Legislature(1995 - 1996)

03/20/1996 01:15 PM TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
            HOUSE TRANSPORTATION STANDING COMMITTEE                            
                         March 20, 1996                                        
                           1:15 p.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Gary Davis, Chairman                                           
 Representative Beverly Masek, Vice Chair                                      
 Representative Jerry Sanders                                                  
 Representative Bill Williams                                                  
 Representative Don Long                                                       
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative Jeanette James                                                 
 Representative Tom Brice                                                      
                                                                               
 OTHER HOUSE MEMBERS PRESENT                                                   
                                                                               
 Representative Norman Rokeberg                                                
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 *HOUSE BILL NO. 496                                                           
 "An Act relating to transportation of members of the Alaska                   
 National Guard by the Alaska marine highway system."                          
                                                                               
      - MOVED OUT OF COMMITTEE                                                 
                                                                               
 *HOUSE BILL NO. 518                                                           
 "An Act exempting certain persons engaged in selling or servicing             
 certain vehicles from overtime wage requirements."                            
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 *HOUSE BILL NO. 543                                                           
 "An Act establishing a preference when entering into state airport            
 land leases."                                                                 
                                                                               
      - HEARD AND HELD                                                         
                                                                               
 *HOUSE BILL NO. 24                                                            
 "An Act relating to the offense of operating a motor vehicle,                 
 aircraft, or watercraft while intoxicated; relating to presumptions           
 arising from the amount of alcohol in a person's breath or blood;             
 and providing for an effective date."                                         
                                                                               
      - HEARD AND HELD                                                         
 *HOUSE BILL NO. 436                                                           
 "An Act relating to purchase and sale of mobile homes by mobile               
 home dealers or agents; to mobile home titles; and providing for an           
 effective date."                                                              
                                                                               
      - BILL POSTPONED                                                         
 (* First public hearing)                                                      
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB 496                                                               
 SHORT TITLE: FERRY TRANSPORTATION FOR NAT GUARD MEMBER                        
 SPONSOR(S): SP CMTE MILITARY & VETERANS AFFAIRS                               
                                                                               
 JRN-DATE     JRN-PG            ACTION                                         
 02/12/96      2723    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/12/96      2723    (H)   MLV, TRANSPORTATION                               
 03/06/96              (H)   MLV AT  5:00 PM CAPITOL 17                        
 03/11/96      3060    (H)   MLV RPT  4DP 1AM                                  
 03/11/96      3060    (H)   DP: MULDER, KOTT, IVAN, FOSTER                    
 03/11/96      3060    (H)   AM: DAVIES                                        
 03/11/96      3060    (H)   FISCAL NOTE (DOT)                                 
 03/20/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
                                                                              
 BILL:  HB 518                                                               
 SHORT TITLE: OVERTIME COMP FOR VEHICLE SALES PEOPLE                          
 SPONSOR(S): LABOR & COMMERCE                                                  
                                                                               
 JRN-DATE     JRN-PG            ACTION                                         
 02/15/96      2776    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/15/96      2776    (H)   TRANSPORTATION, LABOR & COMMERCE                  
 02/28/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 02/28/96              (H)   MINUTE(TRA)                                       
 03/20/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
                                                                               
 BILL:  HB 543                                                              
 SHORT TITLE: STATE AIRPORT LAND LEASE PREFERENCE                             
 SPONSOR(S): TRANSPORTATION                                                    
                                                                               
 JRN-DATE     JRN-PG            ACTION                                         
 03/14/96      3149    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/14/96      3149    (H)   TRANSPORTATION                                    
 03/20/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
                                                                               
 BILL:  HB  24                                                              
 SHORT TITLE: LOWER ALCOHOL LIMIT TO 0.08 FOR OMVI'S                          
 SPONSOR(S): REPRESENTATIVE(S) THERRIAULT,ELTON,Davies,Bunde                   
                                                                               
 JRN-DATE     JRN-PG            ACTION                                         
 01/06/95        26    (H)   PREFILE RELEASED                                  
 01/16/95        26    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/16/95        27    (H)   TRA, JUD, FIN                                     
 01/18/95        74    (H)   COSPONSOR(S): DAVIES                              
 01/19/95        88    (H)   COSPONSOR(S): BUNDE                               
 03/20/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
                                                                               
 BILL:  HB 436                                                              
 SHORT TITLE: MOBILE HOME DEALERS & TITLES                                    
 SPONSOR(S): REPRESENTATIVE(S) MARTIN                                          
                                                                               
 JRN-DATE     JRN-PG            ACTION                                         
 01/19/96      2489    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/19/96      2489    (H)   TRANSPORTATION, L&C, FINANCE                      
 03/20/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
 03/27/96              (H)   TRA AT  1:00 PM CAPITOL 17                        
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 GEORGE DOZIER, Junior, Legislative Aide                                       
        for Representative Kott                                                
 Alaska State Legislature                                                      
 State Capitol, Room 432                                                       
 Juneau, AK  99801                                                             
 Telephone: (907) 465-6882                                                     
 POSITION STATEMENT:  Testified on HB 496 and HB 518                           
                                                                               
 STEVE ALLWINE, Representative                                                 
 Alaska Auto Dealers                                                           
 8725 Mallard Street                                                           
 Juneau, Alaska  99803                                                         
 Telephone:  (907) 789-1386                                                    
 POSITION STATEMENT:  Testified on HB 518                                      
                                                                               
 DEAN BAKER, Apprentice                                                        
 Alaska Auto Dealers                                                           
 8725 Mallard Street                                                           
 Juneau, Alaska  99803                                                         
 Telephone:  (907) 789-1386                                                    
 POSITION STATEMENT:  Testified on HB 518                                      
                                                                               
 JAMES D. HINES, Technician                                                    
 Alaska Auto Dealer Association                                                
 8725 Mallard Street                                                           
 Juneau, Alaska  99803                                                         
 Telephone:  (907) 789-1386                                                    
 POSITION STATEMENT:  Testified on HB 518                                      
                                                                               
 ED FLANAGAN, Deputy Commissioner                                              
 Office of the Commissioner                                                    
 Department of Labor                                                           
 P.O. Box 21149                                                                
 Juneau, Alaska  99802-1149                                                    
 Telephone:  (907) 465-2700                                                    
 POSITION STATEMENT:  Testified on HB 518                                      
                                                                              
 JOSHUA DONALDSON, Legislative Aide                                            
      To Representative Therrriault                                            
 Alaska State Legislature                                                      
 State Capitol, Room 421                                                       
 Juneau, AK  99801                                                             
 Telephone: (907) 465-4797                                                     
 POSITION STATEMENT:  Testified on HB 24                                       
                                                                               
 JUANITA HENSLEY, Chief                                                        
 Driver Services                                                               
 Division of Motor Vehicles                                                    
 Department of Public Safety                                                   
 P.O. Box 20020                                                                
 Juneau, Alaska  99811-0020                                                    
 POSITION STATEMENT:  Testified on HB 24                                       
                                                                               
 LENNI GORSUH, Lobbyist                                                        
 Miller Brewing Company                                                        
 213 3rd Street                                                                
 Juneau, Alaska 99801                                                          
 Telephone:  (907) 463-3531                                                    
 POSITION STATEMENT:  Testified on HB 24                                       
                                                                               
 KURT PARKAN, Deputy Commissioner                                              
 Office of the Commissioner                                                    
 Department of Transportation and Public Facilities                            
 3132 Channel Drive                                                            
 Juneau, Alaska  99801-7898                                                    
 Telephone:  (907) 465-6977                                                    
 POSITION STATEMENT:  Testified on HB 543                                      
                                                                               
 HOWARD FOWLER, General Manager                                                
 NATAK Aviation                                                                
 P.O. Box 190022                                                               
 Anchorage, Alaska  99507                                                      
 Telephone:  (907) 277-4703                                                    
 POSITION STATEMENT:  Testified on HB 543                                      
                                                                               
 RICHARD JENSEN, Former Airport Manager                                        
 2020 Abbott Road, Number 3                                                    
 Anchorage, Alaska  99507                                                      
 Telephone:  (907) 349-7191                                                    
 POSITION STATEMENT:  Testified on HB 543                                      
                                                                               
