02/21/2002 08:02 AM House STA
| Audio | Topic |
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
February 21, 2002
8:02 a.m.
MEMBERS PRESENT
Representative John Coghill, Chair
Representative Hugh Fate
Representative Gary Stevens
Representative Peggy Wilson
Representative Harry Crawford
Representative Joe Hayes
MEMBERS ABSENT
Representative Jeannette James
COMMITTEE CALENDAR
HOUSE BILL NO. 344
"An Act increasing fees for driver's licenses, instruction
permits, and identification cards; and providing for an
effective date."
- MOVED CSHB 344(STA) OUT OF COMMITTEE
HOUSE BILL NO. 346
"An Act relating to concealed handgun permittees."
- MOVED HB 346 OUT OF COMMITTEE
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 254
"An Act relating to the teachers' retirement system, the
judicial retirement system, and the public employees' retirement
system and to the tax qualification under the Internal Revenue
Code of those systems; amending the definition of 'actuarial
adjustment' in the teachers' retirement system and the public
employees' retirement system; repealing certain provisions of
the teachers' retirement system and the public employees'
retirement system; and providing for an effective date."
- MOVED SSHB 254 OUT OF COMMITTEE
HOUSE BILL NO. 300
"An Act relating to the procurement of certain travel services."
- MOVED HB 300 OUT OF COMMITTEE
HOUSE BILL NO. 314
"An Act relating to service in the peace corps as an allowable
absence from the state for purposes of eligibility for permanent
fund dividends; and providing for an effective date."
- BILL HEARING POSTPONED TO 2/28/02
PREVIOUS ACTION
BILL: HB 344
SHORT TITLE:INCREASE DRIVER'S LICENSE FEES
SPONSOR(S): RLS
Jrn-Date Jrn-Page Action
01/18/02 2008 (H) READ THE FIRST TIME -
REFERRALS
01/18/02 2008 (H) STA, FIN
02/05/02 (H) STA AT 8:00 AM CAPITOL 102
02/05/02 (H) Heard & Held
MINUTE(STA)
02/21/02 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 346
SHORT TITLE:CONCEALED HANDGUN PERMITTEES
SPONSOR(S): REPRESENTATIVE(S)MASEK
Jrn-Date Jrn-Page Action
01/22/02 2029 (H) READ THE FIRST TIME -
REFERRALS
01/22/02 2029 (H) STA, JUD
02/04/02 2152 (H) COSPONSOR(S): CROFT
02/21/02 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 254
SHORT TITLE:TAX-QUALIFIED STATE RETIREMENT SYSTEMS
SPONSOR(S): REPRESENTATIVE(S)JAMES BY REQUEST
Jrn-Date Jrn-Page Action
04/24/01 1162 (H) READ THE FIRST TIME -
REFERRALS
04/24/01 1162 (H) STA, FIN
02/15/02 2281 (H) SPONSOR SUBSTITUTE INTRODUCED
02/15/02 2281 (H) READ THE FIRST TIME -
REFERRALS
02/15/02 2281 (H) STA, FIN
02/21/02 (H) STA AT 8:00 AM CAPITOL 102
BILL: HB 300
SHORT TITLE:PROCUREMENT OF TRAVEL SERVICES
SPONSOR(S): REPRESENTATIVE(S)HAYES
Jrn-Date Jrn-Page Action
01/14/02 1953 (H) PREFILE RELEASED 1/4/02
01/14/02 1953 (H) READ THE FIRST TIME -
REFERRALS
01/14/02 1953 (H) STA, FIN
02/14/02 (H) STA AT 8:00 AM BUTROVICH 205
02/14/02 (H) <Bill Postponed to 2/21/02> -
- Location Change --
02/21/02 (H) STA AT 8:00 AM CAPITOL 102
WITNESS REGISTER
LINDA SYLVESTER, Staff
to Representative Pete Kott
Alaska State Legislature
Capitol Building, Room 204
Juneau, Alaska 99801
POSITION STATEMENT: Testified on behalf of Representative Kott,
chair of the House Rules Standing Committee, sponsor of HB 344.
JENNIFER YUHAS, Staff
to Representative Beverly Masek
Alaska State Legislature
Capitol Building, Room 128
Juneau, Alaska 99801
POSITION STATEMENT: Testified on behalf of Representative
Masek, sponsor of HB 346.
JULIA GRIMES, Lieutenant
Division Operations Unit
Alaska State Troopers
5700 East Tudor Road
Anchorage, Alaska 99507-1225
POSITION STATEMENT: Testified regarding reciprocity and
answered questions during the hearing on HB 346.
PATTY OWEN, Alaska Chapter
Million Mom March
7677 North Douglas Highway
Juneau, Alaska 99801
POSITION STATEMENT: Testified on HB 346.
BRIAN JUDY, Northwestern Government Affairs Manager
National Rifle Association (NRA)
555 Capitol Mall, Suite 625
Sacramento, California 95814
POSITION STATEMENT: Testified in support of HB 346.
JESSE VANDERZANDEN, Executive Director
Alaska Outdoor Council (AOC)
PO Box 73902
Fairbanks, Alaska 99709
POSITION STATEMENT: Testified in support of HB 346.
EDDIE GRASSER
(No address provided)
POSITION STATEMENT: Testified in support of HB 346.
BARBARA COTTING, Staff
to Representative Jeannette James
Alaska State Legislature
Capitol Building, Room 214
Juneau, Alaska 99801
POSITION STATEMENT: Testified on behalf of Representative
James, sponsor of SSHB 254 by request.
GUY BELL, Director
Division of Retirement & Benefits
Department of Administration (DOA)
PO Box 110203
Juneau, Alaska 99811-0203
POSITION STATEMENT: Answered questions regarding SSHB 254.
GAYLE PAUL JANECEK, Accounting Supervisor
ABC Travel Time, Inc.
PO Box 878825
Wasilla, Alaska 99687
POSITION STATEMENT: Testified on HB 300 regarding what the
travel agencies do for state agencies and urged enactment of the
legislation.
DAVID BERG, Representative
Viking Travel
PO Box 787
Petersburg, Alaska 99833
POSITION STATEMENT: Testified concerning service fees and
contracting in regard to HB 300.
KIM GARNERO, Director
Division of Finance
Department of Administration
PO Box 110204
Juneau, Alaska 99811-0204
POSITION STATEMENT: Testified on behalf of the department and
answered question in regard to HB 300.
KARA ALTMAN, Owner
Kara's Cruise and Travel
6590 Glacier Highway Number 280
Juneau, Alaska 99801
POSITION STATEMENT: During testimony on HB 300, testified
regarding the effects of the commission decreases on the travel
industry.
CYNDI ISAAK, Owner
Cyndi's Cruise and Travel
415 Fifth Street
Douglas, Alaska 99824
POSITION STATEMENT: During the hearing on HB 300, testified
essentially on behalf of the state-worker clientele who want to
use her services.
RAMONA OXENDINE
Vagabond Travel
805 Airport Way
Fairbanks, Alaska 99701
POSITION STATEMENT: Testified regarding HB 300.
YULANDA JOHANSEN
Northern Lights Travel
505 Old Steese Highway, Suite 117
Fairbanks, Alaska 99701
POSITION STATEMENT: Asked the committee to give consideration
to HB 300.
SHANNON WILEY, Manager
Goldbelt Family Travel
9097 Glacier Highway, Suite 100
Juneau, Alaska 99801
POSITION STATEMENT: Testified regarding HB 300.
