Legislature(2021 - 2022)GRUENBERG 120
02/08/2022 03:00 PM House STATE AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| HB142 | |
| HB94 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 142 | TELECONFERENCED | |
| += | HB 94 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 94-PROHIBITED COMMERCIAL LEASE PROVISIONS
3:35:36 PM
CHAIR KREISS-TOMKINS announced that the final order of business
would be HOUSE BILL NO. 94, "An Act prohibiting the use of
certain restrictive provisions in leases of space for business
use in certain federally established zones; and adding an
unlawful act to the Alaska Unfair Trade Practices and Consumer
Protection Act."
3:35:58 PM
PAUL LABOLLE, Staff, Representative Neal Foster, Alaska State
Legislature, on behalf of Representative Foster, prime sponsor,
explained that HB 94 would prohibit contract clauses that
prevent or limit either partys ability to participate in
business that compete with the other party. In essence, it
would add noncompete clauses to Alaskas Unfair Trade Practices
for lease agreements in HUBZones. He noted that HUBZones are
defined by the United State Small Business Administration (SBA)
under 15 U.S.C. 657a (HUBZone Act of 1997).
CHAIR KREISS-TOMKINS asked Mr. Labolle whether he wanted to make
any additional refresher comments on the bill.
MR. LABOLLE addressed questions from the previous bill hearing
pertaining to HUBZones and where they are located. He noted
that at that time they were under review; however, that process
has been frozen until June 30, 2023, due to pending U.S. Census
data.
3:37:46 PM
REPRESENTATIVE VANCE inquired about the specific instance that
highlighted the need for this legislation.
MR. LABOLLE conveyed that the local Native corporation in
Mountain Village had entered into a lease agreement with Alaska
Commercial (AC) Company; however, due to the noncompete clause,
they couldnt open a smaller store that would compete with AC.
He explained that in rural areas, it's hard enough to get
competition to begin with because the population base is so low.
He said the added barrier to competition is what the bill hopes
to remove.
3:39:19 PM
REPRESENTATIVE CLAMAN asked whether this legislation raises any
equal protection issues.
TERRY BANNISTER, Legislative Legal Services, confirmed that it
does raise equal protection issues as everyone would not be
treated equally.
REPRESENTATIVE CLAMAN pointed out that the population within the
HUBZone would be treated the same and the population outside the
HUBZone would be treated the same. He questioned why that
doesnt resolve the equal protection issue.
MS. BANNISTER remarked Because the people outside the zone are
treated differently than the people inside the zone.
REPRESENTATIVE CLAMAN contended that the equal protection
problem would be a federal issue, as it pertains to the
HUBZones.
3:40:25 PM
MS. BANNISTER said she had not examined federal law on the
HUBZones yet.
REPRESENTATIVE CLAMAN asked whether there are issues related to
delegation of authority to the federal government.
MS. BANNISTER answered yes. She said the bill depends on
establishing operation of the HUBZones, which is a federal
activity. She added that Alaska provisions would depend on the
federal governments actions as they relate to the HUBZones.
Therefore, the issue of delegating authority to the federal
government is raised.
3:41:51 PM
CHAIR KREISS-TOMKINS asked whether ultimately, these are
constitutional problems.
MS. BANNISTER answered yes. She noted that the equal protection
issue also concerns local and special legislation, which is a
state constitutional issue. Further, she said, the improper
delegation would be the activity that the legislature is allowed
to perform their activities, which is ultimately a
constitutional issue.
CHAIR KREISS-TOMKINS asked Ms. Bannister to speak to the local
and special legislation consideration.
MS. BANNISTER stated that the bill would only apply to HUBZones
in certain areas of the state. She explained that a provision
in the constitution indicates that the legislature cannot pass a
law that only applies locally. Alternatively, a general law
could be made applicable at the will of the courts. She added
that if the courts would decide whether the bill bears a fair
and substantial relationship to legitimate state purposes.
CHAIR KREISS-TOMKINS asked Ms. Bannister to opine on whether the
legislation bears a fair and substantial relationship to
legitimate state purposes.
MS. BANNISTER said she has no opinion at this time.
CHAIR KREISS-TOMKINS asked whether she has an opinion on the
broader constitutionality of the bill.
MS. BANNISTER answered no. She said she didnt have enough time
to consider the facts.
CHAIR KREISS-TOMKINS sought to confirm that she was just
flagging them as issues.
MS. BANNISTER confirmed that she was merely bringing attention
to issues that may be raised.
3:45:08 PM
REPRESENTATIVE CLAMAN asked whether the constitutional issues
that have been identified are state related or federal
constitutional issues.
