04/03/2014 03:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB32 | |
| HB276 | |
| HB234 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 32 | TELECONFERENCED | |
| + | HB 276 | TELECONFERENCED | |
| + | HB 234 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
April 3, 2014
3:34 p.m.
MEMBERS PRESENT
Senator Mike Dunleavy, Chair
Senator Peter Micciche, Vice Chair
Senator Donald Olson
MEMBERS ABSENT
Senator Bert Stedman
Senator Johnny Ellis
COMMITTEE CALENDAR
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 32(FIN)
"An Act providing for the issuance of one business license for
multiple lines of business; and providing for reissuance of a
business license to make a change on the license."
- HEARD & HELD
HOUSE BILL NO. 276
"An Act making the Alaska Wage and Hour Act inapplicable to
certain employees of motor vehicle dealers; and providing for an
effective date."
- HEARD & HELD
HOUSE BILL NO. 234
"An Act extending the termination date of the Regulatory
Commission of Alaska; and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 32
SHORT TITLE: LINES OF BUSINESS ON BUSINESS LICENSE
SPONSOR(s): REPRESENTATIVE(s) COSTELLO, HUGHES
01/16/13 (H) PREFILE RELEASED 1/7/13
01/16/13 (H) READ THE FIRST TIME - REFERRALS
01/16/13 (H) L&C, FIN
02/18/13 (H) L&C AT 3:15 PM BARNES 124
02/18/13 (H) Heard & Held
02/18/13 (H) MINUTE(L&C)
03/20/13 (H) L&C AT 3:45 PM BARNES 124
03/20/13 (H) Scheduled But Not Heard
04/03/13 (H) L&C AT 3:15 PM CAPITOL 106
04/03/13 (H) -- MEETING CANCELED --
04/05/13 (H) L&C AT 3:15 PM BARNES 124
04/05/13 (H) Moved CSHB 32(L&C) Out of Committee
04/05/13 (H) MINUTE(L&C)
04/06/13 (H) L&C RPT CS(L&C) NT 5DP
04/06/13 (H) DP: HERRON, CHENAULT, SADDLER,
JOSEPHSON, REINBOLD
04/06/13 (H) LETTER OF INTENT WITH L&C REPORT
02/17/14 (H) FIN AT 1:30 PM HOUSE FINANCE 519
02/17/14 (H) Heard & Held
02/17/14 (H) MINUTE(FIN)
02/24/14 (H) FIN AT 1:30 PM HOUSE FINANCE 519
02/24/14 (H) Moved CSHB 32(FIN) Out of Committee
02/24/14 (H) MINUTE(FIN)
02/26/14 (H) FIN RPT CS(FIN) NT 10DP
02/26/14 (H) DP: GUTTENBERG, EDGMON, MUNOZ, HOLMES,
NEUMAN, THOMPSON, GARA, COSTELLO,
02/26/14 (H) STOLTZE, AUSTERMAN
03/03/14 (H) TRANSMITTED TO (S)
03/03/14 (H) VERSION: CSHB 32(FIN)
03/05/14 (S) READ THE FIRST TIME - REFERRALS
03/05/14 (S) L&C, FIN
04/03/14 (S) L&C AT 3:30 PM BELTZ 105 (TSBldg)
BILL: HB 276
SHORT TITLE: MOTOR VEHICLE DEALER EMPLOYEES
SPONSOR(s): REPRESENTATIVE(s) THOMPSON
01/24/14 (H) READ THE FIRST TIME - REFERRALS
01/24/14 (H) L&C
02/10/14 (H) L&C AT 3:15 PM BARNES 124
02/10/14 (H) Moved Out of Committee
02/10/14 (H) MINUTE(L&C)
02/12/14 (H) L&C RPT 3DP 2NR
02/12/14 (H) DP: MILLETT, REINBOLD, OLSON
02/12/14 (H) NR: CHENAULT, JOSEPHSON
02/19/14 (H) TRANSMITTED TO (S)
02/19/14 (H) VERSION: HB 276
02/21/14 (S) READ THE FIRST TIME - REFERRALS
02/21/14 (S) L&C
04/03/14 (S) L&C AT 3:30 PM BELTZ 105 (TSBldg)
BILL: HB 234
