Legislature(1995 - 1996)
03/28/1995 08:10 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE March 28, 1995 8:10 a.m. MEMBERS PRESENT Representative Jeannette James, Chair Representative Scott Ogan, Vice Chair Representative Joe Green Representative Caren Robinson Representative Ed Willis MEMBERS ABSENT Representative Ivan Representative Brian Porter COMMITTEE CALENDAR SCR 9: Relating to the twenty-seventh annual Girls' State. PASSED OUT OF COMMITTEE SCR 10: Relating to the twenty-ninth annual Boys' State. PASSED OUT OF COMMITTEE *HB 238: "An Act excluding certain direct sellers of consumer products from coverage under the state unemployment compensation laws." PASSED OUT OF COMMITTEE *HJR 9: Requesting the governor to file suit in the United States Supreme Court against the United States government alleging violations of the civil rights of Americans listed as prisoners of war or missing in action in Southeast Asia, demanding that documents concerning these individuals be released; and requesting the other states to join in this suit. PASSED OUT OF COMMITTEE HSTA - 03/28/95 *HB 267: "An Act relating to review and expiration of regulations; and providing an effective date." SCHEDULED BUT NOT HEARD HSTA - 03/28/95 SB 1: "An Act relating to state implementation of federal statutes." SCHEDULED BUT NOT HEARD (* First public hearing) WITNESS REGISTER SENATOR JOHN TORGERSON Alaska State Legislature Capitol Building, Room 427 Juneau, AK 99801 Telephone: 465-2828 POSITION STATEMENT: Sponsored SCR 9 and SCR 10 GEORGE DOZIER, Legislative Assistant Representative Pete Kott Capitol Building, Room 432 Juneau, Alaska 99801 Telephone: 465-3777 POSITION STATEMENT: Provided information on HB 238 MICHAEL LUNCEFORD Mary Kay Cosmetics 8787 Stemmons Dallas, TX 75247 Telephone: 214-905-5734 POSITION STATEMENT: Supported CS for HB 238 BILL JERMAIN, Attorney Jermain, Dunnigan, and Owens Suite 300, 3000 A Street Anchorage, AK 99503 Telephone: 56308844 POSITION STATEMENT: Supported CS for HB 238 JAMES CROSS, Distributor Kirby Company of Anchorage 76 Old Seward Highway Anchorage, AK 99504 Telephone: 344-4545 POSITION STATEMENT: Supported HB 238 ROB SHUMAY, In-House Counsel Kirby Company 28800 Clemens Road West Lake, Ohio 44145 Telephone: 216-892-3000 POSITION STATEMENT: Supported HB 238 EVELYN JARVIS-FERRIS, Vice President of Government Relations Shaklee Corporation 444 Market Street San Francisco, CA Telephone: 4415-954-2016 POSITION STATEMENT: Supported CS for HB 238 DIRK BLOEMENDAAL, Corporate Government Affairs Counsel Amway Corporation 7575 East Fulton Road Ada, Michigan 616-676-7010 POSITION STATEMENT: Supported CS for HB 238 JOSEPH MARIANO, Vice-President and Legal Counsel Direct Selling Association 1666 K Street Northwest Washington, D.C. 20006 Telephone 202-293-5760 POSITION STATEMENT: Supported HB 238 STEVE EGLI Kirby Corporation 9310 Glacier Highway Juneau, AK 99801 Telephone: 790-4446 POSITION STATEMENT: Supported HB 238 PAM NEAL, Executive Director Alaska State Chamber of Commerce 217 2nd Street Juneau, AK 99801 Telephone: 586-2323 POSITION STATEMENT: Supported HB 238 ED FLANAGAN, Deputy Commissioner Alaska Department of Labor 1111 W. 8th Street Juneau, AK 99801 Telephone: 465-2700 POSITION STATEMENT: Provided information on HB 238 GARY TYNDALL P.O. Box 82977 Fairbanks, AK 99708 Telephone: 488-1433 POSITION STATEMENT: Supported HJR 9 WILLIAM FREDERICK P.O. Box 71771 Fairbanks, AK 99707 Telephone: 488-7922 POSITION STATEMENT: Supported HJR 9 TOM GOGGINS c/0 119 N. Cushman Fairbanks, AK 99701 Telephone: 458-6710 POSITION STATEMENT: Supported HJR 9 ART GRISWOLD 873 Runamuck North Pole, AK 99705 Telephone: 488-7805 POSITION STATEMENT: Supported HJR 9 DEE FIELDS 2050 Resolution Road Fairbanks, AK 99712 Telephone: 322-2720 POSITION STATEMENT: Supported HJR 9 LADD MCBRIDE P.O. Box 83567 Fairbanks, AK 99708 Telephone: 479-8096 POSITION STATEMENT: Supported HJR 9 JACK HETHERTON P.O. Box 2376 Soldotna, AK 99669 Telephone: 262-5455 POSITION STATEMENT: Supported HJR 9 NANCY GOURLEY P.O. Box 1082 Kenai, AK 99611 Telephone: 283-3208 POSITION STATEMENT: Supported HJR 9 PREVIOUS