Legislature(2003 - 2004)

04/20/2004 02:04 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         April 20, 2004                                                                                         
                           2:04 p.m.                                                                                            
                                                                                                                              
TAPE(S) 04-34                                                                                                                 
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Con Bunde, Chair                                                                                                        
Senator Ralph Seekins, Vice Chair                                                                                               
Senator Gary Stevens                                                                                                            
Senator Bettye Davis                                                                                                            
Senator Hollis French                                                                                                           
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
SENATE BILL NO. 272                                                                                                             
"An  Act  relating to  certain  monetary  advances in  which  the                                                               
deposit or  other negotiation of  certain instruments to  pay the                                                               
advances  is delayed  until a  later date;  and providing  for an                                                               
effective date."                                                                                                                
                                                                                                                                
     MOVED CSSB 272(L&C) OUT OF COMMITTEE                                                                                       
                                                                                                                                
CS FOR HOUSE BILL NO. 428(JUD)                                                                                                  
"An  Act  relating  to  civil   liability  for  acts  related  to                                                               
obtaining  alcohol for  persons  under  21 years  of  age or  for                                                               
persons under 21 years of age being on licensed premises."                                                                      
                                                                                                                                
     MOVED CSHB 428(JUD) OUT OF COMMITTEE                                                                                       
                                                                                                                                
CS FOR HOUSE BILL NO. 15(FIN) am                                                                                                
"An   Act  relating   to  fair   trade  practices   and  consumer                                                               
protection,   to    telephone   solicitations,    to   charitable                                                               
solicitations; and providing for an effective date."                                                                            
                                                                                                                                
     MOVED SCS CSHB 15 (L&C) OUT OF COMMITTEE                                                                                   
                                                                                                                                
SENATE BILL NO. 349                                                                                                             
"An  Act  requiring licensure  of  midwifery  birth centers;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     MOVED SB 349 OUT OF COMMITTEE                                                                                              
                                                                                                                                
SENATE BILL NO. 389                                                                                                             
"An Act  relating to  the conversion  of certain  corporations to                                                               
limited  liability  companies;  and providing  for  an  effective                                                               
date."                                                                                                                          
                                                                                                                                
     MOVED SB 389 OUT OF COMMITTEE                                                                                              
                                                                                                                                
SENATE BILL NO. 392                                                                                                             
"An Act  relating to the  expenses of investigation,  hearing, or                                                               
public advocacy  before the Regulatory  Commission of  Alaska, to                                                               
calculation of  the regulatory cost  charge for  public utilities                                                               
and pipeline  carriers to include  the Department of  Law's costs                                                               
of its public  advocacy function, to inspection  of certain books                                                               
and  records by  the  attorney general  when  participating as  a                                                               
party in  a matter  before the  Regulatory Commission  of Alaska;                                                               
and providing for an effective date."                                                                                           
                                                                                                                                
     MOVED SB 392 OUT OF COMMITTEE                                                                                              
                                                                                                                                
SENATE BILL NO. 387                                                                                                             
"An  Act authorizing  the making  of  certain commercial  fishing                                                               
loans to  eligible community quota  entities for the  purchase of                                                               
certain  fishing quota  shares;  and providing  for an  effective                                                               
date."                                                                                                                          
                                                                                                                                
     MOVED SB 387 OUT OF COMMITTEE                                                                                              
                                                                                                                                
SENATE BILL NO. 369                                                                                                             
"An  Act  exempting  a  person   who  allows  a  student  of  the                                                               
University of Alaska  to gain practical work  experience with the                                                               
person  while   participating  in  a  practicum   from  vicarious                                                               
liability   as   an   employer,   and   exempting   the   student                                                               
participating in  a practicum from  the Alaska Wage and  Hour Act                                                               
and workers' compensation coverage."                                                                                            
                                                                                                                                
     SCHEDULED BUT NOT HEARD                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 272                                                                                                                  
SHORT TITLE: DEFERRED DEPOSIT ADVANCES (PAYDAY LOANS)                                                                           
SPONSOR(s): RULES                                                                                                               
                                                                                                                                
01/21/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/04       (S)       L&C, FIN                                                                                               
04/06/04       (S)       L&C AT 2:00 PM BELTZ 211                                                                               
04/06/04       (S)       Heard & Held                                                                                           
04/06/04       (S)       MINUTE(L&C)                                                                                            
04/15/04       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
04/15/04       (S)       Scheduled But Not Heard                                                                                
04/20/04       (S)       L&C AT 2:00 PM BELTZ 211                                                                               
                                                                                                                                
BILL: HB 428                                                                                                                  
SHORT TITLE: CIVIL PENALTY: MINORS & ALCOHOL                                                                                    
SPONSOR(s): REPRESENTATIVE(s) MEYER                                                                                             
                                                                                                                                
02/04/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/04/04       (H)       L&C, JUD                                                                                               
02/25/04       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
02/25/04       (H)       Moved Out of Committee                                                                                 
02/25/04       (H)       MINUTE(L&C)                                                                                            
02/26/04       (H)       L&C RPT 5DP                                                                                            
02/26/04       (H)       DP: CRAWFORD, LYNN, ROKEBERG,                                                                          
02/26/04       (H)       GUTTENBERG, GATTO                                                                                      
03/18/04       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
03/18/04       (H)       Heard & Held                                                                                           
03/18/04       (H)       MINUTE(JUD)                                                                                            
03/19/04       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
03/19/04       (H)       Moved CSHB 428(JUD) Out of Committee                                                                   
03/19/04       (H)       MINUTE(JUD)                                                                                            
03/24/04       (H)       JUD RPT CS(JUD) 4DP 1AM                                                                                
03/24/04       (H)       DP: SAMUELS, ANDERSON, GRUENBERG,                                                                      
03/24/04       (H)       MCGUIRE; AM: GARA                                                                                      
03/29/04       (H)       DIVIDE THE AMENDMENT WITHDRAWN                                                                         
03/29/04       (H)       TRANSMITTED TO (S)                                                                                     
03/29/04       (H)       VERSION: CSHB 428(JUD) AM                                                                              
03/31/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/31/04       (S)       L&C, JUD                                                                                               
04/13/04       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
04/13/04       (S)       -- Meeting Canceled --                                                                                 
04/15/04       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
04/15/04       (S)       Scheduled But Not Heard                                                                                
04/20/04       (S)       L&C AT 2:00 PM BELTZ 211                                                                               
                                                                                                                                
BILL: HB  15                                                                                                                  
SHORT TITLE: SOLICITATIONS/CONSUMER PROTECTION                                                                                  
SPONSOR(s): REPRESENTATIVE(s) FATE                                                                                              
                                                                                                                                
01/21/03       (H)       PREFILE RELEASED (1/10/03)                                                                             
01/21/03       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/03       (H)       L&C, STA, FIN                                                                                          
01/29/03       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
01/29/03       (H)       <Bill Postponed>                                                                                       
02/07/03       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
02/07/03       (H)       Moved CSHB 15(L&C) Out of Committee                                                                    
02/07/03       (H)       MINUTE(L&C)                                                                                            
02/10/03       (H)       L&C RPT CS(L&C) NT 3DP 4AM                                                                             
02/10/03       (H)       DP: CRAWFORD, ROKEBERG, ANDERSON;                                                                      
02/10/03       (H)       AM: LYNN, GATTO, GUTTENBERG, DAHLSTROM                                                                 
02/18/03       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
02/18/03       (H)       Heard & Held                                                                                           
02/18/03       (H)       MINUTE(STA)                                                                                            
02/25/03       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
02/25/03       (H)       Scheduled But Not Heard                                                                                
03/11/03       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
03/11/03       (H)       Heard & Held                                                                                           
03/11/03       (H)       MINUTE(STA)                                                                                            
03/13/03       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
03/13/03       (H)       Moved CSHB  15(STA) Out of Committee                                                                   
03/13/03       (H)       MINUTE(STA)                                                                                            
03/26/03       (H)       STA RPT CS(STA) NT 3DP 4NR                                                                             
03/26/03       (H)       DP: SEATON, GRUENBERG, WEYHRAUCH;                                                                      
03/26/03       (H)       NR: HOLM, LYNN, DAHLSTROM, BERKOWITZ                                                                   
02/19/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/19/04       (H)       Heard & Held                                                                                           
02/19/04       (H)       MINUTE(FIN)                                                                                            
02/23/04       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/23/04       (H)       Moved CSHB 15(FIN) Out of Committee                                                                    
02/23/04       (H)       MINUTE(FIN)                                                                                            
02/24/04       (H)       FIN RPT CS(FIN) NT 7DP 3NR                                                                             
02/24/04       (H)       DP: HAWKER, CROFT, CHENAULT, FATE,                                                                     
02/24/04       (H)       MEYER, HARRIS, WILLIAMS; NR: STOLTZE,                                                                  
02/24/04       (H)       JOULE, MOSES                                                                                           
03/03/04       (H)       TRANSMITTED TO (S)                                                                                     
03/03/04       (H)       VERSION: CSHB 15(FIN) AM                                                                               
03/04/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/04/04       (S)       L&C, JUD                                                                                               
03/25/04       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/25/04       (S)       Heard & Held                                                                                           
03/25/04       (S)       MINUTE(L&C)                                                                                            
04/06/04       (S)       L&C AT 2:00 PM BELTZ 211                                                                               
04/06/04       (S)       Heard & Held                                                                                           
04/06/04       (S)       MINUTE(L&C)                                                                                            
04/13/04       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
04/13/04       (S)       -- Meeting Canceled --                                                                                 
04/20/04       (S)       L&C AT 2:00 PM BELTZ 211                                                                               
                                                                                                                                
