04/09/2012 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB326 | |
| HB202 | |
| HB259 | |
| SB122 | |
| SB51 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 326 | TELECONFERENCED | |
| += | HB 202 | TELECONFERENCED | |
| += | HB 259 | TELECONFERENCED | |
| += | HB 266 | TELECONFERENCED | |
| += | SB 122 | TELECONFERENCED | |
| + | SB 51 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 9, 2012
3:23 p.m.
MEMBERS PRESENT
Representative Kurt Olson, Chair
Representative Craig Johnson, Vice Chair
Representative Dan Saddler
Representative Steve Thompson
Representative Lindsey Holmes
Representative Bob Miller
MEMBERS ABSENT
Representative Mike Chenault
COMMITTEE CALENDAR
HOUSE BILL NO. 326
"An Act requiring health care insurers to offer a child-only
policy; and providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 202
"An Act relating to the sale of food products by the producer to
the consumer."
- HEARD & HELD
HOUSE BILL NO. 259
"An Act establishing procedures and guidelines for auditing
pharmacy records; and providing for an effective date."
- HEARD & HELD
COMMITTEE SUBSTITUTE FOR SENATE BILL NO. 122(L&C)
"An Act relating to research on and examination of titles;
relating to residency requirements for title insurance limited
producers; relating to real estate transfer fees; and providing
for an effective date."
- MOVED HCS CSSB 122(L&C) OUT OF COMMITTEE
CS FOR SS FOR SENATE BILL NO. 51(L&C)
"An Act relating to the operation of vending facilities on
public property."
- TABLED
HOUSE BILL NO. 266
"An Act relating to the practice of naturopathy; and providing
for an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
BILL: HB 326
SHORT TITLE: CHILD-ONLY HEALTH CARE COVERAGE
SPONSOR(s): REPRESENTATIVE(s) GUTTENBERG
02/17/12 (H) READ THE FIRST TIME - REFERRALS
02/17/12 (H) L&C, FIN
04/04/12 (H) L&C AT 3:15 PM BARNES 124
04/04/12 (H) Heard & Held
04/04/12 (H) MINUTE(L&C)
04/06/12 (H) L&C AT 3:15 PM BARNES 124
04/06/12 (H) Heard & Held
04/06/12 (H) MINUTE(L&C)
04/09/12 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 202
SHORT TITLE: SALES OF FOOD BY PRODUCERS TO CONSUMERS
SPONSOR(s): REPRESENTATIVE(s) T.WILSON
03/23/11 (H) READ THE FIRST TIME - REFERRALS
03/23/11 (H) L&C, RES
03/21/12 (H) BILL REPRINTED 3/21/12
03/21/12 (H) L&C AT 3:15 PM BARNES 124
03/21/12 (H) Heard & Held
03/21/12 (H) MINUTE(L&C)
04/06/12 (H) L&C AT 3:15 PM BARNES 124
04/06/12 (H) Scheduled But Not Heard
04/09/12 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 259
SHORT TITLE: PHARMACY AUDITS
SPONSOR(s): REPRESENTATIVE(s) MUNOZ, P.WILSON
01/17/12 (H) PREFILE RELEASED 1/13/12
01/17/12 (H) READ THE FIRST TIME - REFERRALS
01/17/12 (H) L&C, FIN
02/27/12 (H) L&C AT 3:15 PM BARNES 124
02/27/12 (H) Heard & Held
02/27/12 (H) MINUTE(L&C)
03/16/12 (H) L&C AT 3:15 PM BARNES 124
03/16/12 (H) Heard & Held
03/16/12 (H) MINUTE(L&C)
03/26/12 (H) L&C AT 3:15 PM BARNES 124
03/26/12 (H) Heard & Held
03/26/12 (H) MINUTE(L&C)
04/02/12 (H) L&C AT 3:15 PM BARNES 124
04/02/12 (H) Heard & Held
04/02/12 (H) MINUTE(L&C)
04/06/12 (H) L&C AT 3:15 PM BARNES 124
04/06/12 (H) Scheduled But Not Heard
04/09/12 (H) L&C AT 3:15 PM BARNES 124
BILL: SB 122
SHORT TITLE: REAL ESTATE TRANSFER FEES/TITLE INSURANCE
SPONSOR(s): LABOR & COMMERCE
04/08/11 (S) READ THE FIRST TIME - REFERRALS
04/08/11 (S) CRA, L&C
01/24/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
01/24/12 (S) Heard & Held
01/24/12 (S) MINUTE(CRA)
01/31/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
01/31/12 (S) Moved CSSB 122(CRA) Out of Committee
01/31/12 (S) MINUTE(CRA)
02/01/12 (S) CRA RPT CS 4DP NEW TITLE
02/01/12 (S) DP: OLSON, KOOKESH, MENARD, WAGONER
02/02/12 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/02/12 (S) Heard & Held
02/02/12 (S) MINUTE(L&C)
02/21/12 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/21/12 (S) -- MEETING CANCELED --
02/23/12 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/23/12 (S) Moved CSSB 122(L&C) Out of Committee
02/23/12 (S) MINUTE(L&C)
02/24/12 (S) L&C RPT CS 5DP NEW TITLE
02/24/12 (S) DP: EGAN, GIESSEL, DAVIS, PASKVAN,
MENARD
03/14/12 (S) TRANSMITTED TO (H)
03/14/12 (S) VERSION: CSSB 122(L&C)
03/15/12 (H) READ THE FIRST TIME - REFERRALS
03/15/12 (H) L&C, JUD
04/04/12 (H) L&C AT 3:15 PM BARNES 124
04/04/12 (H) Heard & Held
04/04/12 (H) MINUTE(L&C)
04/06/12 (H) L&C AT 3:15 PM BARNES 124
04/06/12 (H) Scheduled But Not Heard
04/09/12 (H) L&C AT 3:15 PM BARNES 124
BILL: SB 51
SHORT TITLE: STATE VENDING LICENSES
SPONSOR(s): DAVIS
01/19/11 (S) READ THE FIRST TIME - REFERRALS
01/19/11 (S) L&C, FIN
02/16/11 (S) SPONSOR SUBSTITUTE INTRODUCED-REFERRALS
02/16/11 (S) READ THE FIRST TIME - REFERRALS
02/16/11 (S) L&C, FIN
03/08/11 (S) L&C AT 2:00 PM BELTZ 105 (TSBldg)
03/08/11 (S) Heard & Held
03/08/11 (S) MINUTE(L&C)
03/31/11 (S) L&C AT 2:00 PM BELTZ 105 (TSBldg)
03/31/11 (S) Moved CSSSSB 51(L&C) Out of Committee
03/31/11 (S) MINUTE(L&C)
04/01/11 (S) L&C RPT CS 3DP 1NR SAME TITLE
04/01/11 (S) DP: EGAN, DAVIS, MENARD
04/01/11 (S) NR: GIESSEL
01/20/12 (S) FIN AT 9:00 AM SENATE FINANCE 532
01/20/12 (S) Heard & Held
01/20/12 (S) MINUTE(FIN)
01/27/12 (S) FIN RPT CS (L&C) 4DP 2NR
01/27/12 (S) DP: HOFFMAN, THOMAS, EGAN, ELLIS
01/27/12 (S) NR: STEDMAN, OLSON
01/27/12 (S) FIN AT 9:00 AM SENATE FINANCE 532
01/27/12 (S) Moved CSSSSB 51(L&C) Out of Committee
01/27/12 (S) MINUTE(FIN)
02/08/12 (S) TRANSMITTED TO (H)
02/08/12 (S) VERSION: CSSSSB 51(L&C)
02/10/12 (H) READ THE FIRST TIME - REFERRALS
02/10/12 (H) L&C
04/09/12 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
REPRESENTATIVE TAMMIE WILSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as sponsor during the discussion
of HB 202.
