03/10/2017 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB2 | |
| HB108 | |
| HB141 | |
| HB132 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 132 | TELECONFERENCED | |
| += | SB 14 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 2 | TELECONFERENCED | |
| += | HB 108 | TELECONFERENCED | |
| += | HB 141 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 10, 2017
3:15 p.m.
MEMBERS PRESENT
Representative Sam Kito, Chair
Representative Adam Wool, Vice Chair
Representative Andy Josephson
Representative Louise Stutes
Representative Chris Birch
Representative Gary Knopp
Representative Colleen Sullivan-Leonard
MEMBERS ABSENT
Representative Mike Chenault (alternate)
Representative Bryce Edgmon (alternate)
COMMITTEE CALENDAR
HOUSE BILL NO. 2
"An Act relating to a voluntary preference for veterans by
private employers."
- MOVED CSHB 2(MLV) OUT OF COMMITTEE
HOUSE BILL NO. 108
"An Act adopting and relating to the Revised Uniform Fiduciary
Access to Digital Assets Act."
- MOVED HB 108 OUT OF COMMITTEE
HOUSE BILL NO. 141
"An Act relating to allocations of funding for the Alaska
Workforce Investment Board; and providing for an effective
date."
- MOVED HB 141 OUT OF COMMITTEE
HOUSE BILL NO. 132
"An Act relating to transportation network companies and
transportation network company drivers."
- HEARD & HELD
SENATE BILL NO. 14
"An Act relating to transportation network companies and
transportation network company drivers."
- BILL HEARING CANCELED
PREVIOUS COMMITTEE ACTION
BILL: HB 2
SHORT TITLE: PRIV EMPLOYER VOLUNTARY VET PREFERENCE
SPONSOR(s): REPRESENTATIVE(s) TUCK
01/18/17 (H) PREFILE RELEASED 1/9/17
01/18/17 (H) READ THE FIRST TIME - REFERRALS
01/18/17 (H) MLV, L&C
01/24/17 (H) MLV AT 1:00 PM GRUENBERG 120
01/24/17 (H) Heard & Held
01/24/17 (H) MINUTE(MLV)
01/31/17 (H) MLV AT 1:00 PM GRUENBERG 120
01/31/17 (H) Moved CSHB 2(MLV) Out of Committee
01/31/17 (H) MINUTE(MLV)
02/03/17 (H) MLV RPT CS(MLV) NT 6DP
02/03/17 (H) DP: RAUSCHER, REINBOLD, LEDOUX,
SADDLER, PARISH, TUCK
02/22/17 (H) L&C AT 3:15 PM BARNES 124
02/22/17 (H) Heard & Held
02/22/17 (H) MINUTE(L&C)
02/24/17 (H) L&C AT 3:15 PM BARNES 124
02/24/17 (H) Scheduled but Not Heard
03/10/17 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 108
SHORT TITLE: FIDUCIARY ACCESS TO DIGITAL ASSETS
SPONSOR(s): REPRESENTATIVE(s) CLAMAN
02/08/17 (H) READ THE FIRST TIME - REFERRALS
02/08/17 (H) L&C, JUD
03/08/17 (H) L&C AT 3:15 PM BARNES 124
03/08/17 (H) Heard & Held
03/08/17 (H) MINUTE(L&C)
03/10/17 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 141
SHORT TITLE: AK WORKFORCE INVESTMENT BOARD;FUNDS
SPONSOR(s): REPRESENTATIVE(s) FANSLER
02/22/17 (H) READ THE FIRST TIME - REFERRALS
02/22/17 (H) L&C, FIN
03/06/17 (H) L&C AT 3:15 PM BARNES 124
03/06/17 (H) Heard & Held
03/06/17 (H) MINUTE(L&C)
03/10/17 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 132
SHORT TITLE: TRANSPORTATION NETWORK COMPANIES
SPONSOR(s): REPRESENTATIVE(s) WOOL
02/15/17 (H) READ THE FIRST TIME - REFERRALS
02/15/17 (H) TRA, L&C
02/23/17 (H) TRA AT 1:30 PM BARNES 124
02/23/17 (H) <Bill Hearing Canceled>
02/28/17 (H) TRA AT 1:30 PM BARNES 124
02/28/17 (H) Heard & Held
02/28/17 (H) MINUTE(TRA)
03/02/17 (H) TRA AT 1:30 PM BARNES 124
03/02/17 (H) Heard & Held
03/02/17 (H) MINUTE(TRA)
03/06/17 (H) L&C AT 3:15 PM BARNES 124
03/06/17 (H) Scheduled but Not Heard
03/07/17 (H) TRA AT 1:30 PM BARNES 124
03/07/17 (H) Moved CSHB 132(TRA) Out of Committee
03/07/17 (H) MINUTE(TRA)
03/08/17 (H) TRA RPT CS(TRA) 1DP 4NR 2AM
03/08/17 (H) DP: WOOL
03/08/17 (H) NR: SULLIVAN-LEONARD, NEUMAN, DRUMMOND,
STUTES
03/08/17 (H) AM: CLAMAN, KOPP
03/10/17 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
VERDIE BOWEN, Director
Office of Veteran Affairs
Department of Military & Veterans Affairs
Anchorage, Alaska
POSITION STATEMENT: During the hearing of HB 2, testified in
support of the legislation.
