03/22/2024 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB378 | |
| SB147 | |
| HB55 | |
| HB150 | |
| HB189 | |
| HB233 | |
| HB189 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 378 | TELECONFERENCED | |
| += | HB 189 | TELECONFERENCED | |
| += | HB 233 | TELECONFERENCED | |
| += | HB 204 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | SB 147 | TELECONFERENCED | |
| + | HB 55 | TELECONFERENCED | |
| += | HB 150 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 22, 2024
3:15 p.m.
MEMBERS PRESENT
Representative Jesse Sumner, Chair
Representative Justin Ruffridge, Vice Chair
Representative Mike Prax
Representative Dan Saddler
Representative Stanley Wright
Representative Ashley Carrick
Representative Zack Fields
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 378
"An Act relating to theft; relating to organized retail theft;
establishing a statewide marketplace facilitator sales tax;
establishing the organized retail theft fund in the general
fund; and providing for an effective date."
- HEARD & HELD
CS FOR SENATE BILL NO. 147(L&C)
"An Act relating to reemployment rights and benefits; and
providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 55
"An Act relating to allocations of funding for the Alaska
Workforce Investment Board; and providing for an effective
date."
- HEARD & HELD
HOUSE BILL NO. 150
"An Act relating to residential building codes; relating to
construction contractors and residential contractor
endorsements; and providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 189
"An Act relating to the sale of alcohol; and providing for an
effective date."
- MOVED CSHB 189(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 233
"An Act relating to rates and time allowances for motor vehicle
warranty work."
- HEARD & HELD
HOUSE BILL NO. 204
"An Act exempting certain employees from overtime pay
requirements; and providing for an effective date."
- BILL HEARING CANCELED
PREVIOUS COMMITTEE ACTION
BILL: HB 378
SHORT TITLE: ORG. RETAIL THEFT/FUND;MKTPLACE SALES TAX
SPONSOR(s): REPRESENTATIVE(s) FIELDS
02/20/24 (H) READ THE FIRST TIME - REFERRALS
02/20/24 (H) L&C, JUD, FIN
03/13/24 (H) L&C AT 3:15 PM BARNES 124
03/13/24 (H) <Bill Hearing Rescheduled to 03/15/24>
03/15/24 (H) L&C AT 3:15 PM BARNES 124
03/15/24 (H) -- MEETING CANCELED --
03/22/24 (H) L&C AT 3:15 PM BARNES 124
BILL: SB 147
SHORT TITLE: REEMPLOYMENT BENEFITS
SPONSOR(s): SENATOR(s) KAUFMAN
05/11/23 (S) READ THE FIRST TIME - REFERRALS
05/11/23 (S) L&C, FIN
02/14/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/14/24 (S) Heard & Held
02/14/24 (S) MINUTE(L&C)
02/19/24 (S) FIN REFERRAL REMOVED
02/21/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/21/24 (S) Moved CSSB 147(L&C) Out of Committee
02/21/24 (S) MINUTE(L&C)
02/23/24 (S) L&C RPT CS 2DP 2NR TECHNICAL TITLE
CHANGE
02/23/24 (S) DP: BJORKMAN, GRAY-JACKSON
02/23/24 (S) NR: DUNBAR, MERRICK
03/06/24 (S) TRANSMITTED TO (H)
03/06/24 (S) VERSION: CSSB 147(L&C)
03/11/24 (H) READ THE FIRST TIME - REFERRALS
03/11/24 (H) L&C
03/20/24 (H) L&C AT 3:15 PM BARNES 124
03/20/24 (H) <Bill Hearing Rescheduled to 03/22/24>
03/22/24 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 55
SHORT TITLE: EXTEND WORKFORCE INVEST BOARD ALLOCATIONS
SPONSOR(s): REPRESENTATIVE(s) CARRICK
02/01/23 (H) READ THE FIRST TIME - REFERRALS
02/01/23 (H) EDC, L&C, FIN
01/31/24 (H) EDC AT 8:00 AM DAVIS 106
01/31/24 (H) Heard & Held
01/31/24 (H) MINUTE(EDC)
02/12/24 (H) EDC AT 8:00 AM DAVIS 106
02/12/24 (H) Heard & Held
02/12/24 (H) MINUTE(EDC)
02/14/24 (H) EDC AT 8:00 AM DAVIS 106
02/14/24 (H) Scheduled but Not Heard
03/13/24 (H) EDC AT 8:00 AM DAVIS 106
03/13/24 (H) Heard & Held
03/13/24 (H) MINUTE(EDC)
03/15/24 (H) EDC AT 8:00 AM DAVIS 106
03/15/24 (H) Moved CSHB 55(EDC) Out of Committee
03/15/24 (H) MINUTE(EDC)
03/20/24 (H) EDC RPT CS(EDC) NEW TITLE 2DP 2NR 3AM
03/20/24 (H) DP: MCCORMICK, ALLARD
03/20/24 (H) NR: MCKAY, PRAX
03/20/24 (H) AM: HIMSCHOOT, STORY, RUFFRIDGE
03/20/24 (H) L&C AT 3:15 PM BARNES 124
03/20/24 (H) Scheduled but Not Heard
03/21/24 (H) L&C AT 10:30 AM BARNES 124
03/21/24 (H) -- MEETING CANCELED --
03/22/24 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 150