SHORT TITLE: EXTEND REGULATORY COMMISSION OF ALASKA
SPONSOR(s): REPRESENTATIVE(s) HAWKER, ISAACSON, SADDLER
01/21/14 (H) PREFILE RELEASED 1/10/14
01/21/14 (H) READ THE FIRST TIME - REFERRALS
01/21/14 (H) L&C, FIN
01/31/14 (H) L&C AT 3:15 PM BARNES 124
01/31/14 (H) -- MEETING CANCELED --
02/03/14 (H) L&C AT 3:15 PM BARNES 124
02/03/14 (H) Moved Out of Committee
02/03/14 (H) MINUTE(L&C)
02/05/14 (H) L&C RPT 5DP 2NR
02/05/14 (H) DP: MILLETT, CHENAULT, SADDLER,
JOSEPHSON, OLSON
02/05/14 (H) NR: HERRON, REINBOLD
02/26/14 (H) FIN AT 1:30 PM HOUSE FINANCE 519
02/26/14 (H) Moved Out of Committee
02/26/14 (H) MINUTE(FIN)
02/28/14 (H) FIN RPT 9DP 2NR
02/28/14 (H) DP: GUTTENBERG, HOLMES, MUNOZ, NEUMAN,
THOMPSON, EDGMON, T.WILSON, GARA,
02/28/14 (H) AUSTERMAN
02/28/14 (H) NR: COSTELLO, STOLTZE
03/03/14 (H) TRANSMITTED TO (S)
03/03/14 (H) VERSION: HB 234
03/05/14 (S) READ THE FIRST TIME - REFERRALS
03/05/14 (S) L&C, FIN
04/03/14 (S) L&C AT 3:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
REPRESENTATIVE MIA COSTELLO
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of HB 32.
CHARLES GUINCHARD, Staff
Representative Mia Costello
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided a sectional analysis of HB 32.
SARA CHAMBERS, Director
Division of Corporations, Business and Professional Licensing
Department of Commerce, Community and Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions related to HB 32.
PEGGYANN MCCONNOCHIE, representing herself
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 32
REPRESENTATIVE STEVE THOMPSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of HB 276.
JANE PIERSON, Staff
Representative Steve Thompson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided a sectional analysis of HB 276 on
behalf of the sponsor.
STEVE ALLWYNE, Board Member
Alaska Auto Dealers Association
Juneau, Alaska
POSITION STATEMENT: Testified that he had no objection to HB
276.
REPRESENTATIVE MIKE HAWKER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 234 as joint prime sponsor.
KRIS CURTIS, Legislative Auditor
Legislative Audit Division
Legislative Agencies and Offices
Juneau, Alaska
POSITION STATEMENT: Presented the audit findings and
recommendations during the discussion of HB 234.
T.W. PATCH, Chair
Regulatory Commission of Alaska
Anchorage, Alaska
POSITION STATEMENT: Testified on HB 234.
ACTION NARRATIVE
3:34:57 PM
CHAIR MIKE DUNLEAVY called the Senate Labor and Commerce
Standing Committee meeting to order at 3:34 p.m. Present at the
call to order were Senators Micciche, Olson, and Chair Dunleavy.
HB 32-LINES OF BUSINESS ON BUSINESS LICENSE
3:35:35 PM
CHAIR DUNLEAVY announced the consideration of HB 32. "An Act
providing for the issuance of one business license for multiple
lines of business; and providing for reissuance of a business
license to make a change on the license." This was the first
hearing. [CSHB 32(FIN) was before the committee.]