ROBERT DOEHL, Deputy Commissioner
Department of Military & Veterans Affairs (DMVA)
Anchorage, Alaska
POSITION STATEMENT: During the hearing of HB 2, offered support
for the legislation.
JON DUFENDACH, Treasurer
Partners for Progress in Delta
Delta Junction, Alaska
POSITION STATEMENT: During the hearing of HB 141, offered
support for the legislation.
DON ETHERIDGE, Lobbyist
Alaska American Federation of Laborers - Congress of Industrial
Organizations (Alaska AFL-CIO)
Juneau, Alaska
POSITION STATEMENT: During the hearing of HB 141, offered
support for the legislation.
GRETA SCHUERCH, Liaison
Governmental and External Affairs
NANA Regional Corporation
Anchorage, Alaska
POSITION STATEMENT: During the hearing of HB 141, offered
support for the legislation.
PALOMA HARBOUR, Director
Central Office
Division of Administrative Services
Department of Labor & Workforce Development (DLWD)
POSITION STATEMENT: During the hearing on HB 141, answered
questions.
REPRESENTATIVE ZACH FANSLER
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During the hearing of HB 141, answered
questions.
LAURA STIDOLPH, Staff
Representative Adam Wool
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During the hearing of HB 132, answered
questions.
ANNABEL CHANG, Director
Public Policy
Lyft
San Francisco, California
POSITION STATEMENT: During the hearing of HB 132, explained the
functions of Lyft.
MITCHEL MATTHEWS, Senior Northwest Operations Manager
Uber Technologies
San Francisco, California
POSITION STATEMENT: During the hearing of HB 132, explained the
functions of Uber Technologies.
JARED EBER, Attorney
Uber Technologies
San Francisco, California
POSITION STATEMENT: During the hearing of HB 132, answered a
question.
ACTION NARRATIVE
3:15:27M
CHAIR SAM KITO called the House Labor and Commerce Standing
Committee meeting to order at 3:15 p.m. Representatives Stutes,
Josephson, Wool, Birch, Sullivan-Leonard, and Kito were present
at the call to order. Representative Knopp arrived as the
meeting was in progress.
HB 2-PRIV EMPLOYER VOLUNTARY VET PREFERENCE
3:16:48 PM
CHAIR KITO announced that the first order of business would be
HOUSE BILL NO. 2, "An Act relating to a voluntary preference for
veterans by private employers." [Before the committee was CSHB
2(MLV).]
3:17:21 PM
VERDIE BOWEN, Director, Office of Veteran Affairs, Department of
Military & Veterans Affairs, offered support for HB 2 due to the
effects it will have on communities when private employers
provide [voluntary preference for members of the National Guard
and veterans], and because it also provides legal cover that
employers may need in providing this preference. This law, if
passed, would fall in line with 37 other states also providing
this coverage, he offered.
3:18:40 PM
ROBERT DOEHL, Deputy Commissioner, Department of Military &
Veterans Affairs (DMVA), said he would like to reiterate Mr.
Bowen's comments, and that the Department of Military & Veterans
Affairs (DMVA) strongly supports this legislation in removing a
legal impediment to private employers that public employers are
currently allowed to provide.
CHAIR KITO closed public testimony on HB 2.
3:19:20 PM
REPRESENTATIVE WOOL moved to report CSHB 2, labeled 30-LS0071\D
out of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, CSHB
2(MLV) passed from the House Labor and Commerce Standing
Committee.
3:19:40 PM
The committee took a brief at-ease.
HB 108-FIDUCIARY ACCESS TO DIGITAL ASSETS
3:23:22 PM
CHAIR KITO announced that the next order of business would be
HOUSE BILL NO. 108, "An Act adopting and relating to the Revised
Uniform Fiduciary Access to Digital Assets Act."
CHAIR KITO opened public testimony, and after ascertaining no
one wished to testify, closed public testimony on HB 108.
3:24:16 PM
REPRESENTATIVE SULLIVAN-LEONARD commented that she supports the
legislation because it is important that people understand the
full ramifications of putting together a will and making sure
the family has all of the necessary information.
CHAIR KITO said he concurred, as it is the one piece missing
from his personal will.
REPRESENTATIVE KNOPP commented that the legislation itself does
not cause him concern in getting out of the "dark ages," except
he has concerns about "how this thing will evolve."
REPRESENTATIVE BIRCH related that he is unsure "exactly how this
all works," but he is supportive of the bill. He mentioned that
he recently received a Facebook request from a deceased
individual.
3:26:07 PM
REPRESENTATIVE WOOL moved to report HB 108, labeled 30-LS0210\J,
out of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, HB 108
passed from the House Labor and Commerce Standing Committee.
3:26:24 PM
The committee took an at-ease from 3:26 p.m. to 3:28 p.m.
HB 141-AK WORKFORCE INVESTMENT BOARD;FUNDS
3:28:50 PM
CHAIR KITO announced that the next order of business would be
HOUSE BILL NO. 141, "An Act relating to allocations of funding
for the Alaska Workforce Investment Board; and providing for an
effective date."