ACTION NARRATIVE
TAPE 02-14, SIDE A
Number 0001
CHAIR JOHN COGHILL called the House State Affairs Standing
Committee meeting to order at 8:02 a.m. Representatives Fate,
Stevens, Wilson, Crawford, Hayes, and Coghill were present at
the call to order.
HB 344-INCREASE DRIVER'S LICENSE FEES
CHAIR COGHILL announced that the first order of business would
be HOUSE BILL NO. 344, "An Act increasing fees for driver's
licenses, instruction permits, and identification cards; and
providing for an effective date."
Number 0175
REPRESENTATIVE WILSON moved to adopt the proposed committee
substitute (CS), version 22-LS1301\F, Ford, 2/16/02, as the
working document. There being no objection, Version F was
before the committee.
CHAIR COGHILL indicated there was a fiscal note for Version F.
Number 0231
LINDA SYLVESTER, Staff to Representative Pete Kott, Alaska State
Legislature, testified on behalf of Representative Kott, chair
of the House Rules Standing Committee, sponsor of HB 344. Ms.
Sylvester pointed out that Version F reflects intent language
and findings. Those [changes] were done in order to draw a
fiscal note. She recognized the concerns regarding privacy.
The need to convert to a digital driver's license system is
practical, she told members. Currently, Alaska uses Polaroid
technology for the driver's license system; however, the cameras
aren't available anymore. Furthermore, Polaroid has filed for
[bankruptcy], which means it is selling off its assets and [its
technology] won't be available.
CHAIR COGHILL referred to a national identification (ID) system
and indicated his concern is that this might become "the de
facto national ID." He said the Division of Motor Vehicles
(DMV) has offered assurance that the coding would only be for
those things [listed] on the face of the card. He cautioned DMV
to make sure it stays that way.
Number 0430
REPRESENTATIVE FATE moved to report CSHB 344, version 22-
LS1301\F, Ford, 2/16/02, out of committee with individual
recommendations and the accompanying fiscal note. There being
no objection, CSHB 344(STA) was moved out of the House State
Affairs Standing Committee.
CHAIR COGHILL announced that he would be requesting a [House
Finance Standing Committee] referral.
HB 346-CONCEALED HANDGUN PERMITTEES
Number 0520
CHAIR COGHILL announced the next order of business, HOUSE BILL
NO. 346, "An Act relating to concealed handgun permittees."
CHAIR COGHILL called a brief at-ease at 8:07 a.m. He called the
meeting back to order at 8:09 a.m.
Number 0545
JENNIFER YUHAS, Staff to Representative Beverly Masek, Alaska
State Legislature, testified on behalf of Representative Masek,
sponsor of HB 346. She read from the sponsor statement:
A statutory revision is needed to further clarify the
recognition of concealed handgun permits from other
states. The 21st legislature passed ... Senate Bill
294, which provides for the recognition of permits:
(1) from the states with permit requirements similar
to Alaska; and (2) from states which recognize
Alaska's permits. Senate Bill 294 also directed the
Department of Public Safety to determine which states
and political subdivisions grant reciprocity to Alaska
permit holders and distribute the list to each law
enforcement agency in this state. The department has
yet to fully implement this statutory requirement,
some 16 months later.
This legislation will simplify the process by plainly
recognizing all permits issued by other states. In so
doing, the burden on the department of having to
evaluate all the other state's laws to determine which
ones recognize Alaska's permits and the subjectivity
on the part of the department in determining which
other states' statutes are similar to Alaska law will
be removed. House Bill 346 will better serve the
public and permit holders.
MS. YUHAS noted that Brian Judy was available from the National
Rifle Association (NRA) to testify regarding statutory revisions
and impacts.
Number 0773
JULIA GRIMES, Lieutenant, Division Operations Unit, Alaska State
Troopers, testified via teleconference. She noted that the
proposed legislation doesn't specify a time period similar to
that imposed for vehicle registration and driver licensing,
after which a person would be required to apply for an Alaska
permit. She said current statute provides for a 120-day period,
after which out-of-state permit holders who are in Alaska would
be required to obtain an Alaska permit.
MS GRIMES indicated a concern that the legislation, while
allowing permit holders from other states to come up to Alaska,
does not back its Alaska permit holders. She mentioned efforts
made to get reciprocity for Alaska permit holders to go Outside,
but acknowledged that the legislation doesn't necessarily help
with that.
Number 0899
MS. GRIMES offered an update regarding reciprocity. She said,
"We now have 11 states listed on our web site that offer what I
will call 'true reciprocity,' and that's based on the statute,
paragraph (2), that if they recognize our permits, we will
recognize their permits." She called Georgia, Connecticut, and
Indiana "reciprocity-able" - once those states give written
confirmation of an agreement, they will be included on the web
site list.
MS. GRIMES indicated there are ten states, under "paragraph
(1)," whose permits [Alaska] will honor; however, because the
requirements of their permit programs are dissimilar to
Alaska's, true reciprocity is not currently possible. She said
she is in the process of changing that limitation. She told the
committee this is an ongoing process, because the laws in
various states change frequently.
Number 1034
MS. GRIMES named the following difficulties regarding attempts
to provided reciprocity: some states have no concealed handgun
permit programs, and two states, to her belief, cannot abide
Alaska's 120-day rule because their own limits are much shorter.
CHAIR COGHILL asked: "Is that 2 out of the 25 possible that are
similar?"
MS. GRIMES answered yes. She said New Hampshire is one of the
states that had a problem with the 120-day limit.
CHAIR COGHILL related his understanding, then, that at least 23
states are similar, although the list only contains 11 states.
MS. GRIMES agreed, but pointed out that paragraph (1), which
lists the similar requirements, merely says Alaska will honor
permits from other states that are similar. However, that
paragraph doesn't provide for those states to honor Alaska's
permittees in the other state. Therefore, she reiterated that
she has been negotiating in regard to whether these states could
offer Alaska's permittees reciprocity. Under paragraph (2)
there is true reciprocity.
CHAIR COGHILL asked if there has been some notification to these
other states in regard to Alaska's qualifications.
MS. GRIMES answered yes. She explained that although all states
have been contacted, not all have returned the contact.
Furthermore, letters have been sent to Arkansas and Louisiana
because there has been indication that reciprocity could
probably be arranged through a letter to the attorney general or
department of public safety in those states. The possibility of
reciprocity from quite a few states is pending.
CHAIR COGHILL related his understanding, then, that HB 346
merely recognizes the permits from other states and thus allows
those permittees to carry [concealed handguns] in Alaska.
MS. GRIMES agreed. In further response to Chair Coghill, Ms.
Grimes agreed that those permit holders from other states have
gone through that state's requirements for a concealed-carry
permit. She specified that permit holders from other states
have been subject to only their state's background requirements.
She related her belief that almost all of the states have some
background check.
CHAIR COGHILL commented, "I think we're talking about a very
safe segment of society here." He further commented that he
believes this refers to a small segment of society.
MS. GRIMES agreed.
Number 1469
PATTY OWEN, Alaska Chapter, Million Mom March, informed the
committee that the Million Mom March is a grassroots
organization that advocates for sensible gun laws and safe
children. The Million Mom March has recently united with the
National Brady Campaign, which recently released report cards
for safe gun laws and assigned Alaska a "D-minus." Ms. Owen
expressed her fear that HB 346 will bring Alaska's rating down
to an all-time low.
MS. OWENS said it appears HB 346 eliminates all the safety
standards that were kept as safeguards for dealing with
reciprocity of permits for concealed weapons from other states.
