Legislature(1993 - 1994)

03/10/1994 03:00 PM House L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    HOUSE LABOR AND COMMERCE                                   
                       STANDING COMMITTEE                                      
                         March 10, 1994                                        
                            3:00 p.m.                                          
  MEMBERS PRESENT                                                              
  Rep. Bill Hudson, Chairman                                                   
  Rep. Joe Green, Vice Chairman                                                
  Rep. Brian Porter                                                            
  Rep. Bill Williams                                                           
  Rep. Eldon Mulder                                                            
  Rep. Joe Sitton                                                              
  Rep. Jerry Mackie                                                            
  MEMBERS ABSENT                                                               
  COMMITTEE CALENDAR                                                           
  HB 353:   "An Act repealing the requirement of an annual                     
            audit of the receipts and expenditures applicable                  
            to certain property managed under the Horizontal                   
            Property Regimes Act."                                             
            CSHB 353(L&C) PASSED OUT OF COMMITTEE                              
  *HB 381:  "An Act relating to the commercial fishing                         
            revolving loan fund and the fisheries enhancement                  
            revolving loan fund; and providing for an                          
            effective date."                                                   
            CSHB 381(L&C) PASSED OUT OF COMMITTEE                              
  HB 507:   "An Act relating to licensure by the State Medical                 
            Board and temporary permits for certain                            
            CSHB 507(HESS) PASSED OUT OF COMMITTEE                             
  HB 255:   "An Act relating to application of the Public                      
            Employment Relations Act to municipalities and                     
            other political subdivisions."                                     
            SSHB 255 HEARD AND HELD IN COMMITTEE                               
  (* First public hearing.)                                                    
  WITNESS REGISTER                                                             
  REP. JEANNETTE JAMES                                                         
  Alaska State Legislature                                                     
  State Capitol                                                                
  Juneau, Alaska  99801-1182                                                   
  Position Statement:  Sponsor of HB 353                                       
  BILL McNULL                                                                  
  921 W. 6th Ave., Suite 100                                                   
  Anchorage, Alaska  99501                                                     
  Position Statement:  Supported HB 353                                        
                       (Spoke via teleconference)                              
  TRACEY RICKER                                                                
  Remax of Southeast                                                           
  8800-219 Glacier Hwy.                                                        
  Juneau, Alaska  99801                                                        
  Position Statement:  Opposed HB 353                                          
  CHERYL SUTTON, staff                                                         
  Rep. Carl Moses                                                              
  Alaska State Legislature                                                     
  State Capitol                                                                
  Juneau, Alaska  99801-1182                                                   
  Position Statement:  Presented HB 381 and CSHB 381(L&C)                      
                       for prime sponsor                                       
  FRANK HOMAN                                                                  
  Commercial Fisheries Entry Commission                                        
  8800 Glacier Hwy., #109                                                      
  Juneau, Alaska  99801                                                        
  Position Statement:  Supported CSHB 381(L&C)                                 
  MARTIN RICHARDS, Director                                                    
  Division of Investments                                                      
  Department of Commerce and Economic Development                              
  P.O. Box 34159                                                               
  Juneau, Alaska  99803-4159                                                   
  Position Statement:  Discussed priority list                                 
  REP. CARL MOSES                                                              
  Alaska State Legislature                                                     
  State Capitol                                                                
  Juneau, Alaska  99801-1182                                                   
  Position Statement:  Sponsor of HB 381                                       
  JERRY McCUNE                                                                 
  United Fisherman of Alaska                                                   
  211 4th St., Suite 112                                                       
  Juneau, Alaska  99801                                                        
  Position Statement:  Supported CSHB 381(L&C)                                 
  GREG WINEGAR, Manager                                                        
  Division of Investments                                                      
  Department of Commerce and Economic Development                              
  P.O. Box 34159                                                               
  Juneau, Alaska  99803-4159                                                   
  Position Statement:  Answered questions on HB 381                            
  REP. CYNTHIA TOOHEY                                                          
  Alaska State Legislature                                                     
  State Capitol                                                                
  Juneau, Alaska  99801-1182                                                   
  Position Statement:  Presented CSHB 507(HESS)                                
  DR. JOAN GILINECK                                                            
  1305 21st Ave., Suite 101                                                    