3:29:29 PM
JON DUFENDACH, Treasurer, Partners for Progress in Delta,
referred to a 2/6/17 letter directed to Governor Bill Walker
from Commissioner Heidi Drygas, with regard to non-resident
employment, and he read as follows:
We know it's not enough to encourage Alaska hire only
on state projects, but we have looked for creative
solutions to address the high rates of
residential/non-residential hire in other industries.
Administrative Order 278 is part of that effort and it
incorporates apprenticeship targets in oil and gas
projects. Research shows that apprenticeships are a
powerful tool to encourage Alaska hire rates, in
addition to their workforce development benefits for
employers.
MR. DUFENDACH noted that employment rates in the area of non-
residency are over 40 percent in the oil industry, and 25
percent in the Operating Engineers Union. He said, "We operate
a construction trade academy here in Delta" in an effort to
train Alaskans and offer access to jobs in the construction and
oil industries. He offered appreciation that the Delta Mine
Training Center is now part of the University of Alaska system
and is working with Partners for Progress in Delta. He urged
the committee to consider an extension of the UA Technical
Vocational Education Program (TVEP) and to continue providing
training for Alaska's young resident workers.
3:32:18 PM
DON ETHERIDGE, Lobbyist, Alaska American Federation of Laborers
- Congress of Industrial Organizations (Alaska AFL-CIO), said
the Alaska American Federation of Laborers - Congress of
Industrial Organizations (Alaska AFL-CIO) supports HB 141, and
advised that the organization funds its own training. He
commented that when this program first began, he worked with the
Alaska Works Partnership Program, AFL-CIO, and several people to
put this program "into business" and they would like to see it
continue. He remarked that the only benefit "we get out of it"
is we go out and cherry pick some of the top students for its
apprenticeship programs which has furthered these students'
careers over the years. The main issue is local hire, and if
Alaska does not have the people trained to take the oil and gas
and construction jobs, then there is no argument when people
start coming in from outside to take the jobs. The goal, he
offered, is to train Alaskans for these jobs, and the Alaska
AFL-CIO is in support of these programs.
3:33:56 PM
REPRESENTATIVE BIRCH offered concern that the dollars come out
of the unemployment insurance slice of an existing employee's
pay, such that a piece of every hour of their paycheck goes to
unemployment insurance. He commented that it appears these are
being syphoned off or reallocated to this program, and asked how
that benefits the individual whose paycheck it comes out of
ostensibly for unemployment insurance.
MR. ETHERIDGE suggested that when looking at the issue as per
person, "it doesn't." Although, he explained, it is still not
causing harm either because the program is solvent and if a
person is out of work they can draw unemployment funds. His
view, he advised, is that it saves the overall fund money, to
leave it out there for other people to use without having to
increase it, if the unemployed people get enough training to go
to work. Also, he explained, in the event the person has an
opportunity to go to work and not draw unemployment, that saves
money, and "they" don't have to increase the rates later on in
order to make the program solvent.
3:35:48 PM
REPRESENTATIVE BIRCH pointed out that it appears $12 million is
coming out of the paychecks of working Alaskans identified as
unemployment insurance. Therefore, he said, there's a $12
million slice of unemployment insurance basically going to train
someone else, and he said, "we're trying to figure out whether
that could be increased, decreased, put into vocational schools
in the school district, and so forth." It appears, he said, to
not be a truthful representation to the working individual when
they think they are paying unemployment insurance and, in fact,
$12 million is being redirected. He pointed out that there is
no question it is for a worthy purpose, but money is taken out
of a working person's pocket to train someone else to possibly
come in and take their job, for instance.
3:36:50 PM
MR. ETHERIDGE responded that most of the individuals going
through [TVEP programs] have paid into the funds and are reusing
some of their own funds in many cases. He commented that it is
probably not absolutely fair that it only goes to these few
programs, but those are the programs "we picked out when we
first started it." Initially, he said, there were only four to
five programs and with each allocation "the pie got smaller" for
each group. Speaking as someone who has paid unemployment
insurance all of his life, he said that he does not begrudge any
of that money training someone else to further their career and
enhance local hire in Alaska. He stressed that if the state has
to spend a bit of money to train these people so Alaskans are
able to get those jobs, "I think we need to do it."
3:38:42 PM
GRETA SCHUERCH, Liaison, Governmental and External Affairs, NANA
Regional Corporation, advised that the UA Technical Vocational
Education Program (TVEP) has served as an essential funding
source to the Alaska Technical Center based in Kotzebue, and it
serves as a catalyst for individuals to develop various career
tracks. The Alaska Technical Center (ATC) is an adult
vocational and technical school for all Alaskans, she described,
which has been an essential player in the advancement of the
collective workforce development efforts within the region. She
commented that it benefits employers, such as the Northwest
Arctic Borough School District, NANA Regional Corporation, and
the Red Dog Mine through core programs, and it includes tracks
and business technology, health occupations, construction trade
technology, culinary arts, process technology, and offers a
variety of short courses meeting the needs of local employers
and business partners. In 2016, she offered, 696 individuals
graduated, and 81 percent of whom are currently employed. The
TVEP has had a tremendous positive impact statewide, and she
pointed to the Youth Learning Center in Bethel, which serves a
key role in the dental health aide therapy program benefiting
all areas of the state through its rigorous dental training
program, and whose graduates provide mid-level dental care in
small rural communities throughout Alaska. The NANA Regional
Corporation shareholders also benefit from other programs funded
through TVEP at the University of Alaska, the Galena Interior
Learning Academy, Alaska Vocational Technical Center, and the
INANA Regional Corporation appreciates
the legislature's continued support for secondary, post-
secondary, and adult education that prepares Alaskans for future
jobs in Alaska, she said.