BILL: SB 349                                                                                                                  
SHORT TITLE: MIDWIFERY BIRTH CENTER LICENSING                                                                                   
SPONSOR(s): SENATOR(s) DAVIS                                                                                                    
                                                                                                                                
02/16/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/16/04       (S)       L&C, FIN                                                                                               
04/20/04       (S)       L&C AT 2:00 PM BELTZ 211                                                                               
                                                                                                                                
BILL: SB 389                                                                                                                  
SHORT TITLE: CORP. CONVERSION TO LIMITED LIABILITY CO.                                                                          
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
04/15/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/15/04       (S)       L&C                                                                                                    
04/20/04       (S)       L&C AT 2:00 PM BELTZ 211                                                                               
                                                                                                                                
BILL: SB 392                                                                                                                  
SHORT TITLE: REGULATORY COMMISSION OF ALASKA                                                                                    
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
BILL: SB 387                                                                                                                  
SHORT TITLE: COMMERCIAL FISHING LOANS FOR QUOTA SHARES                                                                          
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
04/13/04       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/13/04       (S)       CRA, L&C                                                                                               
04/19/04       (S)       CRA AT 1:30 PM FAHRENKAMP 203                                                                          
04/19/04       (S)       Moved  SB 387 Out of Committee                                                                         
04/19/04       (S)       MINUTE(CRA)                                                                                            
04/20/04       (S)       L&C AT 2:00 PM BELTZ 211                                                                               
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Mr. Richard Schmitz                                                                                                             
Staff to Senator Cowdery                                                                                                        
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on SB 272 for sponsor.                                                                          
                                                                                                                                
Mr. Ed Sniffen                                                                                                                  
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK  99811-0300                                                                                                          
POSITION STATEMENT: Supports SB 272.                                                                                          
                                                                                                                                
Mr. Steven Cleary, Executive Director                                                                                           
Alaska Public Interest Research Group                                                                                           
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supports SB 272.                                                                                          
                                                                                                                                
Ms. Deborah Fink                                                                                                                
No address provided                                                                                                             
POSITION STATEMENT: Opposes SB 272.                                                                                           
                                                                                                                                
Mr. Jim Davis, Supervising Attorney                                                                                             
Alaska Legal Services                                                                                                           
Anchorage AK                                                                                                                    
POSITION STATEMENT: Opposes SB 272.                                                                                           
                                                                                                                                
Mr. Terry Lutz, Chief Financial Institution Examiner                                                                            
Division of Banking, Securities and Corporations                                                                                
Department of Community & Economic Development                                                                                  
PO Box 110800                                                                                                                   
Juneau, AK 99811-0800                                                                                                           
POSITION STATEMENT: Commented on SB 272.                                                                                      
                                                                                                                                
Mr. Chip Wagoner                                                                                                                
Alaska Catholic Conference                                                                                                      
Juneau AK                                                                                                                       
POSITION STATEMENT: Commented on SB 272.                                                                                      
                                                                                                                                
Mr. Mark Davis, Director                                                                                                        
Division of Banking, Securities and Corporations                                                                                
Department of Community & Economic Development                                                                                  
PO Box 110800                                                                                                                   
Juneau, AK 99811-0800                                                                                                           
POSITION STATEMENT: Commented on SB 272.                                                                                      
                                                                                                                                
Representative Kevin Meyers                                                                                                     
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor of HB 428.                                                                                        
                                                                                                                                
Ms. Cindy Cashen                                                                                                                
Mothers Against Drunk Drivers (MADD)                                                                                            
Juneau AK                                                                                                                       
POSITION STATEMENT: Supports HB 428.                                                                                          
                                                                                                                                
Mr. O.C. Madden, Director                                                                                                       
Human Resources and Loss Prevention, Brown Jug, Inc.                                                                            
Anchorage AK                                                                                                                    
POSITION STATEMENT:  Supports HB 428.                                                                                         
Mr. Dave Lambert                                                                                                                
Fairbanks AK                                                                                                                    
POSITION STATEMENT: Supports HB 428.                                                                                          
                                                                                                                                
Ms. Jessica Paris                                                                                                               
MADD Youth in Action Program                                                                                                    
Juneau AK                                                                                                                       
POSITION STATEMENT: Supports HB 428.                                                                                          
                                                                                                                                
Ms. Suzanne Cunningham                                                                                                          
Staff to Representative Meyer                                                                                                   
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on HB 428 for sponsor.                                                                          
                                                                                                                                
Mr. Jim Pound                                                                                                                   
Staff to Representative Hugh Fate                                                                                               
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on HB 15 for sponsor.                                                                           
                                                                                                                                
Ms. Cindy Drinkwater                                                                                                            
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK  99811-0300                                                                                                          
POSITION STATEMENT: Commented on HB 15.                                                                                       
                                                                                                                                
Mr. Bob Flint                                                                                                                   
Hartig & Rhodes                                                                                                                 
Direct Marketing and Publishers                                                                                                 
Anchorage AK                                                                                                                    
POSITION STATEMENT: Opposes HB 15.                                                                                            
                                                                                                                                
Ms. Ann Darr                                                                                                                    
Magazine Publishers of America                                                                                                  
No address provided                                                                                                             
POSITION STATEMENT: Opposes HB 15.                                                                                            
                                                                                                                                
Ms. Myra Pugh                                                                                                                   
Staff to Senator Bettye Davis                                                                                                   
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on SB 349 for sponsor.                                                                          
                                                                                                                                
Ms. Judy Davidson                                                                                                               
Mat-Su Midwifery                                                                                                                
No address provided                                                                                                             
POSITION STATEMENT: Supports SB 349.                                                                                          
                                                                                                                                
Ms. Kathryn Piatt                                                                                                               
Frontier Midwifery                                                                                                              
Soldotna AK                                                                                                                     
POSITION STATEMENT: Supports SB 349.                                                                                          
                                                                                                                                
Ms. Kelly DeSieyes                                                                                                              
Women's Way Midwifery                                                                                                           
Soldotna AK                                                                                                                     
POSITION STATEMENT: Supports SB 349.                                                                                          
                                                                                                                                
Ms. Barbara Norton, co-owner                                                                                                    
Geneva Woods Birth Center                                                                                                       
Anchorage AK                                                                                                                    
POSITION STATEMENT:  Supports SB 349.                                                                                         
                                                                                                                                
Ms. Dana Brown                                                                                                                  
Fairbanks AK                                                                                                                    
POSITION STATEMENT:  Supports SB 349.                                                                                         
                                                                                                                                
Ms. Kay Kanne, Executive Director                                                                                               
Juneau Family Birth Center                                                                                                      
Juneau AK                                                                                                                       
POSITION STATEMENT: Supports SB 349.                                                                                          
                                                                                                                                
Mr. Mark Hickey                                                                                                                 
Aleut Corporation                                                                                                               
     th                                                                                                                         
211 4 St., Suite 108                                                                                                            
Juneau AK                                                                                                                       
POSITION STATEMENT: Supports SB 389.                                                                                          
                                                                                                                                
Mr. David Jensen, CEO                                                                                                           
Aleut Corporation                                                                                                               
No address provided                                                                                                             
POSITION STATEMENT: Supports SB 389.                                                                                          
                                                                                                                                
Mr. Daniel Patrick, Senior Assistant Attorney General                                                                           
Regulatory Affairs                                                                                                              
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK  99811-0300                                                                                                          
POSITION STATEMENT: Supports SB 392.                                                                                          
                                                                                                                                
