Legislature(1993 - 1994)

04/03/1993 08:00 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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             HOUSE STATE AFFAIRS STANDING COMMITTEE                            
                          April 3, 1993                                        
                            8:00 a.m.                                          
                                                                               
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
  Representative Al Vezey, Chairman                                            
  Representative Pete Kott, Vice Chairman                                      
  Representative Harley Olberg                                                 
  Representative Gary Davis                                                    
  Representative Fran Ulmer                                                    
  Representative Bettye Davis                                                  
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
  Representative Jerry Sanders                                                 
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
  *HB 226   "An Act relating to interest rates and calculation                 
            of interest under certain judgments and decrees                    
            and on refunds of certain taxes, royalties, or net                 
            profit shares; and providing for an effective                      
            date."                                                             
                                                                               
            HELD IN COMMITTEE FOR FURTHER CONSIDERATION                        
                                                                               
  HB 206    "An Act relating to the regulation of election                     
            campaigns, and providing for regulation by the                     
            Alaska Public Offices Commission of elections by                   
            electrical cooperatives."                                          
                                                                               
            CSHB 206 (CRA) MOVED FROM COMMITTEE WITH DO PASS                   
            RECOMMENDATION                                                     
                                                                               
  *SSHB 192 "An Act relating to construction contractors."                     
                                                                               
            CSSSHB 192 (STA) MOVED FROM COMMITTEE WITH DO PASS                 
            RECOMMENDATION                                                     
                                                                               
  *HCR 18   Relating to Federal Public Land Week.                              
                                                                               
            MOVED FROM COMMITTEE WITH DO PASS RECOMMENDATION                   
                                                                               
  HB 46     "An Act relating to frequent traveler credit for                   
            state-paid travel."                                                
                                                                               
            CSHB 46 (STA) MOVED FROM COMMITTEE WITH NO                         
            RECOMMENDATION                                                     
                                                                               
  (* first public hearing)                                                     
                                                                               
  WITNESS REGISTER                                                             
                                                                               
  Representative Eldon Mulder                                                  
  Room 116, State Capitol                                                      
  Juneau, Alaska  99801-1182                                                   
  465-2647                                                                     
  Position Statement: Prime Sponsor, HB 206 and HB 192                         
                                                                               
  Brooke Miles, Branch Administrator                                           
  Alaska Public Offices Commission                                             
  P.O. Box 110222                                                              
  Juneau, Alaska 99811                                                         
  465-4864                                                                     
  Position Statement: Neutral on HB 206                                        
                                                                               
  Joe Geldhof, Assistant Attorney General                                      
  Department of Law                                                            
  P.O. Box 6728                                                                
  Juneau, Alaska  99811                                                        
  465-6728                                                                     
  Position Statement: Outlined HB 226                                          
                                                                               
  Larry Meyers, Director                                                       
  Income and Excise Audit Division                                             
  Department of Revenue                                                        
  P.O. Box 110420                                                              
  Juneau, Alaska 99811-0420                                                    
  465-2320                                                                     
  Position Statement: Provided information on HB 226                           
                                                                               
  Charles E. "Chris" Christensen, III, Staff Counsel                           
  Alaska Court System                                                          
  303 K Street                                                                 
  Anchorage, Alaska 99501                                                      
  264-8228                                                                     
  Position Statement: Opposed HB 226                                           
                                                                               
  Ken Reither                                                                  
  Exxon, USA                                                                   
  3301 C Street                                                                
  Anchorage, Alaska  99503                                                     
  564-3776                                                                     
  Position Statement: Opposed HB 226                                           
                                                                               
  Karl Luck, Director                                                          
  Division of Occupational Licensing                                           
  Department of Commerce and Economic Development                              
  P.O. Box 110806                                                              
  Juneau, Alaska 99811-0806                                                    
  465-2538                                                                     
  Position Statement: Supported HB 192 with suggested                          
                      amendments                                               
                                                                               
  PREVIOUS ACTION                                                              
                                                                               
  BILL:  HB 226                                                                
  SHORT TITLE:  INTEREST RATES: JUDGMENTS/TAXES/ROYALTIES                      
  BILL VERSION:                                                                
  SPONSOR(S):   RULES BY REQUEST OF THE GOVERNOR                               
  TITLE: "An Act relating to interest rates and calculation of                 
  interest under certain judgments and decrees and on refunds                  
  of certain taxes, royalties, or net profit shares; and                       
  providing for an effective date."                                            
  JRN-DATE     JRN-PG               ACTION                                     
  03/12/93       620    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  03/12/93       620    (H)   STATE AFFAIRS, JUDICIARY,                        
                              FINANCE                                          
  03/12/93       620    (H)   -4 ZERO FNS(ADM, ADM, REV, DOT)                  
                              3/12/93                                          
  03/12/93       621    (H)   GOVERNOR'S TRANSMITTAL LETTER                    
  04/03/93              (H)   STA AT 08:00 AM CAPITOL 102                      
                                                                               