3:41:28 PM
CHAIR KITO, after ascertaining no one wished to testify, closed
public testimony on HB 141.
3:42:02 PM
PALOMA HARBOUR, Director, Central Office, Division of
Administrative Services, said she was available for questions.
REPRESENTATIVE SULLIVAN-LEONARD asked Ms. Harbour whether the
funding dispersed from 2000 to present was $142.5 million.
MS. HARBOUR responded that the cumulative total through FY 2017
was $142.5 million.
3:42:51 PM
REPRESENTATIVE SULLIVAN-LEONARD asked the amount of dollars, per
employee, which has been paid into the system from 2000 to 2016.
MS. HARBOUR advised that she did not have that analysis with
her, but the Research and Analysis Section of the department
calculates the total number of employees in Alaska, how many
employees are resident/non-resident, and she could go back and
prepare that analysis.
3:43:44 PM
REPRESENTATIVE SULLIVAN-LEONARD noted that she was looking for a
ball park figure. She asked whether other pieces are taken out
of unemployment insurance for government funding.
MS. HARBOUR answered that the department funds two different
programs: the State Training and Employment Program (STEP) which
performs competitive workforce development grants; and the
Technical and Vocational Education program is designated to the
recipients in statute.
REPRESENTATIVE SULLIVAN-LEONARD explained that she would like to
know whether additional money is taken from unemployment
insurance that would go toward these types of grants.
MS. HARBOUR reiterated that the STEP and TVEP programs are the
two programs that come out of employee contributions to
unemployment insurance. She referred to the previous response
she provided to Chair Kito's office and explained that it shows
the employee's contribution to unemployment insurance, the STEP
and TVEP contribution, how much money is deposited into the UI
Trust Fund, and how much money is deposited into the STEP and
TVEP accounts.
3:45:15 PM
REPRESENTATIVE JOSEPHSON asked whether the other 49 states have
technical training assistance for these two programs, such as
Alaska.
MS. HARBOUR responded there are other funding mechanisms in
other states for training, but they do not originate from
employee contributions to unemployment insurance. Alaska, New
Jersey, and Pennsylvania, are the only three states in the
nation that collect employee contributions for unemployment
insurance, and New Jersey and Pennsylvania do not have a similar
program for training out of that funding.
3:45:58 PM
REPRESENTATIVE JOSEPHSON asked for clarification that there are
only three states in the union requiring the employee to
contribute to unemployment insurance.
MS. HARBOUR answered that Representative Josephson was correct.
REPRESENTATIVE JOSEPHSON said, notwithstanding Alaska being one
of the three states, Alaska has low unemployment insurance
benefits relative to sister-state Washington State.
MS. HARBOUR responded, "Correct," and she opined that Alaska has
a 30 percent wage replacement rate in its maximum unemployment
insurance payment to Alaskans, but she did not have the exact
figure with her today.
REPRESENTATIVE JOSEPHSON asked whether she knew the 30 percent
number to be lower than the mean.
MS. HARBOUR responded "Yes," and she said she did not want to
misspeak because she is not an expert on unemployment insurance,
but opined that Alaska is on the very bottom in states' maximum
weekly benefit payments.
3:47:09 PM
REPRESENTATIVE KNOPP asked how Alaska compares as far as
contributions rates to the other states.
MS. HARBOUR asked whether Representative Knopp was asking about
the employer and employee contribution rates.
REPRESENTATIVE KNOPP referred to the percentages "we pay on
payroll," and asked how Alaska compares to other states because
obviously less benefits are received under a claim. He inquired
as to how Alaska stands as far as the contribution rates
compared to the other states with revenue versus expenditure.
MS. HARBOUR answered that she could speak to TVEP, but she could
not speak to the unemployment insurance program, and she did not
know the answer to that question.
REPRESENTATIVE KNOPP reiterated his request for the unemployment
rates, employee/employer total contribution rates, and how
Alaska compares to the other states. Obviously, he commented,
Alaska is substantially low in the benefits section. He asked
how Alaska rates in terms of contribution.
MS. HARBOUR said she would look into the contribution rates. In
response to Representative Josephson, she said she received a
message that Alaska is 39th in the United States per maximum
weekly benefits.
3:48:52 PM
REPRESENTATIVE WOOL surmised that Alaska is one of the three
states wherein the employee pays into the unemployment insurance
contribution, and asked whether the other states are all
employer only.
MS. HARBOUR said that Representative Wool was correct, for all
of the other states it is solely employer contributions.
3:49:22 PM
REPRESENTATIVE BIRCH referred to STEP and TVEP, and asked
whether STEP is the same dollar magnitude, for example, if it
was $142 million for employee unemployment insurance
contributions going to TVEP, and whether it was roughly the same
for STEP.
