Legislature(2009 - 2010)BELTZ 211

03/19/2009 01:30 PM LABOR & COMMERCE


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 138 TAX CREDIT FOR STATE TOURISM PROGRAM TELECONFERENCED
Moved CSSB 138(L&C) Out of Committee
*+ SB 97 CRANE OPERATOR LICENSES TELECONFERENCED
Heard & Held
*+ SB 149 MORTGAGE LENDING TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         March 19, 2009                                                                                         
                           1:35 p.m.                                                                                            
                                                                                                                              
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Joe Paskvan, Chair                                                                                                      
Senator Joe Thomas, Vice Chair                                                                                                  
Senator Bettye Davis                                                                                                            
Senator Kevin Meyer                                                                                                             
Senator Con Bunde                                                                                                               
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 138                                                                                                             
"An  Act  relating  to  a   corporation  income  tax  credit  for                                                               
contributions  by  a  person owning  or  operating  a  commercial                                                               
passenger  vessel  to  a qualified  trade  association  that  was                                                               
awarded a contract by the  Department of Commerce, Community, and                                                               
Economic  Development,  and used  for  planning  and executing  a                                                               
destination tourism marketing campaign."                                                                                        
     MOVED CSSB 138(L&C) OUT OF COMMITTEE                                                                                       
                                                                                                                                
SENATE BILL NO. 97                                                                                                              
"An  Act  relating  to  the licensing  of  crane  operators;  and                                                               
providing for an effective date."                                                                                               
     HEARD AND HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 149                                                                                                             
"An Act relating  to the regulation of  residential real property                                                               
mortgage lending,  including the  licensing of  mortgage lenders,                                                               
mortgage brokers,  and mortgage  loan originators  and compliance                                                               
with  certain  federal  laws  relating  to  residential  mortgage                                                               
lending; and providing for an effective date."                                                                                  
     HEARD AND HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 138                                                                                                                  
SHORT TITLE: TAX CREDIT FOR STATE TOURISM PROGRAM                                                                               
SPONSOR(s): SENATOR(s) MEYER                                                                                                    
                                                                                                                                
03/09/09       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/09/09       (S)       L&C, FIN                                                                                               
03/19/09       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
                                                                                                                                
BILL: SB  97                                                                                                                  
SHORT TITLE: CRANE OPERATOR LICENSES                                                                                            
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
02/04/09       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/04/09       (S)       L&C, FIN                                                                                               
03/19/09       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
                                                                                                                                
BILL: SB 149                                                                                                                  
SHORT TITLE: MORTGAGE LENDING                                                                                                   
SPONSOR(s): SENATOR(s) PASKVAN                                                                                                  
                                                                                                                                
03/13/09       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/13/09       (S)       L&C, FIN                                                                                               
03/19/09       (S)       L&C AT 1:30 PM BELTZ 211                                                                               
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SENATOR KEVIN MEYER                                                                                                             
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Sponsor of SB 138.                                                                                        
                                                                                                                                
CHRISTINE R. MARASIGAN                                                                                                          
Staff to Senator Meyer                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Commented on SB 138 for the sponsor.                                                                      
                                                                                                                                
BRETT CARLSON, Chair                                                                                                            
Tourism Marketing Association                                                                                                   
POSITION STATEMENT: Supported CSSB 138(L&C).                                                                                  
                                                                                                                                
RON PECK, President                                                                                                             
Alaska Travel Industry Association (ATIA)                                                                                       
POSITION STATEMENT: Supported CSSB 138(L&C).                                                                                  
                                                                                                                                
JOHANNA BALES, Deputy Director                                                                                                  
Tax Division                                                                                                                    
Department of Revenue (DOR)                                                                                                     
POSITION STATEMENT: Answered questions about CSSB 138(L&C).                                                                   
                                                                                                                                
DEBORAH KAY, representing herself                                                                                               
POSITION STATEMENT: Supported SB 138.                                                                                         
                                                                                                                                
ETHAN TYLER                                                                                                                     
CIRI Alaska Tourism Corporation                                                                                                 
POSITION STATEMENT: Supported SB 138.                                                                                         
                                                                                                                                
DAVID KASSER, Vice President of Tourism                                                                                         
Anchorage Convention and Visitor Bureau                                                                                         
POSITION STATEMENT: Supported SB 138.                                                                                         
                                                                                                                                
DEB HICKOK, President and CEO                                                                                                   
Fairbanks Convention and Visitors Bureau                                                                                        
POSITION STATEMENT: Supported SB 138.                                                                                         
                                                                                                                                
MARY RICHARDS, President                                                                                                        
State Bed and Breakfast Association                                                                                             
POSITION STATEMENT: Supported SB 138.                                                                                         
                                                                                                                                
GRAY MITCHELL, Director                                                                                                         
Division of Labor Standards and Safety                                                                                          
Department of Labor and Workforce Development (DOLWD)                                                                           
POSITION STATEMENT: Supported SB 97.                                                                                          
                                                                                                                                
