03/24/2017 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB144 | |
| HB86 | |
| HB170 | |
| HB132 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 170 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 144 | TELECONFERENCED | |
| += | HB 86 | TELECONFERENCED | |
| += | HB 132 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 24, 2017
3:17 p.m.
MEMBERS PRESENT
Representative Sam Kito, Chair
Representative Adam Wool, Vice Chair
Representative Andy Josephson
Representative Louise Stutes
Representative Chris Birch
Representative Gary Knopp
Representative Colleen Sullivan-Leonard
MEMBERS ABSENT
Representative Mike Chenault (alternate)
Representative Bryce Edgmon (alternate)
COMMITTEE CALENDAR
HOUSE BILL NO. 144
"An Act extending the termination date of the Board of
Veterinary Examiners; and providing for an effective date."
- MOVED HB 144 OUT OF COMMITTEE
HOUSE BILL NO. 86
"An Act relating to nonrenewal of occupational licenses for
default on a student loan."
- MOVED HB 86 OUT OF COMMITTEE
HOUSE BILL NO. 170
"An Act relating to securities, registration, exempt securities,
exempt transactions, broker-dealers, agents, investment advice,
investment advisers, investment adviser representatives, federal
covered securities, federal covered investment advisers,
viatical settlement interests, small intrastate security
offerings, Canadian broker-dealers, and Canadian agents;
relating to administrative, civil, and criminal enforcement
provisions, including restitution and civil penalties for
violations; relating to an investor training fund; establishing
increased civil penalties for harming older persons and
vulnerable adults; relating to corporations organized under the
Alaska Native Claims Settlement Act; amending Rules 4, 5, 54,
65, and 90, Alaska Rules of Civil Procedure, and Rule 602,
Alaska Rules of Appellate Procedure; and providing for an
effective date."
- HEARD & HELD
HOUSE BILL NO. 132
"An Act relating to transportation network companies and
transportation network company drivers."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 144
SHORT TITLE: EXTEND BOARD OF VETERINARY EXAMINERS
SPONSOR(s): REPRESENTATIVE(s) KITO
02/24/17 (H) READ THE FIRST TIME - REFERRALS
02/24/17 (H) L&C, FIN
03/22/17 (H) L&C AT 3:15 PM BARNES 124
03/22/17 (H) Heard & Held
03/22/17 (H) MINUTE(L&C)
03/24/17 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 86
SHORT TITLE: STUDENT LOAN DEFAULT/OCC. LICENSE RENEWAL
SPONSOR(s): REPRESENTATIVE(s) CLAMAN
01/27/17 (H) READ THE FIRST TIME - REFERRALS
01/27/17 (H) EDC, L&C
03/01/17 (H) EDC RPT 7DP
03/01/17 (H) DP: TALERICO, PARISH, KOPP, SPOHNHOLZ,
JOHNSTON, FANSLER, DRUMMOND
03/01/17 (H) EDC AT 8:00 AM CAPITOL 106
03/01/17 (H) Moved HB 86 Out of Committee
03/01/17 (H) MINUTE(EDC)
03/22/17 (H) L&C AT 3:15 PM BARNES 124
03/22/17 (H) Heard & Held
03/22/17 (H) MINUTE(L&C)
03/24/17 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 170
SHORT TITLE: AK SECURITIES ACT; PENALTIES; CRT. RULES
SPONSOR(s): LABOR & COMMERCE
03/10/17 (H) READ THE FIRST TIME - REFERRALS
03/10/17 (H) L&C, JUD
03/24/17 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 132
SHORT TITLE: TRANSPORTATION NETWORK COMPANIES
SPONSOR(s): WOOL
02/15/17 (H) READ THE FIRST TIME - REFERRALS
02/15/17 (H) TRA, L&C
02/23/17 (H) TRA AT 1:30 PM BARNES 124
02/23/17 (H) <Bill Hearing Canceled>
02/28/17 (H) TRA AT 1:30 PM BARNES 124
02/28/17 (H) Heard & Held
02/28/17 (H) MINUTE(TRA)
03/02/17 (H) TRA AT 1:30 PM BARNES 124
03/02/17 (H) Heard & Held
03/02/17 (H) MINUTE(TRA)
03/06/17 (H) L&C AT 3:15 PM BARNES 124
03/06/17 (H) Scheduled but Not Heard
03/07/17 (H) TRA AT 1:30 PM BARNES 124
03/07/17 (H) Moved CSHB 132(TRA) Out of Committee
03/07/17 (H) MINUTE(TRA)
03/08/17 (H) TRA RPT CS(TRA) 1DP 4NR 2AM
03/08/17 (H) DP: WOOL
03/08/17 (H) NR: SULLIVAN-LEONARD, NEUMAN, DRUMMOND,
STUTES
03/08/17 (H) AM: CLAMAN, KOPP
03/10/17 (H) L&C AT 3:15 PM BARNES 124
03/10/17 (H) Heard & Held
03/10/17 (H) MINUTE(L&C)
03/17/17 (H) L&C AT 3:15 PM CAPITOL 106
03/17/17 (H) Heard & Held
03/17/17 (H) MINUTE(L&C)
03/18/17 (H) L&C AT 12:30 AM CAPITOL 106
03/18/17 (H) -- Continued from 3/17/17 --
03/22/17 (H) L&C AT 3:15 PM BARNES 124
03/22/17 (H) Heard & Held
03/22/17 (H) MINUTE(L&C)
03/24/17 (H) L&C AT 3:15 PM BARNES 124^
WITNESS REGISTER
CHRYSTAL KOENEMAN, Staff
Representative Sam Kito, III
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During the hearing of HB 144, offered an
overview of the legislation.
DOCTOR RACHAEL BERNGARTT, Veterinarian
Alaska Board of Veterinary Examiners
Juneau, Alaska
POSITION STATEMENT: During the hearing of HB 144, answered
questions.
DOCTOR ERIC JAYNE, Veterinarian
Unknown City, Hawaii
POSITION STATEMENT: During the hearing of HB 144, testified as
a veterinarian who previously worked in rural Alaska.
OWEN PHILLIPS, Staff
Representative Matt Claman
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During the hearing of HB 86, presented an
overview of the legislation.
JANEY HOVENDEN, Director
Corporations, Business, and Professional Licensing (CBPL)
Department of Commerce, Community & Economic Development (DCCED)
Juneau, Alaska
POSITION STATEMENT: During the hearing of HB 86, answered
questions.
KEVIN ANSELM, Director
Division of Banking & Securities
Department of Commerce, Community & Economic Development (DCCED)
Juneau, Alaska
POSITION STATEMENT: During the hearing of HB 170, presented a
PowerPoint titled, Alaska Securities Act, HB 170.
DEB ETHERIDGE, Deputy Director
Central Office
Division of Senior and Disabilities Services
Department of Health and Social Services (DHSS)
Juneau, Alaska
POSITION STATEMENT: During the hearing of HB 170, answered
questions.
ANNABEL CHANG, West Coast Director
Public Policy
Lyft
San Francisco, California
POSITION STATEMENT: During the hearing of HB 132, answered
questions.
MITCHEL MATTHEWS, Senior Global Operations Manager
Uber
San Francisco, California
POSITION STATEMENT: During the hearing of HB 132, answered
questions.
JARED EBER, Associate Counsel
Uber
San Francisco, California
POSITION STATEMENT: During the hearing of HB 132, answered
questions.
ACTION NARRATIVE
3:17:53 PM
CHAIR SAM KITO called the House Labor and Commerce Standing
Committee meeting to order at 3:17 p.m. Representatives Kito,
Stutes, Josephson, Wool, Birch, Knopp, and Sullivan-Leonard were
present at the call to order.
