Legislature(2019 - 2020)BARNES 124
03/18/2019 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing(s): Real Estate Commission | |
| HB48 | |
| HB44 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 48 | TELECONFERENCED | |
| *+ | HB 44 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
March 18, 2019
3:16 p.m.
MEMBERS PRESENT
Representative Adam Wool, Co-Chair
Representative Gabrielle LeDoux, Co-Chair
Representative Zack Fields
Representative Sara Hannan
Representative Louise Stutes
Representative Dave Talerico
MEMBERS ABSENT
Representative Josh Revak
COMMITTEE CALENDAR
CONFIRMATION HEARING(S):
Real Estate Commission
Michael Tavoliero - Anchorage
- CONFIRMATION(S) ADVANCED
HOUSE BILL NO. 48
"An Act removing from the exempt service of the state persons
who are employed in a professional capacity to make a temporary
or special inquiry, study, or examination as authorized by the
governor and including those persons in the partially exempt
service of the state."
- HEARD & HELD
HOUSE BILL NO. 44
"An Act relating to fees for using an automated teller machine;
and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 48
SHORT TITLE: TEMP STATE EMPLOYEES IN PART EXEMPT SVCE
SPONSOR(s): REPRESENTATIVE(s) WILSON
02/20/19 (H) READ THE FIRST TIME - REFERRALS
02/20/19 (H) L&C, FIN
03/18/19 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 44
SHORT TITLE: AUTOMATED TELLER MACHINES: FEES
SPONSOR(s): REPRESENTATIVE(s) ORTIZ
02/20/19 (H) READ THE FIRST TIME - REFERRALS
02/20/19 (H) L&C
03/18/19 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
MICHAEL TAVOLIERO, Appointee
Real Estate Commission
Anchorage, Alaska
POSITION STATEMENT: Testified as appointee to the Real Estate
Commission.
REPRESENTATIVE TAMMIE WILSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented HB 48.
REMOND HENDERSON, Staff
Representative Tammie Wilson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
48, on behalf of Representative Wilson, prime sponsor.
REPRESENTATIVE DAN ORTIZ
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As prime sponsor, presented HB 44.
CAROLINE HAMP, Staff
Representative Dan Ortiz
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
44, on behalf of Representative Ortiz, prime sponsor.
BRUCE RENARD, Executive Director
National ATM Council, Inc. (NAC)
Jacksonville, Florida
POSITION STATEMENT: Testified and answered questions during the
hearing on HB 44.
PAUL THOMAS, Owner
Alaska Cache Liquor
Juneau, Alaska
POSITION STATEMENT: Testified during the hearing on HB 44.
SARAH OATES, President/CEO
Alaska Cabaret, Hotel, Restaurant and Retailers Association
(CHARR)
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 44.
ACTION NARRATIVE
3:16:02 PM
CO-CHAIR GABRIELLE LEDOUX called the House Labor and Commerce
Standing Committee meeting to order at 3:16 p.m.
Representatives Talerico, Fields, Stutes, Hannan, LeDoux, and
Wool were present at the call to order.
^CONFIRMATION HEARING(S): Real Estate Commission
CONFIRMATION HEARING(S): Real Estate Commission
3:17:10 PM
CO-CHAIR LEDOUX announced that the first order of business would
be the confirmation hearing on the Real Estate Commission.
3:17:46 PM
MICHAEL TAVOLIERO, Appointee, Real Estate Commission, stated
that he has been a real estate licensee since 2008. He pointed
out that the real estate industry accounts for a large portion
of the state's economy. The real estate industry is not just
about selling property and making money, he said, "there is a
much deeper emotional and pragmatic aspect to our industry. It
is about bringing people together and giving them the tools to
address the social and economic issues in their life." He
opined that buying a house is more than just a property
investment, "it is really about home ownership, family, future,
and happiness. It is about continuing to improve the quality of
life in Alaska with the expansion of a professional real estate
community." He related that he has worked in both commercial
and residential and done large and small investments, further
noting that the real estate industry creates thousands of jobs
and is a vital part of community development and growth in
Alaska. He suggested that "accomplishing these goals requires
strong partnerships between the state legislature, local
government, and the real estate industry." He concluded by
stating that efforts made by the Real Estate Commission to
develop professional standards are "proudly substantial", adding
that "professional investigations and remedies which are
meaningful and fair to the public must be foremost in the
commission's mindset."
REPRESENTATIVE FIELDS, referencing an email Mr. Tavoliero sent
to the legislature that featured a Facebook post by Carol
Carmen, asked if he was communicating in his role as a
gubernatorial appointee to the Real Estate Commission when he
wrote, "Yes, totally agree. But the legislature, especially the
house majority and senate leadership, are deaf to this opinion.
Therein lies the frailty of opaque state government in the dark
wet recesses of a cave called Juneau."
MR. TAVOLIERO, in response to Representative Fields, asked how
that would impact his ability to serve on the Real Estate
Commission.
REPRESENTATIVE FIELDS questioned whether Mr. Tavoliero wrote
that comment as a representative of the governor or if it was a
personal opinion.
