Legislature(2001 - 2002)

04/02/2002 01:50 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                    
                SENATE LABOR & COMMERCE COMMITTEE                                                                             
                          April 2, 2002                                                                                         
                            1:50 p.m.                                                                                           
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Ben Stevens, Chair                                                                                                      
Senator Alan Austerman                                                                                                          
Senator Loren Leman                                                                                                             
Senator John Torgerson                                                                                                          
Senator Bettye Davis                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All Members Present                                                                                                             
                                                                                                                              
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CS FOR HOUSE BILL NO. 470(L&C)(title am)                                                                                        
"An Act relating to public offering  statements required under the                                                              
Uniform  Common  Interest  Ownership  Act; and  providing  for  an                                                              
effective date."                                                                                                                
                                                                                                                                
     MOVED CSHB 470(L&C)(title am) OUT OF COMMITTEE                                                                             
                                                                                                                                
CS FOR HOUSE BILL NO. 306(L&C)                                                                                                  
"An  Act authorizing  the  Department  of Community  and  Economic                                                              
Development  to issue  permits to  certain  agencies to  purchase,                                                              
possess, and use certain drugs for  euthanizing domestic animals."                                                              
                                                                                                                                
     MOVED CSHB 306(L&C) OUT OF COMMITTEE                                                                                       
                                                                                                                                
CS FOR HOUSE BILL NO. 389(CRA)                                                                                                  
"An Act eliminating the delayed repeal  of a provision authorizing                                                              
an  exemption from  and deferral  of municipal  property taxes  on                                                              
certain  types  of deteriorated  property;  and  providing for  an                                                              
effective date."                                                                                                                
                                                                                                                                
     MOVED CSHB 389(CRA) OUT OF COMMITTEE                                                                                       
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                              
HB 470 - No previous action to consider.                                                                                        
                                                                                                                                
HB 306 - No previous action to consider.                                                                                        
                                                                                                                                
HB 389 - No previous action to consider.                                                                                        
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Representative Rokeberg                                                                                                         
State Capitol Bldg.                                                                                                             
Juneau AK 99811                                                                                                                 
POSITION STATEMENT: Sponsor of HB 470.                                                                                        
                                                                                                                                
Ms. Robin Ward, Co-Chair                                                                                                        
Legislative Affairs                                                                                                             
Alaska State Homebuilders Association                                                                                           
PO Box 91443                                                                                                                    
Anchorage AK 99507                                                                                                              
POSITION STATEMENT: Supported HB  470.                                                                                        
                                                                                                                                
Mr. Jess Hall, Builder                                                                                                          
PO Box 1987                                                                                                                     
Palmer AK 99645                                                                                                                 
POSITION STATEMENT: Supported HB  470.                                                                                        
                                                                                                                                
Mr. Chuck Spinelli                                                                                                              
9210 Vangard, #102                                                                                                              
Anchorage AK 99507                                                                                                              
POSITION STATEMENT: Supported HB  470.                                                                                        
                                                                                                                                
Mr. John Faulkner, President                                                                                                    
Land's End Development Corporation                                                                                              
4786 Homer Spit Rd.                                                                                                             
Homer AK 99603                                                                                                                  
POSITION STATEMENT: Supported HB  470.                                                                                        
                                                                                                                                
Ms. Shana Anderson, President                                                                                                   
Alaska Animal Control Association                                                                                               
PO Box 307                                                                                                                      
Valdez AK 99686                                                                                                                 
POSITION STATEMENT: Supported HB  306.                                                                                        
                                                                                                                                
Mr. Brett Reid                                                                                                                  
Kenai Animal Shelter                                                                                                            
210 Fidalgo Ave.                                                                                                                
Kenai AK 99611                                                                                                                  
POSITION STATEMENT: Supported HB  306.                                                                                        
                                                                                                                                
Ms. Marianne Clark                                                                                                              
Soldotna Animal Shelter                                                                                                         
177 N. Birch St.                                                                                                                
Soldotna AK 99669                                                                                                               
POSITION STATEMENT: Supported HB  306.                                                                                        
                                                                                                                                
Ms. Hava Lee, Executive Director                                                                                                
Juneau Gastineau Humane Society                                                                                                 
PO Box 22246                                                                                                                    
Juneau AK 99802                                                                                                                 
POSITION STATEMENT: Supported HB 306.                                                                                         
                                                                                                                                
Ms. Catherine Reardon, Director                                                                                                 
Division of Occupational Licensing                                                                                              
Department of Community and Economic Development                                                                                
P.O. Box 110806                                                                                                                 
Juneau AK 99811                                                                                                                 
POSITION STATEMENT: Commented on HB 306.                                                                                      
                                                                                                                                
