Legislature(2007 - 2008)CAPITOL 17
03/26/2008 03:00 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB149 | |
| HB258 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 149 | TELECONFERENCED | |
| *+ | HB 258 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 26, 2008
3:08 p.m.
MEMBERS PRESENT
Representative Kurt Olson, Chair
Representative Mark Neuman, Vice Chair
Representative Carl Gatto
Representative Gabrielle LeDoux
Representative Jay Ramras
Representative Robert L. "Bob" Buch
Representative Berta Gardner
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 149
"An Act relating to redistribution of used eyeglasses."
- MOVED CSSB 149(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 258
"An Act relating to pawnbrokers; and providing for an effective
date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 149
SHORT TITLE: REDISTRIBUTION OF USED EYEGLASSES;OPT BD.
SPONSOR(s): SENATOR(s) THERRIAULT
03/30/07 (S) READ THE FIRST TIME - REFERRALS
03/30/07 (S) L&C, HES
02/19/08 (S) L&C AT 1:30 PM BELTZ 211
02/19/08 (S) Heard & Held
02/19/08 (S) MINUTE(L&C)
02/26/08 (S) L&C AT 1:30 PM BELTZ 211
02/26/08 (S) Moved CSSB 149(L&C) Out of Committee
02/26/08 (S) MINUTE(L&C)
02/27/08 (S) L&C RPT CS 5DP NEW TITLE
02/27/08 (S) DP: ELLIS, BUNDE, DAVIS, STEVENS,
HOFFMAN
03/10/08 (S) HES AT 5:00 PM BUTROVICH 205
03/10/08 (S) Moved CSSB 149(L&C) Out of Committee
03/10/08 (S) MINUTE(HES)
03/12/08 (S) HES RPT CS(L&C) 4DP
03/12/08 (S) DP: DAVIS, ELTON, THOMAS, DYSON
03/14/08 (S) TRANSMITTED TO (H)
03/14/08 (S) VERSION: CSSB 149(L&C)
03/17/08 (H) READ THE FIRST TIME - REFERRALS
03/17/08 (H) L&C
03/26/08 (H) L&C AT 3:00 PM CAPITOL 17
BILL: HB 258
SHORT TITLE: PAWNBROKERS
SPONSOR(s): REPRESENTATIVE(s) ROSES
05/13/07 (H) READ THE FIRST TIME - REFERRALS
05/13/07 (H) L&C, JUD
03/17/08 (H) SPONSOR SUBSTITUTE INTRODUCED
03/17/08 (H) READ THE FIRST TIME - REFERRALS
03/17/08 (H) L&C, JUD
03/26/08 (H) L&C AT 3:00 PM CAPITOL 17
WITNESS REGISTER
DAVE STANCLIFF, Staff
to Senator Gene Therriault
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented SB 149 on behalf of the prime
sponsor, Senator Gene Therriault.
HOWARD RIXIE
Aurora Borealis Lions Eyeglass Recycling Center
North Pole, Alaska
POSITION STATEMENT: Testified in support of SB 149.
JOSH APPLEBEE, Staff
to Representative Bob Roses
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 258 on behalf of the prime
sponsor, Representative Bob Roses.
ALEX VAUGHAN, Vice-President
Governmental Relations
Cash America International
Fort Worth, Texas
POSITION STATEMENT: Testified in support of HB 258.
KENNETH GUDGEN, Market Manager
Cash America Alaska
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 258.
MARK DAVIS, Davis, Director
Division of Corporations, Business, and Professional Licensing
Juneau Office
Department of Commerce, Community, & Economic Development
(DCCED)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 258.
ACTION NARRATIVE
CHAIR KURT OLSON called the House Labor and Commerce Standing
Committee meeting to order at 3:08:13 PM. Representatives
Gatto, Buch, Gardner, and Olson were present at the call to
order. Representatives LeDoux, Ramras, and Neuman arrived as
the meeting was in progress.
SB 149-REDISTRIBUTION OF USED EYEGLASSES;OPT BD.
3:08:52 PM
CHAIR OLSON announced that the first order of business would be
SENATE BILL NO. 149, "An Act relating to redistribution of used
eyeglasses."