ACTION BILL: SCR 9 SHORT TITLE: TWENTY-SEVENTH ANNUAL GIRLS' STATE SPONSOR(S): SENATOR(S) TORGERSON, R.Phillips, Pearce, Green, Leman, Ellis, Rieger; REPRESENTATIVE(S) Bunde, Navarre, Grussendorf JRN-DATE JRN-PG ACTION 03/08/95 538 (S) READ THE FIRST TIME - REFERRAL(S) 03/08/95 538 (S) STATE AFFAIRS 03/14/95 (S) STA AT 03:30 PM BELTZ ROOM 211 03/14/95 (S) MINUTE(STA) 03/15/95 616 (S) STA RPT 4DP 03/15/95 616 (S) ZERO FN (LAA) 03/16/95 (S) RLS AT 12:00 PM FAHRENKAMP ROOM 203 03/16/95 (S) MINUTE(RLS) 03/17/95 664 (S) RULES TO CALENDAR 3/17/95 03/17/95 668 (S) READ THE SECOND TIME 03/17/95 678 (S) COSPONSOR: RIEGER 03/17/95 668 (S) PASSED Y18 N- E2 03/17/95 679 (S) TRANSMITTED TO (H) 03/20/95 801 (H) READ THE FIRST TIME - REFERRAL(S) 03/20/95 801 (H) STATE AFFAIRS 03/20/95 825 (H) CROSS SPONSOR(S): BUNDE, NAVARRE 03/20/95 825 (H) CROSS SPONSOR(S): GRUSSENDORF 03/28/95 (H) STA AT 08:00 AM CAPITOL 102 BILL: SCR 10 SHORT TITLE: TWENTY-NINTH ANNUAL BOYS' STATE SPONSOR(S): SENATOR(S) TORGERSON, R.Phillips, Pearce, Green, Leman, Ellis, Rieger; REPRESENTATIVE(S) Bunde, Navarre, Grussendorf JRN-DATE JRN-PG ACTION 03/08/95 538 (S) READ THE FIRST TIME - REFERRAL(S) 03/08/95 538 (S) STATE AFFAIRS 03/14/95 (S) STA AT 03:30 PM BELTZ ROOM 211 03/14/95 (S) MINUTE(STA) 03/15/95 617 (S) STA RPT 4DP 03/15/95 617 (S) ZERO FN (LAA) 03/16/95 (S) RLS AT 12:00 PM FAHRENKAMP ROOM 203 03/16/95 (S) MINUTE(RLS) 03/17/95 664 (S) RULES TO CALENDAR 3/17/95 03/17/95 669 (S) READ THE SECOND TIME 03/17/95 678 (S) COSPONSOR: RIEGER 03/17/95 669 (S) PASSED Y18 N- E2 03/17/95 679 (S) TRANSMITTED TO (H) 03/20/95 801 (H) READ THE FIRST TIME - REFERRAL(S) 03/20/95 801 (H) STATE AFFAIRS 03/20/95 825 (H) CROSS SPONSOR(S): BUNDE, NAVARRE 03/20/95 825 (H) CROSS SPONSOR(S): GRUSSENDORF 03/28/95 (H) STA AT 08:00 AM CAPITOL 102 BILL: HB 238 SHORT TITLE: NO UNEMPLOYMENT COMP FOR DIRECT SELLERS SPONSOR(S): LABOR & COMMERCE BY REQUEST JRN-DATE JRN-PG ACTION 03/08/95 641 (H) READ THE FIRST TIME - REFERRAL(S) 03/08/95 641 (H) STATE AFFAIRS, LABOR & COMMERCE 03/23/95 (H) STA AT 08:00 AM CAPITOL 102 03/28/95 (H) STA AT 08:00 AM CAPITOL 102 BILL: HJR 9 SHORT TITLE: SUIT RE POWS & MIAS AGAINST U.S. & OTHERS SPONSOR(S): REPRESENTATIVE(S) JAMES,Kubina,Therriault,Mulder JRN-DATE JRN-PG ACTION 01/16/95 18 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/95 18 (H) MLV, STA, JUD 01/19/95 87 (H) COSPONSOR(S): KUBINA 03/15/95 757 (H) COSPONSOR(S): THERRIAULT 03/20/95 (H) MLV AT 05:00 PM CAPITOL 17 03/20/95 (H) MINUTE(MLV) 03/22/95 847 (H) MLV RPT CS(MLV) 4DP 03/22/95 847 (H) DP: IVAN, WILLIS, FOSTER, KOTT 03/22/95 847 (H) INDETERMINATE FISCAL NOTE (LAW) 03/27/95 946 (H) COSPONSOR(S): MULDER 03/28/95 (H) STA AT 08:00 AM CAPITOL 102 BILL: HB 267 SHORT TITLE: REGULATION REVIEW AND EXPIRATION SPONSOR(S): REPRESENTATIVE(S) JAMES,Kelly JRN-DATE JRN-PG ACTION 03/17/95 779 (H) READ THE FIRST TIME - REFERRAL(S) 03/17/95 779 (H) STATE AFFAIRS, FINANCE 03/20/95 825 (H) COSPONSOR(S): KELLY 03/23/95 (H) STA AT 08:00 AM CAPITOL 102 03/28/95 (H) STA AT 08:00 AM CAPITOL 102 BILL: SB 1 SHORT TITLE: REVIEW OF FEDERALLY MANDATED PROGRAMS SPONSOR(S): SENATOR(S) TAYLOR,Kelly,Halford,Sharp JRN-DATE JRN-PG ACTION 01/06/95 12 (S) PREFILE RELEASED - 1/6/95 01/16/95 12 (S) READ THE FIRST TIME - REFERRAL(S) 01/16/95 13 (S) STATE AFFAIRS, JUDICIARY 02/07/95 (S) STA AT 03:30 PM BELTZ ROOM 211 02/07/95 (S) MINUTE(STA) 02/08/95 204 (S) STA RPT 2DP 2NR 02/08/95 204 (S) FN(S):DOT #9,REV #13,DPS #14, LAW #15 02/08/95 204 (S) DHSS #16, F&G #17, DCRA #18 02/08/95 204 (S) ZERO FN(S):(DNR #1,DMVA#2,DOE #3,#4, 02/08/95 204 (S) CORR #5, DCED #6, ADM #7, GOV #8, LABOR 02/08/95 204 (S) #10, F&G #11, DEC #12) 02/08/95 209 (S) JUD REFERRAL WAIVED 02/08/95 209 (S) FIN REFERRAL ADDED 03/02/95 454 (S) FIN RPT 4DP 3NR 03/02/95 454 (S) ZERO FISCAL NOTE (S.FIN/ALL DEPTS #19) 03/02/95 (S) FIN AT 09:00 AM SENATE FINANCE 520 03/03/95 (S) RLS AT 11:20 AM FAHRENKAMP ROOM 203 03/03/95 (S) MINUTE(RLS) 03/08/95 537 (S) RULES TO CALENDAR 3/8/95 03/08/95 539 (S) READ THE SECOND TIME 03/08/95 539 (S) ADVANCE TO 3RD READING MOTION WITHDRAWN 03/08/95 539 (S) THIRD READING 3/9 