Legislature(2003 - 2004)
05/05/2003 03:30 PM House L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
May 5, 2003
3:30 p.m.
MEMBERS PRESENT
Representative Tom Anderson, Chair
Representative Bob Lynn, Vice Chair
Representative Nancy Dahlstrom
Representative Carl Gatto
Representative Norman Rokeberg
Representative Harry Crawford
Representative David Guttenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 64(JUD)
"An Act relating to a requirement that certain consumer
reporting agencies provide individuals with certain information
without charge."
- WAIVED FROM COMMITTEE
HOUSE BILL NO. 270
"An Act relating to the licensure of pharmacists; and providing
for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 247
"An Act repealing statutes pertaining to the Alaska Science and
Technology Foundation and transferring money in the foundation's
endowment; repealing statutes relating to the BIDCO assistance
program; repealing statutes pertaining to the international
trade and business endowment and transferring money in the
international trade and business endowment; transferring
oversight administration of outstanding Alaska Science and
Technology Foundation loans and grants to the Alaska Industrial
Development and Export Authority; establishing an Alaska BIDCO
assistance program to be administered by the Department of
Community and Economic Development; making conforming
amendments; and providing for an effective date."
- MOVED HB 247 OUT OF COMMITTEE
HOUSE BILL NO. 272
"An Act relating to motor vehicle dealers."
- HEARD AND HELD
PREVIOUS ACTION
BILL: SB 64
SHORT TITLE:CREDIT INFORMATION
SPONSOR(S): SENATOR(S) FRENCH
Jrn-Date Jrn-Page Action
02/07/03 0133 (S) READ THE FIRST TIME -
REFERRALS
02/07/03 0133 (S) L&C, JUD
02/19/03 0228 (S) COSPONSOR(S): DAVIS
02/20/03 (S) L&C AT 1:30 PM BELTZ 211
02/20/03 (S) Heard & Held
02/20/03 (S) MINUTE(L&C)
04/03/03 (S) L&C AT 1:30 PM BELTZ 211
04/03/03 (S) Moved Out of Committee
04/03/03 (S) MINUTE(L&C)
04/03/03 (S) MINUTE(L&C)
04/04/03 0686 (S) L&C RPT 2DP 1NR 1AM
04/04/03 0686 (S) NR: BUNDE; DP: DAVIS, FRENCH;
04/04/03 0686 (S) AM: SEEKINS
04/04/03 0686 (S) FN1: ZERO(CED)
04/04/03 0686 (S) FN2: ZERO(LAW)
04/16/03 (S) JUD AT 1:00 PM BELTZ 211
04/16/03 (S) Moved CSSB 64(JUD) Out of
Committee -- Permanent Time
Change --
04/16/03 (S) MINUTE(JUD)
04/17/03 0890 (S) JUD RPT CS 5DP NEW TITLE
04/17/03 0890 (S) DP: SEEKINS, ELLIS, FRENCH,
04/17/03 0890 (S) THERRIAULT, OGAN
04/17/03 0890 (S) FN1: ZERO(CED)
04/17/03 0891 (S) FN2: ZERO(LAW)
04/22/03 0920 (S) RULES TO CALENDAR 4/22/2003
04/22/03 0920 (S) READ THE SECOND TIME
04/22/03 0921 (S) JUD CS ADOPTED UNAN CONSENT
04/22/03 0921 (S) COSPONSOR(S): STEVENS B,
THERRIAULT,
04/22/03 0921 (S) TAYLOR, COWDERY, GUESS,
DYSON,
04/22/03 0921 (S) STEVENS G, LINCOLN, WAGONER,
SEEKINS
04/22/03 0921 (S) OLSON
04/22/03 0921 (S) ADVANCED TO THIRD READING
UNAN CONSENT
04/22/03 0921 (S) READ THE THIRD TIME CSSB
64(JUD)
04/22/03 0921 (S) PASSED Y20 N-
04/22/03 0923 (S) TRANSMITTED TO (H)
04/22/03 0923 (S) VERSION: CSSB 64(JUD)
04/23/03 1065 (H) READ THE FIRST TIME -
REFERRALS
04/23/03 1065 (H) L&C, JUD
05/05/03 1327 (H) L&C REFERRAL WAIVED
05/05/03 1327 (H) REFERRED TO JUDICIARY
