Legislature(2003 - 2004)
04/29/2004 02:46 PM Senate L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
April 29, 2004
2:46 p.m.
TAPE(S) 04-37
MEMBERS PRESENT
Senator Con Bunde, Chair
Senator Gary Stevens
Senator Bettye Davis
Senator Hollis French
MEMBERS ABSENT
Senator Ralph Seekins, Vice Chair
COMMITTEE CALENDAR
^OVERVIEW: BLUE CROSS/PREMERA CONVERSION - Gloria Glover, Chief
Financial Examiner, Department of Community & Economic
Development (DCED)
CS FOR HOUSE BILL NO. 423(JUD) am
"An Act relating to accidents involving the vehicle of a person
under the influence of an alcoholic beverage."
MOVED CSHB 423(JUD) am OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 418(FIN)
"An Act extending the termination date of the Real Estate
Commission; relating to real estate; relating to home
inspectors; relating to real estate licensees; and providing for
an effective date."
HEARD AND HELD
HOUSE BILL NO. 430
"An Act relating to employees under 21 years of age in the
premises of hotels, restaurants, and eating places that are
licensed to sell, serve, deliver, or dispense alcoholic
beverages."
MOVED HB 430 OUT OF COMMITTEE
HOUSE BILL NO. 517(title am)
"An Act relating to the definition of certain security accounts,
including certain reinvestment, investment management, and
custody accounts."
MOVED HB 517(title am) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 423
SHORT TITLE: TAXICAB DRIVER LIABILITY
SPONSOR(s): REPRESENTATIVE(s) ANDERSON
02/02/04 (H) READ THE FIRST TIME - REFERRALS
02/02/04 (H) JUD
02/02/04 (H) STA REFERRAL ADDED AFTER JUD
02/09/04 (H) REFERRAL ORDER CHANGED
02/09/04 (H) STA, JUD
02/10/04 (H) STA AT 8:00 AM CAPITOL 102
02/10/04 (H) <Bill Hearing Postponed>
03/02/04 (H) STA AT 8:00 AM CAPITOL 102
03/02/04 (H) Heard & Held
03/02/04 (H) MINUTE(STA)
03/05/04 (H) STA AT 8:00 AM CAPITOL 102
03/05/04 (H) Heard & Held
03/05/04 (H) MINUTE(STA)
03/09/04 (H) STA AT 8:00 AM CAPITOL 102
03/09/04 (H) Moved CSHB 423(STA) Out of Committee
03/09/04 (H) MINUTE(STA)
03/12/04 (H) STA RPT CS(STA) NT 3DP 3NR 1AM
03/12/04 (H) DP: SEATON, HOLM, LYNN; NR: COGHILL,
03/12/04 (H) BERKOWITZ, WEYHRAUCH; AM: GRUENBERG
03/19/04 (H) JUD AT 1:00 PM CAPITOL 120
03/19/04 (H) Heard & Held
03/19/04 (H) MINUTE(JUD)
03/26/04 (H) JUD AT 1:00 PM CAPITOL 120
03/26/04 (H) Moved CSHB 423(JUD) Out of Committee
03/26/04 (H) MINUTE(JUD)
03/29/04 (H) JUD RPT CS(JUD) NT 6DP
03/29/04 (H) DP: HOLM, SAMUELS, GRUENBERG, OGG,
03/29/04 (H) ANDERSON, MCGUIRE
04/19/04 (H) TRANSMITTED TO (S)
04/19/04 (H) VERSION: CSHB 423(JUD) AM
04/20/04 (S) READ THE FIRST TIME - REFERRALS
04/20/04 (S) L&C, JUD
04/29/04 (S) L&C AT 2:45 PM BELTZ 211
BILL: HB 418
SHORT TITLE: REAL ESTATE COM'N/LICENSEE/HOME INSPECT
SPONSOR(s): LABOR & COMMERCE
02/02/04 (H) READ THE FIRST TIME - REFERRALS