MR. TAVOLIERO acknowledged that it was a "private" opinion.
REPRESENTATIVE FIELDS asked for Mr. Tavoliero to elaborate on
the meaning of "the frailty of opaque state government in the
dark wet recesses of a cave called Juneau."
MR. TAVOLIERO opined that the government should be more
transparent, adding "that's why you and I serve the way we do."
REPRESENTATIVE FIELDS, referencing Senator Kiehl's reply to Mr.
Tavoliero's aforementioned email, in which Kiehl wrote
"decisions are made by representatives and senators who Alaskans
elect and send to the state capitol." Representative Fields
inquired as to the meaning of Mr. Tavoliero's response, which
read, "LOL says the hound as he runs with the fox."
MR. TAVOLIERO replied "we've got to cover both sides of the
coin. We've got to serve the state."
REPRESENTATIVE FIELDS repeated his question, asking for the
meaning of the phrase "LOL says the hound as he runs with the
fox."
MR. TAVOLIERO said it is an old Sam Ervin comment that was used
during President Nixon's investigation.
REPRESENTATIVE FIELDS asked Mr. Tavoliero to whom he was
comparing Senator Kiehl.
MR. TAVOLIERO asserted that it was a comment not a comparison.
REPRESENTATIVE FIELDS said he was not familiar with that
reference, but it sounded like a metaphor. He maintained that
he was just trying to figure out the meaning of Mr. Tavoliero's
comment.
MR. TAVOLIERO stated that his job was to promote public interest
and that's all he was doing.
REPRESENTATIVE FIELDS reread the phrase in question and
suggested that Mr. Tavoliero was comparing Senator Kiehl to a
hound. He asked if this was true or if Mr. Tavoliero was trying
to say something else.
MR. TAVOLIERO replied that it was just a comment on the need for
transparency.
REPRESENTATIVE FIELDS questioned how "says the hound as he runs
with the fox" signifies transparency. He asked Mr. Tavoliero to
explain the meaning behind that phrase.
MR. TAVOLIERO maintained that the meaning was about "the big
picture" and the government needing to be more transparent,
adding that he was "at a loss" and unsure as to what
Representative Fields was asking him.
3:25:04 PM
CO-CHAIR LEDOUX acknowledged that Mr. Tavoliero said the phrase
was an old Sam Ervin statement. The problem, she said, was that
nobody knew what it meant. She asked him, once again, to
explain the meaning behind "LOL says the hound as he runs with
the fox."
MR. TAVOLIERO reiterated that he was alluding to the need for
more transparency, noting "it's about the entire process that we
serve for our state."
REPRESENTATIVE FIELDS concluded that the meaning was incoherent.
He asked Mr. Tavoliero to explain the connection to Richard
Nixon and Sam Ervin in greater detail.
MR. TAVOLIERO purported that Sam Ervin was the prosecutor for
Watergate, adding that one of the difficulties he was faced with
was "the opaqueness" of the federal government. After all, Mr.
Tavoliero opined, there were many things done wrong. He asked
Representative Fields if he agreed.
REPRESENTATIVE FIELDS reread Mr. Tavoliero's original statement,
"therein lies the frailty of opaque state government in the dark
wet recesses of a cave called Juneau" and questioned whether he
was suggesting that state government is comparable to the level
of criminality that existed in Washington DC under the Nixon
administration.
MR. TAVOLIERO restated that the suggestion was for more
transparency.
REPRESENTATIVE FIELDS noted that he was not enlightened as to
what "says the hound as he runs with the fox" means.
3:27:44 PM
REPRESENTATIVE HANNAN pointed out that Mr. Tavoliero's "very
abbreviated" resume showed that he had been a real estate agent
since 2008. She asked him if he was working as a full-time
realtor during that 10-year period.
MR. TAVOLIERO answered yes.
REPRESENTATIVE HANNAN sought clarification as to what Mr.
Tavoliero did for work during the 30 years between being a
paralegal and becoming a realtor.
MR. TAVOLIERO replied that he had been a small business owner.
REPRESENTATIVE HANNAN asked Mr. Tavoliero to elaborate on the
kinds of businesses that he had owned.
MR. TAVOLIERO explained that he operated a transmission repair
shop for 15 years, as well as other "odd jobs" during that time.
REPRESENTATIVE HANNAN, referencing Mr. Tavoliero's 10 years of
experience, asked what his vision and goals would be as a member
of the Real Estate Commission. She inquired as to how he would
bring more transparency to state government.
MR. TAVOLIERO stated that he would promote a stronger level of
professionalism in the real estate industry, while at the same
time supporting and bringing in new licensees. He explained
that last year there were licensees lost due to lack of renewal
and he would like to encourage more people to join the industry.
He related that the single most important part of the Real
Estate Commission is protecting the public and serving as a
"consumer protection group," adding that he took that very
seriously.
REPRESENTATIVE HANNAN asked Mr. Tavoliero if, during his ten
years as a real estate agent in Alaska, he had been involved
with the Realtors Political Action Committee (RPAC) or served on
their board in any capacity.