Mr. Mike Krieber                                                                                                                
Staff to Representative Rokeberg                                                                                                
State Capitol Bldg.                                                                                                             
Juneau AK 99811                                                                                                                 
POSITION STATEMENT: Commented on HB 389.                                                                                      
                                                                                                                                
Mr. Marc Marlow                                                                                                                 
229 Whitney Rd.                                                                                                                 
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported HB 389.                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 02-17, SIDE A                                                                                                            
Number 001                                                                                                                      
         HB 470-COMMON INTEREST OWNERSHIP:OFFERING STMTS                                                                    
                                                                                                                              
CHAIRMAN BEN STEVENS called the Senate Labor & Commerce Committee                                                             
meeting to order at 1:50 p.m. and announced HB 470 to be up for                                                                 
consideration.                                                                                                                  
                                                                                                                                
REPRESENTATIVE ROKEBERG, sponsor of HB 470, said there is an                                                                    
anomaly in the state's common ownership act that was brought to                                                                 
his attention by a constituent of Senator Torgerson's.                                                                          
                                                                                                                                
     That being  during the construction of  condominium type                                                                   
     developments,  it's  necessary   under  our  statute  to                                                                   
     provide  a  public  offering  statement  which  requires                                                                   
     certain specific information  including such things as a                                                                   
     legal description and other  technical matters, which in                                                                   
     fact cannot be fully completed  until the unit itself is                                                                   
     completed.  What the  circumstances were  in the  Land's                                                                   
     End area of  Homer were that high end  condominiums were                                                                   
     being  built on  the  two as-built,  to-be-built  custom                                                                   
     build  bases  in  the  cost range  of  half  million  to                                                                   
     $750,000,  but   because  of  the  peculiarity   of  our                                                                   
     statute,  the delivery  of the  public offerings  ticket                                                                   
     couldn't occur  until after the units were  complete and                                                                   
     at  that time,  under  our statute,  the  buyer had  the                                                                   
     opportunity  to back  out of  the  deal. And  on top  of                                                                   
     that,  he had  the  opportunity to  collect  10% of  the                                                                   
     value  of  the transaction.  In  other  words,  somebody                                                                   
     could bargain  for a very costly  unit, back out  of the                                                                   
     deal, break  his [indisc} contract and thus  be rewarded                                                                   
     by our statute to the tune of $75,000.                                                                                     
                                                                                                                                
     What this  bill does, Mr.  Chairman, is fix  that little                                                                   
     anomaly by providing that a  preliminary public offering                                                                   
     statement be  provided which  is very similar  in nature                                                                   
     to the final product and also  indicates if there is any                                                                   
     award to  be made by the courts  that it could be  up to                                                                   
     10%, not  specifically 10%.  Therefore giving the  judge                                                                   
     the ability  to look at  the circumstances and  facts of                                                                   
     the case.                                                                                                                  
                                                                                                                                
SENATOR  LEMAN said  this was  a  revision to  the Uniform  Common                                                              
Interest Ownership  Act and asked if  this was one of  the uniform                                                              
acts  that  they have  adopted  that's  common across  the  United                                                              
States.                                                                                                                         
                                                                                                                                
REPRESENTATIVE ROKEBERG  replied yes, that he had  been working on                                                              
a revision with the homebuilders for about three years.                                                                         
                                                                                                                                
SENATOR LEMAN asked if it was likely  that other states would have                                                              
the same anomaly unless they had revised the Uniform Act.                                                                       
                                                                                                                                
REPRESENTATIVE ROKEBERG replied that  this usually doesn't come to                                                              
light, because  mostly  when townhouse type  condominiums  are put                                                              
together and marketed, they're not  as high ended. So, there's not                                                              
as  much risk  on the  part of  the developer  if the  transaction                                                              
doesn't close.                                                                                                                  
                                                                                                                                
     This  becomes  very glaring  when  you have  a  high-end                                                                   
     resort type  condominium situation,  like you do  at the                                                                   
     Land's End  on the Homer spit,  which the letter  in the                                                                   
     packet  comes  from,  Mr.  Johnson   Faulkner,  and  the                                                                   
     details of that particular plight that he is in.                                                                           
                                                                                                                                
SENATOR AUSTERMAN asked  him to explain how this  Act is different                                                              
than one from a typical homeowner who custom builds a house.                                                                    
                                                                                                                                
REPRESENTATIVE   ROKEBERG  replied  that   in  Alaska   the  first                                                              
statutory  act  they had  was  the  Horizontal Regime  Act,  which                                                              
allowed  for  the  sales,  marketing and  legal  conveyance  of  a                                                              
condominium or  a townhouse and that  was superceded 18  years ago                                                              
by the  Uniform Common Ownership  Act and  all the newer  ones are                                                              
under the Common Ownership Act that  sets up a different estate in                                                              
land where you  can convey fundamentally, airspace.  for example a                                                              
condo can  be high rise  building and  the conveyance of  title is                                                              
only to any particular unit within that particular building.                                                                    
                                                                                                                                