                                                                               
  BILL:  HB 206                                                                
  SHORT TITLE:  ELECTIONS AND ELECTRIC COOP ELECTIONS                          
  BILL VERSION:                                                                
  SPONSOR(S):   REPRESENTATIVE(S) MULDER                                       
  TITLE: "An Act relating to the regulation of election                        
  campaigns, and providing for regulation by the Alaska Public                 
  Offices Commission of elections by electrical cooperatives."                 
  JRN-DATE     JRN-PG               ACTION                                     
  03/05/93       553    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  03/05/93       553    (H)   CRA, STATE AFFAIRS                               
  03/16/93              (H)   CRA AT 01:00 PM CAPITOL 124                      
  03/17/93              (H)   CRA AT 01:00 PM CAPITOL 124                      
  03/17/93              (H)   MINUTE(CRA)                                      
  03/23/93              (H)   MINUTE(CRA)                                      
  03/24/93       757    (H)   CRA RPT  CS(CRA) NEW TITLE  4DP                  
                              1DNP 1NR                                         
  03/24/93       757    (H)   DP: SANDERS, BUNDE, WILLIAMS,                    
                              TOOHEY                                           
  03/24/93       757    (H)   DNP: DAVIES                                      
  03/24/93       757    (H)   NR: OLBERG                                       
  03/24/93       758    (H)   -FISCAL NOTE  (ADM)  3/24/93                     
  04/03/93              (H)   STA AT 08:00 AM CAPITOL 102                      
                                                                               
                                                                               
  BILL:  HB 192                                                                
  SHORT TITLE:  ADVERTISING BY UNREGISTERED CONTRACTORS                        
  BILL VERSION: SSHB 192                                                       
  SPONSOR(S):   REPRESENTATIVE(S) MULDER                                       
  TITLE: "An Act relating to construction contractors."                        
  JRN-DATE     JRN-PG               ACTION                                     
  03/02/93       505    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  03/02/93       505    (H)   STATE AFFAIRS, JUDICIARY,                        
                              FINANCE                                          
  03/20/93              (H)   STA AT 08:00 AM CAPITOL 102                      
  03/24/93       760    (H)   SPONSOR SUBSTITUTE INTRODUCED-                   
                              REFERRALS                                        
  03/24/93       760    (H)   STATE AFFAIRS, JUDICIARY,                        
                              FINANCE                                          
  03/26/93              (H)   JUD AT 01:30 PM CAPITOL 120                      
  04/03/93              (H)   STA AT 08:00 AM CAPITOL 102                      
                                                                               
                                                                               
  BILL:  HCR 18                                                                
  SHORT TITLE:  DECLARE FEDERAL PUBLIC LAND WEEK                               
  BILL VERSION:                                                                
  SPONSOR(S):   REPRESENTATIVE(S) GREEN                                        
  TITLE: Relating to Federal Public Land Week.                                 
  JRN-DATE     JRN-PG               ACTION                                     
  03/26/93       793    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  03/26/93       793    (H)   STATE AFFAIRS                                    
  04/03/93              (H)   STA AT 08:00 AM CAPITOL 102                      
                                                                               
                                                                               
  BILL:  HB 46                                                                 
  SHORT TITLE:  STATE-PAID TRAVEL MILEAGE CREDITS                              
  BILL VERSION:                                                                
  SPONSOR(S):   REPRESENTATIVE(S) MARTIN                                       
  TITLE: "An Act relating to frequent traveler credit for                      
  state-paid travel."                                                          
  JRN-DATE     JRN-PG               ACTION                                     
  01/12/93        43    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/12/93        43    (H)   STATE AFFAIRS, TRANSPORTATION,                   
                              FINANCE                                          
  03/20/93              (H)   STA AT 08:00 AM CAPITOL 102                      
  03/20/93              (H)   MINUTE(STA)                                      
  03/30/93              (H)   STA AT 08:00 AM CAPITOL 102                      
  03/30/93              (H)   MINUTE(STA)                                      
                                                                               
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 93-37, SIDE A                                                           
  Number 000                                                                   
                                                                               
  CHAIRMAN AL VEZEY called the House State Affairs Committee                   
  to order at 8:04 a.m., on April 3, 1993.  Members present                    
  were Representatives Kott, Olberg, B. Davis, G. Davis, and                   
  Ulmer, representing a quorum.                                                
                                                                               