05/05/03 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 270
SHORT TITLE:PHARMACIST LICENSING
SPONSOR(S): REPRESENTATIVE(S)DAHLSTROM
Jrn-Date Jrn-Page Action
04/15/03 0986 (H) READ THE FIRST TIME -
REFERRALS
04/15/03 0986 (H) HES, L&C
04/24/03 (H) HES AT 3:00 PM CAPITOL 106
04/24/03 (H) Moved Out of Committee
MINUTE(HES)
04/25/03 1124 (H) HES RPT 4DP
04/25/03 1124 (H) DP: CISSNA, SEATON, WOLF,
WILSON
04/25/03 1124 (H) FN1: ZERO(CED)
05/05/03 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 247
SHORT TITLE:SCIENCE & TECH FOUNDATION/BIDCO/INT.TRADE
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
04/04/03 0784 (H) READ THE FIRST TIME -
REFERRALS
04/04/03 0784 (H) L&C, FIN
04/04/03 0785 (H) FN1: (CED)
04/04/03 0785 (H) GOVERNOR'S TRANSMITTAL LETTER
05/05/03 (H) L&C AT 3:15 PM CAPITOL 17
BILL: HB 272
SHORT TITLE:MOTOR VEHICLE DEALERS
SPONSOR(S): REPRESENTATIVE(S)WEYHRAUCH
Jrn-Date Jrn-Page Action
04/16/03 1009 (H) READ THE FIRST TIME -
REFERRALS
04/16/03 1009 (H) L&C, STA
04/28/03 (H) L&C AT 3:15 PM CAPITOL 17
04/28/03 (H) Scheduled But Not Heard
04/30/03 (H) L&C AT 3:15 PM CAPITOL 17
04/30/03 (H) Scheduled But Not Heard
05/01/03 (H) STA AT 8:00 AM CAPITOL 102
05/01/03 (H) Scheduled But Not Heard --
Recessed to Mon. 5/5 8:00 AM
05/05/03 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
REPRESENTATIVE NANCY DAHLSTROM
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as the sponsor of HB 270.
CINDY AUDET, Pharmacist
Juneau, Alaska
POSITION STATEMENT: Announced her support of the passage of HB
270.
EDGAR BLATCHFORD, Commissioner
Department of Community & Economic Development
Juneau, Alaska
POSITION STATEMENT: On behalf of the governor, presented HB
247, sponsored by the House Rules Standing Committee by request
of the governor.
TOM LAWSON, Director
Division of Administrative Services
Department of Community & Economic Development
Juneau, Alaska
POSITION STATEMENT: During discussion of HB 247, answered
questions.
LINDA SYLVESTER, Staff
to Representative Bruce Weyhrauch
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 272 on behalf of the sponsor,
Representative Weyhrauch.
LORRIE URBAN
North American Automobile and Trade Association
POSITION STATEMENT: Testified that Section 1 of HB 272 should
be deleted.
DARRELL FRIESS
Budget Car and Truck Sales
Budget Rent-A-Car
POSITION STATEMENT: Testified that Section 1 of HB 272 should
be deleted.
JIM ARPINO, General Manager
Affordable Used Cars
Fairbanks, Alaska
POSITION STATEMENT: Expressed concern with HB 272.
DAN SHERMAN
Variety Motors
Fairbanks, Alaska
POSITION STATEMENT: Testified on HB 272.
PHIL HAWS
Phil Haws Auto Outlet
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 272.
JOHN LYBERGER
Lyberger's Car & Truck Sales
Anchorage, Alaska
POSITION STATEMENT: Related the need to delete Section 1 of HB
272.
ACTION NARRATIVE
TAPE 03-47, SIDE A
Number 0001
CHAIR TOM ANDERSON called the House Labor and Commerce Standing
Committee meeting to order at 3:30 p.m. Representatives
Anderson, Dahlstrom, Gatto, Crawford, and Guttenberg were
present at the call to order. Representative Lynn and Rokeberg
arrived as the meeting was in progress.
SB 64 - CREDIT INFORMATION
CHAIR ANDERSON began by addressing CS FOR SENATE BILL NO.
