Legislature(2011 - 2012)BELTZ 105 (TSBldg)

03/15/2012 01:30 PM LABOR & COMMERCE

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01:48:56 PM Start
01:49:34 PM Presentation: "how Equality Policies Work to Strengthen Economies and the Labor Force."
02:05:47 PM SB28
02:29:26 PM HB267
02:37:27 PM SB116
03:02:06 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Special Presentation: "How Equality Policies TELECONFERENCED
Work to Strengthen Economies and the Labor
Uniform Rule 23 Waived
Moved 2d CSHB 267(JUD) Out of Committee
Bills Previously Heard/Scheduled
Heard & Held
Moved SB 28 Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         March 15, 2012                                                                                         
                           1:48 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Dennis Egan, Chair                                                                                                      
Senator Joe Paskvan, Vice Chair                                                                                                 
Senator Linda Menard                                                                                                            
Senator Bettye Davis                                                                                                            
Senator Cathy Giessel                                                                                                           
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
PRESENTATION:   "How  Equality   Policies   Work  to   Strengthen                                                               
Economies and the Labor Force."                                                                                                 
     - HEARD                                                                                                                    
SENATE BILL NO. 28                                                                                                              
"An  Act  making sales  of  and  offers  to sell  certain  energy                                                               
resources at  prices that are  unconscionable an unlawful  act or                                                               
practice  under the  Alaska Unfair  Trade Practices  and Consumer                                                               
Protection Act."                                                                                                                
     - MOVED SB 28 OUT OF COMMITTEE                                                                                             
CS FOR HOUSE BILL NO. 267(L&C)                                                                                                  
"An Act  relating to  the Real  Estate Commission;  and providing                                                               
for an effective date."                                                                                                         
     - MOVED 2d CSHB 267(JUD) OUT OF COMMITTEE                                                                                  
SENATE BILL NO. 116                                                                                                             
"An  Act offering  mediation  of  disputed workers'  compensation                                                               
claims by a  hearing officer or other classified  employee of the                                                               
division  of   workers'  compensation  and   allowing  collective                                                               
bargaining  agreements to  supersede  certain  provisions of  the                                                               
Alaska Workers' Compensation Act;  and providing for an effective                                                               
     - HEARD AND HELD                                                                                                           
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB  28                                                                                                                  
SHORT TITLE: PRICE GOUGING INVOLVING ENERGY RESOURCES                                                                           
SPONSOR(s): SENATOR(s) WIELECHOWSKI, ELLIS, FRENCH                                                                              
01/19/11       (S)       PREFILE RELEASED 1/7/11                                                                                
01/19/11       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/19/11       (S)       L&C, FIN                                                                                               
03/13/12       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/13/12       (S)       Heard & Held                                                                                           
03/13/12       (S)       MINUTE(L&C)                                                                                            
03/15/12       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
BILL: HB 267                                                                                                                  
SHORT TITLE: REAL ESTATE SALES LICENSEES/COM'N                                                                                  
SPONSOR(s): REPRESENTATIVE(s) MUNOZ, OLSON                                                                                      
01/17/12       (H)       PREFILE RELEASED 1/13/12                                                                               
01/17/12       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/17/12       (H)       L&C                                                                                                    
02/06/12       (H)       L&C AT 3:15 PM BARNES 124                                                                              
02/06/12       (H)       Moved CSHB 267(L&C) Out of Committee                                                                   
02/06/12       (H)       MINUTE(L&C)                                                                                            
02/08/12       (H)       L&C RPT CS(L&C) 4DP                                                                                    
02/08/12       (H)       DP: CHENAULT, THOMPSON, HOLMES, OLSON                                                                  
02/13/12       (H)       JUD REFERRAL ADDED                                                                                     
02/20/12       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
02/20/12       (H)       Moved 2d CSHB 267(JUD) Out of Committee                                                                
02/20/12       (H)       MINUTE(JUD)                                                                                            
02/22/12       (H)       JUD RPT 2D CS(JUD) NT 5DP 2NR                                                                          
02/22/12       (H)       DP: LYNN, GRUENBERG, THOMPSON, HOLMES,                                                                 
02/22/12       (H)       NR: KELLER, GATTO                                                                                      
02/24/12       (H)       MOTION TO ADOPT CS(L&C) WITHDRAWN UC                                                                   
02/24/12       (H)       2D CS(JUD) ADOPTED UNAN CONSENT                                                                        
02/24/12       (H)       TRANSMITTED TO (S)                                                                                     
02/24/12       (H)       VERSION: 2D CSHB 267(JUD)                                                                              
02/27/12       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/27/12       (S)       L&C                                                                                                    
03/15/12       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
BILL: SB 116                                                                                                                  
SHORT TITLE: WORKERS' COMP.: COLL BARGAINING/MEDIATION                                                                          
SPONSOR(s): LABOR & COMMERCE                                                                                                    
03/25/11       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/25/11       (S)       L&C, FIN                                                                                               
04/05/11       (S)       L&C AT 2:00 PM BELTZ 105 (TSBldg)                                                                      
04/05/11       (S)       Heard & Held                                                                                           
04/05/11       (S)       MINUTE(L&C)                                                                                            
01/19/12       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
01/19/12       (S)       Heard & Held                                                                                           
01/19/12       (S)       MINUTE(L&C)                                                                                            
02/21/12       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/21/12       (S)       -- MEETING CANCELED --                                                                                 
02/23/12       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/23/12       (S)       Scheduled But Not Heard                                                                                
02/28/12       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/28/12       (S)       Scheduled But Not Heard                                                                                
03/01/12       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/01/12       (S)       Heard & Held                                                                                           
03/01/12       (S)       MINUTE(L&C)                                                                                            
03/15/12       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
WITNESS REGISTER                                                                                                              
CHRISTINE COUGHMAN, Montana State Senator                                                                                       
Missoula, MT                                                                                                                    