SHORT TITLE: RESIDENTIAL BUILDING CODE
SPONSOR(s): REPRESENTATIVE(s) SUMNER
03/31/23 (H) READ THE FIRST TIME - REFERRALS
03/31/23 (H) L&C
04/14/23 (H) L&C AT 3:15 PM BARNES 124
04/14/23 (H) <Bill Hearing Canceled>
04/19/23 (H) L&C AT 3:15 PM BARNES 124
04/19/23 (H) -- MEETING CANCELED --
04/21/23 (H) L&C AT 3:15 PM BARNES 124
04/21/23 (H) <Bill Hearing Canceled>
04/26/23 (H) L&C AT 3:15 PM BARNES 124
04/26/23 (H) Heard & Held
04/26/23 (H) MINUTE(L&C)
03/11/24 (H) L&C AT 3:15 PM BARNES 124
03/11/24 (H) Scheduled but Not Heard
03/18/24 (H) L&C AT 3:15 PM BARNES 124
03/18/24 (H) -- MEETING CANCELED --
03/20/24 (H) L&C AT 3:15 PM BARNES 124
03/20/24 (H) Scheduled but Not Heard
03/21/24 (H) L&C AT 10:30 AM BARNES 124
03/21/24 (H) -- MEETING CANCELED --
03/22/24 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 189
SHORT TITLE: SALE OF ALCOHOL BY UNDER 21
SPONSOR(s): LABOR & COMMERCE
05/03/23 (H) READ THE FIRST TIME - REFERRALS
05/03/23 (H) L&C
03/06/24 (H) L&C AT 3:15 PM BARNES 124
03/06/24 (H) <Bill Hearing Rescheduled to 03/08/24>
03/08/24 (H) L&C AT 3:15 PM BARNES 124
03/08/24 (H) Scheduled but Not Heard
03/11/24 (H) L&C AT 3:15 PM BARNES 124
03/11/24 (H) Heard & Held
03/11/24 (H) MINUTE(L&C)
03/22/24 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 233
SHORT TITLE: RATES: MOTOR VEHICLE WARRANTY WORK
SPONSOR(s): TOMASZEWSKI
01/16/24 (H) PREFILE RELEASED 1/8/24
01/16/24 (H) READ THE FIRST TIME - REFERRALS
01/16/24 (H) L&C, JUD
03/06/24 (H) L&C AT 3:15 PM BARNES 124
03/06/24 (H) Heard & Held
03/06/24 (H) MINUTE(L&C)
03/15/24 (H) L&C AT 3:15 PM BARNES 124
03/15/24 (H) -- MEETING CANCELED --
03/22/24 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
JOHN STASER, Owner
Mountain View Sports
Anchorage, Alaska
POSITION STATEMENT: Gave invited testimony in support of HB
378.
SENATOR JAMES KAUFMAN
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented CSSB 147(L&C).
CHUCK COLLINS, Director
Division of Workers' Compensation
Department of Labor & Workforce Development
Juneau, Alaska
POSITION STATEMENT: Gave invited testimony during the hearing
on CSSB 147.
STEWART RELAY, Staff
Representative Ashley Carrick
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Gave an explanation of changes in CSHB
55(L&C) from Version A to Version R, on behalf of Representative
Carrick, prime sponsor.
CLARK BICKFORD, Staff
Representative Clark Sumner
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the summary of changes in the
proposed CS for HB 150, Version R, on behalf of Representative
Sumner, prime sponsor.
JEFF TWAIT, Owner
Cornerstone Custom Homes
Washington, D.C.
POSITION STATEMENT: Gave invited testimony on the proposed CS
for HB 150, Version R.
RALPH SAMUELS, Vice President
Community & Government Relations Alaska
Holland America Group
Fallschurch, Virginia
POSITION STATEMENT: Testified in support of HB 189.
CODY RICHARDSON, Managing Partner
Juneau Auto Mall
Juneau, Alaska
POSITION STATEMENT: Testified during the hearing on HB 233.
TODD NOVAC, representing self
Juneau, Alaska
POSITION STATEMENT: Testified during the hearing on HB 233.
CRAIG ORLIN, Director of State and Local Government Affairs
American Honda Motor Company
Alexandria, Viriginia
POSITION STATEMENT: Testified in opposition to HB 233.
SPENCER ALEXANDER, General Manager
Fairbanks Chevrolet GMC
Fairbanks, Alaska
POSITION STATEMENT: Testified during the hearing on HB 223.
MATTHEW EWIN, General Manager
Mazda North America Operations
Fallschurch, Virginia
POSITION STATEMENT: Testified in opposition to HB 233.
DAVID BRIGHT, Senior Attorney
Alliance for Automatic Innovation
Washington, D.C.
POSITION STATEMENT: Testified in opposition to HB 233.
NATE MORAN, General Manager
Toyota Motor North America
Plano, Texas
POSITION STATEMENT: Testified in opposition to HB 233.
LAUREN BAILEY, Director
Franchising and State Law
National Automobile Dealers Association
McLean, Virginia
POSITION STATEMENT: Testified in support of HB 233.
THOMAS LAWSON, Government Affairs Manager
Ford Motor Company
Sacramento, California
POSITION STATEMENT: Testified in opposition to HB 233.
JOSEPH MCARTHUR, Service Manager
Fairbanks Nissan
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 233.