Mr. Pat Luby, Advocacy Director                                                                                                 
AARP Alaska                                                                                                                     
Juneau AK                                                                                                                       
POSITION STATEMENT: Supports SB 392.                                                                                          
                                                                                                                                
Mr. Greg Winegar, Director                                                                                                      
Division of Investments                                                                                                         
Department of Community & Economic Development                                                                                  
PO Box 110800                                                                                                                   
Juneau, AK 99811-0800                                                                                                           
POSITION STATEMENT: Supports SB 387.                                                                                          
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 04-34, SIDE A                                                                                                            
                                                                                                                                
        SB 272-DEFERRED DEPOSIT ADVANCES (PAYDAY LOANS)                                                                     
                                                                                                                              
CHAIR CON  BUNDE called  the Senate  Labor and  Commerce Standing                                                             
Committee meeting  to order  at 2:04  p.m. Present  were Senators                                                               
Bettye Davis,  Ralph Seekins  and Chair  Con Bunde.  Senator Gary                                                               
Stevens  arrived at  2:05 and  Senator Hollis  French arrived  at                                                               
2:10. The  first order of  business to come before  the committee                                                               
was SB 272.                                                                                                                     
                                                                                                                                
SENATOR RALPH SEEKINS  moved to adopt CSSB  272(L&C), version /S.                                                               
There were no objections and it was so ordered.                                                                                 
                                                                                                                                
MR.  RICHARD   SCHMITZ,  staff   to  Senator   Cowdery,  sponsor,                                                               
explained that the  original bill had a $1,000 cap  on the amount                                                               
that could  be loaned, which was  lowered to $500 in  the CS. The                                                               
new version allows  only two rollovers so a person  can't go into                                                               
perpetual debt.  The lender also  has to  post a bond  giving the                                                               
Division  of Banking  closer scrutiny  and offer  the consumer  a                                                               
payment plan  before initiating  a legal action  to collect  on a                                                               
default. Damages a  lender can recover are limited  to $700, down                                                               
from  $1,000 and  he can  only charge  $15 per  $100 loaned.  The                                                               
original bill allowed  for some additional interest.  A couple of                                                               
other minor changes  were made like raising the NSF  fee from $25                                                               
to $30, which is an amount that another bill puts in statute.                                                                   
                                                                                                                                
MR.  ED SNIFFEN,  Department of  Law, clarified  that the  fees a                                                               
lender can charge include the $15  per $100 plus a $5 origination                                                               
fee. A stylistic  change included removing a  problem with third-                                                               
party   collectors.   In   the  original   version,   third-party                                                               
collectors were required  to comply with the  payment plan, which                                                               
was  problematic  because the  Division  of  Banking didn't  have                                                               
jurisdiction  over them.  The CS  requires a  payment plan  to be                                                               
offered  by  the lender  before  taking  any  other action  on  a                                                               
default. He  stood by his  previous testimony on other  issues in                                                               
the bill.                                                                                                                       
                                                                                                                                
CHAIR BUNDE noted that the general  public seems to think this is                                                               
enabling  legislation that  would create  something that  doesn't                                                               
exist  in Alaska  now.  However,  that is  not  correct. This  is                                                               
simply  regulating  a legal  industry  that  currently exists  in                                                               
Alaska.                                                                                                                         
                                                                                                                                
MR. SNIFFEN concurred with that  saying that's why the Department                                                               
of Law supports  it. There is some room for  debate on whether or                                                               
not the current form of this  industry is legal or not in Alaska,                                                               
because of  the Small  Loan Act and  the usury  statute structure                                                               
that  is  a little  confusing,  but  pending legal  action  might                                                               
clarify that.  This legislation goes  a long way in  dealing with                                                               
the problems in the industry, although it's not a perfect fix.                                                                  
                                                                                                                                
MR.  STEVE CLEARY,  Executive  Director,  Alaska Public  Interest                                                               
Research Group (AKPIRG),  said that other states  have a somewhat                                                               
varied track  record with payday loans.  Recently, Georgia capped                                                               
the annual percentage  rate at 60 percent, whereas  this bill has                                                               
the rate at approximately 470 percent.                                                                                          
                                                                                                                                
     So,  we've  been  testifying and  trying  to  show  how                                                                    
     dangerous  these types  of loans  are to  consumers. In                                                                    
     Georgia,  they basically  shut them  down, particularly                                                                    
     around  military bases  because  they  were preying  on                                                                    
     military  families  who couldn't  afford  to  get on  a                                                                    
     cycle of debt.  This bill purports to just  be a short-                                                                    
     term fix for consumers,  but oftentimes what happens is                                                                    
     consumers get on a cycle  of debt that they aren't able                                                                    
     to escape from.                                                                                                            
                                                                                                                                
The compromise  AKPIRG has come  up with is changing  the minimum                                                               
term of  the loans  from 14  days to 30  days, which  would allow                                                               
consumers two pay periods to get  this loaned money back. It also                                                               
would allow  people who are  only paid once  a month a  chance to                                                               
better repay this loan. One  of the payday lenders testified that                                                               
he  gave roughly  26,000  loans  in a  year  to 24,000  different                                                               
customers,  meaning that  most customers  are  only choosing  one                                                               
loan  per  year.  If  the  amount  of  time  allocated  to  these                                                               
customers were doubled, it would  have a negligible affect on the                                                               
profits of payday  lenders. He urged the committee  to change the                                                               
length of the  loan term from 14 to 30  days, which would roughly                                                               
halve the annual percent rate to 200 percent.                                                                                   
                                                                                                                                
MS. DEBORAH FINK, a lender, said she would answer questions.                                                                    
                                                                                                                                
CHAIR BUNDE  asked for  her reaction to  extending the  loan term                                                               
from 14 to 30 days.                                                                                                             
                                                                                                                                
MS. FINK  replied that would  essentially reduce the  income from                                                               
the fees,  which would  make payday  loans a  loosing proposition                                                               
for any of  the people who did  it. "We would have  to double our                                                               
customer base in order to cover that cost...."                                                                                  
                                                                                                                                
MR. JIM  DAVIS, Alaska Legal  Services, said this is,  in effect,                                                               
enabling legislation.                                                                                                           
                                                                                                                                
     It will make  legal what is, in  effect, illegal, which                                                                    
     is  to   charge  400  to  1,000   percent  interest  on                                                                    
     consumers  and  it's  motivated  for  no  other  reason                                                                    
     except  to terminate  the lawsuit  pending in  front of                                                                    
     the Superior  Court here in  Anchorage, which  will, if                                                                    
     left  undisturbed,  lead  to   a  ruling  and,  in  all                                                                    
     probability, that  says these  kinds of  businesses are                                                                    
     violating existing Alaska law....                                                                                          
                                                                                                                                
He  pointed out  that  SB 272  would make  legal  an interest  in                                                               
excess  of  what the  Gambino  crime  family charged  on  similar                                                               
loans. Other purported  protections in the bill  will not protect                                                               
consumers in  fact - monitoring  by the Division of  Banking, for                                                               
one.                                                                                                                            
                                                                                                                                
     Without   additional   staff,    there   will   be   no                                                                    
     monitoring.... And  apparently there are  no additional                                                                    
     staff people that  are going to be  added because there                                                                    
     is  no fiscal  note to  this bill.  So, you'll  have no                                                                    
     effective monitoring by the Division  of Banking or any                                                                    
     other division of the state.  You'll have reams of data                                                                    
     under this bill provided to  the Division of Banking or                                                                    
     to  another  division of  the  state,  but without  new                                                                    
     staff to look at these reams  of data, it'll just be in                                                                    
     a box sitting in a warehouse someplace....                                                                                 
                                                                                                                                
CHAIR  BUNDE responded  that  there is  a  $226,000 fiscal  note,                                                               
which he asked Mr. Lutz to address.                                                                                             
                                                                                                                                
SENATOR FRENCH arrived at 2:10 p.m.                                                                                             
                                                                                                                                
MR.  TERRY  LUTZ,  Financial Institution  Examiner,  Division  of                                                               
Banking, Securities  and Corporations, Department of  Community &                                                               
Economic Development  (DCED), said he  had a  lot to do  with the                                                               
revenue  side  of   the  fiscal  note  and   explained  that  the                                                               
expenditure side was done by  Director Mark Davis who anticipated                                                               
several hearings  initially, which  accounts for  the contractual                                                               
amount of $103,000.  Division of Personal Services has  to add an                                                               
examiner  and   a  clerk.  The   travel  is  pretty   much  self-                                                               
explanatory.                                                                                                                    
                                                                                                                                
