Legislature(2007 - 2008)BELTZ 211

05/08/2007 01:30 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 155(FIN) Out of Committee
Moved CSHB 228(L&C) Out of Committee
Moved CSHB 205(FIN) Out of Committee
Moved SB 165 Out of Committee
Scheduled But Not Heard
<Pending Referral>
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                          May 8, 2007                                                                                           
                           1:34 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Johnny Ellis, Chair                                                                                                     
Senator Gary Stevens, Vice Chair                                                                                                
Senator Bettye Davis                                                                                                            
Senator Con Bunde                                                                                                               
MEMBERS ABSENT                                                                                                                
Senator Lyman Hoffman                                                                                                           
COMMITTEE CALENDAR                                                                                                            
CS FOR HOUSE BILL NO. 155(FIN)                                                                                                  
"An Act extending the termination  date of the Alcoholic Beverage                                                               
Control Board; and providing for an effective date."                                                                            
     MOVED CSHB 155(FIN) OUT OF COMMITTEE                                                                                       
CS FOR HOUSE BILL NO. 228(L&C)                                                                                                  
"An  Act  relating to  fees  for  certain medical  treatment  and                                                               
service  under   the  Alaska   Workers'  Compensation   Act;  and                                                               
providing for an effective date."                                                                                               
     MOVED CSHB 228(L&C) OUT OF COMMITTEE                                                                                       
CS FOR HOUSE BILL NO. 205(FIN)                                                                                                  
"An  Act  relating   to  real  estate  broker   and  real  estate                                                               
salesperson licensing; and providing for an effective date."                                                                    
     MOVED CSHB 205(FIN) OUT OF COMMITTEE                                                                                       
SENATE BILL NO. 165                                                                                                             
"An   Act  relating   to  required   onboard  disclosures   about                                                               
promotions,  tours, flight  seeing operations,  other shore  side                                                               
activities,  shore  side  vendors,   and  visitors  bureaus;  and                                                               
providing for an effective date."                                                                                               
     MOVED SB 165 OUT OF COMMITTEE                                                                                              
CS FOR HOUSE BILL NO. 217(JUD)                                                                                                  
"An   Act  relating   to  required   onboard  disclosures   about                                                               
promotions,  tours, flight  seeing operations,  other shore  side                                                               
activities,  shore  side  vendors,   and  visitors  bureaus;  and                                                               
providing for an effective date."                                                                                               
     SCHEDULED BUT NOT HEARD                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 155                                                                                                                  
SHORT TITLE: EXTEND ALCOHOLIC BEVERAGE CONTROL BOARD                                                                            
SPONSOR(s): LABOR & COMMERCE                                                                                                    
02/26/07       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/26/07       (H)       L&C, FIN                                                                                               
03/16/07       (H)       L&C AT 3:00 PM CAPITOL 17                                                                              
03/16/07       (H)       -- MEETING CANCELED --                                                                                 
03/28/07       (H)       L&C AT 3:00 PM CAPITOL 17                                                                              
03/28/07       (H)       Moved Out of Committee                                                                                 
03/28/07       (H)       MINUTE(L&C)                                                                                            
03/29/07       (H)       L&C RPT 7DP                                                                                            
03/29/07       (H)       DP: GARDNER, LEDOUX, BUCH, NEUMAN,                                                                     
                         GATTO, RAMRAS, OLSON                                                                                   
04/11/07       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/11/07       (H)       Moved CSHB 155(FIN) Out of Committee                                                                   
04/11/07       (H)       MINUTE(FIN)                                                                                            
04/13/07       (H)       FIN RPT CS(FIN) 6DP 3NR                                                                                
04/13/07       (H)       DP: GARA, CRAWFORD, HAWKER, JOULE,                                                                     
                        CHENAULT, MEYER                                                                                         
04/13/07       (H)       NR: NELSON, STOLTZE, KELLY                                                                             
04/25/07       (H)       FIN CS ADOPTED Y24 N12 E4                                                                              
04/26/07       (H)       TRANSMITTED TO (S)                                                                                     
04/26/07       (H)       VERSION: CSHB 155(FIN)                                                                                 
04/27/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/27/07       (S)       L&C, FIN                                                                                               
05/08/07       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
BILL: HB 228                                                                                                                  
SHORT TITLE: WORKERS' COMP. MEDICAL TREATMENT FEES                                                                              
SPONSOR(s): REPRESENTATIVE(s) KELLY                                                                                             
03/29/07       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/29/07       (H)       L&C, FIN                                                                                               
04/16/07       (H)       L&C RPT CS(L&C) 2DP 5NR                                                                                
04/16/07       (H)       DP: NEUMAN, OLSON                                                                                      
04/16/07       (H)       NR: GARDNER, LEDOUX, BUCH, GATTO,                                                                      
04/16/07       (H)       L&C AT 10:00 AM CAPITOL 17                                                                             
04/16/07       (H)       Moved CSHB 228(L&C) Out of Committee                                                                   
04/16/07       (H)       MINUTE(L&C)                                                                                            
04/25/07       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/25/07       (H)       Moved CSHB 228(L&C) Out of Committee                                                                   
04/25/07       (H)       MINUTE(FIN)                                                                                            
04/26/07       (H)       FIN RPT CS(L&C) 5DP 3NR                                                                                
04/26/07       (H)       DP: STOLTZE, KELLY, HAWKER, MEYER,                                                                     
04/26/07       (H)       NR: GARA, CRAWFORD, THOMAS                                                                             
05/02/07       (H)       TRANSMITTED TO (S)                                                                                     
05/02/07       (H)       VERSION: CSHB 228(L&C)                                                                                 
05/03/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