SENATOR  AUSTERMAN said  a single  unit home is  a contract  based                                                              
upon building  a house, a finite  deal and asked if he  was saying                                                              
that a townhouse is not a finite deal.                                                                                          
                                                                                                                                
REPRESENTATIVE ROKEBERG explained  that you could have stand-alone                                                              
property and fee  simple and the ownership [indisc]  fee, but they                                                              
have  no  common  ownership.  He  said it  was  not  uncommon  for                                                              
detached  single-family  homes to  have  homeowner's  associations                                                              
that may own some land in common.                                                                                               
                                                                                                                                
SENATOR AUSTERMAN  said that the  high-end complexes are  based on                                                              
the  same decisions  as the  lower  end ones.  In more  simplistic                                                              
terms he thought this sounded like  they were protecting them from                                                              
themselves.                                                                                                                     
                                                                                                                                
REPRESENTATIVE ROKEBERG responded:                                                                                              
                                                                                                                                
     I  think  what we're  doing  is  facilitating  commerce,                                                                   
     here.  What we  have  is a  circumstance  where it's  an                                                                   
     entirely unilateral right of  the consumer or the buyer,                                                                   
     could  have  the right  not  only  to  back out  of  the                                                                   
     contractual obligations  by statute, but they  even have                                                                   
     the  ability to  profit here.  It's kind  of an  unusual                                                                   
     circumstance.                                                                                                              
                                                                                                                                
MS.   ROBIN   WARD,   Co-chair,    Legislative   Affairs,   Alaska                                                              
Homebuilders Association,  said she is a professional  association                                                              
manager for common interest properties  and that they support this                                                              
bill. She said  there was a model  amendment of this Act  that was                                                              
also enacted  in 1994 and this needed  to be taken care  of in the                                                              
state of Alaska.                                                                                                                
                                                                                                                                
     These are  two issues that  have really plagued  us this                                                                   
     year  especially and  we felt  like we  needed to  fast-                                                                   
     track these. We  pulled these two out of  the large bill                                                                   
     to work  on. Part  of the  problem is  that the risk  is                                                                   
     higher  in the  higher end units,  but the  risk is  the                                                                   
     same for all  developers when they can basically  get to                                                                   
     the closing  table and someone  can back out.  It really                                                                   
     does hurt  on the financing  side of it, but  again I'll                                                                   
     let Mr. Faulkner talk a little bit about that.                                                                             
                                                                                                                                
One of the  reasons this is happening  this year is that  they are                                                              
building a  lot more of them  right now. In Anchorage  almost half                                                              
of the listings are new construction  and half of those fall under                                                              
the Community  Uniform Common Interest  Ownership Act in  one form                                                              
or another.                                                                                                                     
                                                                                                                                
       Even today in our subdivision, if there is a small                                                                       
     piece of land where a sign sits or any kind of a green                                                                     
     belt, it triggers this law…                                                                                                
                                                                                                                                
In Anchorage  the developers are  fairly well versed in  this law,                                                              
but one  of the things  they're finding  out is that  in out-lying                                                              
areas common  interest  properties haven't  been built before  and                                                              
they're not aware of this law.                                                                                                  
                                                                                                                                
MR. JESS  HALL, Mat-Su Valley  Builder, said  he and a  few others                                                              
had done developments out there and  have found that they had done                                                              
condos in the  mid-80s that had fallen in the  Horizontal Property                                                              
Regimes Act.  Since then there hasn't  been too much of  that kind                                                              
of building going  on. More recently he did a  subdivision, but it                                                              
wasn't in  exactly the right form  to be called a  public offering                                                              
statement and if  you don't hand out a public  offering statement,                                                              
you're  liable for  10% of  the sale  price of  the property.  His                                                              
development  is all  single-family  fee simple  and  there are  no                                                              
common elements  in terms of the  houses that can be built  or the                                                              
lot sales,  but the water  system is  common and falls  under this                                                              
act. This act could  also apply to a tiny piece  of property of 10                                                              
x  10  with  a  subdivision  sign on  it.  If  a  public  offering                                                              
statement  was not  given  to each  of  the homeowners,  they  are                                                              
liable for 10% of  the sales prices of their house.  He thought it                                                              
made sense  to at least  go to a point  where a judge  could state                                                              
what  the real  cost was  of negligence  was  on the  part of  the                                                              
developer.  He added  that more  revisions were  needed than  just                                                              
this one Representative Rokeberg mentioned.                                                                                     
                                                                                                                                