  Fairbanks, Alaska  99701                                                     
  Position Statement:  Supported HB 507                                        
                       (Spoke via teleconference)                              
  DR. ROY BOX                                                                  
  9309 Glacier Hwy., Suite A-102                                               
  Juneau, Alaska  99801                                                        
  Position Statement:  Supported HB 507                                        
  JOSEPH EASAW, JR., Staff                                                     
  Rep. Al Vezey                                                                
  Alaska State Legislation                                                     
  State Capitol                                                                
  Juneau, Alaska  99801-1182                                                   
  Position Statement:  Presented HB 255                                        
  JOAN WILKERSON                                                               
  APEA/AFT, AFL-CIO                                                            
  211 Fourth St., Suite 306                                                    
  Juneau, Alaska  99801                                                        
  Position Statement:  Opposed HB 255                                          
  CLAUDIA DOUGLAS                                                              
  114 Seward                                                                   
  Juneau, Alaska  99801                                                        
  Position Statement:  Opposed HB 255 and SSHB 255                             
  PREVIOUS ACTION                                                              
  BILL:  HB 353                                                                
  SPONSOR(S): REPRESENTATIVE(S) JAMES                                          
  JRN-DATE    JRN-PG                     ACTION                                
  01/07/94      2020    (H)   PREFILE RELEASED                                 
  01/10/94      2020    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/10/94      2020    (H)   LABOR & COMMERCE, STATE AFFAIRS                  
  03/08/94              (H)   L&C AT 03:00 PM CAPITOL 17                       
  03/10/94              (H)   L&C AT 03:00 PM CAPITOL 17                       
  BILL:  HB 381                                                                
  SPONSOR(S): REPRESENTATIVE(S) MOSES,Olberg,Grussendorf                       
  JRN-DATE    JRN-PG                     ACTION                                
  01/18/94      2097    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/18/94      2097    (H)   LABOR & COMMERCE, FINANCE                        
  03/10/94              (H)   L&C AT 03:00 PM CAPITOL 17                       
  BILL:  HB 507                                                                
  JRN-DATE    JRN-PG                     ACTION                                
  02/16/94      2416    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  02/16/94      2416    (H)   HES, LABOR & COMMERCE                            
  03/01/94              (H)   HES AT 03:00 PM CAPITOL 106                      
  03/01/94              (H)   MINUTE(HES)                                      
  03/02/94      2576    (H)   HES RPT  CS(HES) 5DP  2NR                        
  03/02/94      2576    (H)   DP:  KOTT, VEZEY, BUNDE,                         
                              TOOHEY, BRICE                                    
  03/02/94      2576    (H)   NR:  OLBERG, NICHOLIA                            
  03/02/94      2576    (H)   -FISCAL NOTE (DCED) 3/2/94                       
  03/02/94      2576    (H)   FIN REFERRAL ADDED                               
  03/10/94              (H)   L&C AT 03:00 PM CAPITOL 17                       
  BILL:  HB 255                                                                
  SHORT TITLE: LOCAL EXEMPTION FROM PERA                                       
  BILL VERSION: SSHB 255                                                       
  SPONSOR(S): STATE AFFAIRS                                                    
  JRN-DATE    JRN-PG                     ACTION                                
  03/26/93       794    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  03/26/93       794    (H)   STATE AFFAIRS                                    
  03/29/93       838    (H)   CRA AND FIN REFERRALS ADDED:                     
  03/29/93       838    (H)   CRA, STA, FIN                                    
  04/15/93              (H)   CRA AT 01:00 PM CAPITOL 124                      
  04/16/93              (H)   CRA AT 01:30 PM CAPITOL 124                      
  01/14/94      2061    (H)   SPONSOR SUBSTITUTE                               
  01/14/94      2061    (H)   CRA, STATE AFFAIRS, FINANCE                      
  01/25/94              (H)   CRA AT 01:00 PM CAPITOL 124                      
  01/25/94              (H)   MINUTE(CRA)                                      
  01/26/94      2150    (H)   CRA RPT  2DP 3DNP 2NR                            
  01/26/94      2150    (H)   DP:  TOOHEY, OLBERG                              
  01/26/94      2150    (H)   DNP:  WILLIS, WILLIAMS, DAVIES                   
  01/26/94      2150    (H)   NR:  SANDERS, BUNDE                              
  01/26/94      2150    (H)   -ZERO FISCAL NOTE (DCRA)                         
  01/26/94      2150    (H)   REFERRED TO STATE AFFAIRS                        
  02/02/94      2229    (H)   STA & FIN REFERRAL CHANGED TO                    
                              L&C & STA                                        
  03/10/94              (H)   L&C AT 03:00 PM CAPITOL 17                       
  ACTION NARRATIVE                                                             
  TAPE 94-21, SIDE A                                                           
  Number 001                                                                   
  CHAIRMAN HUDSON convened the meeting at 3:13 p.m., announced                 
  there was a quorum, and invited Rep. James to present HB
  HB 353 - CONDOMINIUM ASSOCIATION MANAGEMENT                                  
  Number 050                                                                   
  REP. JEANNETTE JAMES, Prime Sponsor of HB 353, stated that                   
  HB 353 was introduced to correct a glitch in the law.  In                    
  1963 when the condominium law was enacted there was a                        
  requirement for an outside audit for condo associations on                   
  an annual basis.  When the law was changed in 1985 it                        
  eliminated the audit requirement.  Rep. James stated there                   
  is a committee substitute for HB 353 that changes the law so                 
  that the requirements of condominiums built before 1987 are                  
  the same as condominiums built after 1987.                                   