MR.  CHIP  WAGONER, Alaska  Catholic  Conference,  said the  main                                                               
issue of  whether loans  should be  for two weeks  or 30  days is                                                               
what affect  that would have  on the consumers, which  he thought                                                               
was pretty easy  to figure out, and what affect  it would have on                                                               
the industry,  which wasn't easy  to figure out. Before  the bill                                                               
leaves  this   committee,  he  thought  it   incumbent  upon  the                                                               
committee to get  written facts and figures from  the industry as                                                               
to what  affect it would  really have. Without  that information,                                                               
he didn't see how the issue could be evaluated.                                                                                 
                                                                                                                                
SENATOR  BETTYE DAVIS  said she  wasn't  aware that  it might  be                                                               
illegal to conduct this kind of  business in Alaska and wanted to                                                               
know if  the court  would make  a decision  soon. "If  that's the                                                               
case, why  would we want  to bother  about regulating this  if it                                                               
turns out to be illegal?"                                                                                                       
                                                                                                                                
MR.  MARK DAVIS,  Director, Division  of Banking,  Securities and                                                               
Corporations, responded:                                                                                                        
                                                                                                                                
     These  loans  have been  made  for  some time  under  a                                                                    
     perceived  exemption  to  the  Small  Loan  Act,  which                                                                    
     exempts, some  people argue, loans  up to  $500. That's                                                                    
     in litigation.  However, the Act also  has an exemption                                                                    
     for  certain   types  of   other  activities   such  as                                                                    
     pawnbrokers.  What we're  suggesting is  the regulation                                                                    
     of this  industry, which, I  think, will tend  to exist                                                                    
     in one form  or another, no matter what  the outcome of                                                                    
     the  litigation.... In  44 states,  the state's  answer                                                                    
     has been to regulate them.                                                                                                 
                                                                                                                                
SENATOR SEEKINS  said he didn't  think the Legislature  wanted to                                                               
eliminate  the  industry and  he  looked  at this  as  regulation                                                               
rather  than   enabling  legislation.  He  moved   to  pass  CSSB                                                               
272(L&C),   version   /S,    from   committee   with   individual                                                               
recommendations and attached fiscal note.                                                                                       
                                                                                                                                
SENATOR FRENCH objected because he  thought they would be passing                                                               
enabling legislation that the state  is better off without and he                                                               
wanted to  allow the lawsuit  to work  its way through  the court                                                               
system.                                                                                                                         
                                                                                                                                
CHAIR  BUNDE asked  for the  roll. Senators  Gary Stevens,  Ralph                                                               
Seekins and Chair Con Bunde  voted yea; Senators Bettye Davis and                                                               
Hollis French voted nay; and CSSB 272(L&C) moved from committee.                                                                
                                                                                                                                
         CSHB 428(JUD)-CIVIL PENALTY: MINORS & ALCOHOL                                                                      
                                                                                                                                
CHAIR  CON   BUNDE  announced   CSHB  428(JUD)   to  be   up  for                                                               
consideration.                                                                                                                  
                                                                                                                                
REPRESENTATIVE KEVIN  MEYER, sponsor,  said HB 428  was requested                                                               
by Mothers Against Drunk Drivers  (MADD) and Brown Jug. It simply                                                               
tries to  deter kids from asking  adults to buy alcohol  for them                                                               
and tries to deter adults from  buying alcohol for kids. "The way                                                               
to do this is to have  businesses take civil action against these                                                               
people who  try to do  it." A  business in Anchorage  has already                                                               
used  this  technique,  nicknamed  'Hey,  Mister'  on  about  100                                                               
people. Once a person is notified  of a civil action, he is given                                                               
a  choice of  either  paying a  fine  of $1,000  or  going to  an                                                               
education program  sponsored by  MADD and other  organizations to                                                               
get  $700  waived. Most  people  choose  to participate  in  this                                                               
program.                                                                                                                        
                                                                                                                                
He explained  that three different  groups of people  buy alcohol                                                               
for minors - older brothers  and sisters, homeless people and sex                                                               
offenders  (who  probably  have other  motives).  This  bill  has                                                               
passed the  House with  no opposition. There  was a  concern that                                                               
businesses would  be forced to take  this type of action,  but it                                                               
is  totally optional.  It  doesn't  cost the  state  or the  city                                                               
anything.                                                                                                                       
                                                                                                                                
SENATOR HOLLIS FRENCH  said he totally agreed with  the intent of                                                               
the bill  and asked  what happens  to the  $1,000 once  Brown Jug                                                               
gets its mitts on it.                                                                                                           
                                                                                                                                
REPRESENTATIVE MEYER  answered that Brown Jug's  testimony states                                                               
that it waives  $700 of the fine and keeps  $300, if the offender                                                               
agrees  to go  through the  alcohol education  program. The  $300                                                               
covers their administrative costs.                                                                                              
                                                                                                                                
MR. O.C.  MADDEN, Director, Human Resources  and Loss Prevention,                                                               
Brown Jug,  Inc., explained that  the municipal  assembly adopted                                                               
this  ordinance last  year. The  civil penalty  has been  used to                                                               
encourage  a bunch  of youngsters  who would  not have  otherwise                                                               
received treatment to get involved in a treatment program.                                                                      
                                                                                                                                
     We offer  a bonus  to our employees  to seize  fake IDs                                                                    
     from  minors and  minors who  illegally enter  licensed                                                                    
     premises and now  we are offering a  bonus to employees                                                                    
     to  interrupt these  third-party sales  where an  adult                                                                    
     has purchased alcohol  for a minor. We use  the $300 to                                                                    
     pay the  bonus to  the employee; we  waive $700  of the                                                                    
     $1,000  if  the  minor  will   agree  to  sign  up  for                                                                    
     treatment.  Virtually all  of  them have.  We are  also                                                                    
     able  to do  the same  thing  with the  adults who  are                                                                    
     purchasing alcohol  for minors. We  found this to  be a                                                                    
     very effective tool  and due to some  questions we have                                                                    
     from  other   licensees  around  the  state   that  are                                                                    
     interested  in  doing  the same  thing,  we  approached                                                                    
     Representative Meyers with this idea.                                                                                      
                                                                                                                                
SENATOR SEEKINS  asked which statute  deals with persons  who buy                                                               
alcohol for minors.                                                                                                             
                                                                                                                                
REPRESENTATIVE MEYER replied that it falls under AS 4.16.060.                                                                   
                                                                                                                                
SENATOR FRENCH asked  if the bill goes after the  fake IDs or the                                                               
Hey, Mister sale.                                                                                                               
                                                                                                                                
REPRESENTATIVE  MEYER  replied  that  Brown  Jug  has  been  very                                                               
aggressive in  getting fake  IDs, but that  action falls  under a                                                               
different bill and a different  statute. This bill focuses on the                                                               
Hey Mister sales.                                                                                                               
                                                                                                                                
MR. DAVE LAMBERT, Fairbanks, said  he owns two establishments and                                                               
strongly supported  HB 428. He  said a similar bill  about minors                                                               
entering premises  passed a couple  of years ago had  worked very                                                               
well. It  gave employees incentive  to go after minors  trying to                                                               
purchase. Prior to that, most employees didn't care.                                                                            
                                                                                                                                
SENATOR FRENCH  asked how  the $1,000  is divvied  up when  he is                                                               
successful in one of these suits.                                                                                               
                                                                                                                                
MR. LAMBERT replied  that he has five in the  works right now and                                                               
has  received  partial  payment  on  two  of  them.  An  employee                                                               
receives $500  for catching  his first  offender. After  that, he                                                               
gets $250 for each one - after the money is collected.                                                                          
                                                                                                                                
     So, all of a sudden  the door-people and bartenders are                                                                    
     really paying attention to  checking IDs.... A thousand                                                                    
     dollars  isn't  that  much  if a  minor  comes  into  a                                                                    
     premises  and is  served and  goes  out and  gets in  a                                                                    
     wreck. A thousand dollars doesn't  go very far to cover                                                                    
     our legal fees.                                                                                                            
                                                                                                                                
SENATOR FRENCH  asked if he could  assume that the other  half of                                                               
the money in  the first instance and the other  three quarters of                                                               
it in  the second in  the subsequent instances  go to him  as the                                                               
bar-owner.                                                                                                                      
                                                                                                                                
MR.  LAMBERT  replied yes,  after  he  collects it.  He  strongly                                                               
supports the training, but he doesn't  think it should be part of                                                               
this bill.  The city of  Fairbanks doesn't  have the money  to go                                                               
after small things.                                                                                                             
                                                                                                                                
