Legislature(2017 - 2018)SENATE FINANCE 532
02/13/2017 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB9 || SB9 | |
| SB14 || SB14 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 9 | TELECONFERENCED | |
| + | SB 14 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
February 13, 2017
9:04 a.m.
9:04:23 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:04 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Anna MacKinnon, Co-Chair
Senator Click Bishop, Vice-Chair
Senator Mike Dunleavy
Senator Peter Micciche
Senator Natasha von Imhof
MEMBERS ABSENT
Senator Donny Olson
ALSO PRESENT
Chad Hutchinson, Staff, Senator John Coghill; Senator Mia
Costello, Sponsor; Weston Eiler, Staff, Senator Costello;
Kathie Wasserman, Executive Director, Alaska Municipal
League, Juneau; Mitchel Matthews, Senior Operations
Manager, Uber Northwest, Juneau; Anna Latham, Deputy
Director, Division of Insurance, Department of Commerce,
Community and Economic Development, Juneau.
PRESENT VIA TELECONFERENCE
Colonel Robert Doehl, Deputy Commissioner, Department of
Military and Veterans Affairs; Jim Dodson, President,
Fairbanks Economic Development Corporation, Fairbanks; Jeff
Stepp, Staff, Mayor's Office, Fairbanks North Star Borough,
Fairbanks; Christine Nelson, Director, Department of
Community Planning, Fairbanks North Star Borough,
Fairbanks; Lisa Tse, Uber Technology Inc., San Francisco;
Annabel Chang, Director, Public Policy, Lyft.
SUMMARY
SB 9 MILITARY FACILITY ZONES
SB 9 was HEARD and HELD in committee for further
consideration.
SB 14 TRANSPORTATION NETWORK COMPANIES
SB 14 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 9
"An Act relating to military facility zones."
9:05:16 AM
Vice-Chair Bishop MOVED to ADOPT the proposed committee
substitute for SB 9, Work Draft 30-LS0183\J (Shutts,
2/8/17). There being NO OBJECTION, it was so ordered.
CHAD HUTCHINSON, STAFF, SENATOR JOHN COGHILL, introduced
the bill.
9:06:15 AM
AT EASE
9:08:02 AM
RECONVENED
9:09:00 AM
Mr. Hutchinson discussed the PowerPoint, Committee
Substitute for Senate Bill 9
By the Senate Finance Committee
(CSSB 9)(FIN) - "An Act Related to Military Facility Zones;
and Providing for an Effective Date" (copy on file).
Mr. Hutchinson highlighted slide 2, "CSSB 9(FIN) Focuses on
Military Facility Zones":
• Potentially important around the state. Especially in
communities with a "military industry."
• High degree of focus in Interior Alaska.
• Eielson Air Force Base
• Fort Wainwright
• Clear Air Force Station
• Fort Greely
•
• Military Facility Zones help foster surrounding
industry in the community.
Mr. Hutchinson addressed slide 3, "Planned Military
Construction Projects in the Fairbanks Area." The slide
represented the urgency and the context of the current
situation.
Mr. Hutchinson looked at slide 4, "Eielson F-35; Facility
Plan." The slide was a closer look at the construction
projects.
9:13:39 AM
Mr. Hutchinson highlighted slide 5, "Reminder: What Are
Military Facility Zones?"
• Designated areas
• Established by the Department of Military and
Veterans' Affairs (DMVA)
• Close to a military facility
• Where industrial and economic development directly
enhance the facility's ability to fulfill its mission
(via public/private funding sources, credit, and
guarantee programs).
• Currently, DMVA considers a number of factors. One
factor includes review of the comprehensive plan of
the local municipality/borough.
• The problem? Comprehensive plans take time.
Meanwhile the military construction window is
short.
9:16:22 AM
Mr. Hutchinson looked at slide 6, "Simple Legislative
Solution - Simple Fix":
1. The main focus of CSSB 9(FIN) is to allow a military
facility zone to be implemented after consideration of
a local zoning ordinance. The following was added:
"or local zoning ordinances;" in AS 26.30.020(c).
2. Relieves the burden of the local community doing a
time-consuming comprehensive plan. The opportunity is
now.
9:17:14 AM
Mr. Hutchinson highlighted slide 7, "Anything else?"
• Yes.
• On February 2, 2017 the Senate Community and Regional
Affairs Committee accepted an amendment brought to
Senate members by the Department of Military and
Veterans' Affairs (DMVA). The amendment received no
objection.