  HCR 18:  DECLARE FEDERAL PUBLIC LAND WEEK                                    
                                                                               
  Number 016                                                                   
                                                                               
  CHAIRMAN VEZEY read the title to HCR 18 and called for a                     
  sponsor statement.  After seeing no one present to present                   
  the statement, he read the resolution, outlined its contents                 
  and called for comments.                                                     
                                                                               
  Number 072                                                                   
                                                                               
  REPRESENTATIVE HARLEY OLBERG noted HCR 18's reference to 95%                 
  of the land in Alaska being controlled by the federal                        
  government, and asked rhetorically who decided that was such                 
  a good idea.                                                                 
                                                                               
  Number 084                                                                   
                                                                               
  REPRESENTATIVE FRAN ULMER felt HCR 18 did not make much of a                 
  statement and asked if it was a national trend to adopt such                 
  a resolution.                                                                
                                                                               
  REPRESENTATIVE OLBERG stated it was a trend among                            
  Northwestern states to adopt the statements made in HCR 18.                  
                                                                               
  Number 107                                                                   
                                                                               
  CHAIRMAN VEZEY MOVED PASSAGE of HCR 18.  There being no                      
  objections, IT SO MOVED.                                                     
                                                                               
  HB 206:  ELECTIONS AND ELECTRIC COOP ELECTIONS                               
                                                                               
  Number 129                                                                   
                                                                               
  CHAIRMAN VEZEY read the title to HB 206 and called for its                   
  sponsor to deliver his statement.                                            
                                                                               
  Number 135                                                                   
                                                                               
  REPRESENTATIVE ELDON MULDER, PRIME SPONSOR OF HB 206,                        
  summarized HB 206 and its intent to regulate utility                         
  cooperative board elections under the Alaska Public Offices                  
  Commission (APOC).  He stated telephone and electric                         
  cooperative elections have changed dramatically in the past                  
  few years, from a time in which candidates spent money                       
  directly from their pockets, and in smaller amounts, to the                  
  present in which thousands of dollars are spent without                      
  accountability to the public.  He noted the lack of a                        
  monitor or tracking mechanism for election to a board that                   
  controls policy for literally thousands of Alaskans.                         
                                                                               
  REPRESENTATIVE MULDER stated HB 206 would waive monitoring                   
  of cooperatives of ten thousand customers or less, and asked                 
  the committee to pass the bill.                                              
                                                                               
  REPRESENTATIVE ULMER noted the existence of three versions                   
  of HB 206, including a State Affairs Committee Substitute,                   
  and asked the sponsor what the differences were.                             
                                                                               
  Number 182                                                                   
                                                                               
  REPRESENTATIVE MULDER stated the first version had no                        
  threshold for monitoring, where version 2, drawn up in the                   
  Community and Regional Affairs Committee, created the ten                    
  thousand customer threshold, and the latest version of HB
  206 further tightened the qualifications of identifying a                    
  candidate for office.                                                        
                                                                               
  Number 208                                                                   
                                                                               
  CHAIRMAN VEZEY asked how the latest version of HB 206 was                    
  drawn up.                                                                    
                                                                               
  Number 215                                                                   
                                                                               
  REPRESENTATIVE OLBERG stated the previous committee noted a                  
  lack of a provision for identifying a candidate, and asked                   
  that such a provision be drawn in.                                           
                                                                               
  Number 228                                                                   
                                                                               
  CHAIRMAN VEZEY asked the sponsor for a clarification between                 
  versions "R" and "U" of HB 206.  He noted the arrival of                     
  Representative Bettye Davis at 8:17 a.m., 13 minutes after                   
  the meeting was called to order.                                             
                                                                               
  Number 232                                                                   
                                                                               
  REPRESENTATIVE MULDER outlined the qualifications for a                      
  candidate that included filing paperwork with APOC.                          
                                                                               
  Number 248                                                                   
                                                                               
  REPRESENTATIVE ULMER wanted to hear more from other                          
  witnesses.                                                                   
                                                                               
  Number 262                                                                   
                                                                               
  BROOKE MILES, JUNEAU BRANCH ADMINISTRATOR, ALASKA PUBLIC                     
  OFFICES COMMISSION (APOC), stated the APOC is neutral on                     
  HB 206, but did provide information to the sponsor during                    
  its creation.  She stated HB 206 provided an avenue to                       
  monitor contributions to co-op candidates by specifying how                  
  and where candidates would file campaign finance reports.                    
  Under current finance laws, candidates file statements with                  
  municipal clerks.  House Bill 206 provides language for co-                  
  op candidates to provide their statements to APOC.                           
                                                                               