POSITION STATEMENT: Gave presentation on "How Equality Policies                                                               
Work to Strengthen Economies and the Labor Force."                                                                              
JAMIE GREER, nondiscrimination activist and lobbyist                                                                            
Missoula, MT                                                                                                                    
POSITION STATEMENT: Supplemented Ms. Coughman's presentation on                                                               
equality policies.                                                                                                              
SENATOR BILL WIELECHOWSKI                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Sponsor of SB 28.                                                                                         
ED SNIFFEN, Assistant Attorney General                                                                                          
Civil Division                                                                                                                  
Commercial and Fair Business Section                                                                                            
Alaska Department of Law                                                                                                        
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Commented on Alaska's anti-trust and                                                                      
consumer protection statutes relative to SB 28.                                                                                 
TERRY HARVEY, Staff                                                                                                             
Representative Cathy Munoz                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Commented on HB 267 for the sponsor.                                                                      
LINDA HALL, Director                                                                                                            
Division of Insurance                                                                                                           
Department  of  Commerce,   Community  and  Economic  Development                                                               
POSITION STATEMENT:  Commented on Alaska's  Workers' Compensation                                                             
system  and  how  she  thought  SB  116  would  affect  insurance                                                               
PAUL GROSSI, Lobbyist                                                                                                           
Pipefitters and Iron Workers                                                                                                    
Juneau, AK                                                                                                                      
POSITION STATEMENT: Supported SB 116.                                                                                         
MIKE MONAGLE, Director                                                                                                          
Division of Workers' Compensation                                                                                               
Department of Labor and Workforce Development (DOLWD)                                                                           
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Pointed out the division's  concerns with SB                                                             
ACTION NARRATIVE                                                                                                              
1:48:56 PM                                                                                                                    
CHAIR DENNIS EGAN  called the Senate Labor  and Commerce Standing                                                             
Committee meeting  to order at 1:48  p.m. Present at the  call to                                                               
order  were  Senators  Menard, Davis  and  Chair  Egan.  Senators                                                               
Giessel  and  Paskvan joined  the  meeting  a couple  of  minutes                                                               
^Presentation:   "How  Equality   Policies  Work   to  Strengthen                                                               
Economies and the Labor Force."                                                                                                 
              Presentation: "How Equality Policies                                                                          
       Work to Strengthen Economies and the Labor Force."                                                                   
1:49:34 PM                                                                                                                    
CHAIR EGAN welcomed Christine Coughman  to give a presentation on                                                               
equality work policies.                                                                                                         
CHRISTINE  COUGHMAN, Montana  State Senator,  thanked the  Chair.                                                               
She stated  that in  addition to  being a  Senator, she  had been                                                               
director of  the Human Rights  Network, which takes a  broad view                                                               
of human  rights in Montana: everything  from helping communities                                                               
respond  to violence  and intimidation  that  occurs to  minority                                                               
populations  and white  supremacist  rhetoric  and activities  of                                                               
groups such as the Militia and  Freemen. They look at health care                                                               
as a human  right along with a broad base  of issues. Even though                                                               
she  no longer  works there,  she  still looks  at gay,  lesbian,                                                               
bisexual and   transgender equality as a civil  rights issue, and                                                               
believes that  what is  good for  human rights  is also  good for                                                               
1:50:33 PM                                                                                                                    
SENATOR GIESSEL joined committee.                                                                                               
MS. COUGHMAN  said equality really  means fairness,  and fairness                                                               
provides  a  multitude  of   intangible  benefits  to  businesses                                                               
everywhere.  Many  people  are  looking for  a  work  place  that                                                               
recognizes the  relationships that  all employees have.  It means                                                               
having  a much  more open  and innovative  business climate  that                                                               
ensures  fundamental   fairness  and   basic  civil   rights  for                                                               
everyone. Alaska has an opportunity,  as other states do, to lead                                                               
by  embracing   non-discrimination  polices  ensuring   that  all                                                               
shareholders,  employees and  consumers can  live their  lives to                                                               
their fullest potential.                                                                                                        
MS. COUGHMAN said to not underestimate  what it means to a gay or                                                               
lesbian  employee to  live in  fear  of losing  their job  should                                                               
their  family life  become a  topic of  conversation among  their                                                               
colleagues. Keeping their  lives secret from people  who may wish                                                               
them harm may become their  focus rather than being productive in                                                               
their jobs.                                                                                                                     
Further, equality  benefits corporate recruitment,  retention and                                                               
morale,  she   said.  Demographers   have  found  that   the  new                                                               
generation  of  highly desirable  workers  are  likely to  choose                                                               
where they want  to live first and then look  for their job. They                                                               
often cite diversity and inclusive  policies in the work force as                                                               
a reason why they want to move  to a community in order to accept                                                               
employment. The  discussion in Montana  is often about  why young                                                               
people  are leaving  the state  for opportunities  elsewhere, and                                                               
people should  stay open to  the possibility that these  kinds of                                                               
policies help  people decide to  come to a community.  Whether or                                                               
not a  person is  gay or lesbian,  he or she  wants to  feel that                                                               
there  are inclusive  policies  of diversity  in  the work  force                                                               
where they live and work.                                                                                                       