02/02/04 (H) L&C
02/16/04 (H) L&C AT 3:15 PM CAPITOL 17
02/16/04 (H) Scheduled But Not Heard
02/23/04 (H) L&C AT 3:15 PM CAPITOL 17
02/23/04 (H) Moved CSHB 418(L&C) Out of Committee
02/23/04 (H) MINUTE(L&C)
02/26/04 (H) L&C RPT CS(L&C) NT 5DP 1NR
02/26/04 (H) DP: LYNN, GATTO, ROKEBERG, DAHLSTROM,
02/26/04 (H) ANDERSON; NR: GUTTENBERG
02/26/04 (H) FIN REFERRAL ADDED AFTER L&C
04/13/04 (H) FIN AT 3:00 PM HOUSE FINANCE 519
04/13/04 (H) Moved CSHB 418(FIN) Out of Committee
04/13/04 (H) MINUTE(FIN)
04/14/04 (H) FIN RPT CS(FIN) NT 7DP 3NR
04/14/04 (H) DP: MEYER, HAWKER, CHENAULT, FATE,
04/14/04 (H) FOSTER, HARRIS, WILLIAMS; NR: STOLTZE,
04/14/04 (H) JOULE, CROFT
04/21/04 (H) TRANSMITTED TO (S)
04/21/04 (H) VERSION: CSHB 418(FIN)
04/22/04 (S) READ THE FIRST TIME - REFERRALS
04/22/04 (S) L&C, FIN
04/29/04 (S) L&C AT 2:45 PM BELTZ 211
BILL: HB 430
SHORT TITLE: EMPLOYEES UNDER 21 AT LICENSED PREMISES
SPONSOR(s): REPRESENTATIVE(s) KERTTULA
02/04/04 (H) READ THE FIRST TIME - REFERRALS
02/04/04 (H) L&C, JUD
02/25/04 (H) L&C AT 3:15 PM CAPITOL 17
02/25/04 (H) Moved Out of Committee
02/25/04 (H) MINUTE(L&C)
02/26/04 (H) L&C RPT 5DP
02/26/04 (H) DP: CRAWFORD, LYNN, ROKEBERG,
02/26/04 (H) GUTTENBERG, GATTO
03/31/04 (H) JUD AT 1:00 PM CAPITOL 120
03/31/04 (H) <Bill Hearing Postponed>
04/06/04 (H) JUD AT 1:00 PM CAPITOL 120
04/06/04 (H) Moved Out of Committee
04/06/04 (H) MINUTE(JUD)
04/07/04 (H) JUD RPT 3DP 1NR
04/07/04 (H) DP: SAMUELS, HOLM, GARA; NR: MCGUIRE
04/07/04 (H) GRUENBERG SIGNED JUDICIARY RPT DP
04/15/04 (H) TRANSMITTED TO (S)
04/15/04 (H) VERSION: HB 430
04/16/04 (S) READ THE FIRST TIME - REFERRALS
04/16/04 (S) L&C, FIN
04/29/04 (S) L&C AT 2:45 PM BELTZ 211
BILL: HB 517
SHORT TITLE: SECURITY ACCOUNT BENEFICIARY DESIGNATION
SPONSOR(s): LABOR & COMMERCE
02/23/04 (H) READ THE FIRST TIME - REFERRALS
02/23/04 (H) L&C, JUD
03/01/04 (H) L&C AT 3:15 PM CAPITOL 17
03/01/04 (H) Moved Out of Committee
03/01/04 (H) MINUTE(L&C)
03/03/04 (H) L&C RPT 4DP 1NR
03/03/04 (H) DP: LYNN, ROKEBERG, DAHLSTROM, GATTO;
03/03/04 (H) NR: CRAWFORD
03/24/04 (H) JUD AT 1:00 PM CAPITOL 120
03/24/04 (H) Moved Out of Committee
03/24/04 (H) MINUTE(JUD)
03/25/04 (H) JUD RPT 5DP 1NR
03/25/04 (H) DP: SAMUELS, GRUENBERG, OGG, HOLM,
03/25/04 (H) MCGUIRE; NR: GARA
04/23/04 (H) TRANSMITTED TO (S)
04/23/04 (H) VERSION: HB 517(TITLE AM)
04/26/04 (S) READ THE FIRST TIME - REFERRALS
04/26/04 (S) L&C
04/29/04 (S) L&C AT 2:45 PM BELTZ 211
WITNESS REGISTER
Mr. Nelson Page, Member
Premera Task Force
Juneau AK
POSITION STATEMENT: Commented on the Blue Cross/Premera
conversion.
Mr. Jim Shine
Staff to Representative Tom Anderson
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Commented on HB 423 for sponsor.
Mr. John Pattee
Gaslight Lounge
Anchorage AK
POSITION STATEMENT: Supports HB 423.