HB 144-EXTEND BOARD OF VETERINARY EXAMINERS
3:19:19 PM
CHAIR KITO announced that the first order of business would be
HOUSE BILL NO. 144, "An Act extending the termination date of
the Board of Veterinary Examiners; and providing for an
effective date."
3:19:35 PM
CHRYSTAL KOENEMAN, Staff, Representative Sam Kito, III, Alaska
State Legislature, advised that HB 144 extends the Board of
Veterinarian Examiners eight full years until 2020, at the
request of the Division of Legislative Audit.
3:20:22 PM
The committee took an at-ease from 3:19 p.m. to 3:21:21 p.m.
3:21:03 PM
CHAIR KITO, after ascertaining no one wished to testify, closed
public testimony on HB 144.
3:21:38 PM
DOCTOR RACHAEL BERNGARTT, Veterinarian, Alaska Board of
Veterinary Examiners, said she was available for questions.
REPRESENTATIVE JOSEPHSON asked what the board could do about
improving veterinary medicine in rural Alaska.
DR. BURNGARTT answered that the Alaska Board of Veterinary
Examiners are charged with regulating licensees and it does not
specifically know where licensees will practice. She suggested
that an appropriate resource to work with in increasing
veterinary care in rural Alaska would be the Alaska State
Veterinary Medical Association, which speaks to all
veterinarians. Historically, people submit their credentials,
the board reviews it, "and that's it." She opined that the
board has never denied a courtesy license, commenting that it
recently completed more than 20, less than 50, courtesy licenses
for the Iditarod and veterinarians were stretched out into very
remote areas of Alaska. She reiterated that the board simply
looks at credentials to be certain license applicants adhere to
the regulations, and while she understands the need to increase
veterinary assess in rural Alaska, she expressed that that is
not the job of the Alaska Board of Veterinary Examiners.
3:24:29 PM
REPRESENTATIVE STUTES asked Dr. Burngartt to explain a courtesy
license.
DR. BURNGARTT answered that a courtesy license is issued for
special events such as, the Iditarod, a spay/neuter clinic, a
marine mammal conference, and such, where the desire is to draw
in outside experts or more manpower. The courtesy license is
issued for a specific event only, at a reduced rate, with an
Alaskan veterinarian as a sponsor. The board also offers
temporary licenses up to 60 days to help folks that may only
need short-term coverage.
3:26:21 PM
REPRESENTATIVE STUTES surmised that courtesy licenses are issued
to existing veterinarians, who may not be Alaskan residents.
DR. BURNGARTT responded that the veterinarians who are issued
courtesy licenses are not Alaska residents.
3:26:43 PM
REPRESENTATIVE KNOPP asked whether the people who have expressed
opposition to HB 144 believe the role of the board is other than
what it is, that maybe the board's role should provide services,
or whether they oppose HB 144 because they view the board as an
impediment to more rural services.
DR. BURNGARTT responded that she could not speculate why they
are unhappy, but the board has not denied a license to any
veterinarian meeting the credentials.
3:27:51 PM
REPRESENTATIVE KNOPP asked whether it would be fair to say [the
unhappy people] were unsure of the board's role, which is not
uncommon.
DR. BURNGARTT speculated, "Yes," and commented that they do not
understand the role of the board and the folks living in rural
Alaska want care for their pets. She said she would like to see
a cardiologist in rural Alaska, and many other things, but that
is not the job of the Alaska Board of Veterinary Examiners.
CHAIR KITO advised Representative Knopp that one of the
challenges is that there does not appear to be a place where
people can call when they do not receive adequate service. He
further advised that that issue is definitely something his
office is interested in working on over the interim and invited
the members of the committee to participate in collecting
information as to different ways the state could help facilitate
additional care for animals in rural Alaska.
CHAIR KITO reopened public testimony on HB 144.
3:29:23 PM
DOCTOR ERIC JAYNE, Veterinarian, advised he is the veterinarian
who worked throughout rural Alaska for 10 years, 1999-2009, and
is intimately knowledgeable about the issues. He advised that
he prepared a 2004 survey through the University of Alaska
Fairbanks, looking at veterinary needs and asking people for
solutions. One recommendation was to increase education because
people in the villages were performing veterinary care for
animals with zero training and simply guessing about the
procedures. The University of Alaska tried to start a training
program and even though the board's only described role was
approving or denying of licenses, he pointed out that the board
actually did intervene in that training. He stressed that the
board will intervene in issues, and the issue at that time was
training people how to perform emergency care, and the board did
not feel the training was appropriate. The 2004 survey found
that a "crazy number" of animals died every year in rural Alaska
due to the lack of veterinary care, and he estimated the number
was in excess of 50,000 animals dying from lack of care, or
being shot. He explained that a huge issue for him in these
small isolated villages is that the individuals caring for
animals have no choice, and when there is an excess of strays,
or animals that cannot be treated, the animal are shot. The
call goes out in the villages for people to tie up their dogs,
which means any loose dogs will be shot. During that time, he
articulated, the children may not actually see the dogs being
shot, but they hear the gunshots which is a source of trauma for
the children in villages. He expressed that the board should be
more involved because there is a rule in the veterinarian board
regulations calling for the board to perform surveys, and the
board has never performed a survey. Also, he pointed out, a
rural member should be admitted to the board, so the needs of
rural Alaskans can be heard, except there are policies now that
are tweaked against rural veterinarians. He clarified that by
rural veterinarians, he meant non-profit veterinarians.
3:31:42 PM
DR. JAYNE related that there is a real hesitation on the part of
Alaska to allow outside non-profit veterinarians into the state,
which is happening all across America, and whether the board
wants to admit it or not, it is a resource being denied
Alaskans. He acknowledged that the board is fine with
everything up to a point, except the survey suggested that at
least 10,000 spays and neuters are necessary in rural Alaska
just to stay even, and when rising up to that number of spays
and neuters, a lot of veterinarians will feel threatened
economically. The manner in which the board's rules are
interpreted currently, "allows easy access to harass a
veterinarian, which is exactly what happened to me." He
explained that he recently withdrew his application "so this
could be talked about, I guess this was keeping the issue from
being talked about, and I'd be happy to talk with anybody about
what has happened to me," and there are many things in the "vet
board rules" allowing the problems to happen. For example, he
said, there is no time limit to file a complaint, and in
reapplying for a license, he actually had a complaint brought
forward from 12-years prior and he was asked to respond to the
complaint, "which is crazy," he expressed.
3:33:08 PM
DR. JAYNE explained that among the many things that are actually
legal in Alaska, the state allows a veterinarian to euthanize a
pet if the owner cannot pay the bill, which happens oftentimes
in rural Alaska. For example, in Chalkyitsik, an elderly woman
sent her little white dog into town to have one small front
tooth removed, the veterinarian removed it, and told her the
cost would be $500 or they would euthanize the dog. She came up
with the money, paid the fee and paid for both flights. The
veterinarian put one stitch in that tooth - the empty socket,
and Dr. Jayne said he had never seen a stitch put in that
location. The veterinarian "literally told her she could not
take the stitch out herself, that that was against the law, that
she had to fly the dog back in to have the stitch removed."
Fortunately, he said, he was in Chalkyitsik at the time and
removed the stitch, the elder was frantic and almost in tears,
he related. There are stories such as that happening all of the
time. Also, he advised, he has seen many cases where rural
Alaskans do not feel protected by the board because they have
received poor quality medicine, were sent drugs without the
correct labeling, and such. Dr. Jayne stressed that there were
so many things the board could do if it took an interest in
rural Alaska, and the best way to accomplish that result would
be to add a true rural Alaska member.
3:34:50 PM
CHAIR KITO encouraged Dr. Jayne to allow Chair Kito's staff to
work with him over the interim to try to come up with different
ideas to bring back before the committee next year.