MS. BANNISTER said the equal protection issue might raise a
problem with federal legal protection laws.
REPRESENTATIVE CLAMAN asked whether Ms. Bannister agrees that
the Alaska equal protection provisions are stronger than the
federal equal protection provisions.
MS. BANNISTER answered yes.
3:45:57 PM
REPRESENTATIVE VANCE asked where the HUBZones are located in
Alaska.
MR. LABOLLE said HUBZones cover all of Alaska for different
reasons. Generally speaking, he said, Anchorage, Mat-Su, and
Fairbanks are the areas outside the HUBZones.
REPRESENTATIVE VANCE sought to confirm that it's the bill
sponsors interpretation that the bill would not conflict with
Alaska statutes.
MR. LABOLLE said the thought process behind the bill is that
equal protection provisions can be violated if there is a
compelling state interest. In this case, he indicated that the
compelling interest would be socioeconomic. He added that the
bill sponsor stuck with the federally defined HUBZones rather
than site specific ones in consideration of the special
legislation provision.
3:48:02 PM
REPRESENTATIVE EASTMAN directed attention to Section 2 and asked
why not make the law apply to every area of the state, as
opposed to only in HUBZones.
MR. LABOLLE said the bill sponsor wouldn't be opposed to that if
it is the will of the committee. He explained that
Representative Foster is looking at the issue from a rural-
centric perspective and didnt want to involve Anchorage;
however, if Anchorage, Mat-Su, and Fairbanks wanted to be
included, it wouldnt pose any problems.
3:49:02 PM
CHAIR KREISS-TOMKINS asked whether Sitka and Homer would be
affected by the geographic scope of the proposed legislation.
MR. LABOLLE offered to follow up with that information.
3:49:30 PM
REPRESENTATIVE CLAMAN, in response to Representative Eastman,
surmised that if Anchorage, Fairbanks, and Mat-Su were included,
property owners would want to control whos on their property.
For example, if the bill were to pass and a quick-stop
convenience store was required to go up in a mall wherein Fred
Meyer was located, Fred Meyer would be concerned with that, he
opined. He shared his belief that its different in a small
community that only has one strip of stores owned by a single
landlord.
CHAIR KREISS-TOMKINS, in reference to the HUBZones Map located
on the SBA website asked, What is designated by the red, Mr.
Labolle?
MR. LABOLLE said the red indicates that the HUBZone is qualified
as a county.
CHAIR KREISS-TOMKINS sought to confirm that red signifies a
HUBZone.
MR. LABOLLE replied, Not just red. He provided a brief
explanation of how to use the interactive map.
CHAIR KREISS-TOMKINS returned to his original question, asking
whether Sitka and Homer are qualified HUBZones.
MR. LABOLLE confirmed that they are both in HUBZones.
3:51:31 PM
REPRESENTATIVE KAUFMAN suggested that there could be unintended
consequences that may dampen businesses interest in an area.
He opined that monopolies arent good unless its the only way
to get goods and services into an area.
3:52:30 PM
REPRESENTATIVE EASTMAN suggested that a geographically neutral
way to write the bill would be to base the limitations on the
size of the business involved or the number of locations it has.
MR. LABOLLE said he is unfamiliar with any statutes that use
that specific categorization. He said another route to consider
would be by population size.
3:53:44 PM
REPRESENTATIVE VANCE urged further consideration of the impacts
to the affected boroughs or municipalities.
MR. LABOLLE acknowledged that if the committee decided to look
at alternate methods of application, that would be an important
consideration.
3:54:48 PM
REPRESENTATIVE EASTMAN said he is always reticent of referencing
federal law in state statute because it is subject to change in
the future. He conveyed that he would be more amenable to
implementing the legislation without a reference to HUBZones due
to the level of uncertainty.
MR. LABOLLE confirmed that he would be following up on the issue
of delegating authority to the federal government. He further
acknowledged that the HUBZones are subject to change, as they
are reassessed every five years.
3:56:37 PM
CHAIR KREISS-TOMKINS announced that HB 94 would be held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 142 Response Letter to H STA 5.7.21 PFD.pdf |
HSTA 2/8/2022 3:00:00 PM |
HB 142 |
| HB 142 Fiscal Note DOR-PFD-2-4-22.pdf |
HSTA 2/8/2022 3:00:00 PM |
HB 142 |
| HB 94 Fiscal Note VAR-EXE-2-5-22.pdf |
HSTA 2/8/2022 3:00:00 PM |
HB 94 |
| HB 94 Additional Info Hubzone-Program-Improvements-FAQ.pdf |
HSTA 2/8/2022 3:00:00 PM |
HB 94 |