Legislature(2001 - 2002)

04/25/2002 02:35 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 25, 2002                                                                                         
                             2:35 pm                                                                                            
                                                                                                                                
                                                                                                                                
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. 212(L&C)                                                                                                  
"An Act requiring a subcontractor  to obtain workers' compensation                                                              
insurance  covering  the  subcontractor  and  the  subcontractor's                                                              
employees  and establishing  responsibility  of  a contractor  for                                                              
obtaining  workers' compensation  coverage  for the  subcontractor                                                              
and the  subcontractor's employees  if the subcontractor  fails to                                                              
obtain  workers'  compensation  coverage;  and  providing  for  an                                                              
effective date."                                                                                                                
                                                                                                                                
     MOVED SCSHB 212(L&C) OUT OF COMMITTEE                                                                                      
                                                                                                                                
SENATE BILL NO. 252                                                                                                             
"An Act renaming  the Alaska Human Resource Investment  Council as                                                              
the  Alaska  Workforce  Investment   Board  and  relating  to  its                                                              
membership; repealing  the termination date of the  state training                                                              
and  employment  program;  relating  to  employment  and  training                                                              
activities; and providing for an effective date."                                                                               
                                                                                                                                
     MOVED CSSB 252(L&C) OUT OF COMMITTEE                                                                                       
                                                                                                                                
CS FOR HOUSE BILL NO. 504(L&C)                                                                                                  
"An Act relating  to the wages of people working  in the fisheries                                                              
business; and providing for an effective date."                                                                                 
                                                                                                                                
     MOVED CSHB 504(L&C) OUT OF COMMITTEE                                                                                       
                                                                                                                                
CS FOR HOUSE JOINT RESOLUTION NO. 38(L&C)                                                                                       
                                                                                                                                
Relating to  urging the United  States Congress to  pass terrorism                                                              
risk protection legislation.                                                                                                    
                                                                                                                                
     MOVED CSHJR 38(L&C) OUT OF COMMITTEE                                                                                       
                                                                                                                                
CS FOR HOUSE BILL NO. 443(L&C)                                                                                                  
"An  Act retroactively  extending  the application  and  licensing                                                              
deadlines and  amending the effective  date of certain  provisions                                                              
relating  to regulation  of  persons  who practice  tattooing  and                                                              
permanent cosmetic  coloring or body  piercing; and  providing for                                                              
an effective date."                                                                                                             
                                                                                                                                
     MOVED CSHB 443(L&C) OUT OF COMMITTEE                                                                                       
                                                                                                                                
CS FOR HOUSE BILL NO. 182(FIN) am                                                                                               
"An Act  relating to certain  vehicles, including  motorcycles and                                                              
trailers;  relating  to  the  registration,   bonding,  and  other                                                              
regulation of motor vehicle dealers;  relating to the registration                                                              
and  other regulation  of certain  motor  vehicle buyers'  agents;                                                              
relating to  acts and transactions  involving vehicles,  including                                                              
trailers, and  to the  acts and practices  of certain  persons and                                                              
entities  involved  in  vehicle  transactions,  including  trailer                                                              
transactions;  relating to  consumer protection  for used  vehicle                                                              
buyers;  amending Rule  3, Alaska  Rules of  Civil Procedure;  and                                                              
providing for an effective date."                                                                                               
                                                                                                                                
     MOVED SCSHB 182(L&C) OUT OF COMMITTEE                                                                                      
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
HB 212 - No previous action to consider.                                                                                        
                                                                                                                                
SB 252 - See Labor & Commerce minutes dated 2/14/02 & 4/18/02.                                                                  
                                                                                                                                
HB 504 - No previous action to consider.                                                                                        
                                                                                                                                
HJR 38 - No previous action to consider.                                                                                        
                                                                                                                                
HB 443 - No previous action to consider.                                                                                        
                                                                                                                                
HB 182 - No previous action to consider.                                                                                        
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Ms. Rebecca Gamez, Deputy Commissioner                                                                                          
Department of Labor & Workforce                                                                                                 
  Development                                                                                                                   
PO Box 21149                                                                                                                    
Juneau, AK 99802-1149                                                                                                           
POSITION STATEMENT: Commented on SB 252.                                                                                      
                                                                                                                                
Mr. Mike Shiffer, Program Coordinator                                                                                           
Workforce Investment Office, State Training and Employment                                                                      
Program (STEP)                                                                                                                  
Department of Labor Workforce Development                                                                                       
3301 Eagle St. Ste. 106                                                                                                         
Anchorage AK 99503-8569                                                                                                         
POSITION STATEMENT:  Commented on SB 252.                                                                                     
                                                                                                                                
Mr. James Wakefield                                                                                                             
Balance of State Workforce Investment Board                                                                                     
17325 Pt. Lena Loop Rd.                                                                                                         
Juneau AK 99801                                                                                                                 
POSITION STATEMENT: Supported SB 252.                                                                                         
                                                                                                                                
Ms. Linda Sylvester                                                                                                             
Representative Pete Kott                                                                                                        
State Capitol Bldg.                                                                                                             
Juneau AK 99811                                                                                                                 
POSITION STATEMENT: Commented on HB 504.                                                                                      
                                                                                                                                
Ms. Stephanie Madsen, Vice President                                                                                            
Pacific Seafood Processor's Association                                                                                         
213 3rd Street #104                                                                                                             
Juneau AK 99801                                                                                                                 
POSITION STATEMENT: Supported HB 504.                                                                                         
                                                                                                                                
Mr. John Brown, President                                                                                                       
Central Labor Council                                                                                                           
AFL-CIO                                                                                                                         
Juneau AK 99801                                                                                                                 
POSITION STATEMENT: Opposed HB 504.                                                                                           
                                                                                                                                
Mr. Darryl Tseu                                                                                                                 
Inland Boatman's Union of the Pacific                                                                                           
Vintage Business Park Ste. 201                                                                                                  
Juneau AK 99801                                                                                                                 
POSITION STATEMENT: Opposed HB 504.                                                                                           
                                                                                                                                
Commissioner Ed Flanagan                                                                                                        
Department of Labor & Workforce                                                                                                 
  Development                                                                                                                   
PO Box 21149                                                                                                                    
Juneau, AK 99802-1149                                                                                                           
POSITION STATEMENT: Opposed HB 504.                                                                                           
                                                                                                                                
Ms. Barbara Huff Tuckness                                                                                                       
Teamsters Local 959, State of Alaska                                                                                            
Anchorage AK 99503                                                                                                              
POSITION STATEMENT: Opposed HB 504.                                                                                           
                                                                                                                                
Representative Joe Hayes                                                                                                        
State Capital Bldg.                                                                                                             
Juneau AK 99811                                                                                                                 
POSITION STATEMENT: Sponsor HJR 38.                                                                                           
                                                                                                                                
Ms. Sharon O'Dell, Chief of Staff                                                                                               
Representative Vic Kohring                                                                                                      
State Capitol Bldg.                                                                                                             
Juneau AK 99811                                                                                                                 
POSITION STATEMENT: Sponsor of HB 443.                                                                                        
                                                                                                                                
Ms. Gail McCann                                                                                                                 
Owner, Electrolysis Clinic                                                                                                      
532 Lee Drive                                                                                                                   
Fairbanks AK 99709                                                                                                              
POSITION STATEMENT: Supported HB 443.                                                                                         
                                                                                                                                
Mr. Joe Schoolcraft                                                                                                             
Two Moons Body Piercing and Tattooing                                                                                           
POB 1136                                                                                                                        
Soldotna AK 99669                                                                                                               
POSITION STATEMENT: Opposed HB 443.                                                                                           
                                                                                                                                
Mr. Todd Gipson                                                                                                                 
Two Moons Body Piercing and Tattooing                                                                                           
44720 Sterling Hwy.                                                                                                             
Soldotna AK 99669                                                                                                               
POSITION STATEMENT: Opposed HB 443.                                                                                           
                                                                                                                                
Mr. Jeff Martin                                                                                                                 
Muttleys Tattoo Clinic                                                                                                          
224 N. Yenlo Ste. 3B                                                                                                            
Wasilla AK 99654                                                                                                                
POSITION STATEMENT: Supported HB 443.                                                                                         
                                                                                                                                
Mr. Andy Kopczenski                                                                                                             
American Tattoo                                                                                                                 
HC 89, Box 259                                                                                                                  
Willow AK 99688                                                                                                                 
POSITION STATEMENT: Opposed HB 443.                                                                                           
                                                                                                                                
Mr. Don Whattley                                                                                                                
Alliance of Automobile Manufacturers                                                                                            
No address provided                                                                                                             
POSITION STATEMENT: Supported HB 182.                                                                                         
                                                                                                                                
Mr. Mark Mueller                                                                                                                
General Motors                                                                                                                  
Detroit MI                                                                                                                      
POSITION STATEMENT: Supported HB 182.                                                                                         
                                                                                                                                
Mr. Stan Hurst                                                                                                                  
Chrysler Corporation                                                                                                            
POSITION STATEMENT:  Supported HB 182.                                                                                        
                                                                                                                                
Ms. Kerry Hennings, Driver Licensing                                                                                            
Division of Motor Vehicles                                                                                                      
Department of Administration                                                                                                    
3300 Fairbanks St.                                                                                                              
Anchorage AK 99503                                                                                                              
POSITION STATEMENT:  Supported HB 182.                                                                                        
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 02-24, SIDE A                                                                                                            
Number 001                                                                                                                      
        HB 212-WORKERS' COMP:CONTRACTORS & SUBCONTRACTOR                                                                    
                                                                                                                              
CHAIRMAN BEN STEVENS called the Senate  Labor & Commerce Committee                                                            
meeting to  order at  2:35 pm and  announced HB  212 to be  up for                                                              
consideration.                                                                                                                  
                                                                                                                                
SENATOR LEMAN said he didn't see  any reason to have a retroactive                                                              
effective date  and moved to change  it to January 1,  2003. There                                                              
were no objections and it was so ordered.                                                                                       
                                                                                                                                
SENATOR DAVIS  moved to pass SCS  HB 212(L&C) from  committee with                                                              
individual recommendations.                                                                                                     
                                                                                                                                
SENATOR  AUSTERMAN   objected.  SENATORS  DAVIS,   TORGERSON,  and                                                              
STEVENS voted yea; SENATORS LEMAN  AND AUSTERMAN voted nay and SCS                                                              
HB 212(L&C) moved from committee.                                                                                               
                                                                                                                                
          SB 252-EMPLOYMENT AND TRAINING PROGRAM/BOARD                                                                      
                                                                                                                                
CHAIRMAN STEVENS announced SB 252 to be up for consideration.                                                                   
                                                                                                                                
SENATOR TORGERSON moved to adopt amendment #1.                                                                                  
                                                                                                                                
                                                      22-GS2052\F.5                                                             
                                                             Craver                                                             
                                                            2/10/03                                                             
                                                                                                                                