DR. JAYNE said, "That would be great," and advised that the
reason he reapplied was absolutely to bring this issue out
because he is "haunted by the memory of the children in rural
Alaska and the effect this has on them."
CHAIR KITO closed public testimony on HB 144.
3:35:38 PM
REPRESENTATIVE WOOL moved to report HB 144, Version 30-LS0596\A,
out of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, HB 144 was
moved from the House Labor and Commerce Standing Committee.
3:35:58 PM
The committee took an at-ease from 3:35 p.m. to 3:39 p.m.
HB 86-STUDENT LOAN DEFAULT/OCC. LICENSE RENEWAL
3:39:09 PM
CHAIR KITO announced that the next order of business would be
HOUSE BILL NO. 86, "An Act relating to nonrenewal of
occupational licenses for default on a student loan."
3:39:43 PM
OWEN PHILLIPS, Staff, Representative Matt Claman, Alaska State
Legislature, advised that HB 86 repeals current statutes
allowing the Alaska Commission on Postsecondary Education (ACPE)
to threaten non-renewal of occupational licenses for individuals
who have defaulted on student loans. Repealing this authority
will allow licensed individuals to continue their work in order
to earn an income and pay back their defaulted loans without
fear of losing their license.
3:40:33 PM
REPRESENTATIVE KNOPP noted that the bill read that the
commission must notify the Division of Corporations, Business
and Professional Licensing that a loan was in default and, AS
14.43.148 actually denies renewal and does not revoke a license.
He noted this provision had not been utilized in eight years,
and asked whether the commission had notified the Division of
Corporations, Business, and Professional Licensing at any point
in the last eight years as to the amount of default, and whether
it was an issue.
3:41:42 PM
JANEY HOVENDEN, Director, Corporations, Business, and
Professional Licensing, Department of Commerce, Community &
Economic Development (DCCED), responded that she could only
speak to how the legislation impacts the Division of
Professional Licensing under Title 08. The Alaska Commission on
Postsecondary Education (ACPE) had not provided a list [of
default] since 2002, and there had been no impact on the
division from this law.
REPRESENTATIVE KNOPP asked Mr. Phillips whether the list exists
and ACPE had not notified the division, or whether the list does
not exist.
MR. PHILLIPS commented that as Ms. Hovenden had not received a
list, he offered his understanding that there was not a list
because current statute read that if the commission reaches out
with a list, then the license must be revoked through this
department.
3:43:06 PM
REPRESENTATIVE BIRCH advised that it appears the state has
approximately $240 million in outstanding debt, and 17,000
borrowers at approximately $14,000 a piece, out of that number
there are only 46 individuals with an occupational license hold,
and commented that it sounded like an incredibly small
percentage of the 17,000 borrowers. He asked whether the State
of Alaska can recover student debt owed by an individual out-of-
state.
MR. PHILLIPS advised that Ms. Butler was not available for this
hearing, and he did not know the answer to that question.
REPRESENTATIVE BIRCH said he was curious as to how much of that
$240 [million] in liability is recoverable if someone lives out-
of-state.
CHAIR KITO responded that that debt is still owed, and this is a
matter of whether the state has the tools to collect, which is
definitely a question for the Alaska Commission on Postsecondary
Education (ACPE).
CHAIR KITO, after ascertaining no one wished to testify, closed
public testimony on HB 86.
3:45:10 PM
REPRESENTATIVE WOOL moved to report HB 86, Version 30-LS0382\A,
out of committee with individual recommendations and the
accompanying fiscal notes. There being no objections, HB 86
moved from the House Labor and Commerce Standing Committee.
3:45:28 PM
The committee took an at-ease from 3:45 p.m. to 3:52 p.m.
HB 170-AK SECURITIES ACT; PENALTIES; CRT. RULES
3:51:51 PM
CHAIR KITO announced that the next order of business would be
HOUSE BILL NO. 170, "An Act relating to securities,
registration, exempt securities, exempt transactions, broker-
dealers, agents, investment advice, investment advisers,
investment adviser representatives, federal covered securities,
federal covered investment advisers, viatical settlement
interests, small intrastate security offerings, Canadian broker-
dealers, and Canadian agents; relating to administrative, civil,
and criminal enforcement provisions, including restitution and
civil penalties for violations; relating to an investor training
fund; establishing increased civil penalties for harming older
persons and vulnerable adults; relating to corporations
organized under the Alaska Native Claims Settlement Act;
amending Rules 4, 5, 54, 65, and 90, Alaska Rules of Civil
Procedure, and Rule 602, Alaska Rules of Appellate Procedure;
and providing for an effective date."
3:52:33 PM
KEVIN ANSELM, Director, Division of Banking & Securities,
Department of Commerce, Community & Economic Development
(DCCED), presented PowerPoint presentation "Alaska Securities
Act, HB 170" and reminded the committee that she had spoken to
the need to update the Alaska Securities Act in late January.
While a portion of the presentation may be a bit redundant, she
said she does not want to confuse anyone by leaving out any
steps.
3:53:08 PM
MS. ANSELM turned to slides 2-3, and explained the Securities
Act provides the legal framework for offering and selling
securities to Alaskans, including the registration of firms and
sales persons, registration or filing of securities, and
enforcement. Currently, the Securities Act also regulates the
Alaska Native Claims Settlement Act (ANCSA) Corporation and
shareholder proxy related provisions. Securities, she offered,
is the largest of the division's 12 programs and includes
registering and monitoring over 95,000 securities registered
salespersons, over 1,000 firms which are mostly out-of-state.
She referred to HB 170, [Sec. 45.56.900(32), page 103, lines 9-
31, and page 104, lines 1-8] and noted the definition of
security was not changed, it includes a long list of investments
including stocks, bonds, limited partnerships, investments in
common enterprises, investment contracts, and viaticals.
3:54:33 PM
MS. ANSELM turned to slide 4, and advised that HB 170 updates
the Alaska Securities Act by adopting many of the most recent
model act provisions while retaining the Alaska centric
provisions. The bill proposes to lift the Alaska Securities Act
out of the Native Claims Settlement Act, the ANCSA provisions,
which would highlight the vast differences between the programs
and allow ANCSA constituents a clear view of the applicable law.
Also, she explained, the bill's new provisions are included to
protect older and vulnerable Alaskans from financial
exploitation and give those investment professionals who make
those reports immunity from administrative and civil liability.
MS. ANSELM pointed out that currently, there is no provision in
the law regarding restitution, and the civil penalty is capped
at $25,000. The bill asks the legislature to designate civil
penalties funds toward consumer protection and education because
currently there is no requirement for continuing education of
industry professionals, and those provisions are included in HB
170.
3:56:02 PM
MS. ANSELM turned to slide 5, and reiterated that ANCSA
provisions remain unchanged under AS 45.55. The new statute
would be located under AS 45.56, the references to exempt ANCSA
securities transactions are also included in the new Act under
AS 45.56.210, Sec. 27.
MS. ANSELM turned to slide 6, pointed to the top four highlights
in HB 170, and advised as follows: the bill eliminates filings
for all Alaska-based exemptions from registration, except
crowdfunding; updates entity and law references; includes "bad
actor" disqualifiers (coughing) basically states that anyone
with certain types of crimes such as dishonesty or theft cannot
be licensed as an Alaska salesperson; and improves enforcement
and investor protection and education provisions.
3:57:27 PM
MS. ANSELM turned to slide 7, and explained the slide depicts
the general articles of the Alaska Securities Act. The first 14
pages of the bill would change the statute number and other
statutes that reference the Securities Act; and Secs. 15-24
repeal and modify statutes under AS 45.55 relating to the ANCSA
Corporations and proxy solicitations.