JERRY ANDREWS, Apprenticeship Coordinator                                                                                       
Department of Labor and Workforce Development (DOLWD)                                                                           
POSITION STATEMENT: Had some concerns with the definitions and                                                                
applications in SB 97.                                                                                                          
                                                                                                                                
ALLEN WILSON                                                                                                                    
Alaska State Homebuilding Association                                                                                           
POSITION STATEMENT: Opposed SB 97.                                                                                            
                                                                                                                                
RALPH KIBBY, owner                                                                                                              
Chatham Electric and member                                                                                                     
National Electrical Contractors Association (NECA)                                                                              
POSITION STATEMENT: Offered to help work on SB 97.                                                                            
                                                                                                                                
JARED HAMLIN                                                                                                                    
International Union of Operating Engineers Local 203                                                                            
POSITION STATEMENT: Supported SB 97.                                                                                          
                                                                                                                                
LORI HOVANEC, Director                                                                                                          
Division of Banking and Securities                                                                                              
Department of Commerce, Community & Economic Development,                                                                       
POSITION STATEMENT: Supported SB 149.                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:35:07 PM                                                                                                                    
CHAIR JOE PASKVAN  called the Senate Labor  and Commerce Standing                                                             
Committee meeting to order at  1:35 p.m. All members were present                                                               
at the call to order.                                                                                                           
                                                                                                                                
          SB 138-TAX CREDIT FOR STATE TOURISM PROGRAM                                                                       
                                                                                                                                
1:35:37 PM                                                                                                                    
CHAIR PASKVAN announced the consideration of SB 138.                                                                            
                                                                                                                                
SENATOR MEYER, sponsor  of SB 138, moved to adopt  CS for SB 138,                                                               
labeled  26-LS0626\P,  as the  working  document.  There were  no                                                               
objections and it was so ordered.                                                                                               
                                                                                                                                
CHRISTINE R.  MARASIGAN, staff  to Senator  Meyer, sponsor  of SB
138,  explained  that  each  year   the  Alaska  Travel  Industry                                                               
Association,  which  is   the  non-profit,  member-based  visitor                                                               
industry trade  association that conducts marketing  on behalf of                                                               
the State  of Alaska,  makes a  request for  funds to  promote an                                                               
Alaska  tourism  marketing  program. Last  year  the  legislature                                                               
applied  a three-year  sunset clause  to  the match  requirement,                                                               
which currently  has a 70/30 split  with the State of  Alaska and                                                               
private industry. Currently the  state-wide car rental tax brings                                                               
in about $9 million and is  combined with $2.7 million of private                                                               
industry match to make a  total tourism marketing budget of $11.7                                                               
million for FY09.                                                                                                               
                                                                                                                                
Last  year the  legislature  requested the  travel industry  come                                                               
back  to the  table with  a long-term  tourism marketing  funding                                                               
growth plan. So, the committee  substitute (CS) would establish a                                                               
tourism  marketing  tax  credit  towards  the  recently  approved                                                               
water's  edge  corporate  cruise  income tax.  This  tax  is  one                                                               
portion of  the state's estimated  tourism revenues  and language                                                               
on page  2, line 2, makes  sure that any other  contributions can                                                               
not be included in this tax  credit. This also does not allow the                                                               
credits to carry over from year to year.                                                                                        
                                                                                                                                
MS.  MARASIGAN said  this tax  is a  very specific  and would  be                                                               
reinvested  to  promote   the  State  of  Alaska   as  a  tourism                                                               
destination.                                                                                                                    
                                                                                                                                
SENATOR  BUNDE asked  if the  fiscal note  for the  original bill                                                               
applied to the CS.                                                                                                              
                                                                                                                                
MS. MARASIGAN answered yes.                                                                                                     
                                                                                                                                
SENATOR BUNDE asked  if the maximum potential  liability would be                                                               
something under $16 million.                                                                                                    
                                                                                                                                
MS. MARASIGAN answered yes.                                                                                                     
                                                                                                                                
SENATOR MEYER  said in his  previous life as co-chair  of Finance                                                               
he worked  with the  Alaska Tourism Association  (ATA) to  find a                                                               
long-term funding  mechanism for  the tourism industry,  and this                                                               
is a  good match. The  dollar amount may  go up as  more tourists                                                               
come in; so he suggested looking at establishing a cap.                                                                         
                                                                                                                                
1:42:26 PM                                                                                                                    
BRETT  CARLSON, Northern  Alaska  Tour Company,  said  he is  the                                                               
volunteer  chair  for  the  Tourism  Marketing  Association,  and                                                               
supported  CSSB 138(L&C).  Tourism plays  a big  part in  Alaskan                                                               
economy  and  has a  record  of  proven economic  development  as                                                               
indicated  in  the  pie  chart.  Last year  it  brought  in  $122                                                               
million.   He  said   the   travel   industry  provides   amazing                                                               
opportunities  for   small  businesses  to  participate   at  the                                                               
ownership  level.  Research  shows  that  the  tourism  marketing                                                               
program works in Alaska as well as around the world.                                                                            
                                                                                                                                
