Legislature(2007 - 2008)BELTZ 211

04/03/2007 01:30 PM LABOR & COMMERCE

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* first hearing in first committee of referral
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Heard & Held
Heard & Held
Heard & Held
Bills Previously Heard/Scheduled
Moved CSSB 116(L&C) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         April 3, 2007                                                                                          
                           1:35 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Johnny Ellis, Chair                                                                                                     
Senator Gary Stevens, Vice Chair                                                                                                
Senator Bettye Davis                                                                                                            
Senator Lyman Hoffman                                                                                                           
Senator Con Bunde                                                                                                               
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 116                                                                                                             
"An Act relating to the Uniform Money Services Act, to money                                                                    
transmission services, and to currency exchange services; and                                                                   
providing for an effective date."                                                                                               
     MOVED CSSB 116(L&C) OUT OF COMMITTEE                                                                                       
SENATE BILL NO. 124                                                                                                             
"An Act relating to the allocation of money appropriated to the                                                                 
Alaska Workforce Investment Board; and providing for an                                                                         
effective date."                                                                                                                
     HEARD AND HELD                                                                                                             
SENATE BILL NO. 115                                                                                                             
"An Act relating to gift certificates and gift cards, and to                                                                    
unclaimed property; and making a violation of certain gift card                                                                 
prohibitions an unlawful trade practice."                                                                                       
     HEARD AND HELD                                                                                                             
HOUSE BILL NO. 34                                                                                                               
"An Act relating to sales of wine by a winery licensee."                                                                        
     HEARD AND HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 116                                                                                                                  
SHORT TITLE: UNIFORM MONEY SERVICES ACT                                                                                         
SPONSOR(s): SENATOR(s) ELTON                                                                                                    
03/14/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/14/07       (S)       L&C, FIN                                                                                               
03/27/07       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
03/27/07       (S)       Heard & Held                                                                                           
03/27/07       (S)       MINUTE(L&C)                                                                                            
04/03/07       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
BILL: SB 124                                                                                                                  
SHORT TITLE: ALASKA WORKFORCE INVESTMENT BD ALLOCATION                                                                          
SPONSOR(s): SENATOR(s) OLSON                                                                                                    
03/16/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/16/07       (S)       L&C, FIN                                                                                               
04/03/07       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
BILL: SB 115                                                                                                                  
SHORT TITLE: GIFT CARDS                                                                                                         
SPONSOR(s): STATE AFFAIRS                                                                                                       
03/12/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/12/07       (S)       STA, L&C                                                                                               
03/20/07       (S)       STA AT 9:00 AM BELTZ 211                                                                               
03/20/07       (S)       Heard & Held                                                                                           
03/20/07       (S)       MINUTE(STA)                                                                                            
03/22/07       (S)       STA AT 9:00 AM BELTZ 211                                                                               
03/22/07       (S)       Moved CSSB 115(STA) Out of Committee                                                                   
03/22/07       (S)       MINUTE(STA)                                                                                            
03/23/07       (S)       STA RPT CS  3DP 2NR   SAME TITLE                                                                       
03/23/07       (S)       DP: MCGUIRE, FRENCH, BUNDE                                                                             
03/23/07       (S)       NR: STEVENS, GREEN                                                                                     
03/23/07       (S)       FIN REFERRAL ADDED                                                                                     
04/03/07       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
BILL: HB  34                                                                                                                  
SHORT TITLE: SALES BY WINERY LICENSEE                                                                                           
SPONSOR(s): REPRESENTATIVE(s) LEDOUX                                                                                            
01/16/07       (H)       PREFILE RELEASED 1/5/07                                                                                
01/16/07       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/16/07       (H)       L&C, FIN                                                                                               
01/29/07       (H)       L&C AT 3:00 PM CAPITOL 17                                                                              
01/29/07       (H)       Moved Out of Committee                                                                                 
01/29/07       (H)       MINUTE(L&C)                                                                                            
01/30/07       (H)       L&C RPT 5DP                                                                                            
01/30/07       (H)       DP: GARDNER, GATTO, RAMRAS, LEDOUX,                                                                    
02/07/07       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/07/07       (H)       Moved Out of Committee                                                                                 
02/07/07       (H)       MINUTE(FIN)                                                                                            
02/08/07       (H)       FIN RPT 7DP 3NR                                                                                        
02/08/07       (H)       DP: JOULE, THOMAS, GARA, CRAWFORD,                                                                     