                        A M E N D M E N T                                                                                   
                                                                                                                                
                                                                                                                                
OFFERED IN THE SENATE                      BY SENATOR TORGERSON                                                                 
     TO:  CSSB 252(   ), Draft Version "F"                                                                                      
                                                                                                                                
Page 15, lines 13 - 23:                                                                                                         
     Delete all material.                                                                                                       
                                                                                                                                
Renumber the following bill sections accordingly.                                                                               
                                                                                                                                
Page 30, line 14:                                                                                                               
     Delete "sec. 57"                                                                                                           
     Insert "sec. 56"                                                                                                           
                                                                                                                                
Page 30, line 16:                                                                                                               
     Delete "secs. 1 - 47"                                                                                                      
     Insert "secs. 1 - 46"                                                                                                      
                                                                                                                                
Page 31, line 7:                                                                                                                
     Delete "48" in two places                                                                                                  
     Insert "47" in two places                                                                                                  
                                                                                                                                
Page 31, line 8:                                                                                                                
     Delete "sec. 48"                                                                                                           
     Insert "sec. 47"                                                                                                           
                                                                                                                                
Page 31, line 9:                                                                                                                
     Delete "Section 48"                                                                                                        
     Insert "Section 47"                                                                                                        
                                                                                                                                
     Page 31, line 10:                                                                                                          
     Delete "Section 52(a)"                                                                                                     
     Insert "Section 51(a)"                                                                                                     
                                                                                                                                
Page 31, line 11:                                                                                                               
     Delete "secs. 55 and 56"                                                                                                   
     Insert "secs. 54 and 55"                                                                                                   
                                                                                                                                
He explained  that it deletes the  language that has  lapsed since                                                              
the  Alaska  Technical  and Vocational  Education  Fund.  A  legal                                                              
opinion says it's  problematic if they keep it.  He explained that                                                              
basically the  money is available  for them to take  whenever they                                                              
want and they can't dedicate it to another source.                                                                              
                                                                                                                                
CHAIRMAN STEVENS asked if the lapsed funds automatically go back                                                                
into the general fund.                                                                                                          
                                                                                                                                
SENATOR TORGERSON answered, "It doesn't do anything. It leaves                                                                  
them right there."                                                                                                              
                                                                                                                                
There were no objections and amendment #1 was adopted.                                                                          
                                                                                                                                
SENATOR TORGERSON asked his staff, Mary Jackson, to explain                                                                     
amendment #2.                                                                                                                   
                                                                                                                                
MS. MARY JACKSON, Staff to Senator Torgerson, said this                                                                         
references subsection 6 in the study.                                                                                           
                                                                                                                                
     The department  says that they  are going to be  able to                                                                   
     respond  to  the  questions  that  were  posed  by  this                                                                   
     committee  previously. If  in  fact, that  is the  case,                                                                   
     then you would  be able to go forward and  delete item 6                                                                   
     from  your   study.  The  same  applies  for   the  next                                                                   
     amendment.  That next  amendment  references the  study,                                                                   
     section 8.                                                                                                                 
                                                                                                                                
She referred to page 29 of the CS, line 14.                                                                                     
                                                                                                                                
     The  department believes  essentially  that the  reports                                                                   
     that they  are providing on an annual  basis encompasses                                                                   
     this and  already gives you  that information.  What the                                                                   
     audit  suggested was that  a review  of this program  in                                                                   
     the  context of the  new federal  legislation should  be                                                                   
     undertaken. And that, frankly,  was the intent of #6 and                                                                   
     it may  just be  that some tweaking  of the language  is                                                                   
     necessary  so the  department has a  comfort level  with                                                                   
     what is  necessary. There is  a new federal  program; it                                                                   
     needs to  be reviewed  in the context  of what the  STEP                                                                   
     currently provides  and that was  the intent of #6  - is                                                                   
     that they  provide facts that  support the need  for the                                                                   
     State Training and Employment Program.                                                                                     
                                                                                                                                
SENATOR TORGERSON moved amendment #2.                                                                                           
                                                      22-GS2052\F.1                                                             
                                                             Craver                                                             
                                                            2/10/03                                                             
                                                                                                                                
                                                                                                                                
                        A M E N D M E N T                                                                                   
                                                                                                                                
                                                                                                                                
OFFERED IN THE SENATE                      BY SENATOR TORGERSON                                                                 
     TO:  CSSB 252(   )                                                                                                         
Page 29, line 14:                                                                                                               
     Delete all material.                                                                                                       
                                                                                                                                
Renumber the following paragraphs accordingly.                                                                                  
                                                                                                                                
                                                                                                                                
There were no objections and it was adopted.                                                                                    
                                                                                                                                
SENATOR TORGERSON moved amendment #3.                                                                                           
                                                                                                                                
                                                      22-GS2052\F.2                                                             
                                                             Craver                                                             
                                                            2/10/03                                                             
                                                                                                                                
                                                                                                                                
                        A M E N D M E N T                                                                                   
                                                                                                                                
                                                                                                                                
OFFERED IN THE SENATE                      BY SENATOR TORGERSON                                                                 
     TO:  CSSB 252(   )                                                                                                         
                                                                                                                                
Page 29, line 14, following "program;":                                                                                         
     Insert "and"                                                                                                               
                                                                                                                                
Page 29, line 17:                                                                                                               
     Delete "; and "                                                                                                            
     Insert "."                                                                                                                 
                                                                                                                                
Page 29, lines 18 - 19:                                                                                                         
     Delete all material.                                                                                                       
                                                                                                                                
                                                                                                                                
SENATOR LEMAN asked why this language was being deleted.                                                                        
                                                                                                                                
MS. JACKSON said the Department would give them information today                                                               
that would answer his question on #8.                                                                                           
                                                                                                                                
MS. REBECCA GAMEZ, Deputy Commissioner,  Department of Labor, said                                                              
she  Mr.  Mike Shiffer,  Program  Coordinator  for  the  Workforce                                                              
Investment  Office   that  administers  the  State   Training  and                                                              
Employment  Program  (STEP),  would explain  the  amendments  that                                                              
would delete 6 and 8.                                                                                                           
                                                                                                                                
MR. SHIFFER explained:                                                                                                          
                                                                                                                                
     Regarding the decision to request  that we delete #6, we                                                                   
     feel  that  the  annual  report   that  is  produced  in                                                                   
     coordination  between the  Department of  Labor and  the                                                                   
     Alaska Human  Resource Investment Council,  that details                                                                   
     the performance of the STEP  program on an annual basis,                                                                   
     speaks  to  the  issues  about  the  on-going  need  for                                                                   
     supporting the State Training  Employment Program. It is                                                                   
     the state's  most successful job training  program. It's                                                                   
     the  only program  that the  state actually  contributes                                                                   
     dollars towards the job-training  program. So, all other                                                                   
     job  training dollars  are  federal funds.  Between  the                                                                   
     two, as  well as  the fact that  the program has  funded                                                                   
     over the last  10 years over 10,000 people  in receiving                                                                   
     training  services,  we feel  that  there is  clear  and                                                                   
     ample  evidence  that  there  is  a need  for  the  STEP                                                                   
     program. We  have the most  recent draft of  the FY2001,                                                                   
     which  continues to  demonstrate that  the STEP  program                                                                   
     continues  to meet  the performance  measures that  have                                                                   
     been laid  out for  it. We would,  therefore, move  that                                                                   
     item 6 is  not necessary given all this other  work that                                                                   
     is going on.                                                                                                               
                                                                                                                                
MS. GAMEZ said they have draft copies of the most recent STEP                                                                   
report that had not officially been adopted by the Human Resource                                                               
Investment Council.                                                                                                             
                                                                                                                                
MR. SHIFFER continued to explain item 8.                                                                                        
                                                                                                                                
     The question  relates to the issue about  the difference                                                                   
     between  public  institution  funding and  the  apparent                                                                   
     increase in  union training. We have  recently completed                                                                   
     our report to  you, Senator, in which you  asked us last                                                                   
     week about  that. We believe that report  satisfactorily                                                                   
     explains  how the  funds have  been distributed  between                                                                   
     FY'97 and  FY'00. It demonstrates  that while  there was                                                                   
     an increase  in FY 2000,  that reflected an  anomaly and                                                                   
     when we compare  across all of the years,  you don't see                                                                   
     a typical shift to the union  programs. It just happened                                                                   
     significantly in one year.                                                                                                 
                                                                                                                                
MS. GAMEZ said that is covered under question #1 in the                                                                         
April 24 letter that was delivered to the committee.                                                                            
                                                                                                                                
CHAIRMAN STEVENS asked if there were any objections to amendment                                                                
#3. There were none and it was adopted.                                                                                         
                                                                                                                                
SENATOR TORGERSON moved amendment #4.                                                                                           
                                                                                                                                
                                                      22-GS2052\F.4                                                             
                                                             Craver                                                             
                                                            2/10/03                                                             
                                                                                                                                
                        A M E N D M E N T                                                                                   
                                                                                                                                
                                                                                                                                
OFFERED IN THE SENATE                      BY SENATOR TORGERSON                                                                 
     TO:  CSSB 252(   ), Draft Version "F"                                                                                      
                                                                                                                                
                                                                                                                                
Page 28, line 31:                                                                                                               
     Delete "2003"                                                                                                          
     Insert "2004"                                                                                                          
                                                                                                                                
He was  reluctant to  offer it,  however, because  he wasn't  sure                                                              
that he agreed  with the Department that this is  the best program                                                              
we have in the state.                                                                                                           
                                                                                                                                
     It needs  to be looked  at. We do  this every year  - go                                                                   
     into this  program and  we find  problems with it.  It's                                                                   
     not the  only general  fund money that  we spend  in the                                                                   
     state  on training.  It's far  from it. As  a matter  of                                                                   
     fact,  it's  not  even general  fund  money  that  we're                                                                   
     spending   on   the  training   program.   Their   total                                                                   
     allocation  is  $3 million  or  $3.4 or  something.  So,                                                                   
     there's a lot more money besides  this. But at any rate,                                                                   
     the audit  clearly brought out some problems  within the                                                                   
     program that  need to be looked  at and they need  to be                                                                   
     looked at in the shortest time frame possible…                                                                             
                                                                                                                                
CHAIRMAN STEVENS  asked if  there were  any further objections  to                                                              
amendment #4.  There were  no further  objections and amendment  4                                                              
was adopted.                                                                                                                    
                                                                                                                                
CHAIRMAN STEVENS  said another technical  amendment was  needed to                                                              
delete the word "Investment" throughout  the bill wherever it says                                                              
"Alaska Workforce Investment Board".                                                                                            
                                                                                                                                
SENATOR TORGERSON asked why.                                                                                                    
                                                                                                                                
CHAIRMAN STEVENS said that it was requested by the Department.                                                                  
                                                                                                                                
MS. GAMEZ explained:                                                                                                            
                                                                                                                                