MR. TAVOLIERO replied that had worked with their board and their
"political process," further noting that he paid his dues every
year.
REPRESENTATIVE HANNAN sought clarification as to whether Mr.
Tavoliero had ever served on RPAC's board or political action
committee, or if he had just been buying and selling real estate
and paying dues to their organization.
MR. TAVOLIERO explained that he had served on their political
policy board as well as their ethics board, but never on RPAC's
actual board itself.
3:31:15 PM
CO-CHAIR WOOL asked Mr. Tavoliero to explain the makeup of the
board.
MR. TAVOLIERO sought clarification as to whether Representative
Wool was referring to the "Anchorage real estate board."
CO-CHAIR WOOL remarked that he was referring to the state board
that Mr. Tavoliero claimed to have worked with on various
subcommittees.
MR. TAVOLIERO explained that there are several boards through
the National Association of Realtors (NAR) that are established
in Alaska. He stated that the only one he had ever worked with
on a peripheral level was the Anchorage real estate board.
CO-CHAIR WOOL asked if Mr. Tavoliero was familiar with the
Alaska board of realtors.
MR. TAVOLIERO maintained that he was not familiar with the board
of realtors.
CO-CHAIR WOOL inquired as to what part of the state Mr.
Tavoliero worked in.
MR. TAVOLIERO replied that he worked in Southcentral Alaska;
Anchorage, Eagle River, Chugiak, and the valley. He added that
he had worked in Fairbanks as well. He disclosed that he owns
property in North Pole, Alaska and was developing homes in that
area.
3:33:40 PM
REPRESENTATIVE STUTES asked Mr. Tavoliero what board he was
currently being appointed to.
MR. TAVOLIERO answered, "the Alaska Real Estate Commission."
REPRESENTATIVE STUTES, in response to Mr. Tavoliero, asked if
that was a statement or a question.
MR. TAVOLIERO reiterated that his appointment was to the Alaska
Real Estate Commission.
3:34:15 PM
CO-CHAIR LEDOUX inquired as to what the Alaska Real Estate
Commission does.
MR. TAVOLIERO opined that it protects the public through
regulation for consumer protection and enhances and develops the
profession itself. He added that testing, fees, and all the
general provisions for licensing are done through the commission
as well.
CO-CHAIR LEDOUX, referencing Mr. Tavoliero's resume, asked for
the names of the businesses he owned or people he worked for in
the 30-year gap between attending San Francisco State University
and becoming a real estate agent.
MR. TAVOLIERO replied that he owned the AAMCO Transmission
franchise in Anchorage for several years.
CO-CHAIR LEDOUX asked Mr. Tavoliero to clarify the dates that he
owned the franchise.
MR. TAVOLIERO stated that it was in the 1980s, after which he
worked transmission repair.
CO-CHAIR LEDOUX questioned whether Mr. Tavoliero owned the
businesses himself.
MR. TAVOLIERO answered yes.
CO-CHAIR LEDOUX asked Mr. Tavoliero for the names of his
transmission businesses.
MR. TAVOLIERO relayed that he owned A Accurate Transmission.
CO-CHAIR LEDOUX inquired as to how long he owned that business.
MR. TAVOLIERO replied that he owned it until 2005 or 2006, after
which he went on disability and then became a real estate agent
in 2008.
CO-CHAIR LEDOUX asked Mr. Tavoliero if he had ever declared
bankruptcy on any of his businesses.
MR. TAVOLIERO answered no and asked how that would affect his
ability to serve on the Real Estate Commission.
CO-CHAIR LEDOUX reminded Mr. Tavoliero that she was the one
asking questions. She asked him again if he had ever declared
bankruptcy.
MR. TAVOLIERO stated that he had not.
3:38:17 PM
CO-CHAIR WOOL asserted that the conversation started out about
transparency and the lack thereof, however, every time Mr.
Tavoliero was asked a question the committee members had to
"pull teeth" to get basic information. He pointed out that Mr.
Tavoliero's resume was scant and that his responses were
lacking.
REPRESENTATIVE HANNAN addressed Mr. Tavoliero's property
development, asking him if he owned or was partnering with the
contracting business that was developing the homes. She also
inquired as to the name of the contracting business.
MR. TAVOLIERO replied that he was pursuing that project with his
wife for retirement purposes. He explained that they found a
contractor in the Fairbanks area and have built one home. He
added that he hoped to build two or three more.
REPRESENTATIVE HANNAN asked if his use of a real estate license
was important in that transaction, whether it was in the rental
process or the search for a contractor.
MR. TAVOLIERO stated that he does get a commission as a result
of the completed project but that he's not involved in the
rental process. He noted that he and his wife contracted with a
property manager.
REPRESENTATIVE HANNAN inquired as to Mr. Tavoliero's opinion on
the statewide residential building code proposals that have come
up in pieces of legislation over the past few years.
MR. TAVOLIERO said that he was unsure because he relied on
contractors for that.
3:40:40 PM
CO-CHAIR LEDOUX remarked that she was astounded by Mr.