64(JUD), "An Act relating to a requirement that certain consumer
reporting agencies provide individuals with certain information
without charge." He noted that SB 64 is substantively similar
to Representative Crawford's legislation, and therefore all
committee members have signed a letter requesting that SB 64 be
waived from the House Labor and Commerce Standing Committee.
HB 270 - PHARMACIST LICENSING
CHAIR ANDERSON announced that the first order of business would
be HOUSE BILL NO. 270, "An Act relating to the licensure of
pharmacists; and providing for an effective date."
Number 0100
REPRESENTATIVE NANCY DAHLSTROM, Alaska State Legislature, spoke
as the sponsor of HB 270. She explained that basically, the
Board of Pharmacy can't deny a license to an applicant with a
"checkered background," such as an individual with a felony,
drug conviction, or drug abuse problem. However, public safety
and the pharmacy profession are both compromised in this
situation. This right to deny a license was unintentionally
left out of the statute when originally drafted. This
legislation provides a fix by allowing the Board of Pharmacy to
deny a license to an applicant with a criminal background. She
informed the committee that all members involved agree with the
proposed changes to this statute. She noted that the committee
packet should include letters of support from the Board of
Pharmacy and the Alaska Pharmaceutical Association. She
concluded by urging the committee's support for HB 270.
Number 0226
CINDY AUDET, Pharmacist, announced her support of the passage of
HB 270. Adding the proposed language would provide the
authority the Board of Pharmacy needs to protect public safety
when reviewing applications.
REPRESENTATIVE CRAWFORD asked if there was actually a case that
precipitated this legislation.
MS. AUDET related her belief that there was a case, although she
specified that she isn't a member of the Board of Pharmacy. She
related her understanding that there was confusion with regard
to an application that the Board of Pharmacy felt needed to have
had more questions. It wasn't clear when more questions would
automatically occur and when they wouldn't.
Number 0323
REPRESENTATIVE DAHLSTROM agreed that there was an issue that
could have potentially become a serious problem, and therefore
this legislation is preventative.
REPRESENTATIVE GATTO asked if, prior to the passage of HB 270,
an individual could've used the application procedure
fraudulently to obtain a license, although the board may have
felt the individual was fraudulent.
MS. AUDET answered that the way the language read it could've
happened as described above, although she didn't believe such a
situation has occurred.
REPRESENTATIVE GATTO asked if a situation ever arose in which
the Board of Pharmacy felt an applicant was fraudulent and
didn't give the applicant a license, and the matter was
challenged.
MS. AUDET related her belief that it was the other way around.
She recalled that someone pointed out that the board was being
more judicious [with the review process] than the statute
allowed.
Number 0402
REPRESENTATIVE GUTTENBERG asked, "Do you know if there are any
people that would become covered under ... this change of the
bill, that people would be looking to ... have their license
removed?"
MS. AUDET pointed out that the application language for licensed
pharmacists has always existed. Therefore, she said she didn't
know of any threat this proposal would create for any of the
current licensees. In response to Representative Gatto, Ms.
Audet related her belief that the existing regulations have
existed 10 years or less because the last revision was in the
early 1990s.
Number 0476
MARGARET SODEN, President, Board of Pharmacy, informed the
committee that a couple of years of ago there was an applicant
seeking licensure in Alaska and the board wanted to deny that
license. However, the board discovered that it didn't really
have the authority to do so. The board was lucky because the
applicant had lied on the application and thus the board didn't
license the applicant based on false application. After the
aforementioned case, the process to add the language "deny a
license" to the board's statute began. She confirmed that in
the 1990s the statutes were written and that authority wasn't
given to the board. Therefore, the Board of Pharmacy wants this
language added. Currently, there could be a situation in which
a felon or an individual with a revoked license in another state
would have to be granted a license as long as the applicant was
truthful on his/her application. In such a situation, the board
would have to take the applicant's license through a
disciplinary sanction process. Ms. Soden pointed out that the
Board of Pharmacy is only requesting that it be able to deny a
license of an applicant based on the same criteria under which
the board can sanction a license. She highlighted that the
prolonged period for disciplinary sanctions is problematic
because a person could continue to have a license and practice
while the disciplinary sanctions are in place.