     As  I spoke  with  you last  week,  under the  Workforce                                                                   
     Investment Act,  the protocol of names has  changed. So,                                                                   
     instead of having service delivery  areas, they now have                                                                   
     local   workforce  investment   boards  and  the   Human                                                                   
     Resource  Investment  Council  (HRIC)  voted in  one  of                                                                   
     their  meetings  that  it  be   changed  to  the  Alaska                                                                   
     Workforce  Board. They  thought the  acronym could  have                                                                   
     been a little too interesting…                                                                                             
                                                                                                                                
SENATOR AUSTERMAN  asked if  the federal act  has now  dropped the                                                              
word "Investment".                                                                                                              
                                                                                                                                
MS. GAMEZ replied:                                                                                                              
                                                                                                                                
     No, the  federal act is  still the Workforce  Investment                                                                   
     Act,   but    the   local   areas,   so    there's   the                                                                   
     Anchorage/MatSu  Local  Workforce Investment  Board  and                                                                   
     then  there  is  the balance  of  State  Goal  Workforce                                                                   
     Investment  Board  and  the  HRIC  Council  thought  the                                                                   
     Alaska Workforce  Board would  be a better acronym  than                                                                   
     the Alaska  Workforce Investment  Board because  of some                                                                   
     of the plays on the acronym.                                                                                               
                                                                                                                                
SENATOR AUSTERMAN objected. SENATORS TORGERSON, AUSTERMAN, and                                                                  
STEVENS voted nay; SENATORS DAVIS and LEMAN voted yea; and the                                                                  
amendment failed.                                                                                                               
                                                                                                                                
CHAIRMAN STEVENS said they would take testimony from the public                                                                 
now.                                                                                                                            
                                                                                                                                
MR. JAMES WAKEFIELD, Juneau realtor, said he supported the STEP                                                                 
program.                                                                                                                        
                                                                                                                                
     I am taking  this time away from my business  to testify                                                                   
     because I believe that job training  is an integral part                                                                   
     of economic  development and  a healthy economy.  I also                                                                   
     serve  as the Chair  of the  Balance of State  Workforce                                                                   
     Investment  Board  for  the   same  reason.  I  am  here                                                                   
     representing  the Board today.  In fact, we're  somewhat                                                                   
     frustrated that  we're even here discussing  this issue.                                                                   
     STEP  has  trained 13,000  Alaskans  since  1989 and  we                                                                   
     believe it  should have become a permanent  program some                                                                   
     time  ago.   If  there  are  occasional  issues   to  be                                                                   
     addressed,  it can always be  tweaked without  having to                                                                   
     go through  a complete  reauthorization every couple  of                                                                   
     years. If  you do  not make it  a permanent program,  at                                                                   
     least reauthorize  it for four  years as recommended  in                                                                   
     your  audit.   We  work  under  limited   administrative                                                                   
     dollars  and  when staff  has  to spend  expensive  time                                                                   
     continually  defending the program,  that is time  taken                                                                   
     away  from  providing  those   services.  Providers  and                                                                   
     businesses are always wondering  if that program will be                                                                   
     around for  another year and  if this is the  vehicle to                                                                   
     commit their energies towards  if it is going to be gone                                                                   
     next year.                                                                                                                 
                                                                                                                                
     Alaska  is facing  a  problem,  as is  the  rest of  the                                                                   
     nation,  of a graying  of the  workforce, especially  in                                                                   
     our  construction and  resource industries.  STEP has  a                                                                   
     good track  record of training  in these industries.  We                                                                   
     are  also facing the  rapid changes  in technology  that                                                                   
     requires  that  businesses  today  need  to  continually                                                                   
     retrain  incumbent workers to  remain competitive.  STEP                                                                   
     does not require  expenditure from the general  fund, as                                                                   
     you are aware.  It comes from employee  contributions to                                                                   
     the  U.I. trust  fund. Using  U.I. funds  to get  people                                                                   
     back  to work  where they  contribute  rather than  draw                                                                   
     down on  unemployment insurance  resources always  makes                                                                   
     good  business   sense.  Employers  must   have  skilled                                                                   
     applicants  to  choose  from   in  filling  their  jobs.                                                                   
     Incumbent worker training is  a big issue in the private                                                                   
     sector  and if  businesses can  retain employees  rather                                                                   
     than  laying   them  off,  it  not  only   benefits  the                                                                   
     businesses, it benefits the  local economy and the trust                                                                   
     fund.                                                                                                                      
                                                                                                                                
     STEP  has  been  a vehicle  for  increased  outreach  by                                                                   
     apprentice  programs  in rural  areas  giving the  local                                                                   
     residents opportunities  for higher paying  construction                                                                   
     jobs  that used  to go  to outsiders.  You have  already                                                                   
     heard  a couple  of  the  success stories,  like  Hyder,                                                                   
     where over  half of the  eligible workforce in  town has                                                                   
     been trained and is working  in their new bottling plant                                                                   
     and Nome where locals are being  trained and employed to                                                                   
     assemble  fuel storage  plants for  rural Alaska.  There                                                                   
     are numerous stories like this  involving not only major                                                                   
     corporations, but small mom and pop businesses.                                                                            
                                                                                                                                
     As we talk  to other entities across the  nation on what                                                                   
     they're  doing  in  employment training,  we  tell  them                                                                   
     about the program that we're  doing here and some of the                                                                   
     stories and we've been encouraged  to apply for national                                                                   
     recognition on some of these  - because they are so well                                                                   
     received.                                                                                                                  
                                                                                                                                
     Our Board did a customer survey  this year - the Balance                                                                   
     of  State  Workforce  Investment Board  survey,  with  a                                                                   
     mailing  of over 900  surveys to  STEP participants  all                                                                   
     over  our  area,  which  encompasses  the  entire  state                                                                   
     within  exclusion  of  Anchorage and  the  MatSu.  These                                                                   
     Alaskans   confirmed   an  extremely   high   level   of                                                                   
     satisfaction  with  STEP  services.  Over  87%  of  them                                                                   
     indicated that  they were satisfied  on a level of  7 or                                                                   
     better on a 10 point scale and  70% marked in 9 or 10 on                                                                   
     the  satisfaction of  the services.  Over  94% of  these                                                                   
     Alaskans said  they would recommend  STEP to  family and                                                                   
     friends.   STEP   works   and  the   people   who   have                                                                   
     participated  in  the  program are  satisfied  with  the                                                                   
     services.                                                                                                                  
                                                                                                                                
     The only concern our Board has  at this time, and we are                                                                   
     working with  staff to address  this issue, and  that is                                                                   
     the process  - we  in the private  sector become  easily                                                                   
     frustrated  with  paperwork.  The Board  has  asked  the                                                                   
     staff to  try and streamline  the process to  minimalize                                                                   
     the  paperwork  and still  have  the oversight  that  is                                                                   
     necessary  for publicly  funded funds.  I thank you  for                                                                   
     your time and ask you to strongly  consider these issues                                                                   
     I have addressed today.                                                                                                    
                                                                                                                                
CHAIRMAN TORGERSON said they took  out the lapsed funding language                                                              
and it's  still in  the title so  that needs to  be taken  out. He                                                              
moved  on  page 1,  line  3,  to delete  "providing  that  lapsing                                                              
employment assistance  and training  program account funds  may be                                                              
appropriated  to the  Alaska  Technical and  Vocational  Education                                                              
Program." There were no objections and it was so adopted.                                                                       
                                                                                                                                
CHAIRMAN  TORGERSON moved  to pass  CSSB  252(L&C) from  committee                                                              
with  individual  recommendations  and accompanying  fiscal  note.                                                              
There were no objections and it was so ordered.                                                                                 
                                                                                                                                
              HB 504-WAGES FOR WORKERS IN FISHERIES                                                                         
                                                                                                                                
CHAIRMAN STEVENS announced HB 504 to be up for consideration.                                                                   
                                                                                                                                
MS. LINDA SYLVESTER, Staff to Representative  Pete Kott, explained                                                              
that HB 504 addresses wages for fisheries.  It is not connected to                                                              
the minimum wage increase, but it  came about in discussion on the                                                              
telephone  with different  businesses  when the  minimum wage  was                                                              
beginning proposed  to go  up to $7.15  per hour. They  complained                                                              
that they had  valid reasons for exemptions. Statutes  has nothing                                                              
for most situations,  but there is a section of the  Wage and Hour                                                              
Act that clearly  addresses the fisheries business.  She read from                                                              
AS 23.10.085 (c):                                                                                                               
                                                                                                                                
     It provides  that the regulations may  permit deductions                                                                   
     by an  employer from the  minimum wage to  employees for                                                                   
     the  reasonable  cost  as determined  on  an  occupation                                                                   
     basis  of  furnishing  board  or  lodging  if  board  or                                                                   
     lodging  is customarily  furnished by  the employer  and                                                                   
     used by the employee.                                                                                                      
                                                                                                                                
She  said  that   clearly  fits  the  fisheries   business,  which                                                              
customarily  provides   board  and  lodging  for   its  employees.                                                              
Typically most  of those businesses  are remote and  the locations                                                              
don't  have alternative  public board  and  lodging. The  enabling                                                              
regulation of the  statute she just read requires  that based on a                                                              
written  agreement   an  employer  can  take  deductions   if:  1.                                                              
Alternative public board and lodging  facilities are accessible to                                                              
the  work  sight  and  the  employee  has  declined  to  use  such                                                              
facilities; 2.  The board and  lodging facilities of  the employer                                                              
are  customarily  furnished  by  the  employer  and  used  by  the                                                              
employees;  and 3. The  cost to the  employee for  the use  of the                                                              
board and lodging  facilities is reasonable and  without profit to                                                              
the employer.                                                                                                                   
                                                                                                                                
They decided that the regulation  was either improperly drafted or                                                              
was being misinterpreted.                                                                                                       
                                                                                                                                
She explained that  they are taking the fisheries  business out of                                                              
the statute and  putting them in their own statute  where they can                                                              
make deductions for room and board.                                                                                             
                                                                                                                                
Further, the Fair  Labor Standards Act includes a  test saying the                                                              
cost  of the room  and board  has to  be reasonable  and it  can't                                                              
profit the employer. They have deleted  that language and inserted                                                              
up  to $15  per day  for every  eight-hour day  that the  employee                                                              
works. It is all  spelled out in a contract the  employee signs at                                                              
the beginning  of the work season.  They feel that there  is ample                                                              
security that  the employee has a  choice from the  get-go whether                                                              
or not they  wanted to work in  a fish camp. "The choice  is there                                                              
at the time of hire."                                                                                                           
                                                                                                                                
MS. SYLVESTER  said there  was a court  case in Juneau  decided by                                                              
Judge Weeks  in 1999  that stipulates  the exact  same thing  that                                                              
they are arguing in regulation 88AC151609d).  It should be read as                                                              
allowing   board  and   lodging   deductions   in  the   following                                                              
circumstances:                                                                                                                  
1. If  alternative public facilities  are available,  then (d)(1),                                                              
which requires  alternative board and lodging, is  applicable and,                                                              
therefore, (d)(1), (d)(2) and (d)(3) must be satisfied; and                                                                     
                                                                                                                                