                         KELLY, MEYER, CHENAULT                                                                                 
02/08/07       (H)       NR: HAWKER, NELSON, STOLTZE                                                                            
02/14/07       (H)       TRANSMITTED TO (S)                                                                                     
02/14/07       (H)       VERSION: HB 34                                                                                         
02/19/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/19/07       (S)       CRA, L&C                                                                                               
03/06/07       (S)       CRA AT 3:30 PM BELTZ 211                                                                               
03/06/07       (S)       Moved  HB  34 Out of Committee                                                                         
03/06/07       (S)       MINUTE(CRA)                                                                                            
03/07/07       (S)       CRA RPT  3DP 1NR                                                                                       
03/07/07       (S)       DP: THOMAS, STEVENS, KOOKESH                                                                           
03/07/07       (S)       NR: OLSON                                                                                              
04/03/07       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
WITNESS REGISTER                                                                                                              
SENATOR KIM ELTON                                                                                                               
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor of SB 116.                                                                                        
JESSE KIEL                                                                                                                      
Staff to Senator Elton                                                                                                          
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on SB 116 for the sponsor.                                                                      
SENATOR OLSON                                                                                                                   
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor of SB 124.                                                                                        
MIKE ANDREWS, Director                                                                                                          
Alaska Works Partnership, Inc.                                                                                                  
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported SB 124.                                                                                         
JEFF SELVEY, Director                                                                                                           
Northwestern Alaska Career and Technical Center (NACTEC)                                                                        
Nome AK                                                                                                                         
POSITION STATEMENT: Supported SB 124.                                                                                         
PHIL REESE, Director                                                                                                            
Post-Secondary Program                                                                                                          
Galena City Schools                                                                                                             
Galena AK                                                                                                                       
POSITION STATEMENT: Supported SB 124.                                                                                         
WENDY REDMAN                                                                                                                    
University of Alaska                                                                                                            
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported SB 124.                                                                                         
MARIT CARLSON-VAN DORT                                                                                                          
Staff to Senator McGuire                                                                                                        
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on SB 115 for the sponsor.                                                                      
RACHAEL LEWIS                                                                                                                   
Unclaimed Property Administrator                                                                                                
Department of Revenue (DOR)                                                                                                     
POSITION STATEMENT: Commented on SB 115.                                                                                      
REPRESENTATIVE GABRIELLE LEDOUX                                                                                                 
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Sponsor of HB 34.                                                                                         
CHRISTINE MARASIGAN                                                                                                             
Staff to Representative LeDoux                                                                                                  
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Commented on HB 34 for the sponsor.                                                                       
DOUG GRIFFIN, Director                                                                                                          
Alcoholic Beverage Control Board (ABC)                                                                                          
Anchorage AK                                                                                                                    
POSITION STATEMENT: Commented on HB 34.                                                                                       
ACTION NARRATIVE                                                                                                              
CHAIR JOHNNY ELLIS called the  Senate Labor and Commerce Standing                                                             
Committee meeting to order at 1:35:56  PM. Present at the call to                                                             
order were  Senators Hoffman and  Ellis. Senator  Stevens arrived                                                               
at 1:36 Senator Davis at 1:38; and Senator Bunde at 1:39.                                                                       
               SB 116-UNIFORM MONEY SERVICES ACT                                                                            
CHAIR ELLIS  announced SB 116 to  be up for its  second committee                                                               
hearing and that it had a new CS.                                                                                               
1:36:55 PM                                                                                                                    
SENATOR STEVENS joined the committee.                                                                                           
SENATOR KIM ELTON, sponsor of SB  116, and his staff, Jesse Kiel,                                                               
took the committee through the CS.                                                                                              
SENATOR ELTON  said the money  transfer industry brought  this to                                                               
his attention. It provides regulations  of the industry to induce                                                               
good  behavior.  It  has  as   its  purpose,  not  only  consumer                                                               
protection  and  guaranteeing good  services  to  people who  use                                                               
money transfers, but  an element of homeland  security. It allows                                                               
better tracking  of money  that is transferred  from the  U.S. to                                                               