3:09:14 PM
DAVE STANCLIFF, Staff to Senator Gene Therriault, Alaska State
Legislature, explained the history of SB 149. He offered that
the Lions Clubs of Alaska requested specific authority in
statute to allow them to fit clients with refurbished
eyeglasses. Clients would submit prescriptions and the Lions
Club of Alaska would fit them with eyeglasses donated to the
club. The Lions Club of Alaska estimates that approximately
1,500 Alaskans would benefit from SB 149. This bill does not
require that a specific organization be granted carte blanche
authority. Thus, SB 149 would provide that a nonprofit
organization must be approved by the Department of Commerce,
Community, & Economic Development (DCCED) to redistribute
eyeglasses, he explained. Under current statutes, the only
people who can fit a person for eyeglasses are licensed
optometrists or opticians. The nonprofit would work with the
DCCED to demonstrate its ability to meet the state's standards
set by regulation. If the DCCED granted permission to the Lions
Clubs of Alaska, a person would present their prescription
obtained from an optometrist or licensed physician to the Lions
Club of Alaska, who would fit the person with a pair of
eyeglasses. He offered that SB 149 has not had any opposition.
3:11:34 PM
REPRESENTATIVE BUCH inquired as to who would determinate that
the eyeglasses are the appropriate prescription for the person.
MR. STANCLIFF answered that the Lions Clubs have routinely
performed these duties in other states and are equipped and
trained to do so. The state would ascertain the program, the
qualifications, and the methods and means to implement the
program.
3:13:12 PM
REPRESENTATIVE BUCH inquired as to whether a prescription that
is close but is not an exact prescription match will harm the
client. He asked if other groups could provide the same
service.
MR. STANCLIFF responded that he is not aware of any other group
so qualified as the Lions Club since the Lions Clubs have
acquired vast experience through its program to donate
eyeglasses to the needy in other countries. However, SB 149
would allow other nonprofits to qualify.
3:14:35 PM
REPRESENTATIVE GARDNER related that when she needs eyeglasses,
she purchases them at Costco, Inc. and the eyeglasses are not
fitted to her and are not prescribed by any state standards.
MR. STANCLIFF answered that the current state standards are
those required of a licensed optometrist. He said he was not
sure what the state would require of the Lions Club, but
probably its staff and volunteers would need to know technical
knowledge. He pointed out that the Lions Clubs have an
international record in operating similar programs. He referred
to page 2, line 24, of SB 149, and noted that language that was
added in the other body reads " ... conforms, to the extent
possible ...". He explained that the Lions Clubs raise funds to
pay for eye examinations so that everyone who needs eyeglasses
can obtain a decent pair of eyeglasses.
3:17:16 PM
REPRESENTATIVE GARDNER characterized the Lions Clubs' program to
recycle eyeglasses as a wonderful program that she fully
supports. She inquired as to the necessity for a person to have
a prescription in order to access the recycled eyeglasses.
MR. STANCLIFF answered that he is not sure why a prescription is
required. He surmised that policy makers set what they must
have considered to be a reasonable standard, such that
prescriptions must be written under a licensed optometrist or
opthalmologist.
3:19:01 PM
HOWARD RIXIE, Aurora Borealis Lions Eyeglass Recycling Center,
explained that he speaks on behalf of approximately 75 Lions
Clubs in Alaska. The Lions Clubs of Alaska all support SB 149.
He provided some background information on the Lions Clubs'
longstanding efforts to assist the needy in obtaining
eyeglasses. He related that in 1925, Helen Keller asked the
Lions Clubs to help fix preventable blindness. He noted that
the Lions Clubs take an active part in the crusade against
darkness. He asked Senator Therriault to sponsor this bill
because of two projects the Lions Clubs strongly support -
eyeglasses recycling and eye care for the needy. Approximately
1,500 people are referred annually to the Lions Clubs for eye
exams, eyeglasses, or for major eye care such as surgery, he
noted. He explained the typical process is that someone refers
a needy client to a Lions Club. The Lions Club would refer the
person to a local state public assistance such as the Denali Kid
Care to establish the validity of the need. Once the client is
found to be truly in need, the Lions Club would financially
sponsor the person. In Interior Alaska, the Lions Club has a
long standing agreement with local eye doctors to provide eye
exams at a flat rate of $60 and eyeglasses at a flat rate of
$110. The total cost is $170 for each person assisted, he
stated. The cost of eye care programs for the needy is
daunting, he opined, and many times needy people are placed on a
waiting list until financial resources become available.