  Number 284                                                                   
                                                                               
  REPRESENTATIVE ULMER MOVED for ADOPTION of CSHB 206 (STA).                   
  There was no objection, and CSHB 206 WAS ADOPTED.                            
                                                                               
  Number 294                                                                   
                                                                               
  REPRESENTATIVE ULMER MOVED PASSAGE of CSHB 206 (STA) from                    
  committee and asked for unanimous consent.  There was no                     
  objection, and IT SO MOVED.                                                  
                                                                               
  HB 226:  INTEREST RATES: JUDGMENTS/TAXES/ROYALTIES                           
                                                                               
  CHAIRMAN VEZEY read the title to HB 226, noted its                           
  introduction at the request of the Governor, and invited a                   
  representative of the Attorney General's office to explain                   
  the intent of HB 226.                                                        
                                                                               
  Number 313                                                                   
                                                                               
  JOE GELDHOF, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW,                  
  outlined HB 226.  He noted Section one dealt with pre and                    
  post judgment interest rates prior to and after court cases                  
  involving either state funds or money owed the state, and                    
  Section two dealt with oil royalties and tax repayment and                   
  the interest to be paid on them.  He stated the provisions                   
  of Section one would create a statutory interest rate as                     
  opposed to the arbitrary 10.5% rate now being paid.  He                      
  stated the advantage to setting a statutory rate would be                    
  that it would not be at the mercy of the market, and that                    
  would in turn save the state money.                                          
                                                                               
  MR. GELDHOF added the administration wished to set a market                  
  based rate, which in HB 226 would be dependant on the                        
  Treasury bill rate for each successive week.                                 
                                                                               
  Number 400                                                                   
                                                                               
  CHAIRMAN VEZEY agreed the interest rate statutes must be                     
  rewritten, but felt HB 226, as written, was nothing more                     
  than giving the state license to steal.  He noted the state                  
  payment of simple interest on overpaid taxes over a period                   
  of years was unfair, since the debt of the common person is                  
  compounded over that time.  He also noted the rate would                     
  favor guilty parties who underpaid their taxes, and asked if                 
  anyone knew how to borrow money at the Treasury bill rate                    
  except for the government.                                                   
                                                                               
  Number 435                                                                   
                                                                               
  MR. GELDHOF replied the Treasury bill rate was chosen                        
  because it is used by the federal government.                                
                                                                               
  Number 440                                                                   
                                                                               
  CHAIRMAN VEZEY's experience was that the rate used is                        
  actually the cost of money to the government.                                
                                                                               
  Number 445                                                                   
                                                                               
  MR. GELDHOF stated the administration was not married to the                 
  Treasury bill rate, as long as the rate finally chosen was                   
  market based.                                                                
                                                                               
  Number 450                                                                   
                                                                               
  CHAIRMAN VEZEY stated under the scenario presented, the                      
  state could whittle away at a debt by applying simple                        
  interest to a compounded debt it owes while stalling a case                  
  in court.                                                                    
                                                                               
  Number 460                                                                   
                                                                               
  MR. GELDHOF explained it would be difficult for clerks to                    
  deal with compound interest rates, and that was why the                      
  administration chose a simple interest solution.                             
                                                                               
  Number 470                                                                   
                                                                               
  CHAIRMAN VEZEY perceived the state was only asking for a                     
  change in the system because of a poor choice earlier.  He                   
  noted under an old system, the state paid seven percent,                     
  then paid 10.8% when the rest of the market was at 12%, and                  
  now that the money market has dropped interest rates, the                    
  state wants to address compound interest debts with simple                   
  interest rates.                                                              
                                                                               
  Number 485                                                                   
                                                                               
  MR. GELDHOF advised people could build compounded interest                   
  rates into contracts with the state if they wished.                          
                                                                               
  Number 490                                                                   
                                                                               
  CHAIRMAN VEZEY had additional objections to HB 226 as drawn                  
  up, noting the state could condemn someone's property, then                  
  be taken to court, and while the case was pending, the debt                  
  on the property would outstrip the amount owed on the                        
  property even if the state lost its case.                                    
                                                                               
  Number 499                                                                   
                                                                               
  REPRESENTATIVE OLBERG noted the two percent add-on to the                    
  Treasury bill rate in court and tax settlements under HB
  226, and stated he would like that deal himself, since he                    
  was paying 12.5% on his land.  He favored a market based                     
  rate.                                                                        
                                                                               
  Number 524                                                                   
                                                                               
  CHAIRMAN VEZEY agreed with the concept of a market based                     
  interest rate that would be fair to both sides of any                        
  disagreement, but objected to the use of the 52-week                         
  Treasury bill rate as the base interest rate.  He stated the                 
  Treasury bill rate was not consistent with what an average                   
  citizen could expect in the "real world."                                    
                                                                               