MS. ANSELM turned to slides 8-10, and reminded the committee
that the division does take enforcement actions: in FY2016, it
issued 36 final orders, and 17 of those orders were securities
related. She explained most of the division's orders are posted
online, and the division is in the process of making sure all of
its orders are posted "back to the beginning of time." In
calendar year 2016, the division issued 27 final orders, and 13
of those orders were securities related.
MS. ANSELM turned to slide 9, and explained some of the scams
and subsequent orders. Mr. Michael Scow took money from an
Alaskan for his Arizona-based insurance firm, wherein an order
for $25,000 was issued by the division, and Mr. Scow has not
paid the Alaskan or the division. She advised that when she
discussed the Fortune Oil and Gas scam during her testimony in
January, at that time the division was awaiting a court order.
She reminded the committee that people from Texas came to
Alaska, sold Alaskans approximately $3.1 million worth of
worthless limited partnerships. The division issued an order
for the maximum amount possible of $25,000, the judge agreed and
issued his order in March of 2016, granting $25,000 in civil
penalty on losses of $3.1 million. She commented, "We're out of
date." The SOS Disasterplan.com scam and the Troy Stafford and
Patrick Williams scam were two different sorts of scams, wherein
SOS Disasterplan.com had a website and issued approximately
$540,000 in worthless securities, again, with the maximum civil
penalty limit being $25,000. She related that it is the same
with Troy Stafford and Patrick Williams, except their scam was a
bit different because they were in Alaska and sold another
Alaskan a business opportunity with an employment opportunity in
a bogus Alaska company. Subsequent to the division speaking
with the two men, the men agreed to rescind and return the
money, except they did not return any money. She explained that
there are provisions in the new HB 170 that would resolve some
of those issues.
4:00:57 PM
MS. ANSELM advised that the Global Arena Capital Corp. is a New
York firm that found Mr. Burk, a retired halibut fisherman, on a
call list, called him at home, and sold him junk bonds. This
firm had advised Mr. Burk that he would make 16-18 percent,
except he did not. The division was able to get his money back,
but the maximum penalty was $25,000, she said.
4:01:40 PM
MS. ANSELM presented oral testimony from Mr. Burk who had since
passed, and noted that, ultimately, the case was settled.
[Mr. Burk's oral testimony 4:01:40 through 4:03:41. See pages
13-15 of the PowerPoint presentation for written testimony.]
4:03:41 PM
MS. ANSELM advised that the division took action against six
individuals and was able to get Mr. Burk's money back because it
found a salesperson with a conscience. Stronger tools are
necessary in order to deal with bad actors and this type of
fraudulent activity should make everyone in the state angry.
She then described Mr. Burk as angry and smart because when he
received another call from someone trying to sell him Bio-
Technology stock, he called the division, and it was able to put
another firm in a different state out of business and take away
its license. As far as fines, she reiterated, that the maximum
fine was $25,000, and the only way to hurt the firms that hurt
Alaskans is usually in the pocketbook. She stressed that it is
the division's hope the legislature help the division through
enacting the new Alaska Securities Act, HB 170.
4:05:00 PM
REPRESENTATIVE STUTES asked how the Alaska Native Claims
Settlement Act (ANCSA) Corporations feel about the separation.
MS. ANSELM responded that the corporations have advised they
have no objection to separating the statutes.
4:05:27 PM
REPRESENTATIVE KNOPP referred to the Troy Stafford and Patrick
Williams scenario, and asked how it falls under securities.
MS. ANSELM answered that the two men were selling the Alaskan
stock in a company and the gentleman would become part owner;
therefore, it was a common enterprise. She said that for a
while he was not directly involved in that enterprise, but part
of the fraud was that he would be a manager of the company.
REPRESENTATIVE KNOPP referred to slide 4 and the last two bullet
points, noting concern about the creation of an investor
education fund, and asked why it is the role of state agencies
to educate the public in investments. He referred to the last
bullet point requiring continuing education, and asked whether
it means the state is not providing the continuing education for
investment advisors. He further asked whether there are
investment advisors registered in Alaska who do not perform
continuing education.
4:07:21 PM
MS. ANSELM responded that as far as education, it is not
required in Alaska currently, and there are a number of
representatives that do not perform continuing education whether
they are stock brokers or investment advisors. The division
would like to be more synthesized with the rest of the nation,
and the division would require the continuing education and not
provide the continuing education. As to why the division would
want to have investor education, she responded that it is part
of the division's mission which read is to:
Protect consumers of financial services and promote
safe and sound financial systems. The division also
supports the department's mission, which is to:
Promote a healthy economy, support strong communities,
and protect consumers in Alaska.
MS. ANSELM explained that the division's mission is to protect
consumers of financial services, and promote safe and sound
financial systems. In supporting the department's mission, the
department is promoting a healthy economy, supporting strong
communities, and protecting consumers in Alaska. Therefore, she
said, when protecting consumers, they must be given the tools to
protect themselves, and the Investor Education Funds would be
set up so approximately one-third of the civil penalties could
be put into another account which would have consumer education
on the account. However, she noted, it would be at the
legislature's behest whether or not the funds would be spent on
consumer education because the legislature controls the budget.
Currently, consumer education is performed in partnership with
other states and sometimes federal organizations. The
Securities and Exchange Commission came to Alaska and performed
joint outreach events with the division for the military,
government workers, and the public. There have been joint-
"scam-jams" with the Department of Justice, U.S. Attorney's
Office, FBI, Better Business Bureau, and others to reach out to
the public so it knows what is going on and can be forewarned
and forearmed. She said that Alaska was able to use some
investor protection funds from the Investor Protection Trust,
which came from a settlement with some large stock brokerage
firms in the 1990s. Those funds are almost depleted, and Alaska
used those funds primarily to partner with AARP and perform a
series of instructive television shows on 360 North. The
instructive television shows were on various topics relating to
seniors and everyone in the state in order to understand how to
protect themselves when working with investments, knowing what
they needed to know about social security and other issues
affecting their livelihood. She said the division speaks in
schools, speaks at civic organizations, and will do pretty much
anything when it can advise people about how they can protect
themselves and hold onto their hard-earned money.
REPRESENTATIVE KNOPP acknowledged that Alaska's aging population
are targets, and as the economy tightens up people get creative.
4:11:31 PM
REPRESENTATIVE JOSEPHSON asked whether there was a draft of HB
170, or some type of reform in the [Twenty-Ninth Alaska State
Legislature].
MS. ANSELM responded that within the [Twenty-Ninth Alaska State
Legislature] House Bill 194 and Senate Bill 108 were similar to
HB 170, there were a couple of additions, including the
vulnerable adult provisions for reporting financial
exploitation.
4:12:15 PM
REPRESENTATIVE WOOL noted his surprise that the education
programs are performed through the Department of Health and
Social Services (DHSS) and asked Ms. Anselm to explain
navigating through the healthcare system, but also through
securities fraud. He asked whether the same people offer the
training on health issues and securities fraud.
MS. ANSELM explained that the new provision, protection for
vulnerable and older Alaskans, read that if there is a suspicion
of financial exploitation, a report is required to be filed with
the division or Adult Protective Services. She deferred to the
Division of Senior and Disabilities Services.
4:14:20 PM
DEB ETHERIDGE, Deputy Director, Central Office, Division of
Senior and Disabilities Services, Department of Health, and
Social Services (DHSS), opined that Representative Wool was
asking how the system responds to allegations of financial
exploitation currently.
REPRESENTATIVE WOOL said she was correct within the discussion
of investor education and prevention of fraud.
4:15:23 PM
MS. ETHERIDGE answered that the Division of Senior and
Disability Services oversees the adult protection unit, and the
authority and requirement in adult protection is to investigate
all allegations of financial exploitation. She explained there
are civil investigations, partnering with law enforcement if
there is a crime, but the adult protection unit also receives
reports of financial exploitation from a mandatory reporters or
citizens, family members, or neighbors. In the event the person
is deemed a vulnerable adult, through that reporting, the
division performs investigations and makes findings, and also
performs protective services. Oftentimes, she said, when the
division receives these reports the money has already been spent
and the division is actually cleaning up, and "this is an
opportunity to receive the reports prior to."