ACTION NARRATIVE
3:15:10 PM
CHAIR JESSE SUMNER called the House Labor and Commerce Standing
Committee meeting to order at 3:15 p.m. Representatives
Saddler, Ruffridge, Fields, Carrick, and Sumner were present at
the call to order. Representatives Wright and Prax arrived as
the meeting was in progress.
HB 378-ORG. RETAIL THEFT/FUND;MKTPLACE SALES TAX
3:16:04 PM
CHAIR SUMNER announced that the first order of business would be
HOUSE BILL NO. 378, "An Act relating to theft; relating to
organized retail theft; establishing a statewide marketplace
facilitator sales tax; establishing the organized retail theft
fund in the general fund; and providing for an effective date."
3:16:21 PM
REPRESENTATIVE FIELDS, as prime sponsor, presented HB 378. He
directed attention to a PowerPoint presentation, entitled "HB
378: Organized Retail Crime" [hardcopy included in committee
packet], and began on slide 2, "Organized Retail Crime," which
read as follows [original punctuation provided]:
• Homeland Security Investigations (HSI) defines
ORC as "the association of two or more persons
engaged in illegally obtaining items of value
from retail establishments, through theft and/or
fraud, as part of a criminal enterprise."
• According to the 2021 joint report released by
the Retail Industry Leaders Association (RILA)
and the Buy Safe America Coalition, in 2019,
nearly $70 billion in goods were stolen from
retailers."
• ORC is not simply shoplifting, and these crimes
are not victimless. A growing number of thefts
turn violent, and consumers, local communities
and businesses bear the costs of rising prices.
These thefts are detrimental to both businesses,
small and large alike, and the overall economy as
they pose both societal and health risks to the
community.
3:18:52 PM
REPRESENTATIVE FIELDS summarized slides 3, 4, and 5, which
shared national statistics on items targeted in retail crime.
He turned to slide 6, "Economic Impact of Organized Retail
Crime," which read as follows [original punctuation provided]:
• The economic impact of retail crime is profound.
Retailers face increased costs for lost product,
security, and labor, which lead to higher prices
for consumers and ultimately, lower sales. Lower
sales translate to fewer jobs throughout the
economy. The result is $125.7 billion in lost
economic activity and 658,375 fewer jobs, paying
almost $39.3 billion in wages and benefits to
workers.
• National estimates reveal ORC costs federal and
state governments nearly $15 billion in lost tax
revenue, not including lost sales taxes.
• It is estimated that the average American family
will pay more than $500 annually in additional
costs due to the impact of ORC.
• ORC is a low-risk, high-reward income stream for
domestic and transnational criminal organizations
that greatly impacts inter-state and
international commerce and the overall economic
security of Alaska and the United States.
REPRESENTATIVE FIELDS explained that most of the items stolen
fall below meaningful criminal penalty thresholds in Alaska, so
the theft may not rise to a level that is addressed or
prosecuted. Nonetheless, many small crimes have massive
aggregate impact on small businesses.
3:20:50 PM
REPRESENTATIVE FIELDS advanced to slide 7, which analyzed the
correlation between the growth in online shopping and
shoplifting. He said retail crime is growing due to several key
factors: firstly, the ease at which items are stolen and resold
in high volume on sites like Facebook Marketplace; secondly, the
rise in opioid addiction makes people desperate and easily
incentivized to steal. Slide 8 showed growing losses at Lowe's
in recent years.
3:21:22 PM
REPRESENTATIVE FIELDS moved to Slide 9 and emphasized that ORC
is being orchestrated by national and transnational criminal
networks that have created a lucrative and low-risk revenue
stream. slide 10 illustrated the organizational structure of
organized theft groups (OTGs). Slide 11 detailed the organized
retail crime cycle and slide 12 shared an example of the Central
America labor trafficking threat.
3:23:00 PM
REPRESENTATIVE FIELDS proceeded to slide 13, which featured data
on the impact of theft on small businesses. Slide 14 showed
pictures illustrating examples of ORT in Alaska. He continued
to slide 15 and reported that retailers in Alaska lost $202
million in revenue to theft in 2022. Slide 16 highlighted the
action that other states are taking to address ORT. Slide 17
took best practices from other states and presented the
following recommendations [original punctuation provided]:
• Update the definition of organized retail crime
and increase criminal penalties: States should
act to define the crime of "organized retail
theft" in criminal law to specify those thefts
involving two or more participants and an
intention of resale and include increased
penalties for those specific violations.
• The law and prosecutors must hold those who
engage in organized and significant retail theft
accountable: Since 2000, at least 40 states have
raised the thresholds for the value of stolen
goods to trigger a felony charge. In some
instances, criminals are taking advantage of
these increased higher thresholds to engage in
repeated thefts and avoid prosecution. States
should reconsider these thresholds and
prosecutors should avoid adopting broad non-
prosecution policies.
REPRESENTATIVE FIELDS summarized slide 18, which detailed how HB
378 defines ORT and lowers the threshold for felony offenses.
He concluded on slide 19, which explains the 2 percent sales tax
on marketplace facilitators, as proposed in HB 378. Slide 19
read as follows [original punctuation provided]:
Upsilon1 Marketplace facilitator means a person who contracts
with a third-party seller to facilitate the sale of
the thirdparty seller's property, product, or services
through a physical retail location or online
marketplace operated by the person.