  Number 534                                                                   
                                                                               
  MR. GELDHOF said if there was an objection to the Treasury                   
  bill rate, he felt the administration would not object to                    
  another market based rate instead.                                           
                                                                               
  Number 540                                                                   
                                                                               
  CHAIRMAN VEZEY saw two options:  Either the administration                   
  could come up with a new proposal, or work with the                          
  committee on a committee substitute version.                                 
                                                                               
  MR. GELDHOF expressed a willingness to work on a new version                 
  of HB 226.                                                                   
                                                                               
  Number 570                                                                   
                                                                               
  REPRESENTATIVE OLBERG volunteered for a subcommittee to work                 
  on the bill, saying he saw a need to find a fair interest                    
  base.                                                                        
                                                                               
  CHAIRMAN VEZEY stated he would appoint a subcommittee later.                 
                                                                               
  Number 595                                                                   
                                                                               
  LARRY MEYERS, DIRECTOR OF INCOME AND EXCISE AUDIT DIVISION,                  
  DEPARTMENT OF REVENUE, testified on one section of HB 226,                   
  Section three.  He said there was a great difference paid                    
  out by the state in case of overpayment under current law                    
  and that provided by HB 226, but there was actually no                       
  difference if such an overpayment was treated as a                           
  correction in the tax return.                                                
                                                                               
  Number 636                                                                   
                                                                               
  CHAIRMAN VEZEY asked if under the old law it would be an                     
  advantage to overpay one's taxes because the government's                    
  interest rate was better than most banks.                                    
                                                                               
  Number 650                                                                   
                                                                               
  MR. MEYERS thought that was a distinct possibility.                          
                                                                               
  Number 655                                                                   
                                                                               
  CHAIRMAN VEZEY asked the difference in the interest rates                    
  for under- and overpayments under current law.                               
                                                                               
  MR. MEYERS stated under current law, there was none.                         
                                                                               
  Number 663                                                                   
                                                                               
  CHAIRMAN VEZEY preferred to see a difference of some kind                    
  for those who underpaid their taxes, saying there should be                  
  some sort of penalty.  He stated there should not be an                      
  incentive for anyone to overpay their taxes as well.                         
                                                                               
  Number 681                                                                   
                                                                               
  REPRESENTATIVE OLBERG inquired into the current rates being                  
  paid.                                                                        
                                                                               
  Number 685                                                                   
                                                                               
  MR. MEYERS advised the rate for overpayments, corrections                    
  and earnings is currently the short-term discount rate plus                  
  three percent, or 11%, whichever is greater.  Under HB 226,                  
  that would change to the discount rate plus two percent, or                  
  11%, whichever was greater, he added.                                        
                                                                               
  TAPE 93-37, SIDE B                                                           
  Number 004                                                                   
                                                                               
  REPRESENTATIVE OLBERG perceived the state was trying to                      
  build a spread for the interest rates, with the five percent                 
  add-on charged going for administrative costs.                               
                                                                               
  Number 030                                                                   
                                                                               
  CHAIRMAN VEZEY felt it would be at least a week before HB
  226 would see any further discussion in committee, and asked                 
  Mr. Meyers if he could provide the figure the federal                        
  government used in over and underpayment of taxes.                           
                                                                               
  Number 048                                                                   
                                                                               
  MR. MEYERS stated the federal government charged a one                       
  percent penalty for those who underpaid their taxes.                         
                                                                               
  Number 069                                                                   
                                                                               
  CHARLES "CHRIS" CHRISTENSEN III, STAFF COUNSEL FOR THE                       
  ALASKA COURT SYSTEM, opposed HB 226, which he said was                       
  unusual for the court system to do, but necessary.  He                       
  stated there was a series of technical problems with HB 226                  
  and the court could not support the bill because it would                    
  place undue strain on the system's clerical staff with no                    
  increase in personnel.  He stated the work load to track                     
  down and then distribute the interest rate to 58 court sites                 
  and 2,500 lawyers in the state would be enormous.  He noted                  
  the court handles close to 15,000 cases a year, and stated                   
  providing the financial information for each case would be                   
  unfair to expect.                                                            
                                                                               
  Number 228                                                                   
                                                                               
  CHAIRMAN VEZEY perceived the creation of a miniature Federal                 
  Reserve in Alaska.                                                           
                                                                               
  Number 258                                                                   
                                                                               
  REPRESENTATIVE OLBERG thought the idea was good, and the                     
  interest rate itself was not the problem, but how it was                     
  created.                                                                     
                                                                               