1:45:18 PM                                                                                                                    
Chart  12  shows what  in  1990  inflation-adjusted dollars,  the                                                               
state's contribution  to the tourism  marketing program  was just                                                               
over  $24 million.  Over time,  it  went into  decline and  small                                                               
businesses were hurt the most.  They engaged with the legislature                                                               
on ways  to come  up with a  long-term tourism  marketing funding                                                               
model and the  legislature adamantly said if they come  up with a                                                               
model, those dollars need to  come from travel industry generated                                                               
revenues.                                                                                                                       
                                                                                                                                
The first step  was reinvestment of the vehicle  rental tax. That                                                               
is  essentially a  flow of  revenue  coming into  the state  from                                                               
independent travel  and the legislature.  This tax credit  is the                                                               
second  part  of the  solution  -  that  also comes  from  travel                                                               
industry generated taxes.                                                                                                       
                                                                                                                                
MR.  CARLSON said  the economic  crisis is  affecting the  travel                                                               
industry, and this plan will  help the state's ability to balance                                                               
the budget. Travel intention studies  indicate a decline of 30-60                                                               
percent in  bookings for Alaskan  businesses. As you  get further                                                               
away from the  water those numbers become "most  scary." This tax                                                               
credit  is one  more tool  that will  help small  businesses help                                                               
themselves.                                                                                                                     
                                                                                                                                
1:48:35 PM                                                                                                                    
SENATOR BUNDE  remarked that  the maximum  project amount  if all                                                               
taxes were  claimed as  credit would  be $15  million and  he has                                                               
heard anecdotally that cruises are  seriously discounted now. How                                                               
low could this go?                                                                                                              
                                                                                                                                
MR. CARLSON  replied that  the tax  credit could  go up  and down                                                               
year to  year. "Next year  we may be  able to determine  what the                                                               
floor on this tax credit is  going to be....One thing about it is                                                               
that tax  credit is  not going to  grow unless  tourism marketing                                                               
works."                                                                                                                         
                                                                                                                                
1:50:05 PM                                                                                                                    
RON PECK,  President, Alaska Travel Industry  Association (ATIA),                                                               
explained that the most recent  information indicates that cruise                                                               
bookings  are increasing,  but the  yields for  Alaska are  still                                                               
down by 20-30 percent.                                                                                                          
                                                                                                                                
SENATOR THOMAS said the only concern  he has heard is the concept                                                               
that when the cruise  ship head tax was put in  place that it was                                                               
charged back to the customer as  an actual charge of $50 on their                                                               
ticket.  Prior  to  that,  the  cruise  ship  industry  had  been                                                               
contributing a  couple million dollars  to the  tourism marketing                                                               
effort  on an  annual  basis. So,  now they  would  be getting  a                                                               
credit  for the  couple  million they  had  been contributing  on                                                               
their own prior to the implementation of the cruise ship tax.                                                                   
                                                                                                                                
MR.  CARLSON  responded  that  any time  you  increase  taxes  on                                                               
businesses in  Alaska, whether it's  shown to the  customer above                                                               
the  line or  below the  line, it  has to  be passed  on to  them                                                               
because there  is no other  place to get  it from. Last  year the                                                               
legislature moved  away from  that model  to a  new one  based on                                                               
reinvestment of a  portion of travel industry  revenues. It seems                                                               
to  make sense  that both  independent and  cruise travel  have a                                                               
revenue stream.                                                                                                                 
                                                                                                                                
MR. PECK  added if  this bill  is passed,  it would  generate $10                                                               
million to $12  million, and the cruise industry  still buys into                                                               
ATIA programs  in the  amount of  $500,000 to  $600,000 annually.                                                               
Prior to this new plan,  their maximum annual contribution from a                                                               
donation  standpoint  was  $1.9  million  to  $2  million.  Their                                                               
contribution could grow substantially.                                                                                          
                                                                                                                                
1:54:35 PM                                                                                                                    
JOHANNA  BALES,  Deputy  Director, Tax  Division,  Department  of                                                               
Revenue (DOR), added that the  commercial passenger vessel excise                                                               
tax is charged above the  line to passengers. This particular tax                                                               
credit  doesn't  offset  that  tax, but  rather  it  offsets  the                                                               
corporate income tax  that the cruise ships are  required to pay.                                                               
Normally those  types of taxes  get passed  on below the  line to                                                               
the customers in the industry.                                                                                                  
                                                                                                                                
SENATOR THOMAS said that information helps.                                                                                     
                                                                                                                                
1:55:53 PM                                                                                                                    
SENATOR BUNDE  said a few  years ago  he asked the  Department of                                                               
Revenue to  give the legislature  a report  on the net  return to                                                               
the state  by various industries. He  asked if her shop  did that                                                               
report.                                                                                                                         
                                                                                                                                
MS.  BALES  said  she  remembered   a  report  about  uncollected                                                               
corporate  income tax,  but didn't  recall doing  this particular                                                               
report.                                                                                                                         
                                                                                                                                