05/03/07       (S)       L&C                                                                                                    
05/08/07       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
BILL: HB 205                                                                                                                  
SHORT TITLE: REAL ESTATE BROKERS/SALESPERSONS                                                                                   
SPONSOR(s): LABOR & COMMERCE BY REQUEST                                                                                         
03/16/07       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/16/07       (H)       L&C, FIN                                                                                               
04/13/07       (H)       L&C AT 3:00 PM CAPITOL 17                                                                              
04/13/07       (H)       Moved CSHB 205(L&C) Out of Committee                                                                   
04/13/07       (H)       MINUTE(L&C)                                                                                            
04/16/07       (H)       L&C RPT CS(L&C) 2DP 2NR                                                                                
04/16/07       (H)       DP: NEUMAN, OLSON                                                                                      
04/16/07       (H)       NR: GARDNER, BUCH                                                                                      
04/17/07       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/17/07       (H)       Heard & Held                                                                                           
04/17/07       (H)       MINUTE(FIN)                                                                                            
04/18/07       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/18/07       (H)       Moved CSHB 205(FIN) Out of Committee                                                                   
04/18/07       (H)       MINUTE(FIN)                                                                                            
04/19/07       (H)       FIN RPT CS(FIN) 4DP 4NR                                                                                
04/19/07       (H)       DP: CRAWFORD, THOMAS, MEYER, CHENAULT                                                                  
04/19/07       (H)       NR: GARA, STOLTZE, JOULE, HAWKER                                                                       
04/27/07       (H)       TRANSMITTED TO (S)                                                                                     
04/27/07       (H)       VERSION: CSHB 205(FIN)                                                                                 
04/30/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/30/07       (S)       L&C, JUD                                                                                               
05/08/07       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
BILL: SB 165                                                                                                                  
SHORT TITLE: TOURISM DISCLOSURES AND NOTICES                                                                                    
SPONSOR(s): SENATOR(s) ELTON                                                                                                    
04/30/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/30/07       (S)       L&C, JUD                                                                                               
05/08/07       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
WITNESS REGISTER                                                                                                              
EMILY WOLF                                                                                                                      
Staff to Representative Olson                                                                                                   
Alaska State Capitol                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT: Commented on HB 155 and HB 205 for the                                                                    
PAT DAVIDSON, Legislative Auditor                                                                                               
Division of Legislative Audit                                                                                                   
Juneau, AK                                                                                                                      
POSITION STATEMENT: Supported HB 155.                                                                                         
DALE FOX, President and CEO                                                                                                     
Cabaret, Hotel, Restaurant and Retailer's Association (CHARR)                                                                   
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Supported HB 155 with a one-year extension.                                                               
ANDY LUNDQUIST, Treasurer                                                                                                       
Kodiak CHARR                                                                                                                    
Kodiak, AK                                                                                                                      
POSITION STATEMENT: Supported HB 155 with a one-year extension.                                                               
DOUG GRIFFIN, Director                                                                                                          
Alcohol Beverage Control Board (ABC)                                                                                            
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Commented on HB 155.                                                                                      
DAVE FEEKIN                                                                                                                     
Alaska Association of Realtors                                                                                                  
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Supported HB 205.                                                                                         
RICK URION, Director                                                                                                            
Division of Corporations, Business and Occupational Licensing                                                                   
Department of Commerce, Community & Economic Development                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Supported HB 205.                                                                                         
DEREK MILLER                                                                                                                    
Staff to Representative Kelly                                                                                                   
Alaska State Capitol                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT: Commented on HB 228 for the sponsor.                                                                      
LINDA HALL, Director                                                                                                            
Division of Insurance                                                                                                           
Department of Commerce, Community & Economic Development (DCCED)                                                                
Juneau, AK                                                                                                                      
POSITION STATEMENT: Supported HB 228.                                                                                         
MIKE HOGAN, Executive Director                                                                                                  
Alaska Physicians and Surgeons                                                                                                  
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Supported HB 228.                                                                                         
REPRESENTATIVE LINDSEY HOLMES                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Commented on SB 165.                                                                                      
JAMES WALDO                                                                                                                     
Staff to Representative Lindsey Holmes                                                                                          
Alaska State Capitol                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT: Commented on SB 165 for Representative                                                                    
DON HESS                                                                                                                        
Chilkat River Adventures                                                                                                        
Haines, AK                                                                                                                      
POSITION STATEMENT: Supported SB 165.                                                                                         
JOHN DUNLAP, Manager                                                                                                            
Allen Marine Tours                                                                                                              
Sitka, AK                                                                                                                       
