05/08/1995 01:00 PM Senate L&C

               SENATE LABOR AND COMMERCE COMMITTEE                             
                          May 8, 1995                                          
                           1:00 P.M.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Senator Tim Kelly, Chairman                                                   
 Senator John Torgerson, Vice Chairman                                         
 Senator Jim Duncan                                                            
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
 Senator Mike Miller                                                           
 Senator Jim Duncan                                                            
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
 CS FOR HOUSE BILL NO. 288(L&C) am                                             
 "An Act relating to procurement preferences and authorizing certain           
 state real property lease extensions; and providing for an                    
 effective date."                                                              
                                                                               
  PREVIOUS SENATE COMMITTEE ACTION                                             
                                                                               
 HB 288 - No previous action to record.                                        
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 Walt Wilcox, Legislative Aide                                                 
 Representative Jeannette James                                                
 State Capitol                                                                 
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Sponsor of HB 288.                                     
                                                                               
 Dugan Petty, Director                                                         
 Division of General Services                                                  
 Department of Administration                                                  
 P.O. Box 110210                                                               
 Juneau, AK 99811-0210                                                         
  POSITION STATEMENT:   Supported HB 288.                                      
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 95-23, SIDE A                                                           
 Number 001                                                                    
    CSHB 288(L&C) am PROCUREMENT PREFERENCE/DISABLED PERSONS                  
                                                                              
 CHAIRMAN KELLY called the Senate Labor and Commerce Committee                 
 meeting to order at 1:00 p.m. and announced  CSHB 288(L&C) am  to be          
 up for consideration.                                                         
                                                                               
 WALT WILCOX, Legislative Aide for Representataive Jeannette James,            
 explained that HB 288 is for for-profit corporations that are in              
 partnerships or are totally disabled-owned.  Currently, disabled-             
 owned sole proprietorships are allowed a better preference when               
 bidding on public contracts.  This would merely add partnerships              
 and corporations that are totally disabled to that status.                    
                                                                               
 The second portion of the bill relates to saving money through                
 allowing the administration to negotiate leases and find windows of           
 opportunity to reduce those lease costs over the next eight years             
 resulting in unknown savings from hundreds of thousands to millions           
 of dollars.  The administration supports this legislation.                    
                                                                               
 DUGAN PETTY, Director, Division of General Services, testified that           
 the state had saved approximately $1.5 million in 1993 by                     
 negotiating 39 leases.  Over the life of the leases they extended             
 the state will save $18,866,000.                                              
                                                                               
 SENATOR KELLY asked if these leases had already gone through the              
 competitive bid process.  MR. PETTY said that was correct.                    
                                                                               
 Number 75                                                                     
                                                                               
 SENATOR TORGERSON asked why a,b, and c were being repealed in the             
 year 2000.  MR. PETTY answered that this was not to be a permanent            
 opportunity.  What doesn't repeal immediately is the report that              
 they would provide annually to the legislature.  The first                    
 authorization of this bill gave them a two-year window.  This bill            
 gives them a five-year window on which they could renegotiate these           
 leases.                                                                       
                                                                               
 SENATOR TORGERSON said he supported the bill, but was concerned               
 with setting up corporations that might be subsidized with public             
 dollars and giving them an undue bidding advantage based upon the             
 bid preference and upon monies they might receive through a public            
 subsidy.  MR. WILCOX replied that none of these corporations are              
 non-profit, publicly-funded corporations.  The corporations this              
 bill addresses are privately-owned, free-enterprise, for-profit               
 corporations owned by disabled individuals.  Those individuals                
 would have to be the owners and operators.                                    
                                                                               
 SENATOR TORGERSON asked if the partnerships would also be                     
 controlled under for-profit partnerships.  MR. WILCOX replied that            
 hopefully it would be for profit partnerships; but the partnerships           
 would not necessarily be of corporations doing a joint venture, but           
 of two individuals going into business together.                              
                                                                               
 SENATOR KELLY asked what advantage we are giving the disabled                 
 folks.  MR. WILCOX explained that they get a 10% bidders preference           
 on public contracts - currently as sole proprietors, but not as               
 partnerships or corporations.                                                 
                                                                               
 SENATOR SALO asked if there was a legal way to differentiate                  
 between those two types of partnerships.  MR. WILCOX explained that           
 a partnership is a partnership whether it is of individuals or of             
 corporations and as long as they were totally disabled-owned, they            
 would fall within the scope of this proposed legislation.                     
                                                                               
 SENATOR SALO asked if being totally disabled-owned meant that every           
 employee had to be disabled.  MR. WILCOX replied that only the                
 owners must be disabled.  There is a provision under current law              
 that says if a business is partially disabled-owned, they can have            
 disabled employees.                                                           
                                                                               
 SENATOR TORGERSON moved to pass CSHB 288(L&C) am from committee               
 with individual recommendations.  There were no objections and it             
 was so ordered.                                                               
 SENATOR KELLY adjourned the meeting at 2:42 p.m.