1:56:51 PM                                                                                                                    
DEBORAH KAY,  representing herself, said  she made her  living in                                                               
tourism  for the  last  20  years, and  this  bill  will help  to                                                               
continue the  growth of the  state's tourism industry  because of                                                               
the  marketing  dollars  it  will  have. It  will  allow  her  to                                                               
continue to support herself and her family.                                                                                     
                                                                                                                                
1:57:48 PM                                                                                                                    
ETHAN  TYLER,  CIRI  Alaska  Tourism  Corporation,  said  with  a                                                               
shrinking world-wide  economy, it's more important  than ever for                                                               
Alaskans to have a strong  and competitive presence in the market                                                               
place. He supported SB 138.                                                                                                     
                                                                                                                                
1:58:56 PM                                                                                                                    
DAVID  KASSER, Vice  President of  Tourism, Anchorage  Convention                                                               
and Visitor  Bureau, said he is  also a small business  owner and                                                               
supported SB  138. He  sees a  lot of alarm  and concern  in just                                                               
about every industry. He knows that  Alaska could work to be more                                                               
welcoming to this industry, especially  the cruise industry which                                                               
is being "wooed" globally.                                                                                                      
                                                                                                                                
2:01:18 PM                                                                                                                    
DEB HICKOK, President and CEO,  Fairbanks Convention and Visitors                                                               
Bureau,  supported SB  138. She  said that  entrepreneurialism is                                                               
one of  the hallmarks of  the Alaska visitors'  industry. Tourism                                                               
has  a  ripple effect  throughout  the  communities in  terms  of                                                               
construction, transportation,  and countless other  life benefits                                                               
to our communities.                                                                                                             
                                                                                                                                
She reminded  them that  winter tourism is  promoted by  ATIA and                                                               
she listed some of the  businesses that could benefit. The beauty                                                               
of a  state destination campaign is  that it reaches a  depth and                                                               
breadth of  potential customers that  is far beyond the  reach of                                                               
most small businesses.                                                                                                          
                                                                                                                                
2:04:22 PM                                                                                                                    
MARY RICHARDS,  President, State  Bed and  Breakfast Association,                                                               
Fairbanks, said  the Association  has 211  members, and  they are                                                               
all  small business  owners that  depend  on the  help that  they                                                               
receive through ATIA  for destination marketing. There  is no way                                                               
they, as small  business owners, can market  independently to the                                                               
domestic,  European or  Asian markets.  Passing  this bill  would                                                               
help each of  them to reach a  market and be able  to continue to                                                               
sustain the living  they make. "If tourism ended  tomorrow, a lot                                                               
of us would be in a world of hurt."                                                                                             
                                                                                                                                
2:07:12 PM                                                                                                                    
CHAIR PASKVAN closed public testimony.                                                                                          
                                                                                                                                
SENATOR  BUNDE   pointed  out  that   there  could   possibly  be                                                               
unintended  consequences and  said there  is no  such thing  as a                                                               
free lunch. Businesses have to  worry about their bottom line and                                                               
he wants them  to succeed, but the legislature's job  is to worry                                                               
about the state's  bottom line. The bottom line for  the state is                                                               
that  tourism generates  $25 million  for the  general fund,  but                                                               
with this bill that will  decrease to about $15 million. Everyone                                                               
needs to  be aware  of that,  because in two  or three  years the                                                               
state  would be  hurting for  money. He  was hoping  they weren't                                                               
robbing  Peter to  pay Paul.  This model  is sustainable  only as                                                               
long as the cruise industry stays in Alaska.                                                                                    
                                                                                                                                
2:09:29 PM                                                                                                                    
SENATOR THOMAS  moved to report  CS for  SB 138, version  P, from                                                               
committee  with individual  recommendations  and attached  fiscal                                                               
note(s). There were no objections and it was so ordered.                                                                        
                                                                                                                                
                                                                                                                                
CHAIR PASKVAN announced an at ease from 2:10 p.m. to 2:11 p.m.                                                                  
                                                                                                                                
                 SB  97-CRANE OPERATOR LICENSES                                                                             
                                                                                                                                
2:11:38 PM                                                                                                                    
CHAIR PASKVAN  announced the consideration  of SB 97.  He pointed                                                               
out that in the past few  years crane accidents around the nation                                                               
have caused numerous workplace deaths  and millions of dollars in                                                               
property  damages. Although  Alaska has  not experienced  a major                                                               
crane  accident  for several  years,  a  chart in  their  packets                                                               
documents  10  fatalities in  the  state  as  a result  of  crane                                                               
accidents.  Although some  of the  accidents were  the result  of                                                               
circumstances beyond the operator's  control, a majority resulted                                                               
from operator  error. SB  97 is  a proactive  step to  avoid more                                                               
crane-related  catastrophes  in  Alaska by  establishing  minimum                                                               
licensing  standards  to  insure that  operators  are  adequately                                                               
qualified.                                                                                                                      
                                                                                                                                