POSITION STATEMENT: Supported SB 165.                                                                                         
STEVE HEIGHTS                                                                                                                   
Skagway Streetcar Company                                                                                                       
Skagway, AK                                                                                                                     
POSITION STATEMENT: Supported SB 165.                                                                                         
ALLEN LEMASTER                                                                                                                  
Gakona, AK                                                                                                                      
POSITION STATEMENT: Supported SB 165.                                                                                         
KELLY DINDINGER                                                                                                                 
Alaska Travel Adventurers                                                                                                       
Alaska Cruises Inc.                                                                                                             
Juneau, AK                                                                                                                      
POSITION STATEMENT: Supported SB 165.                                                                                         
ACTION NARRATIVE                                                                                                              
CHAIR JOHNNY ELLIS called the  Senate Labor and Commerce Standing                                                             
Committee meeting to order at 1:34:30  PM. Present at the call to                                                             
order were Senators Stevens, Davis, Bunde and Ellis.                                                                            
     CSHB 155(FIN)-EXTEND ALCOHOLIC BEVERAGE CONTROL BOARD                                                                  
1:35:28 PM                                                                                                                    
CHAIR ELLIS announced CSHB 155(FIN) to be up for consideration.                                                                 
EMILY WOLF,  staff to  Representative Kurt  Olson, sponsor  of HB
155, said  because of some difficulties  Legislative Audit found,                                                               
the  scheduled extension  was changed  from 2013  to 2010  by the                                                               
Finance Committee.                                                                                                              
1:36:40 PM                                                                                                                    
PAT  DAVIDSON,  Legislative   Auditor,  Division  of  Legislative                                                               
Audit, explained  said that  she recommended  that the  ABC Board                                                               
continue to 2013 even thought  the standard recommendation for an                                                               
extension is eight-years. She recommended  six-years because of a                                                               
lack  of   administrative  strategy  for   accomplishing  overall                                                               
enforcement goals.  She explained  that the Board  is responsible                                                               
for  compliance  checks of  businesses  that  serve alcohol.  The                                                               
number of  inspections did  increase, however  their distribution                                                               
still  needs improvement.  For example,  businesses in  Fairbanks                                                               
and Juneau  have a 100 percent  chance of being inspected  over a                                                               
four-year period, but  Kenai businesses have a  38 percent chance                                                               
of  an inspection  over that  same  time period.  The Board  also                                                               
needs to improve notifications of  its meetings and activities to                                                               
provide for better public participation.                                                                                        
1:38:41 PM                                                                                                                    
She said  another area  where improvement is  needed is  that the                                                               
ABC  executive director  can  make a  tie-breaking  vote and  her                                                               
concern is that  basically he is then acting as  a public member.                                                               
However he has never been  screened to determine whether he meets                                                               
the qualifications of a public  member. Also, being the executive                                                               
director, he is privy to  more information than the board members                                                               
are. She  said there are  alternative ways to get  a tie-breaking                                                               
1:39:30 PM                                                                                                                    
MS. DAVIDSON said  a minor issue of more interest  to the Finance                                                               
Committee  than the  Labor  and Commerce  Committee  is that  the                                                               
general  wholesale license  fees are  based on  sales volume  and                                                               
hadn't  changed  since  1980.  What  has  happened  is  that  the                                                               
increase in  sales volume has  turned what was a  progressive tax                                                               
structure  into a  regressive tax  structure and  the legislature                                                               
might want to adjust that.                                                                                                      
1:39:57 PM                                                                                                                    
CHAIR  ELLIS asked  how she  would characterize  the ABC  Board's                                                               
reaction to her recommendations.                                                                                                
MS.  DAVIDSON   replied  the  members  were   supportive  of  the                                                               
recommendations  and  were  looking  for   ways  to  change.  The                                                               
Department  of  Public  Safety  (DPS)   to  which  the  Board  is                                                               
administratively associated  was also  supportive of  the changes                                                               
and was willing to help it in any way it could.                                                                                 
CHAIR ELLIS  asked if the  administration would  have legislation                                                               
in the future that would address these issues.                                                                                  
MS. DAVIDSON replied that she didn't know.                                                                                      
1:40:55 PM                                                                                                                    
DALE FOX,  President and CEO,  Alaska Cabaret,  Hotel, Restaurant                                                               
and Retailer's Association (                                                                                                    
CHARR), said he supported a strong  ABC Board and HB 155. He said                                                               
that beverage licensees around the  state are dismayed with ABC's                                                               
administration and  anti-business approach.  Many of  his members                                                               
were not  aware of  this meeting  today or  they would  have been                                                               
testifying. He said  that CHARR has been  working both internally                                                               
and externally  to try  to correct some  of the  more significant                                                               
challenges and he  thought a one-year extension would  be good so                                                               
that if improvements  aren't seen by then,  the legislature could                                                               
provide remedies.                                                                                                               
SENATOR   BUNDE  asked   for  some   specific  examples   of  his                                                               