 CHARLES COLE, Attorney                                                        
 Representing Fairbanks Air Taxi Charters                                      
 406 Cushman Street                                                            
 Fairbanks, Alaska  99701                                                      
 Telephone:  (907) 452-1124                                                    
 POSITION STATEMENT:  Testified on HB 543                                      
                                                                               
 JACK BIRMINGHAM                                                               
 6160 South Airpack Drive                                                      
 Anchorage, Alaska  99502                                                      
 Telephone:  (907) 248-4422                                                    
 POSITION STATEMENT:  Testified on HB 543                                      
                                                                               
 PHIL LIVINGSTON, Chair                                                        
 Legislative Committee                                                         
 Vice-President                                                                
 Alaska Airmen's Association                                                   
 P.O. Box 580                                                                  
 Girwood, Alaska  99587                                                        
 Telephone:  (907) 783-3163                                                    
 POSITION STATEMENT:  Testified on HB 543                                      
                                                                               
 BILL INGALDSON, Attorney                                                      
 711 H Street, Suite 500                                                       
 Anchorage, Alaska  99501                                                      
 Telephone:  (907) 258-8750                                                    
 POSITION STATEMENT:  Testified on HB 543                                      
                                                                               
 DAVE KLOSTERMAN, Member                                                       
 Lake Hood Leaseholders Association                                            
 4501 Aircraft Drive                                                           
 Anchorage, Alaska  99502                                                      
 Telephone:  (907) 243-3127                                                    
 POSITION STATEMENT:  Testified on HB 543                                      
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 96-12, SIDE A                                                            
 Number 000                                                                    
                                                                               
 The House Transportation Standing Committee was called to order by            
 Chairman Gary Davis at 1:15 p.m.  Members present at the call to              
 order were Representatives G. Davis, Masek, Long, and Williams.               
 A quorum was present.  This meeting was teleconferenced to                    
 Anchorage and Fairbanks.                                                      
                                                                               
 CHAIRMAN GARY DAVIS announced that the agenda was HB 496, HB 518,             
 HB 24 and HB 543.  He said HB 436 would be rescheduled.                       
 HB 496 - FERRY TRANSPORTATION FOR NAT GUARD MEMBER                          
                                                                               
 CHAIRMAN GARY DAVIS announced that the first item was HB 496, an              
 act relating to transportation of members of the Alaska National              
 Guard by the Alaska marine highway system.                                    
                                                                               
 Number 0100                                                                   
                                                                               
 GEORGE DOZIER, Junior, Legislative Aide for Representative Kott,              
 said HB 496 provides free transportation to Alaska National Guard             
 members when traveling to and from their duties as guard members on           
 a space available basis.  He said this is seen as one way of                  
 assisting individual who are assisting the state of Alaska as well            
 as being a recruitment tool.  He said there are a lot of                      
 individuals, who are not on the surface highway, but on the marine            
 highway, who have no way of getting to and from National Guard                
 drills.  He said HB 496 would allow them to participate in these              
 exercises.                                                                    
                                                                               
 Number 0199                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said HB 496 appears to be a small part in which           
 the legislature can assist Alaska National Guard members.                     
                                                                               
 Number 0223                                                                   
                                                                               
 REPRESENTATIVE BILL WILLIAMS made a motion to move HB 496 out of              
 committee with attached fiscal note and individual recommendations.           
 Hearing no objections HB 496 was moved from the House Standing                
 Committee on Transportation.                                                  
                                                                               
 HB 518 - OVERTIME COMP FOR VEHICLE SALES PEOPLE                             
                                                                               
 Number 0286                                                                   
                                                                               
 CHAIRMAN GARY DAVIS announced that the next item on the agenda was            
 HB 518, an act exempting certain persons engaged in selling or                
 servicing certain vehicles from overtime wage requirements.                   
                                                                               
 GEORGE DOZIER, Junior, Legislative Aide for Representative Kott,              
 said that HB 518 modifies the Alaska Wage and Hour Act,                       
 specifically those provisions which mandate the payment of                    
 overtime.  He said the overtime requirement has a number of                   
 exemptions already in place and HB 518 adds another one.  He said             
 this exemption would apply to employers that operate non-                     
 manufacturing establishments which are primarily engaged in the               
 business of selling vehicles to purchasers.  He said the affected             
 employees would be salesmen, partsmen or mechanics who primarily              
 engage in selling or servicing automobiles, trucks or farm                    
 implements.                                                                   
                                                                               
 Number 0384                                                                   
                                                                               
 STEVE ALLWINE, Representing, Alaska Auto Dealers, said HB 518 will            
 bring the state of Alaska in line with the federal overtime                   
 exemption for the automotive industry, this makes HB 518 a narrow             
 piece of legislation which his organization feels is appropriate.             
 He said his organization's interest in HB 518 is in the area of               
 technicians and whether they should be paid as hourly employees or            
 as flat rate personnel.  He said the industry standard for                    
 technicians, whether body or mechanical, is dependent on the flat             
 rate.  He said this means that a specific repair is based on a                
 published time, determined by the time it would take to complete              
 the repair under normal circumstances.  The technician performs the           
 specific repair and is either faster or slower than the published             
 time.  In either situation the employee is compensated at the                 
 published time.                                                               
                                                                               
 MR. ALLWINE said as the employee's skills increase his or her                 
 efficiency also increases and the result is a significant increase            
 in income.  Efficiency is also increased because technicians know             
 that by improving their education and skills they become more                 
 effective and are rewarded for those efforts.  In Alaska,                     
 technicians are rewarded for improving their skills but never reach           
 the income potential of their counterparts, in other states,                  
 because the hours are limited to an eight hour day.  He said the              
 employees do not have the opportunity to pick up more time because            
 of the overtime situation.  He said, in other states, employees               
 have the opportunity to dictate and work additional hours if they             
 choose.                                                                       
                                                                               
 MR. ALLWINE said at the national and state level there is a                   
 shortage of qualified technicians.  He said the shortage offers an            
 excellent opportunity for local employment.  He said opportunities            
 for training are limited and his organization is forced to "home              
 grow" most of the personnel.  He said current employees express               
 opposition to the current overtime laws because they restrict that            
 additional earning opportunity.  He said, in other areas of the               
 country, technicians have the opportunity to earn as much income as           
 they desire by flexibility in hours.  He said, in the state, the              
 current circumstances hinder the ability to attract and retain                
 qualified technicians.  He said, due to the significant training              
 and investment, it is in everyone's best interest to retain                   
 personnel.                                                                    
                                                                               
 Number 0661                                                                   
                                                                               
 MR. ALLWINE said HB 518 will help reduce the loss of quality                  
 employees to employers outside of Alaska.  He said, to the                    
 customers, the benefits of using publishing times and paying for              
 repairs based on flat rate, a more accurate estimation can be made            
 of the repair.  He said HB 518 will allow the technicians to                  
 complete a job that otherwise would be carried over into the next             
 days business.  He said HB 518 also provides continuity.  If there            
 is a dealer or a service facility that works two shifts of                    
 technicians, a technician might start the job with the second                 
 technician completing the job.                                                
                                                                               
 MR. ALLWINE said HB 518 takes the pressure off the work for the               
 quick completion of jobs within the eight hour work period.  The              
 bill allows flexibility in scheduling work loads, eliminates peaks            
 and valleys and increases employee moral by giving the employees an           
 opportunity to enjoy a higher earning capacity.  He said his                  
 organization would appreciate positive legislative support for HB
 518.                                                                          
                                                                               
 Number 0693                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said HB 518 brings the state in line with other           
 federal law and asked how many other sections of regulated                    
 employment are still out of line with federal law in the Alaska               
 statutes.                                                                     
                                                                               
 Number 0716                                                                   
                                                                               
 MR. ALLWINE said he did not know.                                             
                                                                               
 Number 0750                                                                   
                                                                               
 DEAN BAKER, Alaska Auto Dealers, said he is in an apprenticeship              
 with a local car dealer.  He said he would be able to make more               
 money by putting more effort into it.  He said being limited to 40            
 hours per week would not give him the incentive to learn additional           
 skills.  He said he currently works on an hourly rate, but when he            
 goes flat rate, he wants the opportunity to make more money.                  
                                                                               