KRISTIN RYAN, Director
Division of Environmental Health
Department of Environmental Conservation (DEC)
Anchorage, Alaska
POSITION STATEMENT: Testified and answered questions during the
discussion of HB 202.
KONRAD JACKSON, Staff
Representative Kurt Olson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented the changes to HB 259 on behalf
of the House Labor and Commerce Standing Committee, of which
Representative Kurt Olson is the chair.
DANA OWEN, Staff
Senate Labor & Commerce Committee
Alaska State Legislature
Juneau, Alaska.
POSITION STATEMENT: Testified on behalf of the sponsor, the
Senate Labor & Commerce Committee, Senator Egan, Chair, during
the discussion of SB 122.
ROGER FLOERCHINGER, President and Owner
Yukon Title Company, Inc.
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of SB 122.
KIM GLISSON, Vice President and General Manager
Alaska Escrow & Title Agency, Inc.
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 122.
CHRIS NEWBILL, Manager
Ketchikan Title Agency, Inc.
Ketchikan, Alaska
POSITION STATEMENT: Testified during the discussion SB 122.
CRYSTAL PELTOLA, Vice President and General Manager
Alaska USA Title Agency
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of SB 122.
TERRY BRYAN, Vice President and Manager
First American Title Company
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of SB 122.
HOWARD HANCOCK, Chief Title Officer
Fidelity National Title Insurance Company
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 122.
MICHAEL PRICE, President
Alaska Land Title Association;
Owner, Fidelity National Title Insurance Company
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 122
LINDA HALL, Director
Division of Insurance, Anchorage Office
Department of Commerce, Community & Economic Development (DCCED)
Anchorage, Alaska
POSITION STATEMENT: Answered questions during the discussion of
SB 122.
TOM OBERMEYER, Staff
Senator Bettye Davis
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Explained the changes in the CS for sponsor
substitute for SB 51(L&C), which passed the Senate.
LOREN KEMPTON
Project Manager
Inspirational Action, Inc. (IAI)
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of SB 51.
SHERRYLYN MORELL, Assistant Manager
Inspirational Action, Inc. (IAI)
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of SB 51.
GARY JAMES, Employee
Inspirational Action, Inc. (IAI)
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of SB 51.
CHERYL WALSH, Director
Division of Vocational Rehabilitation (DVR)
Department of Labor & Workforce Development (DLWD)
Juneau, Alaska
POSITION STATEMENT: Testified during the discussion of SB 51.
RICK RENAUD, Chief Executive Officer
Pentagon North, Inc. (PNI);
Chief Executive Officer,
Inspirational Action Inc. (IAI)
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of SB 51.
CAROL RENAUD
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of SB 51.
LYNNE KORAL
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of SB 51.
RICHARD GARDENHIRE, President
Alaska Independent Blind
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 51.
JIM SWARTZ
Alaska Independent Blind
Anchorage, Alaska
POSITION STATEMENT: Testified during the discussion of SB 51.
ACTION NARRATIVE
3:23:27 PM
CHAIR KURT OLSON called the House Labor and Commerce Standing
Committee meeting to order at 3:23 p.m. Representatives
Thompson, Saddler, Miller, Holmes, and Olson were present at the
call to order. Representative Johnson arrived as the meeting
was in progress.
HB 326-CHILD-ONLY HEALTH CARE COVERAGE
3:23:42 PM
CHAIR OLSON announced that the first order of business would be
HOUSE BILL NO. 326, "An Act requiring health care insurers to
offer a child-only policy; and providing for an effective date."
CHAIR OLSON related that this bill will be held over awaiting
additional information.
[HB 326 was held over.]
HB 202-SALES OF FOOD BY PRODUCERS TO CONSUMERS
3:24:24 PM
CHAIR OLSON announced that the next order of business would be
HOUSE BILL NO. 202, "An Act relating to the sale of food
products by the producer to the consumer."
3:24:46 PM
REPRESENTATIVE TAMMIE WILSON, Alaska State Legislature,
explained that HB 202 has been substantially changed and
disallows any food product that has an animal origins - raw or
heat-treated products - which will eliminate meats, seafood, and
dairy products. She pointed out that she went one step further
to disallow food products that require time or temperature
controls to keep foods safe for human consumption from being
sold by a producer [in a proposed committee substitute not taken
up]. She highlighted that the focus was narrowed to address
samples and food products and listing food products that could
be sold. She recapped that she would like the proposed DEC
regulations out prior to the farmers' markets begin this season.
She referred to research in members' packets that indicates some
markets start in April. She hoped the department would respond
with dates for the adoption of the proposed regulations.
3:25:53 PM
KRISTIN RYAN, Director, Division of Environmental Health,
Department of Environmental Conservation (DEC) reported that the
amendments to the Alaska food code under 18 AAC 31 are currently
at Department of Law (DOL) for a final review with the
regulations attorney, Steve Weaver. She has held some
conversations with the DOL so she is aware the department is
current working to review the proposed regulations.
CHAIR OLSON asked for an estimate of when the regulations will
be completed.
MS. RYAN explained the schedule, such that the DOL will complete
its review this week, the regulations will be returned briefly
to the DEC's Commissioner, before being submitted to the
Lieutenant Governor's office, and the regulations will be
finalized 30 days after filing.. She pointed out that during
that time the DEC will have time to work with the U.S.
Cooperative Extension Service (CES) offices to develop brochures
to prepare people for changes that will affect sellers.
3:28:15 PM
REPRESENTATIVE T. WILSON related that she would like to hold the
bill to allow her time to contact farmers' market sellers during
the legislative interim. She explained that she hopes people
will have time to utilize the new DEC regulations. She inquired
as to whether people will be subject to fines as these new, but
more friendly regulations go into effect. She asked for the
process the DEC will use to educate people.
3:28:43 PM
MS. RYAN reiterated that the department is already working with
the CES and the University of Alaska Fairbanks to develop
pamphlets and brochures to explain rules for the cottage food
industry, including what can be sold, the location of test
kitchens, and any items that need permitting. She characterized
the CES as an outreach arm of food preparedness. She advised
that as soon as the regulations are signed by the Lieutenant
Governor the DEC will be able to publicize them.
3:29:46 PM
CHAIR OLSON remarked that the sponsor is smiling.
[HB 202 was held over.]
HB 259-PHARMACY AUDITS
3:30:14 PM
CHAIR OLSON announced that the next order of business would be
HOUSE BILL NO. 259, "An Act establishing procedures and
guidelines for auditing pharmacy records; and providing for an
effective date."
3:31:04 PM
REPRESENTATIVE JOHNSON made a motion to adopt the proposed
committee substitute (CS), for HB 259, labeled 27LS0675\E,
Martin, 4/9/12, as the working document.
CHAIR OLSON objected for purpose of discussion.
3:31:25 PM
KONRAD JACKSON, Staff, Representative Kurt Olson, Alaska State
Legislature, explained the changes in the proposed committee
substitute (CS), Version E of HB 259. He stated that Version E
contains some minor changes from Version D. He referred to page
2, lines 6-8, which deleted the language from Version D, related
to the 75 prescription cap and the error rate of 10 percent. He
explained that concern was raised that 75 prescriptions was an
insufficient number when auditing larger pharmacies. He further
explained that a new cap was not established and the committee
could consider the appropriate number of prescriptions for
audits.