Ms. Janet Sykes
Staff to Representative Rokeberg
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Commented on HB 418 for sponsor.
Mr. William Bruu
Mat-Su AK
POSITION STATEMENT: Supports HB 418.
Ms. Pat Davidson
Division of Legislative Audit
Legislative Affairs Agency
PO Box 113300
Juneau AK 99811-3300
POSITION STATEMENT: Commented on HB 418.
Mr. David Feekin, Legislative Chair
Alaska Association of Realtors
Anchorage AK
POSITION STATEMENT: Supports HB 418.
Ms. Aurora Hauke
Staff to Representative Beth Kerttula
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Commented on HB 430 for sponsor.
Mr. Josh Applebee
Staff to Representative Tom Anderson
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Commented on HB 517 for sponsor.
CONFIRMATION HEARINGS
BOARD OF BARBERS AND HAIRDRESSERS
Deborah Long - Fairbanks
Joylene Mars - Anchorage
Angela Rosa Easton - Anchorage
Larry Alan Unrat - Anchorage
ALCOHOLIC BEVERAGE CONTROL BOARD
Dwayne Udland - Anchorage
^STATE ASSESSMENT REVIEW BOARD
Alan Black - Palmer
Patrick Carlson - Kodiak
BOARD OF MARINE PILOTS
Robert Arts - Anchorage
ALASKA WORKERS' COMPENSATION BOARD
Valerie Almond - Anchorage
Chris Johanson - Fairbanks
David Koester - Anchorage
James Rhodes - Ketchikan
Patricia Voldorf - Anchorage
BOARD OF REGISTRATION FOR ARCHITECTS, ENGINEERS AND LAND
SURVEYORS
Craig Freedon - Eagle River
ACTION NARRATIVE
TAPE 04-37, SIDE A
CHAIR CON BUNDE called the Senate Labor and Commerce Standing
Committee meeting to order at 2:46 p.m. Present were Senators
Hollis French, Gary Stevens and Chair Con Bunde. Senator Bettye
Davis arrived at 2:52. The first order of business to come
before the committee was an overview of the Blue Cross/Premera
conversion that is being discussed.
^OVERVIEW: BLUE CROSS/PREMERA CONVERSION
MS. GLORIA GLOVER, Chief Financial Examiner, Division of
Insurance, Department of Community & Economic Development
(DCED), said she is in the processing of preparing final
recommendations for the June 7 hearing. The actual conversion is
from a non-profit organization to a for-profit corporation.
Transactions of this type require approval by the state
insurance regulators, which in this case is in both Washington
State and Alaska. Washington is conducting the same process as
Alaska. Premera has made a Form A filing, which is required for
any kind of an acquisition of an insurance company. This is
considered an acquisition in the sense that Blue Cross and
Premera are going from the non-profit status to a for-profit
status. A stock corporation will be set up and stock will be
traded in return for assets, which will result in a stock
oriented group of companies. Currently, Premera has a mixture of
both stock and non-profit companies. So, this will result in a
totally stock-oriented corporation.
The results of the stock transfers will then be
transferred to two charitable foundations - one, for
Washington State public and one for Alaska state
public. Those foundations are set up to provide
funding for health initiatives in the respective
states. The transfer, itself, would occur at the
closing of the transaction, which is to be at the same
time as the initial public offering (IPO) of the stock
on the stock exchange. So, at that time, there would
actually be value attributed to the stock that would
be transferred.
The Form A filing includes all aspects of the
transaction including the formation of the
foundations.... These types of documents have voting
trust agreements, registration rights agreements, the
plan of conversion, articles of incorporation for both
the charitable foundations and the new stock
corporation, the equity compensation plans, economic
assurances, affiliate agreements including tax
sharing, management agreements, guarantees and stock
restriction agreements. That's just generally the
types of things that we have been looking at and
reviewing in this transaction.
The Form A filing, itself, was originally submitted to
the division on September 17, 2002 and was amended on
September 27 and October 25. That plan was then
revised after some discussions with the various
regulators and their consultants and the company.
There were concerns that came up and so we discussed
those and that developed a revised plan that was filed
on February 5, 2004.
