     competition among auto manufacturers and auto dealers.                                                                     
                                                                                                                                
     Section 2                                                                                                                  
     Amends AS 45.25.010:                                                                                                       
     Applicability:  AS   45.25.020  -045.25.310   apply  to                                                                    
     franchise agreements  between manufacturers  and Alaska                                                                    
     auto dealers.                                                                                                              
                                                                                                                                
     Section 3                                                                                                                  
     Amends AS 45.25.110(a):                                                                                                    
     Manufacturers may  not terminate an auto  dealer unless                                                                    
     they have  complied with notice requirements  and shown                                                                    
     good  cause for  termination. Auto  dealers have  up to                                                                    
     120 days  to correct areas  out of compliance  with the                                                                    
     franchise agreement. The manufacturer may terminate a                                                                      
     franchise  if the  dealer has  systemically engaged  in                                                                    
     fraud.                                                                                                                     
                                                                                                                                
     Section 4                                                                                                                  
     Adds new subsection to AS 45.25.110:                                                                                       
     Good cause  to terminate  a franchise does  not include                                                                    
     the failure of an auto  dealer to meet sales or service                                                                    
     goals due to  factors beyond the control  of the dealer                                                                    
     including market  conditions or insufficient  supply of                                                                    
     new motor vehicles.                                                                                                        
                                                                                                                                
     Section 5                                                                                                                  
     Amends AS 45.25.140(a):                                                                                                    
     Updates   and  amends   the  manufacturers   repurchase                                                                    
     requirements   upon   termination    of   a   franchise                                                                    
     agreement.  The  manufacturer must  repurchase  current                                                                    
     year models  of new  motor vehicles, certain  new motor                                                                    
     vehicle models  from the  prior year,  parts, trademark                                                                    
     signs   and   equipment,   special   tools,   computer,                                                                    
     printers, and electronic hardware.                                                                                         
                                                                                                                                
     Section 6                                                                                                                  
     Amends AS 45.25.150(b)                                                                                                     
     If a  franchise termination  occurs, auto  dealers have                                                                    
     an  obligation to  mitigate damages  under a  lease and                                                                    
     mitigate   the    costs   of    facility   relocations,                                                                    
     alterations or remodels.                                                                                                   
                                                                                                                                
     Section 7                                                                                                                  
     Adds new subsection to AS 45.25.150:                                                                                       
     If a  franchise termination occurs,  manufacturers must                                                                    
     pay the  costs of relocation, alteration  or remodeling                                                                    
     of an auto dealers facilities  if they were required by                                                                    
     the manufacturer and were  completed within three years                                                                    
     of termination.                                                                                                            
                                                                                                                                
     Section 8                                                                                                                  
     Repeals and reenacts AS 45.25.160:                                                                                         
     This section  establishes a procedure for  the proposed                                                                    
     transfer of a dealership.                                                                                                  
        • Manufacturers may not prevent the sale of a                                                                           
          franchise to  a potential buyer who  is capable of                                                                    
          being  licensed as  an auto  dealer and  who meets                                                                    
          the manufacturers' standards.                                                                                         
        • Upon receipt of the notice to transfer the                                                                            
          franchise, manufacturers  have 30 days  to request                                                                    
          supplemental    information   after    which   the                                                                    
          manufacturer  has  75  days   to  give  notice  of                                                                    
          rejection of the transfer.                                                                                            
        • The manufacturer has the right of first refusal                                                                       
          to a  transfer with limitations.  The manufacturer                                                                    
          has the same notice  requirements for the right of                                                                    
          first  refusal  as  they have  for  rejecting  the                                                                    
          transfer   outright.   A  manufacturer   may   not                                                                    
          exercise  the  right  of   first  refusal  if  the                                                                    
          transfer of  the franchise is  to a  family member                                                                    
          or  a managerial  employee owning  15% or  more of                                                                    
          the  dealership. If  a manufacturer  exercises the                                                                    
          right  of  first  refusal, then  the  manufacturer                                                                    
          must  provide  the  auto   dealer  with  the  same                                                                    
          compensation  as offered  by  the proposed  buyer.                                                                    
          The  manufacturers must  also pay  the legal  fees                                                                    
          incurred for the preparation  of the void transfer                                                                    
          agreement.                                                                                                            
                                                                                                                                
     Section 9                                                                                                                  
     Amends AS 45.25.180(d)                                                                                                     
     Expands  the  factors  that  the  superior  court  must                                                                    
     consider  in a  lawsuit addressing  whether good  cause                                                                    
     exists to establish or relocate a dealership.                                                                              
                                                                                                                                
     Section 10                                                                                                                 
     Adds new subsection to AS 45.25.180                                                                                        
     Establishes  the   burden  of  proof  in   a  franchise                                                                    
     lawsuit.  A manufacturer  has the  burden  of proof  to                                                                    
     establish good  cause for establishing or  relocating a                                                                    
     dealership that the manufacturer  has proposed. An auto                                                                    
     dealer must establish good  cause for any establishment                                                                    
     or relocation that the auto dealer proposes.                                                                               
                                                                                                                                