organization's concerns.                                                                                                        
1:43:33 PM                                                                                                                    
MR.  FOX  replied  everything  from the  lack  of  timeliness  of                                                               
response to the  garbled response in terms of what  the rules are                                                               
and   how  they   are  being   reinterpreted.   One  example   is                                                               
interpretation of TAM  card statues and Title  4 regulations. The                                                               
Board has  come up with 3,  4 or 5 different  interpretations. He                                                               
explained that everyone  who serves alcohol needs a  TAM card and                                                               
the question then becomes who else  needs a TAM card. In previous                                                               
years it has been the  supervisor of people serving alcohol. Then                                                               
the  administration   came  out   and  said  that   included  any                                                               
stockholder. Then it was asked  if all CIRRI stockholders have to                                                               
have TAM cards  because CIRRI has a liquor license.  He said that                                                               
CHARR has three different written  opinions from the ABC Board on                                                               
the TAM card issue and the statute tells them a fourth.                                                                         
Another example is enforcement issues.  The statute says that you                                                               
have to have your TAM card on you  or that you made a copy. Well,                                                               
that seems  clear to  him, but  the ABC  Board and  its enforcers                                                               
have now said  that if you have  a copy, that just  means you can                                                               
finish the  shift and you still  get a ticket. They  have gone as                                                               
far  as walking  into an  establishment to  do an  inspection and                                                               
asking to see the TAM card.  When the bartender went to her purse                                                               
to get her  TAM card and she was  told she had to have  it on her                                                               
person. Also,  he said  you can't  get a license  in any  sort of                                                               
reasonable  time  and  enforcement   is  "punitive  from  top  to                                                               
bottom." For  all these  reasons CHARR wanted  to see  a one-year                                                               
1:46:28 PM                                                                                                                    
ANDY LUNDQUIST,  Treasurer, Kodiak CHARR,  said he is also  a 25-                                                               
year operator of  a bar and package store in  Kodiak. He said the                                                               
ABC Board  is professionally  run and  he liked  the idea  that a                                                               
number of  industry interests  are represented  on it.  He agreed                                                               
that improvements  are still  needed and  that a  one-year sunset                                                               
would be useful.                                                                                                                
1:48:03 PM                                                                                                                    
DOUG  GRIFFIN, Director,  Alcohol Beverage  Control Board  (ABC),                                                               
said the Board  appreciated the concerns raised in  the audit and                                                               
that it is trying to respond  to them. He said it had implemented                                                               
all of the recommendations that were  made in the prior audit and                                                               
use  this  oversight as  a  tool  to  seek  ways to  improve.  He                                                               
reported  that  the Board  is  in  the  process of  refining  its                                                               
database to address some other  internal control issues that were                                                               
raised. He  concurred that the  board director should not  be the                                                               
tie-breaking vote and  he has heard the  Palin administration was                                                               
going to introduce legislation about that.                                                                                      
1:50:29 PM                                                                                                                    
He  said  part of  the  issue  with  enforcement of  the  alcohol                                                               
beverage laws  in Alaska  is that  it is not  done solely  by ABC                                                               
investigators and  he has  no control over  them. In  fact, there                                                               
are only  four investigators for  the entire state. A  trooper is                                                               
also  assigned  to do  compliance  checks,  but aside  from  that                                                               
meager enforcement  staff, they  really rely on  municipal police                                                               
departments and the Alaska State  Troopers. He said that adequate                                                               
training  to  enforcement  taken  from other  agencies  needs  to                                                               
happen and  that these laws  need to  be applied in  a thoughtful                                                               
uniform manner.                                                                                                                 
MR. GRIFFIN  said he preferred  a six-year extension  because the                                                               
Board   needs  additional   time   to  implement   some  of   the                                                               
recommendations made  by Legislative Audit. If  CHARR has issues,                                                               
those need to  be dealt with in separate legislation,  not in the                                                               
sunset vehicle.  Some CHARR people  don't like the fact  that the                                                               
ABC Board  is now in the  Department of Public Safety  (DPS), but                                                               
having moved  to the  DPS has  increased its  enforcement profile                                                               
and the audit said that was a good move.                                                                                        
1:54:21 PM                                                                                                                    
CHAIR  ELLIS said  he thought  the administration  would come  up                                                               
with legislation to  address some of the other issues,  but it is                                                               
a given  that the  ABC Board  will be  extended. He  narrowed the                                                               
issue  down  saying  he  was   comfortable  with  the  three-year                                                               
extension that was proposed in the version before them.                                                                         
SENATOR BUNDE concurred with the chair.                                                                                         
SENATOR STEVENS agreed as well.                                                                                                 
1:55:19 PM                                                                                                                    
SENATOR  BUNDE  moved  to  pass  CSHB  155(FIN)  with  individual                                                               
recommendations. There were no objections and it was so ordered.                                                                
         CSHB 205(FIN)-REAL ESTATE BROKERS/SALESPERSONS                                                                     
1:57:03 PM                                                                                                                    
CHAIR ELLIS announced CSHB 205(FIN) to be up for consideration.                                                                 
ELEANOR WOLF, staff  to Representative Kurt Olsen,  sponsor of HB
205,  said  this  bill  was  introduced at  the  request  of  the                                                               