The  State of  Alaska currently  requires licensing  for numerous                                                               
occupations  from  barbers  and  hairdressers  to  veterinarians.                                                               
Licensing  requirements are  designed  to protect  the public  by                                                               
insuring that individuals  are properly qualified to  engage in a                                                               
particular  field  of  enterprise.  Currently  16  states  and  6                                                               
municipalities have passed legislation  to require crane operator                                                               
licensing, and legislation is pending in 6 more states.                                                                         
                                                                                                                                
The  majority   of  these  licensing  requirements   establish  a                                                               
requirement  for certification  through  the National  Commission                                                               
for  the   Certification  of  Crane   Operators  (NCCCO)   or  an                                                               
equivalent   nationally-accredited    training   provider.   This                                                               
legislation  will  not  create  a burden  on  state  revenues  as                                                               
licensing  fees  will  pay  for  enforcement  costs,  subject  to                                                               
legislative appropriation.  He said  Dave Latch,  Chief Operating                                                               
Officer of BC Contractors, submitted a letter of support.                                                                       
                                                                                                                                
2:14:38 PM                                                                                                                    
GRAY MITCHELL, Director, Division  of Labor Standards and Safety,                                                               
Department  of Labor  and Workforce  Development (DOLWD),  stated                                                               
support for  Chair Paskvan's comments  on SB 97. He  reminded the                                                               
committee of some  of the recent crane accidents  across the U.S.                                                               
to  highlight   some  of  the   dangers  associated   with  crane                                                               
operation, and  mentioned that an  Anchorage worker was  killed a                                                               
few  days ago  while operating  a fork  lift. This  worker hadn't                                                               
been properly trained  and certified for that  piece of equipment                                                               
and it cost him his life.                                                                                                       
                                                                                                                                
Numerous occupations have  licensing requirements including truck                                                               
drivers,  realtors and  hair cutters,  but  not crane  operators.                                                               
Current OSHA regulations aren't  adequate; the regulations in the                                                               
construction standard require that  crane operators are qualified                                                               
based on  a standard that  is more than 40  years old. It  is not                                                               
detailed and  leaves it up  to the employer's judgment  to decide                                                               
what training is required.                                                                                                      
                                                                                                                                
Further,  Mr. Mitchell  said, it  might take  till 2016  for OSHA                                                               
standards  to  be  in  place  on the  federal  level.  Even  OSHA                                                               
regulations don't necessarily apply  to public safety provisions,                                                               
and the  crane licensing  requirement would  cover the  public as                                                               
well.  By  establishing  a   licensing  provision  that  requires                                                               
applicants  to  be certified  by  a  nationally accredited  crane                                                               
training  and certification  provider, Alaska  would be  taking a                                                               
positive step  toward minimizing  the chances for  a catastrophic                                                               
crane accident.                                                                                                                 
                                                                                                                                
He said  that Canadians have  been doing this for  several years;                                                               
Ontario passed a requirement in 1978.  They did a study and saw a                                                               
75  percent reduction  in deaths  related to  crane accidents  in                                                               
more than double that period  after the certification requirement                                                               
was started.                                                                                                                    
                                                                                                                                
In California, Mr.  Mitchell said, they compared  the three years                                                               
prior  to  their certification  requirement  to  the three  years                                                               
after and saw an 80 percent  reduction in deaths and a 56 percent                                                               
reduction  in  injuries  related  to crane  accidents.  "So  this                                                               
really works."                                                                                                                  
                                                                                                                                
2:22:00 PM                                                                                                                    
Just because  Alaska has  not seen a  major accident  for several                                                               
years,  isn't a  good reason  to not  address this  problem. From                                                               
1987-1997, Alaska experienced 15  crane accidents under the state                                                               
and federal  OSHA jurisdictions,  and those accidents  caused the                                                               
deaths of 10 employees and serious  injuries to 11 more. With the                                                               
stimulus projects  hitting the streets and  potential natural gas                                                               
pipeline on  the horizon,  Alaska can  expect to  see a  lot more                                                               
crane use coming.                                                                                                               
                                                                                                                                
MR. MITCHELL  said last summer the  DOLWD mailed a survey  to 569                                                               
companies likely to operate cranes  and got 128 responses on this                                                               
issue.  Several  were  opposed   to  licensing,  but  82  percent                                                               
indicated  that  certification  would reduce  accidents,  and  70                                                               
percent  of  those  indicated  that  crane  operators  should  be                                                               
licensed to work in Alaska.                                                                                                     
                                                                                                                                
He explained  that this bill  does not  apply to cranes  used for                                                               
general industrial purposes,  transportation, commercial fishing,                                                               
logging, mining,  oil and gas  exploration or  for manufacturing.                                                               
The  overwhelming   number  of  accidents  in   the  construction                                                               
industry has  pressed the  department to  focus on  that industry                                                               
first and that's the thrust of this legislation.                                                                                
                                                                                                                                