     Section 11                                                                                                                 
     Amends AS 45.25.190                                                                                                        
     This section  updates the  statutory references  in the                                                                    
     arbitration section.                                                                                                       
                                                                                                                                
     Section 12                                                                                                                 
     Adds new sections to article 2 of AS 45.25                                                                                 
     This section addresses warranty  work and pay rates for                                                                    
     warranty work:                                                                                                             
          Sec  45.25.200: A  manufacturer must  pay an  auto                                                                    
          dealer for  all warranty  work if the  auto dealer                                                                    
          provides  documentation   of  the  need   for  the                                                                    
          repairs.  The auto  dealer must  submit the  claim                                                                    
          within  90 days  of the  completed warranty  work,                                                                    
          and a  manufacturer must approve the  claim within                                                                    
          30 days  of receipt.  If the  manufacturer rejects                                                                    
          the  claim  they  must  provide  notice  of  their                                                                    
          reasons to  the auto dealers, who  may correct the                                                                    
          issues   within  30   days  of   receipt  of   the                                                                    
          rejection. A manufacturer may  conduct an audit of                                                                    
          warranty  repairs performed,  which  must be  done                                                                    
          within a year of the  claim. Only one audit can be                                                                    
          performed per year.                                                                                                   
          Sec  45.25.210: A  manufacturer must  provide auto                                                                    
          dealers  with  a   schedule  of  compensation  for                                                                    
          warranty work. The rates may  not be less than the                                                                    
          rates that  the auto dealer charges  customers for                                                                    
          similar  retail work.  To establish  this warranty                                                                    
          rate, auto  dealers shall submit  100 sequentially                                                                    
          ordered  claims.  Rates  for  special  events  and                                                                    
          manufacturer specials  are not considered  in this                                                                    
          calculation.                                                                                                          
          Sec  45.25.220:   If  a  vehicle   needs  warranty                                                                    
          repairs and is located in a remote location, the                                                                      
          manufacturer  shall  make  reasonable  efforts  to                                                                    
          repair the vehicle in the  remote location. If the                                                                    
          repairs cannot  be made on site,  the manufacturer                                                                    
          may arrange, at no cost  to the owner, to ship the                                                                    
          vehicle  to  a  location   where  repairs  can  be                                                                    
          completed.  The  manufacturer is  responsible  for                                                                    
          returning  the  repaired  vehicle  to  the  remote                                                                    
          location.   The  manufacturer   may  direct   auto                                                                    
          dealers to refer customers  in remote locations to                                                                    
          the  manufacturer.  Auto dealers  may  subcontract                                                                    
          warranty  work  in   a  remote  location.  'Remote                                                                    
          location'  refers  to  a   location  that  is  not                                                                    
          accessible by  road or is  100 road miles  or more                                                                    
          from an auto dealer.                                                                                                  
          Sec  45.25.230: Manufacturers  shall provide  auto                                                                    
          dealers   with  specific   instructions  for   the                                                                    
          preparation  of new  vehicles  before delivery  to                                                                    
          buyers, compensation for  the preparation, and the                                                                    
          amount of time allowed for preparation.                                                                               
                                                                                                                                
     Section 13                                                                                                                 
     Repeals and reenacts AS 45.25.300                                                                                          
     Regarding unfair practices, manufacturers may not:                                                                         
        • Require or coerce auto dealers to relocate or                                                                         
          remodel  their  facilities   if  the  changes  are                                                                    
          unreasonable.                                                                                                         
        • Require auto dealers to purchase a set number of                                                                      
          certified  pre-owned  vehicles   or  lease  return                                                                    
          vehicles                                                                                                              
        • Refuse to deliver for sale a line or make of                                                                          
          vehicles that manufacturer makes.                                                                                     
        • Require auto dealers to purchase unreasonable                                                                         
          advertising displays or  an unreasonable number of                                                                    
          signs.                                                                                                                
        • Require auto dealers to accept vehicles, parts,                                                                       
          accessories or equipment  they did not voluntarily                                                                    
          order.                                                                                                                
        • Increase the price of a vehicle ordered by the                                                                        
          auto dealer between the time of order and the                                                                         
          time of payment.                                                                                                      
        • Require or coerce auto dealers to join an                                                                             
          advertising association or contribute to an                                                                           
          advertising campaign.                                                                                                 
                                                                                                                                
     Section 14                                                                                                                 
     Repeals and reenacts AS 45.25.990(19)                                                                                      
     Defines "terminate" for this chapter.                                                                                      
                                                                                                                                
     Section 15                                                                                                                 
     Adds new paragraph to AS 45.25.990                                                                                         
     Defines 'schedule of compensation" and "warranty work"                                                                     
     for this chapter.                                                                                                          
                                                                                                                                