3:35:51 PM
REPRESENTATIVE MIA COSTELLO, Alaska State Legislature Juneau,
Alaska, introduced HB 32 speaking as sponsor. She explained that
the bill would allow people who apply for business licenses to
consolidate multiple lines of business in the license. It would
also allow a person applying for a license to make a change on
their application. She deferred further explanation to Mr.
Guinchard.
CHARLES GUINCHARD, Staff, Representative Costello, provided a
sectional analysis of HB 32.
Section 1 amends AS 43.70.020(a)(2). Additional language is
inserted to establish that just the primary and secondary line
of business will be listed on the license. The person may have
multiple other businesses on that license and those will show
online.
Section 2 adds a new subsection (f) to AS 43.70.020. It states
that the department will prepare a new application form that
allows an applicant to list multiple lines of business on one
license.
Section 3 adds new subsections (e) and (f) to AS 43.70.030.
Subsection (e) states that a license holder may request a new
business license without paying additional fees to correct a
department error or within 30 days of issuance to make a change
to the license. Subsection (f) states that the expiration date
of a license issued under (e) is the same as the expiration date
of the original license.
Section 4 adds a new paragraph (5) to AS 43.70.110. It defines
the meaning of the term "line of business."
Section 5 refers to the effective date and provides transition
language.
3:39:43 PM
SENATOR MICCICHE asked how often a business license is renewed
and what it costs.
MR. GUINCHARD said that licenses are biannual and they cost $100
every two years. The fiscal note reflects an $8,500 one-time
cost to the Department of Commerce, Community and Economic
Development (DCCED) to update the database and an estimated
$37,500 decrease in revenue because of potential license
consolidations.
CHAIR DUNLEAVY asked if there is any other impact on the fiscal
note.
MR. GUINCHARD replied not to his knowledge.
SARA CHAMBERS, Director, Division of Corporations, Business and
Professional Licensing, Department of Commerce, Community and
Economic Development (DCCED), introduced herself.
CHAIR DUNLEAVY asked her perspective of the fiscal note.
MS. CHAMBERS agreed with Mr. Guinchard's representation. She
noted that while there's an estimated $37,500 decrease in
revenue to an estimated 750 license consolidations, the cost of
the business license would remain at $50.00 per year.
CHAIR DUNLEAVY opened public testimony.
3:43:09 PM
PEGGYANN MCCONNOCHIE, representing herself, Juneau, Alaska, said
she has a real estate license and also teaches real estate so
she has to buy two business licenses every year, and it's a
hardship. She urged the committee to pass the bill as a measure
that will help small businesses throughout Alaska.
CHAIR DUNLEAVY announced he would hold HB 32 for further
consideration. Public testimony was open.
3:44:27 PM
At Ease
HB 276-MOTOR VEHICLE DEALER EMPLOYEES
3:45:03 PM
CHAIR DUNLEAVY reconvened the meeting and announced the
consideration of HB 276. "An Act making the Alaska Wage and Hour
Act inapplicable to certain employees of motor vehicle dealers;
and providing for an effective date." This was the first
hearing.
3:45:11 PM
REPRESENTATIVE STEVE THOMPSON, Alaska State Legislature, Juneau,
Alaska, sponsor of HB 276 introduced the bill paraphrasing the
following sponsor statement: [Original punctuation provided.]
House Bill 276 clarifies that auto salespersons and
service writers are exempt from Alaska's Minimum Wage
and Hour Act. These individuals are paid on a
commission basis and are not and have never been
hourly employees.
HB 276 is a result of confusion caused by previous
regulations from the Department of Labor and Workforce
Development that defined straight commission as "a
fixed percentage of each dollar of sales an employee
makes." This became interpreted as meaning the
commission must be applied to the gross amount of a
sale.
