02/16/2006 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB238 | |
| SB186 | |
| HB347 | |
| HB344 | |
| SB12 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 344 | TELECONFERENCED | |
| + | SB 12 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 347 | TELECONFERENCED | |
| += | HB 238 | TELECONFERENCED | |
| += | SB 186 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
February 16, 2006
8:08 a.m.
MEMBERS PRESENT
Representative Paul Seaton, Chair
Representative Carl Gatto, Vice Chair
Representative Jim Elkins
Representative Bob Lynn
Representative Jay Ramras
Representative Berta Gardner
Representative Max Gruenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 238
"An Act relating to contribution rates for employers and members
in the defined benefit plans of the teachers' retirement system
and the public employees' retirement system and to the ad-hoc
post-retirement pension adjustment in the teachers' retirement
system; requiring insurance plans provided to members of the
teachers' retirement system, the judicial retirement system, the
public employees' retirement system, and the former elected
public officials retirement system to provide a list of
preferred drugs; relating to defined contribution plans for
members of the teachers' retirement system and the public
employees' retirement system; and providing for an effective
date."
- MOVED CSHB 238(STA) OUT OF COMMITTEE
CS FOR SENATE BILL NO. 186(JUD)
"An Act relating to the Alaska Executive Branch Ethics Act; and
providing for an effective date."
- MOVED HCS CSSB 186(STA) OUT OF COMMITTEE
HOUSE BILL NO. 347
"An Act relating to mandatory motor vehicle insurance, license
suspensions, and notices relating to motor vehicles and driver's
licenses."
- MOVED CSHB 347(STA) OUT OF COMMITTEE
HOUSE BILL NO. 344
"An Act relating to the commissioner of administration's
appointing agents to perform for compensation certain
transactions related to vehicles; and providing for an effective
date."
- HEARD AND HELD
CS FOR SENATE BILL NO. 12(STA)
"An Act relating to financial relationships with persons
conducting business in or having headquarters in countries that
support or ignore slavery and trafficking in persons."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 238
SHORT TITLE: PUBLIC EMPLOYEE/TEACHER RETIREMENT
SPONSOR(s): STATE AFFAIRS
03/30/05 (H) READ THE FIRST TIME - REFERRALS
03/30/05 (H) STA, FIN
03/31/05 (H) STA AT 8:00 AM CAPITOL 106
03/31/05 (H) Heard & Held
03/31/05 (H) MINUTE(STA)
04/02/05 (H) STA AT 10:00 AM CAPITOL 106
04/02/05 (H) Heard & Held
04/02/05 (H) MINUTE(STA)
04/05/05 (H) STA AT 8:00 AM CAPITOL 106
04/05/05 (H) Heard & Held
04/05/05 (H) MINUTE(STA)
04/07/05 (H) STA AT 8:00 AM CAPITOL 106
04/07/05 (H) Scheduled But Not Heard
04/09/05 (H) STA AT 9:30 AM CAPITOL 106
04/09/05 (H) Heard & Held
04/09/05 (H) MINUTE(STA)