MR. CHUCK  SPINELLI, Anchorage  Homebuilders Association,  said he                                                              
had been  building in Eagle Crossing  Subdivision for the  last 15                                                              
years  and  although the  look  of  the whole  subdivision  hadn't                                                              
changed much,  the law has. In  the beginning they didn't  have to                                                              
worry about  public offering  statements and  there was  some land                                                              
held in  common, green  belts, etc. and  people were  paying about                                                              
$15 - $20  per month. When the  UCIOA law came through,  they were                                                              
inundated with regulations and expense.  The new sections at Eagle                                                              
Crossing  cost about $5  - $7,000  to create  this monster  2 inch                                                              
thick volume  of work  called the  public offering statement.  For                                                              
every one  they hand  out to a  buyer, it  costs another  $175 per                                                              
copy. It  basically describes the  CT&R for the  subdivision, etc.                                                              
and at the very end, it tells them  the amount of dues they should                                                              
expect. At  Eagle Crossing  the dues are  generally less  than $15                                                              
per month. In most of the sections  they have reserved development                                                              
rights and  have never collected any  dues, but in the  event that                                                              
they do collect  them, they'd be about $180 per  year. The penalty                                                              
for not  advising people  that they were  going to be  responsible                                                              
for $180 per year  for dues would be 10% of the  home price. Their                                                              
average sales price  is $180,000, which would  make about $18,000.                                                              
This would be the penalty if they  forgot to give someone a public                                                              
offering  statement. He  also said  that  current statute  doesn't                                                              
outline how the amount is remitted.                                                                                             
                                                                                                                                
He  concluded that  he supported  HB  470 although  more work  was                                                              
needed to be done on the Act.                                                                                                   
                                                                                                                                
MR. JOHN FAULKNER, President, Land's  End Development Corporation,                                                              
said  he  is developing  a  high-end  custom  condominium  project                                                              
adjacent to  land at the resort at  the tip of Homer  Spit. He saw                                                              
this as a clarification, not a substantive change.                                                                              
                                                                                                                                
     The clarification  is needed because the law  is unclear                                                                   
     and this does not serve anybody's  interests. The reason                                                                   
     it's  unclear is  that you  can give  a public  offering                                                                   
     statement to a buyer in full  compliance with the intent                                                                   
     of the  act, let's  just say,  in July,  and the 15  day                                                                   
     clock starts to  run. You can have the mutual  intent to                                                                   
     build  a  high-end  custom   condominium,  proceed  with                                                                   
     construction  financing  and  construction all  the  way                                                                   
     through  completion  and then  you  have to  survey  the                                                                   
     building -  and I want to go  back at this point  to Mr.                                                                   
     Austerman's question  about what is different  between a                                                                   
     condominium and  a typical home. One of  the differences                                                                   
     - we have to survey these things,  we have to survey the                                                                   
     blocks,  the airspace that  Representative Rokeberg  was                                                                   
     referring to. We  need that survey to go  into the final                                                                   
     recorded  document  that  really  defines  the  person's                                                                   
     legal description.  That, in turn, is used  to determine                                                                   
     their  percentage of  ownership of  these common  areas.                                                                   
     So,  back  to my  original  scenario where  this  15-day                                                                   
     statutory requirement of the  right of rescission, let's                                                                   
     call it, starts to run in July.  You build the building,                                                                   
     you get  to closing  or get to  the point of  completion                                                                   
     and  you have to  survey and  finalize your  declaration                                                                   
     and  update your  public offering  statement to  reflect                                                                   
     that finality  or that  final square footage  allocation                                                                   
     that determine ownership. In  a lot of cases they're the                                                                   
     same. It  doesn't change, but  custom homes  that change                                                                   
     during  construction  can alter  things.  The point  I'm                                                                   
     trying to  make here is that  the law is not  clear that                                                                   
     you can  issue a POS in  good faith and full  compliance                                                                   
     with  what I believe  is the  intent, yet  get to  final                                                                   
     completion  and a  buyer  could technically  argue  that                                                                   
     this  public  offering  statement is  not  the  original                                                                   
     public offering  statement and  the 15-day clock  starts                                                                   
     at this  point, i.e. after construction  and, therefore,                                                                   
     they have  a right  of rescission  when as a  developer,                                                                   
     you have 100% invested. So,  that is what Representative                                                                   
     Rokeberg's  bill  HB 470  does.  It clarifies  that  the                                                                   
     original  public offering  statement is  issued in  good                                                                   
     faith and is  substantially the same as what  is finally                                                                   
     recorded and you're in compliance  with the law. I think                                                                   
     that  serves the consumer's  best interest.  I think  it                                                                   
     serves  general commerce  best  interests  and the  best                                                                   
     interests of  all parties. I'll say one other  thing and                                                                   
     that  is really  don't  think the  framers  of this  law                                                                   
     intended a  buyer to be  able to back  out of a  deal at                                                                   
     the eleventh and  a half hour. So, I can't  imagine that                                                                   
     something that onerous was the original intent.                                                                            
                                                                                                                                
