Legislature(2015 - 2016)BELTZ 105 (TSBldg)

04/07/2015 01:30 PM LABOR & COMMERCE

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Audio Topic
01:29:56 PM Start
01:30:20 PM Confirmation Hearing
02:21:06 PM SB76
02:37:37 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Public Testimony --
+ Confirmation Hearing: TELECONFERENCED
Commissioner Heidi Drygas, Department of Labor &
Workforce Development
<Pending Introduction & Referral>
+ Bills Previously Heard/Scheduled: TELECONFERENCED
Moved SB 76 Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                         April 7, 2015                                                                                          
                           1:29 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Mia Costello, Chair                                                                                                     
Senator Cathy Giessel, Vice Chair                                                                                               
Senator Gary Stevens                                                                                                            
Senator Johnny Ellis                                                                                                            
MEMBERS ABSENT                                                                                                                
Senator Kevin Meyer                                                                                                             
COMMITTEE CALENDAR                                                                                                            
CONFIRMATION HEARING                                                                                                            
     Department of Labor and Workforce Development                                                                            
          Heidi Drygas, Commissioner                                                                                            
     - CONFIRMATION ADVANCED                                                                                                    
SENATE BILL NO. 76                                                                                                              
"An Act  relating to  private actions  and remedies  against real                                                               
estate  licensees for  licensee  relationships, disclosures,  and                                                               
activity before January  1, 2005; and providing  for an effective                                                               
     - MOVED  SB 76 OUT OF COMMITTEE                                                                                            
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB  76                                                                                                                  
SHORT TITLE: REAL ESTATE BROKERS; LIABILITY                                                                                     
SPONSOR(s): JUDICIARY                                                                                                           
03/18/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/18/15       (S)       L&C, JUD                                                                                               
03/31/15       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
03/31/15       (S)       Heard & Held                                                                                           
03/31/15       (S)       MINUTE(L&C)                                                                                            
WITNESS REGISTER                                                                                                              
HEIDI DRYGAS, Commissioner designee                                                                                             
Department of Labor and Workforce Development (DOLWD)                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified as  commissioner designee  for the                                                             
Department of Labor and Workforce Development.                                                                                  
GENEVIEVE WOJTUSIK, Staff                                                                                                       
Senator McGuire                                                                                                                 
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Provided supporting  information for  SB 76                                                             
on behalf of the sponsor.                                                                                                       
JEFFREY  PICKETT,  retained  counsel  for  the  Senate  Judiciary                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions related to SB 76.                                                                     
ACTION NARRATIVE                                                                                                              
1:29:56 PM                                                                                                                    
CHAIR MIA COSTELLO called the  Senate Labor and Commerce Standing                                                             
Committee meeting  to order at 1:29  p.m. Present at the  call to                                                               
order were Senators Ellis, Giessel and Chair Costello.                                                                          
^Confirmation Hearing                                                                                                           
                      Confirmation Hearing                                                                                  
  Commissioner, Department of Labor and Workforce Development                                                               
1:30:20 PM                                                                                                                    
CHAIR COSTELLO announced  the first order of business  would be a                                                               
confirmation  hearing for  Heidi  Drygas as  Commissioner of  the                                                               
Department of Labor and Workforce  Development (DOLWD). She noted                                                               
that  this   was  the  fifth   and  final  hearing   on  governor                                                               
appointments. She  asked Commissioner designee Drygas  to provide                                                               
opening remarks.                                                                                                                
1:31:11 PM                                                                                                                    
HEIDI  DRYGAS, Commissioner  designee,  Department  of Labor  and                                                               
Workforce  Development (DOLWD),  said she  is a  lifelong Alaska.                                                               
She  attended UAF  and received  a  degree in  history. She  then                                                               
attended  Willamette  University and  received  a  law degree  in                                                               
2003. She moved  to Anchorage in 2004 and worked  as an insurance                                                               
defense attorney for a year before  she was offered a position as                                                               