SENATOR SEEKINS  asked if paragraph  (B) puts a foster  parent at                                                               
risk for the actions of a 14 or  15 year old who wants him to buy                                                               
a six-pack.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MEYER replied  that he  didn't think  so, because                                                               
it's currently  legal for parents  to buy alcohol for  their kids                                                               
within their own home and for their own use.                                                                                    
                                                                                                                                
SENATOR SEEKINS  clarified that he  was wondering about  a person                                                               
who has legal custody of an unemancipated minor.                                                                                
                                                                                                                                
REPRESENTATIVE MEYER said he didn't know.                                                                                       
                                                                                                                                
MS.  CINDY  CASHEN,  MADD  Juneau   Chapter,  said  she  is  also                                                               
representing the  other three MADD Alaska  Chapters in Anchorage,                                                               
Mat-Su and Fairbanks and supported  HB 428 because it will assist                                                               
in the  prevention of  underage drinking.  The Alaska  Youth Risk                                                               
Behavior Survey  is conducted annually.  The latest  one included                                                               
42   schools   out  of   19   districts   with  2,175   completed                                                               
questionnaires for grades  9 - 12. According to  the survey, 38.7                                                               
percent of teenagers claim they had  at least one drink in the 30                                                               
days prior to  filling out the survey; almost  27 percent claimed                                                               
five or more drinks within a  couple of hours, binge drinking, in                                                               
the  previous  month.  In comparison,  29.9  percent  of  Alaskan                                                               
adults  reported binge  drinking one  or more  times in  the past                                                               
month.  This bill  will help  prevent that  by adding  a tool  to                                                               
community policing.                                                                                                             
                                                                                                                                
SENATOR GARY  STEVENS asked  if Anchorage is  the only  area that                                                               
has a program and if MADD would be involved if it were here.                                                                    
                                                                                                                                
MS. CASHEN  replied that's  true. MADD would  be involved  in the                                                               
communities that wanted to start the program.                                                                                   
                                                                                                                                
MS.  JESSICA PARIS,  MADD Youth  In  Action Program,  said as  an                                                               
opponent of  underage drinking, she  supports HB 428,  because it                                                               
proposes a  unique, free  and proactive  way to  prevent underage                                                               
drinking and the  tragedies associated with it  like dropping out                                                               
of  high school,  premature sexual  activity,  car crashes,  etc.                                                               
"This  bill  provides the  incentives  for  store owners  to  get                                                               
involved and help prevent these transactions."                                                                                  
                                                                                                                                
MS.  PARIS stated  that a  $1,000  civil fine  is an  appropriate                                                               
amount  because it  is  enough to  impact either  an  adult or  a                                                               
youth.  It is  compensation for  an otherwise  thankless task  of                                                               
providing extra  staff, confronting people in  their parking lot,                                                               
sending legal documents  and risking being taken to  court by the                                                               
defendant.                                                                                                                      
                                                                                                                                
MS. SUZANNE CUNNINGHAM, Staff  to Representative Meyer, explained                                                               
that AS 4.16.051 does not prohibit  a parent or a guardian or the                                                               
legal spouse  of that person from  giving alcohol to a  minor. It                                                               
doesn't say  legal guardian specifically,  but the  bill includes                                                               
that. She wasn't sure about the foster parent question.                                                                         
                                                                                                                                
CHAIR BUNDE noted  there was no further testimony  and closed the                                                               
public hearing.                                                                                                                 
                                                                                                                                
SENATOR SEEKINS moved to pass  CSHB 428 (JUD) from committee with                                                               
individual  recommendations and  attached  fiscal note.  Senators                                                               
Bettye  Davis, Hollis  French, Ralph  Seekins,  Gary Stevens  and                                                               
Chair  Con  Bunde voted  yea;  and  CSHB  428(JUD) moved  out  of                                                               
committee.                                                                                                                      
                                                                                                                                
            HB  15-SOLICITATIONS/CONSUMER PROTECTION                                                                        
                                                                                                                              
CHAIR CON  BUNDE announced HB 15  to be up for  consideration and                                                               
that  some  agreement  had been  reached  between  the  competing                                                               
interests that  resulted in  an amendment.  He moved  amendment 1                                                               
and objected for discussion purposes.                                                                                           
                                                                                                                                
                                                     23-LS0058\VA.1                                                             
                                                            Craver                                                              
                      A M E N D M E N T  1                                                                                  
                                                                                                                                
                                                                                                                                
OFFERED IN THE HOUSE                     BY REPRESENTATIVE FATE                                                                 
     TO:  CSHB 15(FIN) am                                                                                                       
Page 8, lines 14 - 15:                                                                                                          
     Delete all material.                                                                                                       
     Insert "[MAGAZINE, PERIODICAL,] sound recording or [,] book                                                            
through [, OR MEMBERSHIP IN] a book or record club"                                                                         
                                                                                                                                
Page 8, line 20, following "(11)":                                                                                              
     Insert "by a publisher, or a publisher's agent operating                                                               
under a written agreement between a publisher and the agent, who                                                            
is soliciting the sale of a publisher's magazine if                                                                         
                    (A)  the buyer has the right to review the                                                              
          magazine and  cancel the subscription for  the magazine                                                           
          within  seven days  after receipt  of  the magazine;  a                                                           
          cancellation  request  is  timely  if  the  request  is                                                           
          mailed,  properly  addressed  and  postmarked,  postage                                                           
          prepaid,  within  seven  days   after  receipt  of  the                                                           
          magazine; and                                                                                                     
                    (B)  the right of cancellation and refund is                                                            
          fully disclosed to the buyer before or at the time the                                                            
          initial invoice is received by the buyer;                                                                         
               (12)"                                                                                                      
                                                                                                                                
Page 8, line 22:                                                                                                                
     Delete "(12)"                                                                                                              
     Insert "(13) [(12)]"                                                                                                   
                                                                                                                                
Page 8, line 24:                                                                                                                
     Delete "(13)"                                                                                                              
     Insert "(14) [(13)]"                                                                                                   
                                                                                                                                
Page 8, line 26:                                                                                                                
     Delete "(14)"                                                                                                              
     Insert "(15) [(14)]"                                                                                                   
                                                                                                                                
Page 8, line 29:                                                                                                                
     Delete "(15)"                                                                                                              
     Insert "(16) [(15)]"                                                                                                   
                                                                                                                                
Page 9, line 5:                                                                                                                 
     Delete "(16)"                                                                                                              
     Insert "(17) [(16)]"                                                                                                   
                                                                                                                                
Page 9, line 6:                                                                                                                 
     Delete "(17)"                                                                                                              
     Insert "(18) [(17)]"                                                                                                   
                                                                                                                                
Page 9, line 11:                                                                                                                
     Delete "(18)"                                                                                                              
     Insert "(19) [(18)]"                                                                                                   
                                                                                                                                
MR. JIM POUND, staff to Representative Hugh Fate, sponsor,                                                                      
deferred comments to Cindy Drinkwater and Bob Flint.                                                                            
                                                                                                                                
MS.  CINDY DRINKWATER,  Department of  Law (DOL),  explained that                                                               
Amendment 1 is  similar to language that about  five other states                                                               
have  in their  telemarketing  registration  laws. The  reasoning                                                               
behind it  is that  some of  the scams  that are  associated with                                                               
magazine  subscription sales  are believed  to be  perpetrated by                                                               
entities  that are  often  considered to  be  clearing houses  or                                                               
wholesalers   or   some   other    entity   that   doesn't   have                                                               
responsibility for the ultimate  product, but is mostly concerned                                                               
with making  a quick sale  over the telephone. Amendment  1 makes                                                               
an  exemption for  a publisher,  or  an agent  of his,  operating                                                               
under  a  written agreement  for  the  sale of  that  publisher's                                                               
magazine if  two conditions  apply. The  first condition  is that                                                               
the buyer  has the right  to review  the magazine and  cancel the                                                               
subscription for it within seven  days of receipt of the magazine                                                               
and that the right of  cancellation and refund is fully disclosed                                                               
to  the buyer  at the  time the  initial invoice  is received  or                                                               
before.  She felt  this  would  address some  of  the issues  the                                                               
Direct Marketing  Association has  raised. However,  the Consumer                                                               
Protection  Unit urged  an alteration,  which  would involve  two                                                               
small  words   on  line  15.   It  would  read,  "The   right  of                                                               
cancellation  and refund  is fully  disclosed in  writing to  the                                                               
buyer." She supported that, because  in reality the solicitations                                                               
happen and  a month or  two later,  the magazine arrives  and the                                                               
consumer  might not  remember  that  they were  told  in a  phone                                                               
conversation that they had a right to cancel their subscription.                                                                
                                                                                                                                