MS. HARBOUR answered that she did not run those numbers, but
opined that it is less. The STEP contribution is 0.1 percent
and TVEP is 0.16 percent, possibly two-thirds, she said.
3:50:37 PM
REPRESENTATIVE ZACH FANSLER, Alaska State Legislature, in
response to Representative Knopp, said that a quick internet
search indicated Pennsylvania employees contributes 0.07
percent, and New Jersey employees contribute 0.3825 percent
according to the 2016 Fast Wage and Tax Facts.
3:51:26 PM
REPRESENTATIVE KNOPP asked what Alaska's employee/employer
combined contribution rate is.
REPRESENTATIVE FANSLER replied that the Alaska employee
contribution is 0.5 percent, and the employer contribution is
1.01 percent.
3:52:31 PM
REPRESENTATIVE JOSEPHSON commented that he agrees with
Representative Birch and said the line item on a paycheck has
the unemployment insurance, and it should say "UI, TVEP STEP."
That would be truth in description, he described, but it is a
policy call about whether, why, or how much to fund through
this. This legislation is about something quite different, he
related that it is about extending a program that does many
things besides TVEP. He noted that he does not have children,
but as part of the social compact, he invests some of his
property taxes in public schools, police officers, and so forth,
"and I am okay with that." This is the way the world often
works, and he described it as a sharing of responsibility.
3:54:08 PM
REPRESENTATIVE STUTES offered that she is in full support of the
bill and opined that the committee members have paid into
unemployment insurance as an employee or employer. She said she
is happy to know that at least some of that money is going to
retrain people that she could possibly use in her business.
Alaska is "pulling up the rear" in trained individuals, and
vocational training particularly, such as plumbers, or
refrigeration operators for the seafood processing plants, she
commented.
3:55:19 PM
REPRESENTATIVE KNOPP related that he is also a fan of vocational
training, especially because Alaska is large and diverse, and
the local communities decide which type of vocational training
best suits its needs geographically. He said he does not
disagree with Representative Birch and the funding mechanism
could be debated at another time, but in some manner it will be
funded and right now he doesn't see a better option.
3:56:01 PM
REPRESENTATIVE WOOL moved to report HB 141, labeled 30-LS0551\A,
out of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, HB 141
passed from the House Labor and Commerce Standing Committee.
3:56:49 PM
The committee took an at-ease from 3:56 p.m. to 4:00 p.m.
HB 132-TRANSPORTATION NETWORK COMPANIES
4:01:00 PM
CHAIR KITO announced that the final order of business would be
HOUSE BILL NO. 132, "An Act relating to transportation network
companies and transportation network company drivers."
4:01:26 PM
REPRESENTATIVE WOOL, as prime sponsor, presented HB 132 and
described the bill as timely after passing HB 108 out of
committee today wherein the members agreed it is time to get
onboard with the modernization of society. He explained that
"ridesharing" is a platform used to obtain a ride somewhere
through an application (app) on a smart phone and passengers
hire private individuals to drive them from point A to point B.
Other aspects of society have modernized due to digital
technology, which includes: Airbnb is accessed through a smart
phone and people pay the homeowner to stay in their home for a
certain amount of time for a certain amount of money; Car2go
parks cars in different areas and with the appropriate card a
person is able to get into that car, drive it around, park it
later, and not go to a typical car rental counter; traveling is
conducted online; and ridesharing. Ridesharing companies can
include: Uber, Lyft, Side Car Rentals, Car Rental at Geraldton
(GET), and many more with different specialties. He pointed out
that these drivers are independent contractors and do not
receive worker benefits, similar to taxi cab drivers.
Ridesharing is available in 49 states, 20,000 people in Alaska
have the Uber app on their phone, and 60,000 people coming into
Alaska last year attempted to open their app.
4:05:23 PM
REPRESENTATIVE WOOL advised that the upside is that
transportation network companies (TNCs) will help the economy,
as follows: it will provide more income to people looking to
supplement their income; it is one of the few jobs the military
can be involved in during their off-time; it stimulates the
economy especially in downtown areas; it is good for public
safety because less people are driving under the influence; and
people are more prone to go out and spend money. He described
as follows: it is better service than conventional taxis and
studies have shown that where ridesharing has come in, more
people are taking rides and more areas are served because
drivers tend to drive where they live; ridesharing is generally
50 percent less than conventional taxis; ridesharing is
convenient and easy because the app is used rather than a phone
call. He explained that combined with ridesharing are other
products, such as a parent app wherein the parents enable their
children to get a ride and the children can be tracked.
4:07:29 PM
REPRESENTATIVE WOOL advised that carpooling is convenient with
the ridesharing app because a person can opt to share the ride
with another individual so both rates go down, and it is good
for the elderly or disabled individuals who may not be able to
handle money because it is set up on a person's individual phone
and cash is not involved. The purpose of this is not in any
manner to end taxi cabs, he stressed, having transportation
network companies (TNCs) in an area will increase paid riders
and it actually augments taxis cabs. Currently, he offered,
many taxis cabs are adapting and using similar apps with the
same technology as ridesharing, and possibly taxi cabs will
specialize and perform certain types of rides. He added that
taxi cabs can still be hailed which cannot happen with TNCs, and
taxi cabs will always be needed. He described that TNCs are in
every other state in the country, and this is part of the
evolution of technology and modernization of society.