MS.   COUGHMAN  said   the  younger   generation  is   much  more                                                               
comfortable with these  policies than others in  terms of wanting                                                               
them present  in order to  go to work  and feel good  about their                                                               
1:56:26 PM                                                                                                                    
SENATOR PASKVAN joined the committee.                                                                                           
MS. COUGHMAN  said equality policies would  put Alaska businesses                                                               
in  the  strongest  and most  competitive  position  to  attract,                                                               
recruit and  retain the best  and brightest employees as  well as                                                               
keep high caliber  employees in the state.  Alaska employers risk                                                               
losing same  sex-couples and their  allies to  Vancouver, Seattle                                                               
or other places where these polices  are already in place.  Great                                                               
states  and  cities must  demonstrate  a  commitment to  creating                                                               
open, healthy  and equitable  environments in  which to  live and                                                               
work.  Businesses  would  face lower  recruiting  costs  with  an                                                               
expanded pool of qualified candidates.                                                                                          
There is some  threat of negative publicity  around these issues,                                                               
as well. For instance, recently,  two employees of the University                                                               
of Montana  sued the university  system because they  were denied                                                               
health benefits  for their partners. It  went all the way  to the                                                               
Montana  Supreme Court  that ruled  in favor  of the  plaintiffs,                                                               
because the University system had  a policy that allowed opposite                                                               
sex but unmarried  couples to receive health  benefits. The Court                                                               
said  you must  treat unmarried  same-sex couples  the same;  you                                                               
cannot discriminate  against one  over the other.  The University                                                               
could  have decided  to  drop  that benefit,  but  it would  have                                                               
affected a  large number of  people already getting it.  And they                                                               
did  make the  right choice  to keep  it. She  said the  State of                                                               
Montana followed suit,  and as a result she and  her partner were                                                               
able to  take advantage  of the same  benefits as  her colleagues                                                               
do, making her equal to them in the Senate.                                                                                     
MS.  COUGHMAN said  she wished  she  could say  Montana had  been                                                               
successful in passing  statewide non-discriminating policies, but                                                               
that is not the case. They have  tried 10 times over the last two                                                               
decades to  pass additions to  their human rights law  that would                                                               
provide  non-discrimination  policies   in  employment,  housing,                                                               
benefits  and public  accommodations. Even  though they  have not                                                               
been  successful, people  are getting  educated  in the  process.                                                               
This  issue  has  now  has  moved  to  the  municipalities,  like                                                               
question 5 in Anchorage.                                                                                                        
1:58:55 PM                                                                                                                    
She  said that  one  city  in Montana  had  already adopted  non-                                                               
discrimination  policies  and  other  cities are  lining  up.  It                                                               
really does  beg for a  statewide solution in many  ways, because                                                               
really,   do  you   want   your   citizens  receiving   different                                                               
protections based  on where they  happen to work or  recreate and                                                               
MS. COUGHMAN said  the reason she asked Jamie Greer  to chat with                                                               
them is because he is on  the forefront of the effort to organize                                                               
for  non-discrimination benefits  in cities  across the  state of                                                               
Montana. She invited him forward to address the committee.                                                                      
1:59:33 PM                                                                                                                    
JAMIE GREER, non-discrimination  activist and lobbyist, Missoula,                                                               
Montana,  said his  job  primarily is  reaching  out to  business                                                               
owners and  making sure  they understand not  just what  they are                                                               
doing and why it's important, but  also helping them find ways to                                                               
come  forward in  their support  and also  change their  internal                                                               
policies. Right now  in Montana, similar to what  is happening in                                                               
Alaska, gay, lesbian, bisexual and  transgender residents are not                                                               
included  in the  Montana  Human Rights  Act.  He is  approaching                                                               
businesses and saying what they are  doing is not unique and they                                                               
are not alone.                                                                                                                  
He said that 89 percent of  Fortune 500 companies in this country                                                               
already  have workplace  policies  that protect  gay and  lesbian                                                               
individuals,  and  Wal-Mart  Stores, Inc.,  the  largest  private                                                               
employer  in  the world,  recently  added  transgender people  to                                                               
their nondiscrimination  policy. He is  trying to branch  out and                                                               
build  support on  a  local  level using  a  list of  substantial                                                               
corporations that are doing business  located in the Pacific, the                                                               
Pacific Northwest and the West.                                                                                                 
MR. GREER  said 190  major businesses achieved  the top  score of                                                               
100  on the  Human Rights  Campaign's equality  index, which  can                                                               
easily be found  on line. That means that  major corporations are                                                               
already taking  the steps to  protect gay and  lesbian employees,                                                               
and  they are  doing  this because  it makes  sense  in terms  of                                                               
keeping   the  best   and  the   brightest  employees   at  their                                                               
corporations.  An  increasing  number  of  companies,  large  and                                                               
small, are  reimbursing gay and  lesbian employees for  the taxes                                                               
that they pay on health  insurance benefits for their spouses and                                                               
domestic  partners.   It's  a   tax  that   does  not   apply  to                                                               
heterosexual married couples.                                                                                                   
2:02:53 PM                                                                                                                    
SENATOR MENARD asked where they have  gone on a scale from one to                                                               
ten as far as improvement.                                                                                                      
MS. COUGHMAN answered  they have gone from 1 to  7.2. They passed                                                               
a non-discrimination  bill out of  one House in a  previous year.                                                               
This year the Senate passed  a different equality bill related to                                                               