CHAIR BUNDE asked if this notice would come with the invoice.                                                                   
                                                                                                                                
MS. DRINKWATER replied that is correct.                                                                                         
                                                                                                                                
SENATOR  SEEKINS moved  to amend  Amendment  1 on  line 15  after                                                               
"disclose" by adding "in writing". There were no objections.                                                                    
                                                                                                                                
SENATOR GARY STEVENS  said you get the invoice  after getting the                                                               
magazine  and  thought that  was  kind  of  late to  receive  the                                                               
notice.                                                                                                                         
                                                                                                                                
MS. DRINKWATER  replied that she  would like to see  the consumer                                                               
receive something  much closer in  time to the  solicitation, but                                                               
believed  that some  notice  in writing  with  an opportunity  to                                                               
cancel is the critical feature.                                                                                                 
                                                                                                                                
SENATOR SEEKINS  moved to amend  Amendment 1 for the  second time                                                               
on line 12  after "receipt of the magazine" by  adding "or at the                                                               
time the initial  invoice is received by the  buyer, whichever is                                                               
later".                                                                                                                         
                                                                                                                                
TAPE 04-34, SIDE B                                                                                                            
                                                                                                                              
SENATOR  FRENCH objected  to understand  the  amendment and  then                                                               
withdrew his objection.                                                                                                         
                                                                                                                                
CHAIR BUNDE  announced that there  were no further  objections to                                                               
the second amendment to Amendment 1.                                                                                            
                                                                                                                                
CHAIR BUNDE asked if there  was further discussion on Amendment 1                                                               
as  amended.  There  were  no  objections  and  Amendment  1  was                                                               
adopted.                                                                                                                        
                                                                                                                                
MR. ROBERT FLINT, Hartig &  Rhodes, Direct Marketing Association,                                                               
said he thought he had an  agreement, but not after the committee                                                               
adopted  Amendment 1.  Adding "in  writing", which  has been  the                                                               
consistent position  of the Department  of Law,  isn't consistent                                                               
with industry practices and forbids  people to charge the product                                                               
on their credit card at the time of the call.                                                                                   
                                                                                                                                
     I think  we're back to  square one. That's not  the way                                                                    
     the  business works.  We  do have  in  your packets,  I                                                                    
     hope,  our  Freedom  of Information  Act  request  that                                                                    
     suggests that there  is such a low  level of complaints                                                                    
     from  2000  and  1999  that  there  is  no  discernible                                                                    
     practice of abuse regarding this.                                                                                          
                                                                                                                                
MS. ANN DARR, Magazine Publishers of America, said:                                                                             
                                                                                                                                
     We're selling  a magazine subscription!  Every American                                                                    
     knows what  a magazine  is. There's  nothing mysterious                                                                    
     or  questionable about  it. We  have  the best  review,                                                                    
     return or  cancel guarantee in  the world.  If somebody                                                                    
     doesn't  want  it,  we'll credit  them  or  cancel  the                                                                    
     billing. If  they decide they  don't like it  after two                                                                    
     months or three months or  six months, we'll cancel all                                                                    
     unmailed  issues. It's  making  it  too complicated  to                                                                    
     sell  a simple  magazine  subscription.  We offer  many                                                                    
     wonderful  things to  Americans  through magazines.  We                                                                    
     offer information  about retirement,  financial issues,                                                                    
     information  for  elderly  persons,  entertainment  for                                                                    
     children,   educational    articles,   articles   about                                                                    
     history....  So,  we  don't   feel  there  is  anything                                                                    
     mysterious about selling  a magazine subscription, that                                                                    
     there is  anything the consumer  is confused  about. If                                                                    
     they say they want it, we  believe we should be able to                                                                    
     consider it sold with their ability to cancel and not                                                                      
     have to confirm it in writing.                                                                                             
                                                                                                                                
CHAIR  BUNDE asked,  "Even if  that confirmation  comes with  the                                                               
invoice?"                                                                                                                       
                                                                                                                                
MS. DARR  answered, "They  don't always get  an invoice.  If they                                                               
have given us  their credit card and that's how  they want to pay                                                               
for it, they're not going to get an invoice."                                                                                   
                                                                                                                                
CHAIR BUNDE  asked Mr. Pound if  he cared to comment  on the deal                                                               
that was broken.                                                                                                                
                                                                                                                                
MR. POUND  replied that the  "in writing"  issue is the  one that                                                               
Ms.  Drinkwater   and  Mr.   Flint  were   consistently  arguing,                                                               
primarily because according to  the Direct Marketing Association,                                                               
most  of  these  deals  are  done  with  credit  cards  over  the                                                               
telephone.  Requiring "in  writing" would  make it  impossible to                                                               
make credit card sales over the phone.                                                                                          
                                                                                                                                
CHAIR  BUNDE  asked  Ms.  Drinkwater   how  many  complaints  are                                                               
registered yearly about magazine scams.                                                                                         
                                                                                                                                
MS. DRINKWATER answered there were  five complaints in 2003 about                                                               
magazine scams,  which may not seem  like a huge number,  but the                                                               
quality  of  the complaint  is  what  she considers.  These  were                                                               
complaints from senior  citizens who are on a  limited income who                                                               
had  gone  to great  lengths  to  try  to cancel  their  magazine                                                               
subscriptions and were simply unable  to cancel or were unable to                                                               
get through to  a live person at the 800  number they were given.                                                               
She did  not want to change  any of the other  17 exemptions that                                                               
exist in the current statute.                                                                                                   
                                                                                                                                
SENATOR SEEKINS moved  to pass SCS CSHB  15(L&C)am from committee                                                               
with  the attached  fiscal note  and individual  recommendations.                                                               
Senators  Hollis  French,  Gary Stevens,  Ralph  Seekins,  Bettye                                                               
Davis  and Chair  Con Bunde  voted  yea; and  SCS CSHB  15(L&C)am                                                               
moved from committee.                                                                                                           
                                                                                                                                
            SB 349-MIDWIFERY BIRTH CENTER LICENSING                                                                         
                                                                                                                                
CHAIR CON BUNDE announced SB 349 to be up for consideration.                                                                    
                                                                                                                                
MS. MYRA PUGH, staff to  Senator Bettye Davis, sponsor, explained                                                               
that currently there  are six birth centers in  Alaska; five more                                                               
are  registered  and  one  is   licensed.  The  owners,  who  are                                                               
certified direct entry and  certified nurse midwives, unanimously                                                               
concluded they  need to have  one license standard for  all birth                                                               
centers.                                                                                                                        
                                                                                                                                
CHAIR  BUNDE  asked if  in  other  enterprises that  involve  the                                                               
Division of  Licensing, the  licensees have to  bear the  cost of                                                               
licensing and if that was the case now.                                                                                         
                                                                                                                                
MS. PUGH replied  that is the case, but wanted  the department to                                                               
verify that.                                                                                                                    
                                                                                                                                
MS.  JUDY DAVIDSON,  owner and  operator, Mat-Su  Midwifery, said                                                               
she does over 100 births per year.                                                                                              
                                                                                                                                
     We feel this bill is  very appropriate in that it would                                                                    
     license us  for doing what licensed  care providers are                                                                    
     already doing.  We would prefer  to be  licensed rather                                                                    
     than registered and [to] adhere to a single standard.                                                                      
                                                                                                                                
MS. KATHRYN PIATT,  owner, Frontier Midwifery, said  she serves a                                                               
large section of outlying communities  and agreed that having one                                                               
licensed birth  center is  a good  idea so  that the  standard of                                                               
care is consistent all over the state.                                                                                          
                                                                                                                                
SENATOR GARY  STEVENS asked  how many births  per year  happen at                                                               
her facility.                                                                                                                   
                                                                                                                                
MS. PIATT replied about 25,  but another birth center in Soldotna                                                               
does that many, as well.                                                                                                        
                                                                                                                                
MS.  KELLY  DESIEYES,  Women's   Way  Midwifery,  said  having  a                                                               
consistent standard  would not only  help the birth  centers, but                                                               
also the families they serve. She supported SB 349.                                                                             
                                                                                                                                
MS. BARBARA NORTON,  Geneva Woods Birth Center,  supported SB 349                                                               
for the reasons previously stated.                                                                                              
                                                                                                                                