general counsel for the Alaska  District Council of Laborers. She                                                               
held that  position until she  was appointed to this  position on                                                               
December  19, 2014.  She  said  she's enjoying  the  work and  is                                                               
impressed  with the  employees. They  are a  dedicated group  and                                                               
it's an honor to lead the department, she said.                                                                                 
1:32:06 PM                                                                                                                    
SENATOR STEVENS joined the committee.                                                                                           
SENATOR ELLIS asked for an update on the job centers.                                                                           
COMMISSIONER DRYGAS said DOLWD has  been downsizing the number of                                                               
job  centers over  the  past several  years  because the  federal                                                               
funding  sunsets this  year. However,  the department  recognizes                                                               
they are an important resource  for communities and is working to                                                               
partner  with  regional  entities  and communities  so  that  job                                                               
center services aren't entirely  removed from locations. Both the                                                               
Eagle River and  Muldoon job centers will remain  open for FY2016                                                               
with reduced staffing; AVTEC will  take over the responsibilities                                                               
of the job  center in Seward; and the City  of Barrow will assume                                                               
the  job  center  services that  the  department  has  previously                                                               
provided. The ongoing effort is  to ensure that if the department                                                               
doesn't offer the job center services, someone in the area does.                                                                
1:38:18 PM                                                                                                                    
SENATOR  GIESSEL  referenced the  minutes  from  a recent  Alaska                                                               
Gasline  Development   Corporation  (AGDC)  board   of  directors                                                               
meeting  and asked  what decision  points she  had considered  in                                                               
reaching  a yes  vote on  the resolution  [to study  the cost  to                                                               
expand the size of the ASAP pipeline].                                                                                          
COMMISSIONER DRYGAS explained that she  wanted to ensure that the                                                               
resolution reflected  the intent  of the board  regarding whether                                                               
or  not to  support expanding  the capacity  of the  Alaska Stand                                                               
Alone  Pipeline  (ASAP).  She   said  everyone  agrees  that  the                                                               
priority  is to  develop  AKLNG,  but it's  important  to have  a                                                               
viable,  economic  backup.  The  timing  of  the  resolution  was                                                               
important because  the technical team  that has the  expertise to                                                               
study the issue might be disbanded.  She posited that it was part                                                               
of due diligence to study the matter now rather than later time.                                                                
SENATOR GIESSEL asked if the  board was apprised of the estimated                                                               
cost of the study.                                                                                                              
COMMISSIONER  DRYGAS answered  no,  but they  were  told that  it                                                               
would be more expensive to  request the study after the technical                                                               
team had disbanded.                                                                                                             
SENATOR GIESSEL  asked what preparations  are being made  for the                                                               
estimated 10,000-15,000 jobs  that would be created  by the large                                                               
AKLNG pipeline.                                                                                                                 
1:44:50 PM                                                                                                                    
COMMISSIONER  DRYGAS said  the current  estimate is  that between                                                               
8,000 and  9,000 workers  will be needed  to construct  the AKLNG                                                               
pipeline and  about 1,000 workers  to maintain it.  The producers                                                               
have expressed  interest in working  with DOLWD on  an integrated                                                               
labor study looking  at whether the state can  meet the workforce                                                               
needs to  build the project.  She stressed that having  a skilled                                                               
and ready workforce is a number  one goal of the governor and one                                                               
of her primary goals as commissioner.                                                                                           
COMMISSIONER DRYGAS said the new  workforce development plan will                                                               
draw   from  previous   models  and   will  include   input  from                                                               
stakeholders  from  industry and  labor  as  well as  the  Alaska                                                               
Workforce  Investment Board.  The intent  is to  have a  targeted                                                               
timeline to  identify needs and to  put systems in place  to meet                                                               
those needs. She  said the department has hit  the ground running                                                               
to ensure  that the  systems are  in place  to develop  a skilled                                                               
Alaskan workforce  that is  ready to meet  the needs  of industry                                                               
when  the AKLNG  project is  built. The  situation was  different                                                               
when the  Trans Alaska Pipeline  System in that the  state didn't                                                               