  MR. CHRISTENSEN stated it was the creation of the rate, and                  
  more importantly, how it was to be distributed through the                   
  system.                                                                      
                                                                               
  Number 268                                                                   
                                                                               
  CHAIRMAN VEZEY called for testimony via teleconference.                      
                                                                               
  Number 278                                                                   
                                                                               
  KEN REITHER, AN EMPLOYEE OF EXXON USA, testified by                          
  teleconference from Anchorage in opposition to the disparity                 
  in the interest rates applied to the under- and overpayment                  
  of royalties.  It appeared to him to be a six percent                        
  spread.                                                                      
                                                                               
  Number 292                                                                   
                                                                               
  CHAIRMAN VEZEY expressed interest in hearing the business                    
  community's point of view, and announced the committee would                 
  defer action on HB 226.  He then called a short at ease at                   
  8:47 a.m.                                                                    
                                                                               
  HB 192:  ADVERTISING BY UNREGISTERED CONTRACTORS                             
                                                                               
  Number 319                                                                   
                                                                               
  CHAIRMAN VEZEY called the committee back to order at 8:54                    
  a.m., read the title to SSHB 192, and called for its                         
  sponsor's statement.                                                         
                                                                               
  Number 325                                                                   
                                                                               
  REPRESENTATIVE ELDON MULDER, PRIME SPONSOR OF SSHB 192,                      
  stated past regulations prevented unregistered contractors                   
  from advertising their services unless they were certified                   
  tradesmen, but a subsequent court ruling struck those                        
  regulations down.   He stated further that HB 192 would put                  
  the former regulations into statute, which would protect                     
  consumers from unscrupulous contractors.  He advised SSHB
  192 also tightens the "handyman" provisions in the                           
  regulation, which he said accounts for 50% of all unlicensed                 
  contractors' violations.                                                     
                                                                               
  REPRESENTATIVE MULDER explained the latest version also was                  
  amended to exclude publications from penalties because of                    
  periodicals like USA Today and the Wall Street Journal that                  
  are brought in from outside.                                                 
                                                                               
  Number 417                                                                   
                                                                               
  REPRESENTATIVE ULMER perceived the law would be                              
  unenforceable without the advertising restrictions.                          
                                                                               
  Number 440                                                                   
                                                                               
  CHAIRMAN VEZEY declared it did not matter if the state could                 
  penalize publishers, because the industry would police                       
  itself.  He felt it would be in the best interest of                         
  licensed contractors to clean up the business, and that they                 
  would.  He pointed out the latest version of SSHB 192 raised                 
  the maximum fine for violations from $1,000 to $10,000.                      
                                                                               
  Number 464                                                                   
                                                                               
  REPRESENTATIVE ULMER stated the industry might police itself                 
  better if the person turning in a violator was given part of                 
  the fine amount.                                                             
                                                                               
  Number 470                                                                   
                                                                               
  CHAIRMAN VEZEY was not adverse to that idea, but would not                   
  suggest it himself.                                                          
                                                                               
  Number 473                                                                   
                                                                               
  VICE CHAIRMAN PETE KOTT expressed concern about the $10,000                  
  maximum fines, saying similar violations usually carried an                  
  average fine of $300.  He was concerned such a high fine                     
  would constitute criminality and lead to full jury trials.                   
                                                                               
  Number 485                                                                   
                                                                               
  CHAIRMAN VEZEY pointed out it is standard procedure in most                  
  commercial law cases to impose large fines, often in the                     
  $10,000 range, and felt the state would be able to do so                     
  under HB 192.                                                                
                                                                               
  Number 503                                                                   
                                                                               
  REPRESENTATIVE GARY DAVIS had concerns about HB 192, but                     
  supported the larger fine.                                                   
                                                                               
  Number 505                                                                   
                                                                               
  CHAIRMAN VEZEY said the $10,000 level ought to be the                        
  minimum.                                                                     
                                                                               
  Number 510                                                                   
                                                                               
  REPRESENTATIVE OLBERG MOVED ADOPTION of CSHB 192 (STA).                      
  There was no objection, and CSHB 192 (STA) WAS ADOPTED.                      
                                                                               
  Number 519                                                                   
                                                                               
  KARL LUCK, DIRECTOR, DIVISION OF OCCUPATIONAL LICENSING,                     
  DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT (DCED), said                 
  the DCED supported HB 192, but noted the need for several                    
  changes.  He suggested changing Section one to include the                   
  possibility of municipal licenses being issued, and                          
  tightening the use of advertising in the yellow pages, since                 
  there was an exemption for directories in the latest                         
  version.                                                                     
                                                                               