2. If there  are no public alternative facilities  available, then                                                              
(d)(1)  does  not  apply  and  (d)(2)  and  (d)(3)  must  both  be                                                              
satisfied.                                                                                                                      
                                                                                                                                
She said this case is being appealed  and is in the Supreme Court.                                                              
At least  one court has determined  that it's very clear  that the                                                              
legislature intended  for the Department  of Labor to look  at all                                                              
of the occupations,  whether remote or  in an urban area,  if they                                                              
provide room  and board, that it's  fair for them to come  up with                                                              
some kind of  mechanism to receive payment from  its employees for                                                              
that. "It's  a situation  where the  fishing industry  isn't  in a                                                              
position any longer to absorb all of the costs."                                                                                
                                                                                                                                
MS. SYLVESTER said this is not a  "bail out" for the industry, but                                                              
a  clarifying  of  the  intent  of  the  statutes  from  the  very                                                              
beginning of the state of Alaska.                                                                                               
                                                                                                                                
MS. STEFANIE  MADSEN, Vice  President, Pacific Seafood  Processors                                                              
Association,  said  they had  been  in  existence since  1914  and                                                              
supported HB  504. It is a tool  that allows them to  adapt to the                                                              
ever-changing economics in the seafood processing industry.                                                                     
                                                                                                                                
     The  seafood processing  industry  is  diverse. We  have                                                                   
     salmon processors that operate  for 4 - 6 weeks; we have                                                                   
     ground-fish plants  that operate  10 - 11 months  out of                                                                   
     the  year;  we have  remote  sites; we  have  non-remote                                                                   
     sites; we're very diverse. The  regulations as presented                                                                   
     already  make a  differential  between remote  operators                                                                   
     and non-remote operators. The  non-remote operators have                                                                   
     been allowed  to deduct  room and  board for some  time.                                                                   
     Some  do; some  don't. Some  charge $8  and some  charge                                                                   
     $10; some rebate  at the end of the season;  some don't.                                                                   
     What we're asking  you today is to provide  those remote                                                                   
     operators the  opportunity to  deduct room and  board to                                                                   
     again  be  flexible  in adapting  to  the  ever-changing                                                                   
     economics.                                                                                                                 
                                                                                                                                
     I  would  add a  little  bit  of information  about  the                                                                   
     seafood   processing   industry.    We're   very   labor                                                                   
     intensive.  We have a lot  of entry-level positions  and                                                                   
     those are  truly the positions that we're  talking about                                                                   
     today. We have  been described as one of  the last entry                                                                   
     level  employers around.  You  can come  to the  seafood                                                                   
     industry  without  any  work  history  and  without  any                                                                   
     education  and have a  job on what  has been termed  the                                                                   
     slime line.  If you do  your work, you have  incremental                                                                   
     increases, either by contract or by hours.                                                                                 
                                                                                                                                
MS. MADSEN said it was possible that  there was a misunderstanding                                                              
that every processor would go out  there and charge $15 or more if                                                              
they can demonstrate  costs to every employee that  they have, but                                                              
that won't happen, because the market  is going to drive what they                                                              
are  able   to  pay   employees.  Most   every  processor   has  a                                                              
differential and pay different wages.  They deduct differently and                                                              
provide  different  benefits  because they  are  among  themselves                                                              
competitors  and also  competitors with  the Lower  48 to  attract                                                              
employees. Just  by passage  of this bill  doesn't mean  that they                                                              
are going to be able to go out and  do what the bill says they are                                                              
allowed to do. "All we're asking  for today is the ability to have                                                              
some flexibility  in  how we can  control the  efficiency and  the                                                              
expenses of our operations.                                                                                                     
                                                                                                                                
SENATOR DAVIS asked how many people she represented.                                                                            
                                                                                                                                
MS. MADSEN  replied that  she represents 11  of the major  seafood                                                              
processing companies  and that there  are about 300  including mom                                                              
and pop operations.                                                                                                             
                                                                                                                                
SENATOR DAVIS asked  what made the difference between  the mom and                                                              
pops.                                                                                                                           
                                                                                                                                
MS. MADSEN  replied out  of their  11 employees,  four or  five of                                                              
them are in the top 100 employers in the state.                                                                                 
                                                                                                                                
MR. JOHN BROWN,  President, Central Labor Council  (AFL-CIO), said                                                              
he was  sympathetic to  the industry  problems, but felt  strongly                                                              
that  they should  not  be looking  to  the lowest  paid,  hardest                                                              
working  people  in  our state  to  try  and  bail it  out.  Fifty                                                              
thousand people signed a petition  in the state last year to raise                                                              
the minimum  and this bill  seeks to  reduce the minimum  wage for                                                              
people who  are the least  able to absorb  it. "Please  don't pass                                                              
this bill. It's wrong."                                                                                                         
                                                                                                                                
SENATOR  AUSTERMAN asked  within the definition  of the  fisheries                                                              
business that this bill affects how  many of those workers does he                                                              
represent.                                                                                                                      
                                                                                                                                
MR. BROWN replied  that he didn't represent any  of those workers.                                                              
Fairbanks doesn't have any fish processors that he knows of.                                                                    
                                                                                                                                
     I represent  working people everywhere. That's  what the                                                                   
     AFL-CIO does.  They don't just represent  their members.                                                                   
     These are  the people  who have the  least voice  of any                                                                   
     worker  because they don't  have representation.  That's                                                                   
     why they can depend on the state  and federal government                                                                   
     to  pass   laws  that  keep  them  from   being  further                                                                   
     exploited by the work that they do.                                                                                        
                                                                                                                                
SENATOR AUSTERMAN explained that  part of the bill talks about the                                                              
only  way that  they  can deduct  this  is if  it's  in a  written                                                              
agreement with  the worker  or a union  that has an  agreement and                                                              
asked if  that wouldn't  lay the  burden back  on the employee  to                                                              
decide.                                                                                                                         
                                                                                                                                
MR. BROWN replied:                                                                                                              
                                                                                                                                
     Think  to  yourself how  much  choice someone  in  their                                                                   
     position  has in  negotiating  whether or  not they  are                                                                   
     going to  pay the  company for their  room and board  or                                                                   
     not. I mean, here is a person  who is unemployed and the                                                                   
     job  he is  seeking  is paying  minimum  wage. How  much                                                                   
     power  has that  individual  got to  negotiate the  fact                                                                   
     that the  company is  going to pay  his room and  board?                                                                   
     They  virtually have  no power  there. They  are at  the                                                                   
     mercy of  whoever is offering  them a job. She  can talk                                                                   
     about the  market all  she wants, but  the fact  is that                                                                   
     unemployment  is on  the rise;  it's been  on the  rise.                                                                   
     It's leveling  out now, but  there's lots of  people out                                                                   
     there looking for work and lots  of young people looking                                                                   
     for work.  That doesn't mean  that we should  stand back                                                                   
     and  let them  be paid  less  than minimum  wage. In  my                                                                   
     opinion slaves were better off than people working for                                                                     
     minimum wage. They had a roof over their head; they had                                                                    
     clothes to wear - a lot of them…                                                                                           
                                                                                                                              
TAPE 02-24, SIDE B                                                                                                            
                                                                                                                              
SENATOR AUSTERMAN  said he had done  a lot of work in  the seafood                                                              
business and  didn't consider them  slaves. "If I sign  a contract                                                              
that this is what I'm going to do, does that mean I'm a slave?"                                                                 
                                                                                                                                
MR. BROWN responded that he was saying  the type of lifestyle that                                                              
someone can  live making minimum wage  is nowhere close  to what I                                                              
think is  fair. "A slave at  some point in our  countries' history                                                              
was better off  than someone who is working at  minimum wage right                                                              
now as far as what they are able to afford."                                                                                    
                                                                                                                                
SENATOR AUSTERMAN  rebutted that  they sign  a contract  that says                                                              
they are accepting  the fact that  they are going to pay  room and                                                              
board and he fails to follow his logic.                                                                                         
                                                                                                                                
MR. BROWN retorted  that they sign a contract because  they need a                                                              
job. "They  need some income; they  don't have any income  at this                                                              
point."                                                                                                                         
                                                                                                                                
SENATOR AUSTERMAN  replied, "A lot of  us need jobs now  and then.                                                              
We walk down  the street until we  find one that pays  what we can                                                              
afford."                                                                                                                        
                                                                                                                                
MR. BROWN  responded,  "If we get  the right  opportunity,  we do,                                                              
sir, but a lot of us have a lot better opportunity than others…"                                                                
                                                                                                                                
CHAIRMAN  STEVENS asked  if  he heard  about  the  court case  Ms.                                                              
Sylvester mentioned.                                                                                                            
                                                                                                                                
MR. BROWN said he  heard that it is being appealed  to the Supreme                                                              
Court.                                                                                                                          
                                                                                                                                
CHAIRMAN  STEVENS said  the  decision out  of  the First  Judicial                                                              
District  in  Juneau said  that  the  statute currently  does  not                                                              
prohibit deductions  for board and lodging costs  when an employee                                                              
at  remote  sites  where alternative  public  facilities  are  not                                                              
available.                                                                                                                      
                                                                                                                                
MR. BROWN  said he  is not an  attorney, but this  is not  what he                                                              
thinks is right.                                                                                                                
                                                                                                                                
SENATOR AUSTERMAN asked if he would  have the same cause for other                                                              
people who work around the state at minimum wage.                                                                               
                                                                                                                                
MR. BROWN replied yes.                                                                                                          
                                                                                                                                
     I  would  make  the  same argument  for  anyone  who  is                                                                   
     working for  minimum wage. I spent quite  a considerable                                                                   
     amount of  my own time  collecting signatures to  get an                                                                   
     increase in  the minimum wage  on the ballot.  I believe                                                                   
     there needs to be a minimum  wage. People at that end of                                                                   
     the  wage  scale need  protection  from  government  and                                                                   
     that's why I did it.                                                                                                       
                                                                                                                                
MR.  DARRYL TSEU,  Inland  Boatman's Union  of  the Pacific,  said                                                              
although the intentions  of this bill are well  meaning, it leaves                                                              
some of his members with some concern.                                                                                          
                                                                                                                                
     The real victims  right now are fishermen  in Alaska and                                                                   
     our fishery  workers as well.  We question whether  this                                                                   
     bill  will actually  help our fishermen  who supply  the                                                                   
     fish in the first place. Fish  processors are controlled                                                                   
     by the  market and  unfortunately takes  the value  of a                                                                   
     captain's catch.  To hope that this bill  would assist a                                                                   
     crippled fishing  industry may  not be totally  true. It                                                                   
     doesn't  take time browsing  through the current  events                                                                   
     to find  corporate profits getting  in the way  of doing                                                                   
     what's right in the newspaper…                                                                                             
                                                                                                                                