2:23:49 PM                                                                                                                    
SENATOR BUNDE  asked if all  the crane operators he  talked about                                                               
having accidents were uncertified.                                                                                              
                                                                                                                                
MR. MITCHELL said  he didn't have that information;  he said that                                                               
crane certification hasn't been around that long.                                                                               
                                                                                                                                
SENATOR BUNDE  said his  point is  that even  certified operators                                                               
can have  accidents. He asked him  to walk through the  process a                                                               
young Alaskan who  decides he wants to be a  crane operator would                                                               
have  to  do  to  get  the training  and  certification.  He  was                                                               
concerned about  gate keeping and  if you  want to be  a pipeline                                                               
welder and your great granddad wasn't  a member of the union, you                                                               
wouldn't have a chance.                                                                                                         
                                                                                                                                
2:26:16 PM                                                                                                                    
MR. MITCHELL replied that right  now training for crane operators                                                               
is  minimal.  Beside the  Equipment  Operators'  Union, the  only                                                               
other  approved  operation  to   provide  the  training  and  the                                                               
examinations in Alaska is Alaska  Crane Consultants in Kenai. The                                                               
written exam costs  $265 and the practical exam  where the person                                                               
actually  operates the  crane is  $410, a  total of  $675 to  get                                                               
licensed as  a crane operator. Typically  these individuals would                                                               
have  worked as  a trainee  under the  supervision of  a licensed                                                               
crane operator  for several years  and gained some  experience in                                                               
the seat, although  that is not a requirement at  this point. The                                                               
real question  is when you have  a young worker who  shows skills                                                               
in operating a crane, typically  the employer is invested in that                                                               
worker.                                                                                                                         
                                                                                                                                
He  explained  that  the  fee  of   $50  is  one  of  the  lowest                                                               
occupational licensing  fees he has  seen and with this  a person                                                               
could go to work for an  employer and learn the skills they would                                                               
need to  sit for  this exam.  More than  likely the  employer who                                                               
already invested  in the  worker would be  footing the  $675. So,                                                               
cost is not a tremendous barrier.                                                                                               
                                                                                                                                
CHAIR PASKVAN asked him to comment on the 17.5 ton issue.                                                                       
                                                                                                                                
JERRY  ANDREWS, Apprenticeship  Coordinator, Department  of Labor                                                               
and  Workforce  Development  (DOLWD),  said  he  used  to  be  an                                                               
instructor  of crane  training,  a crane  operator  tester and  a                                                               
certified crane operator. He explained  that 17.5 tons was chosen                                                               
by industry  as a  size that  doesn't allow  for the  operator to                                                               
swing with the load. If the  hydraulic crane is greater than 17.5                                                               
tons,  the  classification  generally  has a  swinging  cab.  The                                                               
National  Commission for  the  Certification  of Crane  Operators                                                               
(NCCCO) has broken the certification  into four categories: small                                                               
hydraulics  under 17.5  tons, large  hydraulics  over 17.5  tons,                                                               
lattice boom trucks and lattice boom crawlers.                                                                                  
                                                                                                                                
SENATOR  MEYER asked  if most  cranes  in Alaska  are under  17.5                                                               
tons.                                                                                                                           
                                                                                                                                
MR.  ANDREWS answered  that most  of the  cranes are  larger than                                                               
17.5 tons and  are used in commercial applications.  For the most                                                               
part  the boom  trucks setting  trusses are  over 17.5  tons, but                                                               
many of  those are  used in  the electrical  trade might  be less                                                               
than that.                                                                                                                      
                                                                                                                                
2:32:30 PM                                                                                                                    
ALLEN WILSON,  Alaska State Homebuilding Association,  opposed SB
97. He said there is a  substantial difference in boom trucks and                                                               
cranes. Typically  boom trucks are  used for setting  trusses and                                                               
large beams. They may be on the  job site 1-4 hours and then they                                                               
are gone. It's  quite common for the general contractor  to go to                                                               
the rental  yard, pick up  the truck, go  back and set  the beams                                                               
and it's over  in just a few  hours. Boom trucks are  also used a                                                               
lot in panelized construction.                                                                                                  
                                                                                                                                
2:33:58 PM                                                                                                                    
His concern  is that there is  only one instructor in  the state.                                                               
He understands  Juneau has  one operator who  is licensed  by the                                                               
NCCCO, and  if this bill passes,  when he needs his  trusses set,                                                               
the  licensed operator  might  be  working full  time  on a  "big                                                               
crane," not a  boom truck. This would be an  obstacle for getting                                                               
his work  done during a limited  building season, as well  as add                                                               
to the  cost. He suggested  limiting the bill's  effectiveness to                                                               
20 tons in the exemption section  on page 6. Another option would                                                               
be to  add "cranes  used in the  residential construction  of one                                                               
and two family  homes" on line 4,  page 6. They could  also add a                                                               
definition of boom truck under (c) on line 17.                                                                                  
                                                                                                                                