foreign countries.                                                                                                              
1:38:11 PM                                                                                                                    
SENATOR BETTYE DAVIS joined the committee.                                                                                      
SENATOR  KIM  ELTON   said  SB  116  is   supported  by  consumer                                                               
protection agencies  and industry  as well  as the  Department of                                                               
Commerce, Community & Economic Development.  It has a fiscal note                                                               
of  $80,000, but  the fees  collected from  industry support  the                                                               
function and there is no general fund impact.                                                                                   
1:39:22 PM                                                                                                                    
SENATOR BUNDE joined the committee.                                                                                             
SENATOR STEVENS  asked if  the consumer would  be paying  more to                                                               
cover the costs  and what other impacts would be  on the consumer                                                               
if this bill passes.                                                                                                            
SENATOR ELTON  said this should  not cost the  consumer anything,                                                               
but if it does, it won't be  much and in return the consumer gets                                                               
a guarantee that the money they  are transferring is going to get                                                               
there and  will have  the value  they expect it  to have  when it                                                               
does arrive.                                                                                                                    
CHAIR ELLIS asked  Mr. Kiel to review the proposed  CS to SB 116,                                                               
Bannister 4/3/07 version K.                                                                                                     
1:41:09 PM                                                                                                                    
JESSE KIEL, staff to Senator  Elton, reviewed version K, starting                                                               
with  the  significant  changes.  The first  was  a  question  of                                                               
interpretation  that  was  brought  to  their  attention  by  the                                                               
Department of  Commerce, Community  & Economic  Development staff                                                               
who noted  that the Uniform Money  Services Act was subject  to a                                                               
possible interpretation  that a money transmitter  who originally                                                               
gets his licensure in another  jurisdiction that has adopted this                                                               
uniform act  might not have to  pay fees in Alaska.  According to                                                               
the National  Conference of Commissioners  on Uniform  State Laws                                                               
as well as  Mr. Levine, who testified last week  on behalf of the                                                               
large money transmitters, both of  them said that was never their                                                               
intent. So, this  CS makes it clear that a  money transmitter who                                                               
gets his  license by virtue  of prior licensure in  another state                                                               
with this  law is subject  to the  fees and all  the requirements                                                               
for   filing  and   renewals  and   is  potentially   subject  to                                                               
investigation just  as thought they  were originally  licensed in                                                               
Alaska.  It will  be  a much  less  cumbersome initial  licensure                                                               
process for them, because another  state under comparable law has                                                               
done  the due  diligence and  the homework;  however it  won't be                                                               
free ride.  Changes were also  made to the definition  section to                                                               
address that and make it very clear.                                                                                            
1:43:11 PM                                                                                                                    
MR. KIEL  said the significant  changes to AS O6.55.810  begin on                                                               
page 25, line 7. This section  of the bill would require a notice                                                               
to  consumers  anywhere  money   services  are  provided  whether                                                               
through an authorized delegate or  directed by a licensee. A sign                                                               
needs  to go  up showing  the  business is  regulated and  giving                                                               
contact  information  for  the   department  in  case  there  are                                                               
complaints or questions.                                                                                                        
Section  06.55.820   simply  requires  timely   transmission.  He                                                               
explained that  the industry has  been trending more and  more in                                                               
recent   years  towards   instant   transfers   where  money   is                                                               
transmitted  immediately to  a  bank account.  This  takes in  to                                                               
account  the  possibility  the  consumer  might  order  a  faster                                                               
service through a money transmitter,  but in the more traditional                                                               
money  transmission services,  it's got  to be  available to  the                                                               
destination within 10 days.                                                                                                     
MR.  KIEL explained  that the  receipt and  refund portions  work                                                               
together and  they say that  a consumer needs  to get on  paper a                                                               
statement  that says  how much  money was  transmitted, what  the                                                               
fees were  and either  what the  exchange rate  is if  it's being                                                               
transmitted and will  be picked up in a different  currency or if                                                               
the exchange  rate floats, it's got  to say (on page  26, line 4)                                                               
how  that works.  He said  the  bill doesn't  interfere with  how                                                               
money service  businesses choose  to set  their exchange  rates -                                                               
whether they  are fixed  or whether they  float. "It  simply says                                                               
the consumer has got to know."                                                                                                  
1:45:22 PM                                                                                                                    
SENATOR BUNDE said  10 days seems like an  inordinately long time                                                               
