Legislature(1999 - 2000)
04/13/1999 01:40 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE LABOR AND COMMERCE COMMITTEE April 13, 1999 1:40 P.M. MEMBERS PRESENT Senator Jerry Mackie, Chairman Senator Tim Kelly, Vice Chairman Senator Dave Donley Senator Loren Leman Senator Lyman Hoffman MEMBERS ABSENT All Members Present COMMITTEE CALENDAR HOUSE BILL NO. 68 "An Act extending the termination date of the Board of Pharmacy to June 30, 2005; and providing for an effective date." -MOVED HB 68 OUT OF COMMITTEE CS FOR HOUSE BILL NO. 123(RLS) "An Act relating to the exemption from the requirement for payment of minimum wage and overtime compensation for certain volunteers of nonprofit organizations; exempting individuals who provide ski patrol services on a voluntary basis from the requirement for payment of minimum wage and overtime compensation; and providing for an effective date." -HEARD AND HELD CS FOR HOUSE BILL NO. 128(RLS) "An Act relating to lease-purchases of personal property." -MOVED CSHB 128(RLS)OUT OF COMMITTEE HOUSE BILL NO. 94 "An Act removing employees of the Alcoholic Beverage Control Board from the exempt service." -MOVED HB 94 OUT OF COMMITTEE PREVIOUS SENATE COMMITTEE ACTION HB 68 - No previous action to consider. HB 123 - No previous action to consider. HB 128 - No previous action to consider. HB 94 - No previous action to consider. WITNESS REGISTER Representative Rokeberg State Capitol Bldg. Juneau, AK 99811-1182 POSITION STATEMENT: Commented on HB 68 and HB 123. Mr. Dwight Perkins, Deputy Commissioner Department of Labor P.O. Box 21149 Juneau, AK 99802-1149 POSITION STATEMENT: Supported on HB 123. Ms. Lisa Murkowski State Capitol Bldg. Juneau, AK 99811-1182 POSITION STATEMENT: Sponsor of HB 128. Mr. Brad Denison Texas POSITION STATEMENT: Commented on HB 128. Mr. Pat Harmon, Aide Representative Pete Kott State Capitol Bldg. Juneau, AK 99811-1182 POSITION STATEMENT: Commented for the sponsor on HB 94. Mr. Doug Griffin Acholic Beverage Control Board 550 W 7th #350 Anchorage, AK 99501 POSITION STATEMENT: Commented on HB 94. ACTION NARRATIVE TAPE 99-12, SIDE A Number 001 HB 68-BOARD OF PHARMACY CHAIRMAN MACKIE called the Senate Labor and Commerce Committee meeting to order at 1:40 p.m. and announced HB 68 to be up for consideration. REPRESENTATIVE ROKEBERG explained that HB 68 is a housekeeping measure that extends the termination date of the Board of Pharmacy to 2005 and follows the recommendations of the Legislative Budget and Audit Committee. CHAIRMAN MACKIE noted that the standing policy is to extend Boards for four years. He asked why they suggested six years. REPRESENTATIVE ROKEBERG said there is the geographic differential on the appointments to the Board members, but they try to get different judicial districts. SENATOR KELLY said he didn't have a problem with 2005. SENATOR LEMAN said he didn't have a problem with this particular Board, but he wanted to be consistent. SENATOR LEMAN moved to change the effective date from 2005 to 2003. There were no objections and it was so ordered. REPRESENTATIVE ROKEBERG said he had no objections to the change, but it requires a title change, also. SENATOR LEMAN moved to rescind his motion and asked for unanimous consent. There were no objections and it was so ordered. SENATOR LEMAN moved to pass HB 68. There were no objections and it was so ordered. HB 123-MINIMUM WAGE & OVERTIME EXEMPTIONS CHAIRMAN MACKIE announced HB 123 to be up for consideration. REPRESENTATIVE ROKEBERG explained that the National Ski Patrol requested an exemption from Alaska's Wage and Hour Act because in many instances they work under the supervision of a profit making organization; for example, Alyeska Ski Resort which employs professional as well as volunteer patrollers and the supervisors are paid. This bill only speaks to the volunteers and exempts them from the Wage and Hour Act. He said that organized labor does not oppose this legislation and are quite sympathetic. SENATOR KELLY asked what the status was on the volunteers being covered by Workmen's Compensation. MR. DWIGHT PERKINS, Deputy Commissioner, Department of Labor, testified that they are covered under the Worker's Compensation Act. SENATOR KELLY asked him to verify that. REPRESENTATIVE ROKEBERG mentioned that Eaglecrest Ski resort is under municipal ownership. MR. PERKINS said the Department supported this bill. He explained there are several nonprofits who have volunteers who are subject to Wage and Hour and overtime laws