CHAIR ANDERSON, upon determining no one else wished to testify,
announced that public testimony was closed.
REPRESENTATIVE CRAWFORD related his understanding that Ms. Soden
was saying that the legislation would speed up the process of
taking a license.
REPRESENTATIVE DAHLSTROM said she understood that the language
would allow the board to move more succinctly through the
process of reviewing an application and informing the applicant
that he/she doesn't qualify for a license in this state.
However, under the [current environment] the applicant could be
hired or have their own business and a lengthy process [to take
the license] would ensue.
CHAIR ANDERSON directed attention to page 1, line 4, and
explained that the language allows the denial of a license at
the onset of the application.
REPRESENTATIVE GUTTENBERG, in relation to the language on page
1, line 4, asked if the applicant would receive a hearing.
CHAIR ANDERSON reiterated that the new language specifies that
the board can initially deny an applicant or can do so after a
hearing, which is the existing law. Therefore, allowing the
denial at the beginning of the application process would
expedite the process.
MS. SODEN noted her agreement.
Number 0875
REPRESENTATIVE CRAWFORD asked if those applicants who are denied
during the initial stages would have an opportunity to appeal.
MS. SODEN replied yes, and clarified that the applicant would
have to show why he/she should be granted a license. She noted
that the applicant would have the ability to appeal.
REPRESENTATIVE GUTTENBERG asked if the statute that discusses
having a hearing refers to an "applicant" as compared to an
individual already holding a license.
MS. SODEN answered that under the disciplinary regulations, the
board can sanction the license of an individual who has already
registered in this state. She clarified that the Board of
Pharmacy already has the ability to sanction an individual's
existing license, but doesn't have the ability to deny an
applicant. Therefore, the applicant would have to receive
his/her license as long as there was no falsification of the
application.
REPRESENTATIVE GUTTENBERG turned to the statutes for a hearing
and asked if there is reference to an individual who has already
had his/her license denied or is it just those who already have
a license that the board wants to address.
REPRESENTATIVE CRAWFORD asked if the language "applicant" would
have to be added to the hearing statute as well.
MS. SODEN said that the Division of Occupational Licensing
regulation specialists actually developed the language.
Therefore, she assumed that the board has the authority [to
provide a hearing process for an applicant] without changing any
other language.
Number 1064
REPRESENTATIVE GUTTENBERG commented that he didn't want to pass
this and find out that an individual who has had his/her
application denied has no rights for a hearing because of the
lack of a statutory reference for an applicant to have a
hearing.
CHAIR ANDERSON said that he guessed that there is always
recourse, the ability to appeal, and the possibility for a
hearing.
Number 1144
ROBIN PHILLIPS, Staff to Representative Dahlstrom, Alaska State
Legislature, clarified that the applicant will have an appeal
process while the licensee has a hearing process.
REPRESENTATIVE GUTTENBERG said that he wanted to be sure that
this legislation isn't [inadvertently] denying the ability of an
applicant to have a hearing. He asked if Ms. Phillips actually
reviewed [the statutes] to know that it's consistent.
MS. PHILLIPS replied no. However, she explained that an
applicant wouldn't have a hearing because an applicant isn't a
licensee. However, the applicant can appeal the process. In a
sense, the aforementioned is the applicant's hearing.
REPRESENTATIVE GUTTENBERG asked if the appeal process statutes
refer to an applicant.
MS. SODEN related her belief that this was all covered under the
Administrative Procedures [Act (APA)] for licensing regardless
of the profession.
CHAIR ANDERSON related his belief that this is appealable.
MS. SODEN pointed out that under the Board of Pharmacy's
section, AS 08.80.050 specifies that the board shall comply with
the APA. In further response to Chair Anderson, Ms. Soden
explained that a graduate from pharmacological school would have
to have a certain number of hours internship, be a graduate from
an accredited college, answer background questions, and submit a
license application. The Board of Pharmacy would review the
applicant's license information. Occasionally, there are times
when an individual has something "bad" in his/her background and
currently the board can't deny the individual the license if
this applicant told the truth. The individual would receive the
license and then the board would take action against the
individual. Until the denial happens, the individual could be
working.