Upsilon1 The bill sets a minimum sales threshold for
marketplace facilitators who must remit the tax
at $100,000 or 200 separate transactions.
Upsilon1 HB 378 establishes an organized retail theft fund in
the general fund, intended to be appropriated to local
law enforcement agencies to investigate and prosecute
organized retail theft and related fraud and property
crimes
3:26:40 PM
CHAIR SUMNER shared his understanding that Facebook Marketplace
facilitated in person meetups for cash transactions. He asked
how the bill sponsor envisioned the sales tax as it relates to
Facebook Marketplace.
REPRESENTATIVE FIELDS said the user fee would be a new provision
that other states have not implemented. He added that the user
fee would differ by platform.
3:27:39 PM
JOHN STASER, Owner, Mountain View Sports, said retail theft has
been a drain on businesses since he entered the industry. He
outlined the measures that businesses have taken to improve
security, such as unbreakable windows, alarm systems, and in
some cases, security teams. Despite best efforts, retail theft
is estimated to cost businesses $125 billion each year
nationwide. Furthermore, he opined that reducing theft would
"cut down the life blood" of drug dealers and in the process,
help reduce homelessness. He shared a personal anecdote about a
serial thief. He emphasized the damage that can be inflicted by
individual thieves who steal items from numerous stores and
suggested that aggregating those thefts and creating a felony
charge would encourage law enforcement to go after them. He
said HB 378 would take a step towards punishing this behavior
and thereby decreasing retail theft.
3:34:38 PM
CHAIR SUMNER announced that HB 378 was held over.
SB 147-REEMPLOYMENT BENEFITS
3:34:43 PM
CHAIR SUMNER announced that the next order of business would be
CS FOR SENATE BILL NO. 147(L&C), "An Act relating to
reemployment rights and benefits; and providing for an effective
date."
3:35:04 PM
SENATOR JAMES KAUFMAN, Alaska State Legislature, as prime
sponsor, presented CSSB 147(L&C). He shared the sponsor
statement [included in committee packet], which read as follows
[original punctuation provided]:
This bill seeks to address critical shortcomings in
Alaska's Workers' Compensation system.
Alaska's worker's compensation premium rates are the
4th highest in the nation. However, the maximum plan
cost of $13,300 set in the year 2000 has not been
adjusted for inflation, making the amount often
insufficient in meeting statutory requirements. The
current system also limits workers' flexibility in
moving to different occupations.
Alaska's attempts at ensuring quick, efficient, fair,
and predictable compensation to injured workers at a
reasonable cost to employers has not been working. In
recent years, an average of 140 out of 550 evaluations
performed each year were found eligible for the
current systems rehabilitation plan, yet only an
average of 13 workers fully finished the plan.
The Alaska workers' compensation plan has spent an
average of ten million dollars supporting these
injured workers over the same period. This is clearly
not an efficient system. The Alaska Workers'
Compensation Act last was updated in 2000 and again in
2005 with the addition of job relocation benefits, but
it is long past due that we address the other
shortcomings of the system.
The primary objective of this legislation is to ensure
that injured workers receive swift and fair access to
indemnity and medical benefits while also promoting
efficient return-to-work programs. SB 147 would
transition from an emphasis on retraining to an
emphasis on stay-at-work/early return-to-work. By
updating the system to better align with modern
realities, we can reduce the economic burden of
workplace injuries and illnesses on Alaskans, improve
employment retention, and get more Alaskans back to
work in our communities.
Employees and employers have a shared desire to get a
worker rehabilitated and back to work as quickly as
possible after an injury occurs. This legislation
intends to facilitate this by setting clearer
guidelines regarding the responsibilities of all
stakeholders.
Alaska can be a tough place to work, and injuries do
occur. It is important we as a state help these
injured workers rehabilitate with fair and predictable
compensation. That way, we can hopefully keep these
workers in our state and do our duty as a government
of protecting its citizens. I hope you will support
this important legislation.
CHAIR SUMNER opened invited testimony.
3:37:44 PM
CHUCK COLLINS, Director, Division of Workers' Compensation,
Department of Labor & Workforce Development (DLWD), gave invited
testimony during the hearing on CSSB 147(L&C). He referenced a
resolution that was sent to the House that requested an update
to AS 23.30.041, which covers rehabilitation benefits. He
stated that the plan amount of $13,300 is insufficient to
rehabilitate injured workers who qualify for the benefit. After
90 days, injured workers must receive an evaluation under
current law. He proposed increasing that 90-day period to 120
days and increasing the maximum plan cost from $13,300 to
$22,300, per the inflation index.
3:42:38 PM
CHAIR SUMNER announced that CSSB 147(L&C) was held over.
3:42:44 PM
SENATOR KAUFMAN reported that Alaska employers spend in excess
of $600,000 annually for 13 completed plans. He urged the
committee to think about turning that potential into more
beneficial results.
[CSSB 147(L&C) was held over.]
HB 55-EXTEND WORKFORCE INVEST BOARD ALLOCATIONS
3:43:27 PM
CHAIR SUMNER announced that the next order of business would be
HOUSE BILL NO. 55, "An Act relating to allocations of funding
for the Alaska Workforce Investment Board; and providing for an
effective date." [Before the committee was CSHB 55(EDC).]