Tavoliero's last answer, adding that it seemed to be something
that real estate agents might know about. She pointed out that,
as an associate broker, Mr. Tavoliero must work under someone.
She asked him who that was.
MR. TAVOLIERO reported that he worked for Core Real Estate
Group, LLC.
CO-CHAIR LEDOUX asked where it's headquartered out of and who
the principal broker is.
MR. TAVOLIERO stated that Core Real Estate Group, LLC is in
Eagle River, Alaska and the brokers are Derek Hert and Anneliese
Cooper.
CO-CHAIR LEDOUX asked Mr. Tavoliero how long he had worked
there.
MR. TAVOLIERO explained that he helped start the business and
has worked there for three years.
CO-CHAIR LEDOUX sought clarification as to who Mr. Tavoliero
worked for prior to working for Core Real Estate Group, LLC.
MR. TAVOLIERO revealed that he previously worked for EXIT Realty
and then a company called Signature. He added that both were
located in Eagle River, Alaska; however, he was unsure of their
current status.
3:42:41 PM
REPRESENTATIVE FIELDS addressed Mr. Tavoliero's Twitter account,
referencing a (tweet) by Paul Joseph Watson that he had
retweeted on June 4, 2017, which read, "Theresa May says Terror
ideology is 'a perversion of Islam.' She obviously hasn't read
the Q'uran." He asked if, in retweeting that, Mr. Tavoliero was
trying to say that terrorist ideology is part of Islamic
teachings.
MR. TAVOLIERO alleged that he did not remember tweeting that.
REPRESENTATIVE FIELDS referenced another retweet from Mr.
Tavoliero's account, which read, "Make no mistake, these
medieval butchers won't stop. Islam is not compatible with
Western Civilization." He further noted two more tweets from
Mr. Tavoliero's account on May 27, 2017, which read, "You can't
be polite or tolerable of those who blindly and deftly want to
kill you. Our only option is to destroy them" followed by
"People of Mindanao support President Duterte's efforts to kill
all the terrorists!" Representative Fields pointed out that
Rodrigo Duterte has been widely criticized for murdering
civilians in his country. He asked Mr. Tavoliero if he believed
that Islam is a threat to Western civilization and, to quote Mr.
Tavoliero's tweet, "our only option is to destroy them."
MR. TAVOLIERO maintained that he did not remember the Twitter
comments and sought clarification as to the question he was
being asked.
REPRESENTATIVE FIELDS re-summarized Mr. Tavoliero's tweets and
questioned whether Mr. Tavoliero believed that violence against
Muslims is acceptable, as some of his tweets suggest that Islam
is a threat to western civilization.
MR. TAVOLIERO answered, "no it's not."
REPRESENTATIVE FIELDS asked Mr. Tavoliero why he would write
those things.
MR. TAVOLIERO alleged that he had a "Filipino virtual assistant"
setup his account who he believed to be responsible for the
tweets in question, adding that he did not remember them.
REPRESENTATIVE FIELDS sought to clarify Mr. Tavoliero's last
statement, asking if he had a social media manager that wrote
things for him.
MR. TAVOLIERO restated that he had a "Filipino virtual
assistant" who helped set up a website and social media
accounts.
REPRESENTATIVE FIELDS asked who that individual was.
MR. TAVOLIERO maintained that the virtual assistant only worked
for him for a short period of time and that he could not
remember their name.
REPRESENTATIVE FIELDS asked if that person wrote tweets on Mr.
Tavoliero's behalf.
MR. TAVOLIERO answered, "not to my knowledge."
3:47:35 PM
CO-CHAIR LEDOUX pointed out the inconsistency between Mr.
Tavoliero's statements, in which he blamed his virtual assistant
for tweeting things he didn't agree with on his behalf, and then
said he didn't know anything about that. She added that it was
confusing.
MR. TAVOLIERO agreed that it was confusing because he did not
remember the tweets.
3:48:00 PM
REPRESENTATIVE FIELDS, in closing, remarked that the tweets in
question seemed to come from the same Michael Tavoliero with
whom they were speaking to, adding that they are public record.
He said he was left confused about whether Mr. Tavoliero thought
exterminating mass numbers of people from a particular religion
was appropriate, which is "disturbing."
MR. TAVOLIERO declared, "how dare you say that," adding that
Representative Fields comment wasn't appropriate.
REPRESENTATIVE FIELDS read "You can't be polite or tolerable of
those who blindly and deftly want to kill you. Our only option
is to destroy them" and pointed out that now Mr. Tavoliero was
trying to say he did not agree with that statement, which came
from his Twitter account. He remarked that this was a more
reasonable position than "supporting wholesale murder."
3:49:15 PM
CO-CHAIR LEDOUX opened public testimony. After ascertaining
that no one wished to testify, she closed public testimony.
CO-CHAIR WOOL reiterated that the conversation started out about
transparency, however, more they spoke with Mr. Tavoliero the
less transparent he was He related that they had to "drill
deep" to get basic resume information and found a lot of work
experience that was not on Mr. Tavoliero's resume.