While that interpretation might be appropriate for
some commission sales, it is neither appropriate nor
customary for auto sales. The prime reason is that the
auto dealer must pay for the vehicle first out of the
sale price. Advertising laws prevent an "add-on"
charge to an advertised sale price to accommodate a
commission. Thus, is the net of a sale is 3% of the
gross, the dealer cannot pay a commission of 5%. This
legislation allows for auto dealers' common practice
of using a net amount against which the commission is
applied.
The Department of Labor and Workforce Development did
amend its regulations and has been extremely helpful
working with the Alaska Auto Dealers Association on
this issue. However, as a result of litigation and
with the advice of legal counsel, we believe that it
is necessary to seek final clarification in statute.
3:47:16 PM
JANE PIERSON, Staff, Representative Thompson, Alaska State
Legislature, Juneau, Alaska, provided a sectional review of HB
276.
Section 1 amends AS 23.10.055(a). It exempts from the minimum
wage act auto service writers, individuals who arrange financing
for motor vehicle sales and individuals who solicit, sell,
lease, or exchange motor vehicles.
Section 2 adds a new subsection (d) to AS 23.10.055 to define
"lease," "motor vehicle," and "motor vehicle dealer."
CHAIR DUNLEAVY asked if there is a fiscal impact.
MS. PIERSON said no.
SENATOR OLSON asked if the Ford dealer in Fairbanks has a
position on the bill.
REPRESENTATIVE THOMPSON replied that he didn't have direct
communication with that dealership, but the former Senator has
not opposed the legislation.
3:49:24 PM
STEVE ALLWYNE, Board Member, Alaska Auto Dealers Association,
stated that he knows the former Senator personally and can
assure the committee that he does not object to the bill.
SENATOR OLSON asked if anybody has problems with the bill.
MR. ALLWYNE said he wasn't aware of any problems.
CHAIR DUNLEAVY announced that he would hold HB 276 in committee
for further consideration. Public testimony was open.
3:50:21 PM
At Ease
HB 234-EXTEND REGULATORY COMMISSION OF ALASKA
3:50:56 PM
CHAIR DUNLEAVY reconvened the meeting and announced the
consideration of HB 234. "An Act extending the termination date
of the Regulatory Commission of Alaska; and providing for an
effective date." This was the first hearing.
3:51:12 PM
REPRESENTATIVE MIKE HAWKER Alaska State Legislature, Juneau,
Alaska, as joint prime sponsor, stated that HB 234 extends the
termination date of the Regulatory Commission of Alaska (RCA)
from June 30, 2014 to June 30, 2022. The Legislative Budget and
Audit Agency conducted an audit and recommended the eight-year
reauthorization consistent with the findings that the agency has
been operating in an efficient and effective manner. He pointed
out that the appendixes to the audit include ratings by the
stakeholders that demonstrate overwhelming support for how well
the agency is functioning. The analysis on page 31 of the audit
shows that the regulatory cost charges are sufficient to support
the RCA's operations. He concluded that what the RCA needs more
than anything else is long term future stability and that is the
reason for the recommendation for an eight-year extension.
CHAIR DUNLEAVY asked if the fiscal note has changed.
REPRESENTATIVE HAWKER explained that it's the original fiscal
note that shows receipts, primarily from regulatory cost
charges, of about $9 million per year. The other charges are I/A
and CIP receipts that are essentially fees for services.
3:53:46 PM
KRIS CURTIS, Legislative Auditor, Legislative Audit Division,
Legislative Agencies and Offices, Juneau, Alaska, reported that
the division conducted an audit of the RCA dated July 2013. The
purpose was to determine whether the commission was serving the
public's interest and whether its termination date should be
extended. Overall, the audit concluded that the RCA is operating
in the public's interest and that the termination date should be
extended for eight years, until June, 2022. She noted that the
audit includes two recommendations, but neither impacted the
recommendation for the extension.
The first recommendation is to a repeat of a prior audit
recommendation for the RCA to improve its case management
system. The 2013 audit found there were still high error rates
in the case management system and again recommended
improvements.