• The amendment added another layer of protection to the
DMVA against civil liability. It makes it clear that
DMVA cannot be held liable for civil damages for a
military facility zone designation, based on
inaccurate or incomplete information provided by the
municipality/borough.
• Also added that the legislation would be effective
immediately.
9:18:07 AM
Co-Chair MacKinnon remarked that the state already received
military construction money. She queried the purpose of the
bill. Mr. Hutchinson replied that the bill allowed for the
use of grants and loans at low interest rates as it related
to construction projects around the military installations.
He stressed that the bill affected the businesses that
worked on base, helped to reduce their interest rates. He
stressed that the low interest for residential construction
projects would be beneficial to many companies. He remarked
that the legislation also helped the supplemental
industries.
Co-Chair MacKinnon requested a Sectional Analysis.
Senator Dunleavy wondered what the bill would change, and
queried the ramifications of its passage such as its effect
on zoning. Mr. Hutchinson replied the bill maximized the
benefit for construction entities that were hoping to take
advantage of low interest rates for some of the anticipated
construction projects around military installation.
Co-Chair MacKinnon wondered whether there were low rate
interest rate loans currently offered by the federal
government that required a comprehensive plan approach. Mr.
Hutchinson responded that there was a variance. He
explained that each state was different, and flexibility
related to military facility zones.
Senator von Imhof wondered who initiated the process. Mr.
Hutchinson replied that the process began with the borough,
and its coordination with Lockheed Martin. The application
came from the borough, submitted to the Department of
Military of Veterans Affairs, and upon approval create a
zone around the military installation. The companies could
work with either Lockheed Martin or the Air Force and
submit for grants in ensuring that the military mission
moves forward.
Senator von Imhof surmised that the borough designated the
land near the military to create an opportunity. Mr.
Hutchinson agreed.
9:23:32 AM
Senator Micciche stated that the bill created flexibility
within the process. Mr. Hutchinson agreed.
Co-Chair MacKinnon wondered whether there was a possibility
that the plan could be used in reverse. She shared that the
state lobbied the federal government to ensure a
comprehensive analysis on economic impact should the
federal government close military facilities. She wondered
whether the legislation would allow for the federal
government to go through the local government for the same
result. Mr. Hutchinson asked for more information about the
question.
Co-Chair MacKinnon wondered whether the bill allowed for a
bypass of the federal government to examine economic impact
when considering military facility closures. Mr. Hutchinson
felt that that the bill would allow for a strong synergy
between all the governments to support the underlying
military mission.
Co-Chair Hoffman wondered how the legislation would affect
construction companies outside of the military zone. Mr.
Hutchinson replied that any company could take advantage of
the program, if it directly affected the military mission.
Co-Chair Hoffman surmised that the companies within the
zone would have a better financial position versus those
outside of the zone. Mr. Hutchinson replied in the
affirmative.
Co-Chair MacKinnon queried the difference the original bill
and the committee substitute. She also requested a
sectional analysis.
9:27:54 AM
Mr. Hutchinson discussed the Sectional Analysis (copy on
file):
Section 1: Simply adds the words "or local zoning
ordinances" to Alaska Statute 26.30.020(c)(1).
If added, the Department of Military and
Veterans' Affairs (DMVA) has increased
flexibility when considering a proposed military
facility zone. The zone can be consistent with
the local zoning ordinance or the local
comprehensive plan.
Section 2: This section was proposed by DMVA. The
language ensures that the department will not be held
civilly liable for a military facility zone
designation based on inaccurate or incomplete
information provided by a municipality/borough.
Section 3: Clarifies that this legislation is
effective immediately
Vice-Chair Bishop felt that the bill helped to meet the Air
Force mission. He remarked that the Air Force hoped for
more activity related businesses for their service members.
9:30:15 AM
AT EASE
9:30:48 AM
RECONVENED
9:31:16 AM
COLONEL ROBERT DOEHL, DEPUTY COMMISSIONER, DEPARTMENT OF
MILITARY AND VETERANS AFFAIRS (via teleconference), spoke
in support of the bill.
Co-Chair MacKinnon requested Mr. Doehl's written testimony.
9:36:50 AM
JIM DODSON, PRESIDENT, FAIRBANKS ECONOMIC DEVELOPMENT
CORPORATION, FAIRBANKS (via teleconference), testified in
support of the legislation.