language  that remains  in their  felony laws  regarding same-sex                                                               
neighbors; the House hadn't been cooperating though.                                                                            
SENATOR MENARD asked how many states favor this issue.                                                                          
MR. GREER didn't know the  specific number, but almost 50 percent                                                               
of Americans have either statewide or municipal protections.                                                                    
SENATOR DAVIS welcomed Senator Coughman  to the state, commending                                                               
and encouraging her on her work.                                                                                                
        SB  28-PRICE GOUGING INVOLVING ENERGY RESOURCES                                                                     
2:05:47 PM                                                                                                                    
CHAIR EGAN announced consideration of SB 28.                                                                                    
SENATOR  WIELECHOWSKI, sponsor  of SB  28, said  he had  received                                                               
many  phones calls  and  emails  in support  of  SB  28 and  none                                                               
opposing it.                                                                                                                    
2:07:32 PM                                                                                                                    
SENATOR GIESSEL asked  Mr. Sniffen, Department of Law,  if he had                                                               
investigated fuel prices in the past.                                                                                           
ED SNIFFEN,  Assistant Attorney General, Department  of Law, said                                                               
his  responsibilities  include   enforcement  of  anti-trust  and                                                               
consumer protection  statutes. In that role,  he had investigated                                                               
fuel prices in the last decade.                                                                                                 
SENATOR GIESSEL asked if he found any issues.                                                                                   
MR.  SNIFFEN  replied  that pricing  investigations  are  tricky,                                                               
because anti-trust law requires  finding evidence of collusion or                                                               
coordinated conduct. The department  has retained experts to look                                                               
at fuel pricing in the State  of Alaska, the details of which are                                                               
confidential, but they have released  a couple of reports setting                                                               
out  their  findings.  No  evidence of  illegal  activity  -  any                                                               
collusion or  coordinated conduct -  had been found of  among the                                                               
refiners, distributors or retailers in the state.                                                                               
He said  one of  the good  things about  this particular  bill is                                                               
that it would  remove the requirement to  actually find collusion                                                               
or coordinated conduct.  They could look at conduct  that is just                                                               
"unconscionable." But  the tricky thing  would be  if determining                                                               
unconscionable would be any easier  than determining collusion or                                                               
coordinated conduct.                                                                                                            
SENATOR   GIESSEL  asked   if  he   knew  of   a  definition   of                                                               
MR. SNIFFEN responded that case  law provides some guidance on it                                                               
using  words like  excessive or  exorbitant. In  discussions with                                                               
Senator Wielechowski's  office, they decided  that unconscionable                                                               
would  be   slightly  easier  to   identify  than   collusion  or                                                               
coordinated  conduct, only  because  a couple  of cases  actually                                                               
define  what that  means, although  he didn't  know how  it would                                                               
apply in Alaska.  For example, in Pennsylvania and  Ohio they say                                                               
unconscionable  means  something  that   affronts  the  sense  of                                                               
justice,   decency  and   reasonableness.  Senator   Wielechowski                                                               
pointed out  that in  most states, price  gouging laws  require a                                                               
declared state  of emergency  before the laws  kick in;  then you                                                               
have a  baseline. You could point  out a company that  had raised                                                               
its price by  300 percent only because Hurricane  Katrina came in                                                               
and wiped  out a lot of  people. But because of  Alaska's lack of                                                               
competition, distributors and refiners  can charge what they like                                                               
without a  declared state of emergency,  and he had never  had to                                                               
look at an unconscionable price.                                                                                                
SENATOR  GIESSEL remarked  that he  just  said he  didn't have  a                                                               
determination of "unconscionable price."                                                                                        
MR. SNIFFEN replied that was right,  and he would have to come up                                                               
with a test if  this bill passed. Also, if you  are going to tell                                                               
somebody  they can't  charge something,  the  follow-up might  be                                                               
having to tell them what they  can charge. An accounting would be                                                               
required  to   determine  what  their   costs  are,   what  their                                                               
investment risks  are and what  their return on capital  is. Then                                                               
it starts  to look a lot  like regulation, which is  what the RCA                                                               
SENATOR GIESSEL  said page 2, line  2, refers to "fuel  for space                                                               
heating." In Anchorage  that fuel is natural gas;  in other areas                                                               
it's  diesel. What  does this  refer  to and  who regulates  that                                                               
MR. SNIFFEN  answered most diesel  fuel that is used  for heating                                                               
(delivered  by a  tank wagon  or a  truck) is  the kind  of space                                                               
heating fuel that would be covered  by this bill, but natural gas                                                               
could also  be used, and  that is regulated  by the RCA.  The RCA                                                               
does not regulate prices for fuel oil.                                                                                          
SENATOR GIESSEL asked  if this language conflicts  with the RCA's                                                               
regulatory authority over natural gas.                                                                                          
2:15:09 PM                                                                                                                    
MR. SNIFFEN  replied maybe, but  by default, it would  only apply                                                               
to the commodity that is regulated  by the RCA. He didn't know if                                                               
there  would be  an actual  conflict in  the sense  that the  RCA                                                               
would not attempt to regulate this kind of fuel product.                                                                        
SENATOR WIELECHOWSKI  responded that this provision  was added in                                                               
a committee several years ago  by the Senate Energy Committee; at                                                               
that  time, Senator  Hoffman and  Senator Stedman  were concerned                                                               
about high costs in rural  and Southeast Alaska, particularly, in                                                               
areas that  use diesel oil for  heating. It was never  the intent                                                               
to regulate an  energy source that is currently  regulated by the                                                               
SENATOR PASKVAN  asked Mr. Sniffen  to comment on  the difficulty                                                               
in  applying a  collusion or  coordinated conduct  standard in  a                                                               