3:44:04 PM
REPRESENTATIVE CARRICK, as prime sponsor, presented CSHB
55(EDC). She paraphrased the sponsor statement [included in
committee packet], which read as follows [original punctuation
provided]:
In 2000, the Alaska Legislature established the
Technical Vocational Education Program (TVEP). This
program is administered by the Alaska Workforce
Investment Board and utilizes a portion of
Unemployment Insurance receipts to provide grants to
career and technical education providers across the
State. The TVEP program impacts thousands of students
by offering industry-specific training opportunities
that help Alaskans get to work.
HB 55 would re-authorize the TVEP program for an
additional six years, until fiscal year 2030. The
program currently has ten recipients which include the
University of Alaska, the Alaska Vocational Technical
Education Center, the Alaska Technical Center, as well
as other technical education providers across the
State. These programs train Alaskans for industry-
specific jobs in sectors such as fishing,
transportation, health, mining, and construction.
Please join me in supporting House Bill 55 to re-
authorize the TVEP program and keep thousands of
Alaskans ready for the high-demand careers our State
has to offer.
REPRESENTATIVE CARRICK reported that in 2014, the legislature
increased the amount of funds diverted to the Technical
Vocational Education Program (TVEP) from .15 percent of
unemployment insurance receipts to .16 percent. Currently,
there are 10 statutorily designated recipients that offer
various training across the state. She noted that the committee
substitute (CS) adopted in the House Education Standing
Committee increased the current statutory designation of funds
diverted to the TVEP program from .16 percent to .25 percent.
3:48:44 PM
STEWART RELAY, Staff, Representative Ashley Carrick, Alaska
State Legislature, on behalf of Representative Carrick, prime
sponsor, summarized the explanation of changes from the original
version of the bill to CSHB 55(L&C) ("Version R") [included in
the committee packet], which read as follows [original
punctuation provided]:
Section 1. AS 23.15.835(a) New section
Changes the percentage of wages collected by the
Department of Labor for the TVEP program from .16% to
.25%
Section 2. AS 23.15.835(d) Former section 1
Does not change the designated recipient list from
Version A Section 1 but changes sunset date from June
30, 2030, to June 30, 2026
Section 3. AS 23.15.835(d) New section.
Changes the designated recipient list by adding a new
recipient, alters the percentages for the University
of Alaska and the Alaska Vocational Technical Center
and sets the sunset date from June 30, 2026 through
June 30, 2030.
Makes the following changes to the designated
recipient list:
• University of Alaska reduced to 40% from 45%
• Alaska Vocational Technical Center reduced to 15%
from 17%
• Alaska Job Center Network added with a 7%
designation.
Section 4. AS 23.15.835(g) New section
Requires the Alaska Job Center Network, added in the
previous section to use their allocated funds for
individual training grants.
Section 5 AS 23.15.835(h) New section
Increases the amount of money that the Alaska
Workforce Investment Board can withhold from 20% to
100% from recipients if they fail to comply with
program requirements.
Section 6 AS 23.15.835 New section
Adds a new subsection requiring the funds designated
to the University of Alaska the be distributed in a
regionally equal manner to Alaska's six economic
regions.
Section 7 New section Section 6
applies to funds after July 1, 2024
Section 8. Retroactivity Former section 2
If section 2 of this bill takes effect after June 30,
2024, section one is retroactive.
Section 9. Effective Date
New Section Sections 3 and 4 are effective on July 1,
2026.
Section 10. Effective Date New Section
All other sections are effective immediately.
3:51:58 PM
CHAIR SUMNER asked whether the changes adopted in Version R were
at the request of the bill sponsor or the House Education
Standing Committee.
REPRESENTATIVE CARRICK stated that Version R was the House
Education Standing Committee's CS.
3:52:24 PM
REPRESENTATIVE SADDLER referred to page 3, line 10 and asked
whether the equal distribution of funds would be one-sixth share
to each region of the state.
REPRESENTATIVE CARRICK answered yes.
REPRESENTATIVE SADDLER observed that an equal distribution on a
per-capita basis would short the Mat-Su region and vastly
benefit other regions.
REPRESENTATIVE FIELDS expressed his support for a clean
reauthorization, among other things; however, he would not
support reducing Northwestern Alaska Career and Technical
Center's (NACTEC) funding and the destabilization of important
programs in rural Alaska.
3:54:40 PM
REPRESENTATIVE RUFFRIDGE expressed his support for the clean
adoption of TVEP; nonetheless, he said there's some significant
issues that need to be addressed in the audit of the program.
REPRESENTATIVE CARRICK noted that the audit did not point to bad
training in Alaska; rather, the findings of the audit were more
specific to the structure of the allocations.
3:56:45 PM
REPRESENTATIVE SADDLER recalled a provision that allowed for
some of the training funds to be provided as grants to
individuals.
REPRESENTATIVE CARRICK affirmed that the provision in question
is provided in Version R. The Alaska Jobs Center Network adds a
7 percent allocation, per Section 3 of the CS, which would then
be distributed as individual training grants.
3:57:24 PM
REPRESENTATIVE FIELDS pointed out that if the legislature wants
job center to distribute more money through ITAs, the UI fund
could be tapped more aggressively without taking money away from
TVEP recipients. He suggested that if a clean reauthorization
were passed, members interested in altering the allocations
could commit to visiting some of the regional training centers
in the next 18 months to be better informed.
