Legislature(1997 - 1998)
01/24/1997 03:05 PM House L&C
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HB - 18 STATE PROCUREMENT DISABILITY PREFERENCES
Number 2406
REPRESENTATIVE JEANNETTE JAMES came forward to present testimony on
HB 18. She stated that current law for the disabled gives them a
preference as an entity. When this original legislation was
written there was a provision which required qualifying disabled
people to operate as sole proprietors. She guessed that the
drafters never visualized that two or more disabled people would
want to do business together. What this current legislation does
is to allow 100 percent disabled corporations and partnerships to
be eligible for disabled preferences.
TAPE 97-2, SIDE B
Number 000
REPRESENTATIVE JAMES stated that the administration does support
this bill. It has a zero fiscal note and she offered to answer any
questions.
Number 046
REPRESENTATIVE COWDERY referred to the zero fiscal note and noted
that if they do allow a preference wouldn't this mean an expense to
the state.
REPRESENTATIVE JAMES noted that a fiscal note is required when
additional costs would have been included initially or not covered
already in some other existing way. She suspected that this
wouldn't cause an additional charge to allow these people into the
system. When the original preference was given a fiscal note was
already included.
Number 097
REPRESENTATIVE HUDSON referenced a letter in the bill packet dated
April 10, 1995 from Ms. Bannister and asked if all legal problems
had been cleared up in this final draft.
REPRESENTATIVE JAMES responded affirmatively.
Number 131
CHAIRMAN ROKEBERG interjected that the letter which Representative
Hudson noted had referred to an entire global issue of six months
as a matter of residence. He believed that legislative counsel
referred to this in the context of the entire statute, not
particularly this provision brought forward by Representative
James. Ms. Bannister took the liberty of bringing this up as a
potential constitutional issue as it relates to the six months
issue and the equal protection clause. It was a letter drafted to
put the bill sponsor on notice that there could be potential
ramifications of the statute, but not certainly Representative
James' requested amendment to this statute itself.
REPRESENTATIVE SANDERS asked about the fiscal note issue. He added
that there is an extra cost to the state when a contract is let
under this legislation. "If you pay an extra 10 percent for a
contract that's an extra expense to the state, right?" If the
legislation is broadened so that other individuals get this
preference then there will be a bigger expense, even if this was
factored into the previous legislation.
Number 228
REPRESENTATIVE JAMES responded that when the original bill went
through with a preference and they visualized what the potential
was for severally disabled people who might be in business and
qualify, more people have not been added to this list. What has
been added is a different way of doing business. She's not sure
what the previous fiscal note was, but because of the known numbers
of disabled individuals who might be in business within Alaska, a
fiscal note would have been prepared.
Number 298
DUGAN PETTY, Director, Division of General Services, Department of
Administration came forward to testify. He noted that this bill
was essentially the same as the one supported in this committee
last year. The Department of Administration supports this bill.
This bill corrects an oversight with the initial legislation where
it's allowed for a bidder who employs persons with disabilities as
long as they are a sole proprietor, and qualified through the
Alaska's bidder preference to receive a 10 percent preference.
What the present legislation effectively does is discriminates in
those same situations where a sole proprietor, partnership or a
corporation exists under the same circumstances.
MR. PETTY continued with respect to the division's fiscal note and
stated that there was no additional cost per se. No additional
people will be hired to administer this law if passed.
MR. PETTY continued that Representative Sanders did have a point as
to the preferences on the books, that there was some financial
consequences to administering them in the overall cost to the
contract. The legislature has deemed that from a policy standpoint
the benefits of those preferences and fostering certain types of
Alaska businesses are worth this additional incremental cost. The
division doesn't show this in its fiscal note because the cost of
awarding this bid is simply not a cost which comes back to the
division. The division has seen in this particular preference a
bit more activity over the last couple of years and some
circumstances where the costs have been demonstrably different than
what the cost would have been without it, but it is their job to
administer the division in accordance with the law. There is not
a significant amount of additional cost associated with this, but
they haven't done any projections.
Number 425
REPRESENTATIVE HUDSON stated that he doesn't see how they can
attribute any additional costs because they don't know what's going
to come up. It may mean simply trading off a sole proprietor for
a 100 percent owned corporation which means an expanding of the pie
of those who can seek and qualify for the 10 percent disabled
bidder's preference.
Number 515
CHAIRMAN ROKEBERG stated that he has looked at the statute AS
36.31.70, and subsection (e) specifically. When this new
legislation goes into effect it seemed that in reading the entire
statute there could already be a 5 percent state residency bid
preference. He confirmed that this was correct. He also
referenced under subsection (c) a provision which calls for
offering services through an employment program which offers a 15
percent bidders preference. He asked what this program was.
MR. PETTY responded that an employment program is a successor to
terminology which they used to call a sheltered workshop. An
employment program is a program that has been certified by either
the Division of Vocational Rehabilitation or the Division of
Developmental Disabilities Program. This bill doesn't allow for an
employer to receive both the preference for an employer who employs
someone with a disability and the employment program preference.
It would be one or the other. This 10 percent disabled bidder
preference is added to the 5 percent Alaska bidder preference. In
order to qualify for this someone must first qualify for the 5
percent Alaska bidder preference.
MR. PETTY went on to note his understanding that someone can't have
the 15 percent employment program preference in addition to the 10
percent disabled bidder or an employer who employs disabled bidder
preference. These two can never be connected. The maximum benefit
anyone can receive is 20 percent.
Number 681
DUANE FRENCH, Director, Alaska Division of Vocational
Rehabilitation, Department of Education, testified by
teleconference. Mr. French stated that he supports this bill
because it will expand opportunities for businesses that are wholly
owned by individuals with disabilities to qualify under the bidders
preference and for individuals with disabilities who have formed a
partnership to qualify under the bidders preference. This
legislation will expand vocational opportunities for people with
disabilities. He wishes he could tell the committee that there are
a lot of businesses owned by people with disabilities which are
operating successfully and would qualify under the bidders
preference, but unfortunately that's not the case. There are only
a few businesses and he didn't think they needed to be overly
concerned about there being a flood of businesses wholly owned by
people with disabilities who would qualify under this preference,
but it will make it possible for those few businesses which are
fully owned by people with disabilities.
MR. FRENCH stated that there are businesses which would qualify,
but not very many. He knew of two or three specifically right now,
but he said this didn't mean there weren't more which they were not
aware of. He added that the partnership provision only applies to
partners who each have a disability and would not apply to a
husband and wife team where one or the other has a disability.
Number 954
MR. FRENCH continued to address subsections 1 and 2 in relation to
what defines disability. The same definition used by the Americans
with Disabilities Act would apply to this legislation and would
include persons with HIV.
Number 1032
REPRESENTATIVE HUDSON made a motion to move HB 18 out of committee
with individual recommendations with an accompanied zero fiscal
note and asked for unanimous consent. Hearing no objections, it
was so moved.
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