smaller limited market  where there could be  either an oligopoly                                                               
or a monopoly.                                                                                                                  
MR. SNIFFEN  answered that  it's very  difficult to  find illegal                                                               
collusion  or coordinated  conduct in  a smaller  market, because                                                               
prices are  displayed for everyone to  see. There is no  need for                                                               
competitors to engage in illegal  conduct, because everyone knows                                                               
what everyone  else is doing.  Even in Anchorage, where  there is                                                               
robust competition  for gasoline, collusion between  retailers is                                                               
very  difficult  to  uncover. Several  years  ago,  the  Attorney                                                               
General's Office found evidence  that some retailers had meetings                                                               
and agreed  to fix the price  on gasoline, and he  took action by                                                               
shutting  the stations  down.  But absent  a  "mole" or  "whistle                                                               
blower" who is  at those kinds of meetings, it  is very difficult                                                               
to find.                                                                                                                        
2:18:51 PM                                                                                                                    
SENATOR  WIELECHOWSKI said  originally  the bill  had a  specific                                                               
trigger of  10 percent higher  than Seattle gas  prices. Refiners                                                               
didn't  like that;  it  was  too specific,  even  though the  two                                                               
prices had tracked  for years. Then they  tried using "excessive"                                                               
or "exorbitant" and were finally  advised by attorneys that using                                                               
"unconscionable" was  a better  standard, because  it is  used in                                                               
other states  and in regulatory hearings  and has a body  of case                                                               
law behind  it. The Attorney  General has  reported investigating                                                               
this issue  twice, but  they have been  limited to  collusion and                                                               
anti-trust issues; they have not  investigated whether or not the                                                               
prices are unconscionable.                                                                                                      
SENATOR  WIELECHOWSKI pointed  out  that all  this  bill does  is                                                               
empower the  Attorney General, if  he believes there  is evidence                                                               
of very  high prices without  warrant, to investigate, and  if he                                                               
finds  evidence,  he  can  file  a  lawsuit.  He  explained  that                                                               
originally  the bill  was drafted  so  that anyone  could file  a                                                               
lawsuit.  Tesoro  said that  their  main  concern was  that  they                                                               
didn't  want  to   fight  100  lawsuits.  He  was   told  by  the                                                               
representative that if that provision  were changed to only allow                                                               
the Attorney  General to  file a lawsuit,  they would  not oppose                                                               
the bill. The  next day after he made the  change, Tesoro came in                                                               
and opposed  the bill.  So there are  tight restrictions  on this                                                               
bill; it is designed to protect Alaskan consumers.                                                                              
SENATOR WIELECHOWSKI  stated that  he was  not saying  anyone was                                                               
acting other than  they would in a free market;  people are going                                                               
to try  to make as much  money as they possibly  can. The problem                                                               
in the State of Alaska is there  is no free market here, and that                                                               
situation allows  legal price gouging.  This bill just  says that                                                               
in  that   situation  the  Attorney   General  is   empowered  to                                                               
investigate   and  if   they  find   evidence  of   gouging  with                                                               
unconscionable prices, they have the ability to file a lawsuit.                                                                 
2:22:12 PM                                                                                                                    
SENATOR GIESSEL moved conceptual Amendment 1 as follows:                                                                        
     I move  that SB  28 be amended  to include  health care                                                                    
     (from both  providers and facilities),  rental housing,                                                                    
     and  the  sale of  grocery  food  items. That  they  be                                                                    
     covered  by  and  subject   to  the  same  anti-gouging                                                                    
     provisions as the  refiners, distributors and retailers                                                                    
     of certain energy resources.                                                                                               
She apologized  for the  conceptual form  and said  her amendment                                                               
was  still in  drafting.  She explained  that  the Department  of                                                               
Administration was struggling to  contain the accelerating health                                                               
care costs.  Alaskans pay  50 percent more  for health  care than                                                               
people  in Seattle.  In  fact, many  insurers  are sending  their                                                               
beneficiaries to  Seattle for health  care services,  because the                                                               
prices  are so  high  in Alaska.  She had  heard  the same  about                                                               
rental housing and grocery prices in some locations.                                                                            
SENATOR DAVIS  asked the sponsor  if this amendment  would affect                                                               
the title and what his thoughts were on it.                                                                                     
SENATOR WIELECHOWSKI replied the  amendment would require a title                                                               
change; he  had additional  problems with  it, because  he didn't                                                               
think the state should be in  the business of regulating the free                                                               
market   unless  it's   absolutely  necessary.   The  significant                                                               
difference between groceries, for  instance, and gasoline prices,                                                               
is that there  is one place to buy gasoline;  one refiner refines                                                               
80 to  82 percent  of gasoline, and  another refines  10 percent.                                                               
There is  an oligopoly when it  comes to gasoline and  heating in                                                               
the State  of Alaska, but if  he doesn't like what  he is charged                                                               
for a  dozen eggs or a  carton of milk  at Safeway, he can  go to                                                               
any of another  dozen stores that are around. If  he doesn't like                                                               
what his doctor at Providence charges,  he can go to other health                                                               
care providers.  He has hundreds  of choices in  rental property.                                                               
There  is a  free market  for those  items; there  is not  a free                                                               
market for gasoline. That is the major difference.                                                                              
SENATOR  GIESSEL said  many  Alaskan  communities have  extremely                                                               
limited  grocery and  housing  opportunities  and certain  groups                                                               
offer specialized  health care. So  it does apply to  these other                                                               
SENATOR WIELECHOWSKI  said Senator  Giessel was correct  and that                                                               
would  be an  excellent bill  for  to file  on her  own and  take                                                               
through the committee process.                                                                                                  