JEFF STEPP, STAFF, MAYOR'S OFFICE, FAIRBANKS NORTH STAR
BOROUGH, FAIRBANKS (via teleconference), spoke in support
of the bill.
CHRISTINE NELSON, DIRECTOR, DEPARTMENT OF COMMUNITY
PLANNING, FAIRBANKS NORTH STAR BOROUGH, FAIRBANKS (via
teleconference), spoked in support of the bill. She
explained the purpose of the bill.
Co-Chair MacKinnon CLOSED public testimony.
9:43:09 AM
Vice-Chair Bishop discussed the fiscal note.
Senator Dunleavy queried the difference between the
military legislation passed in a previous legislature. Mr.
Hutchinson explained that the previous legislation was
unworkable because the comprehensive plans took to long. He
stated that the bill would ensure the same objective
through a zoning ordinance.
Senator Dunleavy that the different between the 2012
legislation and the current bill, was that it expedited the
process. Mr. Hutchinson agreed.
SB 9 was HEARD and HELD in committee for further
consideration.
9:46:19 AM
AT EASE
9:48:21 AM
RECONVENED
SENATE BILL NO. 14
"An Act relating to transportation network companies
and transportation network company drivers."
9:48:48 AM
SENATOR MIA COSTELLO, SPONSOR, presented the context of the
bill. She stressed that Alaska was in a recession and
experiencing job losses. She felt that it was important to
diversify the economy, and pass legislation that would
create jobs for individuals. She stated that the
legislation was transportation services network companies
legislation called the "Let's Ride Alaska Act." The
companies were platforms that connected riders with
drivers. The bill defined and clarified that the drivers
were independent contractors and exempted the drivers from
the Workers Compensation Act, and other individuals who
were exempted from that act. She shared that the
legislature had surveyed Alaskans, and 30 percent of people
said that they wanted to diversify the economy. She felt
that the bill allowed for a job opportunity for a stay-at-
home mom or active duty military member.
9:52:16 AM
WESTON EILER, STAFF, SENATOR COSTELLO, explained the bill.
10:01:22 AM
Mr. Eiler discussed the Sectional Analysis (copy on file):
Section 1. Describes the legislative intent for the
bill.
Section 2. Amends AS 21.96 by adding a new section, AS
21.96.018, relating to transportation network company
insurance provisions. This section allows insurers who
write automobile insurance in the state to exclude
coverage while a driver is logged onto the digital
network of a transportation network company or while a
driver provides a prearranged ride. However, nothing
in the section precludes an insurer from providing
coverage for the personal vehicle of transportation
network company drier.
Section 3. Amends AS 23.30.230(a) to exclude
transportation network company drivers from the Alaska
Worker's Compensation Act.
Section 4. Amends AS 23.30.230(c) by adding the
definitions for "digital network," prearranged ride,"
and "transportation network company driver."
Section 5. Amends AS 28 by adding chapter 23, titled
"Transportation Network Companies and Driver."
AS 28.23.005. Provides the DCCED administer the
chapter.
AS 28.23.010. Provides that transportation
network company or driver is not a common carrier
and may not provide taxicab or for-hire services
and that they may not be required to register as
a commercial or for-hire vehicle.
AS 28.23.020. Related to fares collected by
transportation network companies for services.
AS 28.23.030. Governs identification required for
by transportation network vehicles and drivers.
AS 28.23.040. Requires electronic receipts.
10:05:46 AM
Co-Chair Hoffman wondered how the legislation interfaced
with communities that regulated cabs. Mr. Eiler responded
that the bill would set one set policy for rideshare
drivers. He explained that many of the services crossed
municipalities. He remarked that the platform could operate
statewide, and provide clarity for drivers that may move or
travel around the state.
Co-Chair Hoffman surmised that the Uber driver could not
drop the rider off in a different municipality. Mr. Eiler
disagreed. He stressed that the bill did not impact the
municipality's authority to regulate taxicabs.
Co-Chair Hoffman queried the parameters of an Uber driver
within a community that regulated the licenses. Mr. Eiler
responded that the taxicab regulations and Uber were two
very different things.
Co-Chair Hoffman remarked that many communities regulated
the number of licenses. He wondered what would occur if the
legislation were passed. He asked if an Uber driver could
operate in a community without that community's license.
Mr. Eiler replied in the affirmative. He stated that the
legislation complemented the possible reformation in some
communities for taxicabs. He stressed that it would be a
different service than a taxicab. The legislation related
to connecting drivers with riders.