for  a transfer  of  funds.  He asked  how  that  time frame  was                                                               
MR. KIEL replied  that both Hawaii and  Washington states adopted                                                               
that  language. Many  small money  transmitters  specialize in  a                                                               
particular region  of the world  and offer  extremely competitive                                                               
rates. Ten  days should be  the absolute outside extreme  for any                                                               
money  transmission.  Customers  might  be willing  to  accept  a                                                               
slower service for a lesser fee.                                                                                                
SENATOR ELTON  wanted to  standardize this  licensure as  much as                                                               
possible, so  that people don't  have to review  individual state                                                               
laws and deal  with them differently. The 10 day  time frame is a                                                               
ceiling and  in these days of  hyperinflation, you do want  it to                                                               
happen as  fast as  possible. "It's not  arbitrary; it's  kind of                                                               
what  the   standard  is  out   there  that  other   states  have                                                               
1:47:57 PM                                                                                                                    
SENATOR STEVENS  moved to adopt  CSSB 116(L&C), version  K. There                                                               
were no objections and it was so ordered.                                                                                       
1:48:39 PM                                                                                                                    
SENATOR STEVENS moved  to pass CSSB 116(L&C)  from committee with                                                               
individual recommendations  and attached fiscal notes.  There was                                                               
no  discussion   or  objection  and  CSSB   116(L&C)  moved  from                                                               
        SB 124-ALASKA WORKFORCE INVESTMENT BD ALLOCATION                                                                    
CHAIR ELLIS announced the first committee hearing for SB 124.                                                                   
SENATOR OLSON, sponsor  of SB 124, said  Alaska Works Partnership                                                               
(AWP) originally asked him to  introduce SB 124 that reauthorizes                                                               
the  adult voc/tech  training  programs and  raises  the rate  of                                                               
contribution  to  pipeline  training   programs.  This  bill  was                                                               
expanded  to   address  training   needs  throughout   Alaska  in                                                               
forthcoming  pipeline  construction.  This  will  insure  that  a                                                               
greater number of  Alaskans will participate in  building the gas                                                               
line through the state's trade union apprenticeship program.                                                                    
In this  regard, the AWP has  put together a program  that offers                                                               
the  training  expertise  for  all  trades  operating  under  one                                                               
umbrella organization.  He said that AWP  has effectively reached                                                               
out  to  bring  residents  from  all areas  of  Alaska  into  its                                                               
program. It  has extended its  training program and  expertise to                                                               
other   voc/tech   programs   in   Alaska   through   cooperative                                                               
arrangements. These efforts  have proven to be  very effective in                                                               
providing skilled  workers for public construction  projects from                                                               
residents of the community.                                                                                                     
1:52:04 PM                                                                                                                    
SENATOR  OLSON explained  that the  CS, version  M, reflects  the                                                               
recommendations  Alaska Works  Partnership had  put forth  in its                                                               
March   16  letter.   It  essentially   increases  the   employee                                                               
contribution rate  to the technical vocational  education program                                                               
by  .005 percent.  It enacts  a  new allocation  listing for  the                                                               
program funds for  a five-year period between FY08  and FY13. The                                                               
new allocation of  funds adds the Northwestern  Alaska Career and                                                               
Technical  Center  (NACTEC)  in Nome,  Delta  Career  Advancement                                                               
Career Advancement Center in Delta  Junction and the Alaska Works                                                               
Partnership to its list.                                                                                                        
SENATOR STEVENS asked if line 10 on  page 2 of the CS, version M,                                                               
meant a  reduction in  funds to  the Alaska  Vocational Technical                                                               
SENATOR  OLSON asked  the  chair  if he  wanted  to  work off  of                                                               
version M.                                                                                                                      
1:53:34 PM                                                                                                                    
CHAIR ELLIS said no; he wanted  to work off the original bill. He                                                               
also stated that  he didn't want to damage  the existing programs                                                               
at the  University and had  asked folks to discuss  this together                                                               
in the hopes  of bringing another CS to the  committee. He wanted                                                               
it to allow them to use  some monies without hurting the UI trust                                                               
fund, which he thought was doable  at a certain level, to pump up                                                               
some of these programs that might be justified across the state.                                                                
1:56:06 PM                                                                                                                    
MIKE ANDREWS,  Director, Alaska Works Partnership  Inc., said AWP                                                               
is a statewide not-for-profit  dedicated to construction industry                                                               
workforce  development. He  stated  that  this legislation  could                                                               
significantly  contribute to  increasing the  number of  Alaskans                                                               
who are  attracted to  construction jobs  and career  training in                                                               
the state. He  looked forward to working with the  committee on a                                                               
positive resolution.                                                                                                            