2:26:47 PM                                                                                                                    
SENATOR  MENARD  said  she  had   one  strong  concern  with  the                                                               
amendment and that was that it  had not had due process. She knew                                                               
the direction  in which Senator  Giessel was going and  wanted to                                                               
hear from  those other  industries about  why citizens  of Alaska                                                               
feel gouged, but it's way too  late in the session to tackle this                                                               
SENATOR PASKVAN objected  to the amendment. A roll  call vote was                                                               
taken.  Senator  Giessel  voted   yea;  Senators  Menard,  Davis,                                                               
Paskvan and Egan voted nay. Therefore, the amendment failed.                                                                    
2:29:05 PM                                                                                                                    
SENATOR PASKVAN moved to report SB  28 from committee to the next                                                               
committee  of   referral  with  individual   recommendations  and                                                               
attached fiscal  note, if any.  Senator Giessel objected.  A roll                                                               
call vote  was taken:  Senators Menard,  Davis, Paskvan  and Egan                                                               
voted  yea;  and Senator  Giessel  voted  nay. Therefore,  SB  28                                                               
passed from the Senate Labor and Commerce Standing Committee.                                                                   
            HB 267-REAL ESTATE SALES LICENSEES/COM'N                                                                        
2:29:26 PM                                                                                                                    
CHAIR EGAN  announced consideration of  HB 267 [2n  CSHB 267(JUD)                                                               
was before the committee].                                                                                                      
TERRY HARVEY, staff to Representative  Cathy Munoz, sponsor of HB                                                               
267, said  the committee  heard the Senate  companion bill  a few                                                               
weeks back. It  was sponsored by the chair, so  he knew they were                                                               
familiar  with it.  He said  this  bill resolves  three areas  of                                                               
concern brought  to them by  the Alaska Realtors  Association. It                                                               
modifies  real estate  law  in  one area  and  offers clarity  in                                                               
several others.  The modifier  will allow a  licensee to  share a                                                               
part of all  of their commission with  a charitable organization;                                                               
this is  not allowed under  current statutes that say  a licensee                                                               
can  only  share that  information  with  another licensee.  This                                                               
makes  an exception  for  charitable  organizations and  promotes                                                               
charitable giving within the industry.                                                                                          
2:31:20 PM                                                                                                                    
HB 267  also clarifies  that a licensed  assistant can  only work                                                               
for  one brokerage  at  a  time. It  also  clarifies the  closing                                                               
process for  a brokerage. Currently,  if a broker becomes  ill or                                                               
incapacitated or  violates the law, only  another licensed broker                                                               
may  be assigned  by the  Real Estate  Commission to  perform the                                                               
incapacitated   broker's  functions.   This  change   allows  the                                                               
flexibility for the Real Estate  Commission to choose among other                                                               
licensees for that  duty, like a real  estate sales professional.                                                               
This  was deemed  a  reasonable concept,  because  some areas  of                                                               
Alaska have  only one broker  in the entire community  or perhaps                                                               
for  many miles.  The idea  was to  allow other  licensees to  be                                                               
designated by the  commission to come in to  perform the function                                                               
as needed.                                                                                                                      
MR.  HARVEY  said the  House  Judiciary  Committee broadened  the                                                               
title  to  include  temporary permits,  licensed  assistants  and                                                               
charitable  organizations. Also  more  clarity was  added to  the                                                               
licensed assistant language that now reads:                                                                                     
       The licensed assistant is not employed to perform                                                                        
     activities requiring licensure under this chapter for                                                                      
     more than one licensed real estate broker.                                                                                 
2:34:16 PM                                                                                                                    
SENATOR  PASKVAN  asked  the   Alaska  Real  Estate  Commission's                                                               
MR. HARVEY replied the Alaska  Realtors Association supported the                                                               
changes,  and  he  understood  from them  that  the  Real  Estate                                                               
Commission also supported the changes.                                                                                          
CHAIR EGAN noted that Mr. Champion was shaking his head yes.                                                                    
SENATOR PASKVAN asked  if he knew of any  serious opposition from                                                               
within the profession.                                                                                                          
MR. HARVEY said he was not aware of any at this time.                                                                           
2:35:54 PM                                                                                                                    
SENATOR  PASKVAN moved  to report  2d CSHB  267(JUD), version  I,                                                               
from committee to the next  committee of referral with individual                                                               
recommendations  and attached  zero  fiscal note.  There were  no                                                               
objections and it was so ordered.                                                                                               
2:36:27 PM                                                                                                                    
At ease from 2:36 to 2:37 p.m.                                                                                                  
        SB 116-WORKERS' COMP.: COLL BARGAINING/MEDIATION                                                                    
2:37:27 PM                                                                                                                    
CHAIR EGAN  announced the  consideration of SB  116. He  said the                                                               
committee would consider an amendment by Senator Giessel.                                                                       
SENATOR  GIESSEL  explained  that  the  proposed  amendment  [27-                                                               
LS0549\X.1]  would allow  individuals to  choose his  or her  own                                                               
health  care provider  rather than  bargaining away  that patient                                                               
2:38:40 PM                                                                                                                    
LINDA  HALL,  Director,  Division  of  Insurance,  Department  of                                                               
Commerce, Community  and Economic Development  (DCCED), commented                                                               
that she  had done a lot  of work with the  Workers' Compensation                                                               
system  as it  affects  insurance costs  in  particular. She  was                                                               
concerned they were looking at a  new system that will only apply                                                               
to  employers and  employees  that are  engaged  in a  collective                                                               
bargaining   arrangement.  Approximately   25   percent  of   the                                                               