CHAIR KITO opened public testimony on HB 170.
[HB 170 was held over.]
HB 132-TRANSPORTATION NETWORK COMPANIES
4:17:00 PM
CHAIR KITO announced that the final order of business would be
HOUSE BILL NO. 132, "An Act relating to transportation network
companies and transportation network company drivers."
4:17:30 PM
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 1, Version 30-
LS0522\J.3, which read as follows:
Page 10, line 4, following "Records.":
Insert "(a)"
Page 10, following line 11:
Insert new material to read:
"(b) Except for specific information about a
transportation network company rider, including the
rider's name, address, and telephone number, a
transportation network company shall provide a
transportation network driver information for each
ride the driver completes, including global
positioning data, the fare and tip paid by the rider,
and the rate charged.
Sec. 28.23.130. Collective bargaining agreement.
To the extent allowed by federal law and
notwithstanding AS 28.23.080,
(1) transportation network company drivers
may organize for the purpose of mutual aid and
protection and may designate a bargaining agent;
(2) a transportation network company and an
organization of transportation network company drivers
may negotiate, enter into, and administer a collective
bargaining agreement concerning wages, benefits, and
other terms and conditions relating to work performed
by the transportation network company drivers;
(3) a municipality where a transportation
network company operates may regulate conduct allowed
under (1) and (2) of this section.
Sec. 28.23.140. Prohibitions. A transportation
network company may not
(1) take adverse action against a
transportation network company driver, including
restricting the driver's tips or suspending or
terminating the driver's participation in the
company's digital network, as a result of the driver
(A) organizing or joining a driver
association or labor organization, including an
organization under AS 28.23.130, or participating in a
driver association or labor organization or the
activities of the driver association or labor
organization;
(B) decreasing the driver's participation
in the company's digital network; or
(C) generating less fare or tip income;
(2) change a compensation rate or other material term
of a contract with a driver without the driver's
voluntary prior consent, if the contract is based on
the driver providing a ride to a transportation
network company rider."
REPRESENTATIVE WOOL objected.
4:17:38 PM
REPRESENTATIVE JOSEPHSON explained that he had consulted with
labor lawyers and the legislature's lawyers, and although it is
not conventional, there is nothing prohibiting the option for
transportation network companies (TNC) workers in the state to
organize, even as independent contractors. He noted a First
Amendment right of association, mutual aid, and protection.
4:19:09 PM
REPRESENTATIVE JOSEPHSON continued that the National Labor &
Relations Act concerns itself with employees, but it does not
speak to independent contractors. He explained his concern is
for the TNC drivers who may come to learn it is not the
lucrative profession they may have believed because they have to
pay for gasoline, any injuries sustained on the job, and any
repairs. This amendment gives drivers an option to organize,
and there is the potential for a much larger pool of people
statewide than taxi drivers. Frankly, he said, drivers need
authority to work collectively because individual drivers
working separately will have a hard time asking the TNCs for
anything.
4:21:04 PM
REPRESENTATIVE BIRCH spoke against the amendment noting a lot of
communication from AKTeamsters.com objecting to ridesharing and
TNCs, and this effort to propose an organizational structure is
a wrench in the works at this late date. He described that the
amendment was not constructive because, otherwise, there would
be organized taxi drivers everywhere. He said he could not
support the amendment because it is not reasonable or
constructive in the path forward enabling TNCs in Alaska.
4:21:56 PM
REPRESENTATIVE WOOL related that he does not support the
amendment and opined that under federal law collective
bargaining with independent contractors is not allowed.
Seattle, Washington did pass an ordinance about TNC drivers
organizing and he noted that the drivers have not successfully
organized at this point.
4:23:00 PM
CHAIR KITO commented that the discussion to organize TNC drivers
should encompass a larger discussion from actual drivers, and
since Alaska does not have drivers, there is not an opportunity
for TNC drivers, or possibly taxi drivers, to weigh in as to
whether or not they would prefer to organize. He suggested with
this larger discussion there should be in a more independent
piece of legislation, and because there had not been sufficient
discussion on this issue, he does not support this amendment, he
said.
4:23:57 PM
REPRESENTATIVE STUTES questioned whether or not it needed to be
put in statute because drivers would have the opportunity to
organize if they chose to go that route, without it being in
statute.
REPRESENTATIVE WOOL maintained his objection.
4:24:27 PM
A roll call vote was taken. Representative Josephson voted in
favor of adopting Amendment 1. Representatives Stutes, Wool,
Birch, Knopp, Sullivan-Leonard, and Kito voted against it.
Therefore, Amendment 1 failed by a vote of 1-6.
4:24:53 PM
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 2, Version 30-
LS0522\R.1, which read as follows:
Page 11, line 25:
Delete "or"
Insert "and"
Page 11, line 27, through page 12, line 13:
Delete all material and insert:
"* Sec. 8. AS 29.35 is amended by adding a new
section to read:
Sec. 29.35.148. Regulation of transportation
network companies. (a) Notwithstanding AS 28.01.010, a
municipality may by ordinance
(1) prohibit a transportation network
company or driver from conducting activities under
AS 28.23 within the municipality; or
(2) regulate the operation of a
transportation network company or driver in a manner
that is at least as restrictive as or more restrictive
than the provisions of AS 28.23.
(b) This section applies to home rule and
general law municipalities.
(c) In this section, "transportation network
company" and "driver" have the meanings given in
AS 28.23.180."
REPRESENTATIVE WOOL objected
4:25:06 PM
REPRESENTATIVE JOSEPHSON advised that less than 72-hours ago,
the Anchorage Assembly passed a 23-page ordinance with "much
more detail than the bill," by a vote of 8-3. The ordinance
listed any manner of things the assembly wanted to regulate in
the event this bill does become law. The ordinance requires
that: customers would be informed when they are riding under
dynamic or surge pricing; the Municipality Inspection Division
would inspect cars annually; insurance would be cancelled, and
an application would cease to operate if any of the regulations
promulgated in the ordinance were not complied with; TNC would
have an insurance schedule comparable to the taxi insurance
schedule. In addition, there would be an agent for service of
process, a system for lost and stolen items; a system for
handling complaints, a system to handle post-incident drug and
alcohol testing, and issues of violations of alcohol and drug
testing. The ordinance requires that: TNCs would be required to
check that the driver is not included on National Sex Offender
Registry; the city would receive a list of all TNC drivers;
there would be drug and alcohol testing if there is an accident
or incident; the city would be notified of any report of traffic
accidents or injuries; the city would preclude the use of a
vehicle for solicitation or prostitution; TNCs could not be used
to tow or carry a trailer. The ordinance also stipulates that
for vehicles that can carry more than seven people, there would
be a higher rate of insurance. Page 20 of the ordinance
describes that in the event of an accident or litigation, there
would automatically "be all this discovery." He stated that the
ordinance: requires a process for hearings of appeals of denials
of licensure; establishes that disabled [riders] could not be
charged more; and lists a 27-item fine schedule, similar to a
bail schedule.
4:28:56 PM
REPRESENTATIVE JOSEPHSON offered that local governments, due to
its taxis and "boots on the ground," are in a better position to
regulate. Local governments are cut out and that is the problem
with the bill, he said.