                                                                               
 Number 0800                                                                   
                                                                               
 CHAIRMAN GARY DAVIS clarified that Mr. Baker currently works an               
 eight hour shift and then asked how often Mr. Baker had to leave              
 work uncompleted.                                                             
                                                                               
 Number 0819                                                                   
                                                                               
 MR. BAKER said he frequently has to leave work unfinished.  He said           
 that if he had the opportunity to make more money he would stay               
 longer and complete the job.                                                  
                                                                               
 Number 0844                                                                   
                                                                               
 JAMES D HINES, Technician, Alaska Auto Dealer Association, was next           
 to testify.  He said he supported HB 518 because if it does not               
 pass his overtime will be cut, his wages will decrease and he                 
 prefers earning more money.                                                   
                                                                               
 Number 0881                                                                   
                                                                               
 REPRESENTATIVE BEVERLY MASEK asked what the situation has been in             
 the past and what the present situation is.                                   
                                                                               
 Number 0893                                                                   
                                                                               
 MR. HINES said his work place does not force him to work overtime,            
 he has chosen to work extra hours on his own.  He said, he is                 
 afraid that if HB 518 passes, his overtime will be cut when they              
 hire more help in order to get jobs done in the eight hour time               
 frame.                                                                        
                                                                               
 Number 0930                                                                   
                                                                               
 REPRESENTATIVE  MASEK asked if needing to get the job done in eight           
 hours affected his quality of work.                                           
                                                                               
 MR. HINES said it did not affect his quality of work because if a             
 job is done in an unsatisfactory manner he needs to redo it.  He              
 said he would not get paid for that work.  He said he must do the             
 job correctly the first time or else he is in trouble.                        
                                                                               
 Number 0962                                                                   
                                                                               
 REPRESENTATIVE WILLIAMS clarified that if HB 518 goes through it              
 would hurt Mr. Hines.                                                         
                                                                               
 MR. HINES said if HB 518 cuts the overtime by making an eight hour            
 day, it would hurt him.                                                       
                                                                               
 REPRESENTATIVE WILLIAMS said, it was his understanding, that HB 518           
 cut overtime compensation.                                                    
                                                                               
 MR. HINES said he wants HB 518 to pass so that he can get his                 
 overtime.                                                                     
                                                                               
 REPRESENTATIVE WILLIAMS clarified that Mr. Hines supported HB 518.            
                                                                               
 Number 1006                                                                   
                                                                               
 REPRESENTATIVE DON LONG referred to Alaska Statute 23.10.060                  
 regarding the payment of overtime.  He said HB 518 will no longer             
 allow certain employees the right to receive overtime.                        
                                                                               
 MR. HINES said he would support straight time with no overtime.               
                                                                               
 Number 1043                                                                   
                                                                               
 REPRESENTATIVE LONG said HB 518 does not address flat rate, it just           
 exempts overtime for automotive partsmen and mechanics, et cetera,            
 by putting them in a supervisory category which exempts them from             
 overtime.                                                                     
                                                                               
 Number 1090                                                                   
                                                                               
 ED FLANAGAN, Deputy Commissioner, Office of the Commissioner,                 
 Department of Labor (DOL), was next to testify.  He said the DOL is           
 opposed to HB 518, as they are opposed to most exemptions which               
 take away the very basic protection of overtime after 40 hours.  He           
 said the long-standing, pre-statehood policy, the state Wage and              
 Hour Act, which protects these basic rights.  He said the state act           
 is not congruent with federal Fair Labor Standards Act, but added             
 that the federal government is not necessarily the repository of              
 all wisdom on what is a proper law.                                           
                                                                               
 MR. FLANAGAN said it is true as Mr. Allwine said, that a similar or           
 verbatim exemption is in the federal law.  He said this exemption             
 is not consistent throughout the nation and added that only four              
 states have specific exemptions for the class of worker who are               
 service advisors.  He said 16 states, "Washington D.C., the Virgin            
 Islands, and Puerto Rico don't."  He clarified that HB 518 applies            
 to partsmen as well as service advisors.  He said there is a                  
 current lawsuit where several of "those workers" have come forward            
 to receive their overtime pay and added that DOL has ruled that it            
 is their right under the law.  He said the suit probably has                  
 something to do with support for HB 518.                                      
                                                                               
 Number 1179                                                                   
                                                                               
 MR. FLANAGAN clarified that HB 518 only grants this exemption to              
 auto dealers, to sellers and non-manufacturing industries, giving             
 them a competitive advantage over the service stations who are not            
 affiliated with an auto sales arrangement.                                    
                                                                               
 Number 1205                                                                   
                                                                               
 MR. FLANAGAN said there are current flat rate situations despite              
 the legal issue of flat rates.  He said employers require mechanics           
 to be available, without pay, at the work site for hours in excess            
 of the hours they are compensated, if there is no work to be done.            
 He said this is not always the case, but it is not uncommon.  He              
 said diagnostic and warranty work may require mechanics to work               
 without pay and said auto dealers promote "freebies" that are not             
 covered under the book rate.  He said a difficult repair, not as a            
 result of the mechanic, might require excess hours of work without            
 compensation and in a case where something comes back and needs to            
 be redone, the mechanic works for free.  He said a flat rate could            
 be structured which would have the basic guarantees of minimum wage           
 and overtime.  He said this illegal flat rate used by service                 
 stations includes other work, such as pumping gas and cleaning                
 vehicles, which is not compensated under the flat rate.                       
                                                                               
 Number 1270                                                                   
                                                                               
 MR. FLANAGAN said the basic public policy in the state of Alaska is           
 that time worked is time paid.  He said individual workers should             
 not be able to abrogate the state's Wage and Hour Act.                        
                                                                               
 Number 1288                                                                   
                                                                               
 CHAIRMAN GARY DAVIS asked if HB 518 specifically brings the state             
 law in line with federal law.                                                 
 Number 1297                                                                   
                                                                               
 MR. FLANAGAN said there is a provision in the federal Fair Labor              
 Standards Act, the federal counterpart to the Alaska Wage and Hour            
 Act which has, virtually verbatim, the same exception.                        
                                                                               
 Number 1311                                                                   
                                                                               
 REPRESENTATIVE LONG asked for more information regarding the                  
 illegal use of the flat rate.                                                 
                                                                               
 MR. FLANAGAN said the flat rate can occur within the law if                   
 employees are properly compensated for eight hours.  He said, in              
 the service advisor's lawsuit under the Wage and Hour Act, the                
 employees worked 50 hour per week for a flat salary.  He said these           
 service advisors are not properly salaried employees.  The three              
 provisions for salaried employees include executive, administrative           
 and supervisory.                                                              
                                                                               
 Number 1356                                                                   
                                                                               
 REPRESENTATIVE LONG asked if HB 518 would put the flat rate into              
 place.                                                                        
                                                                               
 Number 1380                                                                   
                                                                               
 MR. FLANAGAN said the flat rate would no longer violate the law if            
 HB 518 went into affect.  He said the employees, classified under             
 HB 518, could work as much as they wanted to, paid or unpaid, if              
 the employer charged by the book rate.  He said the employees would           
 be removed from the overtime protection.  He said, he believed,               
 that there were more employers favoring HB 518, than employees.               
                                                                               
 Number 1391                                                                   
                                                                               
 CHAIRMAN GARY DAVIS asked if those, working on a book rate, were              
 salaried employees.  He also asked, if it was the employer or the             
 employee who sets the book rate and if it takes longer than the               
 listed hours to do a job, would the employee be compensated for               
 this time.                                                                    
                                                                               
 Number 1422                                                                   
                                                                               
 MR. FLANAGAN said the book rate lists the amount of hours the                 
 repair will take and then the shop rate is totalled into that many            
 hours were the mechanics portion of the shop rate calculated by               
 shop policy.                                                                  
                                                                               
 Number 1445                                                                   
                                                                               
 REPRESENTATIVE WILLIAMS referred to the testimony and the letters             
 in support of HB 518.  He expressed confusion over this support               
 when people would lose their ability to receive overtime.                     
                                                                               