Association of  Realtors. Specifically, section 1  would increase                                                               
the hours  of education for  a license  applicant from 20  to 40.                                                               
Section  2 increases  continuing education  hours from  20 to  30                                                               
hours.  The realtors  preferred  to increase  their hours  rather                                                               
than scrimp on the education  content. Section 3 adds a provision                                                               
that  7  years must  elapse  for  anyone  convicted of  a  felony                                                               
involving moral turpitude to reapply for licensure.                                                                             
Section 4 adds language that allows  a broker to live outside the                                                               
state  if he  does not  employ a  licensee or  his licensees  are                                                               
directly supervised  by an associate  broker. Section  5 provides                                                               
that  a broker  who owns,  operates  or is  employed by  multiple                                                               
corporations  requiring  real estate  licensing  is  at a  single                                                               
physical address for all principle  offices. Apparently there was                                                               
an incident where  one person owned three or  four different real                                                               
estate  offices  and   was  never  appearing  in   any  of  them.                                                               
Therefore, he was not there to oversee.                                                                                         
1:57:45 PM                                                                                                                    
Section  6  states  that  all policies  and  procedures  be  made                                                               
available  to  the  public.  Section  7 is  a  February  1,  2008                                                               
effective date. This  coincides with the issuance  of the renewal                                                               
1:58:45 PM                                                                                                                    
SENATOR  STEVENS asked  if any  other statutory  language says  a                                                               
felony involves only "moral turpitude."                                                                                         
MS.  WOLF replied  that other  statutes  say you  can't be  under                                                               
indictment for  forgery, theft, extortion, conspiracy  to defraud                                                               
creditors or  any other  felony involving  moral turpitude  or be                                                               
convicted of  such offense. The bill  has added after a  lapse of                                                               
seven years.                                                                                                                    
SENATOR  STEVENS said  he didn't  think  the bill  said what  the                                                               
sponsor statement says. The bill just says "a felony".                                                                          
1:59:22 PM                                                                                                                    
CHAIR ELLIS asked MS. WOLF to get that clarified.                                                                               
1:59:45 PM                                                                                                                    
DAVE  FEEKIN, Alaska  Association of  Realtors, supported  HB 205                                                               
and said it is a  modernization of the existing statutes relating                                                               
to  real   estate  brokerage.  He  highlighted   that  this  bill                                                               
increases the education time from 20  to 40 hours before a person                                                               
takes  the real  estate licensing  exam and  remarked that  at 20                                                               
hours,  Alaska was  the lowest  in  the country;  however, at  40                                                               
hours  it is  still the  lowest in  the country.  The Association                                                               
supported  increasing  post-licensing  education from  20  to  30                                                               
hours  to  have time  to  adequately  teach the  required  course                                                               
material rather than reducing the content.                                                                                      
2:01:21 PM                                                                                                                    
Section 8 requires  a broker to be responsible  and supervise the                                                               
actions of their licensees. He  explained that the Alaska Supreme                                                               
Court  ruled in  the 80s  that a  broker is  not responsible  for                                                               
conduct that they  had no knowledge of, but  this provision makes                                                               
it  the duty  of  the licensee  to inform  the  broker of  issues                                                               
needing his supervision.                                                                                                        
MS. WOLF  clarified and  apologized that she  was looking  at the                                                               
wrong version  of the bill  before, but  she needed more  time to                                                               
see if she used the correct sponsor statement.                                                                                  
SENATOR  STEVENS  added  that  he  went  through  the  bill  more                                                               
carefully and saw  that every reference to  "moral turpitude" was                                                               
removed.  Saying "any  felony" was  tougher language  and he  was                                                               
comfortable with it.                                                                                                            
2:03:38 PM                                                                                                                    
RICK  URION, Director,  Division  of  Corporations, Business  and                                                               
Occupational  Licensing,  Department  of  Commerce,  Community  &                                                               
Economic  Development,  supported  HB   205  saying  it  is  more                                                               
workable for both the division and the public.                                                                                  
2:04:43 PM                                                                                                                    
SENATOR STEVENS moved  to pass CSHB 205(FIN)  from committee with                                                               
individual recommendations  and attached fiscal note.  There were                                                               
no objections and it was so ordered.                                                                                            
      CSHB 228(L&C)-WORKERS' COMP. MEDICAL TREATMENT FEES                                                                   
2:05:20 PM                                                                                                                  
CHAIR ELLIS announced CSHB 228 (L&C) to be up for consideration.                                                                
DEREK MILLER, staff  to Representative Kelly, sponsor  of HB 228,                                                               
said in  2005 the Alaska Legislature  passed SB 130, which  was a                                                               
major rewrite  of the Workers'  Compensation statutes. As  a part                                                               
of that,  medical payments were  frozen at the 2004  fee schedule                                                               
so that  a review could  be done  to find the  underlying reasons                                                               
for premium  increases. This review was  to be jointly done  by a                                                               
special workers'  compensation legislation task force  in concert                                                               
with the  Department of Labor  and Workforce  Development (DOLWD)                                                               
Medical  Review   Committee.  The  task  force   was  to  develop                                                               