have a trained and ready workforce.                                                                                             
1:49:02 PM                                                                                                                    
SENATOR GIESSEL highlighted the  differences in the state between                                                               
the 1970s and now.                                                                                                              
COMMISSIONER DRYGAS responded that she  was in Alaska because her                                                               
father worked on TAPS.                                                                                                          
SENATOR  GIESSEL  asked  her   thoughts  on  the  confidentiality                                                               
agreement concept for an AGDC board member.                                                                                     
COMMISSIONER  DRYGAS   explained  that  the   administration  was                                                               
concerned about  transparency and ensuring that  Alaskans know at                                                               
each  step what  is  happening with  their  resource. That  being                                                               
said,  she  was ready  to  work  on  and sign  a  confidentiality                                                               
agreement that  the administration and AGDC  board members agreed                                                               
SENATOR GIESSEL asked  if she received an  explanation of instate                                                               
consumption capacity  and what would  happen to the extra  gas if                                                               
the small instate line was expanded.                                                                                            
COMMISSIONER DRYGAS  acknowledged that there would  be challenges                                                               
associated with marketing  the gas in a meaningful  way. She said                                                               
the  administration and  the AGDC  board  would like  to see  the                                                               
AKLNG line  come to fruition, but  if that fails this  would be a                                                               
backup to provide gas to  Alaskans and another revenue stream for                                                               
years to come.                                                                                                                  
SENATOR  GIESSEL  expressed  appreciation  for  the  answers  and                                                               
highlighted  the concern  that  the smaller  pipeline  is not  an                                                               
integrated project and has no export component.                                                                                 
1:54:47 PM                                                                                                                    
SENATOR  STEVENS  commented  on  the  importance  of  timing  all                                                               
training and asked who will train the workforce.                                                                                
COMMISSIONER  DRYGAS  replied  the   department  will  work  with                                                               
partners and  regional training centers.  Apprenticeship programs                                                               
will also be  increased. The timing of the training  will be part                                                               
of  the  workforce  development  plan and  will  depend  on  that                                                               
timeline. The  multiple systems  will work  together to  meet the                                                               
different timeframes.                                                                                                           
DOLWD  will   have  collaborative  meetings  with   the  regional                                                               
training centers  to work on  career and technical  education and                                                               
look at  program needs.  The department,  the university  and the                                                               
Department of  Education convened a taskforce  to further develop                                                               
a  career  and  technical  education   (CTE)  plan  to  eliminate                                                               
duplication  and  identify  critical industries  that  need  more                                                               
trained  workers.  The  focus  is  to enhance  the  oil  and  gas                                                               
workforce but  they'll also look  at growing new  industries. She                                                               
noted  that  DOLWD is  working  with  the federal  government  to                                                               
submit an  American Apprenticeship  grant application  that could                                                               
bring  in   $2.5  million  to  $5   million  for  non-traditional                                                               
SENATOR  STEVENS  reiterated  the  importance  of  timeliness  in                                                               
training  a workforce  and thanked  Commissioner  Drygas for  her                                                               
SENATOR COSTELLO  asked Commissioner Drygas  if she saw  the AGDC                                                               
resolution for  the first time on  the same day she  voted on it.                                                               
She  noted that  Mr. Halford  testified to  the Senate  Resources                                                               
Committee that he hadn't seen it before the meeting.                                                                            
COMMISSIONER DRYGAS  said she hadn't  seen the  resolution before                                                               
but  had discussed  the concept  with another  board member.  She                                                               
wasn't  surprised to  see  it  but wanted  to  make  sure it  was                                                               
thoroughly discussed and reflected the intent of the body.                                                                      
CHAIR COSTELLO  quoted Commissioner  Drygas' comments  during the                                                               
3/15/15 AGDC board meeting. "And  I think I'd feel comfortable if                                                               
we took the time to make sure that  if we vote on this, we give a                                                               
clear direction to staff in  the resolution, not just necessarily                                                               
what's  on the  record."  She asked  Commissioner  Drygas if  she                                                               
values getting conversations on the  record because it seems that                                                               
a lot of questions went unanswered.                                                                                             