3:32:43 PM
MR. JACKSON referred to the next change in the proposed CS,
Version E, which relates to language removed on page 2, lines
10-12 of Version D. He explained language was deleted after
"submitted" which read, "...unless a longer time period is
specified in a contract between the pharmacist and the insurer,
managed care company, hospital or medical service corporation,
third-party payor, or pharmacy benefits manager." This change
would mean that unless a longer time period was specified in a
contract the audit of a claim would need to occur within two
years - which essentially restores this paragraph to the
language in the original bill. He related that concern was
expressed that some possibility exists that unilateral changes
could go from two years to a lengthier timeframe which would
totally defeat the purpose of paragraph (4).
3:33:32 PM
MR. JACKSON referred to paragraph (10), to page 2, line 27,
which changes the preliminary audit delivery timeframe from 60
days to 120 days. He explained that to balance this change a
new paragraph was added that reads, "The interest may not accrue
during that time period." Thus from the time the audit is
completed to whenever the preliminary audit report is delivered
interest will not be accruing. He stated this change seems to
provide balance for the pharmacists' concern that interest was
accruing while the PBMs and auditors review and develop the
preliminary report.
3:34:20 PM
MR. JACKSON stated the next change inserts language that was in
the original bill with some minor changes to paragraph (11), as
follows:
to the extent that an audit finds clerical or record
keeping errors in a required document or record, the
pharmacy may not be subject to recoupment unless there
is proof of intent to commit fraud or the clerical or
record keeping error results in actual financial harm
to an insurer, managed care company, hospital or
medical services corporation, third-party payor,
pharmacy benefits manager, or a customer.
MR. JACKSON explained that this goes back to paragraph (6) of
the original bill relating to scrivener's errors. He
highlighted that it was felt that a typographical error would
not rise to level of requiring any compensation.
3:35:44 PM
MR. JACKSON referred to a new paragraph adding the restriction
on confidential information obtained during an audit from being
used for marketing. He recalled previous testimony by
pharmacists, in which pharmacists stated that after an audit a
number of their clients would later receive solicitations from
mail order pharmacies. He explained that this did not seem
quite fair since confidential patient information exists and
access to that information for audit purposes is appropriate,
but not for marketing purposes.
3:36:43 PM
MR. JACKSON stated the next change inserts a new paragraph [3]
limiting subsequent audits to not less than 90 days following an
audit.
3:36:50 PM
REPRESENTATIVE SADDLER asked for the reference to the mail order
solicitations.
MR. JACKSON referred to page 3, lines [25-26].
3:37:19 PM
MR. JACKSON restated the change in paragraph (3), which
prohibits subsequent audits within 90 days following an audit in
which errors were not found. He stated that "error" does not
mean a clerical or record keeping error. He pointed out that
fraud auditors would not be limited to the 90-day period if
significant errors or an attempt to commit fraud was discovered.
He reiterated if significant problems were discovered in an
audit that it seems reasonable for the PBM or auditor to conduct
another audit.
3:37:53 PM
MR. JACKSON pointed out the final change would change the
effective date to January 1, 2013, instead of the fiscal year
listed in Version D.
3:38:14 PM
CHAIR OLSON offered to allow the committee time to digest the
changes.
3:38:36 PM
MR. JACKSON referred to page 3, lines 27-29 to subsection 19
(b), which specifies an exemption for criminal investigation or
investigation or audit by a governmental agency. He suggested
that the committee may wish to consider including schools or
municipalities. He restated this may be a further consideration
the committee may wish to ponder.
[HB 259 was held over.]
SB 122-REAL ESTATE TRANSFER FEES/TITLE INSURANCE
3:39:36 PM
CHAIR OLSON announced that the next order of business would be
the CS FOR SENATE BILL NO. 122(L&C), "An Act relating to
research on and examination of titles; relating to residency
requirements for title insurance limited producers; relating to
real estate transfer fees; and providing for an effective date."
[Before the committee was proposed HCS CSSB 122, labeled 27-
LS0789\D, Bailey, 3/19/12, adopted at the April 4, 2012
meeting.]
3:40:01 PM
DANA OWEN, Staff, Senate Labor & Commerce Committee, Alaska
State Legislature, on behalf of the Senate Labor & Commerce,
Senator Egan, Chair, stated that the bill provides two important
things. First, it provides that titles researched and issued in
Alaska will have some anchor to the state, including that the
people who perform the research have a physical presence in the
state. Second, it would prevent the use of transfer fee
covenants, which are fees that the original seller of a property
would reap for resale of the real property into perpetuity.
This practice would be outlawed under the bill.
3:42:01 PM
ROGER FLOERCHINGER, President and Owner, Yukon Title Company,
Inc., stated that he would like to focus on the residency
requirements in SB 122, which are an effort to prevent Alaska
jobs from being sent overseas. He said, "It is nothing more and
nothing less." He related that similar bills have passed in 13-
14 other state legislatures. He predicted that some other
companies, such as First American Title Insurance, which is a
multi-national title company, will oppose this portion of the
bill. He offered his belief that First American Title currently
examines a large percentage of their Washington state orders in
overseas countries. This company pays their overseas examiners
approximately 10 percent of the fees they would pay local
examiners. He reported that he receives letters weekly from
overseas companies in countries such as Pakistan, India, or the
Philippines, who offer to perform title examinations for a
fraction of what it costs to do the work locally. He remarked
that this offends him. He reported that his examiners receive
wages that far exceed the per capita wages in Fairbanks. These
examiners pay local property taxes and contribute to the economy
of the state. He offered his belief that examiners in the
Philippines receive "slave wages" and contribute to no one
except the shareholders of the multi-national corporations. He
stated that unlike his examiners, the overseas examiners are not
licensed by Alaska's Division of Insurance (DOI) and are not
within the department's reach for review. He also predicted the
committee would hear testimony from others that direct
operations, including those owned by regional national and
multi-national underwriters. These companies will state that
they cannot open offices in Alaska or cannot keep their current
offices open because of the requirement for a limited producer's
license. Further, these opponents will claim this bill would
restrict competition. However, those claims are simply "smoke
and mirrors." The direct operations that currently have offices
in Alaska also hold limited producer licenses, which will not
change under SB 122. He encouraged the committee to ask an
existing national underwriter whether this bill would impact
their ability to open offices in Alaska. He stated that the
Alaska Association of Realtors supports this bill as written
since this organization knows its clients will be better served
by local examiners as opposed to someone who resides in India or
Pakistan. He emphasized that realtors would fight a bill that
would restrict competition in the industry since such a bill
would adversely impact their clients; however, SB 122 is an
Alaska hire issue. He highlighted that he supports SB 122 since
he is in favor of keeping good paying Alaska jobs in Alaska.
3:45:19 PM
KIM GLISSON, Vice President and General Manager, Alaska Escrow &
Title Agency, Inc. stated that she has been in the title and
lending industry for 22 years. Alaska Escrow & Title Agency,
Inc. provides title insurance and escrow services to all seven
recording districts in Southeast Alaska. She asked to speak in
favor of SB 122, Sections 1 and 2 in order to keep local jobs.