CALENDAR 03/09/95 559 (S) READ THE THIRD TIME SB 1 03/09/95 559 (S) PASSED Y11 N8 E1 03/09/95 565 (S) TRANSMITTED TO (H) 03/10/95 696 (H) READ THE FIRST TIME - REFERRAL(S) 03/10/95 696 (H) STATE AFFAIRS, FINANCE 03/15/95 755 (H) WTR REFERRAL ADDED 03/22/95 868 (H) WTR REFERRAL WAIVED 03/28/95 (H) STA AT 08:00 AM CAPITOL 102 ACTION NARRATIVE TAPE 95-36, SIDE A Number 000 CHAIR JEANNETTE JAMES called the meeting to order at 8:10 a.m. Present at roll call were Representatives Robinson, Ogan, Green, and James. Representative Willis arrived later. HSTA - 03/28/95 SCR 9 - TWENTY-SEVENTH ANNUAL GIRLS' STATE SCR 10 - TWENTY-NINTH ANNUAL BOYS' STATE SENATOR JOHN TORGERSON read his sponsor statement for SCR 9 and SCR 10. "I have requested these two concurrent resolutions because I am a lifetime member of the Veterans of Foreign Wars and also a member of the American Legion. Senate Concurrent Resolutions 9 and 10 applaud the sponsors and the participants of the twenty-ninth annual Girls' and Boys' State Programs. These programs work toward bringing an increased awareness of the roles young men and women have in the future of our state. The annual program sponsored by the American Legion and the Auxiliary as well as other cooperating organizations do not receive governmental or taxpayer monetary support but rather are completely organized through volunteer efforts. Without question, the organizers of this annual event are to be congratulated and recognized. Their commitment to preparing our young men and women is outstanding, and I would urge your support for these resolutions." Number 056 CHAIR JAMES noted the arrival of Representative Willis. REPRESENTATIVE JOE GREEN added, for the record, he could not think of a finer place for young people to go than Boys' State or Girls' State. He went when he was young and it was a tremendous experience where he learned a great deal about government. Number 073 REPRESENTATIVE ED WILLIS agreed with Representative Green, adding as a Legionnaire he was privileged to attend and participate in Boys' State last year. It was a tremendous experience. One of his sons attended Boys' State years ago and benefitted greatly. He urged support for the resolutions. Number 101 REPRESENTATIVE CAREN ROBINSON asked why they should use a resolution and not a citation. CHAIR JAMES replied a resolution was a little higher honor than a citation. REPRESENTATIVE SCOTT OGAN made a motion to move SJR 9 and SJR 10 out of committee. CHAIR JAMES added she had participated in Girls' State in Fairbanks recently, doing their inauguration twice and giving educational speeches to the group. They are a fine group of young ladies, and she added her support to the resolutions. Number 128 CHAIR JAMES repeated there was a motion to move the resolutions, with unanimous consent and zero fiscal notes. There were no objections, so SJR 9 and SJR 10 were moved from the State Affairs Committee. HSTA - 03/28/95 HB 238 - NO UNEMPLOYMENT COMP FOR DIRECT SELLERS Number 139 GEORGE DOZIER, Legislative Assistant to Representative Pete Kott, reported HB 238 would amend Alaska law to exempt direct sellers from unemployment compensation coverage. The sponsor, Representative Kott, believes that outside salesmen who are direct sellers are not traditional employees, but independent contractors because they have no supervision and are not controlled by an employer. They assume the risk of their activities, earning money only when they sell. Number 169 MR. DOZIER offered a committee substitute, CS HB 238(STA) version F, for consideration. Number 184 REPRESENTATIVE GREEN asked why the CS was significantly shorter than the original bill. MR. DOZIER replied the original bill potentially excluded a significant number of sales people from its coverage, so the CS broadens the coverage with respect to the original bill. Number 204 MICHAEL LUNCEFORD, Mary Kay Cosmetics, testified via teleconference from Dallas in support of the proposed CS because it now includes many other direct sales people than the original bill, and because it is now consistent with employment statutes. Number 256 BILL JERMAIN, attorney