  Number 087                                                                   
  BILL McNULL, attorney, President of the Board of Directors                   
  of the Alaska Chapter of Community Association Institute,                    
  testified on HB 353.  Mr. McNull stated that the concern of                  
  the association is the expense of an audit for a small                       
  condominium complex; i.e., 8-12 unit building.  Mr. McNull                   
  explained that an audit is approximately $2,500.00 to                        
  $3,500.00 for a condo complex of this size.                                  
  MR. McNULL stated that the requirement includes using a                      
  certified public accountant (CPA).                                           
  MR. McNULL stated that the secondary market has requirements                 
  that include annual audits of larger condo complexes by                      
  MR. McNULL suggested that HB 353 state that there is no                      
  audit required unless required by the secondary market or                    
  the association chooses to have the audit done.                              
  MR. McNULL stated that each association requires that the                    
  members pay money into a reserve account and should be                       
  periodically looked at by a CPA to make sure they are in                     
  Number 160                                                                   
  REP. JAMES commented that whether or not there needs to be                   
  an audit is a matter of philosophy.  She added that the                      
  condominium association should be able to decide for                         
  themselves if they want one through their bylaws.                            
  REP. JAMES asserted that if the requirement was to have an                   
  audit every five years instead of annually the expense would                 
  be the same.                                                                 
  REP. JAMES added that AS 34.08 is specific in its                            
  requirement of the kinds of records you have to keep.  These                 
  records are required to be available to the members at any                   
  time and could be used by the secondary market instead of an                 
  Number 196                                                                   
  MR. McNULL stated that it's the responsibility of each board                 
  to keep the complex marketable and this includes the ability                 
  to get financing on the secondary market.                                    
  Number 215                                                                   
  TRACEY RICKER, Property Manager, Remax of Southeast,                         
  testified in opposition of HB 353.  She said she has been a                  
  property manager in Juneau for ten years and stated that in                  
  her experience an outside independent review of condominium                  
  associations should be required at least annually.  She                      
  added that small complexes may not need an annual review.                    
  MS. RICKER stated that there are three types of reviews that                 
  a CPA can perform that would be effective.  She said the                     
  committee may want to require an annual audit by an Outside                  
  CPA for associations of 50 condos or more and something less                 
  for 50 and under.                                                            
  Number 245                                                                   
  CHAIRMAN HUDSON asked what the differences were between the                  
  two committee substitutes.                                                   
  Number 255                                                                   
  REP. JAMES stated one change was to "level the playing                       
  field" between those condos built before 1987 and those                      
  after.  The other change provides for an audit if the board                  
  or manager determines one is needed.                                         
  REP. MACKIE stated that present law requires an audit and                    
  the CS would not require one.                                                
  Number 280                                                                   
  REP. JAMES responded that the old law enacted in 1965                        
  required an audit every year by an Outside accountant.  The                  
  law changed in 1985, requiring that condos built after 1987                  
  did not have to have an audit.                                               
  REP. JAMES asserted that the state should not be telling                     
  condo associations that they need to have an audit.  She                     
  believed they should choose for themselves.                                  
  Number 299                                                                   
  REP. MACKIE asked if there were any other areas of business                  
  where state law requires audits.                                             
  Number 303                                                                   
  MS. RICKER responded that it is good practice to establish a                 
  review by an independent party on an annual basis for the                    
  comfort of all parties involved.                                             
  Number 320                                                                   
  CHAIRMAN HUDSON stated he supported the language in the CS                   
  that allows for owner discretion in requiring audits or                      
  Number 330                                                                   
  MS. RICKER stated she thinks a minimum standard should be                    
  established by the state.  She added that the standard                       
  should be that a review or compilation by an independent                     
  party or an independent CPA should be done annually based on                 
  the size of the complex.                                                     
  Number 340                                                                   
  REP. PORTER asked if it was her understanding that the                       
  present law does not require any audits now.                                 
  Number 350                                                                   
  MS. RICKER responded that those associations that opt in to                  
  the Universal Common Interest Ownership Act are required to                  
  have audits.                                                                 
  Number 360                                                                   
  REP. MACKIE asked if he was correct in his understanding                     
  that this legislation would take out the requirement for                     
  audits for everyone.                                                         
  Number 371                                                                   
  MS. RICKER responded that he was correct.                                    
  Number 374                                                                   
  REP. JAMES added that she felt it was out of the realm of                    
  the state to require that associations of people should have                 
  their books audited.                                                         
  REP. SITTON stated that he believes a secondary audit is the                 
  function of a loan application.  He added that he believes                   
  government has gone too far in micromanaging the public's                    
  Number 420                                                                   
  REP. PORTER moved the adoption of the 3/9/94 committee                       
  substitute.  No objections were heard; it was so ordered.                    
  REP PORTER moved passage of CSHB 353(L&C) with zero fiscal                   
  note.  No objections were heard; it was so ordered.                          