REPRESENTATIVE FIELDS read the following from Mr. Tavoliero's
resume, "I bring business experience to the table. My skills in
negotiations, management, relationship-building, and community
outreach will benefit all" and reminded members that Mr.
Tavoliero was comparing the legislature, in particular Senator
Kiehl, to a criminal investigation in Washington DC. He
expressed concern that Mr. Tavoliero emailed "flippant" remarks
to all state elected officials and displayed a record of
espousing violent ideology which, he opined, is not appropriate
for someone in a public position. He concluded by echoing
Representative Wool's comments regarding Mr. Tavoliero' lack of
concern, knowledge, and experience that would seem appropriate
for this position.
CO-CHAIR WOOL made a motion to advance the confirmation of
Michael Tavoliero, appointee to the Alaska Real Estate
Commission, to the joint session for consideration. He reminded
members that signing the reports regarding appointments to
boards and commissions in no way reflects individual members'
approval or disapproval of the appointees, and that the
nominations are merely forwarded to the full legislature for
confirmation or rejection.
CO-CHAIR LEDOUX reminded listeners that the committee has no
choice other than to recommend appointees be forwarded to the
joint session for consideration; therefore, Mr. Tavoliero's name
was forwarded.
HB 48- TEMP STATE EMPLOYEES IN PART EXEMPT SVCE
3:52:25 PM
CO-CHAIR LEDOUX announced that the next order of business would
be HOUSE BILL NO. 48, "An Act removing from the exempt service
of the state persons who are employed in a professional capacity
to make a temporary or special inquiry, study, or examination as
authorized by the governor and including those persons in the
partially exempt service of the state."
3:52:51 PM
REPRESENTATIVE TAMMIE WILSON, Alaska State Legislature, as prime
sponsor of HB 48, introduced the bill and read the following
sponsor statement [original punctuation provided]:
AS 39.25.110(9) was supposed to allow the governor to
appoint someone for some "temporary and special
inquiry". Because they are temporary, exempts do not
get PERS or regular State leave, health insurance or
other State benefits. However, the statute has not
been used in that manner. It has instead been used to
establish positions without the intent of the
positions being temporary, which would then entitle
employees to PERS and all other benefits.
The purpose of HB 48 is to discontinue the historical
practice by the Executive Branch of using AS
39.25.110(9) to unilaterally establish highly paid
executive level temporary exempt positions that have
no salary limits. There are positions established many
years ago using this statute that still exist today.
Some are unbudgeted and do not appear in agency
position counts. Several attempts have been made to
obtain a complete list of these positions and current
salary levels, but these attempts have been
unsuccessful.
HB 48 is intended to eliminate the establishment of
"temporary exempt" positions and instead place these
positions in the partially exempt service. Persons may
be "appointed" to partially exempt positions, however,
they will be subject to salary limits like all other
state employees. HB 48 will force the administration
to be more transparent and allow all employees to be
treated fairly.
REPRESENTATIVE WILSON addressed the 0-dollar fiscal note, which
she said could be interpreted as the administration either
attempting to withhold their exempt positions or expressing
indifference because it doesn't impact them.
3:54:51 PM
REPRESENTATIVE HANNAN expressed concern that the words "exempt"
and "temporary exempt" were being used interchangeably. After
looking at the statute, she said, it appeared that the current
bill speaks to those under AS 39.25.110(09) [Exempt Service;
persons employed in a professional capacity to make a temporary
or special inquiry, study or examination as authorized by the
governor], which are temporary; however, they were being
referred to as exempt. She continued by saying that referencing
those positions as exempt is precarious because exempt positions
are a much broader category. Alaska's deputy attorney general,
for example, is an exempt position and isn't temporary in
nature. She asked if the term or phrasing for that subcategory
should be "temporaries."
REPRESENTATIVE WILSON acknowledged that it was one specific area
of statute that would be eliminated and deferred to her staff,
Remond Henderson.
3:56:30 PM
REMOND HENDERSON, Staff, Representative Tammie Wilson, Alaska
State Legislature, on behalf of Representative Wilson, prime
sponsor of HB 48, stated that the current bill was specifically
designed to address only those temporary exempt positions
established by AS 39.25.110(09).
REPRESENTATIVE HANNAN surmised that the current bill was
intended for political appointees that were hired for a specific
purpose. She suggested including a timeframe that would dictate
the length of their temporary employment. She asked if
Representative Wilson had considered that.
REPRESENTATIVE WILSON replied that she was unsure because the
administration was not responsive. She reflected on a phone
call from an anonymous caller who informed her of a position in
Anchorage that was being paid an "exorbitant" amount and had no
Position Control Number (PCN), adding that this particular
position was not political. She explained that if the
governor's office had extra money and wanted to hire someone as
a temporary employee there would be no way to find that
position. Alternatively, they could be put into a PCN and,
unlike others who wouldn't go through this process, designated
to the correct job classification with a corresponding salary
and benefits. However, under AS 39.25.110(09) someone could be
making twice as much as another individual with the same job
title, solely because they were hired by the governor under that
specific part of the statute. She opined that this should not
be happening, and it was time for it to end.