who represented the Kirby Company in litigation regarding the employment security act, testified via teleconference from Anchorage in support of HB 238 or the CS, stating individuals covered by the bill are clearly not employees, they are independent contractors, and it will help avoid a great deal of litigation. Number 309 JAMES CROSS, a Kirby Company distributor, testified via teleconference from Anchorage in support of HB 238. He said the bill defines independent contractors and avoids many potential problems. Number 340 ROB SHUMAY, in-house counsel for the Kirby Company, testified via teleconference from Ohio in support of HB 238. He agreed with previous testifiers and stated he was available for questions. Number 340 EVELYN JARVIS-FERRIS, Vice President of Government Relations, Shaklee Corporation, testified via teleconference from San Francisco in favor of the CS for HB 238, stating it would bring Alaska law into consistency with federal law in its definition of independent contractor as it relates to direct sellers. Number 397 DIRK BLOEMENDAAL, Corporate Government Affairs Counsel, Amway Corporation, testified via teleconference from Oklahoma in favor of the committee substitute for HB 238, stating it tracks federal law. He agreed with previous testifiers that the original bill had problems in terms of location of sale as well as the definition of compensation. A bill similar to the proposed CS has passed both legislative houses in Michigan. Number 338 JOSEPH MARIANO, Vice President and Legal Counsel, Direct Selling Association, supported proposed committee substitute for HB 238. His association applauded Representative Kott's efforts for bringing Alaska law into agreement with federal law. Number 460 STEVE EGLI, Kirby Company of Southeast Alaska, testified in favor of HB 238, saying he had been in a legal dispute with the Department of Labor for three years and the laws need to be redefined to end such disputes. Number 487 REPRESENTATIVE GREEN asked Mr. Egli whether either version might stop the litigations currently in Superior Court. MR. EGLI replied "yes." Number 500 CHAIR JAMES said she had gotten a FAX from the Department of Labor and they oppose the bill, but they had prefaced that statement by saying the Department of Labor is rarely, if ever, in support of legislation removing classes of employees from coverage under any of its protective statutes. She added the committee therefore could not count on ever getting a positive response from the Department of Labor; their function is to include, not exclude, people. CHAIR JAMES added the committee substitute for HB 238 would also help independent contractors get out from under other requirements such as minimum wage and overtime. Number 525 REPRESENTATIVE ROBINSON said her understanding was the Department of Labor was against the proposed working draft, not the original bill, and in fact had worked with Senator Kelly to help draft the original Senate bill. Number 533 MR. EGLI said the Senate committee substitute says on line 11 "commissions on sales or other remuneration directly related to sales or sales performance," and this covers their concerns. He added sales people want to be independent. Selling is a skill, and successful direct sellers are never out of a job or unemployed. Unsuccessful sellers would never make enough money to pay into unemployment so could never collect it anyway and would have no benefits, so it is an unfair tax on the successful direct sellers. Number 558 CHAIR JAMES observed HB 238 is somewhat open-ended regarding employee or nonemployee status. Number 570 MR. MARIANO reinforced Chair James' comments, adding the typical profile of a direct seller is a person who is a woman who sells on a part-time basis. The most important aspect is they view themselves as independent business people, not employees, both legally and philosophically. The committee substitute clarifies this. Number 585 REPRESENTATIVE GREEN observed the Department of Labor prefers the original bill, and wondered whether the committee should adopt the committee substitute as a working draft. CHAIR