She stated she is a second-generation title industry
professional, plus her daughter is working in her office. She
said that her company employs 14 fulltime people and two part-
time local employees. She highlighted that this is best for
Alaska's communities. She stated that she has an employee who
worked for a Washington state firm. When she started they had
seven examiners, but after two years they were all laid off
except for one, due to outsourcing. She referred to Section 3,
which she suggested is best for consumers since without this
provision developers could add additional funds to each
transaction each time property changes hands. She offered her
belief that overall this bill would help protect property owners
in the state.
3:47:26 PM
CHRIS NEWBILL, Manager, Ketchikan Title Agency, Inc. stated that
he is in agreement with SB 122 and the previous testimony by Mr.
Floerchinger and Ms. Glisson. She stated that she has three
employees, who are all residents of Ketchikan and the state.
She said she would hate to see the jobs go overseas.
3:48:10 PM
CRYSTAL PELTOLA, Vice President and General Manager, Alaska USA
Title Agency, stated that the company began in 2008 and now has
five branches located throughout the state. She has been
working in the title insurance business since 1982. She stated
that her organization has always supported the transfer fee
portion of SB 122, Section 3. She also thanked the Alaska
Realtors' Association for their support of the bill. She
emphasized that the company also supports legal competition and
remains a pro-consumer company. She pointed out that this bill
has gone through several changes since it was introduced last
year. Currently, the only remaining item from the original bill
is the transfer section. She said that Sections 1 and 2 are
being touted as Alaska hire, but nothing in the current language
does this. Section 2 of the bill seems to be unconstitutional,
according to the Legislative Legal opinion of March 15, 2012, by
Dennis Baily. She said that Alaska USA Title Agency cannot
support anything that could be deemed unconstitutional. She
related that Section 2 also seems to contradict itself, since on
the one hand it requires licensing provided for in Sections 21
and 27, which have provisions for resident and nonresident
licensing. The language states that one may not obtain a
license unless the individual is a resident of the state. She
predicted that no one today will testify against local hire, but
the language in SB 122 does not seem to provide local hire. She
referred to Section 1, which retains the current law to require
companies owned by national underwriters, such as Stewart Title
and First American Title to obtain their title work from
agencies instead of doing the work themselves. Although the
ownership of these two companies resides in Texas and
California, respectively, their local offices hire Alaskans,
which adds to the economy of the state. She said that one
company's legal counsel has stated the company will modify their
arrangements and become agencies if this bill passes. Thus this
bill would not change how businesses operate, even though the
bill appears to create another layer of paperwork for those
engaged in direct operations. She concluded by stating that she
personally does not see the value of creating this additional
paperwork, nor does she see how SB 122 addresses Alaska hire.
She reiterated her support for Section 3, but emphasized that
she cannot support Sections 1 and 2 at this time.
CHAIR OLSON mentioned the bill has a further referral to the
House Judiciary Standing Committee.
3:51:03 PM
TERRY BRYAN, Vice President and Manager, First American Title
Company, stated that he has 75 employees throughout the state in
ten separate offices. He related that First American Title
Company has been very involved with the evolution of SB 122. He
asked to withdraw his support for SB 122 since the company
cannot support the bill at this time.
3:52:05 PM
REPRESENTATIVE SADDLER asked whether he was withdrawing his
support for all sections of the bill.
MR. BRYAN answered that the primary support was initially for
portions of the bill that have subsequently been stripped from
the bill, which related to the number of years a title plant
would need to be in existence. He highlighted that the company
is currently evaluating issues with respect to Section 2 - the
Alaska hire segment of the bill. He concluded that the company
cannot support the bill in its current form.
REPRESENTATIVE SADDLER understood he opposed all three sections
of the current version of SB 122.
3:53:08 PM
CHAIR OLSON asked whether his company does any outsourcing.
MR. BRYAN answered no; that currently in Alaska, First American
Title Company does not do any outsourcing.
3:53:22 PM
CHAIR OLSON asked whether the company could outsource at some
point in future.
MR. BRYAN answered yes, that just as other companies can
outsource, First American Title would also have the capability
to do so.
3:53:43 PM
REPRESENTATIVE MILLER asked whether he knew how many title
sources for 100 title searches in Alaska how many are being done
outside of Alaska
MR. BRYAN anticipated that about 99 of 100 title searches are
currently being performed in Alaska.
3:54:26 PM
HOWARD HANCOCK, Chief Title Officer, Fidelity National Title
Insurance Company, stated that Fidelity National Title Insurance
Company is in support of SB 122. He stated that he has been in
business for 30 years and is also a board member of the Alaska
Land Title Association. He asked to testify in support of SB
122. He related that the practice to grant a license to
individual residents currently applies to all employed title
examiners in approximately 30 offices around the state. This
provision could also allow the division to grant a nonresident
license. He pointed out that Fidelity National Title Insurance
Company has seen a monthly increase in the number of
solicitations from the Philippines or Bangladesh asking if they
could perform title searches. He has also observed other title
companies in the Lower 48 having title examinations performed by
examiners in foreign countries. He related his company tested
an overseas company from India by giving them a property and
asking them to search the title. The overseas company initially
anticipated it would complete the title search in four days, but
after a week the company reported it was having difficulty
retrieving and interpreting the documents for the chain of
title. His company gave the company in India a few more days,
but the company still could not furnish the report and
eventually the company from India canceled since they could not
complete the job. He emphasized his point is that laws relating
to titles on real property are unique to the state in which the
property is located. He suggested that homebuyers or mortgage
lenders, who are probably the largest title insurance consumers,
should want their titles examined by local expert trained in
Alaska laws and title issues. He pointed out that Alaska has
unique laws and issues including the Alaska Native Claims
Settlement Act (ANCSA), the Native Allotment Act, the mechanic's
lien law, foreclosure laws, and others. He pointed out these
are laws that title insurance companies encounter on a daily
basis. He concluded that SB 122 provides corrections to give
guidance to the division with respect to the division's current
practices to keep jobs local and to require local resident title
examiners perform title searches.
3:57:38 PM
MICHAEL PRICE, President, Alaska Land Title Association; Owner,
Fidelity National Title Insurance Company, stated that he is
also the owner of the Mat-Su Title Agency in Wasilla. He
testified in support of SB 122 as it is currently written. He
said he supports testimony by previous testifiers who spoke in
support of SB 122. He related that his company employs 80-100
Alaskans throughout the state who earn from $50,000 to $100,000
annually as title examiners. He offered his belief that if SB
122 does not pass that those jobs are in jeopardy. He related
his understanding that his good friend, Terry Bryan's company,
First American Title Company, outsources - not in Alaska - but
in other states. He emphasized the importance to pass a local
hire law or it will only be a matter of time before the jobs
will go overseas. He suggested that the Division of Insurance's
director, Linda Hall, could confirm there is nothing in the two
sections of SB 122 that preclude a direct underwriter from
entering business in the state. He further highlighted that
First American Title Company and Stewart Title - as they
currently exist in Alaska - exist as local limited producers and
as Alaska corporations. He related his understanding that these
businesses do not operate as an underwriter from California or
Texas, but as corporations in Alaska. Additionally, in terms of
the constitutionality, he offered he has been an attorney for
over 40 years prior to working in the title insurance business.
He said he believes in the constitutionality of SB 122. He
pointed out that approximately 13 states have passed legislation
that demands the licensed title examiners for title insurance be
residents of the state in which the property is insured. He
recalled that Oregon was the last state to do so approximately
two years ago. He asked members to compare Oregon to the state
of Washington, which does not have such a law. He pointed out
that it is just too easy to consider outsourcing these types of
jobs. He concluded that as president of Alaska Land Title
Association and as owner of the two title companies in the
state, he fully supports SB 122 and urged members to pass SB 122
to protect Alaskans' jobs.