REPRESENTATIVE HANNAN related that she shared Representative
Wilson's concern. She restated her suggestion of putting a one
or two-year timeframe on temporary exempt positions. She
pointed out that the process to make a position exempt exists
under that same statute, which involves going through the
personnel board, classification, and a public notice period. It
still allows an individual to be appointed, she noted, and avoid
the probationary period that one would encounter with a
classified job. She questioned whether defining how long
'temporary' was would mitigate those temporary hires that end up
working for 10-years off the books with no PCN.
REPRESENTATIVE WILSON emphasized that she was more concerned
with the hidden employee names and funds than the temporary
aspect. She offered her belief that, originally, the statute
was for projects that required hiring someone for a short amount
of time who would be paid more for their "specialized
knowledge;" however, the way it's been used over time has
strayed from that initial intent. She opined that as long as
this particular part of the statute exists it will continue to
be abused. She further noted that adding a timeframe of 3 or 6
months would not help designate a specific salary to these
positions, like most jobs have. She pointed out that this would
not take away the [governor's] ability to write a specific
contract for someone.
4:00:56 PM
REPRESENTATIVE STUTES asked for an example of the type of job
being discussed.
MR. HENDERSON described a unit within the Department of
Corrections (DOC) called an "investigative unit" under which
they established temporary exempt positions titled "Professional
Conduct Investigator" using the aforementioned statute. He
stated that the position received 173,000 dollars in salary and
benefits and further noted that it was created in FY 17 and
existed until the current commissioner cut it from the FY 20
budget.
REPRESENTATIVE STUTES posited that temporary exempt positions do
not receive benefits.
4:02:30 PM
REPRESENTATIVE WILSON acknowledged that they are not supposed to
receive benefits under the statute's original intent; however,
it's not being utilized accordingly.
REPRESENTATIVE STUTES surmised that there are some employees who
receive a salary and benefits but are off the books and have no
PCN. She asked if this was correct.
REPRESENTATIVE WILSON replied that some positions do have a PCN
while others do not. She explained that if the governor's
office had money left in their budget, they could hire someone
underneath AS 39.25.110(09) and not give them a PCN. She noted
that positions like that, which you can't find in the budget
books, are what makes things difficult.
4:03:33 PM
MR. HENDERSON added that some [positions] are identified, for
example, by a letter "T" in front of the last 3 letters of the
PCN. He stated that the only way to truly figure out how many
of those positions exist is to contact each department and ask
them to provide that information. He explained that the current
bill moves one particular part of the statute AS 39.25.110(09)
[persons employed in a professional capacity to make a temporary
or special inquiry, study or examination as authorized by the
governor] from Exempt Service [AS 39.25.110] to Partially Exempt
Service [AS 39.25.120], which subjects the appointment to a pay
plan that is established under statute. He further noted that
the governor can still appoint someone up to a step F, unless
there are extenuating circumstances that can justify the need
for a higher paying position. The difference, he said, is that
someone would no longer be able to be placed in a high paying
position without a rationale.
4:05:31 PM
CO-CHAIR LEDOUX asked who would approve the hire if the
administration wanted to employ someone beyond a step F.
MR. HENDERSON offered his belief that it was reviewed by the
personnel board. Nonetheless, he said he would follow up with
clarification from the Department of Administration, Division of
Personnel and Labor Relations.
4:07:04 PM
REPRESENTATIVE FIELDS revealed that he had asked Legislative
Finance and the administration to account for the personnel cost
of political appointees in the executive branch and never
received a response. He acknowledged that he had been a
political appointee himself and understands that they are an
important part of the democratic process; however, everyone has
a right to understand how the executive branch is organized. He
expressed his appreciation for the current bill in the interest
of transparency.
CO-CHAIR LEDOUX acknowledged that knowing the personnel cost of
political appointees in the executive branch would be helpful
information to have. She suggested that Representative Wilson
follow up on that request.
4:07:51 PM
REPRESENTATIVE WILSON asserted that she had already requested
that information multiple times, which is why she had looked
forward to seeing the fiscal note from the Department of
Administration to see if they would list any of the appointed
positions. She concluded that the governor would be okay with
the current bill's proposed changes due to the lack of response.
CO-CHAIR LEDOUX stated that she was having a difficult time
comprehending why there is a 0-dollar fiscal note, adding that
it should probably be a negative fiscal note. She said she was
hopeful that by the bill's next hearing the administration would
provide an explanation.
REPRESENTATIVE WILSON noted that the bill was going to the House
Finance Committee next where they would probably ask the same
question.
4:08:54 PM
CO-CHAIR WOOL inquired as to Alaska's statutory definition of
"exempt" and "partially exempt." He noted the importance of
accounting for employee positions and salaries in the budget,
adding that it should be "a basic condition of transparency."
REPRESENTATIVE WILSON agreed to follow up on the definitions.
She mentioned that the last time she went through the budget she
found two people with the same PCN number, which she thought to
be strange.
4:10:12 PM
The committee took a brief at-ease at 4:10 p.m.
4:11:11 PM
CO-CHAIR LEDOUX announced that HB 48 was held over.