2:36:56 PM                                                                                                                    
Does this  apply to guy  who is  actually pulling the  levers and                                                               
pushing the  buttons or the  guy who  is on the  ground directing                                                               
him  or both?  Many  times  when they  are  setting trusses,  for                                                               
example, the operator can't see  the project; so someone needs to                                                               
give directions.                                                                                                                
                                                                                                                                
2:37:37 PM                                                                                                                    
MR. ANDREWS also pointed out that  24 of the 26 accidents nation-                                                               
wide were commercial. So he didn't  see the need to regulate boom                                                               
trucks on residential construction sites.                                                                                       
                                                                                                                                
SENATOR MEYER  remarked that  most of  the accidents  happened on                                                               
high-rise buildings  instead of residential buildings.  It's also                                                               
not up to the rental store to know if the renter is certified.                                                                  
                                                                                                                                
MR. WILSON replied  that is correct, and for  instance, the local                                                               
rental company  doesn't require  any licensing  for its  17.5 ton                                                               
boom truck.                                                                                                                     
                                                                                                                                
2:39:47 PM                                                                                                                    
MR. ANDREWS said he agreed with  Mr. Wilson that the controls and                                                               
design  are similar  between 15,  17.5, 20  ton boom  trucks, but                                                               
industry  and the  Specialized Carriers  and Riggers  Association                                                               
have recognized it at 17.5 tons.                                                                                                
                                                                                                                                
SENATOR BUNDE asked  if there is another category  of guy sitting                                                               
in a  cab versus  the guy  sitting on  back of  a boom  truck. He                                                               
asked if either of those were used to differentiate licensing.                                                                  
                                                                                                                                
MR.  ANDREWS replied  that 20  tons can  be a  fixed cab,  a boom                                                               
truck or a  swinging cab. He can appreciate the  argument for the                                                               
17.5 tons versus 20.                                                                                                            
                                                                                                                                
SENATOR BUNDE commented that  they could consider differentiating                                                               
between a swinging cab and a boom truck.                                                                                        
                                                                                                                                
CHAIR PASKVAN  asked Mr. Andrews  to comment as matter  of public                                                               
safety on a boom truck up to 20 tons.                                                                                           
                                                                                                                                
MR.  ANDREWS  replied that  as  a  matter  of public  safety  the                                                               
highest risk for  any of the projects that have  a lifting device                                                               
is not  for the operator, it's  for the folks working  around him                                                               
and  the bystanders.  That being  the case,  he didn't  think the                                                               
division between 17.5  tons and 20 tons would make  or break that                                                               
argument.  The issues  are  electrocution,  ground stability  and                                                               
things  like that.  As the  size and  capacity of  the crane  are                                                               
increased, those risks are also increased.                                                                                      
                                                                                                                                
CHAIR  PASKVAN  said  someone   suggested  including  within  the                                                               
definition  of "crane"  on  page 6  that it  does  not include  a                                                               
knuckle boom, stacker,  lift truck, power shovel for  a 20-ton or                                                               
less boom truck. Would he support that?                                                                                         
                                                                                                                                
2:44:43 PM                                                                                                                    
MR. ANDREWS  replied that  he would  like to  refer that  back to                                                               
Gray Mitchell to explore further.                                                                                               
                                                                                                                                
MR. WILSON  said if  he understood  Mr. Mitchell's  testimony, it                                                               
sounds  like  OSHA will  have  requirements  for these  types  of                                                               
equipment soon.                                                                                                                 
                                                                                                                                
2:45:32 PM                                                                                                                    
RALPH  KIBBY, owner,  Chatham Electric,  said he  is a  statewide                                                               
electrical  contractor and  a member  of the  National Electrical                                                               
Contractors Association (NECA) and that  the bill needs much more                                                               
work. He met with the  sponsor of this legislation and identified                                                               
some of the problems industry  has with the current language, and                                                               
he apologized that it has been  a month and he hadn't gotten back                                                               
to him with recommendations.                                                                                                    
                                                                                                                                
NECA  members  were  polled,  but  they  hadn't  enough  time  to                                                               
respond. The  response he  did get  was that  it needs  much more                                                               
work. He  believes, as a  business owner, that all  accidents are                                                               
preventable, and the  people who worked on this  bill believe the                                                               
same thing. He  said he would work with  committee and department                                                               
on providing data  that would help with any  amendments to insure                                                               
the  resulting law  would not  severely  impact companies  across                                                               
Alaska.                                                                                                                         
                                                                                                                                
MR. KIBBY said that Chatham  Electric has several boom trucks and                                                               
20 tons  isn't enough. He  could give him  a picture of  a 30-ton                                                               
that wouldn't look any different. He  also said unless you have a                                                               
CDL license and  were capable of running  something 26,000 pounds                                                               
and over, you couldn't do it.  Incidentally, he said, you have to                                                               
be licensed for the tonnage of the crane, not what it can pick.                                                                 
                                                                                                                                