2:02:26 PM                                                                                                                    
COMMISSIONER  DRYGAS recalled  there  was  discussion during  the                                                               
meeting about  what the  board intended the  staff to  study, but                                                               
her feeling was that specific  directions for the staff should be                                                               
included in  the resolution. The  ultimate decision was  that the                                                               
staff  had sufficient  direction.  She  didn't recall  off-record                                                               
conversations  which are  prohibited  under  the public  meetings                                                               
CHAIR   COSTELLO    advised   Commissioner   Drygas    to   think                                                               
independently and consider  the effect of what  the resolution is                                                               
communicating. She asked how she  can justify spending money on a                                                               
secondary plan  when there's already  a backup on the  books that                                                               
everybody likes.                                                                                                                
COMMISSIONER DRYGAS clarified that  there is no current intention                                                               
to expand  the size  of the Alaska  Stand Alone  Pipeline (ASAP).                                                               
The  AGDC board  is looking  to study  whether that  is a  viable                                                               
option. That's  never been done;  it's only  been looked at  as a                                                               
smaller diameter line. She said she  doesn't take the cost of the                                                               
study lightly  but as a board  member and Commissioner she  has a                                                               
fiduciary responsibility to  the people of Alaska to  look at the                                                               
option to see  if it's economically feasible.  "While we continue                                                               
with  the  study, hopefully  AKLNG  continues  to progress,"  she                                                               
2:11:06 PM                                                                                                                    
CHAIR COSTELLO  expressed concern  that the  study to  expand the                                                               
size  of ASAP  would  put  the larger  pipe  at  risk. She  urged                                                               
waiting a year to give AKLNG time  to move to the next stage. She                                                               
pointed out  that Senate Bill  138 was  signed into law  after 51                                                               
hearings and  thorough discussion.  That project will  bring from                                                               
15,000 to  20,000 jobs and there's  a duty to Alaskans  to follow                                                               
the law which is laid out  very clearly. AKLNG is the star player                                                               
but if it doesn't work out, ASAP is the backup.                                                                                 
She expressed appreciation for  the questions Commissioner Drygas                                                               
asked during  the AGDC Board  meeting and encouraged her  to view                                                               
herself  as  an  independent  member   who  can  ask  the  larger                                                               
questions such  as what  are the  board actions  communicating to                                                               
the market.                                                                                                                     
SENATOR GIESSEL underscored  the importance of waiting  to see if                                                               
the producers  and the  state, as equal  partners, can  make this                                                               
large  project economic.  "We don't  want to  be trying  to craft                                                               
something now  when we don't  know what  the fail points  are for                                                               
this smaller backup," she said.                                                                                                 
2:15:48 PM                                                                                                                    
COMMISSIONER DRYGAS replied she  appreciates the concerns but she                                                               
doesn't believe  that there is time  to wait to look  at the fail                                                               
points before  looking at  the options for  the backup  plan. She                                                               
continued to say:                                                                                                               
     Alaska needs  a new  revenue stream  and we  don't have                                                                    
     the time to  wait. I think it is  important to continue                                                                    
     both  of these  projects together,  as they  have been.                                                                    
     There  has  been a  lot  of  collaboration and  working                                                                    
     together. There's a lot of  shared data involved that's                                                                    
     been  really helpful  and beneficial  and ultimately  I                                                                    
     think  the board  and the  governor would  like to  see                                                                    
     these eventually merge into one.                                                                                           
SENATOR  GIESSEL   pointed  out   that  the  two   projects  have                                                               
fundamentally different goals. The ASAP  line was for instate use                                                               
and not considered for export,  whereas the AKLNG has always been                                                               
an export line. She cautioned that  making a policy change on the                                                               
instate line creates a conflict and a problem.                                                                                  
CHAIR  COSTELLO   added  that  the  AKLNG   project  has  offtake                                                               
opportunities for instate gas.                                                                                                  
2:18:54 PM                                                                                                                    
CHAIR COSTELLO found no further comments and read the following:                                                                