recommendations to  moderate program  increases in the  future as                                                               
part  of  the conditions  of  this  medical  rate freeze  and  to                                                               
complete  its work  by February  of 2006.  The rate  freeze would                                                               
sunset in  August 2007  and a plan  is not yet  in place  for the                                                               
post rate freeze  sunset period and that is  why this legislation                                                               
was introduced.                                                                                                                 
MR. MILLER  said under HB  228 the  medical rate freeze  would be                                                               
extended for  two years to  allow time for recommendations  to be                                                               
developed and  it also implements  an annual rate  increase based                                                               
on the  medical component of  the consumer price index  (CPI). In                                                               
closing, he said this  is not meant to be a  long-term fix, but a                                                               
stop-gap measure.                                                                                                               
2:07:36 PM                                                                                                                  
He said this  bill is supported by the Alaska  State Hospital and                                                               
Nurses Home Association, the Alaska  Physicians and Surgeons, the                                                               
Alaska  State Medical  Association, the  Alaska Municipal  League                                                               
Joint  Insurance  Agency,  the  State Chamber  of  Commerce,  the                                                               
Department  of  Labor  and  Workforce  Development  (DOLWD),  the                                                               
Division  of Insurance  and Bradner's  Alaska Legislative  Digest                                                               
that on  page 6  said this bill  is a "must  have" for  the Palin                                                               
2:07:56 PM                                                                                                                    
LINDA  HALL,  Director,  Division  of  Insurance,  Department  of                                                               
Commerce,  Community &  Economic  Development  (DCCED), said  she                                                               
supported HB  228 and that  she wanted  to highlight some  of its                                                               
points.  She  stated  with  the  freeze  having  been  in  place,                                                               
Attachment 1  shows the portion  of workers'  compensation system                                                               
cost nationally  is 58 percent  - comprised of  medical expenses.                                                               
In Alaska,  that percentage is  at 69 percent and  rising. System                                                               
cost means what is paid out  for treatment of injured workers and                                                               
indemnity as lost wages. They are  not the same thing as premium,                                                               
but they are a component of premium.                                                                                            
MS.  HALL explained  that in  her premium  calculations that  she                                                               
ultimately approves  through public  rate hearings, she  looks at                                                               
historical system costs  and their trending. For  example, if she                                                               
charged $10  for a single  workers' compensation claim  today and                                                               
trended that over the next  10 years, potentially it would likely                                                               
to  trend up  to  $15 or  $20.  On top  of  that, she  explained,                                                               
insurance companies have what is  called an "expense factor" that                                                               
they put on top of that.                                                                                                        
2:10:12 PM                                                                                                                    
MS. HALL urged them  to look at Exhibit 4 and  said as of October                                                               
2006, an Oregon study shows  that the workers' compensation rates                                                               
in Alaska are  the highest in the country -  and they might climb                                                               
even higher unless  some better controls on  medical expenses are                                                               
found. This is not to  imply that people are necessarily charging                                                               
too much; medical costs in Alaska  are higher than in the rest of                                                               
the country, also. This is seen in all the state's systems.                                                                     
2:11:38 PM                                                                                                                    
The last attachment in her presentation  she said is a review and                                                               
evaluation of this  bill by the National  Counsel on Compensation                                                               
Insurance.  The  second  paragraph   predicts  what  would  occur                                                               
without this  legislation and  it projects a  4.5 to  5.8 percent                                                               
increase in  system costs overall. HB  228 holds it at  a minimal                                                               
1.3 percent.  Ms. Hall  said the system  costs are  compounded by                                                               
other parts  of the rate  making process.  So, it is  critical to                                                               
look at this additional freeze.                                                                                                 
2:12:50 PM                                                                                                                    
SENATOR BUNDE  said she mentioned  the medical costs  were around                                                               
60 percent in Alaska and lower  in other states and asked if that                                                               
is a  factor of the cost  of the medical procedures  in Alaska or                                                               
does something else in the system make that percentage higher.                                                                  
MS. HALL  responded that  she just  recently reviewed  a two-year                                                               
National  Counsel on  Compensation  Insurance study  on that  and                                                               
found that, in  general, the cost of doing business  in Alaska is                                                               
more expensive than in other areas of the country.                                                                              
SENATOR BUNDE recalled seeing something  recently saying that the                                                               
cost  of living  in  Anchorage is  probably less  than  it is  in                                                               
Portland and Seattle and yet the  cost of medical treatment is so                                                               
much higher.  A chart showed  that a colonoscopy costs  $2,500 in                                                               
Alaska and  $1,400 in the Lower  48. He found it  hard to believe                                                               
that the cost should be that much higher in Alaska.                                                                             
MS. HALL said she didn't disagree with that.                                                                                    
CHAIR ELLIS  said he shared that  concern and he hoped  to get to                                                               
the bottom of that. He  asked if building inflation-proofing into                                                               
the bill was reasonable                                                                                                         
MS.  HALL  replied that  it  was  an  objective  way to  make  an                                                               
increase and she didn't think  it appropriate or fair to continue                                                               
to freeze  the medical fee  schedule at the December  2004 level.                                                               
To  use objective  criteria is  the  most appropriate  way to  do                                                               