REPRESENTATIVE SADDLER noted that there is an increase in
available funding for distribution on page 1, line 6 of Version
R, so no one would be shorted.
3:58:39 PM
CHAIR SUMNER announced that CSHB 55(EDC) was held over.
HB 150-RESIDENTIAL BUILDING CODE
3:58:48 PM
CHAIR SUMNER announced that the next order of business would be
HOUSE BILL NO. 150, "An Act relating to residential building
codes; relating to construction contractors and residential
contractor endorsements; and providing for an effective date."
3:59:02 PM
REPRESENTATIVE RUFFRIDGE moved to adopt the proposed committee
substitute (CS) for HB 150, Version 33-LS0563\R, A. Radford,
3/8/24, as the working document. There being no objection,
Version R was before the committee.
3:59:35 PM
CLARK BICKFORD, Staff, Representative Clark Sumner, Alaska State
Legislature, on behalf of Representative Sumner, prime sponsor,
read the summary of changes in Version R [included in committee
packet], which read as follows:
Title
New language reflecting the establishment of the
Alaska State Building Code Council in Section 9.
Sec. 1 AS 08.18.025
(a) Reinstates the language "structure of one to four
units" for consistency with the International
Residential Code.
Sec. 2 AS 08.18.171
Removes the exception for residential contractors to
comply with the state residential building code when
providing contractor services to a building subject to
AHFC's residential building code.
Sec. 3 AS 08.18.171
Reinstates the language "structure of one to four
units" for consistency with the International
Residential Code.
Sec. 4 AS 08.18.171
No Changes
Sec. 5 AS 18.56.300(a)
New Section 5
Sec. 6 AS 18.56.300(a)
Section renumbered from 5 to 6; otherwise, no changes.
Sec. 7 AS 18.56.300(b)
Section renumbered from 6 to 7; otherwise, no changes.
Sec. 8 AS 18.56.300(e)(3)
Section renumbered from 7 to 8; removes reference to
DCCED and another nationally recognized residential
building code under AHFC.
Sec. 9 AS 18.60.860
Section renumbered from 8 to 9.
(a) Replaces DCCED with AHFC as the adopter and
administrator of a state residential building
code; specifies the 2018 IRC as the state
residential building code; requires the code to
allow for use of load-bearing dimensional lumber
that is graded and certified under AS 41.17.630.
(b) No material changes.
(c) Subsection renumbered from "d" to "c"; removes
language referencing AHFC.
(d) New subsection "d"
(e) New subsection "e".
Sec9. AS 18.60.865
New language establishing the Alaska State Building
Code Council under AHFC.
Sec 10. Applicability
No changes
Sec. 11. Effective date
Revised effective date from 1/1/2024 to 1/1/2025.
4:02:50 PM
JEFF TWAIT, Owner, Cornerstone Custom Homes, gave invited
testimony on Version R. He shared that there had been concerns
regarding recreational cabins and the owner builder exemption.
He emphasized that the goal is only to hold licensed contractors
with a residential endorsement to this standard at this point in
time. He said the bill would give people who have entered into
contracts without fully understanding the repercussions legal
recourse if that's what it comes to.
4:05:30 PM
CHAIR SUMNER announced that HB 150, Version R, was held over.
HB 189-SALE OF ALCOHOL BY UNDER 21
4:05:38 PM
CHAIR SUMNER announced that the next order of business would be
HOUSE BILL NO. 189, "An Act relating to the sale of alcohol; and
providing for an effective date." [Before the committee,
adopted as the working document on 3/11/22, was the proposed
committee substitute (CS) for HB 189, Version 33-LS0697\S, C.
Radford, 1/15/24 ("Version S").]
4:05:56 PM
CHAIR SUMNER opened public testimony on HB 189.
4:06:13 PM
RALPH SAMUELS, Vice President, Community & Government Relations,
Holland America Group, testified in support of HB 189. He said
the tourism industry has faced labor shortages since the COVID-
19 Pandemic and opined that the bill would help alleviate some
of those issues. HB 189 would allow high performing wait staff
access to better jobs and a better career path and provide more
flexibility for scheduling, he said.
4:07:24 PM
CHAIR SUMNER closed testimony on HB 189 and announced that the
bill was held over.
HB 233-RATES: MOTOR VEHICLE WARRANTY WORK
4:07:34 PM
CHAIR SUMNER announced that the next order of business would be
HOUSE BILL NO. 233, "An Act relating to rates and time
allowances for motor vehicle warranty work."
CHAIR SUMNER opened testimony on HB 233.
4:08:33 PM
CODY RICHARDSON, Managing Partner, Juneau Auto Mall, testified
during the hearing on HB 233. He said dealerships are profit
sharing operations, but when technicians are hamstrung by
unrealistic times, it's unfair and makes it difficult to recruit
and retain these positions. He reported that on average, it
takes $40,000 to recruit technicians in the Lower-48. He said
dealers need the support of their manufacturers to pay these
technicians what they deserve. He believed that the bill would
bring higher paying jobs into Alaska's market and take better
care of both customers and employees.
4:12:45 PM
TODD NOVAC, representing self, testified during the hearing on
HB 223. He claimed that manufacturers use labor times as a
budget item and a means of cutting expenses, which comes at the
expense of technicians. He highlighted the stigma around
warranty pay, which makes it difficult to recruit quality
technicians. He shared his belief that the bill would level the
playing field.