The statute review requires that during a hearing we
look at whether or not the insurer would be able to
satisfy their insurance licensing requirements after
the transaction, whether or not the transaction would
lessen competition in the state or tend to create a
monopoly in the state. We looked at the financial
condition of the acquiring party and whether or not it
might jeopardize the financial stability of the
insurer or prejudice the interests of its
policyholders. We look to see whether the terms of the
agreements are fair or unfair or unreasonable for
charity holders. We also look to see if the plans the
acquiring party has to liquidate - what the insurer
sells after or consolidates with other changes - are
unfair or unreasonable to policyholders or not in the
public interest. We also look at the competence,
experience and integrity of the persons who would
control the operation of the insurer after the
transaction. The director may also look at other types
of information such as marketshare, volatility of
market leaders, number of competitors, concentration,
etc.
SENATOR BETTYE DAVIS arrived at 2:52 p.m.
MS. GLOVER said the hearings would be public and the director of
the Division of Insurance will be the decision-maker. It is a
complicated transaction and is not one the division has seen
before; consultants with expertise on this issue were brought
in. Those are Labosh Lamb and Green and McCray - legal firms
with insurance and regulatory expertise, Signal Hill Capital
Group - investment banking expertise, Navigant Consulting -
economic expertise and Redman & Anders - actuarial expertise.
All of the firms have been involved in these types of
transactions in the past.
The consultants have issued two sets of reports on the
transaction. The initial reports were filed February 2, 2004 and
the supplemental reports, on February 27, 2004, which can be
found on the Division of Insurance website.
CHAIR BUNDE asked what the impact of the transfer would be on
current policyholders.
MS. GLOVER replied that the economic and actuarial consultants
have addressed that issue in their reports. Premiums could
potentially increase and Premera filed a two-year economic
assurance that it would not increase premiums relating to the
conversion, itself, but it doesn't restrict it from increasing
premiums because of high medical costs.
CHAIR BUNDE said that currently any for-profit insurance company
doing business in Alaska needs to have its rates approved by the
Division of Insurance and that would apply to this conversion.
MS. GLOVER replied that a stock health company does not have its
health rates approved. Other property casualty forms of
insurance do need to be approved.
CHAIR BUNDE asked if she had an idea of how much the stock would
be worth.
MS. GLOVER replied that she hadn't done a market valuation
because the market will decide at the time the stock is offered.
CHAIR BUNDE asked who would be the recipient of this largess.
MS. GLOVER replied that the plan is to split the stock that
actually is issued between the Washington foundation and the
Alaska foundation. Each of those entities would operate
separately with the stock they have.
CHAIR BUNDE asked who would belong to the Alaska foundation.
MS. GLOVER answered that the foundation would have a board of
directors appointed by the attorney general. The board would
then make the decisions about when to sell stock and at what
price and how much and how that would be distributed to
charities.
CHAIR BUNDE asked if it would be like the Permanent Fund Board.
MS. GLOVER replied, "Perhaps."
CHAIR BUNDE asked why the attorney general would appoint the
board versus the governor.
MS. GLOVER answered that Premera used to appoint the board, but
the department didn't think that was appropriate. In Washington
State the attorney general made those appointments and that's
what Alaska went with.
CHAIR BUNDE said that Washington State has an elected attorney
general.
MS. GLOVER replied that is true.
CHAIR BUNDE asked if the appointments would be subject to
legislative confirmation.
MS. GLOVER replied that the current proposal doesn't have that.
CHAIR BUNDE asked if the whole transaction would be subject to
legislative confirmation.
MS. GLOVER answered that the statute does not provide for that.
SENATOR HOLLIS FRENCH said he understands that the authority to
make that decision rests with Linda Hall, Director, Division of
Insurance.
MS. GLOVER answered that she is the ultimate decision maker,
although there is an appeal process.
SENATOR FRENCH asked where it would go.
MS. GLOVER replied to the Superior Court.
SENATOR FRENCH said Premera's plan dated March 16, 2004 says
that the conversion will cause a one-time premium rate increase
of 2 to 2.5 percent. He asked if that is upon conversion or at
the end of the two-year period.
MS. GLOVER replied that is the estimate of the pressures that
the stock company would bear that the consultants prepared. It
wouldn't necessarily happen at conversion time; it would
probably happen over time.
SENATOR FRENCH said he read that they would hold off on rate
increases for two years.
MS. GLOVER agreed and said it had supplied the division with an
economic assurance that raising of rates from a direct effect of
the conversion would be held for two years.
SENATOR FRENCH wanted to make certain that the rates would not
be subject to regulatory rate approval after the conversion.
MS. GLOVER said that is correct.