MS. CURTIS reported that the sunset audit also made a new
recommendation for the legislature to consider clarifying the
statutory timeline for rulemaking proceedings. The statutes
currently require the RCA to issue a final order on a rulemaking
docket no later than 730 days after a petition for a regulatory
change is filed or after the commission issues an initiating
order for such proceedings. A provision in the statutes allows
one 90-day extension for good cause, but prohibits the RCA from
terminating a proceeding in one docket and opening a proceeding
in another docket on substantially the same matter.
The audit found that on occasion the RCA has split rulemaking
proceedings into two dockets. First, the RCA will open a docket
to consider whether there is a need for regulation in an area of
concern or interest and then close it once public testimony and
comments are taken. If the record indicates a need for a
regulation, the RCA may open a second docket to consider
adopting the regulations. The audit found that this process
allows the RCA to take up to 4.5 years to complete its
proceedings, but the RCA management has argued that including
clear intent language in a docket's initiating order makes the
process transparent and complies with statute. The auditors
confirmed that the RCA was including clear intent language in
the docket, which provides transparency, but determined that
this was an issue for legislative consideration because it
appears that this practice evades the statutory timelines and
does not appear to serve the regulated community or the public's
interest. She restated the recommendation for the legislature to
consider clarifying the statute to ensure that the RCA complies
with legislative intent when processing regulatory dockets.
3:57:20 PM
T.W. PATCH, Commissioner and Chair, Regulatory Commission of
Alaska, Department of Commerce, Community and Economic
Development (DCCED), stated that it is the position of the
Commission that it has earned the trust of the legislature, has
met its obligations, and should be extended for the eight-year
statutory maximum. Complying with prior legislative guidance,
the RCA filed a report with the legislature on January 16, 2012
and promised a further report. That report outlined the process
to address concerns regarding the length of time it took for the
commission to decide cases involving rate changes and certain
other matters. The commission filed a second report on January
21, 2014 that documented that the commission had significantly
reduced the timeline for rate cases from 450 days to 300 days.
This was done without requesting any additional funding, staff,
or authority. Although it has stressed the agency and the
regulatory affairs and public advocacy section of the Department
of Law, the commission is holding that timeline and will do its
best to continue to hold that timeline. He warned that the
stresses may mount as the RCA is being asked to undertake new
and complex matters. He cited work with AGDC, AOGCC, the
governor's Interior gas project, and the pending matters related
to transmission that may come before the commission in the near
future.
MR. PATCH addressed the audit report. The RCA concurs and has
taken steps to address the first recommendation that the Chair
of the RCA should improve and enforce written procedures. The
manuals have been updated and new manuals are being written. He
expressed confidence that there would be measurable enhancement
in this area.
SENATOR MICCICHE asked if there were serious data issues
associated with the business of the RCA or simple errors that
were identified during the audit.
MR. PATCH replied the issues weren't quantified, but he doesn't
believe the commission would have been faulted on simple
transposition errors in their database.
CHAIR DUNLEAVY asked Ms. Curtis to quantify the errors.
4:02:59 PM
MS. CURTIS directed attention to page 11 of the audit and noted
that this is the fourth time this been before the legislature.
It is a reoccurrence from the two prior audits of the annual
report and the prior sunset audit. The audit examined 26 of 261
tariff filings and 41 of 171 utility dockets and found error
rates of 27 percent in 20 percent of the respective sample. When
the audit mentions error rates it is talking about information
like open and close dates included in the annual report. That is
the nature of the errors, she said.
SENATOR MICCICHE asked if any of the errors were associated with
the calculation of tariffs.
MS. CURTIS replied the nature of the errors related to
descriptive information in an annual report as opposed to
anything that would have affected a decision.
CHAIR DUNLEAVY asked who follows up on the corrective actions.
MS. CURTIS said the recommendation was directed to the RCA Chair
who is responsible for ensuring it occurs.