MR. RIXIE explained that the Aurora Borealis Lions Eyeglass
Recycling project collects approximately 30,000 to 40,000 pairs
of eyeglasses, which are sent to their recycling center in North
Pole. At that location, volunteers sort, clean, inspect,
repair, package, and ship approximately 30,000 pairs of
eyeglasses throughout the world to support vision care health
missions in the third world countries. Although third world
countries are served, he noted that many people in Alaska go
without services. The Lions Clubs researched whether eyeglasses
could be redistributed in Alaska. Although the Alaska statutes
don't preclude it, the statutes do not specifically enable or
address redistribution of eyeglasses in Alaska, he offered.
Thus, to ensure that the Lions Clubs can legally redistribute
recycled eyeglasses, the Lions Clubs approached Senator
Therriault and requested statutory clarification. The Lions
Clubs envision each optometrist or opthalmologist would donate
one or two Saturdays annually to perform free eye examinations.
The Lions Clubs would offer free examinations once or twice
monthly. Additionally, the Lions Clubs hope that among their
thousands of donated ready-to-wear eyeglasses, the client would
find a pair of eyeglasses that would match their prescription.
He stated that the Lions Clubs don't want to "corner the market"
on filling this need, but supports enabling statutes so that
people who need eyeglasses will be able to receive them. One
concern is that the Lions Clubs will take income making
opportunities away from eye care professionals. But he argued
that if the Lions Clubs did not serve the needs of these needy
people, they would never get an eye exam or a pair of glasses.
These folks are not active consumers in the eye care industry,
he opined. And they won't become consumers until they have jobs
that produce sufficient income that places quality of life and
vision sufficiently in the forefront for the need to be acted
upon. Most, if not all of the people served by the Lions Clubs
are homeless, battered, displaced, or severely poor. He urged
the committee to support SB 149.
MR. RIXIE defined the three types of eye care professionals. He
stated that an opthalmologist primarily studies eye disease and
performs surgeries; an optometrist provides prescriptions, and
an optician processes the prescription, orders the eyeglasses
from the manufacturer, and fits the eyeglasses for the client.
The Lions Clubs ideally would partner with opticians or would
work towards the goal of performing the services the optician
performs. Under SB 149, an optician would provide his services
at a clinic and provide the Lions Club with a prescription. The
Lions Club would sort through the recycled eyeglasses to provide
a perfect or "near perfect fit" and would fit the client with
eyeglasses. Currently, the Lions Clubs provide clients in third
world countries with a "near perfect fit." Under the bill, the
Lions Clubs would work with the state to develop the standard
for "near perfect fit" such as reaching within .25 of the
prescription, for a prescription of 1.50. Not all communities
are currently served by optometrists or opticians, especially in
rural Alaska, he noted. Therefore, the Lions Club may need to
teleconference with the appropriate professional in order to
serve the client.
3:26:57 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on SB 149.
3:27:28 PM
REPRESENTATIVE GARDNER inquired as to whether it is essential to
require a prescription for recycled eyeglasses. She related
that second hand stores have stacks of donated eyeglasses and a
person decides which pair of eyeglasses to select.
REPRESENTATIVE RAMRAS stated that the Hippocratic Oath [that
sets the ethical standard for physicians] requires medical
personnel to "do no harm". He related his understanding of the
program is for people to obtain a correct prescription for
eyeglasses and he cautioned members not to degrade the degree of
service. He related his own experience in wearing the wrong
prescription which resulted in a headache. He opined that
selecting ones own eyeglasses would not be appropriate care
since the eyeglasses need to fit the prescription.
REPRESENTATIVE GARDNER suggested that the committee not let the
principle of perfection become the enemy. She acknowledged that
it is great to have perfect fit. However, for many people
without the means to afford eye care a near perfect may be
adequate, she opined. She also noted that some places in rural
Alaska may need to use accommodations such as telemedicine.
3:29:53 PM
REPRESENTATIVE LEDOUX inquired as to whether current law
restricts who can sell eyeglasses.
MR. STANCLIFF answered that currently a person can purchase
eyeglasses off the rack that the person feels corrects his/her
vision. He pointed out the Lions Club and eye care
professionals take that a step further [by determining the
specific prescription of each lens.]