4:09:29 PM
REPRESENTATIVE BIRCH commented that this legislation is well-
timed and from a security standpoint, the traveler is able to
see the driver, when they will be picked up, and so forth.
Pushback in some circles has been the quality of the ride,
security, and timeliness, he said.
4:10:17 PM
REPRESENTATIVE KNOPP referred to the comment that TNCs existed
in Anchorage, and asked why it was no longer available. He also
asked why legislation is needed at the state level to allow
TNCs.
REPRESENTATIVE WOOL said he does not live in Anchorage and he
read in the newspaper that [Uber] came in as a trial project
with the Municipality of Anchorage, which has a regulated taxis
cab system, and Anchorage tried it out as a pilot project. As
far as the statewide legislation, he noted, there is statewide
legislation in 38 states and Wyoming just passed the legislation
a week or so ago. He opined that Washington State just passed a
version on their Senate side and, hopefully, it is about to pass
the legislature. He related that it is just too hard for the
ridesharing companies to have different rules and regulations in
every single municipality; therefore, a uniform system
throughout the state was preferred.
4:12:26 PM
LAURA STIDOLPH, Staff, Representative Adam Wool, Alaska State
Legislature, advised that when Uber had the pilot program in
Anchorage, it was operating without an exemption from the Alaska
Workers' Compensation Act, and this legislation takes care of
that issue.
REPRESENTATIVE KNOPP asked if the issue at that time was whether
TNC drivers were independent contractors or employees.
MS. STIDOLPH answered yes, and she said this bill clarifies that
they are independent contractors exempt from the Alaska Workers'
Compensation Act, much like taxi cab drivers.
4:13:15 PM
REPRESENTATIVE KNOPP asked whether taxi cabs are regulated at
the state or local level.
MS. STIDOLPH replied that taxi cabs are municipally regulated in
Anchorage and "they do have harder regulation there." She said
that there is some regulation in Juneau and Fairbanks, but not
as much as in Anchorage where there are medallions. A state
policy rather than municipal policy is necessary because the new
technology requires a clear set of rules that is not patch
worked around the state. She explained that TNC drivers cross
municipal borders from community to community and multiple
municipal regulations could cause problems.
REPRESENTATIVE KNOPP asked how to level the playing field, how
would the committee allow municipalities to not regulate one
travel group and regulate the other group. He said he likes the
bill and would like to see TNCs here, but only on a level
playing field.
MS. STIDOLPH advised that Anchorage is de-regulating its taxi
cab system in five years and this bill aims to state regulate.
In a year or two, if municipalities are "having that much of a
problem with TNCs then we can go back into statute and perhaps
change it," she said.
4:15:22 PM
REPRESENTATIVE JOSEPHSON surmised that part of the hope is to
have a system that mirrors a taxi cab system, in the respect of
not being an employee but rather self-employed. The
Municipality of Anchorage, for example, requires that taxi cabs
have a $100,000 per person bodily injury coverage, $300,000
aggregate, and $50,000 per occurrence. He referred to HB 132,
page 6, lines 7-8, wherein "there is an opportunity where a
person could be not on a prearranged ride but sort of in a
position, I guess psychologically or physically, to take a
prearranged ride." He asked whether the insurance rates, given
that this is a form of commercial carry, shouldn't be somewhat
higher than is indicated on page 6, lines 9-11.
4:16:43 PM
REPRESENTATIVE WOOL opined that Representative Josephson was
referring to the different periods of the status of a driver for
a TNC, such as period 1, period 2, period 3. Period 1, he
explained, means the driver has the app on their phone open and
they can be in their car, parked in the parking lot, driving, or
at their house. Period 2, he explained, is when someone
requests a ride and the driver accepts the ride. At that point
the coverage goes up to $1 million liability and $1 million
insured/under-insured motorists, which is considerably higher
than the requirement for a taxi cab in Alaska. Period 3, he
explained, is when the passenger gets into the car and the car
is still covered at the $1 million level. Any driver for a TNC
company must have their own valid and verified insurance, and if
the driver loses their insurance for some reason, they lose
their driving privileges with the TNC. That being said, he
commented, the TNC will provide, if needed, the state minimum
requirement for all drivers in the State of Alaska.
4:19:25 PM
REPRESENTATIVE JOSEPHSON asked why TNCs would purchase insurance
for people who are not their employees.
REPRESENTATIVE WOOL responded that the contracted drivers must
purchase their own insurance, the TNCs have a policy above and
beyond the driver's insurance, especially in periods 2-3.
Drivers must meet the state insurance minimum but some may
purchase in excess of that requirement, and insurance companies
offer a product specifically for TNC drivers. He said that Ms.
Stidolph received a letter from her insurance company inquiring
as to whether she was a TNC driver, and if so, it would charge
an extra of $5 - $8 per month. He opined that TNCs buy the
insurance for extra protection in the event extra insurance is
necessary.