JAMES noted the Department of Labor would soon be available for questions on conference call. Number 605 PAM NEAL, Executive Director, Alaska State Chamber of Commerce, stated Avon is a member of the Chamber, as are some other direct sellers. She agreed the changes outlined in HB 238 are necessary. Number 632 ED FLANAGAN, Deputy Commissioner, Alaska Department of Labor, testified via conference call, stating he was not familiar with the proposed CS for HB 238. CHAIR JAMES read the proposed committee substitute for Mr. Flanagan and asked for his comments. Number 680 MR. FLANAGAN referred to the letter he had FAXed outlining the department's position. He said the department opposes any exemption to protective statutes. He had, however, met with proponents of this bill, namely people from the Kirby Vacuum Company of Alaska, and asked why Kirby was in litigation when other direct sellers were not. It became apparent Kirby sellers are set up as distributors with their own stores, engaging also in retail sales, and thus could not meet the test of being independent contractors. MR. FLANAGAN continued the Department of Labor has problems with the draft CS. Independent contractor status has been abused, and the original bill dealt with this. The department would oppose adopting the CS or any other language similar to the federal law, which leaves too many loopholes and is too open to abuse. He urged the committee to adopt the original bill. Number 696 CHAIR JAMES referred to her own experience as a small business owner, accountant, and tax preparer. She added she believes the original bill is just as open as the federal law. MR. FLANAGAN said he did not agree; the exemption would provide a safe harbor which would be too broad and would open itself to other businesses that should not be considered independent contractors. TAPE 95-36, SIDE B Number 000 MR. FLANAGAN noted there is a difference between the Senate and House versions of the bill. The CS for Senate Bill 122 (JUD) is a little tighter, but both bills allow bogus schemes for abusing the definition of independent contractors. Number 047 CHAIR JAMES stated she thinks the Department of Labor's goal should be to include as many people as possible for benefits, and secondary to that should be collecting the tax from those people, rather than having the goal be just collecting the tax for their fund. MR. FLANAGAN replied the two go hand in hand. Concern for the trust fund is to assure there is money to pay the benefits; it is basically an insurance system for people who need it. Number 084 REPRESENTATIVE ROBINSON said it was her understanding the Department of Labor favors the bill as amended in the Senate and asked if that was correct. MR. FLANAGAN said she was correct. Number 100 MR. MARIANO observed it is vital to the direct selling industry that the CS and the federal language be adopted. It would be unfortunate to inadvertently exclude a majority of direct sellers from a direct seller exemption, which could happen without the CS. He added the federal language is very clear cut and articulate and would not allow unintended beneficiaries to take advantage of the exclusion. Number 141 CHAIR JAMES said she believed it would be most fair to include the federal language. Number 154 REPRESENTATIVE OGAN moved to accept the CS as the working document. REPRESENTATIVE GREEN asked for a delay in the vote until the back page of the CS was available. MR. EGLI said the back page was the same as the back page of the original HB 238. Number 171 REPRESENTATIVE ROBINSON asked Mr. Flanagan why the Department of Labor was opposed to the working draft. MR. FLANAGAN said it references a federal statute which lends itself to problems. True direct sellers who are truly independent contractors "aren't broke and they don't need fixing." Although Kirby needs a special exemption, others do not. Number 219 REPRESENTATIVE ROBINSON said as she understood it, Mr. Flanagan was saying the laws in Alaska have not presented a problem to date except for Kirby, and the Department of Labor wants the language narrowed to accommodate just that one