REPRESENTATIVE LEDOUX inquired as to whether the Lions Clubs in
Alaska are prevented from helping people to obtain recycled
eyeglasses unless SB 149 passes the legislature.
MR. RIXIE explained that currently in Alaska the Lions Clubs
work with local eye doctors to provide a subsidy for clients to
purchase the eyeglasses. Thus far, the Lions Clubs have not
been able to redistribute eyeglasses since the eye care
professionals are opposed to redistribution by allowing people
to select their own pair of eyeglasses. He offered that the
Lions Clubs want to provide a quality service to people rather
than to have them randomly select eyeglasses. He pointed out
that there are 50,000 possible prescriptions. He noted that
their program would work to closely fit, if not perfectly fit
the client. If the prescription did not fit exactly, the Lions
Club would prefer to offer the client eyeglasses that are under
their prescription rather than over their prescription, he
stated.
3:32:09 PM
REPRESENTATIVE LEDOUX related her understanding that the Lions
Club could not allow people to sort through eyeglasses to select
their own pair. She reiterated that stores such as Wal-Mart or
second hand stores are selling eyeglasses that people randomly
select, so she said she did not understand why the Lions Clubs
could not do the same thing.
MR. RIXIE said he could not fully explain the reason Wal-Mart
can sell eyeglasses from a rack. He surmised that the
eyeglasses that the Lions Clubs would recycle are actually
eyeglasses prescribed specifically for someone else. He echoed
his earlier testimony that the interpretation the Lions Club
received was that the statutes do not enable or disallow the
Lion's Club from performing the distribution of recycled
eyeglasses. Since the Lions Club wants to be on firm legal
ground, it has asked the legislature for clarification in
statute. He also surmised that without the statute change that
the Lions Club might have some liability if someone wore
eyeglasses dispensed by them and complained.
3:34:27 PM
REPRESENTATIVE LEDOUX inquired as to whether there is a legal
need for SB 149.
MR. STANCLIFF explained that as a nonprofit, the Lions Club
takes its responsibilities seriously. Thus, the Lions Club of
Alaska approached policymakers since it wants to work with the
state agency to set standards to provide the best possible care
for people in need of eyeglasses. He characterized the Lions
Club efforts as benevolent. He said he applauds the approach
that the Lions Club has taken with respect to SB 149.
3:36:15 PM
MR. STANCLIFF, in response to Representative Gatto, said he
couldn't answer if the Lions Club would be free from any
liability. However, he said he believes that taking the route
of working with a state agency to develop standards offers the
Lions Club the best protection against liability.
MR. RIXIE acknowledged that the Lions Club does not expect that
its clubs will be totally free from liability. He pointed out
that the International Lions Club is protected by a $1 million
liability insurance policy. He characterized SB 149 as an
equitable compromise. He related that the Lions Club has
attempted to abide by the principle of "doing no harm" in the
process of trying to make available 40,000 pairs of eyeglasses
to Alaskans
3:38:01 PM
REPRESENTATIVE GARDNER asked whether eyeglasses have an
identifier or if someone must calculate the prescription.
MR. RIXIE answered that the prescription is usually printed on
the sides of the frame on eyeglasses purchased at Wal-Mart or
similar stores. However, the ones generated by an optician or
optometrist do not imprint the prescription on the eyeglasses.
He surmised that may be because a person's vision is often not
the same in each eye. Thus, most of the eyeglasses the Lions
Clubs receive from donors are sent through a lens meter. Thus,
the Lions Club volunteer would read the prescription for each
lens, print a label for each lens, and would adhere the label to
the outside of the bag. He characterized the process as
efficient and precise.
3:39:37 PM
REPRESENTATIVE GARDNER moved to report CSSB 149(L&C) out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSSB 149(L&C) was
reported from the House Labor and Commerce Standing Committee.
3:40:06 PM
The committee took an at-ease from 3:40 p.m. to 3:42 p.m.
HB 258-PAWNBROKERS
3:42:51 PM
CHAIR OLSON announced that the final order of business would be
HOUSE BILL NO. 258, "An Act relating to pawnbrokers; and
providing for an effective date."