Co-Chair MacKinnon wondered whether the taxicab drivers
could drive for the network providers. Mr. Eiler replied in
the affirmative.
Senator von Imhof wondered whether the legislation
addressed taxicab legislation. Mr. Eiler replied that the
legislation did not address taxi regulations.
10:10:35 AM
Vice-Chair Bishop queried the implementation and protocol
for the zero-tolerance drug and alcohol possible. Mr. Eiler
replied that the language was broad in the legislation, but
deferred to the companies' stringent set of policies.
Senator Micciche surmised that a typical Uber driver would
have normal insurance coverage for their own vehicle, that
the provider did not need to carry under the normal policy
while logged onto a digital network. He noted that there
was a separate policy between driving alone and carrying a
passenger. He wondered whether the more stringent policy
mirrored a taxicab requirement. Mr. Eiler agreed to provide
that information. He agreed that there were different
insurance coverages throughout the course of a rideshare
ride.
Senator Micciche wanted to know whether the insurance
mirrored that of taxicabs.
Senator Dunleavy wondered whether the bill required that
transportation network companies and its drivers to
purchase commercial insurance. Mr. Eiler replied in the
affirmative. He noted that there was an exclusion provision
was there for the master policies that Uber, Lyft, and
other companies held.
Senator Dunleavy asked whether the legislation protected
lien holding institutions in the event of damages or loss.
Mr. Eiler replied in the affirmative.
Co-Chair MacKinnon remarked that the current conversation
was not a debate, rather an attempt to understand the bill.
Vice-Chair Bishop queried the driver payback or fee to the
company. Mr. Eiler replied that an Uber driver would pay 25
cents for every dollar for using the service.
10:15:36 AM
KATHIE WASSERMAN, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL
LEAGUE, JUNEAU, addressed concern with Section 7. She
stated that there was a concern about removing regulation
from municipalities, and only be given to the state. She
understood that there would be confusion when crossing
jurisdictions, but it could also be confusing to have two
types of transportation providers in the municipality that
were regulated separately. She stated that there had never
been a large issue related to taxicabs crossing between
jurisdictions. She urged the committee to remove Section 7.
She felt that it should be a local control issue. She
remarked that Section 10 of the Constitution gave local
control to municipalities.
Co-Chair MacKinnon wondered whether the mayors would
support not having a transportation network at all. Ms.
Wasserman replied that she did not know the answer to that
question.
Co-Chair MacKinnon wondered if there was a concern about
low ridership in the state in its entirety. Ms. Wasserman
agreed to address that issue with the mayors. She did not
know how state regulation would increase ridership.
10:18:53 AM
MITCHEL MATTHEWS, SENIOR OPERATIONS MANAGER, UBER
NORTHWEST, JUNEAU, spoke in support of the legislation. He
stated that over 20,000 Alaskans had downloaded the Uber
app, and over 60,000 people had opened the app looking to
connect with a ride in Alaska. He felt that the legislation
provided the appropriate number of safeguards for consumers
while allowing for a predictable, clear, and concise
operational environment for drivers and riders. He
described the Uber service, which provided a digital
network to connect riders with drivers.
10:24:37 AM
Co-Chair Hoffman queried the implementation of the
businesses in rural areas of the state. Mr. Matthews
wondered if Co-Chair Hoffman was referring to a driver.
Co-Chair Hoffman asked how the company would start in
Unalaska. Mr. Matthews stated that he did not know the
licensing requirements for an individual business in
Alaska.
Co-Chair Hoffman wondered how an Uber company would start
in the state. Mr. Matthews replied that the bill allowed
for Uber to operate in the state. He explained that a
driver would download the app and operate from there.
Co-Chair Hoffman wondered how the structure was started in
a community.
10:26:26 AM
AT EASE
10:27:23 AM
RECONVENED
10:27:31 AM
Mr. Matthews shared that Uber was a digital platform, so
the driver was responsible for setting up their company
within the community.
Senator Dunleavy queried the classifications of individuals
who would be prohibited from the platform. Mr. Matthews
responded that driver must submit their full name, date of
birth, social security number, valid driver's license,
valid vehicle registration, and insurance. Those documents
were verified for validity. The individuals were screened
using a social security trace and a comprehensive
background check for offenses related to alcohol. He stated
that there was also an evaluation against the National Sex
Offender registry, and those individuals would be excluded
from operating on the app.