Therefore, she expressed concern that [HB 346] would make it
easier for strangers or nonresidents with unknown backgrounds to
carry guns in Alaska. Although she acknowledged that
negotiations are taking place regarding standardization of
training and background checks, Ms. Owen said she didn't get the
feeling those were in place. She concluded, "I just think the
impatience here isn't worth throwing everything out the window.
... I would hope that Alaska - the Alaska legislature - would
want to be in control of its own laws and not leave it up to
other states to set those standards for us."
REPRESENTATIVE WILSON inquired as to the rating of other states.
MS. OWEN said she could provide the committee with that
information, and noted that there are some states with higher
ratings and others with lower ratings. She specified that this
rating is not only in reference to the concealed handgun laws,
but to other laws as well.
Number 1648
REPRESENTATIVE FATE inquired as to the criteria the rating
system uses.
MS. OWEN replied that some of the [areas reviewed] are the age
at which a firearm can be purchased and the age at which
juveniles can be in possession of a firearm. The [rating
system] places heavy emphasis on the safety of children, such as
[the requirement that] guns which are sold must have safety
locks.
REPRESENTATIVE FATE asked if the criteria include the injuries
or fatalities of youth.
MS. OWEN replied no.
CHAIR COGHILL surmised that part of the Million Mom March's
[goal] is to promote gun control at many levels.
MS. OWEN clarified that the organization [promotes] common-sense
gun laws. "It's not to take away people's rights to have guns,"
she specified.
Number 1753
REPRESENTATIVE WILSON asked if [the rating system] takes into
consideration the fact that Alaskans carry guns for safety.
MS. OWEN said she would have to show the committee the criteria.
CHAIR COGHILL asked if Ms. Owen had a concealed-carry permit.
MS. OWEN replied no. In further response to Chair Coghill, Ms.
Owen said she had a basic understanding of [the requirements],
although she recognized that there have been changes since the
law's inception.
CHAIR COGHILL remarked that by the time an individual has gone
through screening, the individual is fairly well known.
MS. OWEN said she understood that, which is why she would want
Alaska to maintain its standard rather than allow another state
to dictate those criteria.
Number 1860
BRIAN JUDY, Northwestern Government Affairs Manager, National
Rifle Association (NRA), began by informing the committee that
in 1994 the Department of Public Safety (DPS) issued a white
paper entitled "To Conceal or Not to Conceal, That is the
Question," in response to the original right-to-carry
legislation. That [report] was full of alarmist suggestions
that there would be more guns at grocery stores and on ball
fields, and that fender-benders would become shootouts. These
were the same warnings heard in every other state that has
passed concealed-carry legislation.
MR. JUDY noted that DPS, during a recent Senate Judiciary
Committee hearing, said there haven't been any problems, as has
been the case in every other state, regardless of the level of
qualification and training standards. The outcome is that law-
abiding citizens becoming licensed by the government are
exercising their constitutional right to bear arms and their
natural right to defend themselves with the utmost
responsibility.
MR. JUDY commented that self-defense is a fundamental right that
doesn't stop at state borders. Just as people have a driver's
license, right-to-carry permit holders should be allowed to
carry a firearm for self-defense during travel. He said studies
have shown that crime rates drop when law-abiding citizens have
the means to provide self-defense and are able to carry
firearms.
Number 2015
MR. JUDY said the newly named National Brady Campaign, formerly
named Handgun Control, Inc., is attempting to ban handguns in
other states. He announced that banning handguns in Alaska
won't be attempted in Alaska yet. In regard to the ratings of
the states, Mr. Judy said those ratings don't take into account
statistics relating to death and crime, and that most states
receiving "D-minus" and "F" have extraordinarily low crime
rates. He surmised that those states receiving "D-minus" and
"F" would receive "A-plus" when ranked according to their crime
rate. Mr. Judy said the states with the most gun control laws
have the highest crime rates.
MR. JUDY recalled that the warnings of 1994 were heard again in
1998 in regard to SB 141. The outcome was the same when
nonresidents were allowed to carry firearms in Alaska as when
Alaskans were licensed, and that was, nothing happened. "Lo and
behold, law-abiding citizens who go through the process in
whatever state, whatever the process is, and get that permit
come to Alaska, they carry, they go home, and they don't cause
problems," he said.
MR. JUDY suggested that legislation to clarify and broaden the
number of states Alaska would recognize was passed in 2000 due
to inactivity on the part of DPS to comply with the provisions
of the law and provide the listing. There was very little
opposition to that bill. However, DPS has been unable to
provide a complete and accurate listing of all the states which
Alaska recognizes. As the department stated earlier, there are
two types of states that Alaska recognizes: states with similar
laws, as defined in the statute, and states that recognize
Alaska permits.
Number 2149
MR. JUDY recalled that the department had indicated there are 25
states that Alaska recognizes, and therefore he wondered why
those states are listed. He also wondered whether Alaska law
enforcement has been notified which 25 states Alaska recognizes,
which is critical because it's important for local law
enforcement to know which permits from other states are valid.
Mr. Judy guessed that there has been no notification to local
law enforcement regarding those 25 states with valid permits in
Alaska.
MR. JUDY offered that by recognizing permits from other states,
HB 346 will relieve DPS of the burden of having to evaluate all
the other states' laws. Furthermore, it will place local law
enforcement on notice that any law-abiding citizen with that
permit from another state [has a permit that] is valid in
Alaska. With regard to the concern that [HB 346] would require
Alaska to recognize permits from states with lower standards,
Mr. Judy highlighted that every state law is different. He said
44 states issue concealed-weapon permits, and consistent across
those 44 states is that law-abiding citizens in those states are
exercising their rights with the utmost responsibility. He
remarked, "The State of Alaska should not have any concerns or
reservations about welcoming the law-abiding citizens of other
states, and honoring their permits."
MR. JUDY returned attention to the 1994 DPS white paper, which
pointed out that in Alaska anyone who can lawfully possess a
firearm can carry openly practically anywhere in the state.
This can occur now. Therefore, it makes no sense not to allow
those who have gone through the process to carry concealed
[firearms] if they can [already] carry openly. Mr. Judy
concluded:
Law-abiding citizens should be able to choose whether
or not they have a need to provide for their own
protection. They should be able to choose if they
want to carry, and the manner in which they carry -
whether it be open or concealed. So, the National
Rifle Association, our 20,000 members in Alaska, urge
your support for HB 346.
Number 2319
CHAIR COGHILL asked if Mr. Judy has discussed with DPS the issue
of getting reciprocity under the present agreement.
MR. JUDY replied yes. Although the discussions with DPS have
been cordial, he said, they have been totally unproductive. He
pointed out that immediately after the passage of the 1998 law,
DPS published a list of 17 states that would be recognized. At
that time, [NRA] felt that was about right. Within the next
year, however, DPS repealed that list and decided that no
permits from other states would be recognized. Beginning in May
1999, Mr. Judy said he has been in contact with DPS, and the
department hasn't gotten to it. However, in the last week and a
half, the list has increased from 7 to 11. He surmised that the
movement on the list is due to HB 346. He reiterated his
preference to just recognize permits from all other states and
thus he urged the committee's support for HB 346.
MR. JUDY, in response to Chair Coghill, pointed out that he only
knew of one other state, Utah, that provides a time limit;
Utah's time limit is 60 days. He related his belief that what
DPS testified to [in regard to the time limit] isn't correct.
He stressed his belief that Texas would recognize Alaska if HB
346 passes because it eliminates the 120-day time limit. Texas
has no time limit, as is the case in most states. Mr. Judy
related his [firsthand] knowledge that Texas will not recognize
permits from Utah or Alaska because of the time limits.
Therefore, elimination of the time limit will increase the
number of states that will recognize Alaskan permits. He also
predicted that with passage of HB 346, Georgia would recognize
permits from Alaska.