 CHAIRMAN GARY DAVIS asked Mr. Allwine to explain the situation                
 where employees would be putting in extra time.                               
                                                                               
 Number 1514                                                                   
                                                                               
 MR. ALLWINE said the employees would put in extra time by personal            
 choice.  He said if you bring your car in for a specific repair, in           
 most cases the shop will go to a published manual such as Milton or           
 Chilton which will list a time for the repair for example, two                
 hours for the job.  If the certified or journeyman technician can             
 do the job in less than two hours he is still paid for two hours              
 according to this flat rate.  He said someone who doesn't have a              
 lot of experience might take two and half hours, but he is only               
 paid for two hours.  He said there are ways around that                       
 circumstance, such as paying apprentices on a flat, hourly wage.              
 If those apprentices work extended hours they are paid overtime for           
 that time.                                                                    
                                                                               
 Number 1710                                                                   
                                                                               
 MR. ALLWINE referred to the lawsuit regarding service advisors, and           
 he said that his organization has no interest in the service                  
 advisor's interest in HB 518.  He said the personnel and the                  
 dealers were concerned because the federal exemption also includes            
 parts people and they don't feel that exemption is appropriate.  He           
 said their only interest in HB 518 is the technician issue and flat           
 rate versus an hourly rate with the overtime provision.                       
                                                                               
 MR. ALLWINE said if a journeyman technician makes his living as a             
 journeyman technician he works through the day, putting in his                
 eight hours.  He said the objective, during those eight hours, is             
 to bill out as many hours as is humanly possible.  If the                     
 journeyman technician can bill out 16 hours, he makes 16 hours.  He           
 said, the problem is, if the journeyman technician wants to come in           
 early and pick up a couple of extra hours, he cannot do that                  
 without the employer approving this extra time and paying him the             
 overtime.                                                                     
                                                                               
 MR. ALLWINE said if HB 518 is enacted or modified so that it                  
 specifically deals with the technicians, you are giving them the              
 ability to work according to the schedule that they want.  He said,           
 if there is no work, people will not stay at the shop.  He said               
 journeyman technicians do not sweep floors, and added that they               
 have thousands of dollars in tools.  He said HB 518 does not                  
 address service stations and other places.  He said his association           
 is not trying to do something which creates a problem for their               
 employees.                                                                    
                                                                               
 Number 1710                                                                   
                                                                               
 MR. ALLWINE referred to his experience and said that if he worked             
 hard and did the job right, he could make more money.  He said this           
 incentive is good and an incentive that you don't get on time and             
 a half.  He said the income flat rate technicians are able to get             
 cannot be matched.                                                            
                                                                               
 Number 1732                                                                   
                                                                               
 REPRESENTATIVE JERRY SANDERS asked how many people work 8 hours and           
 get 16 hours of book rate done.                                               
                                                                               
 Number 1746                                                                   
                                                                               
 MR. ALLWINE said journeyman technicians will be able to receive               
 over eight hours of pay 90 percent of the time for eight hours of             
 work.                                                                         
                                                                               
 REPRESENTATIVE SANDERS asked if it was for 16 hours of pay.                   
                                                                               
 MR. ALLWINE said it was true some of the time.                                
                                                                               
 REPRESENTATIVE SANDERS said, in an overtime situation, an employee            
 is going to get $120 worth of work done and asked what the problem            
 was with paying that employee time and a half.  He said it appeared           
 that the journeyman technician would be earning beyond that amount.           
                                                                               
 Number 1782                                                                   
                                                                               
 MR. ALLWINE said the interpretation by the DOL is not consistent              
 and has created a guessing game by what that overtime calculation             
 would be.  He heard that a technician is paid $25 an hour if he               
 works his eight hours.  He said that if he produces ten hours worth           
 of work within that eight hours then that lump sum, divided by                
 eight hours becomes the figure used for overtime calculation.  He             
 said, as an employer, this overtime figure becomes significant when           
 the customer is not being charged extra to compensate for the                 
 associated overtime costs.                                                    
                                                                               
 Number 1851                                                                   
                                                                               
 CHAIRMAN GARY DAVIS asked if the employer was restricted from                 
 charging more than the book rate.                                             
                                                                               
 Number 1858                                                                   
                                                                               
 MR. ALLWINE said automotive repair shops are ethically required to            
 charge the book rate.  He said that there might be people who                 
 charge more, but most don't.  He said you are at the mercy of the             
 customer who might not return if you overcharge.                              
                                                                               
 Number 1878                                                                   
                                                                               
 MR. FLANAGAN said the book rate just lists the numbers of hours, he           
 said the shop rate will vary from dealer to dealer.  He said the              
 shop rate throughout the community will probably be consistent.  He           
 said, it has been his experience, that the employee receives a                
 third of the shop rate.  He said it seems like there would be room            
 for an overtime multiplier if they did get overtime.                          
                                                                               
 Number 1920                                                                   
                                                                               
 REPRESENTATIVE WILLIAMS asked for details about the book rate and             
 how it is set up.                                                             
                                                                               
 Number 1923                                                                   
                                                                               
 MR. ALLWINE said all the manufacturer's have published specific               
 repair book times, in addition there are other book rates which               
 include Motor's and Chilton's.  He said these book rates are pretty           
 consistent.  He said there was a comment about doing work and not             
 being compensated for it and said this is not an accurate                     
 statement.  He said, if the technician is working on electrical or            
 diagnostic time, the industry standard cost is time and materials.            
 He said there are specific rules which compensate the employees for           
 that time which is compensated even if the technician says there is           
 no problem.                                                                   
                                                                               
 Number 1981                                                                   
                                                                               
 REPRESENTATIVE SANDERS repeated his question as to the work                   
 technicians perform in an eight hour day.                                     
                                                                               
 Number 1996                                                                   
                                                                               
 MR. ALLWINE said he could not give concrete numbers, but did say              
 that a significant majority of the journeymen technicians bill out            
 more than eight hours in a given eight hour day.                              
                                                                               
 REPRESENTATIVE SANDERS asked him to guess an average as 50 percent,           
 100 percent more.                                                             
                                                                               
 Number 2019                                                                   
                                                                               
 MR. ALLWINE said he did not know how to respond to the question and           
 be accurate.                                                                  
                                                                               
 Number 2028                                                                   
                                                                               
 MR. FLANAGAN referred to Mr. Allwine's comment that the                       
 manufacturers allow some payment for diagnostic time on warrantee             
 work.  He said there is a lot of non-warrantee work that is done in           
 the shops.  He said the possession of thousands of dollars of tools           
 does not put them on an independent contractor status.  He said the           
 technician might get a tool allowance, but they provide their own             
 tools.  He said these technicians are entitled to the very basic              
 protection of overtime pay over 40 hours of work.                             
                                                                               
 Number 2051                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said HB 518 was a House Labor and Commerce bill           
 and asked Mr. Allwine if his organization requested this bill.                
                                                                               
 MR. ALLWINE said his organization did not.                                    
                                                                               
 MR. DOZIER said that he didn't know who had made the request for HB
 518.                                                                          
                                                                               
 Number 2069                                                                   
                                                                               
 CHAIRMAN GARY DAVIS referred to the many letters of support for HB
 518 and said it might be possible to narrow the scope and the way             
 in which the employee is paid, whether by a book rate or hourly.              
 He said HB 518 will be held over until the sponsor, the Labor and             
 Commerce Committee, could address some of the House Transportation            
 Committee questions.                                                          
 HB  24 - LOWER ALCOHOL LIMIT TO 0.08 FOR OMVI'S                             
                                                                               
 Number 2174                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said the next item on the agenda was HB 24, an            
 act relating to the offense of operating a motor vehicle, aircraft,           
 or watercraft while intoxicated; relating to presumptions arising             
 from the amount of alcohol in a person's breath or blood; and                 
 providing for an effective date.  He said the committee would only            
 hear testimony on this bill today due to a request from the                   
 sponsor, Representative Therriault.                                           
                                                                               