workforce would be impacted by this  bill - if they choose to and                                                               
they  may not.  Some provisions  could be  advantageous to  other                                                               
employers and she wasn't sure  why they would adopt something for                                                               
less than 25 percent of the state's workforce.                                                                                  
2:40:28 PM                                                                                                                    
MS. HALL said that supporters of  HB 116 have alleged there would                                                               
be cost  savings, but  in working with  the Division  of Workers'                                                               
Compensation, she hadn't  found a study supporting  that claim. A                                                               
University of California Berkeley  Study of California carve-outs                                                               
since 1993 concluded  that, "Overall carve-outs do  not appear to                                                               
harm  employees,  sometimes  they  help." Data  analysis  of  one                                                               
carve-out  showed that  it  had  no effect  on  costs in  dispute                                                               
She said  Alaska's costs are  driven by  the high cost  of health                                                               
care.  Currently, 76  percent  of  the costs  of  our system  are                                                               
driven by  medical costs  in comparison to  a 59  percent average                                                               
nationwide. So  if lawmakers allow  a deviation from  the current                                                               
system  that  has any  potential  to  reduce medical  costs,  she                                                               
thought it  should be something  that all employers  could engage                                                               
MS. HALL  said she  had heard  this system  could cause  a single                                                               
employer  to simultaneously  run  multiple workers'  compensation                                                               
systems. The  Municipality of Anchorage, for  instance, has about                                                               
seven collective  bargaining units. If  they each decided  to set                                                               
up  some type  of  this arrangement,  the  municipality would  be                                                               
running eight different systems  (including the state system). It                                                               
would be a "system run amuck."                                                                                                  
2:43:18 PM                                                                                                                    
She said these are general  thoughts she has had. Another concern                                                               
was that  that they were  considering implementing a  new program                                                               
and yet  the Medical Service  Review Committee, a group  that was                                                               
formed by this  legislature, had made an extensive  report with a                                                               
lot of recommendations for changes in  the system as a whole, and                                                               
she hadn't  seen any real debate  of any of those  measures. This                                                               
committee spent months studying new  systems, new ways to develop                                                               
fee schedules  and had a  number of recommendations that  were in                                                               
HB  12. It  proposed the  adoption  of an  advisory committee  to                                                               
serve  as  a  sounding  board   for  the  legislature  to  review                                                               
proposals and  make recommendations for various  types of changes                                                               
in an open and transparent environment.                                                                                         
MS.  HALL said  a  number  of options  had  been  put forward  to                                                               
improve  our system  including medical  treatment guidelines  and                                                               
utilization guidelines. It appears, and  it has been stated, that                                                               
the  administration  of  this  new  exemption  program  would  be                                                               
through  some kind  of trust.  But the  bill doesn't  mention the                                                               
trust or  how it would be  funded. With today's system  costs and                                                               
with Montana's reforms, she worried  that Alaska would be back in                                                               
first place as having the  highest workers' compensation premiums                                                               
in the country - and that is not a place we want to be.                                                                         
2:45:07 PM                                                                                                                    
MS. HALL  said that SB  116 also provides for  the identification                                                               
of   medical   treatment   providers,  medical   evaluators   and                                                               
vocational rehabilitation specialists who  would be the exclusive                                                               
source  of  treatment,  but  there   weren't  any  principles  or                                                               
guidelines. So  there is  a potential for  a multitude  of little                                                               
groups  without any  consistency, and  that concerned  her in  an                                                               
area as critical as workers'  compensation. Basically, she wanted                                                               
to see  a system whose emphasis  is on getting an  injured worker                                                               
back to work and didn't see this doing that.                                                                                    
CHAIR EGAN asked if she had comments on the amendment.                                                                          
MS. HALL answered no.                                                                                                           
2:46:22 PM                                                                                                                    
PAUL  GROSSI,  lobbyist,  Pipefitters   and  Iron  Workers,  said                                                               
adopting the amendment  to SB 116 would  eliminate potential cost                                                               
savings and they wouldn't be able to support it any longer.{                                                                    
SENATOR PASKVAN asked what he  thought of the director's concerns                                                               
about limited application.                                                                                                      
MR. GROSSI responded that her  concern was that all employers and                                                               
employees wouldn't be  affected, which is true,  but that doesn't                                                               
mean  it shouldn't  be tried.  It could  potentially be  a "pilot                                                               
project" from which  things could be extrapolated  for the larger                                                               
population. So that is not a reason to stop it.                                                                                 
He said the director's concern  about it leading to two different                                                               
systems  isn't really  accurate,  because if  an employer  thinks                                                               
this is  not effective  for them  they could choose  to not  be a                                                               
part of  it. No  one is  being forced into  this system.  This is                                                               
just enabling language.                                                                                                         
SENATOR PASKVAN  asked his understanding of  competing physicians                                                               
being able to meet and communicate.                                                                                             
2:50:55 PM                                                                                                                    
MR. GROSSI  replied that  he is  not  an expert  on this  type of                                                               
system, but  to him it means  that doctors would be  permitted by                                                               
law to form groups  to bid on these types of  systems to get this                                                               
SENATOR GIESSEL said a 2009  report from the Minnesota Department                                                               
of  Labor indicated  that  the  costs have  actually  gone up  in                                                               
Minnesota  where this  system is  used over  the past  few years.                                                               
Alaska  has an  even smaller  pool of  health care  providers and                                                               