4:15:19 PM
CRAIG ORLIN, Director of State and Local Government Affairs,
American Honda Motor Company, testified in opposition to HB 233.
He said Honda values its partnership with dealers and wants to
make sure that technicians are compensated fairly for warranty
and recall work. He said Honda goes to great lengths to
guarantee fair time guides and calculates the time with hand
tools instead of power tools to ensure that technicians aren't
rushed. However, he said the bill would dramatically overpay
dealers for their work, which would lead to higher vehicle
prices for consumers. Further, he pointed out that dealerships
are independently owned and operated, adding that the dealers,
not the original equipment manufacturers (OEM), pay technicians.
Nothing in the bill would ensure that additional money goes
towards technicians, he said. He urged the committee to defer
the bill and allow dealers and manufacturers to negotiate a
settlement.
4:16:50 PM
REPRESENTATIVE CARRICK asked whether training videos of Honda's
technicians performing the warranty work are regularly shared
with dealerships.
MR. ORLIN answered yes, training videos are available to the
dealers to create a more transparent process.
4:18:59 PM
REPRESENTATIVE SADDLER asked Mr. Orlin to expound on the appeal
process.
MR. ORLIN explained that for a specific vehicle, a time slip can
be submitted to the manufacturer who then reviews and approves
it. If a number of complaints are received in relation to a
specific vehicle, Honda conducts an audit of that repair.
REPRESENTATIVE SADDLER asked whether the manufacturer
automatically approves time slips.
MR. ORLIN confirmed that they are almost universally accepted.
4:21:00 PM
REPRESENTATIVE RUFFRIDGE asked what change needs to occur if
everyone can appeal the process and be awarded more money for
the extra time.
MR. ORLIN reiterated that appeals are almost always universally
accepted. He explained that Honda wants to discuss the concerns
raised by dealers and suggested that instead of using a third-
party time guide, actual time could be granted.
4:22:31 PM
SPENCER ALEXANDER, General Manager, Fairbanks Chevrolet GMC,
testified during the hearing on HB 233. He provided additional
context and clarification to testimony given by Mr. Perry on
3/6/24. He addressed additional labor hours and noted that of
the approximately 10,000 warranty repairs performed at Alaska
dealerships, additional hours were only applied for 197 times
due to the cumbersome process. In short, he said the process
adds more time to the repair than it would give. He further
noted that weather/climate related delays are not covered by
General Motors (GM). He characterized the warranty excess
threshold as a moving target. He acknowledged that dealers pay
their technicians; however, he said he already pays them based
on third-party book times. Lastly, in response to Mr. Perry, he
suggested that state interference is supported when it benefits
the manufacturers, not when it benefits the dealers. He defined
HB 233 as a consumer protection bill, an Alaska business
protection bill, and a worker protection bill.
4:29:35 PM
REPRESENTATIVE SADDLER asked Mr. Alexander to submit written
testimony.
4:29:52 PM
MATTHEW EWIN, General Manager, Mazda North America Operations,
testified in opposition to HB 233. He discussed warranty times
and shared that Mazda technicians frequently beat the time
guides on a regular basis. He addressed Mazda's appeal process,
which on occasion, result in changes to the time guides when the
dealers are correct. He said Mazda doesn't want to see
customers getting gouged because a third-party time guide is
trying to make more money off warranty sales.
4:32:43 PM
REPRESENTATIVE SADDLER asked for the ratio of warranty repairs
to claims filed and the percentage of claims that result in
additional payments to the dealers.
MR. EWIN offered to follow up with the requested information.
4:33:52 PM
REPRESENTATIVE RUFFRIDGE asked how much time Mr. Ewin had spent
in Alaska.
MR. EWIN said he had not spent much time in the state.
4:34:25 PM
REPRESENTATIVE PRAX said it would make more sense to take
feedback from the dealers across the country to reflect
geographical differences in repair times. He asked why averages
of the dealers are not utilized.
MR. EWIN said scientific studies are conducted on how long it
takes to perform a repair. He shared an example and reiterated
that if Mazda sees something taking longer, those times are
addressed.
4:37:43 PM
DAVID BRIGHT, Senior Attorney, Alliance for Automatic
Innovation, testified in opposition to HB 233. He said the bill
would not help the relationship between dealers and
manufacturers. He explained that HB 233 would require
manufacturers to purchase up to 50 percent more hours of labor
than what is actually being performed on warranty work, which
would result in higher costs to consumers. If every state
passed a similar bill, he reported that an additional $5 billion
in unecessary costs would be created. Further, he said only
four states have a similar law, one of which is being challenged
in federal district court. He stressed that there is no problem
to fix, and that the average dealer in Alaska is making 74
percent gross profit margin on warranty work under the current
system. He opined that overcompensating dealers for hours not
worked is not a policy that Alaska should pursue. He urged the
committee not to pass HB 233.
4:40:20 PM
REPRESENTATIVE SADDLER asked why dealers are complaining if the
profit margin is 74 percent on warranty work.
MR. BRIGHT noted that the 74 percent figure came from Alaska
dealers' financial statements, which is consistent with the rest
of the country. He said the high profit margin that dealers are
enjoying is indicative of why there is no problem to fix.
4:41:26 PM
REPRESENTATIVE RUFFRIDGE asked how much time Mr. Bright had
spent in Alaska.
MR. BRIGHT said he had been to Alaska twice.