CHAIR ELLIS said they were open to his suggestions.                                                                             
1:57:20 PM                                                                                                                    
JEFF SELVEY,  Director, Northwestern Alaska Career  and Technical                                                               
Center (NACTEC) said  that it had existed in Nome  for four years                                                               
and  that  they  worked  with   AWP,  the  University  of  Alaska                                                               
Northwest and Norton  Sound Health Corp. in  developing a program                                                               
for  training  high  school students  and  supported  educational                                                               
services for  adults throughout  the region.  He stated  he would                                                               
like to  continue using his  facilities to train a  workforce for                                                               
his area.                                                                                                                       
CHAIR ELLIS asked how many people use the NACTEC facilities now.                                                                
MR.  SELVEY recapped  that  in  its first  year  the high  school                                                               
program had  112 students, the second  year - 224, and  last year                                                               
it had 239. This year their  goal is to have 250 students. NACTEC                                                               
has served  over 500  students so far.  Alaska Works  Program and                                                               
students  from the  Northwest campus  use their  facilities after                                                               
hours and they have trained about 70 people.                                                                                    
CHAIR  ELLIS  responded  that  he  appreciated  that  cooperative                                                               
attitude in sharing resources.                                                                                                  
1:59:07 PM                                                                                                                    
PHIL  REESE,   Director,  Post-Secondary  Program,   Galena  City                                                               
Schools, supported  SB 124.  He said they  had been  in existence                                                               
for five years. He is  always looking for opportunities to extend                                                               
training opportunities.                                                                                                         
2:00:29 PM                                                                                                                    
WENDY  REDMAN, University  of Alaska,  thanked Senator  Olson for                                                               
introducing this bill. She said they  are very close to finding a                                                               
solution without hurting other programs.                                                                                        
SENATOR  OLSON closed  his comments  relating that  their efforts                                                               
are on track.                                                                                                                   
CHAIR ELLIS held SB 124.                                                                                                        
                       SB 115-GIFT CARDS                                                                                    
CHAIR ELLIS announced SB 115 to be up for consideration.                                                                        
MARIT CARLSON-VAN DORT,  staff to Senator McGuire,  sponsor of SB                                                               
115, explained  this bill was  crafted in response to  a dramatic                                                               
increase  in  consumer demand  for  gift  options and  increasing                                                               
consumer  frustration with  hidden or  poorly disclosed  fees and                                                               
She said  in the  last few  years, several  states have  begun to                                                               
adopt measures  to limit  or restrict  expiration dates  and fees                                                               
associated  with these  gift cards.  This bill  will insure  gift                                                               
cards that  are purchased will  retain their full  purchase value                                                               
in perpetuity and  will not be subject to a  variety of fees such                                                               
as dormancy, latency, administrative and  periodic fees - any fee                                                               
that will have the effect of  reducing the total amount for which                                                               
the holder may redeem the card.                                                                                                 
The bill  excludes gift  cards that are  issued under  an awards,                                                               
loyalty or  promotional program that  is donated to  a non-profit                                                               
or a charitable  organization or a card that is  used to purchase                                                               
gifts or services through numerous  sellers or vendors. This bill                                                               
also excludes bank-issued gift cards and telephone cards.                                                                       
In  addition,  she  said,  gift  cards that  are  issued  in  the                                                               
ordinary course of  an issuer' business that  remain unclaimed by                                                               
the owner  for more than  three years are presumed  abandoned and                                                               
may be subject to reporting to  the State of Alaska Department of                                                               
Revenue as unclaimed property.                                                                                                  
2:05:55 PM                                                                                                                    
SENATOR STEVENS asked where they stand on the perpetuity issue.                                                                 
MS. VAN DORT  replied that "in perpetuity" was left  in the bill,                                                               
because the  sponsor and committee  both felt that  subjecting it                                                               
to the unclaimed property reporting  requirement provided a "nice                                                               
balance" for consumers  and for businesses. The  business can get                                                               
it off  their books and  the consumer can  still go to  the state                                                               
for a redemption.                                                                                                               
2:06:17 PM                                                                                                                    
SENATOR STEVENS asked if the  state receives something eventually                                                               
for handling unclaimed property. How asked how it works.                                                                        
2:06:32 PM                                                                                                                    
MS. VAN DORT replied if the  issuer of the gift card reported the                                                               
balance  of  the gift  to  the  state  as unclaimed  property,  a                                                               
consumer could click  on the Department of  Revenue's website and                                                               