  HB 381 - COMM'L FISH LOANS FOR CERTAIN OBLIGATIONS                           
  CHAIR HUDSON announced that HB 381 as the next bill before                   
  the committee and introduced Rep. Carl Moses, the bill's                     
  Number 450                                                                   
  CHERYL SUTTON, Fisheries aide to Rep. Carl Moses, asked if                   
  the committee would like her to speak to the committee                       
  substitute or the original bill.                                             
  The Chair asked that she discuss the 3/9/94 work draft                       
  version first.                                                               
  Number 482                                                                   
  CHAIRMAN HUDSON asked that the record reflect that HB 381                    
  was placed in a subcommittee for discussion of the IRS and                   
  child support provisions.  He added that his staff worked                    
  with the subcommittee and prime sponsor and produced the                     
  3/9/94 version presently before the committee.                               
  REP. WILLIAMS moved adoption of the CS referenced above.  No                 
  objections were heard; it was so ordered.                                    
  Number 500                                                                   
  MS. SUTTON read a sponsor statement for CSHB 381(L&C).  She                  
  said CSHB 381(L&C) adds four new elements to AS 16.10:                       
  1)  refinancing of private bank loans                                        
  2)  loans to upgrade existing vessels and gear for quality                   
  3)  loans to satisfy federal tax obligations with specific                   
  4)  transfer of funds that are not needed for current loan                   
      demand between the commercial fishing revolving loan                     
      fund and the fisheries enhancement revolving loan fund.                  
  MS. SUTTON said the Commercial Fishing Loan Program is a                     
  primary source of loans to Alaska fishermen and one of only                  
  two lenders authorized by law to take Alaska Limited entry                   
  permits as collateral.  One of the basic tenets of the                       
  Commercial Fishing Revolving Loan Fund was to maintain a                     
  resident Alaskan fishery.  If permits go up for auction                      
  because of seizure, there is no control over keeping them in                 
  MS. SUTTON said the IRS currently is not receptive to making                 
  pay arrangements with fishermen who are in arrears on their                  
  federal tax obligations.  According to the IRS, 74% of the                   
  Alaska resident limited entry permit holders in arrears who                  
  have filed tax returns owe $10,000.00 or less.  These                        
  Alaskans are not tax evaders, but simply fishermen facing a                  
  crisis.  CSHB 381(L&C) adds a new section on page 3, Section                 
  2, which sets forth loan criteria for the Department of                      
  Commerce to follow.  The first criterion would be the                        
  individual has to have filed past and current tax returns;                   
  the second, the individual would have to have executed an                    
  agreement with the federal government for repayment; and                     
  third, the individual may receive only one loan during his                   
  or her lifetime to satisfy past tax obligations; and the                     
  fourth, the loan may not exceed $30,000.00.                                  
  MS. SUTTON stated the refinancing provision would allow                      
  fishermen to combine debt service on permit loans and boat                   
  loans or with loans from other private lending institutions.                 
  It would also provide for a better interest rate and more                    
  reasonable repayment schedule.  There have been instances                    
  where a fisherman owned a limited entry permit free of                       
  encumbrances and held a boat loan through a private banking                  
  institution.  Through circumstances beyond the fisherman's                   
  control, the debt obligation on the boat could not be met                    
  and the boat was confiscated by the lender.  In this                         
  situation, a fisherman has no means of participating in the                  
  fishery and no means of meeting the debt obligation.                         
  MS. SUTTON said CSHB 381(L&C) would allow the Department of                  
  Commerce and Economic Development to transfer funds that are                 
  not needed for current loan demand between the Commercial                    
  Fishing Revolving Loan Fund and the Fisheries Enhancement                    
  Revolving Loan Fund.                                                         
  MS. SUTTON stated this bill addresses constituent needs of                   
  every legislator.  The crisis in salmon fisheries has                        
  affected every area of the state.  Much of what has happened                 
  in the salmon industry is well beyond the control of                         
  fishermen.  The CSHB 381(L&C) would provide some small                       
  measure of support and help through a secured loan process                   
  in these difficult times.                                                    
  Number 543                                                                   
  REP. PORTER asked, What is the other fund that can take a                    
  Number 558                                                                   
  MS. SUTTON responded that the other fund is the Commercial                   
  Fishing and Agricultural Bank.                                               
  CHAIR HUDSON asked for people who would like to testify on                   
  this bill.                                                                   
  Number 560                                                                   
  FRANK HOMAN, Commercial Fishing Entry Commission, testified                  
  in support on CSHB 381(L&C).  He stated that he testified                    
  before the subcommittee and would be glad to answer any                      
  Number 574                                                                   
  REP. WILLIAMS moved the following letter of intent:                          
  It is the intent of the House Labor and Commerce Committee                   
  that the Division of Investments exercise particular care in                 
  forecasting loan demand in order to fully accommodate all                    
  new commercial fishing lending needs that arise from the                     
  modification of the commercial fishing loan program by the                   
  Eighteenth Alaska State Legislature.  It is further the                      
  intent of the House Labor and Commerce Committee that use of                 
  the Commercial Fisheries Revolving loan Fund for loans for                   
  refinancing purposes succeed all other commercial fishing                    
  lending needs in priority.  Finally, it is the House Labor                   
  and Commerce Committee's intent that transfers of excess                     
  funds from the Commercial Fisheries Revolving Loan Fund be                   
  permitted only after commercial fishing loan needs,                          
  including any anticipated loans for purchase of Individual                   
  Fishing Quotas, have been met.                                               
  Number 579                                                                   
  REP. SITTON suggested that the committee make the law                        
  clearer instead of using the letter of intent.                               