4:01:01 PM
REPRESENTATIVE JOHNSON asked whether there is any difference in
the cost of title insurance in Washington and Oregon.
MR. PRICE answered no. He explained that each state files its
rates with the Division of Insurance. He suggested that every
state in the western U.S. have filed rates, such as Alaska. He
pointed out that some rates are promulgated by the respective
director of insurance. He related his understanding that the
title insurance in Washington is less than in Oregon, but
comparable to Alaska. Additionally, Alaska has unique laws and
risks due to ANCSA and laws relating to public lands; however,
generally speaking title insurance in the Western U.S. have
filed rates, which means they are filed by national companies.
Thus the rates are set by companies such as Fidelity National
Title Insurance Company and not local agents. He concluded by
advising that filed rates are approved by various directors of
insurance and would be available to the legislators and staff
through an Internet search.
4:02:56 PM
REPRESENTATIVE JOHNSON remarked that when jobs are outsourced
and it affects companies that is one thing, but if it actually
results in less cost to consumer that is a different issue.
MR. PRICE answered that he was not aware of any empirical
evidence that an underwriter sending an order to Bangladesh
results in reductions to insurance costs. He offered his belief
that most of the costs of insurance is based on overhead,
administrative, and claims handling. He offered his belief that
states in the Lower 48 that outsource cannot provide evidence
that the cost of insurance has gone down. He highlighted that
the general rate schedule in Alaska has not changed since 1968.
4:04:17 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on SB 122.
4:04:35 PM
LINDA HALL, Director, Division of Insurance, Anchorage Office,
Department of Commerce, Community & Economic Development
(DCCED), provided a brief summary. She explained the DOI
regulates various aspects of the title insurance industry. She
pointed out that companies exist in the title insurance industry
as well as agencies. Thus two types of licenses exist. She
stated that there is not an Alaska domiciled insurance company
in Alaska and companies may be located in Texas or other states.
These companies are licensed in same way as other insurance
companies, such that application processes and deposits are
required.
4:06:10 PM
CHAIR OLSON related his understanding these companies would be
admitted companies.
MS. HALL answered yes. She explained that the company files
rates for the product sold by the agent. She further explained
that much of that product is based on overhead. It is much more
difficult for the division to examine specific information. The
overhead, the majority of the employees conducting title
research, the cost of running an office, and conducting
electronic research represents the bigger part of the rate,
which is not an expense of the insurance company. She further
explained that loss ratios in the title insurance industry are
very low. The division has seen historical losses in most lines
of insurance the division regulates, including the much smaller
piece of overhead and commissions. She explained that the title
world is different so the title insurance company receives a
small portion of the premium. The title agent, on the other
hand, called the limited lines title producer - the agency -
keeps a majority of the premium since they perform the majority
of the work and have the overhead. Thus if the overhead is less
expensive since some of the work is outsourced it will not
affect the rate that is filed by the title insurance company.
She hoped this helps.
4:07:56 PM
CHAIR OLSON agreed her explanation helps. He asked about
licensing aspects.
MS. HALL stated she referenced the licensure of the insurance
company. She explained that the agency is also licensed since
the division licenses title plants, noting two or more entities
can form together as a joint title plant. She indicated the
division inspects them and provides a test, similar to one Mr.
Hancock conducted when he tested a title search by someone in
India. She described the process, such that the division would
give the company a piece of property to determine how well they
can research and find anything wrong with the title that would
prevent it from being a clear title. Additionally, the division
licenses the limited title producers as agents, licensed under a
different section of statute than the insurance companies. She
highlighted that Title 21 specifically outlines specific
requirements for title agents, including that they must have a
place of business in the recording district in which they will
operate. She noted this does not require residency, but the
company must have a place of business in Alaska. She reiterated
that limited title producers as agents are licensed differently.
4:09:28 PM
REPRESENTATIVE SADDLER referred to page 2, to Section 2 of the
bill, which makes reference to title insurance limited
producers. He asked whether there is any distinction between
the term "licensed title insurance limited producer" on page 1,
and the "title insurance limited producer to be licensed" on
page 2.
MS. HALL responded that in Section 1 the licensed title
insurance limited producers are not required to be a resident,
but are required to be licensed under AS 21.27. She offered her
belief that the division has never issued a nonresident - to a
resident of another state - license, but that is not to say they
couldn't do so. She noted that some of reciprocity laws do not
apply to title insurance specifically, but if a title agent was
licensed in another state and applied for a nonresident license
that it is possible, but not likely the individual would be
licensed. She pointed out the agent would still need to have to
have a place of business in Alaska.
4:10:56 PM
REPRESENTATIVE SADDLER recalled that AS 21.27 does include a
provision for alien license. He asked whether the state has
ever issued an alien license.
MS. HALL answered that no, not in the title industry. She
explained that the division has issued 6 of 39,000 licensees as
alien licenses.
4:11:33 PM
CHAIR OLSON asked whether this is something the division used to
do routinely.
MS. HALL answered no.
4:11:40 PM
REPRESENTATIVE JOHNSON asked if this bill passes whether it will
drive up the cost of insurance.
MS. HALL answered that she did not know why it would drive up
costs. She stated that the division has issued a zero fiscal
note. She further stated that rates enforced should represent
the expenses and did not note anything in the bill that would
increase expenses.
4:12:22 PM
REPRESENTATIVE JOHNSON asked if the bill did not pass if rates
would be reduced.
MS. HALL answered that she doubted it.
4:12:30 PM
REPRESENTATIVE JOHNSON remarked that the consumer is the
ultimate payer. He did not have any issue with the bill since
Ms. Hall indicates the costs to consumers will not likely
change.
4:12:58 PM
CHAIR OLSON asked whether is it safe to assume that one reason
that issues on title policies is that there is not a frequency
in the number of claims against title policies.
MS. HALL answered yes; that would be accurate.
4:13:16 PM
CHAIR OLSON recalled only one issue in his community in 30
years, which was due to a surveying error.
4:13:37 PM
REPRESENTATIVE SADDLER pointed out that Ms. Peltola suggested
Section 2 may be self-contradictory. He said an owner producer
may not obtain a license unless they are a resident, however, AS
21.27 allows for alien or nonresident licenses. He asked
whether an inherent contradiction exists.
MS. HALL suggested that is probably a legal question she did not
think she was qualified to answer.
4:14:18 PM
REPRESENTATIVE JOHNSON moved to report the proposed House
Committee Substitute (HCS) for Senate Bill 122, labeled, 27-
LS0789\D, Bailey, 3/19/12, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no further objection, HCS CSSB 122(L&C) was reported from the
House Labor and Commerce Standing Committee.
4:15:09 PM
The committee took an at-ease from 4:15 p.m. to 4:17 p.m.
SB 51-STATE VENDING LICENSES
4:17:03 PM
CHAIR OLSON announced that the final order of business would be
the CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 51(L&C), "An
Act relating to the operation of vending facilities on public
property."
4:17:26 PM
TOM OBERMEYER, Staff, Senator Bettye Davis, Alaska State
Legislature, explained the changes in the bill that passed the
Senate, labeled 27-LS0079\I, from the sponsor substitute. He
stated the sponsor originally asked to insert additional
properties available to the blind in SB 51 to change the
definition of property to include school property and municipal
property so that vending facilities would be available to more
people; however, it was determined after discussions with
schools and municipal entities that would not be feasible. The
sponsor created a sponsor substitute to remove the language. He
explained that the bill would pertain to six federal properties
under the Randolph-Sheppard Act and to six state properties
under the Chance Act of 1976.