3:43:08 PM
JOSH APPLEBEE, Staff to Representative Bob Roses, Alaska State
Legislature, on behalf of the prime sponsor, Representative Bob
Roses, explained that HB 258 will modernize, update, and
regulate the pawnbroker industry. This bill would provide new
provisions to create licensure, fee structure, and regulatory
framework for the industry. The bill would provide a grace
period for military members, standardize the fee structure,
require a biennial report to the legislature, and would
institute a 30 day grace period for customers to retrieve their
personal belongings. He highlighted that the sponsor worked
over the legislative interim with the Division of Corporations,
Business, and Professional Licensing (DCBPL) and the industry on
issues with HB 258. He noted that AARP supports HB 258.
3:46:45 PM
REPRESENTATIVE LEDOUX referred to page 2, proposed AS 08.76.020
of HB 258. She expressed concern that the pawnshop's "book"
will be open to the inspection of a peace officer at reasonable
times since the book contains confidential information such as
someone's name and address. She inquired as to the rationale
for disclosing to the government, a person's name, address,
description of the pledged property, and the amount loaned to
the person.
MR. APPLEBEE answered that there are several instances that
might arise when a law enforcement officer may need to inspect
the books such as with suspicion of theft or during an
investigation. He pointed out that currently every financial
institution has this requirement in place for their loans.
3:48:39 PM
REPRESENTATIVE GARDNER referred to page 2, lines [1-12] of HB
258 that lists the information that must be compiled in the
pawnbroker's book such as the date, name, and address of the
customer. She inquired as to whether the customer must prove
his/her age.
MR. APPLEBEE answered that HB 258 requires that a person must be
18 years or older so it would be incumbent on the pawnbroker to
check identification of the person pledging the property.
3:49:40 PM
REPRESENTATIVE GARDNER referred to page 2, lines 14-16, that
reads, "Blank lines may not be left between entries." She
expressed concern that someone pledging property would have
access to personal information of prior customers since blank
lines may not be left between entries. She inquired as to
whether the pawnbroker would need to maintain a log and also
need to duplicate the information in an electronic format in
order to submit it.
MR. APPLEBEE explained that the provisions in proposed Section 4
are intended to establish a process in which the law enforcement
personnel or auditor can verify that the pawn transaction was
appropriately conducted. He surmised that a larger city, such
as the Municipality of Anchorage, would likely connect pawnshops
to the Anchorage Police Department or other public safety
offices. Since some unincorporated boroughs or towns do not
have the ability to submit data electronically, HB 258 provides
for a manual system to accommodate them. He related that if
property is stolen and reported to the police, that the police
would have the ability to check by computer all pawnshop entries
that may match the stolen item.
REPRESENTATIVE GARDNER offered her belief that this provision
may be an impediment for owners who may have to perform data
entry to list items that are recorded in the book. She pointed
out that scanning the information would render the data
unsearchable.
3:53:11 PM
CHAIR OLSON announced that it is not his intention to move HB
258 until the Department of Law is able to answer questions.
3:53:28 PM
REPRESENTATIVE LEDOUX related her understanding that the
pawnshop would be connected electronically to the police
department and asked for clarification of that process.
MR. APPLEBEE answered that it is possible to connect the
pawnshops to the police departments since the software currently
exists. In further response to Representative LeDoux, Mr.
Applebee related that electronic programs are designed to track
only the property, such as the serial number and description of
the item, and not information on the person who pawned the item.
He noted that the specific information on the seller would be
held only at the pawnshop.
REPRESENTATIVE LEDOUX inquired as to whether problems currently
exist that HB 258 would remedy, such as preventing sale of
stolen merchandise to pawnshops.
MR. APPLEBEE answered that HB 258 would afford some level of
certainty that pawnshops won't be used for that purpose.
3:56:54 PM
REPRESENTATIVE BUCH referred to page 2, line 27, and inquired as
to the method used to establish that a person has good character
in order for the person to secure a license. He noted that he
didn't need an immediate answer to the question, but wanted to
know generally the process the agency would use to determine if
a person had good character.
REPRESENTATIVE GARDNER asked to add to the list of questions the
reason to require that a person has prior business experience.
REPRESENTATIVE BUCH referred to page 3, line 4, to the
requirement for a nonrefundable initial investigation fee of
$200, and inquired specifically what type of investigation the
fee would entail. He referred to page 4, line 13, and further
asked what limitations in AS 08.76.210 are pertinent to
pawnshops.