CHAIR  ELLIS asked  Senator Bunde  if the  base is  fair and  the                                                               
mechanism is  reasonable, could he support  inflation proofing so                                                               
the legislature didn't have to spend time revisiting it.                                                                        
SENATOR  BUNDE  said  it's  hard to  find  doctors  for  Medicare                                                               
patients   because   of   the   federally   mandated   level   of                                                               
reimbursement.  He asked  if she  could envision  injured workers                                                               
having  problems with  finding  someone to  treat  them at  these                                                               
2:17:06 PM                                                                                                                    
MS. HALL  replied that her  division hadn't received  a complaint                                                               
about  access  to  medical  care and  she  didn't  envision  this                                                               
legislation having an impact on people getting medical care.                                                                    
MIKE HOGAN,  Executive Director, Alaska Physicians  and surgeons,                                                               
supported HB 228.                                                                                                               
2:18:45 PM                                                                                                                    
SENATOR STEVENS moved  to pass CSHB 228(L&C)  from committee with                                                               
individual recommendations and attached  fiscal notes. There were                                                               
no objections and it was so ordered.                                                                                            
             SB 165-TOURISM DISCLOSURES AND NOTICES                                                                         
2:19:53 PM                                                                                                                    
CHAIR ELLIS announced SB 165 to  be up for consideration. He said                                                               
it is companion  legislation to house legislation  that is coming                                                               
over shortly. His  goal was to hear  this bill and move  it on to                                                               
the Judiciary Committee and expect  the House legislation to meet                                                               
it there. He said that  Representative Holmes had done the lion's                                                               
share of the work and would speak for Senator Elton.                                                                            
REPRESENTATIVE  LINDSEY  HOLMES, sponsor  of  the  HB 217,  asked                                                               
JAMES WALDO, her staff person, to help present the bill.                                                                        
MR.  WALDO said  SB  165,  which is  the  companion  for HB  217,                                                               
addresses  concerns  of  the local  vendor  tour  businesses.  It                                                               
alters and  improves the  disclosure section  that was  passed in                                                               
the  cruise  ship  initiative,  Ballot Measure  2,  in  the  last                                                               
election.  It adds  several requirements  for disclosure  for on-                                                               
board sales  and alters the  commission rate disclosure;  it also                                                               
adds a  section that  applies that  to advertisements  for shore-                                                               
side  retailers as  well. He  said  the on-board  tour sales  are                                                               
changed to  require a  disclosure under every  sale that  the on-                                                               
board sale is a wholesale/retail relationship between the shore-                                                                
side tour  vendor and the  cruise line. This basically  helps the                                                               
passengers  to be  informed  that  the cruise  line  will keep  a                                                               
percentage of the  money paid for a tour. The  disclosure is also                                                               
required to  include information on other  alternatives available                                                               
at  future ports  of  call with  different  prices and  different                                                               
features. It also  requires the cruise ships  to provide vendors'                                                               
contact  information to  the visitors'  bureaus in  each port  of                                                               
call so  that the passengers  can contact them  independently and                                                               
compare prices.                                                                                                                 
2:21:51 PM                                                                                                                    
MR.   WALDO  said   this   legislation   alters  the   disclosure                                                               
requirement  that was  in the  initial initiative.  It originally                                                               
said  the  cruise   line  is  required  to   disclose  the  exact                                                               
commission  rate in  all written  materials when  they sold  that                                                               
tour. However, that threatened the  local Alaskan business on the                                                               
shore-side because  it would expose their  pricing structures and                                                               
they  had a  very  really worry  that this  would  lead to  price                                                               
undercutting.  This  price  undercutting would  only  affect  the                                                               
Alaskan  businesses because  they  would be  competing with  each                                                               
other  for  lower  and  lower   prices  while  the  cruise  ships                                                               
maintained the higher commission rate.                                                                                          
After  working with  the initiative's  sponsors, Mr.  Waldo said,                                                               
they  came to  a  good fix  in requiring  a  disclosure when  the                                                               
commission reaches a  certain threshold of over  20 percent. This                                                               
helps the  consumer realize they  are paying a commission  over a                                                               
certain rate.                                                                                                                   
2:24:19 PM                                                                                                                    
Finally,  it  adds  a  new  section that  was  left  out  of  the                                                               
initiative.  That section  applies these  disclosure requirements                                                               
to shore-side  retailers as well.  Right now on-board  the cruise                                                               
ships   shore-side   retailers,  like   Diamonds   International,                                                               
advertise,  but they  charge  extremely  steep advertising  rates                                                               
that  amount to  a  percentage  of the  sales.  This would  allow                                                               
passengers to  see that  a percentage of  those retail  sales are                                                               
being recouped by the cruise  ship and effectively allows them to                                                               
realize that  there are other  stores and other  alternatives for                                                               
them to use.                                                                                                                    
2:25:10 PM                                                                                                                    
SENATOR BUNDE  asked if  sponsors of  the cruise  ship initiative                                                               
agree with this legislation.                                                                                                    
MR. WALDO replied  yes. He said that Joe Geldhof  is on record in                                                               