     In accordance  with AS 39.05.080  the Senate  Labor and                                                                    
     Commerce   Committee   reviewed   the   following   and                                                                    
     recommends the  appointment to be forwarded  to a joint                                                                    
     session for consideration.                                                                                                 
2:19:06 PM                                                                                                                    
CHAIR COSTELLO called an at ease to sign the paperwork.                                                                         
             SB  76-REAL ESTATE BROKERS; LIABILITY                                                                          
2:21:06 PM                                                                                                                    
CHAIR  COSTELLO   reconvened  the   meeting  and   announced  the                                                               
consideration of  SB 76. "An Act relating to private  actions and                                                             
remedies   against    real   estate   licensees    for   licensee                                                               
relationships, disclosures, and activity  before January 1, 2005;                                                               
and providing  for an  effective date." She  noted that  this was                                                               
the second hearing.                                                                                                             
2:21:42 PM                                                                                                                    
GENEVIEVE WOJTUSIK,  Staff, Senator  McGuire, summarized  that SB
76   addresses   notification   requirements  for   real   estate                                                               
transactions before January 1, 2005  when the licensee represents                                                               
both the buyer  and seller. The original statute  did not specify                                                               
remedies if  a real estate  licensee violated its  provisions and                                                               
had no  timeline. In 2002 a  lawsuit was brought and  it became a                                                               
class action  suit in 2010.  SB 76  broadens the language  in [AS                                                               
08.88.396(e)] to help with that suit.                                                                                           
During the previous  hearing, Senator Giessel asked  what the law                                                               
said  in 1998  regarding dual  representation. At  that time,  AS                                                               
08.88.396(c) said: "A person licensed  under this chapter may act                                                               
as an  agent for  both the prospective  seller and  a prospective                                                               
buyer of  real estate, only  after the licensee informs  both the                                                               
seller  and the  buyer of  the dual  agency and  receives written                                                               
consent to  the dual  agency from  both principals."  The statute                                                               
did not include  a timeline for obtaining the  written consent to                                                               
the dual representation.                                                                                                        
2:24:04 PM                                                                                                                    
CHAIR  COSTELLO  recalled  previous  testimony  that  prospective                                                               
homeowners  were making  on  the spot  offers  after viewing  the                                                               
properties. As a  result, a situation came up where  a buyer felt                                                               
he/she  made an  offer without  receiving communication  from the                                                               
agent about their dual representation.                                                                                          
MS. WOJTUSIK  confirmed that two  people felt that they  were not                                                               
informed  that  the real  estate  licensee  represented both  the                                                               
buyer and seller. They brought legal action in 2002.                                                                            
CHAIR COSTELLO  asked why  the new  language on  page 1,  line 6,                                                               
striking  the term  "for" and  inserting  "arising out  of" is  a                                                               
MS. WOJTUSIK deferred to Mr. Pickett.                                                                                           
2:25:34 PM                                                                                                                    
JEFFREY  PICKETT,  retained  counsel  for  the  Senate  Judiciary                                                               
Committee, explained  that the  term "arising out  of" is  a more                                                               
broadly interpreted  term by Alaska  courts and would  cover both                                                               
common  law  and  statutory  actions.   This  would  clarify  the                                                               
legislature's intent  in 2003 when  it limited damages  to actual                                                               
damages for violations of the dual agency notice requirement.                                                                   
CHAIR  COSTELLO  asked  if  this   change  might  bring  consumer                                                               
protection concerns.                                                                                                            
MR.  PICKETT  replied  he  has  heard  nothing  on  the  consumer                                                               
advocate side  that would indicate  concern with this  change. He                                                               
explained that  the change is  focused on the damages  a consumer                                                               
is  entitled  to if  the  dual  representation was  not  properly                                                               
disclosed. Should forfeiture  be allowed as a  remedy for failure                                                               
to  properly disclose,  some 3,500  transactions that  took place                                                               
during  this  timeframe would  be  at  risk. That  would  gravely                                                               
damage the entire industry.                                                                                                     
2:28:55 PM                                                                                                                    
CHAIR  COSTELLO asked  how the  bill  clarifies the  will of  the                                                               
