Legislature(1997 - 1998)
01/24/1997 03:05 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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.