find it  and the state  would send him a  check for the  value of                                                               
the gift card. If it was  not reported, his other option would be                                                               
to go directly to the vendor of the card.                                                                                       
2:07:27 PM                                                                                                                    
SENATOR  STEVENS said  at  some  point the  state  might have  to                                                               
balance with the vendor.                                                                                                        
MS. VAN  DORT replied  that one  would receive  the value  of the                                                               
gift card  from the State of  Alaska if the vendor  qualified and                                                               
reported it.                                                                                                                    
CHAIR  ELLIS  asked  how  this   bill  is  similar  to  the  bill                                                               
introduced by Representative Gardner.                                                                                           
MS.  VAN DORT  replied  that it  is  identical to  Representative                                                               
Gatto's legislation and Representative Gardner was a co-sponsor.                                                                
2:09:20 PM                                                                                                                    
RACHAEL  LEWIS, Unclaimed  Property Administrator,  Department of                                                               
Revenue   (DOR),  gave   the  committee   an   overview  of   her                                                               
department's duties.  She explained  that in 1986  Alaska adopted                                                               
the Uniform Unclaimed Property Act.  This means that any uncashed                                                               
payroll  check,  any   uncashed  health  insurance  reimbursement                                                               
check,  stocks, bonds,  bank accounts  that  have inactivity  for                                                               
certain periods of time, rather  than the business retaining that                                                               
money, it turns it  over to the State of Alaska  that acts as the                                                               
custodian.  "We  never  take  full  title. We  just  hold  it  in                                                               
perpetuity 'til an owner or their heir comes forward."                                                                          
MS. LEWIS  said that gift  cards and certificates are  already in                                                               
the  Act. This  bill  doesn't  really change  that;  but it  adds                                                               
definitions to the Unfair Trade  Practices. She found that people                                                               
do not  realize how much money  adds up from just  small uncashed                                                               
payroll checks. Since  1986, $88 million has been  turned over as                                                               
unclaimed  property. She  has returned  $23 million  of unclaimed                                                               
property to people  in Alaska and about $56 million  has been put                                                               
into the general fund because  it's an excess she doesn't believe                                                               
the owners will  come forward to claim. So, they  return about 30                                                               
percent and all Alaskans get to  benefit from the state acting as                                                               
2:11:26 PM                                                                                                                    
CHAIR ELLIS  asked what  efforts the  department went  through to                                                               
contact people to claim property.                                                                                               
MS. LEWIS replied  that the department make  efforts annually and                                                               
pools its searchable  database with 38 other  states. She doesn't                                                               
advertise in  newspapers any  more, because  it costs  $33,000 in                                                               
Alaska  to advertise  1,100  claims. They  list  seven times  the                                                               
claims on the Internet for free.                                                                                                
2:13:05 PM                                                                                                                    
SENATOR STEVENS asked  what dollar amount they  are talking about                                                               
in gift cards.                                                                                                                  
2:13:36 PM                                                                                                                    
MS.  LEWIS replied  that she  is  holding about  $56,000 in  gift                                                               
cards  and   certificates  for  1,000  Alaskans.   Last  year  an                                                               
estimated $58  billion worth of  gift cards were  sold nationwide                                                               
and  5 -  10  percent  of those  became  unclaimed,  lost or  not                                                               
CHAIR ELLIS asked  if passing the bill  would be a net  gain or a                                                               
net drain for her office.                                                                                                       
MS. LEWIS replied it would be good public policy.                                                                               
2:14:54 PM                                                                                                                    
MS. VAN  DORT returned to the  table and the chair  asked her who                                                               
else had weighed in.                                                                                                            
MS. VAN DORT replied no one.                                                                                                    
CHAIR ELLIS asked her to  contact Alaska Public Interest Research                                                               
Group (AKPIRG) and other consumer groups for their opinions.                                                                    
MS. VAN  DORT added  that she  had a  conversation with  Mr. Glen                                                               
Peterson,  District  Manager   of  Carrs/Safeway,  who  expressed                                                               
support. His one concern was whether  or not the gift cards would                                                               
be redeemable for cash  - language on page 3, lines  29 - 31. The                                                               
drafter  said the  language could  stand  clarification, but  the                                                               
sponsor didn't  think it took  away the individual  discretion of                                                               
the business owner. At this time  they state whether or not their                                                               
certificate is  redeemable at  full cash value  for cash  or just                                                               
for goods and services. Her opinion was to let it lie.                                                                          
2:17:07 PM                                                                                                                    
CHAIR ELLIS announced SB 115 would be held over.                                                                                