SENATOR MICCICHE summarized that the errors were clerical in
nature.
MS. CURTIS said most likely the errors were data input and those
can be associated with a lack of procedures in entering the
data. These are things that can be addressed by adequate
training and procedures and a quality control procedure at the
commission for continuous review to ensure that the information
is being gathered and entered accurately, she said.
4:06:19 PM
MR. PATCH said the commission is in the process of changing
policies and procedures to address the 2-3 day discrepancy
between the date on a letter or document that comes to the
commission and the date it is entered into the database. A
tariff filing that isn't addressed within 45 days is given the
force of law on day 45, so that two or three day difference has
a legal consequence in favor of the utility applicant. He agreed
with Ms. Curtis that it has taken the commission some time to
address this issue, and noted that adopting electronic filing
measures has helped in its resolution.
MR. PATCH asked the committee to consider the second audit
finding by reviewing page 3 of his response to the audit because
it may affect another matter. He posed a hypothetical example to
illustrate how it might happen that the RCA would open a docket,
close the docket to stay within the statutory timeline, and then
open a second docket 10 months to four years later on a
substantially similar question. He stated that it is RCA's
belief that to open a docket to consider the need for a
regulation is entirely different than opening a docket to
consider a specific regulation and how it may address a problem.
"In this case, I do not think her recommendation need concern
this legislature with respect to my agency's sunset extension,"
Mr. Patch stated.
4:11:28 PM
SENATOR OLSON asked how long he has been Chair of the RCA.
MR. PATCH replied it will be three years on June 30, 2014.
SENATOR OLSON asked if he served on the RCA before that.
MR. PATCH relayed that he was appointed by Governor Parnell in
2010.
SENATOR OLSON asked how he managed to reduce the timeline from
450 days to 300 days.
MR. PATCH replied it was a matter of diligence, clear expression
of desire for a cooperative process, early meeting between the
RCA's administrative law judges and the parties to set
procedural schedules for discovery, careful employment of the
RCA assets, and honest and open conversation with parties in the
dockets regarding requests for additional time.
SENATOR OLSON asked if anything was compromised in the time
reduction.
MR. PATCH said he didn't believe anything was compromised.
SENATOR OLSON asked if he anticipates that the RCA will regulate
the gas pipeline.
MR. PATCH said the agency's engineering, pipeline, technical,
and legal staff is actively engaged in the process of getting
ahead of the AGDC tariff issues. The RCA should be able to
decide a filing in a timely fashion, he said.
4:16:26 PM
SENATOR MICCICHE said he'd like to talk off the record about the
second recommendation, because the issue won't go away in future
audits if the discrepancy isn't resolved.
MR. PATCH said the RCA has a solution that he believes is
acceptable to Ms. Curtis. The RCA adopted an additional
information gathering "I" docket to receive and store
information. This docket has no statutory timeline. If there is
need for a regulation that addresses the concern in the "I"
docket the RCA could move forward to an R docket, which is
subject to the timeline.
SENATOR MICCICHE observed that one is an application process and
the second starts the 730 day timeline.
MR. PATCH agreed.
CHAIR DUNLEAVY suggested that after the discussion he make a
statement that his concerns have been addressed.
SENATOR MICCICHE asked Ms. Curtis to comment on the proposed
solution.
MS. CURTIS said the division's opinion is based on field work
and extensive work, and does not factor in what management might
do to address an audit recommendation. It's a matter of
appearing and being independent as auditors. She restated that
the recommendation is to the legislature to consider clarifying
the statute to address the issue. If the legislature doesn't
take any action on this recommendation, she said she will be
reluctant to pursue it again.
4:21:21 PM
CHAIR DUNLEAVY announced that he would hold HB 234 in committee
for further consideration. Public testimony was open.
4:21:59 PM
There being no further business to come before the committee,
Chair Dunleavy adjourned the Senate Labor and Commerce Committee
meeting at 4:21 p.m.