Number 2530
CHAIR COGHILL related his understanding, then, that Alaska's
permittees would benefit from the passage of HB 346 as it is.
Chair Coghill asked whether the [existing] rule of requiring the
permittees to announce they are [carrying a handgun] is standard
practice.
MR. JUDY reiterated that the existing law recognizes those
states with similar laws, which is defined in Alaska code. He
specified that currently permittees from other states have to be
21 years of age, go through a fingerprint-based background
check, go through a course, and be eligible to possess [a
firearm] under state and federal law. Those requirements would
be repealed by HB 346, and therefore Alaska would recognize
permits from all other states. In regard to notifying police,
many states have that same requirement. Anyone carrying in
Alaska with an out-of-state permit would still be required under
Alaska law, and under this law, to notify law enforcement that
he/she is carrying a firearm.
CHAIR COGHILL again expressed his assumption that these permit
holders are a very conscientious and disciplined group of
people. He said he would be inquiring as to the problems that
have been experienced with permitted carriers.
Number 2685
JESSE VANDERZANDEN, Executive Director, Alaska Outdoor Council
(AOC), testified in support of the passage of HB 346. Mr.
VanderZanden informed the committee that the AOC has about 50
clubs statewide and is the state affiliate of NRA in Alaska. He
pointed out that AOC's policies, bylaws, and articles of
incorporation clearly state the organization's belief in the
right to keep and bear arms as guaranteed by the constitution.
The member clubs and individual memberships comprise over 12,000
in the state. Many members have encouraged AOC to assist
passage of HB 346. He highlighted that many of the members are
responsible, law-abiding citizens who actually teach these
concealed-carry permits [classes]. Mr. VanderZanden concluded
by reiterating AOC's support of HB 346.
Number 2800
REPRESENTATIVE STEVENS asked if Mr. VanderZanden saw any reason
to be concerned with the criteria used by other states in that
some states may have a less stringent concealed-carry
requirement than Alaska.
MR. VANDERZANDEN acknowledged that it varies, although he
stressed that it doesn't vary significantly. He recognized that
Alaska's requirements are very thorough and take time and money.
He expressed the need for local law enforcement to [know] what
states Alaska recognizes.
REPRESENTATIVE STEVENS asked whether there should be concern
that allowing people from other states to carry concealed
weapons in Alaska lowers [Alaska's] standards.
MR. VANDERZANDEN said he didn't think so. He echoed earlier
testimony that those going through the concealed-carry process
are upstanding citizens. The data doesn't show that these folks
are the ones who might do something detrimental to society.
Number 2930
EDDIE GRASSER informed the committee that he is a Native-born
Alaskan who grew up in a family business involving guiding.
TAPE 02-14, SIDE B
Number 2961
MR. GRASSER acknowledged that there are concerns that the Second
Amendment may not provide an individual right to keep and bear
arms. However, he said the documents of the Founding Fathers
make it clear that the Second Amendment was intended for
individuals. The Alaska constitution is also quite clear that
the right to keep and bear arms is an individual right.
Therefore, this discussion is surrounding a fundamental right,
not a privilege.
MR. GRASSER discussed his belief that the government's duty is
to protect those fundamental rights rather than look for ways to
take them away. He charged that governmental agencies and
legislative bodies discuss how these rights can be eroded. Mr.
Grasser stressed his belief that it isn't the government's
business to tell him where and when he can carry a firearm,
although he recognized the need to regulate it [to some degree].
Therefore, he related his belief that it is incumbent upon
legislative bodies to act in the spirit of the Founding Fathers
and ensure that those rights [relating to the right to keep and
bear arms] are protected to the extent possible, which he
believes HB 346 does. He urged the committee to pass HB 346.
Number 2835
REPRESENTATIVE STEVENS asked if Mr. Grasser has any concern with
allowing people from other states to carry concealed firearms in
Alaska.
MR. GRASSER replied no; these are Americans, and he views the
right to carry [firearms] as one that extends beyond borders.
Mr. Grasser specified that he wasn't concerned with the
requirements of other states because he believes the
constitution provides the right [to carry firearms] to these
individuals beyond the scope of the state's authority to specify
the exact rules.
REPRESENTATIVE WILSON informed the committee that she has a
permit to carry a concealed firearm and feels that she is a much
safer person [in regard to handling firearms].
CHAIR COGHILL reminded the committee that HB 346 allows for
reciprocity for those who have gone through some background
check. Although there are dissimilarities in laws across the
nation, there is a heightened awareness of responsibility
compared with Alaska's ability to carry openly without regard to
responsibility. Chair Coghill acknowledged that there are
constitutional issues.
Number 2656
MS. GRIMES informed the committee that her research has found
that five states don't require a fingerprint-based criminal
history for permittees; six states don't require a handgun
safety course of any kind. Ms. Grimes maintained that this
research should be accurate. She highlighted that the Alaska
concealed-handgun permit program is responsible for making sure
that permits aren't issued to folks who are prohibited under
federal firearm laws, for which the fingerprint-based criminal
history is the best method to avoid issuing permits to such
persons. Therefore, states not requiring that background check
could issue permits to citizens who aren't eligible to own or
possess firearms under federal law.
MR. JUDY reiterated his position that evidence has shown that
regardless of the standards, those who go through the process
don't cause problems. He also reiterated that every person who
can lawfully possess a firearm in the other 49 states can openly
carry a firearm in Alaska. Therefore, he felt it didn't make
sense to allow everyone to carry openly, while the small
percentage of the population who goes through the permitting
process [can't carry a concealed firearm].
Number 2520
CHAIR COGHILL pointed out that [HB 346] deletes a lot [from
statute]; he requested that the rationale be explained.
MR. YUHAS responded that the deleted language is language that
[the sponsor] believes encumbers DPS in its process for granting
reciprocity.
CHAIR COGHILL noted that [HB 346] does maintain language
regarding notification when stopped by a police officer.
REPRESENTATIVE FATE informed the committee that in reviewing the
rating of the states by [the National Brady Campaign], he found
that every state with a "D" or lower - except for two states -
is a hunting state. Twenty-nine of the fifty states received a
"D" or less. Representative Fate commented:
Something's wrong here. Basically, it looks as though
the states that are hunting states have been graded
the lowest, and you'd have thought that because of the
amount of hunting, and the gun activity in those
states, and the protection, and the knowledge of
carrying weapons, that they would've been the highest
states.
Number 2405
REPRESENTATIVE STEVENS ascertained from the [the National Brady
Campaign] rating that 31 states had received a "D" [or lower] in
regard to concealed-carry laws. He pointed out that those
states that prohibit concealed-carry [permits] received an "A."
REPRESENTATIVE WILSON pointed out that those states with low
scores from [the National Brady Campaign] rating are [states
with low crime rates].
MS. YUHAS addressed concerns stated in regard to permittees with
unknown backgrounds. To that, she echoed earlier testimony that
those [permittees from other states] have gone through a
background check, although it may not be as extensive as
Alaska's.
MS. YUHAS offered the following statistics regarding people with
concealed-carry permits: licensees are 5.7 percent less likely
to be arrested for violent offenses; licensees are 13.5 times
less likely to be arrested for nonviolent offenses; and the
general public is 1.4 times more likely to be arrested for
murder. Furthermore, states that allow people to conceal and
carry firearms have an average of 24 percent lower total violent
crimes, 26 percent lower homicides, 39 percent lower robberies,
and 19 percent lower aggravated assaults. She also highlighted
that concealed-handgun laws reduce murder by 8.5 percent, rape
by 5 percent, and severe assault by 7 percent. Ms. Yuhas
related that she personally took the concealed-carry class, but
refused to do the paperwork because she felt the only piece of
paper she needed [to carry a firearm] was the constitution. Ms.