legislature in 2003.                                                                                                            
MR. PICKETT replied the will  of the legislature is determined by                                                               
courts after a  review of the legislative  history. This includes                                                               
testimony, written comments  and anything put on  the record. His                                                               
understanding  is that  the  legislature in  2003  was trying  to                                                               
clarify the same thing that SB  76 seeks to clarify. That is that                                                               
permitting  forfeiture as  a remedy  for violations  of the  dual                                                               
agency  provisions would  have a  very disruptive  impact on  the                                                               
real estate industry.                                                                                                           
CHAIR  COSTELLO  asked  Senator  Ellis  if  he  had  supplemental                                                               
SENATOR ELLIS replied the previous comments reflect his memory.                                                                 
2:30:53 PM                                                                                                                    
SENATOR STEVENS asked why the  bill is retroactive [to January 1,                                                               
1991], if  anyone would  be harmed by  the retroactivity  and how                                                               
they would be harmed.                                                                                                           
MR. PICKETT  explained that the  bill is  necessarily retroactive                                                               
so  it  applies  to  cases  and claims  brought  since  the  1998                                                               
amendment made disclosure of dual  agency a requirement. The bill                                                               
makes it clear  to the courts that the intent  of the legislature                                                               
in  2003 was  that  only actual  damages would  be  awarded to  a                                                               
consumer  if  provisions  of the  dual  agency  requirement  were                                                               
SENATOR STEVENS asked  if there are ongoing court  cases to which                                                               
this would apply and if it  would provide a definitive answer for                                                               
any court decisions.                                                                                                            
MR. PICKETT  confirmed that  a case has  been ongoing  since 2010                                                               
could  be  affected,  and  others   could  be  brought  based  on                                                               
transactions between 1998 and 2003.  He said the ambiguity in the                                                               
law  is  related to  whether  the  limitation to  actual  damages                                                               
applies to  common law actions.  It clearly applies  to statutory                                                               
actions.  The pending  case could  be affected  because the  bill                                                               
would  require  the courts  to  apply  the limitation  to  actual                                                               
damages in any  case arising out of the failure  to disclose dual                                                               
agency representation.                                                                                                          
2:34:23 PM                                                                                                                    
CHAIR COSTELLO  asked how to rationalize  a retroactive effective                                                               
date  when   one  legislature  is   not  able  to   bind  another                                                               
MR. PICKETT explained that retroactivity  is a permitted power of                                                               
a  sitting legislature.  One legislature  may not  bind a  future                                                               
legislature, but  it is permissible  for a legislature  to change                                                               
what an earlier legislature has done.                                                                                           
SENATOR STEVENS  asked for  an explanation  of actual  damages as                                                               
opposed to other types.                                                                                                         
MR.  PICKETT  explained  that actual  damages  are  out-of-pocket                                                               
losses a buyer  or seller might have suffered as  a result of not                                                               
understanding that  the agent was representing  both parties. The                                                               
claimants in the pending case  are seeking the punitive damage of                                                               
forfeiture.  Those claimants  would like  the real  estate agents                                                               
that didn't  technically comply  with the  disclosure requirement                                                               
to disgorge the commissions and fees that they earned.                                                                          
2:37:05 PM                                                                                                                    
CHAIR  COSTELLO  found  no further  questions  or  testimony  and                                                               
closed public testimony.                                                                                                        
2:37:24 PM                                                                                                                    
SENATOR STEVENS motioned to report SB 76 from committee with                                                                    
individual recommendations and attached fiscal note(s).                                                                         
CHAIR COSTELLO announced that without objection, SB 76 is                                                                       
reported from the Senate Labor and Commerce Standing Committee.                                                                 
2:37:37 PM                                                                                                                    
There being nothing further to come before the committee,                                                                       
Senator Costello adjourned the Senate Labor and Commerce                                                                        
Standing Committee at 2:37 p.m.                                                                                                 

Document Name Date/Time Subjects
Commissioner DOLWF - Drygas #3.pdf SL&C 4/7/2015 1:30:00 PM
Appointment Confirmations