     Back  when this law  was framed,  I believe  condominium                                                                   
     development  was really  confined for  the most part  to                                                                   
     large  say - 50  unit plus  buildings that  were not  as                                                                   
     customized  and certainly less  expensive than  what I'm                                                                   
     doing. So, loosing  one deal maybe at the  eleventh hour                                                                   
     wasn't  as onerous to  a developer  or as damaging,  but                                                                   
     clearly,  I'm building three  at a time  and my  bank is                                                                   
     certainly aware of this loophole  and it has impacted my                                                                   
     ability  to get  financing to  the  point where  they're                                                                   
     requiring unreasonable  amounts of cash, in  some cases,                                                                   
     100% to  be set  aside in escrow  with absolutely  iron-                                                                   
     clad language  that restricts a buyer's ability  to back                                                                   
     out. So,  it is  impeding commerce at  this point  and I                                                                   
     believe  it's a  needed clarification  and  one that  we                                                                   
     deserve  because  I can't  imagine  the intent  of  this                                                                   
     language  was to  allow a  willing buyer  and a  willing                                                                   
     seller   to  come   to   an  agreement   before   custom                                                                   
     construction and then again  at the eleventh hour decide                                                                   
     some minor  revision that couldn't be avoided  that they                                                                   
     have the right to back out.                                                                                                
                                                                                                                                
CHAIRMAN STEVENS asked if the bank  brought this to his attention.                                                              
                                                                                                                                
MR. FAULKNER  replied that this was  pointed out by  his attorney,                                                              
Sandra  Wicks, one  of  the most  knowledgeable  about the  Common                                                              
Ownership Act. It  has never been litigated. "The  problem is that                                                              
the probability,  as  low as  it might  be, times  the risk  of it                                                              
happening is absolutely still disproportional…"                                                                                 
                                                                                                                                
He said it may  happen once in a million years,  but that one time                                                              
it's going to happen, it's going to devastate the developer.                                                                    
                                                                                                                                
CHAIRMAN STEVENS asked if anyone  had had a problem with this that                                                              
he knew of.                                                                                                                     
                                                                                                                                
MR. FAULKNER said he didn't know  of anyone, but he thought it was                                                              
a "prudent precaution."                                                                                                         
                                                                                                                                
SENATOR  LEMAN  moved  to  pass CSHB  470(L&C)(title  am)  out  of                                                              
committee  with individual  recommendations  and the  accompanying                                                              
fiscal note. There were no objections and it was so ordered.                                                                    
                                                                                                                                
             HB 306-EUTHANASIA FOR DOMESTIC ANIMALS                                                                         
                                                                                                                                
CHAIRMAN STEVENS announced HB 306 to be up for consideration.                                                                   
                                                                                                                                
REPRESENTATIVE LANCASTER,  sponsor of  HB 306, said in  Alaska the                                                              
animal control  agencies do  not have  the authority to  purchase,                                                              
possess or use certain drugs to perform  the most humane method of                                                              
euthanasia for domestic  animals. Right now a  veterinarian has to                                                              
be called  to do this or  the animal would  have to be taken  to a                                                              
veterinarian  facility.  If an  animal  is brought  in  suffering,                                                              
nothing can be done  until the vet gets there and  this could take                                                              
hours. If HB 306  were to pass, injured animals would  not have to                                                              
suffer these  hours and the process  would be more  humane. During                                                              
business hours  a veterinarian  might be  busy with other  animals                                                              
and unable  to respond  immediately or  sometimes there  isn't one                                                              
available in  small villages, which  have access  to veterinarians                                                              
only  occasionally  and  have  to resort  to  harsher  methods  of                                                              
euthanasia.  If an  animal  is brought  in  in the  middle of  the                                                              
night,  it would  take longer  for a  vet to  respond. Pet  owners                                                              
would still have the option of bringing their animals to a vet.                                                                 
                                                                                                                                
     The goal  of HB 306  is not to  take business  away from                                                                   
     veterinarians,  but  to  provide  a  more  humane  cost-                                                                   
     effective  method to  treat sick  or abandoned  animals.                                                                   
     Not only would it be more efficient  and humane, it will                                                                   
     also   save  municipalities   money.  With  the   fiscal                                                                   
     situation the  state is in, finding areas  to save money                                                                   
     is essential.  In the Mat-Su  alone, the animal  shelter                                                                   
     is spending $34,000 and up per  year to contract for the                                                                   
     service with the local veterinarian.                                                                                       
                                                                                                                                