4:30:02 PM
REPRESENTATIVE BIRCH spoke against Amendment 2, noting that
while it is encouraging that the Anchorage Assembly and
community is supportive of TNCs, there was significant prior
testimony pointing out the problems in having a patchwork of
different nuances in every different community. He said that
during his ten years on the assembly, it had long standing
issues in trying to accommodate public transportation
requirements into Chugiak, Eagle River, and the Matanuska-
Susitna areas. The patchwork problem comes to a head when it
becomes necessary to direct the service areas into different
nuances on how services could be delivered. He described the
bill as a good workable product to carry forward and stated that
the safety and security issues have been addressed, and
Amendment 2 would get the committee needlessly "tangled up."
4:31:31 PM
REPRESENTATIVE KNOPP spoke in support of Amendment 2, expressing
that unique issues arise in the various communities "they
operate in" and there is no better place to fix the issues. The
rules written in the bill are lenient and not especially
restrictive, yet in reality, people do not get to operate
without some type of rules. He stated concern about rating
passengers, such as in the instance of a passenger not being a
big tipper and therefore rated a "one," leading to those people
waiting a long time for the next Uber ride. Also, he noted
concern about the "mini-suite" application as to buying 12 cars
and putting drivers in them because now they are actually
employees and he stated that he was unsure how that would work.
The point, he said, is that there will be issues that arise, and
this amendment provides the opportunity for those issues to be
addressed.
4:33:46 PM
REPRESENTATIVE STUTES spoke in support of Amendment 2, and that
she is in favor of seeing Uber come into communities and
commented that her rural Alaska community is confined to an
island. She said that both the borough manager and city manager
are "exceedingly concerned" about these drivers coming in with
no regulation, when Kodiak's taxi cabs are seriously regulated.
She has heard from many of her constituents, living in both the
city and the borough, who believe that it is alarming to think
there would be no regulation and they would have no input as to
what went on with these drivers, she said.
4:34:54 PM
REPRESENTATIVE WOOL spoke in opposition to Amendment 2, and said
he understands the concern of municipalities, although, the case
in point is that three individuals on the committee support
municipal regulations, all of which are from different
municipalities, and patchwork is part of the problem. He
referred to Lyft, noting that it will not go into a state
without statewide legislation, and stressed that Alaska wants to
be current and innovative, and this technology platform is used
in 49 states, with 38 or 39 states under statewide legislation.
Some Alaskans can practice exceptionalism, and not care how
things are run outside of Alaska, and be without the TNC service
except, he said, most Alaskans want the TNC service. He
referred to the Anchorage ordinance and advised that the Lyft or
Uber contract contains much of what was listed, and drug and
alcohol tests are performed by law enforcement following an
accident. As far as suites, he opined, a group of drivers are
not allowed to work under a driver. The rating system is a very
good system, he described, because rating makes the TNC service
far superior to the experience of people riding in taxis, and
pointed out that over many hours of testimony, not one testifier
complained about TNC service. Historically, larger cities had
local control when the service was rolled out, but that is not
going to happen in Alaska. He offered that statewide control is
good and more language could be added to the bill in addressing
some of these concerns, but he stated that he does not intend to
make the bill basically a contract for TNCs. He asked that
Annabel Chang address the issue of suites.
4:39:04 PM
REPRESENTATIVE KNOPP offered a point of order, noting that the
committee is addressing the amendment, and asked whether Chair
Kito planned to open it up to public testimony.
CHAIR KITO ruled that there is a question as to the impact of
the amendment and Lyft is being asked to respond.
4:39:28 PM
ANNABEL CHANG, West Coast Director, Public Policy, Lyft, asked
that the question be repeated.
REPRESENTATIVE WOOL asked about drivers subcontracting with
other drivers.
MS. CHANG explained that each individual driver on the Lyft
platform must go through an individual background check process,
including the vehicle they drive. For example, in the event a
family shares a vehicle and the wife wants to drive for Lyft and
it is under her husband's name, she must be approved to drive
that vehicle and must be listed on the insurance. The wife's
husband cannot drive that vehicle because he was not approved to
drive on the Lyft platform unless he goes through a separate
background check, driving record check, and identity check. Of
course, she said, when opening the app, the photo of the actual
approved driver pops up so the passenger is aware of who is
actually picking them up before they even get into the vehicle.
4:41:05 PM
CHAIR KITO asked if an individual is operating as a Lyft driver
when they activate the app, and whether there is a policy
regarding whether or not that has to be the individual that is
authorized.
MS. CHANG agreed, and she said it would be against the terms of
service to have anyone not approved to drive on the platform
using the platform, and the approved person would risk
deactivation at that point. Of course, she noted, passengers
would have notification because they would know when they are
picked up whether the driver matches the photo on the mobile
app.
4:42:07 PM
REPRESENTATIVE KNOPP referred to the last time she spoke to the
committee when the issue of "mini-suites" was brought up and Ms.
Chang had agreed that it was possible, and asked how it would
work if someone was to buy six cars and put drivers in the cars.
MS. CHANG responded that Lyft partners with General Motors and
Enterprise wherein they actually lease out vehicles in
partnership with Lyft. In that situation, she explained, an
individual can lease out a vehicle for a few weeks at a time to
drive on the Lyft platform, and prior to their approval to drive
on the Lyft platform, they must go through a background check,
driving record check, and their name and face must be linked to
that vehicle on the mobile app. There is always a connection
between the approved individual and the vehicle before a person
is allowed to drive and be activated on the mobile app, she
explained.
4:43:38 PM
REPRESENTATIVE KNOPP offered a scenario wherein someone leases a
car from Hertz, Budget, or Enterprise and their names are not on
the title or with the insurance company.
MS. CHANG answered that the individual is listed on the
insurance, and insurance is provided through General Motors or
Hertz.
4:44:23 PM
REPRESENTATIVE SULLIVAN-LEONARD said she echoes Representative
Birch's comments because in the taxi industry their ability to
travel through the Matanuska-Susitna Valley, as an example, is
rather limited. As to the arrival of TNCs, its freedom of
movement and moving passengers in and around the south-central
area is an important component, and the thought of actually
delineating between each municipality is an incredible patchwork
that should be avoided, she said. The current bill contains
regulations in place, there will be a requirement for business
licensing, sales tax collection, and disbursement to the cities
requiring those collections and, she stated, she does not
support Amendment 2.
4:45:55 PM
REPRESENTATIVE STUTES acknowledged that she was mistaken in
thinking there was an opt-in clause for a municipality and have
the opportunity for local control. She suggested a friendly
amendment adding an opt-in clause.
REPRESENTATIVE JOSEPHSON advised that Amendment 2 would allow
municipalities to opt-in and referred to Amendment 2, page 1,
lines 8-9, which read as follows:
Sec. 29.35.148. Regulation of transportation
network companies. (a) Notwithstanding AS 28.01.010,
a municipality may by ordinance
4:46:58 PM
CHAIR KITO referred to Amendment 2, page 1, lines 8-11, Sec.
29.35.148, which read as follows:
(a) Notwithstanding AS 28.01.010, a municipality
may be ordinance
(1) prohibit a transportation network
company or driver from conducting activities under AS
28.23 within the municipality; or
CHAIR KITO described that Amendment 2 would allow a municipality
to opt-out.
REPRESENTATIVE STUTES asked whether that is opposed to opting-
in.
CHAIR KITO answered in the affirmative.
4:47:35 PM
REPRESENTATIVE BIRCH commented that while he appreciates the
testimony of Ms. Chang, his concern still stands when looking no
farther than the language in this amendment which speaks to
prohibiting and regulating a TNC. He opined that it is
commendable that there is support for the TNC, and if the
committee wants TNCs to operate in Alaska, it needs to be in a
uniform manner. That responsibility rests with the legislature
and the oversight and regulation would be incumbent upon the
legislature, and he does not believe this amendment adds value,
he advised.