  Number 570                                                                   
                                                                               
  CHAIRMAN VEZEY had no problem with deleting lines five and                   
  six of section one.                                                          
                                                                               
  Number 587                                                                   
                                                                               
  REPRESENTATIVE OLBERG agreed with the deletion.  He could                    
  envision the Yellow Pages with several listings after the                    
  exemption was given.                                                         
                                                                               
  Number 592                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS concurred, saying the Yellow Pages                   
  would be a key area for small contractors to draw business                   
  from.                                                                        
                                                                               
  Number 600                                                                   
                                                                               
  MR. LUCK also had concerns about the maximum fine amount,                    
  saying an opinion from state attorneys said any fine above                   
  the $3,000 amount might be determined as criminal instead of                 
  a misdemeanor.                                                               
                                                                               
  Number 620                                                                   
                                                                               
  CHAIRMAN VEZEY felt the legislature is moving toward stiffer                 
  penalties and incarceration standards of this magnitude, and                 
  the maximum fine is within the guidelines of that                            
  philosophy.                                                                  
                                                                               
  Number 630                                                                   
                                                                               
  REPRESENTATIVE ULMER agreed with the Chairman, but asked for                 
  either a court opinion or an Attorney General's opinion to                   
  backup Mr. Luck's statements.                                                
                                                                               
  Number 640                                                                   
                                                                               
  MR. LUCK stated there was no written opinion, but rather                     
  verbal comments from staff lawyers that led him to believe                   
  the large fine might be a problem.  He went on to detail his                 
  concerns with Line 25 on page two of HB 192, in which the                    
  sale of non-permanent parts of a structure are permitted.                    
  He did not know what that meant.                                             
                                                                               
  Number 657                                                                   
                                                                               
  CHAIRMAN VEZEY believed that referred to tools and                           
  equipment.                                                                   
                                                                               
  Number 660                                                                   
                                                                               
  MR. LUCK asked the committee to define those terms in the                    
  final version of CSHB 192.  He then took issue with                          
  paragraph eight of page two, saying the qualification of                     
  "handymen" would be hard to define without a contract.  He                   
  asked for a definition of "minor, inconsequential, or                        
  casual" labor as mentioned in CSHB 192.                                      
                                                                               
  Number 693                                                                   
                                                                               
  CHAIRMAN VEZEY felt it would be hard to legislate common                     
  sense of what "minor, inconsequential or casual" labor might                 
  be.  He stated the idea was to allow small businessmen to                    
  get started while maintaining some control over the                          
  industry.                                                                    
                                                                               
  Number 698                                                                   
                                                                               
  REPRESENTATIVE OLBERG stated if the department sought only                   
  minor changes, perhaps the committee should hold HB 192.                     
                                                                               
  TAPE 93-38, SIDE A                                                           
  Number 000                                                                   
                                                                               
  MR. LUCK felt the "handyman" work threshold of $2,500 to                     
  $5,000 would be hard for the state to enforce with current                   
  personnel levels.                                                            
                                                                               
  CHAIRMAN VEZEY felt the state should not be trying to                        
  enforce that anyway, because the industry would probably do                  
  the enforcement.                                                             
                                                                               
  Number 050                                                                   
                                                                               
  MR. LUCK stated it would still require more people even if                   
  the industry policed itself, because complaints would still                  
  have to be handled by state commerce officers.  He estimated                 
  it would take at least 12 people statewide to handle the                     
  investigation of complaints.                                                 
                                                                               
  Number 092                                                                   
                                                                               
  CHAIRMAN VEZEY noted Mr. Luck's suggestions, summarized the                  
  amendments the committee might want to make, then                            
  entertained a motion to formalize the latest version of CSHB
  192.  (A copy of the amendments  may be found in the House                   
  State Affairs Committee Room, Capitol Room 102, and after                    
  the adjournment of the second session of the 18th Alaska                     
  State Legislature, in the Legislative Reference Library.)                    
                                                                               
  Number 111                                                                   
                                                                               
  REPRESENTATIVE OLBERG MOVED ADOPTION of the AMENDMENTS.                      
  Members took some moments to familiarize themselves with the                 
  language changes.                                                            
                                                                               
  Number 182                                                                   
                                                                               
  CHAIRMAN VEZEY MOVED the PROPOSED AMENDMENTS.  There were no                 
  objections; the AMENDMENTS to CSHB 192 (STA) WERE ADOPTED.                   
                                                                               
  REPRESENTATIVE OLBERG MOVED PASSAGE of CSHB 192 (STA) from                   
  committee, and asked for unanimous consent.  Without                         
  objections, THE MOTION CARRIED.                                              
                                                                               