                HB  34-SALES BY WINERY LICENSEE                                                                             
CHAIR ELLIS announced HB 34 to be up for consideration.                                                                         
REPRESENTATIVE  LEDOUX,  sponsor  of  HB 34,  explained  that  it                                                               
allows  wine to  be shipped  from a  place in  Alaska to  another                                                               
place  in Alaska.  Currently, Alaskans  can only  receive shipped                                                               
wine from  out of state.  She said  that Kodiak has  two wineries                                                               
and visiting Alaskans are not able to order its product.                                                                        
2:18:22 PM                                                                                                                    
CHAIR ELLIS asked why this is needed.                                                                                           
CHRISTINE  MARASIGAN, staff  to Representative  LeDoux, explained                                                               
that people  never thought  that Alaska  would be  a hub  of wine                                                               
production  and  the  language  in  the  law  was  an  unintended                                                               
mistake. Specialty wines have become  a niche industry with value                                                               
added products in Kodiak.                                                                                                       
2:21:45 PM                                                                                                                    
SENATOR HOFFMAN noticed the  legislation wouldn't allow shipments                                                               
to dry villages and asked how that would be enforced.                                                                           
MS. MARASIGAN replied  that she wasn't totally sure,  but as with                                                               
people  who ship  liquor, there  is  a list  of communities  that                                                               
don't allow it. You simply don't ship to them.                                                                                  
SENATOR  HOFFMAN asked  again  how that  is  enforced if  someone                                                               
wants to make profit more than follow a community's wishes.                                                                     
2:23:18 PM                                                                                                                    
DOUG GRIFFIN,  Director, Alcoholic Beverage Control  Board (ABC),                                                               
said  that in  terms of  enforcement, the  Board would  share its                                                               
list of  dry communities with  wineries on the ABC  website. They                                                               
do  provide some  oversight over  wineries.  The biggest  penalty                                                               
would be taking  away the shipping part of  their business, which                                                               
would  be  a  death  knell.  He thought  the  wineries  would  be                                                               
conscientious,  because  rural  villages are  not  their  market.                                                               
Also, he remarked that specialty wines are a national trend.                                                                    
2:25:48 PM                                                                                                                    
SENATOR HOFFMAN  said he understands rural  villages aren't their                                                               
targeted market,  but even  if they  are talking  about specialty                                                               
wine,  they   would  be  considerably  cheaper   than  bootlegged                                                               
products.  He  asked  how  that is  being  handled  for  wineries                                                               
outside the state of Alaska.                                                                                                    
2:28:51 PM                                                                                                                    
MR. GRIFFIN replied  that the ABC Board  doesn't regulate outside                                                               
wineries  right now,  although the  legislature  could choose  to                                                               
give it  that power. Some  states prohibit shipments from  out of                                                               
state  wineries, but  allowed instate  wineries to  ship instate.                                                               
That  practice was  struck down  by a  Supreme Court  decision in                                                               
He said  the Board works with  the state troopers to  do the best                                                               
job they can  with policing the bootlegging problem  - with mixed                                                               
results. He  said the  Kodiak winery wants  to operate  under the                                                               
law and  that could  theoretically be a  problem, but  they would                                                               
police it the best they could.                                                                                                  
SENATOR BUNDE said under the  current system if the wineries sold                                                               
to  an alcohol  retailer, then  the wine  could be  shipped to  a                                                               
community  and  the   same  kind  of  enforcement   would  be  in                                                               
2:29:25 PM                                                                                                                    
MR. GRIFFIN  replied that is  correct if  the retailer is  one of                                                               
the 19  package stores  that have permission  to ship  by written                                                               
order.  The shipping  quantities  are limited,  however, just  as                                                               
package  stores have  quotas  on  how much  they  can  ship on  a                                                               
monthly basis by written order.                                                                                                 
SENATOR BUNDE asked if there are  19 package stores that can ship                                                               
would this bill would add another 8 wineries.                                                                                   
MR. GRIFFIN replied that is correct.                                                                                            
SENATOR  HOFFMAN  asked  if  package  liquor  stores  use  common                                                               
carriers like  Northern Air  Cargo and  Alaska Airlines,  but the                                                               
wineries  would  ship through  a  completely  different means  of                                                               
transport like UPS and others that are harder to monitor.                                                                       
MR. GRIFFIN  replied the  wineries could  use UPS  or any  of the                                                               
others, but they can't legally use  the U.S. Mail. So, they would                                                               
have  to  form  some  type  of a  relationship  with  a  delivery                                                               
company, which could be a common carrier.                                                                                       
SENATOR  HOFFMAN asked  if the  common carriers  normally have  a                                                               
minimum weight  limit of 100  lbs. and it doesn't  make financial                                                               