problem. MR. FLANAGAN said she was correct, and the Department of Labor could only support a bill which was that narrow and limited. Number 235 CHAIR JAMES asked Mr. Flanagan how he would define "sale of services." MR. FLANAGAN this could be construed as the performance of actual labor on somebody's dwelling, which is frequently abused, and this is what he wants to avoid. A ludicrous example is when a restaurant owner tries to apply it to waiters and waitresses. Number 258 CHAIR JAMES said she recognized the exemptions are abused, and this occurs because the rules and regulations regarding employees make it impossible for many people to work and they have created a depressed economy in the country. Number 267 MR. FLANAGAN responded the statutes and regulations are "pretty basic stuff" such as minimum wage, time and a half for overtime, unemployment insurance, and workers compensation. He did not see these "basic protections" as creating excessive costs. Number 280 CHAIR JAMES gave an example of a sales person who works ten hours a day and sells nothing for three days, then on the fourth day makes a sale. If that person is an employee for those three days, he is on minimum wage plus overtime, and his employer has to pay that. That is a deterrent. There are a lot of products that can be sold by direct sale, other than Kirbys, and those direct sellers should not be treated as employees. We have been putting dampers on employment opportunities, in a depressed economic situation, and including direct sellers under the federal law might solve the problem. Number 320 MR. FLANAGAN replied the language the Department of Labor supports would accomplish the same goal, if a seller is truly an independent contractor. CHAIR JAMES responded she has done federal audits, and they are just as stringent as the state, and they are not likely to allow restaurant workers. Number 335 REPRESENTATIVE OGAN reminded the Chair there was a CS on the table. CHAIR JAMES said the discussion was about whether to accept the CS as a working document. REPRESENTATIVE GREEN requested the maker of the motion to withdraw it, because he was not ready to vote. REPRESENTATIVE OGAN withdrew his motion to accept the CS as the working document. Number 350 REPRESENTATIVE GREEN disclosed his wife had been a dental hygienist and had worked as an independent contractor. When her boss realized the criteria was whether she had to work at the direction and discretion of someone else, it became apparent to the dentist that she did not qualify as an independent contractor but was actually an employee. Representative Green asked if this would be a criteria in the case of network marketing organizations such as Shaklee: do the organizations exercise any direct authority or instruction over their network people, or are they completely independent in their marketing. Number 374 REPRESENTATIVE OGAN said his wife used to sell Shaklee, and she was a completely independent business person, setting her own hours. He added the language in the federal law is pretty clear on this issue. Number 391 REPRESENTATIVE ROBINSON noted sales people for companies like Avon and Amway are already exempt. CHAIR JAMES agreed, adding the Department of Labor said they never audit them because they do not have retail establishments and have no employees. REPRESENTATIVE ROBINSON referred to Merle Norman make-up sales people, for example, who can either sell independently or set up a retail business. She believes that once a person sets up a retail business, all the laws should be followed. Number 412 MR. MARIANO agreed, adding the reason the federal government exempted people in his industry was because it was clear no controls were imposed on the sellers. He would like to see the committee substitute passed to include all who should be included in the exemption. Number 455 REPRESENTATIVE GREEN asked Mr. Flanagan if the independent sellers excluded would later be subject to unemployment compensation. MR. FLANAGAN said they are not subject to it now and would not be under the proposed bill. He referred to the "ABC test" for employees: A. The