if it wasn't changed. The Department feels that certain organizations that are strictly volunteer like the Iditarod Groups should have the ability to volunteer their time and services without being paid compensation. SENATOR LEMAN asked for an example in Alaska of an activity that would not be a nonprofit activity of a nonprofit organization. REPRESENTATIVE ROKEBERG said the Salvation Army Thrift Shop paying its workers was one example. MR. PERKINS added that there were a few organizations that are selling T-shirts or trinkets as their for-profit side that may have very different rules affecting them. Those people are being paid and have to be compensated with minimum wage and overtime while working in the store. The volunteers who wouldn't be paid are ones working events like the Iditarod volunteers along the course. SENATOR LEMAN said he wasn't sure the language "engaged in nonprofit activities" was necessary. CHAIRMAN MACKIE tried to clarify that in the case of the Salvation Army, working in their Thrift shop is a forprofit activity, but for a nonprofit organization. SENATOR LEMAN wanted to know where Alaskan corporate laws separate profit and nonprofit activities of a nonprofit organization. MR. PERKINS explained if Senator Leman is the manager of the Salvation Army Thrift Shop and he (Mr. Perkins) wants to work there, and Senator Leman controls the days and hours he works there, then there is an employer/employee relationship. Under those guidelines, he would be eligible to be compensated for minimum wage and overtime. The definition of volunteer is coming and going as a volunteer. SENATOR LEMAN said his problem is with the phrase "nonprofit" in the first line and the last addition to the same paragraph. He asked if we have nonprofit organizations that have profit making activities that are allowed under the law. He wanted to know what activities of nonprofit organizations exist that cause the legislature to want to clarify that. He asked if there are "nonprofit activities going on in Alaska of nonprofit organizations that are not nonprofit activities." SENATOR LEMAN said he thought the words on line 9 "or other nonprofit organizations" was to make sure the Special Olympics and the Ski Patrol were covered. REPRESENTATIVE ROKEBERG added for background that last year the Legislature redefined "business" to include nonprofit organizations. The language in this bill actually came from Mr. Randy Parr, Department of Labor, and it was reviewed by Legislative Legal Service. CHAIRMAN MACKIE announced that he intended to hold the bill over so they could talk to the drafter to make sure it does what it's intended to do. HB 128-LEASE-PURCHASE OF PERSONAL PROPERTY CHAIRMAN MACKIE announced HB 128 to be up for consideration. REPRESENTATIVE LISA MURKOWSKI, sponsor of HB 128, said this is basically the "rent to own" bill; this is a fledgling industry in our state and is growing quickly throughout the country. It applies to renting personal property mostly for people who are temporary residents. This bill makes it clear for the consumer to know what his or her obligations are and the lease/purchase owner's disclosure requirements. There is nothing in the Alaska statutes which addresses lease purchase situations. There have been no specific problems in the industry; it's more preventative. Forty four other states have similar legislation that addresses the disclosure requirement. She said they looked at legislation from South Dakota and received input from people within the industry in Alaska. SENATOR HOFFMAN asked if in the description of rent purchase agreements, merchants don't require a security deposit or downpayment. He asked if that was true in this legislation. REPRESENTATIVE MURKOWSKI indicated that was true. SENATOR LEMAN asked if there was a table that would establish what a "fair market value" is and would it be the original purchase price or depreciated value, for instance. REPRESENTATIVE MURKOWSKI said she understands that the purpose of the fair market value disclosure is that there are no hidden agendas. If you're going to rent it, it's going to cost so much per week or month. If you want to purchase it, you want to know what the value of the T.V. will be. SENATOR LEMAN noted that there is a late fee of $5 and asked if there was a restriction on the amount of the fee and is there some other way for a business to recover the cost of someone's payment being late. Number 450 REPRESENTATIVE MURKOWSKI responded that the