4:18:58 PM
MR. OBERMEYER read the sponsor statement, as follows [original
punctuation provided]:
SB 51 restores to blind persons first priority for a
contract to operate a vending facility on state and
other public property. This bill amends the Alaska
Chance Act of 1976 to require that the state Division
of Vocational Rehabilitation Business Enterprise
Program provide the same first priority to the blind
on state and other public property as it does on
federal property enforced under the Randolph-Sheppard
Act of 1936. The Alaska Chance Act for the first time
added disabled persons in addition to the blind in
preference for vending licenses on public facilities.
This loss of first priority and expansion of
beneficiaries has thwarted the spirit and letter of
the Randolph-Sheppard Act. The resulting decrease in
vending opportunities for blind merchants in Alaska
exacerbated their already extraordinarily high
unemployment rates among all types and severities of
the disabled and the population in general.
MR. OBERMEYER stated that this bill shows there are few
opportunities in the state for blind or disabled persons.
4:20:27 PM
CHAIR OLSON stated that Senator Davis has joined the
meeting.
4:20:39 PM
MR. OBERMEYER stated the total number of blind in the state may
range upwards to approximately 1,200. He related that 9.3
million visually-impaired people live in the U.S. The recent
U.S. Census asked whether disabled or blind persons reside in
the family, but the census question did not distinguish between
blind and disabled.
4:21:52 PM
MR. OBERMEYER continued to read the sponsor statement, as
follows [original punctuation provided]:
SB 51 recognizes that the blind are dissimilarly
situated compared to other disabled persons who do not
suffer the same degree of impairment and unemployment
as an economic matter. Although the State has
combined management and training opportunities for
both the blind and other persons with disabilities
under one Business Enterprise Program of the Division
of Vocational Rehabilitation, this bill requires that
it must give first priority to the blind for vending
contracts on state, federal or other public property.
SB 51 comports with original legislative intent and
gives first priority to the blind imposed under AS
23.15.100 prior to changes in 1974 and 2006 which
added persons with disabilities and severe
disabilities who currently compete with the blind for
licenses on vending facilities on public property. It
requires that the Division attempt to find and notify
blind persons of vending opportunities as they arise
on public property. These public properties may
include among others court houses, military bases,
state and federal office buildings, and other public
properties.
4:22:57 PM
REPRESENTATIVE SADDLER asked whether there are an estimated
12,000 blind or visually impaired individuals in the state.
MR. OBERMEYER answered he assumed the figures referred to the
visually impaired, noting there are different levels of
impairment for the blind and visually impaired.
REPRESENTATIVE SADDLER asked for the numbers of the severely
disabled people living in Alaska.
MR. OBERMEYER answered that he did not have the figures.
4:23:36 PM
REPRESENTATIVE SADDLER asked whether the severely disabled would
be barred from obtaining contracts.
MR. OBERMEYER related his understanding they would not be
barred. He explained that the Business Enterprise program was
designed specifically to assist them. He further suggested that
some procedures exist for the disabled to temporarily take the
place of a blind person in the event a blind person was not
available, which may result in long-term positions for the
disabled. He pointed out that training is an important part of
the process.
4:24:22 PM
REPRESENTATIVE SADDLER related his understanding the disabled
person might be able to take up the jobs.
MR. OBERMEYER related his understanding, but deferred to the
department or the bill drafter.
4:24:44 PM
REPRESENTATIVE SADDLER asked whether this bill would require the
severely disabled to give up contracts. He further asked for
the impact on the severely disabled.
MR. OBERMEYER related his understanding that everyone with
existing contracts would be grandfathered into the long term
project process. He characterized the long-term contracts as
essentially licenses since the contracts are indefinite in
duration. He did not envision any threat to current holders of
the vendor licenses. He pointed to Section 3, AS 23.15.133
allows the agency to contract persons who are not blind. He
referred to subsection (d), when there is a vacancy occurs the
agency will attempt to contact a blind person. He deferred to
the bill drafter to indicate if any prohibitions from the blind
not only taking disabled or other contracts for remote
locations. He provided an example; noting that a facility in
Kodiak could not obtain training for the vendor for the
facility.
4:26:19 PM
REPRESENTATIVE SADDLER asked in instances in which there are not
visually impaired or disabled people with first priority
available to take the contract, whether any provision exists to
contract out or if people could be hired on behalf of blind
person.
MR. OBERMEYER offered his belief that it is possible and in some
cases it is almost imperative, such as an instance in which the
facility has a large cafeteria so the vendor must hire others to
assist them.
4:27:01 PM
REPRESENTATIVE SADDLER asked whether this pertains not just to
operate the facilities but to contract to operate the
facilities.
MR. OBERMEYER deferred to the department to answer. He related
his understanding some concern arose over the term contract, but
that a contract is issued on a temporary basis to try to place
people; however operating agreements/contracts are used even
with long-term licenses, but again, he deferred to the
department.
4:27:32 PM
MR. OBERMEYER referred to the bill that passed the Senate,
Version I. He reviewed the sectional analysis of the bill. He
stated that Section 1 amends a provision dealing with powers and
duties of the Division of Vocational Rehabilitation (DVR). It
removes references to persons with severe disabilities from the
provisions dealing with the operation of vending facilities on
public property. He stated that Section 2 directs the agency to
issue a license for the operation of vending facilities on
public property to blind persons who meet certain criteria,
including criteria established by agency regulations. It
requires these regulations to provide blind persons with first
priority for a contract to operate a vending facility on public
property.
4:28:21 PM
MR. OBERMEYER detailed that Section 3 adds new subsections to
the section on the issuance of licenses for vending facilities
on public property. He stated that proposed AS 23.15.133(c)
should allow the agency to contract with a person who is not
blind to operate a vending facility until the agency can locate
a blind person who qualifies to operate the vending facility.
He detailed that proposed AS 23.15.133 (d) indicates that when a
vacancy in the operation of a vending facility on state property
the agency must attempt to contact blind persons directly about
operating the vending facility. This proposed section would
also direct the agency to work with private organizations to
contact blind persons. This requirement is in addition to other
procurement requirements of AS 36.30, the state procurement
code. He clarified that news advertising is not sufficient. He
reported that proposed AS 23.15.133 (e) allows a blind person
operating a vending facility to operate another vending facility
if the agency cannot find a blind person to operate the other
vending facility. He recapped that it would allow for a
multiple vending contract for an individual.
4:29:32 PM
MR. OBERMEYER referred to Section 4, which deletes a reference
to persons with severe disabilities from a provision relating to
hearings on agency actions that relate to vending facilities.
Section 5 would amend the definition of "licensee" to remove the
reference to a person with severe disability. Section 6 would
repeal a section relating to vending facilities operated by
persons with severe disabilities. Section 7 indicates that the
act applies to vending facility licenses issued and vending
facility contracts entered into, on, or after the effective date
of the bill. Section 8 states that the act does not affect a
contract entered into before the effective date of the act,
which answers the question of whether licensees would be have
grandfather rights.
4:30:16 PM
REPRESENTATIVE JOHNSON asked whether this would add work for the
department since they would not use the regular notice process.
MR. OBERMEYER deferred to the department to answer.