MR. APPLEBEE answered that payday lenders were separated out
from other lenders in legislation that passed the legislature
two years ago. He highlighted that the pawnbroker businesses
are also required to be separated from other types of lending.
4:01:01 PM
REPRESENTATIVE GARDNER referred to page 4, line 13, and related
her understanding that this section would remove the $500 pawn
cash limit currently in statute.
MR. APPLEBEE agreed that the cash limit would be removed.
REPRESENTATIVE GARDNER referred to proposed AS 08.76.170, under
customer and transaction limitations, which states that a
pawnbroker may not knowingly enter into a pawnbroker transaction
with a person who is under the influence of alcohol or a
controlled substance. She pointed out that this same
restriction is not required for a sale. She inquired as to
whether these elements are intentionally treated differently.
MR. APPLEBEE answered that he doesn't know if it is realistic to
prevent people from exercising their right to purchase goods
even if the people are under the influence of alcohol. He noted
that currently customers are not forbidden from entering any
other store to make purchases while under the influence of
alcohol or drugs. Thus, pawnshops are treated in the same
manner as other stores.
REPRESENTATIVE GARDNER related her understanding that under HB
258 that a person could not pawn a ring while under the
influence of drugs or alcohol, but that the person could
purchase one.
MR. APPLEBEE answered that HB 258 provides some assurance that a
customer will enter into financial transactions with a clear
head.
REPRESENTATIVE LEDOUX referred to page 4, and related her
understanding that proposed AS 08.76.170 would only apply to
incoming property but not to sales of merchandise. She inquired
as to whether this section could be clarified so that it is
clear that the person who purchases items is excluded.
MR. APPLEBEE answered that with respect to the customer and
transaction limitations, the intent of proposed AS 08.76.170 is
to ensure that the pawnbroker doesn't have a customer under the
influence of alcohol or drugs proceed into transactions under
someone else's name. He further stated that this section could
be amended for clarification.
4:06:32 PM
REPRESENTATIVE LEDOUX inquired as to the purpose of the language
of proposed AS 08.76.180 that specifies listing the name of the
person purchasing property. She pointed out that she could
purchase items at stores such as Nordstrom's and not have her
name and address recorded.
MR. APPLEBEE answered that under HB 248 if something goes wrong
the bill provides assurance that the transaction can be traced.
Further, if someone has a habit of pawning items, it may be an
indicator that the person is selling stolen merchandise.
REPRESENTATIVE LEDOUX pointed out that a person might habitually
frequent pawnshops simply to find nice ivory and jewelry in the
shops. She maintained her concern that a jeweler is not held to
the same standard.
MR. APPLEBEE said he believes that the intent is to establish a
certain level of trustworthiness since pawnshops have a bad
reputation, perhaps due to the way pawnshops are depicted in
films. This bill attempts to make the process open and
transparent and help remove any stigma for pawnshops.
4:08:58 PM
REPRESENTATIVE NEUMAN related that from his own experiences that
he has found some pawnshops to be "top notch" and noted he did
not share the opinion depicted in some films. He expressed his
concern with respect to keeping a record of all sales. He
referred to page 3, [paragraph (e)] and expressed concern that a
mid-level bureaucrat in the Department of Commerce, Community, &
Economic Development (DCCED) would be in the position to judge
the character of the licensee. He asked that clarification of
the guidelines for judging a person's character be added to the
list of questions.
MR. APPLEBEE, in response to Representative Neuman said he
believes that the application can be submitted electronically.
4:11:24 PM
ALEX VAUGHAN, Vice-President, Governmental Relations, Cash
America International, explained that his business is a
publically traded company. He explained that Cash America
International provides financial services to individuals across
the United States in 942 locations. His company is the largest
provider of pawn loans in the country, he opined. Of their 499
pawnshops, 5 stores are located in Anchorage, he noted. He
offered that Cash America International supports HB 258 since it
st
creates a 21 century regulatory structure for the industry. He
opined that HB 258 would protect consumers and customers. This
bill provides licensing provisions, oversight, and regulation by
a state agency, which he said he believes is important for the
industry. This bill contains uniform standards for licensing,
investigation fees to allow the state to ensure that pawnbrokers
are legitimate, a requirement for a biennial report, and
strengthens the reporting activities to police departments.
This bill also creates consumer protections for military
service, standardizes the fee structure for the initial 30 day
loan period, and maintains the current finance rate. This bill
allows a 30 day grace period to allow customers to retrieve
their property.