individual is free of control and direction in the performance of service; B. The service is performed outside the places of business; and C. The individual is engaged in an independently established business of the same nature. MR. FLANAGAN said sellers for Avon, Shaklee, and the others, meet this test now and had no problems in the first place. Number 495 REPRESENTATIVE ROBINSON noted the bill has a referral to the Labor and Commerce Committee. She believes it is in the state's interest to address the problem and would recommend moving HB 238 as written and let the next committee decide the best direction to go. Number 514 MR. DOZIER said he believed Representative Kott would not have a problem with passing it on to Labor and Commerce, which he Chairs. CHAIR JAMES listed the committee's options: They could move the original bill without the CS, or they could move the CS, or they could do a conceptual amendment similar to SB 122 in accordance with the Department of Labor's wishes. Her personal opinion was, in an effort to put more people to work and allow businesses to profit, and to lessen rules and regulations which strangle employment opportunities, a change needed to be made and the CS needed to be adopted. Number 551 REPRESENTATIVE OGAN commented people in direct sales are one of "the last of a dying breed of true capitalists in this country," where everyone is regulated by government intervention in all aspects of life. He moved the committee substitute for HB 238. Number 567 REPRESENTATIVE GREEN said, after hearing all the debate, he tended to learn toward the CS. He observed that a large number of the direct sellers affected were women with children at home, and he was in favor of the motion. Number 580 REPRESENTATIVE WILLIS said he agreed with the Department of Labor and favored the Senate version of the bill because it addressed the specific concerns of Alaska as opposed to the federal law. He did not want to see Alaska tied to regulations and laws at the federal level. Number 604 CHAIR JAMES said there already is a direct tie to the federal law, because all income is reported to the federal government. So it is imperative we define employees the same way the federal government does in order to avoid penalties. Number 625 REPRESENTATIVE ROBINSON observed SB 122 is already in Rules, so the House will probably be seeing that version soon anyway and it will probably be the vehicle. Number 630 CHAIR JAMES repeated the motion, to use the CS as the working document. There were objections. A roll call vote was taken. Representatives Ogan, Green, and James voted yes. Representatives Robinson and Willis voted no. The motion passed 3 to 2. REPRESENTATIVE OGAN made a motion to move the CS from committee with individual recommendations and zero fiscal note. Hearing no objection, CSHB 238(STA) passed out of committee. HSTA - 03/28/95 HJR 9 - SUIT RE POWS & MIAS AGAINST U.S. & OTHERS Number 660 GARY TYNDALL testified via teleconference from Fairbanks in support of HJR 9, noting similar resolutions had been passed or introduced in 37 states. Alaska has the highest percentage of veterans of any state. During the Vietnam peace talks in 1973, Alaska presented the North Vietnamese with a list of over 3,700 names of people known or suspected of being alive in enemy hands. We got back 591 of those people. Three weeks later, the remaining 3,100 were declared officially dead, just written off and abandoned, with no explanation to the families. Within the last few years, individuals within our government have admitted they knew some men were left behind alive and have proof of sightings; some were used as bargaining chips. They should not be declared dead just for the convenience of the government and then abandoned. TAPE 95-37, SIDE A Number 000 MR. TYNDALL continued, HJR 9 signals Alaska's willingness to join with other states in petitioning to bring our men home. WILLIAM FREDERICK testified via teleconference in Fairbanks in support of HJR 9, stating he was past commander of American Legion Post 1 in Anchorage, currently commander V.F.W. Post 10029 in North Pole, and