He said  their concern  is also  that deductions  could be  higher                                                              
than $15  per day if the  employer demonstrates to  the department                                                              
that the  cost to employee is  reasonable. He challenges  the fact                                                              
that a  company can be  trusted to do  the right thing  especially                                                              
with today's  economy and global  competition. "The  company store                                                              
mentality was  wrong in the 19th  Century in plantations  and it's                                                              
still wrong in 2002."                                                                                                           
                                                                                                                                
SENATOR LEMAN said  he didn't see any connection  this bill has to                                                              
making fishermen victims. He said:                                                                                              
                                                                                                                                
     If  you reduce the  overhead to  the seafood  processor,                                                                   
     arguably that  money is available  to pay fishermen.  If                                                                   
     you increase the overhead, there's  less money available                                                                   
     to  pay  the fishermen.  This  bill,  instead,  probably                                                                   
     protects fishermen rather than makes them a victim.                                                                        
                                                                                                                                
MR. TSEU  replied that  his thinking was  when a company  dictates                                                              
the price  of fish and  how much it's able  to pay to  process it,                                                              
there's no way to say that's what their true expenses are.                                                                      
                                                                                                                                
SENATOR AUSTERMAN said he referred to plantations.                                                                              
                                                                                                                                
MR. TSEU said he  had discussions in the hallway  on this bill and                                                              
part of  his family  history came out  that his great  grandfather                                                              
and grandfather  both worked on  sugar cane plantations  in Hawaii                                                              
and they  signed a seven-year  contract to  provide the  labor and                                                              
they were also supplied  the housing, but they had  to pay for it.                                                              
They were forced  to buy everything from the company  store. After                                                              
a  seven-year stint  it  was evident  that  they  couldn't make  a                                                              
living wage  and couldn't get out  of their contract  because they                                                              
couldn't find any place else to move.                                                                                           
                                                                                                                                
SENATOR  AUSTERMAN asked  if  his union  agrees  with the  Central                                                              
Council  that anybody  who is  working  a minimum  wage should  be                                                              
provided room and board.                                                                                                        
                                                                                                                                
MR. TSEU  said he  didn't think that  was the  intent of  what Mr.                                                              
Brown was  saying. He  felt at this  point if  he was living  on a                                                              
minimum wage,  he would not  be able to  live. People he  knows in                                                              
town  working for  a  minimum wage  need to  have  two jobs.  That                                                              
concerns him, because then they are  not there with their children                                                              
where they should be at night.                                                                                                  
                                                                                                                                
SENATOR AUSTERMAN said  it was hard for him to  understand why the                                                              
unions haven't  been pushing for  room and board for  every person                                                              
who works for minimum wage.                                                                                                     
                                                                                                                                
MR. TSEU said at  first glance at the bill, he  would say that $15                                                              
dollars is not much for the cost  of living, but there is no limit                                                              
to it.  There is also language  that allows other  fish processors                                                              
in areas  where there other alternatives  to other housing  and he                                                              
has no problem with that. There is a choice.                                                                                    
                                                                                                                                
SENATOR  LEMAN  said it  might  well be  that  it would  cost  the                                                              
employer $30  or $40 per day to  provide room and board,  but they                                                              
also have  to compete for  workers and if  they raise the  fee and                                                              
the market place  doesn't go there, they're going  to have a tough                                                              
time getting enough workers.                                                                                                    
                                                                                                                                
MR.  TSEU said,  "It might  not be  correct for  companies to  get                                                              
together  and set  a price,  but we all  know that  kind of  thing                                                              
happens."                                                                                                                       
                                                                                                                                
MS. SYLVESTER said that there is  one inaccuracy. There is a limit                                                              
of $15 and  the Department of  Labor is the watchdog  agency. They                                                              
would have to okay anything in excess of $15.                                                                                   
                                                                                                                                
COMMISSIONER  ED  FLANIGAN,  Department  of  Labor  and  Workforce                                                              
Development, said that about three  weeks ago this committee moved                                                              
the minimum wage  increase bill and he thought  it was unfortunate                                                              
that  they are  here today  as a  result  of it  to undercut  that                                                              
increase for a  large percentage of the people  that it's intended                                                              
to help.                                                                                                                        
                                                                                                                                
     There has been  a lot of historical distortion  in terms                                                                   
     of what the  legislative and statutory history  is here.                                                                   
     In  1959  it's  true,  the   legislature  did  give  the                                                                   
     department the option to adopt  regulations allowing for                                                                   
     the room and board. In 43 years  since statehood through                                                                   
     eight administrations,  I think  it is, three  different                                                                   
     political parties,  the policy of the  department, which                                                                   
     was  only then in  1985 promulgated  in regulation,  was                                                                   
     that you don't charge for room  and board in a situation                                                                   
     where there is no alternative  and it is exactly for the                                                                   
     old company  store type situations. In the  analogy that                                                                   
     Senator  Leman mentioned  earlier  - your  father -  the                                                                   
     whole crux  there - he had  the option of going  home to                                                                   
     have a sandwich.  If he was in a remote  area, and maybe                                                                   
     it was remote at that time,  I don't know, but right now                                                                   
     there are many processors where  this does not apply and                                                                   
     that is those where there are  viable alternatives - and                                                                   
     sometimes that viable alternative  is a city campground,                                                                   
     but  there  are other  options;  there's  usually  other                                                                   
     employers.                                                                                                                 
                                                                                                                                
     It has  been the policy  of the  State of Alaska  for 43                                                                   
     years  that if you're  in a  remote site, your  employer                                                                   
     cannot charge  you for  room and board  if there  are no                                                                   
     alternative   facilities  available.   The  court   case                                                                   
     reference  is not exactly  on point,  because that  is a                                                                   
     situation, as I understand it,  where we are not a party                                                                   
     to that lawsuit in the Silver  Bay, Globe and Diaz suit.                                                                   
     That was a deduction that didn't  reduce the wages below                                                                   
     minimum  wage. So, it's  not the  same as we're  talking                                                                   
     about  here. I  only got some  - we  could play  dueling                                                                   
     depositions.  I will  make  available  to the  committee                                                                   
     some  that  came  to  me  through  my  office  from  the                                                                   
     plaintiff's  attorney  from Mr.  Wilson's  boss and  the                                                                   
     then  Commissioner   Jim  Robison.  I  will   make  that                                                                   
     immediately available to the  committee. So, again, that                                                                   
     case isn't exactly on point…                                                                                               
                                                                                                                                
     With  regard to  other statements  that  were made,  the                                                                   
     $15, the  way the legislature  reads now - at  one point                                                                   
     in its  progress through  the House,  it just said  they                                                                   
     may deduct $15 and basically  by statute said that was a                                                                   
     fair  amount. In  that case,  $15 would  just be  agreed                                                                   
     upon.  We  wouldn't have  any  enforcement  role. As  it                                                                   
     reads now, it  says $15 or a reasonable amount  and then                                                                   
     we are supposed  to, as Ms. Sylvester said,  enforce the                                                                   
     reasonable amount.  But we're supposed  to do it  with a                                                                   
     $0  fiscal note.  I think  you  have in  your packets  a                                                                   
     fiscal note,  which we will  offer at every  opportunity                                                                   
     whether  it gets approved  or not,  because this is  not                                                                   
     without cost. If  this was a larger division  and we had                                                                   
     more  wage and  hour personnel  as we do  in some  cases                                                                   
     with indeterminate fiscal notes,  we would give it a $0.                                                                   
     But this will generate work.  There are approximately 40                                                                   
     on a list that we keep for OSHA  inspection purposes. We                                                                   
     have 80 shore side processors;  40 of them would fall in                                                                   
     the  remote  category  -  about   half.  For  those  any                                                                   
     employee  could  make  a complaint  and  allege  if  the                                                                   
     employer did go  over $15 that it generated  a profit or                                                                   
     wasn't a fair  rate, didn't really actually  reflect the                                                                   
     costs and it would be a real  pain in the butt. It would                                                                   
     be  a major  audit; you'd  have  to look  at their  fuel                                                                   
     costs and  every other thing.  So there would be  a cost                                                                   
     and that's  why we  have a very  moderate fiscal  note -                                                                   
     since they made the $15 change  in there, but there is a                                                                   
     cost  nonetheless  and  we  won't  have  the  people  to                                                                   
     enforce  it so it  will just  generate more problems.  I                                                                   
     think  it is  important, not  today  thankfully, but  in                                                                   
     other committees we've heard  about how it's all college                                                                   
     students.  Well,  as  I'm  sure  Senator  Austerman  and                                                                   
     Senator  Leman  and probably  all  of you  know,  that's                                                                   
     about  20 years out  of date.  There are adults  working                                                                   
     out there in  those processing plants. We  only have age                                                                   
     data for Alaska  residents from the Permanent  Fund, but                                                                   
     the median  age of  Alaskan residents  that work in  the                                                                   
     canneries as cannery workers,  not managers, is 32 years                                                                   
     of  age. So,  we're  not talking  kids.  Sure they  make                                                                   
     money  in overtime,  but if  you're working  in a  plant                                                                   
     where  it's 80 hours  a week  and you're getting,  let's                                                                   
     say after  the increase  should it  go through, you  get                                                                   
     $7.15  and hour.  Well,  for working  80  hours a  week,                                                                   
     you're getting the princely sum of $715 a week…                                                                            
                                                                                                                                
     So,  if you  take $15  per day, which  is not  a lot  to                                                                   
     charge for  room and board, admittedly, that's  $105 per                                                                   
     week.  So  that  basically in  large  part  negates  the                                                                   
     minimum  wage increase  by $1  an hour  on the  person's                                                                   
     wage.                                                                                                                      
                                                                                                                                
COMMISSIONER  FLANAGAN pointed  out that  this bill isn't  waiting                                                              
for the minimum wage increase to  take effect; it's to take effect                                                              
immediately  in the  misguided belief  that we've  got to  deliver                                                              
this no  cost to  us relief  to the  industry by  doing it  on the                                                              
backs of the workers.                                                                                                           
                                                                                                                                
CHAIRMAN STEVENS interrupted  to say with existing law,  40 out of                                                              
the 80  plants are not  allowed to deduct  for room and  board and                                                              
then asked what the other 40 plants do.                                                                                         
                                                                                                                                
COMMISSIONER FLANAGAN replied that  it varies from plant to plant.                                                              
At the Icicle  Plant in Petersburg  they have a bunkhouse  and the                                                              
worker can  elect to stay  in the bunkhouse  and they  are charged                                                              
$10 per  day. They  have a  kitchen and  meals were available  for                                                              
$3.50  per  meal. It  really  is  voluntary, because  people  have                                                              
options. In the  remote sites they can say it's  voluntary because                                                              
there is an agreement, but there really aren't options.                                                                         
                                                                                                                                
CHAIRMAN STEVENS asked if the guys  who work in a rural area where                                                              
there are other facilities are allowed  to deduct for the room and                                                              
board.                                                                                                                          
                                                                                                                                
COMMISSIONER FLANAGAN replied that they are.                                                                                    
                                                                                                                                