REPRESENTATIVE CRAWFORD surmised that everyone agrees that to
deny a license to an applicant is appropriate. However, the
question is whether the term "applicant" needs to be added to
the statute referring to the appeal process.
CHAIR ANDERSON announced that HB 270 would be held over in order
to determine whether the statutes are consistent with the
language being proposed.
REPRESENTATIVE ROKEBERG requested having someone from the
Division of Occupational Licensing testify as to why this
legislation is necessary because sometimes there is boilerplate
licensing procedures [in division statutes that] allow for
denial.
REPRESENTATIVE DAHLSTROM agreed to research these questions.
[HB 270 was held over.]
HB 247 - SCIENCE & TECH FOUNDATION/BIDCO/INT.TRADE
CHAIR ANDERSON announced that the next order of business would
be HOUSE BILL NO. 247, "An Act repealing statutes pertaining to
the Alaska Science and Technology Foundation and transferring
money in the foundation's endowment; repealing statutes relating
to the BIDCO assistance program; repealing statutes pertaining
to the international trade and business endowment and
transferring money in the international trade and business
endowment; transferring oversight administration of outstanding
Alaska Science and Technology Foundation loans and grants to the
Alaska Industrial Development and Export Authority; establishing
an Alaska BIDCO assistance program to be administered by the
Department of Community and Economic Development; making
conforming amendments; and providing for an effective date."
Number 1630
EDGAR BLATCHFORD, Commissioner, Department of Community &
Economic Development (DCED), paraphrased from his written
testimony, which read:
The bill repeals the existing AS 37.17 statutes that
create the Alaska Science and Technology Foundation
(ASTF) and programs it administers: foundation grants
and the BIDCO (Business and Industrial Development
Corporation) assistance program.
The statute creating the international trade and business
endowment in the ASTF is also repealed.
Subject to appropriation, the bill provides for the
transfer to the general fund of the money remaining in
the ASTF [foundation] fund and in the international trade
and business endowment.
Oversight administration of existing ASTF grants and
BIDCO assistance program loans and other financial
assistance would be transferred to the Alaska Industrial
[Development] and Export Authority (AIDEA).
A new BIDCO assistance program, very similar to the
repealed BIDCO assistance program is established and
administered by the Department of Community and Economic
Development (DCED).
ASTF was created in 1988 with an endowment of more than
$100 million to support grants for technology projects,
knowledge projects, small business innovation research
bridging grants and direct grants to teachers. Through
its endowment, ASTF has generated about $126 million in
income for distribution. Between 1988 and 2002, one half
the endowment income, $63 million, has been appropriated
and spent for "non-ASTF purposes":
$35 million for University of Alaska operations,
Alaska Aerospace Development Corporation (AADC)
operations, and Trade and Development operations;
$17 million was appropriated to the state general
fund; and
$11 million was used to match federal funding for
construction of AADC's $39 million Kodiak Launch
Complex.
The remaining $63 million was distributed by the ASTF
board over the last 14 years:
$25 million in technology project grants;
$10 million in knowledge project grants;
$8 million to partners;
$5 million to wiring K-12 schools and science museums
or internet connectivity;
$2 million in K-12 science and math teacher grants;
Contributions to the principal of the ASTF endowment
(less than $500,000); and
$13 million in ASTF operations.
In mid-March the Legislature passed and the Governor
signed into law a supplemental appropriation reducing
ASTF FY 2003 operations to amounts spent and obligated to
date and included intent language to ASTF to wind down
operations by May 15, 2003. The Governor's FY04 budget
provided no funding for ASTF.
Thank you for the opportunity to speak before you today
and I urge you to support passage of HB 247.
REPRESENTATIVE ROKEBERG asked if HB 247 needs to pass in order
for the governor to access the corpus of ASTF's endowment.
COMMISSIONER BLATCHFORD replied no.
Number 1775
TOM LAWSON, Director, Division of Administrative Services,
Department of Community & Economic Development, in response to
Representative Rokeberg, specified that the BIDCO program has
been used once. There is one licensed BIDCO in the state, the
Alaska Growth Capital Program, which will remain in business.
REPRESENTATIVE GATTO turned to the fiscal notes and mentioned
that there would've been funds appropriated for the current year
as well as funds that some of these ventures would've earned in
future years. Therefore, he asked if the future funds that will
never be realized are accounted for in the fiscal notes.