MS. DANA  BROWN, Fairbanks, said  she is  the director of  a non-                                                               
profit birth  center that also  serves outlying  Bush communities                                                               
in the  Interior and  that she supported  SB 349.  Licensing will                                                               
make a  better standard  for birth  centers throughout  the state                                                               
and will continue  to advance midwifery, which  the public really                                                               
wants.                                                                                                                          
                                                                                                                                
MS. KAY  KANNE, Executive Director,  Juneau Family  Birth Center,                                                               
said  she sat  on the  board of  Certified Direct  Entry Midwives                                                               
from its inception in 1992 until  2000. She is also the volunteer                                                               
lobbyist for  the Midwives  Association of  Alaska. She  gave the                                                               
committee  background on  how  two kinds  of  birth centers  came                                                               
about in Alaska - registered and licensed.                                                                                      
                                                                                                                                
     This happened back in 1992  when we passed our original                                                                    
     legislation  to  create  a board  of  Certified  Direct                                                                    
     Entry Midwives for licensure. We  also went back to the                                                                    
     Health  and   Social  Services  law  and   changed  the                                                                    
     line...where  it said,  'The  commissioner shall  adopt                                                                    
     regulations for  the registration  of lay  midwifery in                                                                    
     the State  of Alaska.' Well,  we no longer  needed that                                                                    
     because we  were going to  be licensed by  the Division                                                                    
     of Occupational Licensing. So, we  changed that line to                                                                    
     address one of  our other concerns, which  was the fact                                                                    
     that the  birth center  regulations at the  time stated                                                                    
     that only a  physician or a nurse  midwife could attend                                                                    
     births in a birth center.  So, basically we changed the                                                                    
     line  to say  'the registration  of birth  centers' and                                                                    
     then  we   changed  the  wording   to  say   that  'The                                                                    
     commissioner  shall not  require  that  a physician  or                                                                    
     nurse  midwife be  present  at  a birth',  accidentally                                                                    
     leaving the  word 'registered'  in instead  of changing                                                                    
     it to 'licensed'.  We didn't notice that  until we went                                                                    
     back after the law was  passed and the Department said,                                                                    
     'Oh,  we can't  change these  regulations for  licensed                                                                    
     birth  centers.  What you've  done  is  create a  whole                                                                    
     different  kind  of birth  center.  So,  that's how  it                                                                    
     happened in 1992. It was never intended....                                                                                
                                                                                                                                
CHAIR BUNDE asked if anyone  opposes this bill. Someone indicated                                                               
no.                                                                                                                             
                                                                                                                                
SENATOR  FRENCH  moved  to  pass   SB  349  from  committee  with                                                               
individual recommendations and attached fiscal note.                                                                            
                                                                                                                                
CHAIR  BUNDE   objected  only  to  get   clarification  that  the                                                               
registration will  in deed  be handled  like other  licensing and                                                               
actually pay  for itself. He  asked for the roll.  Senators Ralph                                                               
Seekins, Hollis French, Gary Stevens,  Bettye Davis and Chair Con                                                               
Bunde voted yea; and SB 349 moved from committee.                                                                               
                                                                                                                                
        SB 389-CORP. CONVERSION TO LIMITED LIABILITY CO.                                                                    
                                                                                                                                
CHAIR CON BUNDE  announced SB 389 to be up  for consideration. He                                                               
said this is a housekeeping  measure and was requested by several                                                               
Alaska regional  Native corporations  and amends existing  law to                                                               
allow  an  Alaskan  corporation  that   is  a  subsidiary  to  be                                                               
converted into  a limited liability company.  Many states already                                                               
allow this.                                                                                                                     
                                                                                                                                
MR.  MARK HICKEY,  Aleut Corporation,  thanked the  committee for                                                               
sponsoring the  bill and hearing  it promptly. He  concurred with                                                               
the chair's summary of the  bill. Current definition in state law                                                               
sets out  which business  entities may convert  to the  status of                                                               
limited liability company (LLC) and  corporations are not on that                                                               
list. SB 389  includes subsidiary corporations only  so there are                                                               
no tax consequences to the state.                                                                                               
                                                                                                                                
MR. HICKEY said  it is possible for Aleut  Corporation to convert                                                               
now,  but  it  would  have  to  dissolve  and  reform  a  limited                                                               
liability company. The problem this  presents is that a number of                                                               
its subsidiaries have 8A minority  business contractors under the                                                               
federal contracting process.  One of them has  15 such individual                                                               
contracts. To dissolve the corporation,  he would have to go back                                                               
to the  government agencies on  each contract  and get a  new one                                                               
put  in   place  and   then  go  back   to  the   Small  Business                                                               
Administration and get those approved.                                                                                          
                                                                                                                                
     This change  in law  will allow us  to make  the simple                                                                    
     conversion   without   having   to  go   through   that                                                                    
     cumbersome  process.  The  basic advantage  for  us  in                                                                    
     terms of being able to shift  to an LLC is it's cheaper                                                                    
     to operate,  we have  fewer rules  that apply,  no need                                                                    
     for a  board structure in cases  of pursuing financing,                                                                    
     a lesser standard in terms  of financial statements and                                                                    
     the audit requirements.                                                                                                    
                                                                                                                                
     I would just like to point  out on page 2 - it's really                                                                    
     the operative  language - we have  structured it pretty                                                                    
     carefully. It  is only to  a subsidiary and goes  on to                                                                    
     say  'owned directly  or indirectly'.  The only  reason                                                                    
     for  the  indirect part  is  we  have, in  some  cases,                                                                    
     subsidiaries that  are owned  by another  subsidiary of                                                                    
     our entity or  at least in part  by another subsidiary.                                                                    
     So,  we want  to be  broad enough  to cover  that case.                                                                    
     Then it  goes on to  say 'owned  by one or  more parent                                                                    
     corporations'. There  are some, but not  many, entities                                                                    
     that  are jointly  owned between  two corporations  and                                                                    
     this would  allow those, as  well, to become  LLCs, but                                                                    
     even  in that  case, the  tax consequence  would remain                                                                    
     neutral. The  parent would have the  obligation for the                                                                    
     tax   obligation  that   had   been   with  the   prior                                                                    
     subsidiary.                                                                                                                
                                                                                                                                
CHAIR  BUNDE asked  if he  was aware  of any  opposition to  this                                                               
bill.                                                                                                                           
                                                                                                                                
MR. HICKEY replied that he wasn't aware of any.                                                                                 
                                                                                                                                
MR. DAVID  JENSEN, CEO, Aleut  Corporation, said  his corporation                                                               
originally created C corporations, one  of which is out of state,                                                               
prior to legislation that authorized incorporation of the LLCs.                                                                 
                                                                                                                                
     To  restructure  Aleut   Corporation  for  streamlining                                                                    
     purposes,  we need  to  make all  of  our wholly  owned                                                                    
     subsidiaries   all   LLCs   for   management   reasons,                                                                    
     governance   and  so   on.  It   makes  sense   for  us                                                                    
     internally. Externally,  there are no  tax implications                                                                    
     to  the  state or,  for  that  matter, to  the  federal                                                                    
     government  either  since  we consolidate  all  of  our                                                                    
     income tax returns annually anyway.                                                                                        
                                                                                                                                
SENATOR  GARY  STEVENS  asked  if he  would  have  to  completely                                                               
disorganize and reform and get a lot of approval for contracts.                                                                 
                                                                                                                                
MR. JENSEN said  yes and added that another  alternative would be                                                               
to move  the corporation from  Alaska and  put it in  Colorado or                                                               
some other  state where  it can be  done easily,  another lengthy                                                               
process.                                                                                                                        
                                                                                                                                
SENATOR  SEEKINS  asked  why  SB   389  doesn't  allow  just  any                                                               
corporation to convert.                                                                                                         
                                                                                                                                
MR.  JENSEN replied  that has  been proposed,  but it  raises tax                                                               
consequences and  the subsidiary language clearly  doesn't create                                                               
that problem.                                                                                                                   
                                                                                                                                
SENATOR HOLLIS FRENCH asked why  there are no tax consequences to                                                               
this move.                                                                                                                      
                                                                                                                                
MR. HICKEY explained that current  subsidiaries either have a tax                                                               
obligation on their own or,  in many cases, they are consolidated                                                               
with the  parent. If they  are an LLC  and a subsidiary,  the tax                                                               
obligation passes up to the parent.                                                                                             
                                                                                                                                
SENATOR GARY  STEVENS moved  to pass SB  389 from  committee with                                                               
individual  recommendations   and  attached  zero   fiscal  note.                                                               
Senator Bettye Davis,  Gary Stevens, Ralph Seekins  and Chair Con                                                               
Bunde vote yea; and SB 389 moved from committee.                                                                                
                                                                                                                                