SENATOR LEMAN said  in Petersburg it probably cost  more than $300                                                              
per day to rent  a place to stay, plus it would  cost at least $10                                                              
a day for meals if someone were living  on their own. In that case                                                              
they  are  probably getting  a  good  deal  compared to  what  the                                                              
alternative might be.                                                                                                           
                                                                                                                                
COMMISSIONER FLANAGAN  said that is  true, but it is  customary to                                                              
pay  $1 more  per hour  in those  places  where they  are able  to                                                              
charge. "Of  course, that  brings this whole  issue up is  that we                                                              
have  to be  raising  the  floor which  is  a viable  function  of                                                              
government."                                                                                                                    
                                                                                                                                
CHAIRMAN  STEVENS asked  if there  was  a regulation  that says  a                                                              
campground is an alternative to qualified housing.                                                                              
                                                                                                                                
COMMISSIONER FLANAGAN replied that wasn't in regulation.                                                                        
                                                                                                                                
CHAIRMAN   STEVENS  said,   "You're  using   the  fact  that   the                                                              
alternative to live in a campground  is validated to say that they                                                              
can charge in an urban area where there's alternative housing."                                                                 
                                                                                                                                
COMMISSIONER FLANAGAN said that people  have other options besides                                                              
that.                                                                                                                           
                                                                                                                                
CHAIRMAN  STEVENS  said  they  are  all  choosing  the  campground                                                              
instead of the other option.                                                                                                    
                                                                                                                                
COMMISSIONER FLANAGAN responded that  they're not all choosing it.                                                              
He said no one had challenged this  regulation until this suit and                                                              
it will be interesting  to see how it plays. "But  again, that did                                                              
not reduce the wage below minimum wage."                                                                                        
                                                                                                                                
He concluded  saying that  he thought this  was bad policy  and he                                                              
works with the  fishing industry and is aware of  the problems. He                                                              
has spent  most of five  summers in the  disaster areas,  but when                                                              
times are good, the processors and  the fishermen make more money.                                                              
"These  line workers  make in  the remote  sites a  nickel or  ten                                                              
cents more  than minimum  wage. They don't  go up when  things get                                                              
better. They  make what they  make and that's  why we have  a wage                                                              
floor."                                                                                                                         
                                                                                                                                
He  also  noted  that  with  the   exception  of  one  very  small                                                              
fishermen's  organization,   there  has  not  been   to  date  any                                                              
testimony from fishermen in support of this bill.                                                                               
                                                                                                                                
     I don't know  that they agree with Senator  Leman's idea                                                                   
     that any extra dollar the processor  gets is going to be                                                                   
     automatically  distributed  to them  in  the  form of  a                                                                   
     higher price.                                                                                                              
                                                                                                                                
SENATOR  AUSTERMAN  asked  what  was  the  unemployment  rate  for                                                              
processing and was it easy for them to get people to work.                                                                      
                                                                                                                                
COMMISSIONER FLANAGAN replied that  it has gotten easier this year                                                              
and last year. Two  or three years ago it was  real tough. He said                                                              
that Icicle Seafoods  did everything they could to  hire people in                                                              
state,  but  there   just  weren't  the  people.   He  called  his                                                              
counterpart in  Texas to vouch for  Icicle and told them  that the                                                              
labor law up here would take care  of Texan workers. But this year                                                              
he said that job orders are up in  the seafood area from what they                                                              
were told to expect prior to last year.                                                                                         
                                                                                                                                
SENATOR  AUSTERMAN  said  it  appears  to  him  that  there  is  a                                                              
competitive element out there and  he's not sure this will even be                                                              
used.                                                                                                                           
                                                                                                                                
COMMISSIONER  FLANAGAN said there  would be at  least a  couple or                                                              
three  major  plants  that  will  use  it.  They  do  alien  labor                                                              
certifications   for  roe  techs   and  supervisors   and  special                                                              
positions.                                                                                                                      
                                                                                                                                
     Basically,  the way  the immigration  law works, if  you                                                                   
     make  a job undesirable  enough, then  it's 'Katie,  bar                                                                   
     the  door.'  You  can  bring  in  people  from  anywhere                                                                   
     including other countries and  I think that's what we're                                                                   
     going to  be looking at if  we beat down  the conditions                                                                   
     for the low-wage workers in the canneries.                                                                                 
                                                                                                                                
SENATOR  LEMAN  said he  didn't  suggest  earlier that  the  money                                                              
available would  automatically go to  fishermen. "I said  it would                                                              
be available for distribution."                                                                                                 
                                                                                                                                
COMMISSIONER FLANAGAN said he stood corrected and apologized.                                                                   
                                                                                                                                
SENATOR LEMAN said, "If you increase  the cost to processors, it's                                                              
certainly not available to pay the fishermen."                                                                                  
                                                                                                                                
COMMISSIONER FLANAGAN said he wouldn't dispute that.                                                                            
                                                                                                                                
CHAIRMAN STEVENS  commented that  if you  could get fishermen  and                                                              
processor  together   to  agree   on  anything,  you   would  have                                                              
accomplished something that he has yet to see achieved in life.                                                                 
                                                                                                                                
COMMISSIONER FLANAGAN agreed.                                                                                                   
                                                                                                                                
CHAIRMAN  STEVENS said  AS 23.10.080  - Powers  and Duties  of the                                                              
Division - says, "The director shall  investigate, ascertain wages                                                              
and related conditions on standards  of employment of any employee                                                              
in  the  state,   etc."  and  then  lays  out  how   they  are  to                                                              
investigate.                                                                                                                    
                                                                                                                                
     AS 23.10.085 - Scope of Administrative  Regulations - AS                                                                   
     23.10.085  (c) Regulations may  permit deductions  by an                                                                   
     employer from  the minimum wage applicable  to employees                                                                   
     for the  reasonable cost as  determined by the  director                                                                   
     on an  occupation basis of  furnishing board  or lodging                                                                   
     if  board or  lodging is  customarily  furnished by  the                                                                   
     employer and used by the employee.                                                                                         
                                                                                                                                
COMMISSIONER FLANAGAN responded:                                                                                                
                                                                                                                                
     Yes, sir, and  the key word is 'may'.  Regulation 'may.'                                                                   
     I  believe if  the legislature  at that  time wanted  to                                                                   
     make that law  and I don't know what it was  - if it was                                                                   
     a  compromise or  something, because  in 1959  something                                                                   
     else  was happening.  We were  first  having the  Alaska                                                                   
     minimum  wage, which was  50 cents  over the federal  of                                                                   
     $1.00…If the  legislature meant  to make that  law, they                                                                   
     would  have  put  it  in  statute.  And  again  I'm  the                                                                   
     thirteenth  commissioner  that  has  interpreted  things                                                                   
     that way.                                                                                                                  
                                                                                                                                
MS. BARBARA  HUFF TUCKNESS, Teamsters  Local 959, said  that there                                                              
was a letter  from Jerry Hood regarding this particular  issue and                                                              
it probably  addresses in a nutshell  where they are at.  She also                                                              
noted that  they represent  a little over  7,000 workers  with the                                                              
state  and  different   industries  around  the   state  with  the                                                              
exception of at sea processors, but that is not why she is here.                                                                
                                                                                                                                
     It's not a union issue; it's  a worker issue. It's about                                                                   
     some,  whether my  numbers  are right  or  wrong, and  I                                                                   
     would love to be proven differently,  the $11 billion at                                                                   
     sea fishing industry as a whole  comes to this state, to                                                                   
     this capital, and  makes a request of the  House and the                                                                   
     Senate  legislative  body  to  reduce  existing  minimum                                                                   
     wage.  We're  not  talking  about  an  increase  in  the                                                                   
     minimum wage  here; we're talking  about an  existing of                                                                   
     which for  some of these  folks…some of these  start out                                                                   
     at $6 an hour. Granted, some  others are paying minimums                                                                   
     of $7.50  an hour already and  I would assume  would not                                                                   
     attempt at this point to reduce  even further, and don't                                                                   
     believe  legally   they  probably  could,   unless  they                                                                   
     unilaterally went in and reduced  what they are offering                                                                   
     to pay  and I don't  know that to  be the case.  But, we                                                                   
     come to the table and as I understand  this bill will be                                                                   
     moving out of  committee - and we would request  that it                                                                   
     not move -  that there be some due consideration  to the                                                                   
     public policy  statement that is being set  here. And it                                                                   
     goes back to the working people of the state.                                                                              
                                                                                                                                
     I've been  told that these people  - most of  them don't                                                                   
     even work  in the state and  in fact most of  them don't                                                                   
     even work in  this country. Why are you  guys concerned?                                                                   
     Again, these people come to  this state, they do work in                                                                   
     this  state and  they leave  and we  had one  - down  in                                                                   
     Mexico - who did used to work  here who makes more money                                                                   
     now working  in Mexico  in one  of their hotels  working                                                                   
     eight hours  a day versus the  16 hours a day  they used                                                                   
     to  work here.  Now, from  my perspective  in the  labor                                                                   
     industry that's  kind of a sad  state of affairs  in and                                                                   
     of  itself, when  these people  can make  more money  in                                                                   
     Mexico.                                                                                                                    
                                                                                                                                
     The state  of Alaska in some  respects was built  on the                                                                   
     backs of the  men and women that work here.  Some of you                                                                   
     have worked  in the  industry. Some  of you have  worked                                                                   
     for the at  sea processing company, of which  Trident, I                                                                   
     believe, is one  of the companies here. I  guess we come                                                                   
     to the  table more looking  at the public  policy that's                                                                   
     being set  here, not only  for the corporations.  From a                                                                   
     short-term perspective, maybe  this $11 billion industry                                                                   
     does  need some assistance  out there,  but the  analogy                                                                   
     that was  used by some  individuals in comparison,  it's                                                                   
     almost  like  taking  our  state  fiscal  plan  or  lack                                                                   
     thereof  or the alleged  crisis and  say we're going  to                                                                   
     cut the legislators  per diem to go towards  that fiscal                                                                   
     gap. It is  so out of this world it's not  going to make                                                                   
     any difference.  We've been told  that this is  going to                                                                   
     save  this  $11 billion  fishing  industry  $5  million.                                                                   
     Well, when you  take the $5 million, it is  a savings. I                                                                   
     guess  if my employer  quit paying  me, they would  save                                                                   
     some  money, also.  I wish  everyone  would think  about                                                                   
     what we're doing  here. It's not about the  $15 per day.                                                                   
     That's not what it's about -  whether it was $5 per day.                                                                   
     It's  the fact  that these  people,  these minimum  wage                                                                   
     people are going  to have this money taken  out of their                                                                   
     pocket  in lieu  of  room and  board.  And  what are  we                                                                   
     talking about  room and board. Those of you  who've been                                                                   
     on these ships, I don't believe  we're talking about big                                                                   
     rooms;  in fact,  I believe  most of the  rooms have  at                                                                   
     least  4 - 10  per camp.  They've got  little beds  that                                                                   
     they're  sleeping in.  They're working  16 hours a  day;                                                                   
     they get to  hopefully sleep in the bed for  a couple of                                                                   
     hours and then they come back  and charge. It's a bigger                                                                   
     public policy here.                                                                                                        
                                                                                                                                