  Number 584                                                                   
  CHAIRMAN HUDSON responded that it was a matter of                            
  prioritizing the available funds.                                            
  Number 610                                                                   
  MARTIN RICHARDS, Director, Division of Investments,                          
  Department of Commerce and Economic Development, testified                   
  that at the subcommittee meeting the Division offered a                      
  proposed list that showed how the Division would prioritize                  
  if funds were short.  The intent language follows this list.                 
  Number 630                                                                   
  REP. PORTER asked if there was still a set of requirements                   
  fishermen would be held to before the state would lend any                   
  money out of this fund.                                                      
  Number 636                                                                   
  MR. RICHARDS responded that all the qualifications that                      
  exist in the program would stay there.                                       
  TAPE 94-21, SIDE B                                                           
  Number 001                                                                   
  REP. WILLIAMS moved adoption of the letter of intent.  No                    
  objections were heard; it was so ordered.                                    
  Number 030                                                                   
  MS. SUTTON stated that the letter of intent hopefully would                  
  offer some level of comfort as to how the loans would be                     
  Number 037                                                                   
  REP. MACKIE asked why the intent of the letter wasn't put                    
  into  statute so the intent would be law.                                    
  REP. MOSES stated that he felt it important to leave some                    
  discretion to the division as times change.                                  
  REP. WILLIAMS stated that the priorities are covered by                      
  regulations that the Division of Investment works under.  He                 
  added, "what we're trying to do is move the IFQ loans up                     
  underneath the IRS loans, have them third in line.  The IFQ                  
  loan bill is still in Finance."                                              
  CHAIR HUDSON asked the next witness to testify.                              
  Number 066                                                                   
  JERRY McCUNE, United Fisherman of Alaska, testified in                       
  support of CSHB 381(L&C).  He dittoed Ms. Sutton's                           
  Number 087                                                                   
  CHAIRMAN HUDSON asked Mr. McCune if he was satisfied with                    
  the letter of intent.                                                        
  Number 087                                                                   
  MR. McCUNE responded that he was.                                            
  Number 130                                                                   
  REP. MULDER offered a technical amendment to the letter of                   
  intent:  delete the word "expansion" and insert "modify."                    
  Number 166                                                                   
  REP. GREEN suggested that subsection (I) be deleted in AS                    
  16.10.320 so that you could borrow for the permit and then                   
  the boat and vice versa.  He read that subsection.                           
  Number 188                                                                   
  GREG WINEGAR, Loan Manager, Division of Investments,                         
  Department of Commerce and Economic Development, explained                   
  to Rep. Green how the program came about.  He answered                       
  questions regarding AS 16.                                                   
  MR. WINEGAR stated that he thought the deletion of                           
  subsection (I) would be a substantial expansion of the                       
  Number 225                                                                   
  REP. GREEN asked Mr. Winegar to look into this issue and be                  
  prepared to explain it to the next committee.                                
  Number 237                                                                   
  REP. MACKIE asked Rep. Moses if HB 381 would encourage                       
  rather than discourage fishermen to not pay their taxes.                     
  Number 248                                                                   
  REP. MOSES responded that he couldn't imagine a person                       
  having that attitude and that the restrictions in the bill                   
  provided plenty of protection.                                               
  Number 258                                                                   
  REP. WILLIAMS moved passage of CSHB 381(L&C) with individual                 
  recommendations and a zero fiscal note.  No objections were                  
  heard; it was so ordered.                                                    
  HB 507 - LICENSING OF OPTOMETRISTS AND PHYSICIANS                            
  CHAIR HUDSON announced that HB 507 was the next bill before                  
  the committee.                                                               
  Number 296                                                                   
  REP. CYNTHIA TOOHEY, Co-Chair of the HESS Committee, read                    
  the following sponsor statement on CSHB 507(HESS):                           
  Section 1 addresses the concerns of the State Medical Board                  
  for interviewing applicants for licensure in person.  They                   
  would like it to be expanded to "the board or its designated                 
  representative."  This would lessen the cost in time, money,                 
  and inconvenience for applicants who wish to practice                        
  medicine in the state.                                                       
  Section 2 deals with granting a temporary permit for locum                   
  tenens for the purpose of providing temporary medical                        
  coverage for an underserved area as approved by the board.                   
  Under current statute, locum tenens permits may only be                      
  issued to physicians who are substituting for an absent                      
  physician.  With this change, a temporary permit may be                      
  issued to a physician who will be practicing in an area that                 
  does not have a regular residing physician.                                  