04/12/05 (H) STA AT 8:00 AM CAPITOL 106
04/12/05 (H) Heard & Held
04/12/05 (H) MINUTE(STA)
04/14/05 (H) STA AT 8:00 AM CAPITOL 106
04/14/05 (H) Heard & Held
04/14/05 (H) MINUTE(STA)
04/16/05 (H) STA AT 9:30 AM CAPITOL 106
04/16/05 (H) Heard & Held
04/16/05 (H) MINUTE(STA)
04/19/05 (H) STA AT 8:00 AM CAPITOL 106
04/19/05 (H) Scheduled But Not Heard
04/20/05 (H) STA AT 8:00 AM CAPITOL 106
04/20/05 (H) Scheduled But Not Heard
04/21/05 (H) STA AT 8:00 AM CAPITOL 106
04/21/05 (H) <Bill Hearing Canceled>
02/02/06 (H) STA AT 8:00 AM CAPITOL 106
02/02/06 (H) Heard & Held
02/02/06 (H) MINUTE(STA)
02/14/06 (H) STA AT 8:00 AM CAPITOL 106
02/14/06 (H) Scheduled But Not Heard
02/16/06 (H) STA AT 8:00 AM CAPITOL 106
BILL: SB 186
SHORT TITLE: EXECUTIVE BRANCH ETHICS
SPONSOR(s): SENATOR(s) SEEKINS
04/22/05 (S) READ THE FIRST TIME - REFERRALS
04/22/05 (S) STA, JUD
04/26/05 (S) STA AT 3:30 PM BELTZ 211
04/26/05 (S) Moved CSSB 186(STA) Out of Committee
04/26/05 (S) MINUTE(STA)
04/27/05 (S) JUD AT 8:30 AM BUTROVICH 205
04/27/05 (S) Scheduled But Not Heard
04/28/05 (S) STA RPT CS 3NR 1DNP
NEW TITLE
04/28/05 (S) NR: THERRIAULT, WAGONER, HUGGINS
04/28/05 (S) DNP: ELTON
04/28/05 (S) JUD AT 8:30 AM BUTROVICH 205
04/28/05 (S) Scheduled But Not Heard
04/29/05 (S) JUD AT 8:30 AM BUTROVICH 205
04/29/05 (S) LEGISLATIVE ETHICS/MEETINGS
04/30/05 (S) JUD AT 9:00 AM BUTROVICH 205
04/30/05 (S) Scheduled But Not Heard
05/01/05 (S) JUD AT 4:00 PM BUTROVICH 205
05/01/05 (S) Moved CSSB 186(JUD) Out of Committee
05/01/05 (S) MINUTE(JUD)
05/02/05 (S) JUD RPT CS FORTHCOMING 1DP 1DNP 2NR
1AM
05/02/05 (S) DP: SEEKINS
05/02/05 (S) DNP: FRENCH
05/02/05 (S) NR: THERRIAULT, HUGGINS
05/02/05 (S) AM: GUESS
05/02/05 (S) JUD AT 8:30 AM BUTROVICH 205
05/02/05 (S) Moved Out of Committee 5/1/05
05/02/05 (S) MINUTE(JUD)
05/03/05 (S) JUD CS RECEIVED
NEW TITLE
05/04/05 (S) RETURNED TO RLS COMMITTEE
05/08/05 (S) TRANSMITTED TO (H)
05/08/05 (S) VERSION: CSSB 186(JUD)
05/09/05 (H) READ THE FIRST TIME - REFERRALS
05/09/05 (H) STA, JUD
01/31/06 (H) STA AT 8:00 AM CAPITOL 106
01/31/06 (H) Heard & Held
01/31/06 (H) MINUTE(STA)
02/14/06 (H) STA AT 8:00 AM CAPITOL 106
02/14/06 (H) Heard & Held
02/14/06 (H) MINUTE(STA)
02/16/06 (H) STA AT 8:00 AM CAPITOL 106
BILL: HB 347
SHORT TITLE: MOTOR VEHICLE INSURANCE/LICENSE/ NOTICES
SPONSOR(s): REPRESENTATIVE(s) GARA, LYNN
01/09/06 (H) PREFILE RELEASED 1/6/06
01/09/06 (H) READ THE FIRST TIME - REFERRALS
01/09/06 (H) STA, JUD
01/31/06 (H) STA AT 8:00 AM CAPITOL 106
01/31/06 (H) Heard & Held
01/31/06 (H) MINUTE(STA)
02/14/06 (H) STA AT 8:00 AM CAPITOL 106
02/14/06 (H) Heard & Held
02/14/06 (H) MINUTE(STA)
02/16/06 (H) STA AT 8:00 AM CAPITOL 106
BILL: HB 344
SHORT TITLE: VEHICLE TRANSACTION AGENTS
SPONSOR(s): REPRESENTATIVE(s) KOHRING, RAMRAS
01/09/06 (H) PREFILE RELEASED 1/6/06
01/09/06 (H) READ THE FIRST TIME - REFERRALS
01/09/06 (H) STA, FIN