MS. TUCKNESS  said that  in the several  committees this  bill has                                                              
been heard  in not one worker who  has testified in favor  of this                                                              
bill.  This impacts  many people  who  work here,  but don't  live                                                              
here.  She said  it's like  the oil  industry on  the North  Slope                                                              
where workers  are provided very nice  rooms and some of  the best                                                              
food in  the state.  They do  not get  charged. Granted  there are                                                              
different expectations  and different skills required,  but she is                                                              
not asking  that they increase  wages, but  that they look  at the                                                              
fairness and application  and the impact it will  set from a long-                                                              
term public policy for this state.                                                                                              
                                                                                                                                
SENATOR  AUSTERMAN  added  that  at-sea  processing  is  a  little                                                              
different than  shore based and he  didn't know if this  bill even                                                              
applies to the at-sea processor.                                                                                                
                                                                                                                                
COMMISSIONER FLANAGAN inserted that  it would apply to floaters in                                                              
state waters, but not the at sea factory processors.                                                                            
                                                                                                                                
SENATOR AUSTERMAN asked the other  two unions if the concept is so                                                              
important,  why haven't  they done  anything  about the  McDonalds                                                              
workers  of the  Subway workers  or  the processors  that work  in                                                              
Kodiak already that make minimum wage.                                                                                          
                                                                                                                                
MS.  TUCKNESS responded  that she  believed that  he is  comparing                                                              
apples  and  oranges.  The  McDonalds  in her  area  in  Anchorage                                                              
doesn't pay  minimum wage.  If they would  pay minimum  wage, they                                                              
couldn't get people  to work there. From an  industry perspective,                                                              
this particular industry, separate from the McDonalds…                                                                          
                                                                                                                                
SENATOR AUSTERMAN  interrupted saying that there  are minimum wage                                                              
workers  in  the  state  of  Alaska  other  than  in  the  seafood                                                              
industry.                                                                                                                       
                                                                                                                                
MS. TUCKNESS  responded that she  believed there were some  in the                                                              
restaurants and some folks have actually  compared this to the tip                                                              
credit bill.  On one  hand they  make minimum  and they  get tips,                                                              
then you turn  around and take the  money out of the  tips to help                                                              
cover any potential  increases in that area. The  concept there is                                                              
somewhat similar.                                                                                                               
                                                                                                                                
     I guess  from our perspective  from where these  fishing                                                                   
     locations  are at,  it  boiled down  to  choice. And  my                                                                   
     understanding…is  when that  came out,  and actually  it                                                                   
     came about addressing employees  that were being charged                                                                   
     by some of these companies for  room and board when they                                                                   
     quit.  And this  was  back 15  years  ago,  some of  the                                                                   
     industry was  going back and  taking money out  of these                                                                   
     people's pockets.  They ended  up with no paychecks.  It                                                                   
     was  at that  time…how this  particular regulation  came                                                                   
     about.                                                                                                                     
                                                                                                                                
TAPE 02-25, SIDE A                                                                                                            
                                                                                                                              
MS. HUFFTUCKNESS continued:                                                                                                     
                                                                                                                                
     The Department  of Labor  at the  time stepped back.  We                                                                   
     have to  do something;  there needs to  be some  sort of                                                                   
     balance  or a  leveling  of the  playing  field. So,  in                                                                   
     those  areas where  there was  housing  or choice,  then                                                                   
     that choice  was given  to the  employee. It was  either                                                                   
     one or the other and in those  areas where there was not                                                                   
     available  or alternative  housing,  then  the room  and                                                                   
     board was  picked up. Under  this particular  bill, what                                                                   
     it says  now is that anybody  out there can  charge room                                                                   
     and board  whether you have available  housing elsewhere                                                                   
     and the  employee is able  to make that choice,  whether                                                                   
     it's in  a tent or  10 or 15 of  them get together  in a                                                                   
     house or live  in an apartment. Their  living conditions                                                                   
     I  do not believe  would be  commensurate  to any of  us                                                                   
     sitting in this room. It is  a different life style, but                                                                   
     simply  because they  made a choice  in that  particular                                                                   
     life  style, is  it okay  - and  I guess  you guys  will                                                                   
     ultimately make  that public policy  - to take  room and                                                                   
     board,  whatever that  amount  is out  of these  minimum                                                                   
     wage people's  pockets, simply because of  where they're                                                                   
     at  in the  industry and  what  they are  doing so  that                                                                   
     there  is some  savings? Are  there other  alternatives?                                                                   
     Are  there some other  things that  maybe this  industry                                                                   
     can  do in  this  short-term crisis?  Because  I do  not                                                                   
     believe that  it is a  long-term crisis here,  if indeed                                                                   
     it's a crisis. That has not been proven either.                                                                            
                                                                                                                                
SENATOR DAVIS said she wanted to get the following comment on                                                                   
record:                                                                                                                         
                                                                                                                                
     I think  it is very  poor timing  for this bill  to come                                                                   
     forward regardless  of who supports it and  who does not                                                                   
     support it in the sense that  you have people coming and                                                                   
     wanting  to take  money  that might  be  an increase  in                                                                   
     minimum wage  and we don't even  have it. It's  going to                                                                   
     be on the ballot in November  if we don't pass something                                                                   
     that  would be  acceptable…  but there  is no  guarantee                                                                   
     that the minimum wage will increase…                                                                                       
                                                                                                                                
SENATOR DAVIS said  she also had a possible amendment  to the bill                                                              
and asked if she could bring it up at this time.                                                                                
                                                                                                                                
CHAIRMAN STEVENS told her to go ahead.                                                                                          
                                                                                                                                
SENATOR  DAVIS  said  testimony   from  a  representative  of  the                                                              
processors was that room and board  fee would be around $8 now and                                                              
moved to  delete where  it says  the department  would be  able to                                                              
review a grant for  an increase above $15, language  on lines 10 -                                                              
13.                                                                                                                             
                                                                                                                                
MS. SYLVESTER said  that was added because originally  it was just                                                              
$15  dollars   a  day,  the   implication  being  that   that  was                                                              
reasonable.                                                                                                                     
                                                                                                                                
     But in  the urban areas  if there is alternative  public                                                                   
     board   and   lodging,   the    department   makes   the                                                                   
     determination  whether  it's $15  or $20  per  day on  a                                                                   
     case-by-case  basis. If  we cap  it at  $15, then  we're                                                                   
     potentially damaging the businesses  that are located in                                                                   
     urban  areas  that  already   have  determinations  this                                                                   
     summer. Icicle Seafoods has  $10 for board and $3.50 per                                                                   
     meal. Their  determination is  much higher than  $15, so                                                                   
     we would be rolling them back.                                                                                             
                                                                                                                                
SENATOR  DAVIS said  she wanted to  the department  to comment  on                                                              
that and asked  where, as Ms. Sylvester indicated,  does it say in                                                              
the bill  that they wouldn't be  charged if they worked  less than                                                              
eight hours.                                                                                                                    
                                                                                                                                
CHAIRMAN STEVENS noted it was lines 5 and 6.                                                                                    
                                                                                                                                
COMMISSIONER FLANAGAN  said the proposed  amendment would  go back                                                              
to the House  Labor and Commerce Committee CS. In  putting the $15                                                              
without  requiring  the department  to  verify or  certify  higher                                                              
expenditures that did moot our fiscal note.                                                                                     
                                                                                                                                
     I mean,  if you took this  amendment, it would  moot the                                                                   
     fiscal  note that  you're probably  not going to  adopt,                                                                   
     but you should, because you're  just giving an unfounded                                                                   
     mandate to the department. So,  that would remove one of                                                                   
     my  arguments against  the bill. There  will be  audits.                                                                   
     Right  now we  very  rarely have  audits  on the  places                                                                   
     where  they are able  to charge,  because the costs  are                                                                   
     kept low. But  we're going to open up a  whole new venue                                                                   
     involving thousands of employees  and, again, maybe most                                                                   
     of them will go $15 or less,  but the ones that go more,                                                                   
     it  will generate  a  lot of  complaints  and  a lot  of                                                                   
     workload  and backlog…We are  opening up  a new area  of                                                                   
     complaint that  we have to  investigate when we  have to                                                                   
     take  thousands  of  workers  that  right  now  are  not                                                                   
     required  to  pay  their  room and  board  and  will  be                                                                   
     charged.                                                                                                                   
                                                                                                                                
SENATOR DAVIS  asked if  those places  that have alternatives  for                                                              
room and board already able to charge more than $15?                                                                            
                                                                                                                                
COMMISSIONER FLANAGAN replied that is correct.                                                                                  
                                                                                                                                
SENATOR  DAVIS said  she thought  this bill was  designed to  help                                                              
areas where there was no alternative housing.                                                                                   
                                                                                                                                
COMMISSIONER  FLANAGAN explained  initially the bill  specifically                                                              
mentioned  remote  processors and  when  they  took out  the  work                                                              
"remote"  and put  in  "$15", they  caught  up the  ones that  are                                                              
currently  able  to  charge.  A possible  amendment  would  be  to                                                              
delineate  remote processors  and no  more. "That  would moot  our                                                              
fiscal note, because we would be  in terms of enforcement actions,                                                              
where we are now…"                                                                                                              
                                                                                                                                
CHAIRMAN STEVENS  declared a  conflict saying  that he  has passed                                                              
employment history  with the fisheries business and  has a company                                                              
that  dose services  for companies  that  qualify under  fisheries                                                              
business.                                                                                                                       
                                                                                                                                
SENATOR AUSTERMAN objected.                                                                                                     
                                                                                                                                
SENATOR  LEMAN moved  that he be  allowed to  abstain from  voting                                                              
because he  sometimes fishes, but  doesn't make much money  at it.                                                              
"It's  conceivable  that  I  could loose  money,  if  the  seafood                                                              
processors have to pay more overhead."                                                                                          
                                                                                                                                
SENATOR AUSTERMAN objected.                                                                                                     
                                                                                                                                
SENATOR DAVIS moved the amendment so they could vote on it.                                                                     
                                                                                                                                
SENATORS AUSTERMAN,  LEMAN, and STEVENS  voted nay;  SENATOR DAVIS                                                              
voted yea; and the amendment failed.                                                                                            
                                                                                                                                
SENATOR   AUSTERMAN  moved   to   pass  CSHB   504(L&C)  and   the                                                              
accompanying   fiscal   note  from   committee   with   individual                                                              
recommendations. There were no objections and it was so ordered.                                                                
                                                                                                                                
          HJR 38-TERRORISM RISK PROTECTION LEGISLATION                                                                      
                                                                                                                                
CHAIRMAN STEVENS announced HJR 38 to be up for consideration.                                                                   
                                                                                                                                