     Section 16                                                                                                                 
     Repeals AS 45.25.320                                                                                                       
                                                                                                                                
4:58:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  whether the  bill represents  an                                                               
agreement between the two sides.                                                                                                
                                                                                                                                
REPRESENTATIVE CLAMAN  said the  dealers would present  what they                                                               
like about the  proposed bill and the manufacturers  would do the                                                               
same.                                                                                                                           
                                                                                                                                
4:59:46 PM                                                                                                                    
                                                                                                                                
GARY SLEEPER, Attorney, testified in support  of HB 136.  He said                                                               
the automobile  manufacturers present  franchise agreements  on a                                                               
"take  it or  leave it"  basis.   He  mentioned requirements  for                                                               
remodeling dealership  premises, payment for warranty  repairs on                                                               
manufacturing defects at  70 percent or less,  or termination due                                                               
to a failure  to meet sales goals.  He  explained that in Alaska,                                                               
the law governing  automobile franchises was adopted  in 2002 and                                                               
has not been updated.  He  highlighted Section 12 of the proposed                                                               
bill,  which  provides  for  manufactures  to  pay  for  warranty                                                               
repairs at  the same rate as  paid by consumers for  similar non-                                                               
warranty work.                                                                                                                  
                                                                                                                                
5:07:51 PM                                                                                                                    
                                                                                                                                
MR. SLEEPER  shared his appreciation for  Representative Claman's                                                               
work on the proposed bill.                                                                                                      
                                                                                                                                
5:09:08 PM                                                                                                                    
                                                                                                                                
VICE CHAIR WOOL opened public testimony on HB 136.                                                                              
                                                                                                                                
VICE CHAIR WOOL held over HB 136.                                                                                               
                                                                                                                                
5:09:39 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Labor and Commerce Standing Committee meeting was adjourned at                                                                  
5:10 p.m.                                                                                                                       

Document Name Date/Time Subjects
SB108 Power Point vsn I 3-29-18.pdf HL&C 4/2/2018 3:15:00 PM
SB 108
SB108 Supporting Document Flow Chart 2016.pdf HL&C 4/2/2018 3:15:00 PM
SB 108
SSSB108 Version U 1-18-18.PDF HL&C 4/2/2018 3:15:00 PM
SB 108
SB108 Supporting Document Backlog Stats DCCED 2-13-18.pdf HL&C 4/2/2018 3:15:00 PM
SB 108
CSSSSB108(FIN) Explanation of Changes 3-14-18.pdf HL&C 4/2/2018 3:15:00 PM
SB 108
CSSSSB108(FIN) Fiscal Note DCCED 3-14-18.PDF HL&C 4/2/2018 3:15:00 PM
SB 108
CSSSSB108(FIN) Sectional Analysis 3-14-18.pdf HL&C 4/2/2018 3:15:00 PM
SB 108
CSSSSB108(FIN) vsn I 3-14-18.pdf HL&C 4/2/2018 3:15:00 PM
SB 108
CSSSSB108(FIN) Sponsor Statement 3-13-18.pdf HL&C 4/2/2018 3:15:00 PM
SB 108
CSHB136 Ver. R 3.23.18.pdf HL&C 4/2/2018 3:15:00 PM
HB 136
HB136 Additional Documents-AADA Provisions and List of Alaska Businesses 3.6.17.pdf HL&C 4/2/2018 3:15:00 PM
HB 136
HB136 Additional Documents-AADA Why Franchise Laws 3.6.2017.pdf HL&C 4/2/2018 3:15:00 PM
HB 136
HB136 Additional Documents-NADA Alaska 2016 Annual Contribution 3.23.18.pdf HL&C 4/2/2018 3:15:00 PM
HB 136
CSHB136 Sectional Analysis 03.23.18.pdf HL&C 4/2/2018 3:15:00 PM
HB 136
HB136 Fiscal Note LAW-CIV 3.10.17.pdf HL&C 4/2/2018 3:15:00 PM
HB 136
SB155 Supporting Document - AMC Registry Fees - Lexology Article.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
CSHB136 Sponsor Statement 3.23.18.pdf HL&C 4/2/2018 3:15:00 PM
HB 136
SB155 Supporting Documents - State AMC Bond Requirements.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Version O.PDF HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Suuporting Document - AMC Framework - Lexology Article.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Version R.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 DCCED AMC Extension Request.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Explanation of Changes V.A to V.O.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Fical Note DCCED-CBPL 3.5.18.PDF HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Sectional Summary CSSB 155 (FIN).pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Sponsor Statement V.O.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Support Letters 3.31.18.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Amendment R.2.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Amendment R.3.pdf HL&C 4/2/2018 3:15:00 PM
SB 155
SB155 Amendment R.1.pdf HL&C 4/2/2018 3:15:00 PM
SB 155