SENATOR FRENCH continued that the report also says that the
number of medically uninsured people will increase.
MS. GLOVER replied that was the consultant's conclusion.
SENATOR FRENCH said further that Premera could withdraw in the
future from less profitable business lines and asked if the
division foresees that happening.
MS. GLOVER replied that the consultants concluded that was a
potential.
SENATOR FRENCH said he had a hard time not jumping to the
conclusion that the stockholders are going to get rich and
Alaskan consumers are not.
MS. GLOVER responded that the division is still drawing its
conclusions and preparing for the hearing in front of the
director.
CHAIR BUNDE noted that three people were listening on line -
Jack McCray, John Dominick and Barbara Branton - and that Nelson
Page, member of the Conversion Task Force, was present.
MR. NELSON PAGE, member of the Conversion Task Force, said it
consists of a number of organizations including the Mental
Health Trust, the Rasmussen Foundation, the Denali Commission,
the Alaska Native Health Board, the University of Alaska and
individuals who are concerned or interested in the conversion
process. Primarily, it is focused on what is left in the form of
the foundation that it is worthy and helpful for the State of
Alaska if the conversion takes place.
First, I will point out that this is not an unusual
way for these conversions to take place. The Blue
Cross corporations have always been non-profit
corporations. When they convert to for-profit, it has
been both a doctrine of law and a consideration of
equity that the money and the assets that were created
by the non-profit should continue to be used in the
charitable or beneficial way for the people of the
State of Alaska. Foundations are created for that
purpose. We are concerned to make sure that the
foundation, if the conversion goes through, if it is
actually created, that it be independent - and we have
some concerns that the makeup of the board of
directors might be such that...wouldn't be able to be
an effective advocate and an effective change agent
for health care needs in the state.
We also have some concerns about some restrictions on
the proposed conversion plan that might limit the
foundation's ability to realize full value from the
shares of stock that it would receive initially. These
are restrictions such as a timetable for having to
sell the stock, which might not be the best timetable
to maximize their market value.
Finally, there is the issue, which I think the state
is going to have to get in to, of how you allocate a
percentage of the total amount from this conversion to
the State of Washington versus the State of Alaska and
what is a fair percentage.
MR. PAGE said this foundation may be a mitigation for some of
the concerns and issues regarding a conversion. His experience
with the Mental Health Trust is that these kinds of
organizations can have a substantial effect far outweighing the
amount of dollars that they wield.
CHAIR BUNDE asked if the Mental Health Trust would be one of the
foundation members and thereby a stockholder.
MR. PAGE answered no. Presently it is envisioned that this
foundation would be an independent entity and probably more akin
to a private foundation like the Rasmusen Foundation rather than
a semi-state corporation like the Mental Health Trust. The
foundation would be the beneficiary of stock. The plan of
conversion requires the foundation to sell the stock over a
period of time and he didn't have a problem with that. However,
he strongly felt that restrictions on when and how much has to
be sold could limit the value of the stock. Also, unless the
conversion has conditions, Premera might decide to create and
issue new shares of stock within a short period of time, which
would dilute the value of the foundation's stock.
CHAIR BUNDE said he shares his concerns about Alaska and he has
heard a rumor that there is a desire to keep the legislature out
of the process. He asked him what role the legislature could
have in the process.
MR. PAGE replied that question could best be resolved between
Premera, the Division of Insurance, the administration and the
legislature.
To be candid, there is a concern that this is a lot of
money and that there may be a desire to use that money
in ways, which would not carry a benefit forward into
the future. Beyond that, I don't think it is the
feeling of anyone that I've talked to that we should
keep the legislature in the dark about what's going
on. To the contrary, that's one reason I'm here. I
invite anyone who has questions or concerns to feel
free to contact me or any member of the Premera
committee to discuss those.
CHAIR BUNDE asked when he thought this process would come to a
conclusion.
MR. PAGE deferred to the division for that answer. He
understands that decisions would be made some time over the
summer. His group has taken a firm non-position on whether the
conversion should happen or not. It would not shock him to have
legal challenges if the conversion goes forward.
CHAIR BUNDE observed that it is unfortunate that the legislature
is getting involved at this late date in the session. One
question he had is why the attorney general, as an agent of the
governor, would appoint the board when the governor could make
the appointments and have legislative confirmation.
SENATOR HOLLIS FRENCH asked Mr. Page to comment on an article he
wrote partially about the ability of the foundation to advocate
the availability of affordable health insurance.