Yuhas concluded by urging the committee to pass HB 346.
Number 2230
REPRESENTATIVE FATE moved to report HB 346 out of committee with
individual recommendations and the accompanying zero fiscal
note. There being no objection, HB 346 was moved out of the
House State Affairs Standing Committee.
The committee took an at-ease from 9:07 a.m. to 9:09 a.m.
HB 254-TAX-QUALIFIED STATE RETIREMENT SYSTEMS
Number 2198
CHAIR COGHILL announced the next order of business, SPONSOR
SUBSTITUTE FOR HOUSE BILL NO. 254, "An Act relating to the
teachers' retirement system, the judicial retirement system, and
the public employees' retirement system and to the tax
qualification under the Internal Revenue Code of those systems;
amending the definition of 'actuarial adjustment' in the
teachers' retirement system and the public employees' retirement
system; repealing certain provisions of the teachers' retirement
system and the public employees' retirement system; and
providing for an effective date."
Number 2176
BARBARA COTTING, Staff to Representative Jeannette James, Alaska
State Legislature, presented SSHB 254 on behalf of
Representative James, sponsor. She said Chair Coghill had
described [SSHB 254] aptly when he called it complex; however,
its purpose is simple. Ms. Cotting emphasized the importance of
passing the bill this year. Developed over the past year, the
bill would keep the retirement system of the state employees in
compliance with the Internal Revenue Service (IRS). She
deferred to Guy Bell, who was responsible for writing the
sectional analysis, to address technical aspects.
Number 2142
GUY BELL, Director, Division of Retirement & Benefits,
Department of Administration (DOA), thanked Representative James
for sponsoring SSHB 254. He said the legislation would bring
the statutes for public employees, teachers, and the judicial
retirement system up-to-date with the Internal Revenue Code,
which is important for the continued tax qualification plans of
the division. He explained: "Basically, it means that we can
take employee contributions, pretaxed, and that ... taxation
doesn't occur until the benefits are received." He said the
legislation would not increase or reduce retirement benefits
under any provisions of the aforementioned systems. Simply a
compliance bill, [SSHB 254] would bring the statutes into
compliance with the Internal Revenue Code.
MR. BELL noted that the legislation would allow [retirement
system] members to take advantage of recent federal pension-
reform legislation that is beneficial to teachers and other
public employees. It would allow those members to purchase
service credit using pretax dollars. He listed the following
service credit options: military time, Outside teaching time,
and temporary time. Currently, members may buy that time, but
only with post-tax dollars.
MR. BELL told the committee this proposed legislation would
allow members to buy that time either with pretax payroll
deductions or with tax-deferred savings allowed under the
Internal Revenue Code, including the following: public
employees; deferred compensation 457-plan monies offered by the
state and many political subdivisions to employees; or, offered
by most school districts to teachers, 403(b) money, a tax-
deferred savings. He said, "This will be a direct benefit to
those folks who want to purchase time, which effectively adds to
their defined benefit at retirement." He added that it reduces
the cost of purchasing that service.
CHAIR COGHILL asked Mr. Bell to clarify the meaning of "buying
time."
MR. BELL offered the following explanation:
Alaska Statutes allow ... members to buy [a] certain
kind of time, which effectively adds to their defined
benefit. For instance, a person who has military time
can buy up to five years of military time by paying
the actuarial cost. ... What that means is ... a
person who has ... military service can claim an
additional ... five years of service toward ... the
retirement benefit. And remember that retirement
benefits are calculated using a formula, and part of
that formula includes years of service. ...
Let's say, ... depending on your multiplier, ... if
you were retiring after 30 years that would be an
extra 12.5 percent retirement benefit, and that costs
something. [The] individual has to pay to receive
that. They pay to receive that for the rest of their
life through the defined benefit, currently, either by
taking an actuarial reduction to their benefit or by
paying cash or taking payroll deductions - post-tax.
With the change in the federal pension reform, they
can now do that, ... subject to [the] legislature
incorporating the new provision, by taking pretax
payroll deductions or using their 457-plan money or
403(b)-plan money.
CHAIR COGHILL indicated he thought that aspect of the issue was
important, because the committee would be addressing it "in
another venue, in a little different angle."
MR. BELL added that this legislation would not cost the
employers or change employer contribution rates to the
retirement system, because it is the member who would be paying.
The difference, he highlighted, would be that the member would
be paying with pretax dollars, versus post-tax dollars.
Number 1773
REPRESENTATIVE WILSON asked Mr. Bell to confirm that [the
proposed legislation] would not add a cost to the employer or
state and would not jeopardize the retirement plan for anybody
else.
MR. BELL said, "That's correct."
Number 1745
REPRESENTATIVE STEVENS, having retired from the university in
TRS [Teachers' Retirement System], said he was paying a
substantial amount of money to "buy in" his military service.
He asked Mr. Bell if there would be any retroactive provisions.
MR. BELL replied that there are retroactive provisions in the
bill; however, once a person is receiving a benefit, he didn't
think a retroactive adjustment could be made.
CHAIR COGHILL concurred that retroactive provisions were
provided in the bill for those "buying in" to get the pretax
benefit for previous time [worked]. He said he believed this
issue to be important.
MR. BELL said he would follow up on the topic to be certain of
the answer.
MR. BELL told the committee the Alaska Government Finance
Officers Association - a group of finance officers from the
political subdivisions around the state - has endorsed [SSHB
254]. He noted that the retirement systems are not only for
state employees, but also for teachers and employees of most of
the political subdivisions in the state.
Number 1646
CHAIR COGHILL stated, "Certainly, there are practices that have
pushed the limits of our ability of the law to respond to [the]
IRS." He asked if there had ever been any penalty to the State
of Alaska for "doing a practice that wasn't necessarily lined
out in statute."
Number 1632
MR. BELL answered no. He said letter rulings had been submitted
to the IRS, asking for its approval of the plan [for
legislation], and [the IRS] was in the final stages of that
process. He explained that one reason for the repeated drafting
of the bill is that there has been some "give and take" between
the tax consultants and the IRS regarding specific language in
the bill. He said there have been no penalties; furthermore, he
stated his belief that the IRS may appreciate the continued
efforts of [the division] to bring the statutes up-to-date. He
clarified that the division has not been out of compliance in
terms of its practice; rather, the law doesn't match the current
requirements of the IRS. He concluded that [the IRS] is
"happily accepting our request for that letter ruling, and that
letter ruling effectively incorporates this legislation."
Number 1555
CHAIR COGHILL confessed that the language of the bill was, at
times, difficult to comprehend. His study of the proposed
legislation did raise a question regarding flexibility and new
IRS rulings. He said there would be changes in various benefits
programs in the future, and he asked Mr. Bell if there is
flexibility in [the language of SSHB 254] to allow for that.
MR. BELL responded, "There is some flexibility, because it
doesn't make indication to ... the broad provisions of the
Internal Revenue Code." He clarified that those provisions may
change, but "we" would still be in compliance, because the
changes are made by reference. He noted that the IRS requires a
plan document and that [the division's] plan document is [Alaska
Statute], which specifies benefits, requirements, and
provisions.
MR. BELL said he thinks some states give broader leeway to the
"retirement entity" to develop those rules or plan documents by
regulation, or by some other means, through a board process.
Because the division's plan document is the state statutes,
however, it is subject to legislative oversight and review.