MR. LAWSON explained that this legislation sets up AIDEA to
monitor any payments that are due to the state. One of the
categories of grants is the technology grant, for which there
were up to $25 million of grants that were granted. All of the
technology grants have a repayment clause, and therefore the
purpose of the staff in AIDEA would be to ensure that the state
receives its repayments. However, Mr. Lawson specified that
there will be no new grant funds issued at the end of FY03.
REPRESENTATIVE GATTO restated his question as follows: "Is the
fiscal note understated in that there is additional funding,
beyond the current, that we will see as a revenue source; and
therefore, the fiscal note is saying look at how much money we
get by eliminating the program and yet there's even more that I
don't know if it's been accounted for."
MR. LAWSON answered that [the department] isn't sure how much
money will return because part of that relates to the health of
the company that received the grant. The state felt it was
important to have someone monitor the repayments in order to
ensure that when repayments are due, they are made.
REPRESENTATIVE GATTO asked if this revenue stream [of
repayments] was accounted for in the fiscal note.
MR. LAWSON responded that the fiscal note doesn't account for
the amount of revenue that's coming in [through repayments].
The fiscal note specifies that around $300,000 has come in thus
far and more is anticipated.
Number 1954
REPRESENTATIVE GUTTENBERG related his understanding that the
governor's intent is to take ASTF and the funds in it and HB 247
establishes a vehicle to monitor the funds and the returns. He
inquired as to why ASTF is being eliminated from statute [rather
than just not funding it].
COMMISSIONER BLATCHFORD said that "we" didn't consider that
question. He related his belief that this legislation appears
to be much cleaner.
REPRESENTATIVE CRAWFORD remarked that he didn't understand
eliminating endowments. He pointed out that ASTF has generated
over $126 million in income over the $100 million endowment that
was used to establish the program. He likened this to the
plantations where he grew up; people would do various things
with the earnings from the plantation but would never sell the
land. This [legislation] is like selling the land, he said. He
questioned why one wouldn't place the funds in the endowment
somewhere else to generate income.
Number 2058
COMMISSIONER BLATCHFORD replied, "The state needs the money."
After reviewing all the projects in depth, it was decided that
ASTF wasn't following the intent behind its creation.
Therefore, it was decided it should wind down. Commissioner
Blatchford indicated his disagreement with Representative
Crawford's analogy.
REPRESENTATIVE GATTO asked if it was Commissioner Blatchford's
decision to dissolve ASTF.
COMMISSIONER BLATCHFORD answered that it was a collective
decision.
REPRESENTATIVE GATTO specified that he was trying to determine
whether Commissioner Blatchford was directed to do this or was
actually a part of it.
CHAIR ANDERSON interjected that it's difficult for a
commissioner to say that he isn't part of such a decision
because the governor is his boss. Conversely, the
commissioner's have to counsel the governor.
Number 2115
REPRESENTATIVE CRAWFORD acknowledged the need for money, but
highlighted that ASTF has generated income that far exceeds the
original investment. Therefore, he said he didn't understand
why [the entire endowment] would be taken in one year and thus
in the coming years the state wouldn't have [the revenue] on
which to fall back. If there is dissatisfaction with regard to
where the earnings are going, that can be changed, he pointed
out.
REPRESENTATIVE GUTTENBERG noted that over the past couple of
days some in the legislature had the opportunity to listen to
Red Boucher discuss e-commerce. According to Mr. Boucher,
science and technology could be a vehicle for e-commerce.
Therefore, he asked if there is any other vehicle to e-commerce
and economic development besides this legislative process.
COMMISSIONER BLATCHFORD pointed out that within DECD is the
Division of Community Advocacy, which he views as an incubator
for entrepreneurial ideas. This division works closely with all
of the communities in Alaska and many suggestions regarding how
to work with them to seize opportunities in the private and
public sector are obtained. Furthermore, the University of
Alaska system [provides] greater opportunities in this arena.
Number 2355
REPRESENTATIVE CRAWFORD asked if Commissioner Blatchford is
saying that DCED would be able to provide matching funds similar
to those that made the Kodiak launch facility possible.