4:31:11 PM
LOREN KEMPTON, Project Manager, Inspirational Action, Inc. (IAI)
stated that Inspirational Action, Inc. is a nonprofit to help
developmentally disabled people obtain contracts by offering a
training program. She expressed the IAI concerns that by taking
out language geared to the disabled strips their program. She
highlighted that IAI is not asking for priority over the blind,
but does not want to lose the job opportunities for the
developmentally disabled. She related the progress people have
made by the time the training is completed, including that after
training they could take contracts and provide a living for
themselves instead of having to rely on public assistance,
Supplemental Security Income (SSI), or becoming homeless. She
estimated that 65 percent of the homeless have mental or
physical disabilities that prevent them from working. She said
the IAA helps people overcome these hurdles.
4:33:10 PM
REPRESENTATIVE JOHNSON thanked her for the service she provides.
He asked whether this bill would hinder the IAI's ability to
secure contracts if the developmentally disabled are given
second priority.
MS. KEMPTON answered that the developmentally disabled are
already given second priority, which is not the issue since they
are able to reach out and assist people. She explained the IAI
does not want to lose "what little bit we do have."
4:33:43 PM
SHERRYLYN MORELL, Assistant Manager, Inspirational Action, Inc.
stated that she has had the pleasure to work with the Division
of Vocational Rehabilitation (DVR) to train people. She
understood the point to give priority vendor contracts to the
blind. She agrees with Ms. Kempton's testimony. She has worked
with several people and she has learned as much from them as
they have from her.
4:35:02 PM
GARY JAMES, Employee, stated that he is employed by IAI. He got
the job through DVR.
REPRESENTATIVE MILLER thanked him for testifying. He asked him
how long he has been part of the program.
MR. JAMES answered he has been part of the team since October.
REPRESENTATIVE MILLER related his understanding that currently
without the bill the developmentally disabled or disabled
persons have more of an equal footing with the visually
impaired.
MS. MORELL stated that she understood that the program already
gave a priority to the blind with a secondary priority for the
disabled persons. She explained that the bill removes any
reference to disabled persons.
4:37:10 PM
REPRESENTATIVE MILLER asked for the types of disabilities of
those employed.
MS. MORELL answered that IAI works with all disabled as long as
it has been determined it is safe for them to work in food
operations. She related that in her experience she has mainly
worked with people with mild mental disabilities, but the IAI
can work with people who have physical disabilities.
4:37:35 PM
REPRESENTATIVE HOLMES asked whether Mr. James likes his job.
MR. JAMES answered yes.
REPRESENTATIVE HOLMES asked what his job duties entail.
MR. JAMES answered that he is a back-up cook and operates the
register.
REPRESENTATIVE HOLMES asked whether he was trained by IAI to
perform his duties
MR. JAMES answered yes.
4:38:10 PM
CHERYL WALSH, Director, Division of Vocational Rehabilitation
(DVR), Department of Labor & Workforce Development (DLWD), asked
to address concerns the division has with SB 51. She explained
that 13 business enterprise sites exist within the state,
including one in Juneau at the State Office Building. This bill
would direct the division to work with a private organization
that specializes in the employment of blind people to contact
them about business enterprise program (BEP) openings. She said
she was unsure which private organization specializes in the
employment for the blind. Thus it is difficult for the division
to determine associated costs since the organization is not
identified in the bill. She emphasized that the DVR is the
organization that specializes in the employment of people who
are blind.
4:39:44 PM
MS. WALSH stated it is also unclear whether the passage of SB 51
would allow the division to combine its two programs. The DVR
has a separate program for state sites and one for federal
sites. These program divisions are necessary since the program
includes people with severe disabilities at state sites.
Therefore federal dollars cannot be used on state sites. She
stated that a person with a severe disability currently works on
a state site. That individual holds an indefinite license to
the site and would be grandfathered in. She said she was unsure
if the division can divide or combine the programs and the
funding mechanism for the position or associated benefits.
MS. WALSH explained that licenses are granted for an indefinite
period of time. She was also unsure when the person may choose
to retire, noting the DVR can only remove a person if they
terminate voluntarily or for cause, which is defined in
regulation.
4:41:16 PM
MS. WALSH expressed other concerns. She stated that SB 51 is
unclear as to whether it is establishing first priority for
blind persons for all BEP contracts or if it is limited to
temporary contracts, which could impede the division's ability
to manage the program. She related that the division issues
temporary contracts to industry or subject matter experts,
particularly if a feasibility study needs to be done on a site
to determine viability. Additionally, feasibility studies are
done if the DVR is considering a site as a training site, in
which the division would bring in an industry expert on coffee
carts or for other specific training. She expressed concern
that a blind person may not have the expertise to meet the
business or programmatic needs of the temporary contracts. She
stated that the division believes the first priority should be
limited to the permanent assignment or licensing of a vending
facility and not to temporary contracts. The bill would allow a
blind individual to operate another facility even if he/she
already is permanently assigned to a facility if the division
cannot locate an individual. She pointed out that blindness is
a low incidence disability so it is possible the division may
have an opportunity to open a new site or a vacancy could occur
at a time without a current trained blind person to immediately
assume the contract or facility. She further stated that the
bill is unclear as to the length of time the division must keep
the contract open. Further once the site is offered to a
permanent vendor the site is locked up permanently. She
expressed concern this may lead to future lawsuits. She
indicated it was also unclear how many sites a currently
licensed individual would be allowed to have since people
advance in the system based on seniority and experience. This
could lead to people taking over multiple sites and diminishing
the number of sites available to others entering the program or
for transfer or promotional opportunities for others.
4:44:03 PM
REPRESENTATIVE JOHNSON asked what happened to the coffee cart in
the entry way at the State Office Building.
MS. WALSH said she was not sure.
4:44:32 PM
REPRESENTATIVE JOHNSON asked whether costs would be associated
with any outreach.
MS. WALSH answered that she was not certain who the outreach
would be directed at and the need for it. She explained that
currently all the individuals in the program are certified by
the DVR. They apply with the client services program and
identify a goal to become a dining facility manager or snack bar
manager and the division writes a plan. She related that the
division is aware of the certified managers and have a committee
of blind vendors the division works with who represent all of
the current vendors. She said she was certain that anyone who
moved to Alaska who had been certified from another state would
contact them about participating in the DVR's program.
4:45:36 PM
REPRESENTATIVE MILLER asked for the length of the training.
MS. WALSH answered that the initial training is for six months,
which involves some testing and job shadowing. She stated that
they provide a $500 training stipend for continuing education
(CE). Additionally, the blind vendors hold an annual meeting
with training provided by industry experts. She attended one
last year that showcased a variety of foods vendors may wish to
add to their menus.
4:46:38 PM
REPRESENTATIVE MILLER asked for an estimate of the number of the
blind as compared to all other divisions.
MS. WALSH referred to a chart that indicated the DVR placed 29
individuals who were blind in other occupations outside the BEP
sites within the past two years, plus the 13 facilities, 10 of
which are operated by blind individuals. She explained that the
blind is a lower incidence disability and that the division
worked with 2,500 cases of people with disabilities. She
estimated less than five percent of the cases would be for blind
individuals.
4:47:53 PM
RICK RENAUD, Chief Executive Officer, Pentagon North, Inc.
(PNI);, Chief Executive Officer, Inspirational Action Inc.
(IAI), stated that IAI is a 501 (c)(3) nonprofit organization.
He said he is also a BPE vendor. He explained that both
organizations provide food service to state and federal
facilities and employment training to people with disabilities.