sense to ship that way. UPS can ship smaller parcels.                                                                           
MR. GRIFFIN said he was correct.                                                                                                
SENATOR STEVENS  said he likes  the fact that this  bill attempts                                                               
to level the playing field  in that out-of-state wineries can now                                                               
ship in, but  it doesn't truly level it  because outside wineries                                                               
don't  have to  comply with  our laws.  A local  one would.  This                                                               
local  winery is  putting  itself on  the line  if  it makes  the                                                               
mistake of shipping to a community  that is dry. So, the state is                                                               
still asking more of in-state wineries.                                                                                         
2:33:23 PM                                                                                                                    
CHAIR ELLIS  asked Mr.  Griffin if he  anticipated the  ABC Board                                                               
providing the  do-not-ship list or  was it  up to each  winery to                                                               
get it.                                                                                                                         
MR. GRIFFIN replied the Board  is pro-active. Every time there is                                                               
a change, it  sends that list to the 19  package stores that sell                                                               
by written order. These wineries would  be added to the list; but                                                               
it would take a few days.                                                                                                       
2:34:35 PM                                                                                                                    
CHAIR ELLIS asked  if under existing state statute  the ABC Board                                                               
has the  authority to  punish wineries that  ship to  the do-not-                                                               
ship list.                                                                                                                      
MR. GRIFFIN  replied that a  regulation is already in  place that                                                               
allows them punitive  authority, but they would  probably have to                                                               
add  these wineries  to  the  category, which  could  be done  by                                                               
regulation. The  Board would  also want  to provide  adequate due                                                               
process by  having at least  one fair hearing before  taking away                                                               
someone's rights to ship by written order.                                                                                      
CHAIR  ELLIS asked  him to  find  out for  sure that  he has  the                                                               
authority now.                                                                                                                  
2:36:40 PM                                                                                                                    
SENATOR BUNDE asked if there is a  state law that an out of state                                                               
winery  would  be subject  to  in  terms  of  shipping to  a  dry                                                               
MR. GRIFFIN  replied that  out of  state wineries  aren't totally                                                               
immune from the  long arm of the law. Some  provisions in federal                                                               
law allow  states to go  after wineries that violate  the state's                                                               
laws.  He never  uses  them, but  they are  there.  The State  of                                                               
Florida, for  instance, prosecuted  someone in another  state for                                                               
shipping wine  to a customer  in Florida (a felony)  working with                                                               
the U.S. Attorney General.                                                                                                      
CHAIR ELLIS said  if there is a  fear among a lot  of people that                                                               
under-aged  folks would  order  alcoholic  beverages through  the                                                               
Internet and  there would be  no checking  of ages. He  asked Mr.                                                               
Griffin to remind them of requirements  for proof of age when the                                                               
orders are placed.                                                                                                              
MR. GRIFFIN  replied that hadn't  been addressed other  than very                                                               
generally  under Title  4 that  deals with  providing alcohol  to                                                               
someone who  is not 21 years  of age. This issue  is a nationwide                                                               
controversy. He thought  that DHL, UPS and others  since they are                                                               
in the delivery  business, have safeguards in place  to make sure                                                               
that it  is accepted and signed  for by someone over  21 years of                                                               
age.  He didn't  know if  that  was impeccably  enforced, but  he                                                               
hadn't received any complaints about it in Alaska.                                                                              
SENATOR  STEVENS pointed  out that  they are  talking about  high                                                               
quality wines from niche market  wineries. There are only nine of                                                               
them in the state and their  wines are very expensive - maybe $40                                                               
a bottle. An  under-aged kid would probably not  have the palette                                                               
or the money to order it. They need to keep perspective on this.                                                                
2:43:47 PM                                                                                                                    
SENATOR BUNDE said  he was afraid the  economic argument wouldn't                                                               
work, because  there is proof that  some people in some  parts of                                                               
Alaska will pay $200 - $300 for very cheap spirits.                                                                             
2:44:32 PM                                                                                                                    
REPRESENTATIVE  LEDOUX  wrapped up  by  reading  a quote  from  a                                                               
Supreme  Court case  on minors  drinking.  The staff  of the  FTC                                                               
found that of the 26  states currently allowing direct shipments,                                                               
none of them reported increased access to wine by minors.                                                                       
CHAIR ELLIS said  he would keep the public hearing  open and that                                                               
he  would hold  HB  34  for a  further  hearing.  There being  no                                                               
further business to  come before the committee,  he adjourned the                                                               
meeting at 2:46:20 PM.                                                                                                        

Document Name Date/Time Subjects