COMMISSIONER BLATCHFORD said that the department has to be
creative in working with local communities and the federal
government.
TAPE 03-47, SIDE B
COMMISSIONER BLATCHFORD continued by saying that the department
would work closely with the almost two dozen agencies that have
impact on funding Alaskan projects. He indicated that in a
situation in which there was an opportunity for projects with
requirements for a match, the state would work closely with the
unorganized boroughs to try to match it.
Number 2340
CHAIR ANDERSON, upon determining that no one else wished to
testify, closed the public testimony.
REPRESENTATIVE GUTTENBERG reiterated his concern with regard to
eliminating ASTF from the statute completely because often times
there is the need for a vehicle.
REPRESENTATIVE DAHLSTROM moved to report HB 247 out of committee
with individual recommendations and the accompanying zero fiscal
note.
REPRESENTATIVE CRAWFORD objected and said, "I do believe that
even if we were to strip the money away from this, it doesn't do
us any good to do away with the vehicle if we are able to use it
after we get our fiscal policy in order."
REPRESENTATIVE GUTTENBERG echoed his earlier comments regarding
his concern with completely eliminating ASTF from the statutes.
REPRESENTATIVE ROKEBERG commented, "It's a shame we have this
bill; it was a great idea for all the reasons of the technology,
but it didn't work."
REPRESENTATIVE CRAWFORD suggested that then ASTF should be fixed
so that it does work because he believes some of the things ASTF
did were good things.
Number 2144
A roll call vote was taken. Representatives Lynn, Dahlstrom,
Gatto, and Rokeberg voted in favor of reporting HB 247 from
committee. Representatives Guttenberg, Crawford, and Anderson
voted against it. Therefore, HB 247 was reported out of the
House Labor and Commerce Standing Committee by a vote of 4-3.
The committee took an at-ease from 4:25 p.m. to 4:26 p.m.
HB 272 - MOTOR VEHICLE DEALERS
CHAIR ANDERSON announced that the final order of business would
be HOUSE BILL NO. 272, "An Act relating to motor vehicle
dealers."
LINDA SYLVESTER, Staff to Representative Bruce Weyhrauch, Alaska
State Legislature, informed the committee that HB 272 is a
follow-up to HB 182, omnibus legislation [offered in the Twenty-
Second Alaska State Legislature] that dealt with the
relationship between manufacturers of motor vehicles and dealers
and franchise owners in the state. Section 2 of HB 272
addresses semantic changes to HB 182. However, Section 1 is
more controversial as it relates to SB 105, which passed in
1993. Senate Bill 105 addressed consumer protection with regard
to how brokers of automobiles are allowed to operate in the
state. Two provisions in the statute [created by SB 105] are
unenforceable, as Ed Sniffen, Assistant Attorney General, will
testify.
MS. SYLVESTER explained that basically Section 1 will prohibit a
dealer from selling or offering to sell a motor vehicle as new
unless the vehicle retains the manufacturer's certificate of
origin. Furthermore, Section 1 prohibits the dealer from
selling or offering to sell the vehicle as a current model motor
vehicle unless the following two conditions are met: the dealer
has a current sales and service agreement with the manufacturer
or the vehicle is a current model used vehicle received as a
trade-in in the normal course of business.
MS. SYLVESTER noted that Mr. Sniffen drafted HB 272. She
invited the committee to assist in fixing Section 1(b)(2)
because it inadvertently impacts a common practice of rental car
companies. She explained that rental car companies commonly
purchase new vehicles and turn them over in under a year.
Therefore, HB 272 would unintentionally put those rental car
companies out of business. The legislation is intended to
address vehicles intended for the Canadian market, whether
manufactured in the U.S. or Canada. There is a practice of
these vehicles being purchased in Canada and being sold in the
U.S. Because of the economic conditions in Canada, the
manufacturers sell these cars in Canada at a discounted price.
The manufacturers have tried to stem the tide of these vehicles
entering the U.S., but they have achieved mixed success.
Number 1854
CLYDE (ED) SNIFFEN, JR., Assistant Attorney General, Fair
Business Practices Section, Civil Division (Anchorage),
Department of Law, offered to listen to testimony and return for
questions.