In Fairbanks, it  costs up to $85 per case. He  said that agencies                                                              
in this program  will be under  the self sufficiency act,  so this                                                              
would not cost the state of Alaska  any money. Agencies wishing to                                                              
apply will  have certain guidelines  to follow in order  to obtain                                                              
and  keep these  permits. Those  who will  be administering  these                                                              
drugs will  have completed  a euthanasia technician  certification                                                              
course   that  is  approved   by  the   National  Animal   Control                                                              
Association,  the American Humane  Association, and  Public Humane                                                              
Society of the United States.                                                                                                   
                                                                                                                                
Testimony  in the  House revealed  that there  were concerns  that                                                              
drugs would be available to untrained  individuals, but any agency                                                              
that  applies for  the permit  will have  to follow  the rules  in                                                              
effect for possession  of drugs for veterinarians.  They will have                                                              
to be kept  under lock and  key and licensed supervision.  The DEA                                                              
has  indicated there  has been  very few  investigations of  these                                                              
drugs  and those  were  because  of improper  storage.  Thirty-one                                                              
other states have laws allowing animal  control leagues to use the                                                              
right to  apply for a  permit to purchase,  possess and  use drugs                                                              
for euthanasia of domestic animals.                                                                                             
                                                                                                                                
MS. SHANA  ANDERSON said she has  been the animal  control officer                                                              
in Valdez  for almost 13  years and she  is also the  president of                                                              
the  Alaska Animal  Control  Association.  She supported  HB  306,                                                              
explaining   that  right  now   she  has   a  very  good   working                                                              
relationship with a veterinarian,  but that isn't always the case.                                                              
Other agencies  have had  problems being  able to purchase  drugs.                                                              
"Anyone  in this field  who performs  euthanasia are  professional                                                              
people, they're compassionate people…"                                                                                          
                                                                                                                                
MS.  ANDERSON  said  that she  wished  she  could  be put  out  of                                                              
business  and that  euthanasia  wasn't needed.  Many  times it  is                                                              
necessary because animals don't have homes.                                                                                     
                                                                                                                                
MS. LAURA  HOOD, Manager, Fairbanks  North Star Borough,  Division                                                              
of Animal Control, supported HB 306.                                                                                            
                                                                                                                                
     Unfortunately,  thousands of  animals are euthanised  in                                                                   
     shelters  in the state  of Alaska  each year. This  bill                                                                   
     allows  animal  shelter  workers  to  legally  purchase,                                                                   
     maintain and use the drug which  is accepted as the best                                                                   
     euthanasia  method that  we have available  to us.  This                                                                   
     bill will save municipalities  money as they become able                                                                   
     to   purchase    these   drugs    directly   from    the                                                                   
     manufacturers. They  will no longer have to  rely on the                                                                   
     services  of a  veterinarian to  purchase or  administer                                                                   
     the drug,  which can cause the municipalities  thousands                                                                   
     of dollars  each year. It will protect  veterinarians by                                                                   
     removing  responsibility  of these  drugs  when used  in                                                                   
     animal shelters  from the  veterinarians and placing  it                                                                   
     with  the  animal  sheltering agencies.  It  will  allow                                                                   
     communities  without veterinarians  to practice  modern,                                                                   
     safe  and humane animal  control. It  will allow  humane                                                                   
     euthanasia  for injured  pets  in emergencies  that  may                                                                   
     occur   day   or  night.   The   euthanasia   technician                                                                   
     certification   requirement  will   set  a  state   wide                                                                   
     standard  for the  level of  care that  pets receive  in                                                                   
     their last moments  of life and will raise  the level of                                                                   
     professionalism  in  animal  control  workers  providing                                                                   
     this service.  I really urge  you to support  this bill.                                                                   
     Thanks.                                                                                                                    
                                                                                                                                
MR. BRETT REID, Kenai Animal Shelter,  supported HB 306. He wanted                                                              
to clarify  that the  "tool" they  need to  conduct euthanasia  is                                                              
basically a controlled  overdose that does require  some training.                                                              
The course  for using it  is offered 20  times in the  coming year                                                              
and  will probably  be offered  in  Juneau, as  well. The  federal                                                              
record keeping  is pretty well  established, so the  wheel doesn't                                                              
have to be  reinvented on that issue.  This is not a  blank ticket                                                              
to buy drugs as the bill lists specific ones that can be used.                                                                  
                                                                                                                                