He referred to the sponsor statement for SB 51, which indicates
a loss of employment and priority for persons with blindness to
hold and operate vending facilities on state and other public
properties. He refutes this document on the basis that people
like him with severe disabilities are involved in the decrease
of vending and employment opportunities on state and public
properties including court houses, military bases, and office
buildings. He explained that disabled people will make a
difference with respect to employment of the blind. He took
issue with the first statement of the sponsor's statement which
states that that SB 51 restores to blind persons first priority
for a contract to operate a vending facility on state and other
public property. He said it is impossible to restore what was
never taken away in the first place. The Alaska Chance Act of
1976 and its related programs has had clear clauses regarding
first priority for the blind which still holds true according to
AS 23.15.210, and Ms. Walsh's testimony.
4:50:53 PM
MR. RENAUD emphasized that the act does not indicate that the
blind do not have priority for vending contracts. Furthermore,
he argued against the implication that the inclusion of people
severe disabilities in the Chance Act has hindered opportunities
for the blind to gain vending contracts or employment. He
pointed out that the blind vendors' committee removed three
federal facilities from their program. Additionally, two other
state facilities have remained vacant for over two years because
there has been no success in finding qualified blind merchants
to occupy the spaces. He emphasized that it is not that there
is a lack of opportunities since they have been taken over by
vendors with other disabilities, but rather that blind vendors
and associated programs have been giving up these opportunities
and have not taken advantage of them. He highlighted that the
lack of employment among the blind has little to do with the
disabled and has more to do with the blind vendors and their
associated programs. He indicated that if there is a real
difference in employment rates that more needs to be done from
within. He acknowledged that there is indeed a problem of
extreme high unemployment rates among persons who are blind.
According to a report of federal programs for unemployment for
persons with disabilities, in 2004, 337 blind workers were hired
out of 2,681 licensed BPE vendors and even less workers with
disabilities; however, the number of workers hired without any
disabilities was 6,607. Therefore in order to create more
employment opportunities blind vendors and programs need to hire
and train more people who are blind. He concluded by pointing
out that the problem is not expanding opportunities of vending
locations for the blind by taking away the opportunities made
available to the severely disabled, but finding trained,
experienced blind vendors who are willing to fill the positions.
He concluded that it shouldn't be the fault of people with other
types of disabilities with qualifications, but rather on the
programs to train and prepare the blind.
4:53:55 PM
CAROL RENAUD stated that she is a person with severe
disabilities. She said that if the legislature takes away the
program that it will not be available when she may need it. She
might be forced to go on welfare or apply for social security
benefits (SSI). She related that she can currently work part
time.
4:55:04 PM
LYNNE KORAL, testifying on behalf of herself, stated that she
has been blind her whole life. She stated that she was told in
middle school that she might not find a job as an adult. She
surmised that people with other disabilities do not hear similar
statements. She offered her belief that blind people are seen
as the most feared and abhorred disability in the U.S.,
including cancer and aids victims. She said she olds two
college masters' degrees and people are not willing to see the
capabilities of blind people. She stated that this program was
established in 1936 since blind people were not able to find
employment. She recalled a blind man holding a masters' degree
who committed suicide because he could not find a job. She
emphasized that this program was not established to
disenfranchise other disabled people, but was set up by the
federal government to help those who are blind to attain gainful
employment.
4:57:20 PM
MS. KORAL stated that blind and disabled people want an
opportunity for a chance at upward mobility. She stated that
blind people have a disability that affects more than their
mobility, daily living and communication. She reiterated that
the public have a hard time understanding blind people can hold
jobs and use specific technology and fear blind people. She has
been told blind people can't be trained well. She explained
that most people in the vending programs are visually impaired
and not totally blind. She recalled people telling her she
should have a realistic goal. She said she is not a vendor and
does not want to be one, but she thinks that some of the issues
many blind people have are related to their inability to find
jobs and their lower standard of living. She pointed out the
blind are treated by stereotypes, including that the blind
cannot hold high-paying decent jobs. She offered her belief
that if she was not blind she would be paid five times as much
as she has been able to earn. She suggested that this bill is
not about parity since the Chance Act of 1936 specifically gave
blind people a hand up not a hand out. She emphasized that the
blind need to continue to have the first priority, which has not
been adhered to or implemented by the DVR. She said she has
degree in public administration and social work so she
understands the legislative process and political implications.
5:00:26 PM
MS. KORAL recalled some 2001 figures for the blind. She
indicated that the appropriate organization, the nonprofit that
would help with employment would be the Alaska Center for the
Blind and Visually Impaired, which would be at least as well
equipped to train people as the DVR to help certify and train
the blind. She characterized this bill as smoke and mirrors.
She asked to get the facts on table and stop treating the blind
as people who cannot be trained.
5:01:23 PM
RICHARD GARDENHIRE, President, Alaska Independent Blind, stated
the Alaska Independent Blind is a consumer organization of blind
and visually-impaired people. He said he does not have a
prepared statement. He asked to speak in support of SB 51. He
related that like Ms. Koral, he is not a vendor, but is
employable. He stated that several years ago he went to the DVR
to apply for small business loan. He offered that he had
blueprints and projected revenues. He related that the
counselor said he/she was sorry and could not help him. He
found that response to be discouraging since he was a DVR client
who wanted to apply for a small business loan. He indicated
that he did not necessarily need financial help as help to
figure out how to buy and purchase equipment. He emphasized
that time after time the DVR has violated the state statutes by
not giving blind people the priority to operate the state
vending stands. He concluded that he is speaking in support of
the bill since the bill will clarify and better define what
first priority means.
5:05:23 PM
JIM SWARTZ, Alaska Independent Blind, stated that he is
currently a BEP vendor. He said that he previously worked as
the DVR's BEP Director from 1992-1995. He stated that the DVR
trains and places hundreds of people in employment
opportunities. He highlighted that BEP is unique in that the
program was developed specifically for the blind and provides an
employment opportunity. He emphasized that since he is an
entrepreneur as are all the vendors within the program since
they own their own businesses. He said that he owns Jimmy's
Espresso stand located in the Alaska Native Medical Center in
Anchorage. He employs six people, two of whom are blind, and
one is deaf. In 2006, he applied for a vending stand in the
court house and as a blind person should have received first
priority. However, he was denied the opportunity and it was
given to a non-blind person. He related that the non-blind
person today is the CEO of two corporations; however, he still
retains the facility denying a blind person of the employment
opportunity even though it is very clear that the person should
not have been awarded as vendor. He urged members to pass SB
51, since it does not deny anyone an employment opportunity, but
just protects the right of the blind and their first priority
for vendor jobs. He noted that he operated the coffee stand at
the Juneau State Office Building.
5:08:10 PM
REPRESENTATIVE JOHNSON asked what happened to the stand.
MR. SWARTZ offered his belief that the DVR mismanaged the
facility and did not place a qualified vendor in the facility.
5:09:01 PM
SENATOR DAVIS stated there is a real need for this bill, but she
is not ready to move SB 51 forward in its present form. She
noted that the bill is not ready. She expressed concern about
the direction that the DVR is moving in and she would like to
ask for an audit at some point to investigate some of the
situations raised by the blind, including that they were not
given priority for jobs. She also expressed concern about the
training they provide and the need to improve services. She
informed the committee she would be withdrawing her bill and
would not request another hearing.
CHAIR OLSON commended Senator Davis for bringing the bill
forward. He advised the committee that the bill would be
tabled.
[SB 51 was tabled.]
5:10:34 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:11 p.m.