Number 1826
LORRIE URBAN, North American Automobile and Trade Association,
informed the committee that she represents independent importers
and exporters of motor vehicles, specifically Canadian motor
vehicles to the American market. Mr. Urban requested that
Section 1 be removed from HB 272 because it is harmful to the
interests of the consumer. Furthermore, it is an illegal trade
restriction that exposes the state government to liability under
the North American Free Trade Agreement. Section 1 was crafted
solely for the benefit of franchised dealers who are trying to
prevent competition from independent dealers who import and sell
Canadian automobiles. These automobiles meet the U.S. safety
and emission standards, the only difference is the price. She
pointed out that independent dealers are able to sell these
automobiles to consumers for more competitive prices. Laws
prohibiting the sale of current model year vehicles by
nonfranchise independent dealers is ridiculous, she said.
Furthermore, such action provides no benefit to commerce in
Alaska. Ms. Urban said she didn't believe it's appropriate for
the government to eliminate businesses and companies that are
able to supply identical goods at lower prices. She estimated
that there are approximately 351 auto dealers and 31 franchise
dealers in this state. Many of these dealers, including
franchise dealers, do sell Canadian automobiles to consumers.
MS. URBAN acknowledged that recently, automobile manufacturers
have increased their interest in preventing imports of Canadian
automobiles into the U.S. However, this is legal trade; the
[U.S.] Department of Transportation licenses registered
importers to import Canadian automobiles into the U.S.
Basically, the only modification necessary to an automobile
being imported from Canada is the odometer. Although
[automobile manufacturers] are trying to prevent the sale of
Canadian automobiles to U.S. consumers, regulatory constraints
have been eliminated to allow these automobiles to enter the
U.S. from independent dealers. Ms. Urban noted that currently
there is a multi-billion dollar lawsuit against manufacturers
and dealers which alleges that many manufacturers are colluding
with each other to stop competition from independents who sell
Canadian automobiles. Furthermore, the Federal Trade Commission
(FTC) is investigating the anti-trust implications for consumers
and the committee packet should include documents that she
provided on this matter. Ms. Urban expressed the need to remove
Section 1 from HB 272 in order to eliminate the state from being
part of the scheme.
Number 1577
DARRELL FRIESS, Budget Car and Truck Sales, Budget Rent-A-Car,
announced his agreement with Ms. Urban in regard to the need to
remove Section 1 entirely. As a whole tourism and local
consumers will be harmed if they aren't able to purchase
vehicles at lower prices that are offered through local rental
car companies liquidating through local auctions when those
automobiles are purchased by independent dealers.
Number 1508
JIM ARPINO, General Manager, Affordable Used Cars, said that HB
272, as currently written, isn't good for the customer. The
issue of rental car sales is one of the reasons why the
legislation isn't good for the customer as already addressed.
The normal course of the rental car business is not only to take
automobiles in on trade but also to purchase vehicles through
various avenues, such as auctions. Mr. Arpino stated that HB
272 would essentially give franchise dealers a monopoly on those
vehicles for approximately 15-16 months. The aforementioned
doesn't help fair trade in the state. He predicted that most
likely there will be discussion [from those supporting HB 272]
regarding the laws in the State of Washington.
Number 1351
DAN SHERMAN, Variety Motors, pointed out that both franchise
dealers and used [car dealers] can purchase at these auctions.
"So, it really doesn't effect anyone unfairly," he said. Mr.
Sherman informed the committee that when this legislation was
drafted no independent automobile dealers were contacted.
PHIL HAWS, Phil Haws Auto Outlet, informed the committee that he
worked in new automobile care [dealers] for years and it seems
like that group is trying to corner the market. Mr. Haws said
that he didn't understand [this legislation] because a used car
is a used car.
Number 1219
JOHN LYBERGER, Lyberger's Car & Truck Sales, began by informing
the committee that he sells a number of Canadian vehicles and,
as was noted earlier, there is almost no difference between
Canadian and American vehicles. Mr. Lyberger related his belief
that the rebates, hold backs, advertising, and 0 percent
interest deals allow all dealers to compete. He expressed
concerns with regard to Section 1 and suggested that it be
deleted.
CHAIR ANDERSON announced that HB 272 would be held over.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:50 p.m.
| Document Name | Date/Time | Subjects |
|---|