  In Section 3 of this bill, a locum tenens permit may be                      
  issued to a nonresident optometrist for the purpose of                       
  assisting or substituting for an optometrist licensed under                  
  AS 08.72.                                                                    
  Alaska has a lot of solo practitioners in remote and semi-                   
  remote areas of the state.  If a practitioner becomes                        
  injured, seriously ill or must leave temporarily, he                         
  presently must close down his clinic.  This can bring a                      
  hardship to his patients, especially if the time away                        
  extends to several months.                                                   
  REP. TOOHEY explained that the only change from the original                 
  bill to the committee substitute appears on page 1, line 6:                  
  the word "shall" was changed to "may."                                       
  Number 328                                                                   
  REP. SITTON asked why medical professionals need interviews                  
  when they have extensive backgrounds and degrees that could                  
  be looked at instead.                                                        
  Number 337                                                                   
  REP. TOOHEY explained that the testimony in the Health,                      
  Education and Social Services Committee held that it was                     
  very important to have face to face interviews rather than                   
  just looking at the paper trail of someone's educational                     
  experience alone.                                                            
  REP. SITTON asked if the rest of the medical profession was                  
  handled in the same way as HB 507 proposes to handle                         
  REP. TOOHEY replied yes.                                                     
  Number 357                                                                   
  DR. ROY BOX, a licensed optometrist who practices in Juneau,                 
  testified in support of the locum tenens addition to HB 507,                 
  saying it was basically his idea and that's why he got                       
  appointed to testify on it.  Dr. Box stated that there are                   
  only approximately 50 optometrists practicing in the state,                  
  and ten of them work for various and sundry government                       
  agencies, and that leaves 40, so if anyone gets sick or                      
  needs to leave their practice for a period of time, as a                     
  practical matter there is no one to fill in for them.  He                    
  said HB 507 would protect the public as far as the licensure                 
  is concerned because that it requires that the medical                       
  personnel filling in be licensed by another state or                         
  DR. BOX added that this provision would also help in the                     
  area of specialty care.  Small towns often don't have enough                 
  business to have their own specialist, but under this bill                   
  specialist could come to these towns to hold clinics                         
  Number 372                                                                   
  DR. JOAN GILINECK, board member of the State Medical Board,                  
  testified in support of HB 507 and the interviewing process.                 
  She said the board feels the interview process provides a                    
  window of observation that is not otherwise available to                     
  scrutinize the applicant and compliment the written                          
  application.  She said there are 19 states that require an                   
  interview with a board member; there are three states who                    
  require an interview with the full board; there are five                     
  states who require an oral examination; there are eleven                     
  states that require a possible interview; and there are 15                   
  states she thought that require no interview.  She said                      
  these statistics say something about the value that other                    
  states attach the interviewing process.  Of course the value                 
  of the interview will be in direct proportion to the                         
  experience and the skill of the interviewer.                                 
  Number 420                                                                   
  REP. PORTER asked if the changes being discussed would                       
  affect licensing for all physicians.                                         
  Number 430                                                                   
  DR. BOX stated that the first two sections apply to the                      
  medical licensing law and Section 3 applies only to                          
  Number 447                                                                   
  REP. PORTER asked Dr. Gilineck if HB 507 would allow phone                   
  Number 452                                                                   
  DR. GILINECK responded that a telephonic interview would be                  
  allowed under certain circumstances.                                         
  REP. MACKIE moved passage of HB 507 with individual                          
  recommendations and fiscal note.  No objections were heard;                  
  it was so ordered.                                                           
  HB 255 - LOCAL EXEMPTION FROM PERA                                           
  CHAIR HUDSON announced HB 255 as the next bill before the                    
  committee.  He introduced Rep. Al Vezey as the prime sponsor                 
  of the bill and asked him to join members at the table.                      
  REP. VEZEY stated that Mr. Easaw was prepared to give the                    
  opening statement.                                                           
  Number 480                                                                   
  JOSEPH EASAW, JR., staff, Rep. Al Vezey, provided the                        
  following sponsor statement on HB 255:                                       
  The intent of HB 255 is to allow municipalities the option                   
  of removing themselves from PERA (Public Employees Relation                  
  Act).  Under this proposed legislation, a municipality could                 
  make such a decision with the approval of the voters of the                  
  It was the intent of the 1972 legislation to allow                           
  municipalities to opt out of PERA.  As the law currently                     
  exists, a municipality under PERA, for all practical                         
  purposes, cannot remove themselves.  This determination has                  
  been brought about by decisions of the court.  This                          
  condition has resulted in diminished control over local                      
  Existing legislation as interpreted by the courts has put                    
  local governing bodies in a position where one governing                     
  body can obligate all future governing bodies.  This bill is                 
  intended to correct what the legislature has inadvertently                   
  allowed the court to mandate on local governments by placing                 
  the decision making process back into the hands of local                     
  governing officials and the people.                                          
  Number 540                                                                   
  REP. SITTON asked what HB 255 would do to employees                          
  currently in collective bargaining agreements in                             
  Number 548                                                                   
  MR. EASAW responded that if there is a collective bargaining                 
  agreement in place it will remain in effect.                                 