 JOSHUA DONALDSON, Legislative Aide to Representative Therrriault,             
 read from the sponsor statement, "HB 24 lowers the legal definition           
 of intoxication for the crime of driving while intoxicated from .10           
 percent to .08 percent blood alcohol level.  This initiative would            
 make it illegal to operate a motor vehicle, aircraft, or watercraft           
 with a blood alcohol level of greater than .08 percent.  Several              
 studies have demonstrated that measurable impairment to operate a             
 motor vehicle begins in most drivers at or below .05 percent blood            
 alcohol level, at that all drivers are impaired at a blood alcohol            
 level of .08 percent.                                                         
                                                                               
 Number 2211                                                                   
                                                                               
 Similar legislation has been passed in several other states and is            
 being considered by many others.  A blood alcohol threshold of .08            
 percent already exists throughout Canada, as in all of Europe.                
 With alcoholism and alcohol related fatalities already taking a               
 tremendous toll in Alaska, a reduced threshold will not only                  
 increase the odds of obtaining convictions for drunk driving, but             
 will also increase driving safety.  A study by the state of                   
 California showed that traffic fatalities were reduced by 12                  
 percent after the implementation of .08 DWI laws.                             
                                                                               
 Number 2234                                                                   
                                                                               
 In December of 1993, the Supreme Court ruled in Haynes versus the             
 Department of Public Safety that due to the margin of error                   
 inherent to the Intoximeter 3000 of .01, the actual level at which            
 an operator of a motor vehicle should be convicted of drunk driving           
 is .11.  This clearly suggests an even greater need for .08 percent           
 legislation."                                                                 
                                                                               
 Number 2253                                                                   
                                                                               
 CHAIRMAN GARY DAVIS asked if all the fiscal notes have been                   
 collected and asked specifically if there was a fiscal note from              
 the Department of Corrections.                                                
                                                                               
 Number 2264                                                                   
                                                                               
 MR. DONALDSON said a fiscal note has not been received from the               
 Department of Corrections.  He said the sponsor could request one.            
                                                                               
 CHAIRMAN GARY DAVIS said perhaps the department did not see a need            
 for one.                                                                      
                                                                               
 Number 2279                                                                   
                                                                               
 JUANITA HENSLEY, Chief, Driver Services, Division of Motor Vehicles           
 (DMV), Department of Public Safety (DPS), said that HB 24 is the              
 type of legislation that the DPS has supported for a number of                
 years.  She said it is felt that anytime you can reduce the number            
 of drunk driving fatalities and injury accidents it benefits the              
 state from a societal standpoint as well as reducing associated               
 costs.                                                                        
                                                                               
 Number 2319                                                                   
                                                                               
 MS. HENSLEY referred to a packet titled, "Strategies for Dealing              
 with Persistent Drinking Driver," which was a report done in                  
 February 1995, by the Transportation Research Board.  She said it             
 was an independent research report including various specialists              
 and their recommendations.  She said the .08 percent blood alcohol            
 level is supported by the Alaska Peace Officers Association,                  
 Transportation Research Board, the National Highway Traffic Safety            
 Administration, the Mothers Against Drunk Drivers, et cetera.                 
                                                                               
 Number 2362                                                                   
                                                                               
 REPRESENTATIVE SANDERS asked if she had any figures to show what              
 percentage of car accidents involve people who are between .08                
 percent and .1 percent.                                                       
                                                                               
 Number 2373                                                                   
                                                                               
 MS. HENSLEY said she did not have those figures on hand, but would            
 get them and make them available to him.  She said there are                  
 Alaskan figures for all types of accidents that occur in the state.           
 She said there is a data base, called the Fatal Accident Reporting            
 System (FARS), which has all the fatal accidents that occur in                
 states throughout the nation.  She said all the factors are                   
 measured and put into that data base.  She said all accident                  
 reports are sent to the Department of Transportation (DOT) and are            
 statistics that are kept through the Highway Analysis System (HAS)            
 system.                                                                       
                                                                               
 Number 2404                                                                   
                                                                               
 REPRESENTATIVE WILLIAMS referred to a time when the state did "move           
 it down once."  He said if you watched the police reports,                    
 throughout the state, DWIs did not stop.  He asked if DPS was                 
 thinking of increasing the fine.  He said, currently, people are              
 fined, they get out and the next weekend they are driving under the           
 influence again.  He said these people are not afraid of the laws.            
 He suggested that the penalty be increased.                                   
                                                                               
 Number 2458                                                                   
                                                                               
 MS. HENSLEY said that last year the legislature passed a felony               
 drunk driving law which makes the third offense, within a five year           
 period, a felony.                                                             
                                                                               
 TAPE 96-12, SIDE B                                                            
 Number 0000                                                                   
                                                                               
 MS. HENSLEY said, in 1983, the legal limit was set at .10 percent             
 or greater.  She said in 1983, the legislature proposed the                   
 Administrative License Revocation Act which has an inherent                   
 deterrent affect.  She said in 1984 there was a total of, a little            
 over, 7,700 arrest statewide whereas last year there was barely               
 5,000.  She said these changes have made an impact.  She said                 
 decreases have occurred in the size of the State Trooper force, but           
 added that the municipality and cities have increased in their                
 force in some areas, particularly in Juneau and Anchorage.  She               
 said driving under the influence is an issue that the state has               
 tried to address.  She said the DPS supports stronger measures to             
 help the public.  She said society, as a whole, must realize that             
 alcohol and a car does not mix.                                               
                                                                               
 Number 0060                                                                   
                                                                               
 MS. HENSLEY said in the United States, on an average, there is over           
 56,000 people killed per year in automobile accidents a majority of           
 which are alcohol related.                                                    
                                                                               
 Number 0068                                                                   
                                                                               
 REPRESENTATIVE SANDERS said he agreed that alcohol and driving do             
 not mix.  He said he was not in the legislature when they voted for           
 the .10 percent but he did vote for making the third conviction a             
 felony.  He said he would be glad to vote for stiffer penalties. He           
 questioned the inconvenience to the overall public, who never has             
 had a car accident and has two or three drinks falling between the            
 .08 percent and .10 percent.  He wondered if the inconvenience is             
 offset by the savings the state will receive.  He said the people             
 who fall between .08 percent and .10 percent are the real problem.            
 He said the problem is the people who fall between 1.7 percent and            
 2.4 percent.  He said that problem should be addressed and the                
 focus should be away from social drinkers.                                    
                                                                               
 Number 0117                                                                   
                                                                               
 MS. HENSLEY said, as part of her work, she has had to deal with               
 this issue for 16 years.  She said, during that time, she has seen            
 many of the same names coming across her desk.  She said there are            
 a lot of alcohol problems and many people lose their license as a             
 result.  She said some individuals have lost their license until              
 the year 2060 because they continue to drive.  She said the average           
 blood alcohol in Alaska is .19, which is nearly twice the limit.              
                                                                               
 Number 0157                                                                   
                                                                               
 MS. HENSLEY mentioned the Supreme Court case, Haynes versus the               
 state of Alaska, which determined that the state must consider the            
 margin of error of the Intoximeter instrument.  She said that                 
 margin of error has been placed at .01 percent.  If the state has             
 an arrest that is a .10, the person is not considered intoxicated             
 until that person is .11 percent.  She said this issue must be                
 addressed and asked that HB 24 be amended to allow the inherent               
 margin of error to be taken into consideration.  She said the test            
 at the time should be valid, as long as the machine is calibrated             
 according to the standard criteria set in the law.                            
                                                                               
 Number 0193                                                                   
                                                                               
 REPRESENTATIVE SANDERS clarified that the margin of error worked              
 both ways.  He then asked if someone with a blood alcohol level of            
 .07 percent, with a reading of .08 percent, could be in as much               
 trouble as someone with a blood alcohol level of 3.6 percent.                 
                                                                               
 Number 0215                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said that would be true if the margin of error            
 was .01 percent.  He then asked how long the .10 percent has been             
 in effect and how long the .04 percent for commercial drivers has             
 been in effect.                                                               
                                                                               
 Number 0224                                                                   
                                                                               
 MS. HENSLEY said the effective date of the .10 percent in law was             
 October 18, 1983 and the effect date of the .04 percent in law was            
 April 1, 1992.                                                                
                                                                               