MS. MARIANNE CLARK, Soldotna Animal  Shelter, said she had been in                                                              
this field  for over  25 years and  supported HB  306. "This  is a                                                              
very important  tool for us to use.  It is the most  humane method                                                              
of euthanising the animals…"                                                                                                    
                                                                                                                                
MS. NANCY BUCKMASTER, Sitka Animal  Control Officer, said she runs                                                              
the animal shelter and is the euthanasia  technician. She has been                                                              
certified  for   almost  four  years   and  has  a   good  working                                                              
relationship  with  the two  veterinarians  that  work there.  She                                                              
supported  this bill. She  said it's  more of  a timing  issue for                                                              
those that have good working relationships  with veterinarians. If                                                              
she is not able to get drugs when  she needs them, the process has                                                              
to wait.                                                                                                                        
                                                                                                                                
     Anyone  who  performs  euthanasia   usually  has  to  be                                                                   
     mentally ready  and when those  tools are not  available                                                                   
     for us, we then again have to  redo our mental state and                                                                   
     get prepared  again to euthanise an animal.  It's not an                                                                   
     easy process,  but the timing  has to be there.  I would                                                                   
     ask that you support this bill  for not only us, but all                                                                   
     the smaller communities that are in the Alaska area.                                                                       
                                                                                                                                
MS.  HAVA  LEE,   Executive  Director,  Juneau   Gastineau  Humane                                                              
Society,  supported  HB  306.  She  said  that  everyone  in  this                                                              
business knows  that euthanasia  is a difficult  topic, but  it is                                                              
part of their  job and there is training available.  The procedure                                                              
is not  to be  taken lightly. There  is nothing  in the  bill that                                                              
says  that  organizations  would   have  to  discontinue  using  a                                                              
veterinarian for  this service and  probably in Juneau  they would                                                              
continue.  This   bill  provides  options  that   allow  qualified                                                              
individuals  to  have access  to  euthanasia drugs.  In  instances                                                              
where  a  veterinarian  is  not available,  this  could  mean  the                                                              
difference  between  a humane  death  or  hours  or even  days  of                                                              
endless agony  for an  animal. Supporters  of this bill  including                                                              
humane societies  and animal shelters and animal  control officers                                                              
throughout  the state  do not  see  this bill  as a  cheap way  to                                                              
reduce  the  animal  populations.  Animal  organizations  have  an                                                              
aggressive spay  and neuter program.  Humane societies  and animal                                                              
shelters do  not create  domestic over  populations, but  they are                                                              
responsible  for  dealing with  the  problems  of pets  when  they                                                              
populate too much.                                                                                                              
                                                                                                                                
     In  Juneau,  as in  most  if  not all  animal  shelters,                                                                   
     animals are  euthanised if there is no  possibility that                                                                   
     they will be  adopted. We do euthanise animals  that are                                                                   
     severely  injured, old  and too sick  to recover  and/or                                                                   
     vicious and  like most animal welfare  organizations, we                                                                   
     go out of  our way to find homes for  adoptable animals.                                                                   
     We do not have a list of people  who want to adopt a 17-                                                                   
     year old cat  that sprays and has diabetes.  That's just                                                                   
     the reality.                                                                                                               
                                                                                                                                
TAPE 02-17, SIDE B                                                                                                            
                                                                                                                              
MS.  CATHERINE   REARDON,  Director,   Division  of   Occupational                                                              
Licensing, said her division staffs  the Veterinary Board. She has                                                              
reviewed  and worked with  the sponsor  so they  would be  able to                                                              
administer  the  bill  if  it  passes  and  she  didn't  have  any                                                              
technical problems with it.                                                                                                     
                                                                                                                                
MS.  REARDON  said  that  the  Veterinary  Board  is  not  totally                                                              
comfortable  with  the  bill, because  they  are  concerned  about                                                              
whether there  would be sufficient  insurance that  the euthanasia                                                              
drugs would  be kept secure in  community settings. They  are also                                                              
concerned about  "pre-medication," meaning that  sometimes animals                                                              
need to  be given a  soothing drug before  they can  be euthanised                                                              
because they are  agitated by their situation.  They are concerned                                                              
about those drugs having potentials to become street drugs.                                                                     
                                                                                                                                
                                                                                                                                
SENATOR DAVIS asked if the Board  of Veterinarians brought this up                                                              
on the House side.                                                                                                              
                                                                                                                                
MS. REARDON  replied that  she thought it  was mentioned  in House                                                              
Labor and Commerce.                                                                                                             
                                                                                                                                
SENATOR AUSTERMAN asked  if the concern of the Board  was that the                                                              
control of the drug was not going to be tight enough.                                                                           
                                                                                                                                
MS. REARDON replied yes.                                                                                                        
                                                                                                                                