             SB 392-REGULATORY COMMISSION OF ALASKA                                                                         
                                                                                                                                
CHAIR CON BUNDE  announced SB 392 to be up  for consideration and                                                               
said that it was requested by the administration.                                                                               
                                                                                                                                
MR.   DANIEL   PATRICK,   Senior  Assistant   Attorney   General,                                                               
Regulatory Affairs,  Department of Law  (DOL), said the  need for                                                               
this bill arises as a result  of last year's Executive Order 111,                                                               
which transferred  the responsibility  for advocacy on  behalf of                                                               
the public in  utility matters from the  Regulatory Commission of                                                               
Alaska (RCA) to  the Attorney General's Office.  That has already                                                               
occurred. SB  392 is essentially  a compliment to that  bill. The                                                               
RCA  personnel who  were responsible  for that  advocacy now  act                                                               
under the  direction of  the DOL. This  bill would  complete that                                                               
transfer of  control by expressly  providing four aspects  of its                                                               
execution. They are:                                                                                                            
                                                                                                                                
   1. The bill would clarify that regulatory cost charge                                                                        
     receipts, not  general funds,  will continue  to pay  of the                                                               
     costs  of  public  advocacy, but  now  administered  by  the                                                               
     Department  of  Law  - just  as  those  off-budget  receipts                                                               
     historically paid  for the advocacy costs  when the function                                                               
     was performed within the RCA.                                                                                              
   2. The bill modifies the regulatory cost charge ceiling and                                                                  
     creates two  distinct budget  components -  one for  the RCA                                                               
     and one  for the  DOL public advocacy  function in  order to                                                               
     provide  each entity  with budgetary  independence from  the                                                               
     other.  The  purpose  for  that  is that  the  RCA,  in  its                                                               
     context, functions as the adjudicator  and the Department of                                                               
     Law,  as the  public advocate,  will be  an advocate  before                                                               
     them  as   a  party  and   it's  important  that   there  be                                                               
     independence between  the two as  in any judicial  or quasi-                                                               
     judicial setting.                                                                                                          
   3. The bill provides the Department of Law with qualified                                                                    
     access  to  utility  or   pipeline  carrier  records,  again                                                               
     similar to  that that was  afforded the RCA's  former public                                                               
     advocacy  staff in  order to  maintain efficient  economical                                                               
     access to information.                                                                                                     
   4. Finally, the bill clarifies that state agencies are exempt                                                                
     from paying the allocated costs  of RCA proceedings to which                                                               
     the state agency is a party,  because there is no net fiscal                                                               
     benefit  in  the current  arrangement.  You  have one  state                                                               
     agency, that from time to time and unexpectedly, may cost-                                                                 
     allocate  to  another  state  agency  and  then  that  state                                                               
     agency,  whether  it's  the  state   as  the  state  or  the                                                               
     Department  of  Law  public  advocate,  would  come  to  the                                                               
     Legislature to  get a supplemental  to pay those  costs. So,                                                               
     it would eliminate that exercise.                                                                                          
                                                                                                                                
MR. PATRICK summarized that the  bill completes the consolidation                                                               
of the  public advocacy  function within the  DOL and  gives that                                                               
function  budgetary independence  for  the RCA.  It provides  the                                                               
advocate with qualified  access to records and  it eliminates the                                                               
inefficiency by exempting key agencies  from paying RCA allocated                                                               
costs.                                                                                                                          
                                                                                                                                
MR.  PAT  LUBY,  Advocacy  Director, AARP,  said  it  has  76,000                                                               
members in Alaska, all of whom consume utilities. He said:                                                                      
                                                                                                                                
     All  too  often  the  RCA is  perceived  as  a  referee                                                                    
     between competing  utilities as they battle  for market                                                                    
     share. From  AARP's perspective, the RCA  is our voice,                                                                    
     our  watchdog,  our  public  advocate  in  the  utility                                                                    
     marketplace.                                                                                                               
                                                                                                                                
     Now that the responsibilities  for public advocacy have                                                                    
     been shifted to the  Attorney General's Office, we know                                                                    
     that the  budget will  always be  limited. The  cost of                                                                    
     representing the  public on  utility issues  should not                                                                    
     have to  be weighed in comparison  with other important                                                                    
     functions in the AG's office.  If the issues before the                                                                    
     RCA do not,  in effect, cost the  Attorney General some                                                                    
     of  his limited  budget, he  would be  more comfortable                                                                    
     allowing  his   staff  to  proceed  as   necessary  and                                                                    
     appropriate knowing  the utilities  will be  picking up                                                                    
     the cost. This  is as it should be.  AARP families need                                                                    
     the RCA, we need them to  have the budget and the staff                                                                    
     to  do the  investigations  necessary  for all  utility                                                                    
     issues and we encourage your support of SB 392.                                                                            
                                                                                                                                
SENATOR  STEVENS  moved  to  pass  SB  392  from  committee  with                                                               
individual recommendations  and attached fiscal note.  There were                                                               
no objections and it was so ordered.                                                                                            
                                                                                                                                
        SB 387-COMMERCIAL FISHING LOANS FOR QUOTA SHARES                                                                    
                                                                                                                                
CHAIR CON BUNDE announced SB 387 to be up for consideration.                                                                    
                                                                                                                                
MR. GREG  WINEGAR, Director, Division of  Investments, Department                                                               
of Community  & Economic Development (DCED),  said he appreciated                                                               
the committee hearing  this bill. It is straightforward  and is a                                                               
very small change to the Commercial Fishing Revolving Loan Fund.                                                                
                                                                                                                                
     It allows  a new  type of  quota shareowner  to qualify                                                                    
     for loans,  which are called community  quota entities.                                                                    
     These  entities  are  being  created  as  a  result  of                                                                    
     changes  the National  Marine Fisheries  Service (NMFS)                                                                    
     is making  in the quota share  program. Essentially, 42                                                                    
     smaller  Gulf communities  will  be able  to form  non-                                                                    
     profit  corporations, go  out  in  the marketplace  and                                                                    
     purchase quota  shares and lease them  back to citizens                                                                    
     within  those particular  communities. The  goal is  to                                                                    
     try  to   improve  the  economic  viability   of  these                                                                    
     communities   through   local  ownership   of   fishing                                                                    
     privileges. The  new federal rule  is expected  to take                                                                    
     place sometime in May. It's not in effect yet.                                                                             
                                                                                                                                
MR. WINEGAR  said this would be  a very small change  to the loan                                                               
program  and that  he can  already do  this for  individuals. The                                                               
loan criteria,  such as interest  rates and down  payments, would                                                               
be the same.                                                                                                                    
                                                                                                                                
     There  is  plenty  of  funding.   This  fund  is  self-                                                                    
     sufficient and  hasn't had any  general funds  for many                                                                    
     years....It will  bring the loan  program in  line with                                                                    
     what NMFS is doing with  the quota share program. It is                                                                    
     consistent   with  the   mission   of  the   Commercial                                                                    
     Revolving Loan Fund and, most  importantly, it is going                                                                    
     to provide these loans to  communities with a tool they                                                                    
     can  use to  try and  generate some  economic activity.                                                                    
     Many  of them  have lost  a  lot of  quota share  since                                                                    
     inception of the program in 1995.                                                                                          
                                                                                                                                
SENATOR GARY STEVENS said he  heard about this program in another                                                               
committee  and  thinks  it's  an excellent  idea.  It  makes  the                                                               
smaller communities  more economically  viable and  doesn't force                                                               
anyone to sell permits.                                                                                                         
                                                                                                                                
MR. WINEGAR acknowledged that those are two good points.                                                                        
                                                                                                                                
CHAIR BUNDE said  he was distributing testimony in  support of SB                                                               
392 to the committee from Don Beamer and Gordon Jackson.                                                                        
                                                                                                                                
SENATOR GARY  STEVENS moved  to pass SB  392 from  committee with                                                               
attached  fiscal note  and  individual recommendations.  Senators                                                               
Ralph Seekins,  Gary Stevens and  Chair Con Bunde voted  yea; and                                                               
SB 392 moved from committee.                                                                                                    
                                                                                                                                
SENATOR SEEKINS moved to forward  all the names of the confirmees                                                               
to  the  full body.  There  were  no  objections  and it  was  so                                                               
ordered.  There being  no  further business  to  come before  the                                                               
committee, adjourned the meeting at 3:30 p.m.                                                                                   

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