REPRESENTATIVE JOE HAYES, Sponsor  of HJR 38, said the whole point                                                              
of  the  resolution  is  to address  issues  concerning  9/11  and                                                              
liability insurance.  There was an $877,000 increase  in different                                                              
insurance policies  as a  result of 9/11.  The effects of  such an                                                              
enormous loss  has taken  its toll on  the insurance  industry and                                                              
the  American economy.  Several of  the  reinsurance carriers  are                                                              
declining to offer insurance that  covers terrorism now at all and                                                              
others are increasing their rates  tremendously. He noted that the                                                              
aviation  industry has  particularly  been hit  hard  going up  in                                                              
Alaska 20  - 200%  and the  number of  companies willing  to offer                                                              
insurance  in   Alaska  has  decreased   more  than  a   dozen  to                                                              
approximately  six.  One  company   has  also  issued  non-renewal                                                              
notices  regarding  workers  compensation  claims  in  Alaska  and                                                              
several others are publicly considering following suit.                                                                         
                                                                                                                                
     HJR  38   recommends  passage  of  the   Terrorism  Risk                                                                   
     Protection  Act  legislation,  currently in  the  United                                                                   
     State Senate. The Terrorism  Risk Protection legislation                                                                   
     has already passed the House;  it was H.R. 3210 and this                                                                   
     resolution  urges Congress to  create a viable  solution                                                                   
     to the uncertainty of insurance  risk currently faced in                                                                   
     America.  If  a  solution  is   not  found  in  America,                                                                   
     Americans  are left with  limited coverage, the  effects                                                                   
     of  a natural  disaster  or  terrorist attack  could  be                                                                   
     devastating  the American people  and to Alaska  and its                                                                   
     economy as a whole.                                                                                                        
                                                                                                                                
SENATOR AUSTERMAN moved to pass CSHJR  38(L&C) from committee with                                                              
individual recommendations.  There were  no objections and  it was                                                              
so ordered.                                                                                                                     
                                                                                                                                
4:10 - 4:27 pm - at ease                                                                                                        
                                                                                                                                
               HB 443-TATTOOING AND BODY PIERCING                                                                           
                                                                                                                                
CHAIRMAN STEVENS announced HB 443 to be up for consideration.                                                                   
                                                                                                                                
MS. SHARON O'DELL, Chief of Staff  for Representative Vic Kohring,                                                              
said in 2000  the legislature passed  SB 34 to address  safety and                                                              
health  issues  with the  body  piercing  and tattoo  industry  by                                                              
bringing them under the licensing  requirements of the Barbers and                                                              
Hairdressers  Board. The qualifying  application deadline  was set                                                              
in statute,  but didn't  allow the  department  any kind of  grace                                                              
period or an appeal process. Because  of that there were qualified                                                              
practitioners who  were already in  business that will have  to go                                                              
out of  business because they  missed that qualifying  application                                                              
date. The  practitioners they have talked  to are in favor  of the                                                              
regulations set  forth in  SB 34, but  even though the  department                                                              
did their  best to notify everyone  that would be affected  by the                                                              
new regulations,  some people just  got left out. They  are trying                                                              
to address  that problem with those  businesses that will  have to                                                              
otherwise  close. They  would have  to go through  the process  of                                                              
finding another practitioner  who has gotten their  license to get                                                              
them through  the training period.  It could be difficult  to even                                                              
find someone  in their area who is  willing to take them  on. This                                                              
is an  unintentional result  of the law  that went into  effect in                                                              
2000.                                                                                                                           
                                                                                                                                
HB 443 does two  things. It doesn't change any  of the regulations                                                              
or  the  qualifying  date set  forth  in  SB  34. It  extends  the                                                              
transitional license application  date to July 1, 2002 and extends                                                              
the  license requirement  date to  December  1, 2000.  There is  a                                                              
fiscal note  for the  renotification because  the DEC  regulations                                                              
that  have been  adopted will  go stale  in October  in this  year                                                              
requiring renotification.                                                                                                       
                                                                                                                                
MS. GAIL  MCCANN, Owner of  the Electrolysis Clinic  in Fairbanks,                                                              
supported  HB 443.  She is  one of  the individuals  who would  be                                                              
impacted  by the  bill not  being passed.  If it  didn't pass,  it                                                              
would  definitely  affect  her  livelihood   and  her  ability  to                                                              
continue offering her service. She  uses a tattooing technique for                                                              
permanent and  corrective cosmetics  working with burn  survivors,                                                              
as  an  example,   who  have  gone   as  far  as  they   can  with                                                              
reconstructive  surgery  and want  to  take their  improvement  in                                                              
appearance a  step farther. Many  times a burn survivor  will have                                                              
lost  their facial  hair  - eyebrows  and  eyelashes  and she  can                                                              
tattoo those features.  She said people with  surgically corrected                                                              
cleft palates were another example of clients she served.                                                                       
                                                                                                                                
MR. JOE SCHOOLCRAFT,  Two Moons Body Piercing  and Tattooing, said                                                              
the tattooing community  is small and he found it  hard to believe                                                              
that some  people didn't know about  this. He thought if  a person                                                              
missed  the deadline  that through  the  tattooing community  they                                                              
could find  someone who  could reach out  and help them.  The test                                                              
has to do with sanitation and nothing with technique.                                                                           
                                                                                                                                
MR. TODD  GIPSON, Two Moons  Body Piercing and  Tattooing, opposed                                                              
HB 443. He  thought the interested  parties should keep  on top of                                                              
the laws and what's going on.                                                                                                   
                                                                                                                                
MR.  JEFF MARTIN,  Muttleys Tattoo  Clinic, supported  HB 443.  He                                                              
said he is in transition and somehow  missed the application time.                                                              
He has three employees who are affected as well.                                                                                
                                                                                                                                
MR. ANDY  KOPCZENSKI, American  Tattoo, said he  had been  in this                                                              
business for  22 years. He  said he does  the same thing  that Ms.                                                              
McCann  does about  10 times  a week.  He opposed  this bill.  The                                                              
fiscal  note that  goes with  it comes  out of  the general  fund,                                                              
which is his money.  He didn't want to be charged  for people "not                                                              
getting their homework done."                                                                                                   
                                                                                                                                
MR. KOPCZENSKI  said, "This  is another way  to charge me  for the                                                              
guy next door."                                                                                                                 
                                                                                                                                
SENATOR  LEMAN moved  to pass  CSHB 443(L&C)  from committee  with                                                              
individual recommendations.  There were  no objections and  it was                                                              
so ordered.                                                                                                                     
                                                                                                                                
             HB 182-MOTOR VEHICLE SALES AND DEALERS                                                                         
                                                                                                                                
                                                                                                                                
CHAIRMAN STEVENS announced HB 192 to be up for consideration.                                                                   
                                                                                                                                
MS.  MAY ERICKSON,  Staff to  Representative Murkowski,  explained                                                              
that this bill  began last session  and has gone through  a lot of                                                              
work and is in a form that is supported by all parties.                                                                         
                                                                                                                                
     It is a  comprehensive motor-vehicle act  that addresses                                                                   
     the  relationship  between   motor-vehicle  dealers  and                                                                   
     manufacturers and  perspective auto buyers  by providing                                                                   
     guidelines to protect dealers  and consumers from abuses                                                                   
     within  the  automobile  industry. The  bill  creates  a                                                                   
     platform for a dispute resolution  between manufacturers                                                                   
     and  motor  vehicle  dealers with  regard  to  franchise                                                                   
     disagreements   and  brings   agreements  made   between                                                                   
     manufacturers and  dealers under jurisdiction  of Alaska                                                                   
     courts.  The  bill  sets  forth   uniform  processes  to                                                                   
     transfer,  terminate,  or convey  franchise  agreements.                                                                   
     Protections  are also  provided  against replacement  by                                                                   
     manufacturers  of new competing  dealerships within  too                                                                   
     close a proximity to a current  dealer's market area and                                                                   
     provides uniform guidelines  when designating successors                                                                   
     in the case  of death or incapacity of  franchisees. The                                                                   
     bill  also  provides  meaningful   protection  for  auto                                                                   
     buyers  by   imposing  safeguards  regarding   deceptive                                                                   
     advertising,  price  comparisons   and  availability  of                                                                   
     advertised  items. The  bill also states  that a  dealer                                                                   
     must,  when  obtaining  a used  motor  vehicle  from  an                                                                   
     individual  consumer,  make  reasonable inquiry  of  the                                                                   
     seller  and  the  seller must  provide  in  writing  the                                                                   
     condition  of  that  vehicle   including  the  vehicle's                                                                   
     accident  and repair history.  The dealer then  provides                                                                   
     that  statement  to  a  prospective   purchaser  of  the                                                                   
     vehicle. Dealers  must also disclose if the  vehicle was                                                                   
     purchased from  an auction or wholesaler  (Just inserted                                                                   
     on the House floor and passed unanimously).                                                                                
                                                                                                                                
MR. DON WHATTLEY, Alliance of Automobile  Manufacturers, supported                                                              
HB 182.                                                                                                                         
                                                                                                                                
MR. MARK MUELLER, General Motors, supported HB 182.                                                                             
                                                                                                                                
MR. STAN HURST, Chrysler Corporation, supported HB 182.                                                                         
                                                                                                                                
MS. KERRY  HENNINGS, Division  of Motor  Vehicles, said  they also                                                              
support HB 182.                                                                                                                 
                                                                                                                                
MS.  ERICKSON said  that she  forgot  one thing,  an amendment  by                                                              
Representative Dyson,  that would allow  a person to sell  10 used                                                              
motor  vehicles per  year  and still  not have  to  register as  a                                                              
dealer. After doing  research, she found that five  is the correct                                                              
amount  and asked  if they  would  consider amending  the bill  to                                                              
reflect  that. She  explained  that  five vehicle  is  set out  in                                                              
federal law and is also recommended  by DMV and the AG's office as                                                              
well.                                                                                                                           
                                                                                                                                
CHAIRMAN STEVENS  asked if Representative Dyson  raised the number                                                              
from 5 to 10 on the floor.                                                                                                      
                                                                                                                                
MS. ERICKSON replied yes, but he  was thinking that many people in                                                              
the Valley buy used cars quite frequently  for family members, fix                                                              
them up  and turn them  over, but there  is an exemption  for that                                                              
kind of transaction for family members.                                                                                         
                                                                                                                                
CHAIRMAN  STEVENS  asked  if  it   was  okay  with  Representative                                                              
Murkowski.                                                                                                                      
                                                                                                                                
MS. ERICKSON replied that she was fine with it.                                                                                 
                                                                                                                                
4:50 - 5:00 - fire drill                                                                                                        
                                                                                                                                
SENATOR AUSTERMAN  moved on page 4,  line 19 to delete  "new or 10                                                              
used". There were no objections and it was so ordered.                                                                          
                                                                                                                                
SENATOR AUSTERMAN  moved to  pass SCS  HB 182(L&C) from  committee                                                              
with individual  recommendations. There were no  objections and it                                                              
was so ordered.                                                                                                                 
                                                                                                                                
CHAIRMAN STEVENS adjourned the meeting at 5:05 pm.                                                                              

Document Name Date/Time Subjects