although it's similar  to Minnesota in that Minnesota  is kind of                                                               
rural, it  has the Mayo  Clinic and some large  universities. She                                                               
asked if he had run any numbers as far as costs.                                                                                
MR.  GROSSI  answered no;  Director  Hall  talked about  a  small                                                               
California study but  he wasn't sure if it  was accurate. Getting                                                               
back to Minnesota, he said you  have to look at costs relative to                                                               
the rest of  the system. He guessed that costs  would still go up                                                               
in Alaska,  but they  might not  go up as  much. While  he didn't                                                               
have any  numbers on workers'  compensation, itself, some  of the                                                               
labor groups and their employers  have formed similar systems for                                                               
their health care benefits that have shown a savings.                                                                           
SENATOR  GIESSEL  asked  if  overall  he  regarded  the  existing                                                               
workers' compensation  system as  broken -  excessively expensive                                                               
and slow to settle claims.                                                                                                      
MR. GROSSI replied  that he wouldn't couch it as  broken yet, but                                                               
it  is becoming  more expensive,  and most  of it  is because  of                                                               
rising health  care costs  along with  some litigation.  At least                                                               
there is the potential to  improve by trying something different.                                                               
The  "broken" term  could be  used in  the near  future, if  they                                                               
don't  start  doing  something.  They  should  consider  Director                                                               
Hall's  suggestions, too,  because this  measure is  not the  one                                                               
answer to fix the system.                                                                                                       
2:55:53 PM                                                                                                                    
MIKE  MONAGLE,  Director,   Division  of  Workers'  Compensation,                                                               
Department of  Labor and Workforce Development  (DOLWD), observed                                                               
that Director  Hall had  mentioned the cost  of benefits  and how                                                               
Alaska has  been going back and  forth with the State  of Montana                                                               
for  the last  10 years  on  who is  number  one and  two in  the                                                               
country on  workers' comp costs.  Last year, Montana  put serious                                                               
reforms  for  medical  costs  in  place, and  as  a  result,  the                                                               
National  Council on  Compensation  Insurance,  Inc. (NCCI),  the                                                               
rating organization  that also rates Alaska,  lowered the premium                                                               
costs in  Montana by  25 percent,  and he had  no doubt  when the                                                               
premium studies  come out  this year that  Alaska will  take over                                                               
the number one spot on workers' comp costs again.                                                                               
He also  observed that  as the director,  he often  gets comments                                                               
from injured  workers that  the system  is difficult  to navigate                                                               
and complex and he fears  that adding carve outs would complicate                                                               
it more.                                                                                                                        
2:57:59 PM                                                                                                                    
MR.  MONAGLE said  as far  as  the selection  of medical  doctors                                                               
goes, he didn't see any incentive  to bring costs down under this                                                               
process.  The Health  Care Commission's  study noted  the biggest                                                               
cost driver to  the system was lack of  competition. Just because                                                               
you  have a  list of  doctors who  step forward  to say  they are                                                               
interested in participating, that  doesn't equate to an incentive                                                               
to  reduce their  fees. And  unless something  is done  to reduce                                                               
fees,  he didn't  see any  changes to  the medical  costs in  the                                                               
workers' comp system.                                                                                                           
Finally,  Mr. Monagle  said part  of the  legislation presupposes                                                               
that a carve-out  will reduce costs, but the  2002 Berkeley study                                                               
mentioned  by Director  Hall  and the  2012  State of  California                                                               
study  found  no  significant differences  between  rates  for  a                                                               
carve-out employer  and the  rates for  an employer  who received                                                               
their benefits  through the insurance marketplace.  He had looked                                                               
extensively and hadn't found a  single study that said carve-outs                                                               
will, in fact, reduce workers' comp rates.                                                                                      
SENATOR PASKVAN said  if you can reduce just  the mediation costs                                                               
(resolution  without  using  lawyers)   and  the  employer  isn't                                                               
required to  use the new system,  there is a chance  that medical                                                               
costs could be reduced a little bit, too.                                                                                       
MR.  MONAGLE  referenced  the  California  study  that  found  no                                                               
difference in  the number  of disputes  in the  carve-out process                                                               
versus disputes  under the workers'  comp claim system.  He said,                                                               
although  it's   not  in  statute,  the   division  already  does                                                               
mediations;  he did  60  last year.  One of  the  things that  is                                                               
concerning about  the process is  that although the  bill doesn't                                                               
mandate mediation,  it does say  once you choose to  mediate, and                                                               
once that process is broken off  either by the hearing officer or                                                               
the  parties, it  must go  to arbitration.  That process  doesn't                                                               
simplify the system, but it does add costs to it.                                                                               
3:01:13 PM                                                                                                                    
MR. MONAGLE  explained that the  prior version  of SB 116  had an                                                               
appellate provision  saying that the arbitrator's  decision could                                                               
be  appealed to  the  Workers' Comp  Appeals  Commission, but  he                                                               
didn't see  that in  the CS,  where it would  seem as  though the                                                               
arbitrator's decision would be final,  and that could potentially                                                               
lead to some additional administrative costs.                                                                                   
CHAIR EGAN said  the committee still had  questions about Senator                                                               
Giessel's amendment. He held SB 116 in committee.                                                                               
3:02:06 PM                                                                                                                    
There being no further business to come before the committee,                                                                   
Chair Egan adjourned the Senate Labor and Commerce meeting at                                                                   
3:02 p.m.                                                                                                                       

Document Name Date/Time Subjects
SB 116 lttr opposing, WCCommittee of AK 030512.pdf SL&C 3/15/2012 1:30:00 PM
SB 116