  Number 555                                                                   
  REP. SITTON stated he saw the list of municipalities who had                 
  the chance to opt out of PERA and didn't and wondered if HB
  255 was requested by them in order to give them another                      
  Number 560                                                                   
  MR. EASAW replied that the intent of the language does not                   
  give any time frame for those municipalities to act.  That                   
  decision came by court decision in 1975 in the case of                       
  Petersburg vs. State.  Mr. Easaw stated that some interpret                  
  the decision to still allow municipalities to opt out.                       
  REP. MULDER asked if his understanding was correct that                      
  current law provides that municipalities will be included in                 
  PERA unless they opt out and HB 255 would change the law to                  
  say that PERA would not apply to municipalities unless the                   
  municipality holds an election as set out in subsection (b).                 
  MR. EASAW stated that under current statutes if you are a                    
  new municipality forming you have a reasonable amount of                     
  time to opt out of PERA.  He said PERA does not permit a                     
  municipality to opt out of it after its employees have                       
  started to organize.                                                         
  Number 592                                                                   
  REP. MULDER asked if under HB 255 a municipality is out of                   
  PERA unless they opt in.                                                     
  Number 595                                                                   
  MR. EASAW replied that that was true.                                        
  Number 600                                                                   
  CHAIRMAN HUDSON stated that it was his understanding that                    
  the court has ruled that a political subdivision may not opt                 
  out if there is any organizational steps being taken by the                  
  Number 606                                                                   
  MR. EASAW stated that the court has said that you cannot opt                 
  out of PERA unless you have done so in a reasonable time                     
  frame after organization.                                                    
  Number 616                                                                   
  REP. PORTER asked if a city currently under PERA would be                    
  able to opt out of PERA without a vote of the people if HB
  255 passed.                                                                  
  Number 619                                                                   
  MR. EASAW replied that HB 255 expressly states that in order                 
  for a community to opt out they must go to a vote of the                     
  TAPE 94-22, SIDE A                                                           
  Number 001                                                                   
  MR. EASAW stated that as he understood labor contracts, if a                 
  negotiation is ongoing, the expired contract remains in                      
  Number 020                                                                   
  REP. PORTER asked, if a city is currently in PERA, can they                  
  take a vote of the community to determine if they want to                    
  opt out?                                                                     
  MR. EASAW answered that he was correct.                                      
  CHAIR HUDSON asked Joan Wilkerson to testify.                                
  Number 057                                                                   
  JOAN WILKERSON, Southeast Regional Manager for APEA/AFT,                     
  testified in opposition to HB 255.  Ms. Wilkerson stated she                 
  was also speaking for the Alaska AFL/CIO and its 50,000                      
  members state wide.                                                          
  MS. WILKERSON provided the following statement for the                       
  We adamantly oppose HB 255, as should all supporters of                      
  collective bargaining because this bill is intended to do                    
  nothing less than eliminate collective bargaining for                        
  thousands of Alaska's workers.  By establishing a revolving                  
  door system of opting in or out of PERA, the bill would not                  
  only deny the basic human right to collectively bargain with                 
  their employer to employees in political subdivisions which                  
  opt out of the system, but would also render meaningless the                 
  system left behind for those areas which continue to bargain                 
  with their employees, since the notion of "good faith                        
  bargaining" will cease to exist when an employer can always                  
  threaten to opt out if it doesn't like the way things are                    
  going in negotiations.                                                       
  The immediate practical effect of this legislation will be                   
  full employment for attorneys, to the detriment of both                      
  taxpayers and employee groups.  The legal issues raised by                   
  an election to opt out while a collective bargaining                         
  agreement is in effect will tie both the courts and the                      
  labor relations agency in knots.  Even where a healthy and                   
  viable bargaining relationship exists between the local                      
  government and its employees, a small number of anti-union                   
  voters in a community, sufficient to put the issue on the                    
  ballot by initiative, can require annual elections with the                  
  attendant expenditure of public and private resources better                 
  used elsewhere.                                                              
  PERA has governed public employment relations in this state                  
  for 20 years.  There was nothing "inadvertent" about its                     
  intent to apply to political subdivisions.  A floor                          
  amendment allowed a one-time "opt-out," of which many                        
  municipalities have made use.  Some, such as Fairbanks and                   
  Cordova, have subsequently elected to opt back in.                           
  Some decisions must be final and binding.  The decision to                   
  engage in good faith bargaining with employees is one such                   
  decision.  We urge you to go on record in support of                         
  collective bargaining and keep this bill in committee.                       