HB 44-AUTOMATED TELLER MACHINES: FEES
4:11:39 PM
CO-CHAIR LEDOUX announced that the final order of business would
be HOUSE BILL NO. 44, "An Act relating to fees for using an
automated teller machine; and providing for an effective date."
4:12:25 PM
REPRESENTATIVE DAN ORTIZ, Alaska State Legislature, as prime
sponsor, presented HB 44. He paraphrased parts of the sponsor
statement [included in the committee packet], which read in its
entirety as follows [original punctuation provided]:
The intent of this bill is to allow retail automatic
teller machines (ATMs) to charge a withdraw fee on
transactions made by international bank card holders.
Currently, independently owned ATMs are not able to
charge a fee on transactions made by international
card holders. Our current law only pertains to ATMs
owned by state-sponsored banks or credit unions, and
does not include retail and individually owned ATMs.
Because of this gap, retail ATMs cannot charge a
withdraw fee on transactions from bank cards outside
of the United States.
Alaska welcomes millions of visitors each year, with a
large percentage of those visitors from out of the
country. In the summer of 2016 alone, nearly 300,000
international visitors came to Alaska. Retail ATM
owners cannot charge fees on these tourists'
transactions.
Multiple other states have already passed laws to
close this gap and allow retail ATM owners to charge a
transaction fee to international card holders.
4:14:11 PM
CO-CHAIR LEDOUX asked if domestic card holders can be charged a
withdraw fee.
REPRESENTATIVE ORTIZ answered yes. He explained that the
current bill would "close the gap" and allow privately owned
ATMs to charge international users [a withdraw fee], adding
that, currently, retail ATM owners charge domestic card holders
more to make up for the rates they don't receive from
international users. He stated that the current bill would
allow private owners to set a fee for withdraws made by
international card users, which would increase their revenue
from international tourists. He further noted that HB 44 has
received support from Alaskan ATM owners; the Alaska Cabaret,
Hotel, Restaurant and Retailers Association (CHARR) and the
National ATM Council, Inc. (NAC).
4:15:56 PM
REPRESENTATIVE STUTES inquired as to the difference between an
international user and a "regular" user.
REPRESENTATIVE ORTIZ explained that an international user was
"anyone from a foreign country other than the United States."
REPRESENTATIVE STUTES surmised that an international user would
be recognized by his or her bank being located outside of the
United States. She asked if this was correct.
4:16:33 PM
CAROLINE HAMP, Staff, Representative Dan Ortiz, Alaska State
Legislature, on behalf of Representative Ortiz, prime sponsor of
HB 44, acknowledged that it was the card holders' bank, not
their nationality, that was significant.
4:16:56 PM
REPRESENTATIVE HANNAN said she had made the presumption that if
an ATM couldn't charge a fee then the bank card wouldn't work,
when, in reality, an international card holder can use the ATM,
but no fee is recovered.
REPRESENTATIVE ORTIZ said that was correct.
REPRESENTATIVE HANNAN asked if ATM owners were allowed to block
users if they couldn't charge them a fee.
REPRESENTATIVE ORTIZ replied that he did not know the answer to
that question.
4:17:52 PM
CO-CHAIR WOOL, as an ATM owner himself, disclosed a conflict of
interest. In response to Representative Hannan, he explained
that he bought his [ATM] machine from a private company who
processes the transactions and compensates him monthly. He said
he was unsure as to whether that company can block transactions
from specific banks, adding that foreign card holders most
likely use the machine without being charged the withdraw fee.
Nonetheless, he revealed that even if they had to pay the
withdraw fee and he was making money off every transaction, he
still wouldn't be inclined to lower the fee. He concluded by
expressing his support for the current bill.
REPRESENTATIVE STUTES sought clarification on the withdraw fee
and whether it concerned the exchange rate or if it was simply
the extra fee a card holder is charged when they use an ATM
machine that does not belong to their bank.
REPRESENTATIVE ORTIZ confirmed that it was the extra fee.
4:20:53 PM
CO-CHAIR LEDOUX recognized Bruce Renard and asked him if private
ATM machine owners can block foreign transactions.
BRUCE RENARD, Executive Director, National ATM Council, Inc.
(NAC), pointed out that it's a misnomer to refer to an ATM as
"private" because each one has a sponsoring bank. He explained
that 60 percent of ATMs in the United States are owned by
entrepreneurs and business owners and referred to as
"independent ATMs," despite being operated pursuant to their
sponsoring bank.
CO-CHAIR LEDOUX interjected, asking Mr. Renard if he could
answer her previously stated question and save the rest for
public testimony.
MR. RENARD consented and offered his belief that, technically,
blocking [foreign transactions] could be done, but it would be
in violation of the network rules. He explained that all ATMs
are subject to compliance with the rules of the global finance
network, who wouldn't approve of blocking. He further described
the situation [in Alaska] as "a catch-22" because ATMs must
allow these international transactions that, theoretically,
could be blocked. He noted that Alaska is the last state with
this glitch.
CO-CHAIR LEDOUX inquired as to why her Wells Fargo bank card
only works in certain ATM machines when she travels
internationally.