 Number 0261                                                                   
                                                                               
 LENNI GORSUH, Lobbyist, Miller Brewing Company, was next to                   
 testify.  She said most of the concern, her company has, was                  
 expressed by Representatives Williams and Sanders.  She said the              
 company believes that most of the fatal crashes are most often                
 caused by people well above .10 percent and that it is the problem            
 drinkers which legislation must address, rather than the social               
 drinkers.  She referred to a chart which gives an indication of               
 where the fatal crashes occur depending on the blood alcohol                  
 content.  She said the figures listed on the chart would concur               
 with the figures by Ms. Hensley.                                              
                                                                               
 Number 0301                                                                   
                                                                               
 MS. GORSUH said her company thinks the most effective deterrent to            
 drunk driving consists of stricter law enforcement, expanded                  
 consumer awareness and increased severity of the penalties levied             
 for drunk driving.  She said her company has supported this type of           
 activity.  She said people need to know that if they drive drunk,             
 they will be caught, arrested and prosecuted.                                 
 HB 543 - STATE AIRPORT LAND LEASE PREFERENCE                                
                                                                               
 Number 0330                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said the next item on the agenda was HB 543, an           
 act establishing a preference when entering into state airport land           
 leases, sponsored by the House Transportation Committee.                      
                                                                               
 CHAIRMAN GARY DAVIS said HB 543 said this bill was requested                  
 because current regulations, as well as amended regulations, which            
 have a detrimental affect on those people leasing airport lands.              
 He said HB 543 gives a preference to those people who have leased             
 airport lands and have made a substantial investment in those                 
 leases.  He said those assets might be in jeopardy when a lease               
 comes up for renewal.  He said, currently, at the end of a 25 year            
 lease where assets have been added to that lease, for example the             
 construction of a $100,000 hangar, the lease is put out to bid and            
 the person who invested in that lease might stand to lose their               
 investment.  He concluded that HB 543 gives preference in renewing            
 the lease and said there is a constitutional issue related to HB
 543.                                                                          
                                                                               
 Number 0448                                                                   
                                                                               
 REPRESENTATIVE NORMAN ROKEBERG proposed three separate amendments             
 to HB 543.  He said he had spent over 25 years as a commercial real           
 estate broker, primarily leasing commercial office space and ground           
 in the Anchorage area as well as in the rest of the state.  He said           
 the airport land lease has been an issue for a long time and that             
 it was brought to his attention again by the Alaska Air Carriers              
 Association (AACA) who have asked for some statutory changes.                 
                                                                               
 Number 0526                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG said HB 543 would apply to both rural and             
 international airports and that his amendments would only apply to            
 existing leases, not for future leases.  He said there is one                 
 exception to this, a revisionary interest clause for improvements             
 in any future leases.  He said this clause has to do with leasehold           
 improvements which include the buildings, the tarmac pavement, the            
 understructure subsurface area, field distributions and storage               
 tanks, essentially any improvement made by a lessee or tenant on              
 the land.  He said there have been substantial problems in the past           
 because there has been either a failure on the state to include a             
 reversionary clause in the lease document or there has been a lack            
 of clarity within the document.  He said the disposition of                   
 improvements, at the expiration of the lease, is in question.                 
 He said there are regulations that currently exist, but they are              
 not administered evenly.                                                      
                                                                               
 Number 0613                                                                   
                                                                               
 CHAIRMAN GARY DAVIS clarified that a revisionary interest clause              
 means that the improvements revert back to the owner at the end of            
 the lease.                                                                    
                                                                               
 Number 0619                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG said improvements can revert back to the              
 owner and said this relates to Amendment 2.  He said this amendment           
 states that "leases made prior to the effective date the lessees              
 shall have the right to elect to abandon, remove, or sell to a                
 succeeding tenant all or some of the leasehold improvements                   
 installed and paid for by the lessee."  He said Amendment 2 would             
 occur in a bargain for a leasehold situation, the improvements                
 would either revert to the tenant or revert back to the landholder            
 depending on the agreement.  He said the bureaucracy is not working           
 with the private sector of this state to promote and foster                   
 aviation in the business community.                                           
                                                                               
 Number 0716                                                                   
 REPRESENTATIVE ROKEBERG said the renewal provisions, which are                
 located in Section 1 of HB 543, relates to Amendment 1 which grants           
 a right of renewal to the existing tenants only.  He said the state           
 should be in a position to bargain for new tenants and new business           
 coming in to the airport.  He said new statutes will have some                
 bearing on future negotiations, and added that the bureaucracy is             
 having an affect on the business community.  He said the renewal              
 option only affects current leases and stipulates that the terms,             
 conditions and rents of the new extended period have to be mutually           
 agreed upon in a reasonable amount of time.  He said if the terms,            
 conditions and rents are not agreed upon within a reasonable amount           
 of time, there is a provision for a three member arbitration panel            
 which would determine the fair market value rent and other terms or           
 additions for that particular lease in order to resolve the                   
 conflict between the state and tenant.                                        
                                                                               
 REPRESENTATIVE ROKEBERG said additional language was added at the             
 bottom of Amendment 1, which allows the state to deny renewal or              
 extension of the lease if the state can prove that it is in its               
 best interest or consistent with the airport master plan that they            
 don't renew it.                                                               
                                                                               
 Number 0778                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG said Amendment 1 and HB 543 both include              
 language, "offering under a long term lease scenario."  He said he            
 felt five years or longer is a long term lease.  He said a person             
 with a 35 year lease should have the right to extend that lease for           
 five years.  He said, currently, the statute limits the length of             
 a ground lease or land lease in the state of Alaska to 55 years and           
 added that he supports this concept.  He said it is his intention             
 that the lease term and extension periods be limited to 55 years.             
 He said an additional amendment might be needed to add this                   
 provision.                                                                    
                                                                               
 Number 0854                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG repeated that his intent was to ameliorate            
 business problems that are occurring in industry and affecting the            
 state's business community.                                                   
                                                                               
 Number 0865                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG said Amendment 3 provides findings and a              
 statement of purpose for HB 543.  He said the sections need to be             
 renumbered, he said subsection 2 includes (c) and should include              
 (d) below.  He said he would amend this amendment.  He said the               
 findings are intended to overcome any potential constitutional                
 challenge to this legislation by laying out the reason for the                
 statutory change.                                                             
                                                                               
 Number 0926                                                                   
 KURT PARKAN, Deputy Commissioner, Office of the Commissioner,                 
 Department of Transportation and Public Facilities, (DOT/PF) was              
 next to testify.  He said the Administration supports changing the            
 language in the statute to allow the right of first refusal for an            
 existing tenant to enter into a new lease.  He said the biggest               
 concern is making HB 543 legally defensible.  He said DOT/PF has              
 drafted up a bill which addresses the same concerns and adequately            
 addresses the legal concerns as well.  He said in reviewing HB 543            
 and the comments that Terry Banister (ph.) had submitted, findings            
 were included in the Administration's legislation to meet the                 
 constitutional challenges.                                                    
                                                                               
 Number 1042                                                                   
                                                                               
 MR. PARKAN said the state wants to create an environment that is              
 good for the aviation business and that the state wants to do what            
 they can to assist the current tenants.  He said he just received             
 the amendments proposed by Representative Rokeberg so he could not            
 comment on them.  He said the expert on statewide aviation leasing            
 policy is in Washington D.C. trying to put together a state                   
 position opposing proposed Federal Aviation Administration (FAA)              
 regulation regarding a ten seat rule for certified airports.                  
                                                                               
 Number 1096                                                                   
                                                                               
 CHAIRMAN GARY DAVIS referred to the right to refusal provision and            
 asked him about the legalities in including this provision.                   
                                                                               
 Number 1116                                                                   
                                                                               
 MR. PARKAN said the state would prefer to give the existing tenant            
 the right for refusal, giving a preference to a new lease.                    
                                                                               
 CHAIRMAN GARY DAVIS said it appeared the Administration's bill and            
 HB 543 looked at the same thing.                                              
                                                                               