MR. VAUGHAN highlighted that HB 258 creates one of the most
modern pawn statutes in the country. He opined that many
Americans depend on pawnbrokers to help them meet their
financial needs not offered by other financial institutions. He
offered that pawn customers represent the working families who
periodically experience unexpected needs for short term
finances. He said, "Pawn loans help them keep the electricity
on and the rents paid." He opined that Cash America
International constantly works to enhance the image of
pawnbrokers while offering needed services to the people in the
community. He opined that their stores are attractive and
welcoming places to conduct business. He noted that Cash
America International is a member of the National Pawnbroker
Association whose mission is to improve professional development
and enhance the image of the industry by advocating for
pawnbroker rights, responsibilities, and improving regulation of
the industry.
MR. VAUGHAN described the pawnbroker's process. He stated that
a customer pledges his/her personal property as collateral for a
loan. When the customer repays the loan and fees, the
merchandise is returned. Pawn loans are made on products
ranging from jewelry to electronics. If a customer does not
redeem his/her property, there are no credit consequences, but
the property becomes the property of the pawnbroker who sells
the merchandise to retail customers. He noted that the average
pawn loan in the United States is $75, and in Alaska is $85.
Approximately 75 to 80 percent of the time, customers redeem
their property, he noted. The redemption rate in Alaska is
approximately 51 percent. The length of terms to redeem
property varies between states, but typically a pawnbroker
allows customers 30 days, with some states allowing an
additional 30 day grace period. Currently, the Alaska statutes
allow 30 days without a grace period for customers to redeem
pawned property. The interest rates are set at 20 percent,
which is comparable with other western states. He noted that
under HB 258, all transactions would be reported to assist in
property crime investigations. He opined that it is in the best
interest of customers, coworkers, and investors to eliminate any
potential transaction involving stolen merchandise. He
acknowledged the perception in the media and in Hollywood is
that pawnshops are pipelines used by criminals. However, he
offered statistics that counter that perception. In the past 12
months ending in December 2007, Cash America International's 485
stores handled 9.6 million items and advanced $525 million in
loans to customers on 6 million transactions. Of those, only
4,484 transactions involved police seizures, he opined. Of the
127,000 items in Alaska resulting in $5.7 million in loans on
7,976 transactions, only 32 resulted in police holds or seizure.
Less than one percent of the overall transactions resulted in
police holds or seizures, he offered. He noted that pawnbrokers
have the responsibility to safeguard their customer's
information under federal law. This bill would allow Cash
America International to work with local law enforcement by
submitting the pawn transaction information, but not the
customer information. Under the bill, The pawn transactions
would be held confidential and release of information would be
limited to investigation of stolen property. This bill provides
many improvements to the regulatory framework in which all
pawnbrokers can operate profitably while providing the state
regulatory oversight, he concluded.
4:19:56 PM
REPRESENTATIVE LEDOUX inquired as to whether a pawnbroker would
provide the name of the customer to the police department.
MR. VAUGHAN answered that the police would be able to access the
records when necessary in the course of conducting an
investigation or an audit in electronic or paper form. The
record provided to the police agencies would only be the
description of the property and information such as the date the
property was pawned, the amount of the loan, but would not
include any customer information. Additionally, if information
is sent electronically, it would be encrypted as required under
federal standards.
4:21:28 PM
REPRESENTATIVE LEDOUX referred to proposed section AS 08.76.010,
and noted that provision refers to the types of information that
must be maintained. She expressed concern that the name, age,
and address of the customer is listed, and that proposed Section
4 states that the book shall be open to the inspection of a
peace officer at reasonable times.
MR. VAUGHAN answered that the records are maintained at the
store. An officer or agent of the state would have access to
records at his store to ensure that the pawnbroker is meeting
the requirements. However, information transmitted to the
police agencies would be solely transactional.