REPRESENTATIVE RUFFRIDGE asked whether there was any sort of
arctic consideration for vehicle warranty work in Alaska.
MR. BRIGHT said there is no special allotment for different
states. He suggested that the solution [for weather delays]
would be a request for additional time, as opposed to creating
different time guides for different parts of the country.
REPRESENTATIVE RUFFRIDGE asked Mr. Bright to speak to warranty
excess and how often that is triggered in Alaska auto dealers.
MR. BRIGHT said he did not have specific data. Nonetheless, he
pointed out that it's not an adversarial process. He opined
that the process for requesting additional labor hours works now
and it works fairly.
REPRESENTATIVE RUFFRIDGE theorized that Alaska dealers may
trigger warranty excess more often due to arctic conditions,
which may result in a financial penalty through the audit
process. He opined that there is a disconnect between what that
warranty excess looks like and how it's compensated, which may
not be easily rectified.
MR. BRIGHT pointed out that current statutes in Alaska regulate
the audit process, so dealers are not defenseless.
4:48:19 PM
NATE MORAN, General Manager, Toyota Motor North America,
testified in opposition to HB 233. He expressed concern that
the bill ignores the time it takes to repair cars and
establishes an incentive for dealers to increase prices for
Alaskan drivers. He shared the following three key points to
support those concerns: Toyota time allowances are based on
expert studies; additional time can be requested for individual
repairs through the warranty department; and there is a
standardized process for updating time guides when a concern is
raised about a particular repair type. He opined that HB 233 is
not needed and if passed, would impose a 40-50 percent increase
in costs on Alaskan customers.
4:49:58 PM
REPRESENTATIVE RUFFRIDGE asked whether Toyota takes into account
artic repairs.
MR. MORAN answered no, arctic temperatures are not considered.
However, he said initial time studies are performed with manual
tools and multiple technicians with varying skill levels.
4:50:46 PM
REPRESENTATIVE CARRICK asked whether expert studies are provided
to dealers upon request.
MR. MORAN answered no, the time guides are made available for
all new models but not the full studies.
4:51:23 PM
REPRESENTATIVE SADDLER asked why there's no special provision
for arctic temperatures.
MR. MORAN posited that the vehicle's performance should be no
different in Alaska than Texas.
REPRESENTATIVE SADDLER asked why Toyota provides no
accommodation for the time it takes to thaw a car in Alaska.
MR. MORAN reiterated that dealers can submit a request for
additional time in a repair order for review.
REPRESENTATIVE SADDLER emphasized that it's not a matter of the
individual car. Every car that comes into the dealer in
Fairbanks will be cold, he said.
4:54:22 PM
LAUREN BAILEY, Director, Franchising and State Law, National
Automobile Dealers Association, testified in opposition to HB
233. She said these laws would protect local economies and
safeguard consumers. She added that these laws are a direct
investment in every community with a dealership, particularly
rural ones. She said dealer franchise laws are about ensuring a
competitive, fair, and sage automotive market for everyone
involved, including local communities that benefit economically
to the consumers who rely on local dealerships for fair prices
and reliable services.
4:56:19 PM
REPRESENTATIVE RUFFRIDGE asked whether Ms. Bailey had any data
on the geo-location of warranty excess claims and how that could
be tracked.
MS. BAILEY offered to follow up with the requested information.
4:57:02 PM
THOMAS LAWSON, Government Affairs Manager, Ford Motor Company,
testified in opposition to HB 233 and aligned his comments with
those of his OEM peers. He shared his belief that third-party
time guides are inappropriate for warranty work and reiterated
his opposition to the bill.
4:58:05 PM
REPRESENTATIVE RUFFRIDGE sought to confirm that Mr. Lawson had
stated that Ford does not create its own expert time guides and
instead works with dealers to come up with them.
MR. LAWSON answered yes to both of those things.
4:58:42 PM
JOSEPH MCARTHUR, Service Manager, Fairbanks Nissan, testified in
support of HB 233. He discussed battery tests, noting that to
do so, the battery must be above 32 degrees Fahrenheit and
tested every month. Essentially, he said technicians are asked
to test a battery that will fail due to harsh conditions without
compensation. In addition, he shared that it takes 90 minutes
to complete an evacuation and recharge on an A/C system with the
manufacturer's machine, for which the manufacturer pays .9 of an
hour. He added that his master technician has over 35 years'
experience and can rarely beat the manufacturer's' recommended
time.
5:00:59 PM
CHAIR SUMNER closed public testimony on HB 233 and announced
that the bill was held over.
5:01:19 PM
The committee took a brief at-ease at 5:01 p.m.
HB 189-SALE OF ALCOHOL BY UNDER 21
5:01:34 PM
CHAIR SUMMNER announced that the final order of business would
be a return to HOUSE BILL NO. 189, "An Act relating to the sale
of alcohol; and providing for an effective date." [Before the
committee, adopted as the working document on 3/11/22, was the
proposed committee substitute (CS) for HB 189, Version 33-
LS0697\S, C. Radford, 1/15/24 ("Version S").]
5:01:38 PM
REPRESENTATIVE RUFFRIDGE moved to report CSHB 189, Version 33-
LS0697\S, C. Radford, 1/15/24, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 189(L&C) was reported from the House Labor
and Commerce Standing Committee.
5:02:02 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:02 p.m.