02/16/06 (H) STA AT 8:00 AM CAPITOL 106
BILL: SB 12
SHORT TITLE: HUMAN TRAFFICKING/SEXTOURISM/PROCUREMENTS
SPONSOR(s): SENATOR(s) DYSON
01/11/05 (S) PREFILE RELEASED 12/30/04
01/11/05 (S) READ THE FIRST TIME - REFERRALS
01/11/05 (S) STA, JUD
02/08/05 (S) STA AT 3:30 PM BELTZ 211
02/08/05 (S) Heard & Held
02/08/05 (S) MINUTE(STA)
04/14/05 (S) STA AT 3:30 PM BELTZ 211
04/14/05 (S) Moved CSSB 12(STA) Out of Committee
04/14/05 (S) MINUTE(STA)
04/15/05 (S) STA RPT CS FORTHCOMING 4DP
04/15/05 (S) DP: THERRIAULT, HUGGINS, DAVIS, ELTON
04/18/05 (S) STA CS RECEIVED
NEW TITLE
04/26/05 (S) JUD RPT CS(STA) 4DP 1NR
04/26/05 (S) DP: SEEKINS, FRENCH, THERRIAULT,
HUGGINS
04/26/05 (S) NR: GUESS
04/26/05 (S) JUD AT 8:30 AM BUTROVICH 205
04/26/05 (S) Moved CSSB 12(STA) Out of Committee
04/26/05 (S) MINUTE(JUD)
05/02/05 (S) TRANSMITTED TO (H)
05/02/05 (S) VERSION: CSSB 12(STA)
05/03/05 (H) READ THE FIRST TIME - REFERRALS
05/03/05 (H) STA, JUD
02/16/06 (H) STA AT 8:00 AM CAPITOL 106
WITNESS REGISTER
TRACI CARPENTER, Project Manager
Central Office
Division of Retirement & Benefits
Department of Administration
Juneau, Alaska
POSITION STATEMENT: Answered a question pertaining to an
amendment during the hearing on HB 238.
REPRESENTATIVE VIC KOHRING
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As one of the prime sponsors, presented HB
344.
DUANE BANNOCK, Director
Director's Office
Division of Motor Vehicles
Department of Administration
Anchorage, Alaska
POSITION STATEMENT: Answered questions on behalf of the
division during the hearing on HB 344.
CARROL LYBERGER
Lyberger's Car & Truck Sales, LLC ("Lyberger's")
Anchorage, Alaska
POSITION STATEMENT: Testified in support of a surcharge for
business partners of Alaska's Division of Motor Vehicles, during
the hearing on HB 344.
JIM ARPINO
Affordable Used Cars, Fairbanks and Anchorage;
Board member
Alaska Automotive Dealers Association
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 344.
DEANNA SLACK, General Manager
Cal Worthington Ford
Anchorage, Alaska
POSITION STATEMENT: Talked about the customer service aspect of
being a business partner with DMV and answered questions during
the hearing on HB 344.
JOHN IMMEL, Past Co-Owner
Gene's Chrysler
Fairbanks, Alaska
POSITION STATEMENT: Emphasized the efficiency provided by
business partners of DMV, during the hearing on HB 344.
SENATOR FRED DYSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified as sponsor of SB 12.
JASON HOOLEY, Staff
to Senator Fred Dyson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered a question on behalf of Senator
Dyson, sponsor of SB 12.
ACTION NARRATIVE
CHAIR PAUL SEATON called the House State Affairs Standing
Committee meeting to order at 8:08:53 AM. Present at the call
to order were Representatives Lynn, Ramras, Gardner, and Seaton.
Representatives Gatto, Elkins, and Gruenberg arrived as the
meeting was in progress.