 Number 1146                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG said he chose not to use the concept of the           
 first right of refusal in his amendments because this concept in              
 law requires a bonified third party to come forward for the lease.            
 He said if an existing tenant wanted to renew his lease and the               
 state replied that the lease needed to be put up for bid, another             
 bid was put up which the existing tenant could match.  He said if             
 there is knowledge that a first right of refusal exists, a bonified           
 third party might not come forward.  He said first right of                   
 refusals are not currently in practice, they have been replaced               
 with first rights of offer.  He said his amendment gives the                  
 existing tenant the first right of offer and does not require a               
 third party to come forward.                                                  
                                                                               
 Number 1249                                                                   
 REPRESENTATIVE WILLIAMS asked if the committee members have                   
 received a copy of the Administration bill draft.                             
                                                                               
 Number 1256                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said it was located in the committee packet.              
 He added that he had no pride of authorship, but felt the best                
 version should go forward for the protection and passage by                   
 everyone.                                                                     
                                                                               
 Number 1280                                                                   
                                                                               
 MR. PARKAN echoed Chairman Davis' comment.  He said the                       
 Administration bill is a draft of a transmittal letter as well as             
 the legislation itself.  He said it include sections of which are             
 also included in the proposed amendments.                                     
                                                                               
 CHAIRMAN GARY DAVIS said he wanted to hear testimony on HB 543 and            
 was not sure it would be moved today as there might need to be                
 additional work done on this bill.                                            
                                                                               
 Number 1309                                                                   
                                                                               
 REPRESENTATIVE WILLIAMS asked about the proposed Amendment 1, page            
 one, line five, after the word, "lease" and asked him to explain              
 this section.  He asked how this proposed amendment would affect              
 him if he wanted to build a building that would last 55 years and             
 only a five year lease would be granted.                                      
                                                                               
 Number 1374                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG said that part of Amendment 1 is only                 
 addressing renewals of leases.  He said the language could be                 
 clarified in Amendment 1 and added that most of the airport leases            
 are 30 to 35 years.  He said this provision was added so that if              
 you were close to retirement and only wanted to extend it by five             
 years you could do so.  He said the 55 year limit is a statutory              
 limit.                                                                        
                                                                               
 CHAIRMAN GARY DAVIS said the 55 year maximum limit might be the               
 intent of some of the parties.                                                
                                                                               
 Number 1445                                                                   
                                                                               
 HOWARD FOWLER, Alaskan Air Carriers Association (AACA), said he has           
 been dealing with the issues of dispositions of improvements on               
 expiring leases and the requirement in the lease contract of                  
 investments on a sliding scale for the length of the lease.  He               
 said if a lease is renewed and there is an operating business which           
 doesn't need any more capital improvements, the requirement that              
 more money should be invested is unnecessary.                                 
                                                                               
 Number 1520                                                                   
                                                                               
 CHAIRMAN GARY DAVIS asked him if the lease was located at the                 
 Anchorage International Airport.                                              
                                                                               
 MR. FOWLER said his company is called Natak Aviation and they have            
 a 200 by 200 foot lot with a helicopter hangar on it at Lake Hood.            
 He said the lease expired last July and he requested that either              
 the lease be extended on the basis of additional improvements                 
 exceeding those initially required or that he lease on a month by             
 month basis until "sane" policy is involved and he can sign a                 
 longer lease contract.                                                        
                                                                               
 Number 1571                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said it appeared that the people who write the            
 leases have the authority to add and subtract different provisions            
 of the leases.  He said the committee would contact him regarding             
 this issue.                                                                   
                                                                               
 Number 1609                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG said, in terms of Mr. Fowler's situation,             
 the language in HB 543 and the amendments do not speak to the                 
 investment, but the arbitration amendment would be able to help him           
 resolve his differences.  He said, currently, Mr. Fowler is at the            
 mercy of the state, and added that to have someone invest over the            
 course of a 25 year lease is ridiculous.                                      
                                                                               
 CHAIRMAN GARY DAVIS asked Mr. Fowler what he had done regarding his           
 lease issue.                                                                  
                                                                               
 MR. FOWLER said he wrote a letter, dated November 29, 1995, to the            
 local leasing officer with letters sent to Commissioner Perkins,              
 the Governor and some other interested people.  He said he has                
 received no reply on this issue other than receiving an invitation            
 to bid on a neighboring lease.                                                
                                                                               
 Number 1741                                                                   
                                                                               
 RICHARD JENSEN said he was the former airport manager 20 years ago            
 when most of the leases, which are now currently expiring, were               
 made.  He said, at the time, the state was happy to have those                
 entrepreneurs, who were willing to risk their resources and offer             
 services to both the traveling public and the tourists.  He said              
 the comment on revisionist provisions made by Representative                  
 Rokeberg is pertinent to current and future leases and that the               
 bureaucracy involved was a morass.  He commented that there was and           
 is no leasing criteria and policy.                                            
                                                                               
 Number 1851                                                                   
                                                                               
 MR. JENSEN said it was a "jake legged" operation in that when he              
 was the airport manager, the division was doing the leasing and he            
 did the enforcing.  He said the airport had little input as to who            
 or where people were getting their leases.                                    
                                                                               
 Number 1887                                                                   
                                                                               
 MR. JENSEN said in reviewing some of these charges and the basis              
 for them, there are two separated classes of airports in Alaska and           
 that HB 543 doesn't differentiate between these two income sources.           
 He said the two international airports, in Anchorage and Fairbanks,           
 operate separately from all other airports in the state.  He said             
 the international airports are a separate entity created by an                
 early statute and are self supporting.  He said these airports have           
 their own bond rating and its own bonding authority.  He said the             
 revenue from these two airports requires these bonds.  He said, by            
 grouping all these same airports under the same leasing regulations           
 might need to be reviewed in context of ownership lease, use and              
 operation airports and facilities will provide revenues sufficient            
 to comply with all the covenants of the bond revenues.  He said               
 there must be more than one bond resolution because the                       
 international enterprise fund is separate.  He said lease terms and           
 lease charges there might be a basis for a differential in those              
 regulations and or charges.                                                   
                                                                               
 Number 2070                                                                   
                                                                               
 CHAIRMAN GARY DAVIS said the DOT/PF has been struggling with                  
 regulations that will affect the international and the rural                  
 airports.                                                                     
                                                                               
 Number 2100                                                                   
                                                                               
 CHARLES COLE said that several years ago he was asked by the Lake             
 Hood airport lessees to represent them in connection with problems            
 that are currently being addressed in HB 543.  He said some of                
 these operators had their leases expiring and they were concerned             
 about their renewal rights.  He said Governor Knowles appointed a             
 well-balanced, multi-member committee to conduct hearings on the              
 problems raised by the airport lessees.  He said this committee               
 made recommendations in the form of a majority and minority report            
 through the commissioner about addressing and resolving these                 
 problems.  He said the AACA, generally, accepted the                          
 recommendations made by the majority members of that committee.  He           
 said no action has been taken by the commissioner on those                    
 recommendations.  He said, as a result, those concerns are now                
 being raised to the legislature.                                              
                                                                               
 Number 2231                                                                   
                                                                               
 MR. JENSEN said he did not have a copy of the proposed amendments             
 to HB 543.  He said it is important that the legislature make                 
 findings in connection with HB 543 in order to support legal issues           
 which might be raised in connection with the constitutionality of             
 the bill.  He said he has not reviewed the findings included in the           
 proposed amendment or in the Administration bill, but he said both            
 of those are probably satisfactory.                                           
                                                                               
 Number 2313                                                                   
                                                                               
 MR. JENSEN said he would agree with Representative Rokeberg that              
 existing lessees should be given the opportunity to renew their               
 leases.  He said it would be a mistake to have a right of refusal             
 for the reasons Representative Rokeberg mentioned.                            
                                                                               
 Number 2369                                                                   
                                                                               
 MR. JENSEN said the Lake Hood operators and many other airport                
 lessees favor a reversionary clause, so that they can continue to             
 own the improvements which they made on the property during the               
 lease.  He said most of these existing tenants, 25 years ago, were            
 told that they would have the right to renew these leases.  He said           
 these leases were signed in good faith and the lessees accepted the           
 word of the state.  He said these leases are now expiring without             
 any statutory rights to extend the leases.                                    
                                                                               