Senator von Imhof asked whether there was a periodic
background check. Mr. Matthews replied that the internal
process involved an annual background check. He stated that
the compliance at Uber depended on the various expiration
dates on the documents.
Vice-Chair Bishop asked for more information about drug
testing. He wondered whether there was random drug testing.
Mr. Matthews replied that Uber did not do drug testing. He
explained that a rider might notify Uber about a suspicious
driver, and then Uber would investigate that complaint.
Senator Dunleavy wondered whether the background checks had
been "tightened" since September 2016.
10:31:15 AM
LISA TSE, UBER TECHNOLOGY INC., SAN FRANCISCO (via
teleconference), introduced herself.
Senator Dunleavy wondered whether the issues in San
Francisco and Los Angeles had been addressed since
September 2016. Ms. Tse replied that California had changed
its background check requirements.
Ms. Tse restated that in September 2016 the California
legislature had adopted new legislation related to
background checks. The bill confirmed that criminal
background checks conducted by commercial services were
permissible. It also modified some of the adjudication
criteria. She stated that, as of January 1, 2017, Uber had
implemented processes in California to ensure compliance.
Senator Dunleavy surmised that the issue of those who had
bypassed the background checks at LAX was addressed. Ms.
Tse replied that she was not familiar with that issue, and
agreed to provide further information.
Senator Dunleavy stressed that the issue was in the news,
so he wanted to know what had changed in the background
checks protocol.
10:33:56 AM
ANNABEL CHANG, DIRECTOR, PUBLIC POLICY, LYFT (via
teleconference), spoke in support of the legislation. She
stated the number one priority at Lyft was the safety of
its users. She stated that Lyft had national criminal
background checks, a motor vehicle record check, and
nineteen-point vehicle inspection. She stated Lyft provided
consumers with new levels of transparency and
accountability. She shared that every Lyft ride was tracked
via GPS; and passengers could see a driver picture, user
rating of the driver, license plate, and make and model of
the vehicle. The drivers also received a photo and name of
the passenger. She stated that the app allowed to share
real time route information with others, providing for an
additional level of security.
Co-Chair MacKinnon CLOSED public testimony.
10:38:04 AM
Vice-Chair Bishop discussed the fiscal notes.
Co-Chair MacKinnon surmised that there was only an initial
request for insurance.
Vice-Chair Bishop continued to discuss the fiscal notes.
Vice-Chair Bishop requested a "scrub" of the vehicle pool,
computers, office panels, and furniture.
Co-Chair MacKinnon wondered whether there was new
requirements in other states for a network system.
10:44:39 AM
ANNA LATHAM, DEPUTY DIRECTOR, DIVISION OF INSURANCE,
DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT,
JUNEAU, explained that prior to the committee substitute,
the division had submitted a zero fiscal note. She stated
that the new version would put administration of the
legislation under the Department of Commerce, Community and
Economic Development (DCCED), which would require the
creation of two new positions. She stated that the
legislation prohibited municipalities from regulation, so
the regulation would be solely on the state.
Senator Dunleavy surmised that there would be a cost to the
state. Ms. Latham replied in the affirmative.
Senator Dunleavy wondered whether the cost would be offset
by fees collected by the companies. Ms. Latham replied that
the reason for general fund and not receipts was because
there was not a mechanism to collect funds for
administration of the program.
Co-Chair MacKinnon announced that she planned to recommend
zeroing the fiscal note.
Senator Micciche wondered how Uber made its revenue.
Co-Chair MacKinnon stated that Uber made 25 percent of each
dollar against the driver's revenue.
Senator Micciche felt that the cost would be handled like
any other license in the state.
10:48:01 AM
Senator Dunleavy wondered whether there could be multiple
passengers in one ride. Mr. Matthews responded that there
were opportunities to connect individuals who may not know
each other through the route of a trip.
Senator Dunleavy asked whether individual passengers may
not know each other. Mr. Matthews replied in the
affirmative.
Co-Chair Hoffman surmised that the parent companies did not
operate in Alaska. Co-Chair MacKinnon agreed.
Co-Chair Hoffman expressed concern that that the 25 percent
of the revenue would be leaving the state.
Co-Chair MacKinnon discussed committee business.
Co-Chair MacKinnon wished a happy birthday to her grandson,
Mason.
SB 14 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
10:51:04 AM
The meeting was adjourned at 10:51 a.m.