HB 238-PUBLIC EMPLOYEE/TEACHER RETIREMENT
8:09:28 AM
CHAIR SEATON announced that the first order of business was
HOUSE BILL NO. 238, "An Act relating to contribution rates for
employers and members in the defined benefit plans of the
teachers' retirement system and the public employees' retirement
system and to the ad-hoc post-retirement pension adjustment in
the teachers' retirement system; requiring insurance plans
provided to members of the teachers' retirement system, the
judicial retirement system, the public employees' retirement
system, and the former elected public officials retirement
system to provide a list of preferred drugs; relating to defined
contribution plans for members of the teachers' retirement
system and the public employees' retirement system; and
providing for an effective date."
[Before the committee was CSHB 238, Version 24-LS0761\R, Wayne,
1/31/06.]
8:10:43 AM
CHAIR SEATON, after ascertaining that there was no one to
testify, closed public testimony.
8:11:01 AM
CHAIR SEATON moved Amendment 1, labeled, 24-LS0761\R.1, Wayne,
2/7/06, which read as follows:
Page 2, line 5, following "to":
Insert "the average salary of all employees of
the employer multiplied by"
8:12:15 AM
REPRESENTATIVE GARDNER objected for discussion purposes, and she
asked Chair Seaton to clarify how the language of the bill would
read with Amendment 1.
8:12:44 AM
CHAIR SEATON explained that the language, beginning on [page 2],
line 3, would read as follows:
(1) applying the employer's past service cost rate, up
to an amount equal to the blended employer past
service cost rate, as calculated on the employer's
entire wage base, to the average salary of all
employees of the employer multiplied by the number of
employees of that employer who are members of the
public employees' defined contribution plan in AS
39.35.700-39.35.990;
CHAIR SEATON said the language currently on [page 2, lines 3-6]
sets out a calculation formula, but it is missing the language
of Amendment 1.
8:13:14 AM
REPRESENTATIVE GARDNER removed her objection.
CHAIR SEATON asked if there was any further objection to
Amendment 1. There being none, it was so ordered.
8:13:24 AM
CHAIR SEATON moved Amendment 2, labeled, 24-LS0761\R.3, Wayne,
2/7/06, which read as follows:
Page 2, lines 20 - 21:
Delete all material:
Insert "contribution plan established in
AS 39.35.700 - 39.35.990 and the defined benefit plan
established in AS 39.35.095 - 39.35.680;"
8:13:34 AM
REPRESENTATIVE GARDNER objected for discussion purposes.
8:13:45 AM
CHAIR SEATON explained that the identifying statutes on page 2,
lines 20-21, are in the wrong order, and Amendment 2 corrects
that mistake.
8:14:04 AM
REPRESENTATIVE GARDNER removed her objection to Amendment 2.
CHAIR SEATON asked if there was any further objection. There
being none, Amendment 2 was adopted.
8:14:21 AM
CHAIR SEATON moved Amendment 3, which read as follows [original
punctuation provided]:
Page 2, lines 7-14
Delete all material
REPRESENTATIVE GARDNER objected for discussion purposes.
8:15:36 AM
CHAIR SEATON stated his assumption that regarding employer
contribution rates in municipalities with low-compensated
elected officials, "the entire normal [medical] cost associated
with that person is spread among the rest of the individuals of
that employer and is calculated in that employer's rate." He
said he would like confirmation that that is true.
8:15:51 AM
TRACI CARPENTER, Project Manager, Central Office, Division of
Retirement & Benefits, Department of Administration, confirmed
that Chair Seaton's statement is true. She rephrased the
concept as follows: "The way that calculation works by the
actuary is they determine what the dollar cost amount is for
medical benefits for all of the participating members for that
year, and then, having arrived at the dollar amount, they divide
that by the wage base to arrive at the contribution amount."
8:16:18 AM
CHAIR SEATON asked if that is also the case in Tiers I, II, and
III of the defined benefits program.