4:20:48 PM
REPRESENTATIVE JOSEPHSON commented that it is curious that TNCs
would afford this benefits to someone they want to be detached
from. He asked whether there are regulations in other states
allowing the drivers to organize, and whether the TNCs have
essentially tolerated that sort of regulation and worked
consistent with the regulation.
REPRESENTATIVE WOOL, in response to Representative Josephson's
first question, advised that taxi cab companies also buy
insurance for their independent contractor drivers. He opined
that the City of Seattle passed an ordinance allowing drivers to
organize and he does not believe they have yet organized. A
sub-group of drivers in New York City, Uber Black for example,
are employees of a separate company that uses the Uber platform
so they may be organized in a different manner. Technically, he
said, they are employees of a different company and are more
professional drivers.
4:22:40 PM
CHAIR KITO surmised that Uber Black is not your grandparent's
Uber.
REPRESENTATIVE WOOL agreed, and he said that only a small
percentage of the drivers in Seattle actually want to organize.
An issue about organizing these drivers is that many are part-
time, and as far as all of the issues that go into organizing
employees, such as sick time and vacation time, which is usually
ascribed to full-time employment. He opined that there are not
any organized TNC drivers, but representatives from the
companies can validate his statement.
4:23:37 PM
CHAIR KITO opened invited testimony and advised that public
testimony would not be taken today.
4:23:53 PM
ANNABEL CHANG, Director of Public Policy, Lyft, offered support
for the legislation and explained that the Lyft ridesharing app
technology connects people with efficient and safe rides by
downloading, and registering the app on a person's smart phone,
and requesting a ride with the tap of a button. She said that
Lyft utilizes technology to provide consumers with new levels of
transparency and accountability. Every Lyft ride is tracked via
GPS, she explained, and once the app is open, passengers are
provided with the driver's picture, user ratings of the driver,
the license plate, make and model of the vehicle, and passengers
can track the car; the drivers receive a photo and the name of
their passenger. She remarked that there is a function in the
app where an ETA can be sent to the passenger, and the passenger
can send an ETA to their family or colleagues in a business
meeting. Payments through Lyft are entirely digital, thereby
enhancing security; every passenger automatically receives a
digital receipt with the information of their driver, and no
cash changes hands. Subsequently, she said, every passenger and
driver have, the opportunity to rate each other, and after every
ride there is instantaneous feedback. Lyft is more than simply
a ridesharing app because it offers unique and flexible economic
opportunities, such that, in 2016 drivers on the Lyft platform
earned $1.5 billion and over $150 million in tips, and Lyft
passengers increased their consumer spending by $750 million in
one year. Currently, 39 states across the nation have passed
comprehensive statewide legislation to regulate Lyft in a safe
and robust manner, almost identical to HB 132. Lyft hopes that
Alaska will join that effort and requests the committee's
support for HB 132, she said.
4:27:49 PM
MITCHEL MATTHEWS, Senior Northwest Operations Manager, Uber
Technologies, offered support for the legislation and the
opportunity to return its flagship product back to Alaska. He
explained that over 20,000 Alaskans currently have the Uber app
downloaded on their smart phone, and in 2016, 60,000 individuals
opened that app seeking a ride using the Uber platform, be it
tourists, residents, or visitors to the state. This legislation
provides appropriate safeguards for consumers and a clear,
precise, and predictable operational framework for transport
network company (TNC) drivers and riders across the State of
Alaska. The legislation contains an insurance model that has
been adopted in essentially the same form in over 40 states, and
that language has the support of the largest property and
casualty insurance trade groups in the United States. Further,
he said, this bill provides a clear framework to ensure public
safety because it creates a certainty to conduct business
without the need to navigate a patchwork of local regulations
that may differ from city to city. It further enhances access
to transportation in and around rural communities as well as
creating new small businesses and an income stream for families
and individuals, he said.
4:29:23 PM
MR. MATTHEWS explained that residents in the Matanuska-Susitna
Valley who commute and travel from Anchorage would benefit from
the bill's clear and concise framework. Uber riders request a
ride with the touch of a button and after a trip match is made
between the rider and driver, the name, photograph, license
plate and contact details, which are anonymized, are shared
between each individual. During the ride a rider may share
their location and trip with their family members, thereby,
providing an enhanced safety feature, and there is an
accountability component wherein each rider and driver rate each
other through the app with direct feedback. Independent
contractors value the flexibly of Uber's model, and he said that
over 80 percent of the drivers drive less than 10 hours per week
because it allows drivers to work when they want for as long as
they want, drivers can work with competitors, and drivers can
drive in the area of their choice. He explained that Uber's
driver verification process includes an extensive screening
process for each applicant via a third-party approved by the
National Association of Background Check Screeners. The
screening process includes: social security numbers; driving
records; personal information - full name, date of birth, social
security number, valid driver's license, bank account
information, vehicle registration; and Uber does not allow
anyone on the National Sex Offender Public Website maintained by
the United States Department of Justice to drive for the
company.
4:31:31 PM
REPRESENTATIVE SULLIVAN-LEONARD asked whether a ridesharing
driver would be required to sign up through the City and Borough
of Juneau (CBJ) for a business license, background check, and
drug testing, and further asked whether the drivers would be
applicable for a sales tax application.