  HB 46:  STATE-PAID TRAVEL MILEAGE CREDITS                                    
                                                                               
  Number 205                                                                   
                                                                               
  CHAIRMAN VEZEY introduced a new CSHB 46, and asked its                       
  acceptance for purposes of discussion.                                       
                                                                               
  REPRESENTATIVE OLBERG MOVED ADOPTION of CSHB 46 (STA).                       
  There was no objection, and CSHB 46 (STA) WAS ADOPTED.                       
                                                                               
  CHAIRMAN VEZEY explained the changes in CSHB 46 (STA), which                 
  included the deletion of jail terms for those who violate                    
  the law; the recognition that federal law codifies the                       
  airlines frequent flier programs as property of the                          
  airlines; and the deletion of section two and its subsequent                 
  replacement with a section that says state employees are no                  
  longer allowed to accept frequent flier mileage.                             
                                                                               
  Number 244                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS noted the last time HB 46 was                        
  discussed, a union official claimed the mileage program was                  
  included in a formal labor agreement, and asked for                          
  verification that was true.                                                  
                                                                               
  Number 254                                                                   
                                                                               
  CHAIRMAN VEZEY noted the papers provided the committee were                  
  unsigned, and subsequent discussions with the Department of                  
  Administration led to the realization no such agreement                      
  occurred.                                                                    
                                                                               
  Number 262                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS was concerned about the unsigned                     
  document and wondered if other members were concerned about                  
  the veracity of the union official's testimony.                              
                                                                               
  CHAIRMAN VEZEY stated there was no evidence the agreement                    
  was ever made.                                                               
                                                                               
  Number 277                                                                   
                                                                               
  REPRESENTATIVE ULMER wanted the point clarified for the                      
  record, and wanted to know from the Department of                            
  Administration's Commissioner, Nancy Usera, if such an                       
  agreement ever existed, rather than depend on a single phone                 
  call.  It seemed to her CSHB 46 (STA) simply ruled employees                 
  could not claim credit for mileage, with no provision for                    
  the state getting that credit, which seemed to contradict                    
  the original intent of HB 46.                                                
                                                                               
  Number 312                                                                   
                                                                               
  CHAIRMAN VEZEY stated the committee staff requested any                      
  documentation that might prove the existence of frequent                     
  flier mileage being included in labor agreements with the                    
  state, and none was produced by the Department of                            
  Administration.  He went on to state CSHB 46 (STA) simply                    
  paved the way for state agencies to collect frequent flier                   
  mileage because of the incentive provided the airlines.                      
                                                                               
  Number 340                                                                   
                                                                               
  REPRESENTATIVE OLBERG stated that since Juneau is down to                    
  one major airline serving the city, and if employees not                     
  getting the mileage would help that one airline                              
  economically, he would opt for helping the airline.                          
                                                                               
  Number 356                                                                   
                                                                               
  REPRESENTATIVE ULMER understood Representative Olberg's                      
  point, but says with the prices Alaska Airlines charges in                   
  Southeast Alaska, she feels the community has done enough                    
  economically for the airline.                                                
                                                                               
  REPRESENTATIVE G. DAVIS shared Representative Ulmer's                        
  concerns, and stated CSHB 46 (STA) needed a statement of                     
  intent that the state should eventually collect the frequent                 
  flier mileage.                                                               
                                                                               
  Number 393                                                                   
                                                                               
  REPRESENTATIVE OLBERG stated it was appropriate to include a                 
  statement saying CSHB 46 (STA) was the first step for the                    
  state collecting the mileage.                                                
                                                                               
  Number 400                                                                   
                                                                               
  CHAIRMAN VEZEY felt it would be a simple matter for the                      
  Department of Administration to find a way to collect the                    
  mileage, and was not opposed to an amendment for intent                      
  language.                                                                    
                                                                               
  Number 416                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS replied he would get another chance                  
  at CSHB 46 (STA) in the House Transportation Committee, and                  
  would address his concerns there.  He then MOVED PASSAGE of                  
  CSHB 46 (STA).                                                               
                                                                               
  Number 423                                                                   
                                                                               
  VICE CHAIR KOTT hoped the House Transportation Committee                     
  would also look at ways to claim travel mileage from both                    
  hotel and car rentals during its deliberations.                              
                                                                               
  Number 448                                                                   
                                                                               
  The House State Affairs Committee Substitute to HB 46 was                    
  PASSED from committee by a 5-1 vote, with Representative                     
  Ulmer voting NO.                                                             
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  Number 460                                                                   
                                                                               
  CHAIRMAN VEZEY adjourned the committee at 10:05 a.m.                         

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