8:16:32 AM
MS. CARPENTER answered yes.
8:16:38 AM
CHAIR SEATON explained that Amendment 3 would remove language
that is not necessary.
8:17:07 AM
REPRESENTATIVE GARDNER removed her objection to Amendment 3.
CHAIR SEATON asked if there was any further objection to
Amendment 3. There being none, it was so ordered.
8:17:23 AM
REPRESENTATIVE LYNN moved to report CSHB 238, Version 24-
LS0761\R, Wayne, 1/31/06, as amended, out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, CSHB 238(STA) was reported out of the
House State Affairs Standing Committee.
The committee took an at-ease from 8:19:01 AM to 8:19:40 AM.
SB 186-EXECUTIVE BRANCH ETHICS
CHAIR SEATON announced that the next order of business was CS
FOR SENATE BILL NO. 186(JUD), "An Act relating to the Alaska
Executive Branch Ethics Act; and providing for an effective
date."
[Before the committee was HCS CSSB 186, Version 24-LS0874\X,
Wayne, 1/30/06, as amended.]
8:19:49 AM
REPRESENTATIVE GARDNER moved to adopt Amendment [9], as follows:
Page 1, line 11, following ";":
Insert "or"
Page 1, lines 12 - 14:
Delete "financial interest in a matter is held in
a blind trust or the public officer does not have
management control over the financial interest; or
(4)"
Page 3, line 18, through page 4, line 1:
Delete all material.
Renumber the following bill sections accordingly.
Page 9, line 31, through page 10, line 3:
Delete "establishment of a blind trust for a
period of time or under conditions determined
appropriate, placement of the financial interest into
an investment where the employee does not have
management control over the financial interest,"
Insert " [ESTABLISHMENT OF A BLIND TRUST,]"
REPRESENTATIVE GARDNER directed attention to an article
[included in the committee packet], entitled, "Frist Was Updated
On Blind Trust," from CBS News, [dated 9/26/05]. She indicated
that the article speaks to the heart of her concern about blind
trusts that "they are not necessarily blind." She explained, "I
think that people understand that if somebody puts their assets
in a blind trust, they might have reason to believe that they
will still benefit from decisions made while those assets are in
a blind trust." She continued:
I think, for example, ... [Vice President Dick] Cheney
has assets related to his service with Halliburton
[Company] and stock. And they're in a blind trust,
but I think that everybody understands that when he's
out of office, he'll probably be a very much wealthier
man than when he entered, in part because of his
relationship with Halliburton. And there's nothing
illegal about that, but it does raise - rightly - a
public concern. I personally believe that if you want
to serve in government office and you have personal
interest in particular companies or businesses,
putting them in a blind trust does not remove that
interest, even though you may not, on a day-to-day
basis know what is in the trust. You know what you
put in [and] there's an expectation of what comes out.
And I think that even if the decisions you make as a
public official are not considering your personal
benefit, the perception that it does is there. And in
this life, perception is sometimes even more important
than reality. If we want public trust in government,
we must remove any perception of conflict of interest
in every way we can.
REPRESENTATIVE GARDNER revealed that she had tried to get an
attorney, accountant, or someone who deals with blind trusts to
address this issue on the record. She related that one man
laughed and said, "Oh, you mean leaky, peaky trusts." She said
she thinks that's very telling. She explained that, given the
importance of the issue of confidence in government, she is
offering Amendment [9].
8:23:07 AM
REPRESENTATIVE RAMRAS objected to Amendment [9].
8:23:22 AM
CHAIR SEATON noted that also included in the committee packet is
an article from the New Jersey Department of Law & Public
Safety, entitled, "Executive Commission on Ethical Standards."