Although he surmised the division could, alternatively, add a
one-line provision in statute to change that, he noted that it
was not doing so with this legislation.
CHAIR COGHILL asked if the actuarial adjustments were designed
by the IRS or [the division].
MR. BELL answered that [the division] designed the actuarial
adjustments. Provisions of Alaska law determine the cost of
purchasing certain types of service. Although laws relating to
purchasing military service have changed over time through the
legislative process, for example, that isn't what is being
changed [in this legislation]. Mr. Bell clarified that how it
is purchased is the issue, not how it is calculated.
CHAIR COGHILL stated his intention a little later on to discuss
the actuarial "makeup" [as it pertains to the retirement
system]; however, he clarified that the present discussion was
regarding the "pre-post-tax trigger."
Number 1350
REPRESENTATIVE FATE moved to report SSHB 254 out of committee
with individual recommendations and the accompanying zero fiscal
note. There being no objection, SSHB 254 was moved out of the
House State Affairs Standing Committee.
HB 300-PROCUREMENT OF TRAVEL SERVICES
Number 1305
CHAIR COGHILL announced the next order of business, HOUSE BILL
NO. 300, "An Act relating to the procurement of certain travel
services."
Number 1296
REPRESENTATIVE HAYES, sponsor of HB 300, explained that the
proposed legislation would allow businesses in the state to have
equity. Currently, the state executive branch doesn't allow
travel agencies to charge a fee to certain entities such as the
court, transportation, and administration.
REPRESENTATIVE HAYES explained that [prior to the terrorist
activities] of September 11, 2001, airlines were paying travel
agencies approximately 5 percent for each ticket sold. After
September 11, 2001, that price [was capped at] $10-$20 for a
one-way or roundtrip airfare, respectively. Because of the cap,
it became necessary to request that the state actually pay for
the services it receives.
REPRESENTATIVE HAYES noted that currently the travel agencies
have to sign a waiver saying they won't charge the state a fee,
in order for state agencies to use their services.
Representative Hayes said it seemed unacceptable because the
agencies are providing a service to the State of Alaska and,
therefore, should be paid for those services.
Number 1145
REPRESENTATIVE HAYES indicated two letters. The first, from a
travel agency in Fairbanks, read in part:
The state should not be exempt from paying for
services from any business. We provide a valuable
service. I do not want to see our public servants
wasting time and money trying to be travel agents,
when a call to professional and efficient travel agent
can have a state employee off the phone and the
Internet in minutes.
Currently, the state does not pay for a service of
ticket deliveries, or the additional cost if the
ticket has to be changed and reissued.
REPRESENTATIVE HAYES pointed out the final paragraph of a letter
[dated August 29, 1991] from [then-Representative] Fran Ulmer to
then-Governor Walter Hickel, which read in part, "While I
applaud your efforts to find efficiencies, it is no benefit to
Alaskans to pinch pennies while taking away jobs."
Representative Hayes said while he also applauds efforts to find
efficiencies, the result has been to hurt the [travel] industry
in Alaska. He stated his belief that [the legislature] needs to
find ways to pay for the services that the industry provides to
the state and its citizens.
Number 1045
REPRESENTATIVE WILSON mentioned "that waiver that they signed."
She said in [Wrangell] the agency gets paid. She asked why the
agency would get paid in one town and not another.
REPRESENTATIVE HAYES replied that the university, the Alaska
Railroad [Corporation], and the state legislature can pick and
choose which agencies to use. He continued:
We, in effect, subsidize the other part of state
government, because we pay for those services and the
State of Alaska executive [branch] does not. ... I do
believe in 1988, when this was actually put into
place, ... all the officers received a memo stating
that we should use travel agencies that do not charge
the State of Alaska. And a lot of our legislators
were upset by this, and they'd say, "I will prefer to
... use whatever travel agency I've always used." So,
they couldn't enforce the provision on us, so we could
use whatever travel agency we choose to use as
legislators. But for the executive branch - courts,
administration, corrections - (indisc.) they did not
have that purpose.
Number 0925
REPRESENTATIVE WILSON referred to the fiscal note and questioned
whether the amount paid will be only $8 a ticket, instead of the
$10, $15, or $20 being charged. She requested an explanation.
Number 0882
REPRESENTATIVE HAYES said that was the amount the administration
determined would be fair and equitable.
CHAIR COGHILL suggested that there were people present to
testify who might be able to answer the question [of whether the
$8 on the fiscal note is for a one-way or roundtrip ticket].
Number 0752
REPRESENTATIVE FATE asked Representative Hayes to clarify that
this doesn't speak to the charges of the travel agent, but
solely to the availability.
REPRESENTATIVE HAYES replied that he didn't think that was the
case. He stated that the purpose of the legislation is to
exempt travel agencies from the procurement code, so that
individual agencies can choose which [travel] agency they would
like to use. By doing so, he explained, those [state] agencies
would have to pay a [fee] to those travel agents. Currently, he
reminded the committee, the work done is subsidized by "other
portions of state government."
REPRESENTATIVE FATE remarked that his interest in this is
because over the last several years there has been a "pullback"
on the amount of travel agents' commissions from the airlines.
He asked if that commission would be standardized throughout the
entire industry, including the State of Alaska administration,
for example, or whether there will be a surcharge on top of
that. He suggested it is a huge question because of the current
charging practices of the agencies.
REPRESENTATIVE HAYES suggested that question might be better
answered by the representatives from travel agency.
Number 0660
REPRESENTATIVE STEVENS asked Representative Hayes if "we" were
experiencing any difficulty finding travel agents willing to
take on the responsibilities of making arrangement for the State
of Alaska.
REPRESENTATIVE HAYES responded that he did not know of any
[difficulties in that regard] previous [to September 11, 2001];
however, after that date, and after the airlines reduced their
fees from 5 percent of the total ticket to [$10 to $20], he
said, "You're looking at businesses that ... are working on very
thin margins." He continued:
By the airlines' reducing that margin even more, ...
what I fear is that we're going to run businesses out
of business in ... Alaska, all over the point that ...
[there is] $285,000 that travel agents would be
receiving from the State of Alaska for providing a
service that they currently provide to the state.
And, again, my ultimate problem with this is: If you
receive a service, you should ... pay for that service
that you're receiving. And that's ultimately why I
brought this forward.
Number 0554
GAYLE PAUL JANECEK, Accounting Supervisor, ABC Travel Time,
Inc., testifying via teleconference, told the committee that
company has been serving Alaska for 24 years, with offices in
Palmer and Wasilla. She surmised that the days of travel
agents' being paid airline commissions will soon be over, partly
because airlines are "operating on the edge of
[impoverishment]." Ms. Janecek told the committee that on the
national level, almost all remaining agencies are charging
service fees or reservation processing fees to their clients in
order to continue providing "a reliable, nonbiased source of
travel information."
MS. JANECEK noted that in her 14 years with [ABC Travel Time]
she has tracked several loyal, local Alaskan state employees who
rely on the agency to "go the extra distance" for their travel
arrangements and who pay the agency's service fees out of their
own pockets. She said, "Doing business on a local level assures
them that they are trusted people who can quickly and
efficiently handle the state's routine or problem travel."
MS. JANECEK said she could understand the difficulty in
reconciling the state's travel-credit-card account to determine
which charges align with which state employees for what dates of
travel, for example. She suggested perhaps the process could be
streamlined by e-mailing the information as transactions occur,
thereby alerting the "finance department" of the pending
charges. Denying economic opportunity to serve the State of
Alaska because of "reconciling problems," she said, seems
discriminatory against small, local businesses. Ms. Janecek
urged enactment of this legislation. She indicated this is not
a handout or monetary relief as a result of September 11, 2001,
but is about being paid for work performed and services
rendered.