SENATOR  AUSTERMAN  asked  if  it   was  true  that  veterinarians                                                              
controlled the drug now and there is no problem.                                                                                
                                                                                                                                
MS. REARDON  replied yes. DEA has  rules about tracking  the drugs                                                              
and locking them  up and things like that. The  veterinarians' DEA                                                              
permits  are   on  the  line  if   they  don't  adhere   to  those                                                              
regulations.                                                                                                                    
                                                                                                                                
SENATOR AUSTERMAN  said he assumed that municipalities  would fall                                                              
under those same rules.                                                                                                         
                                                                                                                                
MS. REARDON  said she  thought the  concern was  with the  smaller                                                              
communities who  might not have the  resources or staff  to adhere                                                              
to all the requirements.                                                                                                        
                                                                                                                                
SENATOR TORGERSON  moved to pass  CSHB 306 (L&C) out  of committee                                                              
with  individual  recommendations  and accompanying  fiscal  note.                                                              
There were no objections and it was so ordered.                                                                                 
                                                                                                                                
        HB 389-MUNI TAX EXEMPTION: DETERIORATED PROPERTY                                                                    
                                                                                                                                
CHAIRMAN STEVENS announced HB 389 to be up for consideration.                                                                   
                                                                                                                                
REPRESENTATIVE  VIC KOHRING,  sponsor  of HB  389, said  it is  an                                                              
amendment  to Title  29  that would  allow  for  certain types  of                                                              
property  exemptions  that would  enable  deteriorated  properties                                                              
that are subject  to rehabilitation to have greater  odds in terms                                                              
of financing  of those properties.  He said the McKay  Building in                                                              
downtown  Anchorage had  been an  eyesore for  many years and  had                                                              
been  purchased  by  Marlow  Development  Corporation,  which  was                                                              
attempting to upgrade the building,  but they need more financing.                                                              
This legislation  would enable them  and other similar  properties                                                              
to obtain  that financing,  because a tax  exemption puts  them in                                                              
better position to get dollars from investment institutions.                                                                    
                                                                                                                                
This bill  actually adds  to the existing  law on properties  that                                                              
are  granted  a  tax  exemption.  In 1996-97  a  bill  was  passed                                                              
addressing this issue, but it sunsets  on July 1, 2002. Instead of                                                              
extending the sunset this legislation deletes the sunset clause.                                                                
                                                                                                                                
SENATOR  LEMAN  said  he  understands   the  reasons  behind  this                                                              
legislation and asked why he didn't just extend the sunset date.                                                                
                                                                                                                                
REPRESENTATIVE KOHRING  replied that his original  legislation had                                                              
a time  certain of 2005,  but the  Community and Regional  Affairs                                                              
Committee amended the  legislation and they felt it  was better to                                                              
drop the exemption.                                                                                                             
                                                                                                                                
MR.  MIKE KRIEBER,  Staff to  Representative  Kohring, agreed  and                                                              
said  they  did the  same  thing  a few  years  ago when  it  came                                                              
through.  Representative Halcro  had put  in language relating  to                                                              
local  community control  that he  felt  were adequate  so no  one                                                              
would  receive  unfair  economic   benefit  -  the  rationale  the                                                              
committee used to remove the sunset  extension that Representative                                                              
Kohring's original bill proposed.                                                                                               
                                                                                                                                
SENATOR   AUSTERMAN  asked   if  AS   29.45.05  actually   exempts                                                              
deteriorated buildings  and does it go on until  the renovation is                                                              
completed.                                                                                                                      
                                                                                                                                
MR. MARC MARLOW, Marlow Development  Corporation, said the goal of                                                              
the  previous  legislation   was  to  develop  a   way  for  local                                                              
communities  to   extend  property  tax  relief   to  deteriorated                                                              
properties for up to five years of  an outright exemption followed                                                              
by  up  to five  years  of  deferred property  taxes.  This  would                                                              
provide flexibility in financing  a renovation. The local assembly                                                              
must first  by ordinance designate  a property that  would benefit                                                              
from this  statute as  a deteriorated  property and the  developer                                                              
could request  exemptions based  on need.  The mayor and  assembly                                                              
would then approve it or reject it.                                                                                             
                                                                                                                                
SENATOR  TORGERSON said  he,  like Senator  Leman,  wanted a  date                                                              
certain.                                                                                                                        
                                                                                                                                
SENATOR  DAVIS moved  to pass  CSHB 389(CRA)  from committee  with                                                              
individual  recommendations and  the attached  fiscal note.  There                                                              
were no objections and it was so ordered.                                                                                       
                                                                                                                                
CHAIRMAN STEVENS adjourned the meeting at 2:50 p.m.                                                                             

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