  Number 150                                                                   
  CHAIRMAN HUDSON asked Ms. Wilkerson what the positive                        
  benefits of PERA were for municipalities as well as for                      
  Number 152                                                                   
  MS. WILKERSON replied that the bill as it currently exists                   
  is essentially a bill of rights for public employees in the                  
  state of Alaska.  It allows them to exercise their                           
  fundamental constitutional rights to association by virtue                   
  of their relationship with each other as employees of a                      
  public government, as a public entity.  It creates and                       
  answers to the Alaska Labor Relations Agency.  It permits                    
  corporations to form through the associations of these                       
  employees and to collectively bargain with employers.  In                    
  her limited exposure to municipalities and boroughs who have                 
  opted out, the employees have virtually no rights at all.                    
  It was her understanding from PERA itself, that the initial                  
  intent of the legislature was that if a political                            
  subdivision was going to opt out of PERA, that they should                   
  pass an ordinance which would more or less take the place of                 
  PERA.  She has seen this in action in a municipality in                      
  Southeast Alaska that did opt out and passed personnel rules                 
  which are so vague in nature that they do not afford the                     
  rights incumbent in PERA.  The most basic of those rights,                   
  which are at issue right now, are the right to bargain, and                  
  for the employee the right to defend themselves through                      
  exercising the right to strike, or to send a matter to                       
  binding arbitration.                                                         
  Number 179                                                                   
  REP. PORTER stated that it was his understanding that if a                   
  municipality wanted to opt out of PERA they would have to                    
  provide some mechanism for bargaining.  He added that he                     
  disagreed with Ms. Wilkerson regarding an employee's rights.                 
  He does not believe an employee would lose any rights if                     
  they were not in PERA.                                                       
  Number 193                                                                   
  MS. WILKERSON said she was not specifically speaking to the                  
  Anchorage Municipality, which Rep. Porter referred to, but                   
  she was speaking of another municipality.  She added that it                 
  would be important to note that each municipality is                         
  different without PERA.                                                      
  Number 215                                                                   
  REP. MULDER stated that in 1992 the Anchorage teachers were                  
  included in PERA.  He asked, if Anchorage has opted out of                   
  PERA, are the teachers out as well?                                          
  Number 230                                                                   
  REP. PORTER answered that teachers are still in PERA.                        
  Number 235                                                                   
  REP. SITTON asked for an elaboration regarding binding                       
  arbitration noted in the resolution from the City of                         
  REP. PORTER replied it only applied to Class 1 employees,                    
  which are only cops and firemen.                                             
  Number 250                                                                   
  MS. WILKERSON added that binding arbitration was also                        
  dictated by statute.  She stated that there were two kinds                   
  of binding arbitration:  (1) interest arbitration -- the                     
  negotiation process itself and (2) the grievance process.                    
  Number 250                                                                   
  CLAUDIA DOUGLAS, President, National Education Association                   
  testified against HB 255 and SSHB 255.  Ms. Douglas read the                 
  following statement for the record:                                          
  The bill will allow municipalities or other political                        
  subdivisions, including school districts, to conduct an                      
  election to determine if employees are to continue under the                 
  provision of AS 23.40.070 - 23.40.260.                                       
  Since the early 1970's state policy extended the statutory                   
  right to bargain to public employees.  School employees                      
  struggled for over ten years to establish their rights under                 
  PERA.  The schools and school employees have developed a                     
  successful pattern of bargaining under PERA for nearly four                  
  Bargaining provides public employees a good participatory                    
  way to influence decisions that affect the work place.  At                   
  the bargaining table public employees share in the decision                  
  making process affecting wages and working conditions.  They                 
  have become more responsive and better able to exchange                      
  ideas and information on operations with their                               
  administrators.  Successful businesses are moving to                         
  management models designed to involve employees in a                         
  meaningful participatory role.  Studies have shown that                      
  successful school reform occurs in school districts where                    
  mature bargaining relations exist.                                           
  If SSHB 255 were to become law, labor relations between                      
  school districts and school employees would be disrupted.                    
  Good faith bargaining would give way to politics.                            
  Management and school boards would have greater latitude to                  
  delay and forestall the bargaining process.  Some school                     
  districts could submit the question of continuance under                     
  PERA to voters annually or during each round of bargaining.                  
  In short the school, municipal, borough or state employee                    
  would lose. Inconsistency between units and school districts                 
  would occur.  The bargaining process would be weakened and                   
  in some instances destroyed.                                                 
  The bill calls for a vote of the people.  Who pays for the                   
  election?  Will the election activate adversarial clashes                    
  between the special anti-labor groups with agendas opposed                   
  to working people?                                                           
  We live in a republic where representatives are elected to                   
  make decisions for their constituency in view of the public                  
  good.  The issue of inclusion of school employees under PERA                 
  has been debated on the state level.  A majority of the                      
  legislature, after weighing carefully the facts and                          
  information, decided it is good policy.  In its declaration                  
  of the policy, it said, "the legislature finds that joint                    
  decision-making is the modern way of administering                           
  government."  We urge you to oppose this bill.                               
  Number 308                                                                   
  CHAIRMAN HUDSON announced that he did not intend to move HB
  255 at this time.  He stated that he wanted the committee to                 
  hear the opposing sides.                                                     
  CHAIRMAN HUDSON adjourned the meeting at 5:02 p.m.                           

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