 Number 2452                                                                   
                                                                               
 MR. JENSEN said the problem is more than simply just losing                   
 property, constructed on the lease premise, but loss of an entire             
 business.                                                                     
                                                                               
 TAPE 96-13, SIDE A                                                            
 Number 0000                                                                   
                                                                               
 MR. JENSEN said the loss of a business is a serious problem.  He              
 referred to the concept of not allowing lessees to renew the lease            
 because of it not being in the states best interest.  He said he              
 was hesitant about giving too much discretion to the state                    
 regarding airport leasing and questioned what construed the state's           
 best interest and also questioned airport policy.  He said those              
 provisions, in addition to the one mentioned by Representative                
 Rokeberg should be eliminated.                                                
                                                                               
 Number 0131                                                                   
                                                                               
 MR. JENSEN said, in regards to comments by Mr. Fowler regarding the           
 leasing as shown in some proposed notice of lease option, if                  
 someone makes an improvement of $125,000 plus then they can have              
 the lease for 25 years.  He cited an example where someone put a              
 $4.5 million hangar and said that person would have to pay one-               
 twenty-fifth of the $4.5 million improvement to the state every               
 year as opposed to someone putting $200,000 improvement would only            
 have to pay one-twenty-fifth of that.                                         
 Number 0312                                                                   
                                                                               
 MR. JENSEN said another state policy is to require, for lease                 
 renewal or extension, improvements on the premises.  He said some             
 of these premises are mature and have been there for 25 years and             
 there is no more room for improvements or the company might not               
 have economic justification for improvements.   He said he had                
 concerns in new leases where the improvements would revert to the             
 state.  He said the state should get the full value of what it                
 gives to the lessee which would be raw land located on state ground           
 near an airport.                                                              
                                                                               
 CHAIRMAN GARY DAVIS said he would send him information regarding              
 the proposed Administration bill.                                             
                                                                               
 Number 0447                                                                   
                                                                               
 JACK BIRMINGHAM, employee, Air Aviation, and member of the AACA,              
 said he agreed with the testimony by Mr. Cole.  He said, in one               
 form or another, commercial airport tenants have been in hearing              
 after hearing occurring before 1986, trying to resolve many of                
 these same issues and that now legislative help has been requested.           
 He said the short answer is located in a Michael Barton memorandum            
 dated August 26, 1994.                                                        
                                                                               
 MR. BIRMINGHAM suggested the committee move HB 543.  He said the              
 Administration's bill has two faults, the findings provision only             
 includes commercial properties and does not include non-commercial            
 tenants and added that the worst experiences involve these non-               
 commercial tenants.  He said the other issue is the rights of first           
 refusal on new terms and conditions and said this could be                    
 anything.                                                                     
                                                                               
 Number 0571                                                                   
                                                                               
 MR. BIRMINGHAM said most of these constitutional concerns have been           
 highly overstated and said the legislature should draft a bill that           
 makes sense and fits the circumstances.  He said only two                     
 leaseholds have gone to bid at the insistence of the state and most           
 people have justifiably assumed that there was a reasonable renewal           
 preference and a reasonable right of extension which is true and              
 can be found in historical records.  He mentioned that the DOT/PF             
 changed this policy in 1990 or 1991.  He said the government could            
 grant extensions if, during the middle of your 25 year lease term,            
 you wanted to extend the lease out.                                           
                                                                               
 Number 0653                                                                   
                                                                               
 MR. BIRMINGHAM said the proposed Amendments 1 and 2 appear to be in           
 the right vein.  He said he would like a working group to be formed           
 on HB 543 so that it can be done correctly.  He said value of new             
 improvements does not include the value of maintenance on existing            
 improvements.  He said these structures are well maintained.  He              
 said if you tell the tenant that ten years down the road, his lease           
 is going to terminate or that there will be uncertainty regarding             
 its renewal, the maintenance level will decline.                              
                                                                               
 Number 0734                                                                   
                                                                               
 PHIL LIVINGSTON, Chair, Legislative Committee, Vice-President of              
 Alaska Airlines Association, was next to testify.  He said he                 
 agreed with the testimony of Mr. Birmingham and Mr. Cole.  He said            
 this has been a long standing problem and nothing has been                    
 resolved.  He said he just received the proposed amendments and               
 said Representative Rokeberg knows about leasing.  He said the                
 Administration's bill does not refer directly to private hangars,             
 or private ownership.  He said a solid bankable renewal preference            
 is needed in order for businesses to continue with certainty over             
 a long period of time.  He said HB 543 should handle all leases,              
 not just existing leases, because the same problems will exist for            
 new leases.  He said his organization is trying to encourage the              
 aviation industry and said that lack of certainty and short term              
 leases will not do this.                                                      
                                                                               
 Number 0827                                                                   
                                                                               
 MR. LIVINGSTON said, as far as improvements are concerned, people             
 need to have a long term assurance that they won't have their                 
 investments confiscated at the end of that term.  He said transfer            
 of private ownership is done through a sale.  He said, under a                
 first right of refusal and/or a bid process, the state takes the              
 leverage the owner will have to make a successful sale.                       
                                                                               
 Number 0859                                                                   
                                                                               
 MR. LIVINGSTON said the state is in the business of land leasing              
 and they should value the ground rents and leave the improvements             
 on the property (indiscernible) as opposed to a matter of state               
 policy.  He said some of the improvements on Lake Hood are simply             
 not substantial because the businesses do not require substantial             
 improvements.  He said the businesses are substantial and are not             
 considered in the real estate question.  He said some of the                  
 businesses are worth millions of dollars whereas their investments            
 only total $10,000.                                                           
                                                                               
 Number 0910                                                                   
                                                                               
 MR. PARKAN said DOT/PF had sent a draft copy of their bill to the             
 AACA, Airmen's Association and had received Mr. Livingston's                  
 comments on it today.  He said DOT/PF has no problem with the                 
 commercial or non-commercial and said it was not their intention to           
 exclude it.  He said the Administration has altered their draft to            
 include language which refers to the non-commercial and commercial.           
 He said he would share this with the committee and with all                   
 interested parties.                                                           
                                                                               
 Number 0952                                                                   
                                                                               
 BILL INGALDSON, Attorney, representing the neighbor of Mr. Fowler,            
 was next to testify.  He said his client has been trying to renew             
 his lease for two years and it is currently in a hold over status.            
 He echoed the comments of Mr. Cole.  He said in regards to the                
 proposed Amendment 1, the last section on page one, line 9, after             
 "land" it refers to the "terms, conditions and rents shall be                 
 agreed upon prior to the expiration of the lease".  He requested              
 additional language be added to the proposed amendment, "present              
 lessees who are in a holdover status".  He said his client will not           
 be affected by HB 543.                                                        
                                                                               
 Number 1043                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG noted that Amendment 1 would now include,             
 "in a holdover periodic tendency".                                            
                                                                               
 Number 1043                                                                   
                                                                               
 DAVE KLOSTERMAN said everyone is interested in achieving solutions            
 to these problems.  He echoed Mr. Ingaldson's comments that people            
 in holdover status be included until policy is derived from                   
 legislative efforts.   He mentioned that there is a growing group             
 of lessees who are in a holdover position.  He said he would be               
 interested in being part of the group to help work on this issue.             
                                                                               
 Number 1190                                                                   
                                                                               
 CHAIRMAN GARY DAVIS agreed that everyone would like to solve this             
 problem.                                                                      
                                                                               
 MR. INGALDSON said his clients have received notice that his lease            
 is being put up for public bid, he asked that the commissioner                
 postpone this public bid as legislation will change his client's              
 interest.                                                                     
                                                                               
 CHAIRMAN GARY DAVIS said due notice has been given and said that he           
 will work on a committee substitute.                                          
                                                                               
 Number 1200                                                                   
                                                                               
 REPRESENTATIVE MASEK said she has been involved with this issue               
 since October of 1995.  She said it is unfortunate that it has                
 taken until this point for the Administration to come forward.                
 ADJOURNMENT                                                                   
                                                                               
 As there was no further business to come before the House                     
 Transportation Standing Committee, Chairman Gary Davis adjourned              
 the meeting at 3:10 p.m.                                                      
                                                                               

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