4:48:42 PM
REPRESENTATIVE WOOL referred to the opt-out provision, and
advised that Fairbanks is a city and a borough, and the city and
borough are sandwiched on top of each other, it would be
complicated if the city chose to opt-out. For example, he
explained, he lives in the City of Fairbanks and if he wanted to
be picked up by a TNC, he must then walk to the city border. He
expressed that for that reason alone the amendment is
unacceptable, on top of the other previously stated reasons.
4:49:25 PM
REPRESENTATIVE KNOPP remarked that he did not view it as an opt-
out, but rather an opt-in because it read, "a municipality may
by ordinance regulate or prohibit." Therefore, it is not
inclusive until adopting an ordinance, it does provide the
option to address issues when they come up, that is all it does,
he said.
4:50:06 PM
REPRESENTATIVE JOSEPHSON expressed frustration with the
legislation because this could be a great victory for everyone
and opined that most cities would not prohibit it and would opt
for paragraph (a)(2) in the amendment, and would want something
more restrictive. Although, he noted, cities could opt for
paragraph (a)(1) and be able to prohibit a TNC, local
governments want more local control as was reflected in the
Anchorage ordinance.
[The committee treated the objection as maintained.]
4:51:09 PM
A roll call vote was taken. Representatives Stutes, Josephson,
and Knopp voted in favor of adopting Amendment 2.
Representatives Sullivan-Leonard, Wool, Birch, and Kito voted
against it. Therefore, Amendment 2 failed to be adopted by a
vote of 3-4.
4:51:49 PM
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 3, Version 30-
LS0522\R.2, which read as follows:
Page 10, line 14:
Delete "one year"
Insert "two years"
Page 10, line 17:
Delete "one year"
Insert "two years"
REPRESENTATIVE WOOL objected for the purposes of discussion.
4:52:07 PM
REPRESENTATIVE JOSEPHSON remarked that under the bill, records
are to be retained for one year, yet there is a statute of
limitations in tort law, or personal injury, of two years and
the bill should match that statute. For example, let us say a
TNC driver assaulted a passenger by hitting them on the jaw, the
passenger believed he would heal; except one year and one day
passed and the passenger required jaw surgery. That passenger
would not have access to the records that otherwise would have
been available, yet he would be allowed to sue for another 364
days because the statute of limitations runs for a full two
years. The records could be information that would exculpate or
exonerate the driver, records are retained in other cities for
three years, and the TNCs would accommodate, he opined.
4:54:14 PM
REPRESENTATIVE WOOL commented that Representative Josephson made
good points and he removed his objection.
MS. CHANG, in response to Representative Birch, advised that
Lyft has no objection to this amendment.
4:55:10 PM
CHAIR KITO noted that the objection had been removed, there
being no objection, Amendment 3 was adopted.
4:55:13 PM
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 4, Version 30-
LS0522\R.3, which read as follows:
Page 11, lines 11 - 12:
Delete "and related services"
REPRESENTATIVE WOOL objected.
4:55:44 PM
REPRESENTATIVE JOSEPHSON referred to CSHB 132, Version R, page
11, lines 11-12, and said some stakeholders are concerned that
the language "and related services" is vague. As written, TNCs
could work in connection to potential passengers and related
services and, he said, stakeholders do not know the meaning of
that language. For example, could a person with a semi-truck,
without a CDL, be hired at a reduced rate because this becomes a
pebble thrown in the preverbal pond that moves further and
further into the workplace.
4:56:58 PM
REPRESENTATIVE BIRCH remarked that there was testimony regarding
passengers potentially ordering up a driver, for instance, to
deliver a teen-age child from a junior high school to an
appointment. In this instance, the person may not be the
passenger but they have ordered up the TNC to provide a service.
One of the benefits of ridesharing is the potential for a
scheduled and known person and vehicle to transport someone who
may not be "yourself" to an appointment. Therefore, he said he
has concerns and is not comfortable with Amendment 4.
4:58:14 PM
REPRESENTATIVE SULLIVAN-LEONARD reminded the committee that this
issue was discussed previously with Ms. Chang, and she asked Ms.
Chang to reiterate aspects of what "other related services"
would be with regard to a TNC.
MS. CHANG reiterated that Lyft often works with hospitals or
senior centers and someone at the front desk who is not the
passenger will order a Lyft for a patient or a resident. For
instance, an 85-year-old grandmother, not familiar with smart
phones, can receive a ride through a Lyft ordered by the front
desk attendant, or her granddaughter, for instance.
4:59:24 PM
REPRESENTATIVE WOOL noted other services in ridesharing, such as
carpooling and such. He referred to the concern about trucks
and hauling freight being considered part of the "other related
services" and stressed that that certainly was not his intent
with this legislation. In the event that were to happen, he
described that he would certainly draft a new bill to make sure
that did not happen, but at this point that is a bit preemptive.
CHAIR KITO turned to Mr. Matthews of Uber, referred to related
services, and asked whether calling a ridesharing service to
deliver a birthday cake from one location to another location
and not actually carrying a passenger, was possible with the
Uber platform.
5:00:57 PM
MITCHEL MATTHEWS, Senior Global Operations Manager, Uber,
responded that Chair Kito's scenario was possible, but not
intended. From Uber's perspective, the "other related services"
relates more to activities relating to the transportation of
passengers. For example, Uber's view on related services is
that TNCs help facilitate the payment stream or facilitate
communication between riders and drivers through its anonymized
channels.
CHAIR KITO surmised that Uber's related services are related to
what the app provides in facilitating passenger and driver
activity.
MR. MATTHEWS answered in the affirmative, and he reiterated that
it would be helping to facilitate payments or communications
between rider and driver at the time they were connected for a
trip.
REPRESENTATIVE WOOL maintained his objection.
5:02:39 PM
A roll call vote was taken. Representative Josephson voted in
favor of adopting Amendment 4. Representatives Knopp, Sullivan-
Leonard, Stutes, Wool, Birch, and Kito voted against it.
Therefore, Amendment 4 failed to be adopted by a vote of 1-6.
5:03:04 PM
CHAIR KITO clarified that Amendment 5, Version 30-LS0522\R.4 had
been noticed but was not being offered at this time.
5:03:28 PM
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 6, Version 30-
LS0522\R.6 which read as follows:
Page 6, line 17:
Delete "$50,000"
Insert "$100,000"
Delete "$100,000"
Insert "$300,000"
Page 6, line 18:
Delete "$25,000"
Insert "$50,000"
Page 6, lines 19 - 20:
Delete "as required under AS 21.96.020 and
AS 28.20.440"
Insert "in the amount of at least $100,000 for
death and bodily injury for each person, $300,000 for
death and bodily injury for each incident, and $25,000
for property damage"
Page 6, line 31, through page 7, line 1:
Delete "as required under AS 21.96.020 and
AS 28.20.440"
Insert "in the amount of at least $1,000,000 for death
and bodily injury for each person, $1,000,000 for
death and bodily injury for each incident, and $25,000
for property damage"
REPRESENTATIVE WOOL objected.
5:03:32 PM
REPRESENTATIVE JOSEPHSON explained that the amendment read that
a driver will pick up a passenger who presumably the driver has
no relationship. "But, remember, we're not calling them
commercial carriers so it's a whole new relationship." He
opined that during period one, the driver is not at home
thinking about engaging the application, the driver could
actually be driving and looking for the next ride. Therefore,
the driver could be a distracted driver, except the insurance in
that period is the same as for private individuals in the State
of Alaska, and yet the legal duty is there. The vehicle could
be moving and passenger-less and, he explained the first part of
Amendment 6 mirrors the $100,000 for each injury and$300,000 for
aggregate injuries, of which is located in the taxi code of the
municipality. He said that taxi cab drivers are independent
contractors, TNC drivers are independent contractors, "so do
that for the insurance as well." The $25,000/$50,000 reflects
property damage which mirrors the taxi rates required in
Anchorage. He referenced uninsured motorists and noted that
rather than defaulting to the statute, which would only mirror
this smaller $50,000/$100,000 number, the latter part of
Amendment 6 language would instead mirror what Uber itself wants
to offer, $1 million for periods two and three, and $100,000 and
$300,000 for period one. Essentially, he said, this is designed
to insure people in a more legitimate manner, noting that the
$50,000 and $100,000 numbers had not increased over a long
period of time. There will be accidents, he said, and the
Anchorage ordinance read that if there are seven passengers in
the vehicle the insurance would be even higher, stressing that
he wants this "new thing" properly insured.