a Vietnam veteran. He stated at least families of deceased veterans have the solace of knowing their loved ones are accounted for. The Missing in Action (MIAs) families have had no such comfort for 20 years. He urged the passage of HJR 9. TOM GOGGINS testified via teleconference in Fairbanks in support of HJR 9, saying he had served during World War II and also in Korea. He believes Americans have a duty to do all we can to recover the missing people. It is on his mind each and every day of his life. Number 128 ART GRISWOLD testified via teleconference in Fairbanks in support of HJR 9. As a Korean veteran, he believes we must get behind this resolution because these men have given the ultimate for their country. Number 148 CHAIR JAMES reminded listeners they could also send written testimony to the committee. Number 173 DEE FIELDS testified via teleconference in Fairbanks in support of HJR 9, saying she is a proud member of the Alaska Independence Party and it is time we resolve this issue and get our Prisoners of War (POWs) and MIAs back from Vietnam. LADD MCBRIDE testified via teleconference in Fairbanks in support of HJR 9, stating he is a Korean veteran and just retired from the military in 1992. He is sorry Alaska is not in the forefront on this issue because Alaska has the highest military population ratio in the United States. He is also chair of the Interior Alaska Veterans Committee which unanimously supports HJR 9. Number 203 JACK HETHERTON testified via teleconference from Kenai in favor of HJR 9 on behalf of VFW Post 10046, of which he is Commander, and on behalf of the two Alaskans still listed as missing in action. Soldiers missing in action are too often declared dead for political expediency. This has to be the ultimate shame of our country. As a combat Vietnam veteran, there has not been a day gone by in the past 25 years when he has not thought about his abandoned comrades. He carries a great shame in his heart where there should be pride. HJR 9 asks our country to honor a sacred duty to our veterans. Number 250 NANCY GOURLEY testified via teleconference from Kenai in support of HJR 9, stating she is a family member of a man who has been missing in action from Vietnam since November 18, 1971. In addition, her uncle has been missing from Korea since July 5, 1950. She is keenly involved and interested in this issue. She had an investigation into her brother's crash site, but the information she received was very suspicious and questionable. The family has had no resolution from the Central Intelligence Agency (CIA), Department of Defense (DOD), State Department, National Security Council, National Security Agency, seven congressional investigations, or from Alaska's congressional delegation, and they feel like this resolution is their last hope. Everybody agrees on just one point: There were live men left behind. She asked where are they now, and why aren't they home. Number 296 CHAIR JAMES stated Alaska has two service men missing and unaccounted for in Southeast Asia, Thomas E. Anderson, USMF, from Spenard and Howard M. Koslowski, US Navy, from Anchorage. Number 313 REPRESENTATIVE WILLIS moved and asked unanimous consent that HJR 9 be moved out of committee. There was no objection; the resolution was moved. REPRESENTATIVE GREEN asked if this resolution was the "last shot" at recovering the MIAs and POWs. He wondered if there was any way to negotiate, or if filing suit was our last resort. CHAIR JAMES responded yes, this was our last resort. The movement started in Michigan, where a way was found to go directly to the Supreme Court on behalf of the POWs and MIAs. Previously, any court action could only be taken by the person himself; not even relatives were allowed. But Alaska as a state can do it for our residents and go directly to the Supreme Court, and she hopes all the states will join in and do the same thing. REPRESENTATIVE ROBINSON noted it is not just the existing President but the last several, for the last twenty years at least, who have failed to deal with this issue. ADJOURNMENT CHAIR JAMES adjourned the meeting at 10:02 a.m.