MR. PAGE replied:
That particular concern is pretty straightforward.
There are limitations on the ability of the
foundation...to lobby to the extent they would want to
advocate about insurance rates or the availability of
insurance or the nature of insurance that is being
offered or not being offered. Those restrictions, I
think, are inappropriate and should not be included in
any conversion plan.
CHAIR BUNDE asked if he saw any conflict in advocating for more
consumer health care for a lower price.
MR. PAGE replied if the foundation is independent and, in fact,
is supposed to be advocating for the unmet health needs of
Alaskans, one of the things that they have to be able to talk
about is the availability of health insurance. "To have
limitations and restrictions on their ability to do that doesn't
make any sense."
SENATOR FRENCH said Mr. Page also pointed out in the article
that the initial contribution to the foundation has to be fair
and that the initial proposal contains significant limitations
on the ability of the foundation to receive contributions from
other sources or to sell the assets it will receive from the
conversion in a manner that will obtain the highest market
value. He asked what interest Blue Cross or Premera has in the
assets they give over to the foundation once it has gone away.
MR. PAGE replied:
In fairness, this becomes fairly complicated and I try
to look at both sides of this issue. Blue Cross will
become a for-profit corporation at the beginning of
the conversion to shareholders, one in Washington and
one in Alaska. It seems if you look at it, it's fairly
reasonable that they would have some restrictions on
what those two shareholders can do with all of those
shares of stock. They would be in complete control
with this for-profit corporation until the shares are
sold into the general market. Some of the restrictions
that have been suggested, however, seem to be very,
very inappropriate or at least unnecessary. Again,
there is a timetable by which the shares of stock have
to be sold - 20 percent within the first year, I
think...and then a certain percentage more within two
years and by the end of 10 years, they should have
less than five percent of the shares of stock - all of
which in some ways makes sense, but in other ways
means that we may be forced into a timetable with the
market that dictates we don't get our fair value....
The other issue again, is a fairly complicated tax
issue. The foundation as is presently proposed in the
conversion plan would be a 501(c)(4) organization.
That is an organization that can do some lobbying and
advocacy, but has the restriction that cannot accept
funds or receive charitable contributions from any
other source. A 501(c)(3) organization, which is sort
of the one that most of us are familiar with as a non-
profit, doesn't have those restrictions. Now, there
are some tax implications of whether it's a 501(c)(4)
or a 501(c)(3) that are fairly complicated. I won't
attempt to try to explain them to you right now. But,
it would seem to me that is an issue that hasn't been
looked at as closely as it should in the conversion
plan.
CHAIR BUNDE said it appeared that they had just scratched the
surface of some of these issues. He concluded saying on behalf
of the committee and the legislature that they would want to
have some oversight and that needs to be explored in the next
session.
CHAIR BUNDE announced confirmation hearings to be the next order
of business. He declared a personal conflict of interest in that
his daughter is one of the appointees to the Board of Barbers
and Hairdressers.
^CONFIRMATION HEARINGS
^BOARD OF BARBERS AND HAIRDRESSERS
Deborah Long - Fairbanks
Joylene Mars - Anchorage
Angela Rosa Easton - Anchorage
Larry Alan Unrat - Anchorage
^ALCOHOLIC BEVERAGE CONTROL BOARD
Dwayne Udland - Anchorage
^STATE ASSESSMENT REVIEW BOARD
Alan Black - Palmer
Patrick Carlson - Kodiak
^BOARD OF MARINE PILOTS
Robert Arts - Anchorage
^ALASKA WORKERS' COMPENSATION BOARD
Valerie Almond - Anchorage
Chris Johanson - Fairbanks
David Koester - Anchorage
James Rhodes - Ketchikan
Patricia Voldorf - Anchorage
^BOARD OF REGISTRATION FOR ARCHITECTS, ENGINEERS AND LAND
SURVEYORS
Craig Freedon - Eagle River
CHAIR BUNDE noted that the committee moved the names forward,
but that didn't reflect any intent by any member to vote for or
against any of these people in further sessions.
HB 423-TAXICAB DRIVER LIABILITY
CHAIR CON BUNDE announced HB 423 to be up for consideration.
MR. JIM SHINE, staff to Representative Tom Anderson, said HB 423
will allow taxicab operators to transport a motor vehicle owned
by an intoxicated person to his home or another directed
residential location while another cab driver will take the
intoxicated person to the same residential location.
