Legislature(1997 - 1998)

01/24/1997 03:05 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
 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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