MR. RENARD stated that different countries have different
protocols, however, Visa and Mastercard cards should work
everywhere, which is why they are so dominant. He remarked
that, in general, ATMs should accept US cards abroad, and if
they don't it's unique to that country.
4:24:59 PM
REPRESENTATIVE HANNAN stated that she intended to support this
piece of legislation because Alaska receives so many
international visitors. She asked if a statute had been passed
to allow ATMs to charge fees on domestic card holders'
transactions. She sought clarification as to why, in an
industry that is highly regulated by the federal government,
Alaska was the last state with this glitch concerning
transaction fees. She asked if international fees were excluded
from federal banking law.
REPRESENTATIVE ORTIZ offered his understanding that when
regulations around ATM use were established, they left
independently owned machines out of the equation. He explained
that, currently, institutions like Wells Fargo can charge a fee,
but for some reason, Alaska remains the one place where
individually owned ATMs cannot charge international users. He
added that passing the current bill would put Alaska on par with
the other 49 states.
4:26:44 PM
CO-CHAIR LEDOUX opened public testimony.
4:27:21 PM
MR. RENARD addressed the intent of the current bill, which is to
solve the glitch that is specific to Alaska and its interaction
with the global network rules. That interaction has resulted in
the inability of Alaska's independently owned ATMs to charge a
reasonable fee on transactions made by international bank card
holders. He pointed out that federal law placed a fee
disclosure requirement and the ability to opt out on any
surcharge established by ATM owners. This has resulted in
independently owned ATM surcharges remaining low, generally
within two to three dollars, whereas surcharges from Bank ATMs
(other than one's own) may be twice as high. He reiterated that
HB 44 would fix the glitch that is currently in Alaska law by
allowing ATMs to charge the same fees to international card
holders as they do domestic card holders. By doing so, he said,
it would create a level playing field between bank owned ATMs
and independently owned ATMs.
4:33:07 PM
PAUL THOMAS, Owner, Alaska Cache Liquor Inc, noted that he owned
the ATM located inside his business as well as 14 other ATMs in
Juneau. He stated that the current bill would put independently
owned ATMs on par with all the other ATMs. He pointed out the
impact that being located close to international traveler
departure points has on ATM operators. The docks, being a
prominent departure point for international cruise ship
passengers, means independent ATMS in that area will see a
considerable amount of "no charge" fees, which could prompt
owners to raise the surcharge. He urged members to even "the
playing field."
4:34:07 PM
SARAH OATES, President/CEO, Alaska Cabaret, Hotel, Restaurant
and Retailers Association (CHARR), noted that she was
representing many business owners from across the state, many of
whom have independent ATMs in their establishments. She
expressed their support for the current bill, as it would allow
for independent ATM owners to collect the same fee as large
financial institutions. She stated that current law puts small
business owners at a disadvantage by forcing them to "eat the
cost" of international fees rather than passing them on to
consumers. She concluded by reiterating that Alaska CHARR fully
supports "this very fair piece of legislation that would help
small Alaskan businesses."
4:35:12 PM
CO-CHAIR LEDOUX closed public testimony and announced that HB 44
was held over.
4:35:47 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
[4:35] p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Michael Tavoliero_Redacted.pdf |
HL&C 3/18/2019 3:15:00 PM |
Commission Hearing: Michael Tavoliero |
| HB044 Sectional Analysis 2.26.19.pdf |
HL&C 3/18/2019 3:15:00 PM HL&C 3/20/2019 3:15:00 PM |
HB 44 |
| HB044 Sponsor Statement 2.26.19.pdf |
HL&C 3/18/2019 3:15:00 PM |
HB 44 |
| HB 44 Fiscal Note.pdf |
HL&C 3/18/2019 3:15:00 PM |
HB 44 |
| HB044 ver A 3.15.19.PDF |
HL&C 3/18/2019 3:15:00 PM |
HB 44 |
| HB044 Supporting Document-Support Letters 2.26.19.pdf |
HL&C 3/18/2019 3:15:00 PM HL&C 3/20/2019 3:15:00 PM |
HB 44 |
| HB044 Supporting Document-Support Letter National ATM Council 3.15.19.pdf |
HL&C 3/18/2019 3:15:00 PM HL&C 3/20/2019 3:15:00 PM |
HB 44 |
| 2019.HB 44.Backup Support Letters.pdf |
HL&C 3/18/2019 3:15:00 PM HL&C 3/20/2019 3:15:00 PM |
HB 44 |
| HB044 Additional Document-ATM Location Study 3.15.19.pdf |
HL&C 3/18/2019 3:15:00 PM |
HB 44 |
| HB048 Sponsor Statement 3.4.19.pdf |
HL&C 3/18/2019 3:15:00 PM |
HB 48 |
| HB0048 ver M 3.4.19.PDF |
HL&C 3/18/2019 3:15:00 PM |
HB 48 |
| HB 48 Fiscal Note.pdf |
HL&C 3/18/2019 3:15:00 PM HL&C 3/20/2019 3:15:00 PM |
HB 48 |