Absent gross negligence or reckless or intentional
misconduct, a person engaged in this activity would
not be civilly liable for damages. There are times
when Alaskans will find themselves in an end of the
evening dilemma when they are over the .08 blood
alcohol limit and shouldn't drive, but are worried and
reluctant to leave their car unattended overnight for
several reasons - fear of vandalism or having it towed
or stolen. This bill will allow the intoxicated person
and his or her vehicle to get home safely without the
taxicab operator who drives the person's vehicle
fearing liability. This bill promotes responsible
behavior and encourages people to do the right thing
and not drive while intoxicated.
In 2002, there were 87 traffic deaths in Alaska of
which 35 were alcohol related. That created 40 percent
of the traffic deaths. In 2001, 53 percent of auto
deaths were alcohol related.
In order for this program to be successful,
establishments would implement the following
strategies and policies:
They'll be placing signs near payphones, direct lines
to cab companies in other conspicuous areas in
establishments such as restrooms and near exits.
CHAIR BUNDE asked who would pay for that.
MR. SHINE replied that the bar owners would do that. He
continued:
Also they'll be training the staff in these
establishments on the availability of the
program, how to inform patrons and implement the
process, making public service announcements at
the end of the evening as the bar is nearing
closing. The bars will be paying a portion of the
cab fare agreed upon by the establishment and the
program officials. They will track the program
usage to assess the effectiveness to promote
and/or improve the program. This service will be
free to consumers as the bar and corporate
sponsors will be splitting the cost of $40 for
each cab trip in the downtown Anchorage bowl
area.
CHAIR BUNDE asked if the person calls the cab himself does he
pay the fare.
MR. SHINE replied no and said that the Anchorage Cabaret, Hotel,
Restaurant & Retailers Association (CHARR) has been soliciting
corporate sponsors to help pay for getting drunk drivers off the
road and has talked with bar owners who have consented to being
involved in this program and have agreed to splitting the cost
of it with the corporate sponsors. He said that letters from
Mothers Against Drunk Drivers (MADD) and Cabaret, Hotel,
Restaurant and Retailers Association (CHARR) in support of HB
423 are in the committee's packets and noted that it passed the
House unanimously by a vote of 38 - 0.
MR. JOHN PATTEE, owner, Gaslight Lounge and Avenue Bar, said he
is also a board member of Anchorage CHARR, the Downtown
Community Council and the Anchorage Downtown Partnership.
Several years ago, he and Rod Flager, Anchorage Downtown
Partnership, tried to identify why people may drink and drive.
They found that some people want to take their cars home because
they are expensive and might be vandalized or stolen if they are
left downtown. A few years ago, insurance companies estimated it
would cost $1,000 per cab for providing this type of coverage,
which was prohibitive. People don't want to leave their cars on
the streets for many reasons. If they are legitimate reasons,
they should be addressed. This program, which is called Off The
Road, is a good start at addressing the problem and could be
refined as experience dictates.
CHAIR BUNDE said he thought this was an issue worthy of being
moved forward.
SENATOR BETTYE DAVIS moved to pass HB 423 from committee.
Senators Hollis French, Bettye Davis and Chair Con Bunde voted
yea; and HB 423 moved from committee.
CSHB 418(FIN)-REAL ESTATE COM'N/LICENSEE/HOME INSPECT
CHAIR CON BUNDE announced CSHB 418(FIN) to be up for
consideration.
MS. JANET SYKES, staff to Representative Rokeberg, said that
CSHB 418(FIN) extends the life of the Real Estate Commission as
recommended in the audit, clarifies procedures with regards to
inactive real estate licensees, clarifies requirements for
contact information and notices, and makes clarifying amendments
to home inspection legislation.
MR. WILLIAM BRUU supported HB 418. "I think it's an absolute
necessity that we tune up the home inspector statute." His one
concern is that current regulations fail to grandfather in
individuals who have been certified inspectors for as long as 15
years.
MR. DAVID FEEKIN, Legislative Chair, Alaska Association of
Realtors, supported HB 418.
MS. PAT DAVIDSON, Division of Legislative Audit, said this bill
addresses one of the audit's concerns relating to the
notification of a determination against a license. Two other
issues weren't addressed and one is to increase the award limit
from $10,000 to $20,000. The $10,000 cap was established in 1974
and has not been revised since then. The last five payments in
the last few years have been for the full $10,000 and the
alleged losses in those claims exceeded $10,000 - all but one
was over $20,000. Moving the cap to $20,000 would assist the
buyers who have suffered from fraud or deceit by a real estate
agent.