reason a nominal late fee was placed in there is because typically within the industry they don't charge a late fee. It came from the industry as being a reasonable sum. Usually, property is either returned voluntarily or it is repossessed. MR. BRAD DENISON, testifying from New Jersey, said this bill is very similar to what most of the other states have. It's based on suggested legislation from the Council of State Governments which is existing Virginia state law. As far as he knows, no one in the industry is charging a security deposit; and he didn't think this bill addressed that issue. Industry's position is that late fees should be left up to the individual dealer and should depend on the market place. There is no table of fair market value if the merchandise is damaged, but there is a formula that most dealers use to determine the value of the property at any time. It's based on the cash price of the goods at the outset of the transaction. For instance, if at the outset a T.V. is valued at $300, the customer can buy it by tendering an amount equal to the cash price less 50 percent of all the rent paid. The is the formula for determining fair market value. As a practical matter, when something happens to the goods, it turns out to be a loss for everyone, because many customers don't have the cash to pay for the T.V. It hasn't been a big issue in the industry. MR. DENISON explained the late fee of $5 is to recover the cost of having to either make phone calls or send letters. It also serves as an incentive for the customer to make on-time payments. Number 532 SENATOR LEMAN moved to pass HB 128 with individual recommendations. There were no objections and it was so ordered. HB 94-ABC BD EMPLOYEES NOT EXEMPT EMPLOYEES CHAIRMAN MACKIE announced HB 94 to be up for consideration. MR. PAT HARMON, Aide to Senator Kott, sponsor, said HB 94 is a housekeeping measure. The statutes presently classify the agents of the Alcoholic Beverage Control Board as exempt employees when they are classified employees. They are no longer appointed; the patronage system is no longer applied as they are basically professional police officers. To delete that section would make them classified employees by default which they actually are. SENATOR KELLY asked how many there were. MR. HARMON answered there were three with one supervisor. SENATOR KELLY asked if they were union members. MR. HARMON answered there was a union involved. SENATOR KELLY asked if there were any retirement or benefits involved. Number 561 MR. DOUG GRIFFIN, ABC Board, said the Administration, the Department, and the Board officially have no position on the bill which came from employees who work for the ABC Board. There are four positions affected by this legislation, the enforcement investigative staff of the Board. The three investigative positions are members of the general government bargaining unit. The supervisor is a member of the supervisory bargaining unit. He is glad that Representative Kott put this bill forward. CHAIRMAN MACKIE asked if this changed their union status. MR. GRIFFIN answered, "Absolutely not." They researched back 30 years and didn't find ABC investigators were ever exempt employees. SENATOR KELLY asked once they become classified employees, can they change unions. MR. PERKINS answered that they have been classified employees in the unions. TAPE 99-12, SIDE B He couldn't predict the future, but couldn't see any requirements that would trigger them changing unions. SENATOR LEMAN asked if they were currently evaluated for merit pay and if their pay increases were based on that evaluation, and if so, what is the process that is used. How many of the four employees received the merit pay based on that process. MR. PERKINS replied that they are evaluated like other classified employees in state employment. They have an annual evaluation and typically are awarded merit increases. They are evaluated on their effectiveness in dealing with licensees, the thoroughness of their investigations and reports. They look at how well they prepare the occasional prosecutions and how well they conduct themselves in discussing issues and problems with liquor licensees. They need to have knowledge of Title 4. SENATOR KELLY said he didn't have any problem with this bill if they would not switch unions. He moved to pass HB 94 from committee with individual recommendations. There were no objections and it was so ordered. CHAIRMAN MACKIE adjourned the meeting at 2:25 p.m.