5:07:49 PM
REPRESENTATIVE WOOL referred to Representative Josephson's
statement that a TNC driver might be driving around looking for
a fare and explained that TNC drivers do not drive around
looking for fares. He further explained that according to the
contract, fares only arrive to the driver through their phone
app; he expounded that a forthcoming committee substitute will
state that the only way a passenger can get a ride on a TNC is
through a phone app, and not through a phone call or being waved
down on the street. He pointed out that during period one, the
driver could be doing anything, such as being parked and
drinking a cup of coffee. Basically, he remarked, the limits
set in the proposed statute are as high as any other area in the
country, and as high as required by the state for any individual
driving in the State of Alaska. The $1 million requirement far
exceeds what the state requires of taxi drivers, and he
commented that the committee has already had this discussion
many times and he maintained his objection.
5:09:50 PM
REPRESENTATIVE KNOPP surmised the numbers in the draft are the
state minimum requirements, and between his work trucks and
personal vehicles he probably has 13, maybe 14 vehicles covered
in damages. He related that he has never had an insurance agent
recommend the minimum the state requires because the agents
advise it is just too low, and the amount is not anywhere close
to what would truly be necessary. He referred to Amendment 6,
page 1, line 14 and line 19, and suggested deleting $25,000, and
inserting $50,000 for property damage on both lines. He asked
whether that was Representative Josephson's intent.
5:10:56 PM
REPRESENTATIVE JOSEPHSON moved to adopt Representative Knopp's
Conceptual Amendment 1 to Amendment 6, page 1, line 14 and line
19, to delete $25,000 and insert $50,000 on both lines.
CHAIR KITO noted there being no objection to Conceptual
Amendment 1 to Amendment 6, Conceptual Amendment 1 was adopted.
5:12:07 PM
REPRESENTATIVE WOOL noted that he owns vehicles through his
business and insures them for more than the minimum requirement,
and anyone driving for a TNC can certainly insure their car for
more than the minimum. In the event the vehicle is new, the
driver has to have full coverage, and this is just a fallback
because in the event someone does not have insurance, the TNC
will cover everyone in all phases.
5:13:09 PM
CHAIR KITO clarified that the discussion now is regarding the
three periods of operation as follows: period one is when the
driver is in the vehicle and the app is not engaged; period two
is when the driver is in the vehicle and the app is engaged but
no passengers are being transported; and period three is when
the driver has accepted a fare and is engaged in the transport
of that individual. He noted that the insurance changes
recommended by Amendment 6 appear to be for period two, when the
vehicle is not occupied by a passenger but the app is engaged.
REPRESENTATIVE SULLIVAN-LEONARD advised that Chair Kito's
clarification was incorrect.
5:14:48 PM
JARED EBER, Associate Counsel, Uber, responded as follows:
during period one, the driver is engaged in the app but has not
yet accepted a ride; period two is when the driver has accepted
the ride until the point they pick up the passenger; and period
three is when the passenger is actually in the vehicle until
they exit the vehicle. Amendment 6 would raise the insurance
limits for period one when there are no passengers in the
vehicle and the driver has the app turned on but has not yet
accepted a ride. He noted that during that period, over 40
states have adopted statewide legislation for insurance being at
the same limits as in the bill, $50,000 for an injury to one
individual, $100,000 for more than one individual, which is
third-party liability, and $25,000 for property damage. Other
than the States of Alaska and Vermont, every other state has
significantly less limits, at roughly $15,000 - $20,000 per
injury for one person, $25,000 - $40,000 for multiple
individuals per accident, and $15,000 - $25,000 for property
damage. He pointed out that the limits listed in the bill have
been accepted by the National Conference of Insurance
Legislatures together with the largest insurance trade groups in
the country agreeing that those limits are sufficient for period
one. He said that someone drinking a cup of coffee with the app
on is one piece, but the other piece is the moral hazard wherein
if raising limits that are not the minimum limits in Amendment
6, then the driver can turn the app on 100 percent of time they
are in their vehicle, even if they have no intention whatsoever
of accepting a ride. The would put the liability on the
transportation network company (TNC) regardless of whether the
driver actually has any intention of accepting a ride.
Therefore, the driver knows they have higher limits they are not
paying for which, inherently, makes them a more dangerous driver
because they have no risk.
5:19:05 PM
REPRESENTATIVE JOSEPHSON remarked that another way to view this
is that a driver could transport a passenger to Eagle River and
not have a passenger driving back to Anchorage and this driver
could be under a great incentive to make a living, and in that
window of time hurry back up the Glenn Highway just as fast as
they can travel. He described that "You're taking on this
mantle" of effectively being a commercial carrier, and even if
the committee carved out and pretended that drivers are not
really commercial carriers, "they are this other thing." He
commented that the drivers and passengers do not know each
other, but the drivers are making money driving passengers
around and it appears reasonable to charge the same rate as the
Municipality of Anchorage. He argued that the limits in the
bill are not sufficient.
5:20:55 PM
REPRESENTATIVE BIRCH spoke against the amendment, and he
referred to prior discussions regarding an established
acceptable base rate. There was a comment about a driver
transporting a passenger from Eagle River to Anchorage and
driving back without a passenger and, he said, that is the
current practice which is part of the problem. In the event
someone drives to Anchorage from the Matanuska-Susitna Valley,
they are prohibited from "a back haul." Certainly, he offered,
the TNC option preserves that ridesharing and makes good use and
utility of the equipment and resources available.
REPRESENTATIVE WOOL maintained his objection.
5:22:10 PM
A roll call vote was taken. Representatives Knopp and Josephson
voted in favor of the adoption of Amendment 6, as amended.
Representatives Birch, Sullivan-Leonard, Stutes, Wool, and Kito
voted against it. Therefore, Amendment 6 failed to be adopted
by a vote of 2-5.
[HB 132 was held over.]
5:23:11 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:23 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB170 DCCED Presentation 3.23.17.pdf |
HL&C 3/24/2017 3:15:00 PM |
HB 170 |
| HB170 Fiscal Note DHSS-SDSA 3.17.17.pdf |
HL&C 3/24/2017 3:15:00 PM |
HB 170 |
| HB170 Fiscal Note DCCED-DBS 3.13.17.pdf |
HL&C 3/24/2017 3:15:00 PM |
HB 170 |
| HB170 Repealers List 3.21.17.pdf |
HL&C 3/24/2017 3:15:00 PM |
HB 170 |
| HB170 Sectional Analysis 3.21.17.pdf |
HL&C 3/24/2017 3:15:00 PM |
HB 170 |
| HB170 Sponsor Statement 3.21.17.pdf |
HL&C 3/24/2017 3:15:00 PM |
HB 170 |
| HB086 ACPE Response HLAC 3.23.17.pdf |
HL&C 3/24/2017 3:15:00 PM |
HB 86 |
| HB141 DOLWD Response HLAC 3.10.17.pdf |
HL&C 3/24/2017 3:15:00 PM |
HB 141 |
| HB170 DCCED Whitepaper 3.20.17.pdf |
HL&C 3/24/2017 3:15:00 PM |
HB 170 |
| HB170 DCCED Presentation 3.23.17.pdf |
HL&C 3/24/2017 3:15:00 PM |
HB 170 |