The second item that is not addressed has to do with confusion
by the Real Estate Commission on how mobile home sales are
handled by licensees. She explained that the audit recommends
mobile home transactions handled by real estate agents to be
covered by the surety funds. She elaborated that mobile home
transactions are not required to be handled by real estate
agents and she is not recommending that, but rather if a person
does seek the assistance of a licensed realtor, those
transactions should be covered by the surety fund.
CHAIR BUNDE thanked her and put HB 418 aside until the committee
had a quorum.
TAPE 04-37, SIDE B
HB 430-EMPLOYEES UNDER 21 AT LICENSED PREMISES
CHAIR CON BUNDE announced HB 430 to be up for consideration.
MS. AURORA HAUKE, staff to Representative Beth Kerttula,
sponsor, said this bill deals with the employment of people who
are under 21 who work in hotels and restaurants that are
licensed to serve alcoholic beverages. Currently, 16, 17, and
18-year olds are allowed to work in these establishments with
the permission of their parents. Nineteen and 21-year olds don't
need parental permission. No one under the age of 21 is allowed
to work with the alcohol. This bill would allow 18-year olds to
work without parental permission since they have reached the age
of majority and are adults. They would still not be able to work
with the alcohol. This legislation would clear up difficulties
and deterrents for 18-year olds trying to find gainful
employment in a restaurant and would increase the prospective
labor pool for employers. This bill was brought to
Representative Kerttula's attention by a constituent who was
trying to hire an 18-year old young man who had been a foster
child and didn't have any legal parents. Since he had not been
adopted by his foster parents, they could not sign for him and
eventually he was not able to work in the restaurant.
CHAIR BUNDE noted that Doug Griffin, Alcohol Beverage Control
Board (ABC) was not able to testify at this time and he would
hold the bill.
MS. HAUKE pointed out a letter of support from the ABC Board in
the committee packets.
HB 517-SECURITY ACCOUNT BENEFICIARY DESIGNATION
CHAIR CON BUNDE announced HB 517 to be up for consideration.
MR. JOSH APPLEBEE, staff to Representative Tom Anderson,
sponsor, said HB 517 permits an investment management or custody
account with a trust company or a trust division of a bank with
trust powers to have a beneficiary designation take effect upon
the death of the owner of the account. Under current law,
securities and brokerage accounts have this beneficiary
designation take effect upon the death of the owner pursuant to
the Uniform Transfer On Debt Security Registration Act. However,
the current definition in Alaska is not broad enough to include
investment management or custody accounts, which are generally
used by trust departments and banks. This problem cannot be
solved other than by statute. Several states including
California, Idaho, Iowa, Minnesota and Washington have enacted
similar legislation in the last three years. HB 517 will now
allow these investment products to avoid probate by providing a
statutory authorization to use a beneficiary designation to take
effect upon death. It will also put bank trust departments on an
equal footing with brokerage firms. There is wide spread support
for this bill including Wells Fargo and the Alaska Banker's
Association.
CHAIR BUNDE said that he now had a quorum, but wanted to give
members some time to look at the bill.
HB 430-EMPLOYEES UNDER 21 AT LICENSED PREMISES
CHAIR CON BUNDE brought HB 430 back before the committee.
SENATOR BETTYE DAVIS moved to pass HB 430 from committee.
Senators Bettye Davis, Gary Stevens and Chair Con Bunde voted
yea; and HB 430 moved from committee.
HB 517(title am)-SECURITY ACCOUNT BENEFICIARY DESIGNATION
CHAIR CON BUNDE announced HB 517(title am) to be back before the
committee.
MR. JOSH APPLEBEE recapped that HB 517(title am) allows trust
custody accounts at a bank or trust company to use the time of
death designation. When an owner of an account dies, the
beneficiary will take over at the time of death.
SENATOR GARY STEVENS moved to pass HB 517(title am) from
committee with attached fiscal note and individual
recommendations. Senators Bettye Davis, Gary Stevens and Chair
Con Bunde voted yea; and HB 517(title am) moved from committee.
3:41 - 3:43 - at ease
CHAIR BUNDE adjourned the meeting at 3:43 p.m.
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