4:23:09 PM
KENNETH GUDGEN, Market Manager, Cash America Alaska, stated that
his company owns 5 stores in Anchorage. Cash America Alaska
employs 48 people in Anchorage and offers employees a full
benefits package that includes health benefits, life insurance,
and a retirement plan. His company also offers employee
training on sales and customer service. He offered that his
company's purpose is to serve the community in a safe
environment. He noted his pawnshops are well run, well
maintained businesses that strive to provide a high level of
service. The stores have been remodeled and are clean and well
lit. Their core business is the pawn business, he offered. In
2007, 29,000 residents resulted in total sales of $5.7 million
in the Anchorage pawnshops. He offered that Cash America Alaska
offers loans for many purposes such as to provide expenses for
fishermen in the off season, or to people who work in remote
locations and don't receive their pay for several weeks. Other
loans are made for emergencies such as for car repairs or
surgeries, he offered. Customers offer their valuable
possessions as collateral to secure the loans. He opined that
HB 258 offers customers and his businesses many advantages. He
advised that his stores currently report all pawn transactions
to the police department including the make, model, and serial
number of all items as well as the name, driver's license
number, and birth date of the person pawning the item. He
characterized his relationship with the Anchorage Police
Department as a good working relationship. When Cash America
Alaska receives stolen merchandise, the store provides police
with information including surveillance videos. The
Municipality of Anchorage requires mandatory reporting laws.
This proposed legislation makes reporting mandatory for all
license holders in Alaska, which provides consumer protections
and protections for pawnshops. This bill also protects military
customers by guaranteeing no interest on their pawned
merchandise during the time the military person is overseas. He
concluded that his goals are to take good care of the people
that his stores serve.
REPRESENTATIVE GARDNER referred to page 7, lines 17-26, and
inquired as to how the pawnbroker can track the military
personnel. She opined that unless the military personnel
notified the pawn shop prior to leaving the country, that the
pawned item could be inadvertently sold.
MR. GUDGEN agreed that the pawnbroker would need to be notified
prior to departure or the pawned goods would be sold.
4:30:01 PM
MARK DAVIS, Director, Division of Corporations, Business, and
Professional Licensing, Juneau Office. Department of Commerce,
Community, & Economic Development (DCCED) explained that the
division is in support of licensing pawnbrokers. He stated that
the division supports HB 258, although he noted that the bill
may need some refinement. He suggested one area that may need
to be reviewed is the requirement for good character in proposed
AS 08.76.110.
4:30:57 PM
REPRESENTATIVE GARDNER referred to page 4, subsection (b) which
describes the biennial report and inquired as to what is the
state's interest in knowing the number and amounts paid since
that information is proprietary information.
MR. DAVIS answered that he interprets this subsection would
require reporting only the aggregate amount, similar to the
reporting requirement for banks, which is to inform the
legislature the size of the industry and provide industry
trends.
MR. DAVIS, in response to Representative Gardner, explained that
various reports require tracking items such as the number of
licensees, aggregate size, assets under control. He surmised
that the division would probably develop a reporting requirement
in regulation designed to determine how the industry is
performing.
REPRESENTATIVE GARDNER opined that she is not convinced that the
state needs to know the profitability of pawnbrokers.
MR. DAVIS answered that the report would not divulge
profitability, but would show items such as the number of
transactions, number of items pawned, and number of redemptions.
He pointed out the industry is currently recording this
information.
4:33:18 PM
MR. DAVIS, in response to Representative Neuman, noted that the
division does not currently regulate pawnshops so the bill's
sponsor projected an estimate of 30 new licensees. In further
response to Representative Neuman, Mr. Davis advised that not
everyone uses the name "pawnshop" in their business name so a
search of business licenses would not provide the number of
pawnbrokers operating in the state.
4:34:15 PM
REPRESENTATIVE GARDNER inquired as to whether the requirement
that the applicant be of good character and have the experience
to engage is required of other professions.
MR. DAVIS answered that some professions have similar
requirements. He referred to AS 06.50.020, which establishes
qualifications for deferred deposit lending licenses that
requires applicants to, "demonstrate financial responsibility,
financial condition, business experience, character, and general
fitness." In further response to Representative Gardner, Mr.
Davis answered that the experience to engage in business as a
pawnbroker would require applicants demonstrate the ability to
understand money lending, risk involved in lending money, and
the ability to maintain records, which could be demonstrated by
educational experience or prior work experience. He opined that
it is important in lending businesses that the person has the
necessary business acumen.
4:36:17 PM
CHAIR OLSON, after first determining that no one else wished to
testify, announced that he would keep public testimony open.
4:36:39 PM
CHAIR OLSON announced that HB 258 would be held over.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:36 p.m.
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