CHAIR COGHILL told Ms. Janecek he appreciated her testimony.
Number 0325
DAVID BERG, Representative, Viking Travel, Petersburg, testified
via teleconference. He informed the committee that Viking
Travel has represented the State of Alaska for approximately 20
years and presently has a contract to provide travel services
for state agencies in Petersburg. The contract allows the
agency to charge modest service charges to cover its cost of
doing business, "in light of reduced airline commissions and
caps." Mr. Berg said the experience of [Viking Travel] is that
many state agencies refuse to pay service charges. He remarked,
"When agency employees use our services, the agency requires
that the employee pay services charges out of their own pocket."
MR. BERG explained that under its existing contract [Viking
Travel] is paid by the state to provide the lowest-cost travel
arrangements for the employee. He said, "If the traveler does
not decide to use the contract agent, the state has no guarantee
or impartial source of information that travel is being obtained
at the lowest cost to the state." He opined that a bill
proposing that state agencies procure travel services should
contain language requiring state agencies to use contractors for
travel where contracts are in place, to ensure that the state is
getting the lowest-cost travel services in the market.
CHAIR COGHILL said he thought the state would be considering how
it might take advantage of Internet bookings. He asked Mr. Berg
whether that is an issue of concern for travel agents and, if
so, how it is being addressed.
MR. BERG replied that he sees almost daily examples of airlines
"telling you what they want to" on their web sites. He noted
that there are mistakes in pricing of transactions. He said he
has known individuals who have bought tickets from Petersburg to
Sitka, for example, and the airline system will not (indisc.)
the connections that are necessary; consequently, the ticket is
issued at twice the value of the appropriate pair. Mr. Berg
stated his belief that until these problems are addressed, the
state needs an impartial judge, which is what the travel agents
can provide.
Number 0085
KIM GARNERO, Director, Division of Finance, Department of
Administration, told the committee that while she is no expert
on procurement issues, she is familiar with the business
relationships between the State of Alaska and travel agencies.
She testified as follows:
State government has a long history of relying on a
private sector for professional travel services.
Until a few years ago, these services were provided
for free to travelers, because travel agencies relied
on commissions from travel providers such as airlines
and hotels. Because no public funds were spent for
these services, each state office was able to use a
travel agent of their choice, and strong loyalties
developed.
In October 1999, airlines cut travel agent commissions
from 8 to 5 percent. This 37.5 percent reduction was
an early step in a trend that continues to place
severe economic pressure on travel agents. With ever-
declining commissions from airlines, more and more
travel agencies are responding by initiating fees for
their services.
When fees are introduced to travel services, the issue
of competitive procurement arises. The State of
Alaska spends over $16 million a year on airline
tickets, so a fee as low as 1 percent results in
$160,000 a year spent for these services.
[The end of the tape cut off a portion of Ms. Garnero's
testimony; however, the content was later provided to the
secretary and read as follows: "Current procurement law
requires formal competitive bids for purchases of this size.
The result is that all state travel purchases are then made from
the successful bidder."]
TAPE 02-15, SIDE A
Number 0001
MS. GARNERO continued as follows:
Our policy has been to obtain travel agent services
without paying fees wherever possible. Toward that
end, the Department of Administration has maintained a
web site listing travel agents willing to provide
services free of charge to state agencies. State
agencies may use any of the listed travel agencies, or
any other travel agency willing to waive fees for
their service.
But in communities where no travel agencies are
willing to provide free services, we competitively
established a travel agent contract in accordance with
the procurement code. This has resulted in single-
award contracts for the communities of Juneau,
Wrangell, Petersburg, Haines, Cordova, Seward, and
Dillingham. Fees paid under these contracts range
from $5 to $20 for an airline ticket.
Number 0098
MS. GARNERO informed members that she was responsible for
writing the fiscal note. She explained that the $8 is not
necessarily "reasonable" amount, but rather an assumption "based
on what we've seen in these contracts we've picked out so far."
She continued as follows:
If the legislation passes, travel-related services
would be exempted from the procurement code. In that
case, the Department of Administration will meet with
industry representatives to establish a reasonable fee
schedule, which would become the benchmark for doing
business with the state. Any travel agency willing to
provide services at or below the benchmark would be
eligible to do business with the state, and state
employees could then choose to use any eligible travel
agency.
But to sum up, passage of HB 300 will eliminate the
requirement for competitive procurement in order to
pay fees, but it would not prevent establishing [a]
future travel agency contract when that's in the
state's best interest. It also will have no effect on
our existing ... travel agency contracts, since they
are preexisting and legally binding.
MS. GARNERO offered to answer questions.
Number 0207
REPRESENTATIVE STEVENS asked what benefits exist to travel
agents to provide services free of charge to the state.
MS. GARNERO answered that the travel agents still receive 5
percent from the airlines; she mentioned that she thinks hotels
and rental car agencies are paying them. She admitted that she
doesn't fully understand the travel agency revenue structure.
She said there are still commissions left; however, she referred
to previous testimony regarding the inevitable trend of reducing
commissions.
REPRESENTATIVE STEVENS asked if Ms. Garnero was finding
disinclination on the part of travel agents to continue this
arrangement with [the state] at no charge.
CHAIR COGHILL commented, "I think the testimony to a bill is
pretty resounding."
MS. GARNERO mentioned the October 1999 reduction. She said
after that reduction, [the department] wrote letters to 170
travel agencies around the state, asking if they were willing to
waive fees for their service, "after we first put that web site
together." Noting that perhaps more than 80 travel agencies
were listed at that time, she said many have gone out of
business, and the number is now 40. She mentioned the following
numbers of travel agents currently listed: 13 in Anchorage, 9
in Fairbanks, and "1 or 2 shops around the state."
Number 0344
REPRESENTATIVE WILSON indicated the fiscal note and asked if
[the $8] reflected [a fee] for one-way or roundtrip travel.
MS. GARNERO answered that her intention at the time she wrote
the fiscal note was that [the $8] was for a roundtrip ticket.
She reiterated that she didn't know if that was reasonable. She
said [the determination] would come from discussion with the
travel industry representatives.
Number 0400
REPRESENTATIVE FATE asked if his understanding - that this would
take out procurement and open the door to agency competition -
was correct.
MS. GARNERO replied, "I'm not sure that it opens the door to
agency competition, because what we're speaking of doing is
setting some benchmark at which we would pay, and I don't know
that we would get many that would charge us less than that."
REPRESENTATIVE FATE noted that there are many factors which are
hurting the [travel] agencies, including the cutback of
commissions and the increasing acceptance of Internet ticketing
and electronic ticketing. He asked what would happen to the
system when, inevitability, several of these agencies go out of
business for one reason or another.
MS. GARNERO responded that her mother owned a travel agency for
20 years, which closed 2 years ago; so she herself is aware of
what is going on in the industry. She explained that when she
procured the information for the fiscal note, 23 percent of the
tickets bought last year were purchased directly from Alaska
Airlines. She added that she was certain many of those were
purchased over the Internet. She said she didn't have data for
early years, but was sure the numbers for next year would be
higher than 23 percent.
MS. GARNERO noted that the macroeconomics of travel agencies is
changing because of the consolidation of smaller agencies into
bigger ones, for example, and because many agencies are closing
their doors.
REPRESENTATIVE FATE asked if that would make ticketing by the
state more difficult.