MR. MATTHEWS responded that the legislation itself provides
background check language and requirements so when an individual
signs up to drive with Uber, Lyft, or others, the third-party
the TNC works with would be responsible for conducting that
background check and adjudicating the information. He advised
that drivers are independent business owners and a business
license for Juneau, for example, would be the state business
license where they register their intent to operate in Juneau,
or a CBJ business license would be theirs to obtain.
REPRESENTATIVE SULLIVAN-LEONARD surmised that the drivers would
have to follow the rules as to sales tax, collections, and
payment to the CJB.
MR. MATTHEWS opined that the bill sponsor is crafting language
with respect to sales tax.
4:33:29 PM
CHAIR KITO requested Mr. Matthews to describe the vehicle
inspection requirements for a driver, and how the requirements
might be accomplished in an area without a mechanic, for
example.
MR. MATTHEWS answered that Uber requires a 19-point vehicle
inspection to ensure that the vehicles are mechanically able to
provide a service, and "we would review it again. In areas of
Alaska, as takes place in areas of Montana, Uber may require
individuals signing up to take photographs or videos of their
vehicles, Uber would then have the photographs and videos
reviewed by an individual who would ensure that the vehicle does
meet the requirements to drive and pass an inspection. The
statewide framework is important, he described, because it
allows a person who signs up in a community without a mechanic
the opportunity to drive.
4:34:49 PM
REPRESENTATIVE JOSEPHSON surmised that the TNCs have a means in
other jurisdictions to pay a sales tax.
MR. MATTHEWS related that in some jurisdictions there would be
no taxes levied against the TNC, and a state sales tax exists in
other areas of the state. He deferred to the bill sponsor for
clarity.
REPRESENTATIVE JOSEPHSON asked what percentage of people
screened for background checks that are rejected.
MR. MATTHEWS advised that he does not have data on that issue.
The requirements listed in the bill, he explained, are the
requirements people would be adjudicated against, the
determining factor as to whether a person could drive on the
Uber platform.
REPRESENTATIVE JOSEPHSON referred to personal insurance policies
and the insurance policies provided by the TNC, and asked
whether both policies would cover an accident. He further asked
which insurance policy would take priority.
MR. MATHEWS deferred to Jared Eber.
4:36:45 PM
JARED EBER, Attorney, Uber Technologies, explained that
individual drivers purchase specific insurance through carriers
offering a ridesharing product, and in addition, TNCs are
required to have their own insurance as well. The driver's
specific ridesharing insurance policy would respond first, and
Uber's insurance policy would respond on top of that for any
additional amounts the driver's specific ridesharing insurance
would not cover, he explained. The TNCs coverage would be
primary in the event the driver's insurance did not provide
coverage, he said, and would start at dollar one.
4:38:27 PM
REPRESENTATIVE KNOPP noted that the drivers would be independent
contractors and would go to the Division of Licensing for
business licenses, and asked how many applications
Representative Wool expected to be submitted.
REPRESENTATIVE WOOL said he was unaware of the projection for
the number of TNC drivers, but there were 80 drivers in the
pilot program in Anchorage.
REPRESENTATIVE KNOPP offered that the Division of Licensing
would be substantially busy with the licensing of these
independent contractors. He then reiterated concern regarding
little to no local control, and asked whether, when complaints
are filed, the person would most likely call the local police or
someone at the state level. He asked how the complaints would
be addressed, especially when the local municipalities do not
have authority to regulate and yet get stuck handling some of
the complaint calls.
REPRESENTATIVE WOOL answered that there had not yet been a
discussion regarding an abundance of complaints. He referred to
the local control issue and said that Anchorage has a medallion
system which will expire. He commented that he was unsure
whether the Anchorage control system was working well and that
he assumed those working with the control system possibly would
prefer to be out of the taxi cab business.
REPRESENTATIVE KNOPP explained that he was just putting his
thoughts out there for future conversations. He referred to the
Kenai Peninsula Borough's sales tax and commented that the Kenai
Peninsula Borough "does not do business licensing," but the
drivers would still be required to register and collect a sales
tax as independent contractors. He said that he assumed under
this bill there is no exemption.
REPRESENTATIVE WOOL related that the language is currently being
crafted incorporating local municipal sales tax in a form that
the driver will pay to the municipality.
4:41:50 PM
REPRESENTATIVE BIRCH offered his understanding that if there is
a complaint with a driver or any issue, it is loaded up
immediately and is shared to whoever is handling that ride
distribution. He opined that it is a two-way street and if a
passenger is overly drunk, the driver has protections in that
"they can basically measure up the potential cab ride as well."
4:42:46 PM
REPRESENTATIVE WOOL explained that the rating is mandatory and
before a person's next ride, they have to rate [the last ride].
He said that the ratings and comments are taken seriously for
the driver and the passenger, and if someone receives bad
ratings "they take them off the system" for drivers and
passengers.
REPRESENTATIVE BIRCH surmised that from a business standpoint,
there is always accountability through the business model.
REPRESENTATIVE WOOL agreed, and he said that he was unaware how
often complaints go to the local or state government level, as
mostly they are handled internally.
4:44:18 PM
CHAIR KITO commented that society will see an adaptation for any
of these types of new technologies coming forward.
[HB 132 was held over.]
4:45:09 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:45 p.m.