the House  Judiciary Committee  speaking in favor  of HB  217 and                                                               
Kirsten  Cohen,  another  sponsor  of the  initiative,  had  also                                                               
written a letter in support.                                                                                                    
SENATOR BUNDE  said he  heard from a  number of  constituents who                                                               
said they knew what they voted for and didn't want it changed.                                                                  
MR. WALDO  responded that  to assuage  those concerns  even more,                                                               
one of the more significant final  pieces in the bill corrects an                                                               
error   in  the   initiative  that   cited  violation   of  these                                                               
requirements as  an unfair trade  practice - with a  maximum fine                                                               
of $100 - which  for a cruise line, is just a  slap on the wrist.                                                               
Any  other unfair  trade  practice  has a  penalty  of $1,000  to                                                               
$25,000, a  significant deterrent. So,  SB 165 and HB  217 remove                                                               
the requirement  the $100-penalty and  replace it with  $1,000 to                                                               
2:27:58 PM                                                                                                                    
DON  HESS, Chilkat  River Adventures,  supported SB  165. He  was                                                               
once  in the  logging business,  then he  turned to  trucking and                                                               
being a heavy equipment operator. In  1973, he decided to start a                                                               
river tour  business in  Haines. He said  his current  company is                                                               
successful only because  of the cruise ships and now  it is being                                                               
drastically affected by  the initiative's disclosure requirement.                                                               
He  urged  them  to  pass  SB 165  out  of  committee  today;  50                                                               
businesses have  testified in  support of  these changes  and not                                                               
one business has testified in opposition.                                                                                       
CHAIR ELLIS  said he personally  thought a good balance  had been                                                               
struck between the spirit of  the initiative and the sponsors and                                                               
some of the practical implications.                                                                                             
2:32:37 PM                                                                                                                    
JOHN DUNLAP,  Manager, Allen Marine  Tours, supported SB  165 and                                                               
thought the  language met  the intent of  the voters  better than                                                               
that in the ballot initiative.                                                                                                  
2:34:16 PM                                                                                                                    
STEVE HEIGHTS,  Skagway Streetcar  Company, supported SB  165. He                                                               
agreed  with  the previous  two  testifiers  and said  that  most                                                               
importantly, the committee should  understand that tour operators                                                               
don't  pay commissions  to the  cruise lines.  Rather the  cruise                                                               
lines customers pay them. He explained:                                                                                         
     We  create, manufacture,  tour  products,  and we  sell                                                                    
     those  at wholesale  net price  to the  cruise ship  or                                                                    
     retail store.  We sell our  products at a  volume rate,                                                                    
     too, because blocks of seats  - we can produce for less                                                                    
     than  the  cost of  a  single  seat.  Some of  us  sell                                                                    
     retail, as  well, at  our windows, but  those are  at a                                                                    
     retail price, not at the wholesale volume price.                                                                           
He knows of  no other retail business that has  to disclose their                                                               
retail  markups.  He  is  not  opposed  to  disclosure,  but  the                                                               
disclosure he wants  to see is the  truth. He said point  4 in SB
165 is  still wrong  in that  it still  includes an  arbitrary 20                                                               
percent  figure; it  still uses  the incorrect  word "commission"                                                               
and this is not true. Rather:                                                                                                   
     The  truth   is  that   there  is   a  retail/wholesale                                                                    
     relationship  here  and  having  been so  stated  in  a                                                                    
     statute, there should be no  more that needs to be said                                                                    
     - because that in and  of itself in business states the                                                                    
     truth  of  commerce.  HB  217  and  SB  165  may  be  a                                                                    
     temporary fix,  but they still  do not state  the truth                                                                    
     and truth  and honesty  in disclosure for  the citizens                                                                    
     of Alaska, for  the consumer, is what  the people voted                                                                    
     for.  Thank you  so much  for my  opportunity and  I do                                                                    
     hope you pass this along.                                                                                                  
2:37:10 PM                                                                                                                    
ALLEN LEMASTER testified  from Gakona in support  of Mr. Heights'                                                               
testimony. This bill  is the best fix  we can have for  what is a                                                               
bad idea initially.                                                                                                             
2:38:46 PM                                                                                                                    
KELLY  DINDINGER, Alaska  Travel Adventurers  and Alaska  Cruises                                                               
Inc., said  she is  very concerned  that this  bill may  not move                                                               
forward  quickly.  She  said Alaska  Travel  Adventurers  is  her                                                               
livelihood and  it doesn't  start making money  until July  - and                                                               
"We're out of money now. We  need to start making our sales." She                                                               
just  got an  announcement  that some  cruise  lines are  telling                                                               
their customers if  they don't buy a tour  before hitting Alaskan                                                               
waters, they are  not going to get to buy  it, because they don't                                                               
know what is legal.                                                                                                             
2:42:19 PM                                                                                                                    
SENATOR  STEVENS  moved  to  pass  SB  165  from  committee  with                                                               
individual recommendations and attached  fiscal note. There being                                                               
no objection, it was so ordered.                                                                                                
There being  no further  business to  come before  the committee,                                                               
Chair Ellis adjourned the meeting at 2:42:48 PM.                                                                              

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