MS. GARNERO answered as follows:
Last year in Juneau, our last few travel agencies that
were waiving fees for us said they could no longer do
it. We did a procurement. We had several bidders and
ended up with a contract with a large statewide
agency. We're paying ... $5 for a ticket to Anchorage
roundtrip, and $8 for a ticket anywhere else
roundtrip, on that contract. I would imagine in our
larger urban areas, procurements would yield similar
results.
MS. GARNERO noted, "The only community we were not able to get a
contract in - that wouldn't waive fees - was Bethel."
CHAIR COGHILL commented, "With this law, it would allow us some
flexibility in discussing things with travel agencies, but it
would not mandate it. I mean, we could look for other areas for
cost savings if we had to."
MS. GARNERO said yes. She added that it would also put the
choice back in state agencies, which she said they like.
Number 0758
KARA ALTMAN, Owner, Kara's Cruise and Travel, told the committee
she is a lifelong Alaskan and a Juneau resident who has worked
for most of the last 15 years of her career in the travel
industry at Southeast Executravel. She noted that Southeast
Executravel was forced to close its doors on December 8, 2000;
eight employees lost their jobs that day, with about two days'
notice. She said this was a direct result of the state's
refusal to compensate the travel agency for work done on its
behalf.
MS. ALTMAN said no agency in town could absorb eight agents
suddenly out of work; some of those out-of-work agents had to
rely upon state public assistance to provide for their families
- yet another cost to the state. She recounted that she and her
colleague [Cyndi Isaak] had set up home-based travel agencies at
their own expense. Not charging a fee would be the death of
their businesses and livelihood, she emphasized.
MS. ALTMAN said she knows of no other professional in the world
that offers services at no charge. She explained that [the
travel agency] was able to do that when commissions were 10
percent, but they have been cut to 5 percent over the years,
which means a 50 percent cut in pay. In regard to capping
tickets at a $20 maximum, she said it costs an agent
approximately $35 in overhead costs; therefore, the agents lose
$15 minimum for each ticket issued.
MS. ALTMAN referred to an aforementioned comment regarding
[commissions paid] on cars and hotels. She told the committee,
"Cars generally do pay us 10 percent, but not for the state; for
the state, we only get 5 percent." Hotels, she said, will often
say that government fees are non-commissionable, after the
travel agent has made a long-distance phone call at his/her own
expense to book the reservation.
MS. ALTMAN said the $8 charge is per ticket, whether "a
roundtrip to Timbuktu or a one-way to Anchorage," no matter how
many segments are in the itinerary. She noted that when booking
travel for "regular citizens," many agencies charge $20, but she
said, "Our fee is $10." She pointed out that charging $8 to the
state would be, in effect, giving the state a discount. She
added that [travel agents] can and always have been able to
issue electronic tickets, so that is not an issue of concern.
Number 1020
CHAIR COGHILL asked Ms. Altman to describe some of the areas in
which her work can "overrule the e-ticket world."
MS. ALTMAN replied that a travel agent has access to all
airlines, cars, and hotels at once, and can get the client the
best rates. A person can e-mail the travel agent and spend very
little time working on travel plans. She said all [agents] know
that for the State of Alaska, Avis Car Rental Agency has the
contract, for example. If an employee has to go on the Internet
or hold on the phone with an airline, the airline will give that
person its rates, but not the rates of other airlines. She
mentioned the time involved in making one's own reservation.
She said, "You're going to pay your state employees for one or
two hours booking their own travel, when you could pay a travel
professional a - in my opinion - miniscule $8 to do it for you
and have it done."
CHAIR COGHILL said he was looking for that answer and told Ms.
Altman she'd done a good job in representing her industry.
Number 1103
CYNDI ISAAK, Owner, Cyndi's Cruise and Travel, told the
committee she'd previously worked for 12 years with [Southeast]
Executravel and "saw what happened with that agency." A mother
of two who'd worked out of her home for the last six years, she
said that when her employer's business folded, she was
encouraged by her large clientele to open her own business.
MS. ISAAK noted that she has run her own agency since April
2001. When she opened her business, she offered to make travel
arrangements for the state at no charge because she knew the
state wouldn't pay a fee for the large clientele who wanted her
to continue her services. She added that she did charge her
"other" customers fees [to avoid the same fate as Southeast
Executravel]. She remarked, "When the state went out to
contract, I actually was not included on that contract, because
the person who put out the bid used the old phone book." She
clarified that it wasn't to say that she'd have bid on the
entire State of Alaska, because she'd have had to hire more
employees and probably have a storefront agency.
MS. ISAAK said she has "extended that" to a few other agents who
want to work out of their homes in order to be with their
children. She noted that although she doesn't have high
overhead, rents, and salaries, the fee is still necessary. She
told members, "If you read all the travel agency trade, they
will eventually go to zero. I mean, we have been forced into
this position."
MS. ISAAK said she guessed she was before the committee on
behalf of her clients who don't like being in a contract with
one agency in town and don't have a choice. She continued:
I have some who say, "I'm a little rebellious; I don't
want to use them, I want to use you." They can't even
use me if they want to pay the fee out of their
pocket. I had somebody try yesterday, and because
they have a contract with another agency in town, they
can't, even if they want to pay the fee themselves.
So, what they're doing is using state time and
spending hours on the Internet trying to figure out
their own travel.
MS. ISAAK recalled that one of her clients had booked the same
flight that she herself was booking, while on the phone
together, and the price quoted to the client was higher. She
said [a travel agent's] job is to search for the greatest rates
[from immediately available sources] and that it is imperative
to charge "the little fee."
MS. ISAAK said because the airlines have capped "us," she would
agree to the state's saying, "Okay, we will use you if you only
charge us $8, or $10, or whatever it turns out to be." Then,
she noted, there would be the flexibility to say "yes" to taking
on the state. She told members it isn't fair for one agency to
be able to "have the entire State of Alaska." Furthermore, not
all the little agencies that exist now can handle the entire
state. In conclusion, she said, "I'd love to have my people
back, and I know that they would like their choice, as well."
Number 1317
RAMONA OXENDINE, Vagabond Travel, testifying via teleconference,
told the committee she thought [travel agents] had been well
represented [by the previous testimony]. She said all she could
add is, "Ditto, ditto, ditto, ditto." Stating her hope that
[the committee] could see the writing on the wall, she remarked,
"I do not think the Internet is your friend." If the time comes
when [travel agents] are gone - which will happen unless there
is a realization that the fees are necessary - people will be a
captive audience with the airlines, Ms. Oxendine said, and
airlines will give people [only] the information online that
they want people to see.
Number 1409
YULANDA JOHANSEN, Northern Lights Travel, testifying via
teleconference, concurred that everyone had spoken well. She
said, "I do hope the state realizes the valuable service that
we, as travel agents - professionals - do offer." She asked the
committee to consider the bill.
Number 1447
SHANNON WILEY, Manager, Goldbelt Family Travel, told the
committee she has worked in the industry in Juneau for
approximately 15 years, formerly with American Express. She
pointed out that the airlines' move to cut commissions has,
basically, "put the consumer on peg there, to have to carry the
cost of the distribution," which she explained, is "what is
happening with the fee structure that most companies have come
up with." Ms. Wiley noted that travel agencies don't provide
services solely to the State of Alaska and its employees; the
wide range of services includes those for the tourism industry,
"the third-largest economic factor" in the state. It hurts the
entire industry when so many agencies are going out of business,
she concluded.
Number 1622
REPRESENTATIVE HAYES moved to report HB 300 from committee with
individual recommendations and the accompanying fiscal note.
There being no objection, HB 300 moved out of the House State
Affairs Standing Committee.
ADJOURNMENT
Number 1657
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at 10:01
a.m.
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