Legislature(2003 - 2004)
05/16/2003 07:48 AM House FSH
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 22-COMMERCIAL FISHING PERMIT BROKERS CHAIR SEATON announced that the first order of business would be HOUSE BILL NO. 22, "An Act relating to commercial fishing permit brokers; and providing for an effective date. [Before the committee was Version Q, 23-LS0133\Q, Utermohle, 3/18/03. In the committee packet was a new proposed committee substitute (CS), Version V.] CHAIR SEATON noted that while the committee was awaiting a quorum, discussion of HB 22 would begin. Number 0086 LINDA SYLVESTER, Staff to Representative Bruce Weyhrauch, Alaska State Legislature, testified on behalf of Representative Weyhrauch, sponsor of HB 22, and introduced the proposed changes to the bill, saying that Version V incorporated a substantive change found [under Sec. 16.10.570] on page 3, line 23, paragraph (b). She said that for the protection of consumers, use of an escrow account was sought for situations in which funds were being handled by the broker. She noted that previous testimony had indicated that the cost of the escrow account would be onerous in some situations, as it would cost between $85 and $225. Number 0200 MS. SYLVESTER continued that there had been discussion of setting a floor or ceiling so that the small transactions would not be required to use an escrow account but that approach seemed overly complex in the final analysis. A result of discussions with several brokers, including John Mitchell and Stuart Ricky (ph) was that there ought to be a way for people to not use an escrow account. She said there are situations in which a cashier's check is being held, the check is in the name of the seller and the broker holds that check in a file; the feeling is that this is a secure way of transacting. Number 0309 MS. SYLVESTER explained the changes incorporated in paragraph (b), saying that if a broker is going to negotiate the money - to hold it and put it into a separate account - he/she must use an escrow account. However, if the broker is only going to hold a cashier's check, then he/she is allowed to do that, and that is "thought to be an adequate protection for that". She said that occupational licensing provides a modest protection. The fiscal note on occupational licensing was amended by the director and went from a high to a low number for a biennial license, with the cost being borne by the brokers themselves. This would provide some protection for consumers in the state because brokers would be subject to loosing control. The sponsor's hope is that the changes could be incorporated before the end of this session so that next year, HB 22 could be taken up by the House Resources Standing Committee. Number 0457 CHAIR SEATON referred to page 3, line 17, and mentioned that "handle or facilitate" had been changed to "broker", which had been conceptually defined as being an agent for others in negotiating contract purchases or sales in return for a fee or commission, for example. He questioned whether the intention was to remove the verb "broker". Number 0565 MS. SYLVESTER said her focus had been on the substantive change made in paragraph (b) [page 3, line 23], and deferred to the committee aide and to the materials to which Chair Seaton was referring. CHAIR SEATON noted that a motion could be made at the appropriate time to change "handle or facilitate" to "broker" throughout the bill. Number 0635 REPRESENTATIVE OGG reminded the committee that this had previously been suggested by Representative Berkowitz. CHAIR SEATON said that when a quorum was present, Version V needed to be adopted, and after that [Conceptual Amendment 1] and a definition of broker could be addressed. Number 0684 JOHN MITCHELL, Alaska Permit Services, Bellingham, Washington, said he had been in the brokerage business for over 20 years and was also been a fisherman in Bristol Bay. He provided the following testimony: Trust, confidence, a reliance or resting of the mind on the integrity, justice, or other sound principal of another person. I believe the public is deserving of trust. The time has come to provide the public the assurance of trust when dealing with the brokerage industry. To ensure that each party will receive what they bargained for. The issue of trust has once again become a matter of attention due to the neglect of one within the brokerage industry that caused the public harm and broke the law. It may seem difficult to create a cure-all solution. However, to take the initiative to create some simple forms of safeguards surely is warranted today - occupational licensing for this industry which is currently un-regulated. Independent escrow account for the deposit and disbursement of all funds, unless the parties mutually agree for the substitution of a cashier's check as the form of payment, made payable to the seller and to be held and handled by the broker, under written instructions of the parties: I strongly endorse these two proposed recommendations and requirements contained in this bill. CHAIR SEATON announced that public testimony was closed and stated that HB 22 would be put aside until a quorum was present. HB 22-COMMERCIAL FISHING PERMIT BROKERS Number 2499 CHAIR SEATON returned attention to HOUSE BILL NO. 22, "An Act relating to commercial fishing permit brokers; and providing for an effective date." [A quorum was now present.] Number 2522 REPRESENTATIVE OGG moved to adopt Version V [23-LS0133\V, Utermohle, 5/15/03] as a work draft. There being no objection, Version V was before the committee. CHAIR SEATON said [Conceptual Amendment 1, discussed earlier in the meeting] would change "handle or facilitate" to "broker" throughout the bill. REPRESENTATIVE OGG said, "Yes, the verb, broker." CHAIR SEATON said, "Thank you, and then of course a definition of broker will also be added and clarified." REPRESENTATIVE OGG asked if this would be a definition of the verb, "to broker." CHAIR SEATON confirmed this to be so. [No formal motion was made, but Conceptual Amendment 1 was treated as adopted.] MS. SYLVESTER explained the changes [previously discussed in committee, addressing the changes being made from Version Q to Version V] to Representative Wilson. She said the substantive change was addressed in paragraph (b) on page 3, beginning on line 23. She said that at the last hearing there was concern that requiring an escrow account for each and every situation might be onerous and not appropriate. She said if the broker is going to hold and negotiate the money, it must be put into an escrow account where it will be safe. However, if the purchaser provides the broker with a cashier's check in the name of the seller, he/she may hold that in a file, for example, and that would be considered to be safe and secure. Ms. Sylvester stated that there are two options and that a floor/ceiling was not being contemplated. CHAIR SEATON added that occupational licensing is involved at the lowest level so the fiscal note is only $3,000. MS. SYLVESTER added that the amount would be $240 for a two-year license. Number 2615 REPRESENTATIVE OGG moved to report CSHB 22, Version 23-LS0133\V, Utermohle, 5/15/03, as amended, out of committee with individual recommendations and the accompanying fiscal note. There being no objection, CSHB 22(FSH) was reported from the House Special Committee on Fisheries.
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