He has up  to 30 employees who currently operate  his cranes, and                                                               
he  assured them  that  as an  owner he  didn't  allow anyone  to                                                               
operate  a crane  who  had not  been trained  to  do so.  Someone                                                               
mentioned  exempting  electricians  and line  work,  but  Chatham                                                               
Electric  performs three  disciplines: line,  telecommunications,                                                               
and wiring;  they work  with transmission  distribution, lighting                                                               
in   intersections,  residential,   industrial  and   commercial.                                                               
Everyone at Chatham  Electric has to be capable  of operating the                                                               
crane.                                                                                                                          
                                                                                                                                
The way  this legislation is  written will have a  huge financial                                                               
impact on his business. He  said this industry is already heavily                                                               
regulated. Everyone  at Chatham  has certificates of  fitness and                                                               
the  crane, itself,  has to  get annual  certification. He  asked                                                               
them to look further at the exemptions language.                                                                                
                                                                                                                                
SENATOR BUNDE  asked if all  of his  equipment is called  a "boom                                                               
truck," because he hears that used interchangeably with "crane."                                                                
                                                                                                                                
2:52:48 PM                                                                                                                    
MR. KIBBY replied in his opinion  it's a moving target. Some days                                                               
it's a  boom truck; others  it's a truck  crane. He has  no known                                                               
definition.  He currently  has  a 24  ton  boom truck/crane  that                                                               
doesn't swing. Again, he asked for  more time to work on wording;                                                               
he did not  want to leave it at the  20-tons, because he operates                                                               
in excess of 50 tons.                                                                                                           
                                                                                                                                
2:53:16 PM                                                                                                                    
JARED HAMLIN,  International Union  of Operating  Engineers Local                                                               
203,  supported  SB  97.  He  has   talked  with  a  lot  of  his                                                               
contractors and the  general consensus is they would  like to see                                                               
some  type of  crane operation  licensing put  in place  for many                                                               
reasons. On the business aspect,  in looking at other areas where                                                               
this has been enacted they  have noticed lower comp and insurance                                                               
rates and things like that.                                                                                                     
                                                                                                                                
CHAIR PASKVAN asked  him to comment upon  the distinction between                                                               
a 17.5 ton boom truck and a 20 ton.                                                                                             
                                                                                                                                
MR. HAMLIN replied that the 17.5  ton number comes from the NCCCO                                                               
that had to pick a standard  in which they could properly certify                                                               
crane operators in multiple areas across the United States.                                                                     
                                                                                                                                
CHAIR PASKVAN asked if he thought  that was the standard that was                                                               
most appropriate for safety.                                                                                                    
                                                                                                                                
MR. HAMLIN replied that the people  who make up the NCCCO are the                                                               
manufacturers  of the  cranes, their  users,  their insurers  and                                                               
anybody who  has anything to do  with it. This is  what they came                                                               
up with.                                                                                                                        
                                                                                                                                
2:56:15 PM                                                                                                                    
CHAIR PASKVAN closed public testimony  and held SB 97 for further                                                               
input.                                                                                                                          
                                                                                                                                
                    SB 149-MORTGAGE LENDING                                                                                 
                                                                                                                                
CHAIR PASKVAN announced the consideration of SB 149.                                                                            
                                                                                                                                
2:57:19 PM                                                                                                                    
LORI  HOVANEC,  Director,  Division of  Banking  and  Securities,                                                               
Department  of   Commerce,  Community  &   Economic  Development,                                                               
supported  SB 149.  The purpose  of it  is to  bring the  state's                                                               
current  mortgage  lending  statute   into  compliance  with  new                                                               
federal requirements.  Congress decided it was  important to have                                                               
a  national   component  to  the   licensing  of   mortgage  loan                                                               
originators.  So  last  year  they passed  the  Secure  and  Fair                                                               
Enforcement from  Mortgage Licensing Act  of 2008 (SAFE  Act). It                                                               
requires all  states to implement  mortgage law that  conforms to                                                               
it  by the  deadline of  July 30,  2009, and  to join  a national                                                               
mortgage   licensing   system   for   licensing   mortgage   loan                                                               
originators. She  said the  division is on  schedule to  join the                                                               
national mortgage  licensing system on  August 1, 20099  and they                                                               
need statutory authority  to do so as well as  the ability to pay                                                               
the  fee to  join  it.  Her main  concern  today  is meeting  the                                                               
deadline. The  result of  non-compliance is  that HUD  would take                                                               
over mortgage licensing in Alaska as required in the SAFE Act.                                                                  
                                                                                                                                
3:04:57 PM                                                                                                                    
CHAIR  PASKVAN held  SB 149  for further  work and  adjourned the                                                               
meeting at 3:04 p.m.                                                                                                            
                                                                                                                                

Document Name Date/Time Subjects
SB 138 Bill Packet.pdf SL&C 3/19/2009 1:30:00 PM
SB 138
SB 149 Bill Packet.pdf SL&C 3/19/2009 1:30:00 PM
SL&C 3/31/2009 1:00:00 PM
SB 149
SB 97 Bill Packet.pdf SL&C 3/19/2009 1:30:00 PM
SB 97