He said, "... You'll notice that at least in this case, nothing
that's required to be recorded in a public office can be put in
a blind trust. That's because anything that's recorded in a
public office is then, of course, known." He noted that Alaska
uses the Alaska Public Offices Commission's (APOC's) rule for
financial disclosures for elected officials. He said, "For this
case it doesn't seem like we have the ability on elected
officials." He referred to a portion of the handout showing the
New Jersey department's standards, which read:
The trust shall not contain investments or assets in
which the holder's ownership right or interest is
required to the [sic] recorded in a public office or
those assets whose permanency makes transfer by the
trustee improbable or impractical; these investments
or assets would include, but not be limited to,
businesses, real estate, security interests in
personal property and mortgages;
CHAIR SEATON remarked, "The probability that those will remain
in the trust is extremely high, and therefore a person that puts
something in that trust would have the knowledge that those
basically nonliquid assets would remain in the trusts." He
reminded the committee, "This does not remove blind trusts from
the government. All this does is remove blind trusts as an
absolute, nonconflict of interest; so, if you put something into
a blind trust under this bill, you absolutely don't have any
conflict of interest - even if you just put it in and you know
it's there." He said he believes that's the thrust of the two
articles.
8:26:10 AM
A roll call vote was taken. Representatives Gardner, Gruenberg,
Gatto, and Seaton voted in favor of Amendment 9.
Representatives Elkins and Ramras voted against it. Therefore,
Amendment 9 passed by a vote of 4-2.
8:26:56 AM
REPRESENTATIVE GRUENBERG moved to adopt Amendment 10, which read
as follows [original punctuation provided]:
Page 2, lines 3-4:
Delete all material and insert:
"(B) does not own stock or options to boy
stock that, when combined,
(i) equal more than one percent of the stock
in the business; or
(ii) have a total value of more than
$10,000;"
8:27:04 AM
CHAIR SEATON objected for discussion purposes.
8:27:52 AM
REPRESENTATIVE GRUENBERG noted that there is a typographical
error in the amendment: "boy" should read, "buy". [The
committee treated Representative Gruenberg's notice of the error
as sufficient to change the error - no amendment necessary.]
Representative Gruenberg reminded the committee of its
discussion [during the 2/14/06 hearing on SB 186] regarding
whether stock options should be included in addition to the
actual shares of stock, at which time the sponsor, Senator Ralph
Seekins, said he did not object.
8:28:25 AM
CHAIR SEATON removed his objection. He asked if there was any
further objection to Amendment 10. There being none, Amendment
10 was adopted.
8:28:40 AM
REPRESENTATIVE GRUENBERG noted that there were [three other
amendments] stapled to the back of the adopted Amendment 10.
8:29:11 AM
REPRESENTATIVE GRUENBERG moved to [rescind the committee's
action in adopting] Amendment 10. There being no objection, it
was so ordered.
8:29:40 AM
REPRESENTATIVE GRUENBERG moved to adopt Conceptual Amendment 11,
which includes the rescinded Amendment 10 [text provided
previously], plus the following amendments combined, which read
as follows [original punctuation provided with some formatting
changed]:
Page 2, lines 5-6:
Delete all material and insert:
"(C) owns
(i) less than one percent of the equity
interest in the business; or
(ii) an equity interest in the business
worth less than $10,000;"
Page 2, line 10:
Insert:
after "provide" insert "or have an option to
provide"
Page 2, line 12:
Insert:
after "contract" insert "or have an option
for a contract"
8:31:14 AM
CHAIR SEATON, regarding the part of the amendment addressing
page 2, lines 5-6, explained that "equity interest" means a
partnership without a stock.
8:32:04 AM
REPRESENTATIVE GRUENBERG moved Conceptual Amendment 1 to [the
portion of] Conceptual Amendment 11 [which addresses page 2,
lines 5-6], to insert "or has an option to buy" after "(C)
owns".
CHAIR SEATON asked if there was any objection to Conceptual
Amendment 1 to Conceptual Amendment 11. There being none, it
was so ordered.
8:32:45 AM
REPRESENTATIVE GATTO [referred to the portion of Amendment 11
that read: "(i) less than one percent of the equity interest in
the business; or"], and questioned the use of the word "or". In
response to Chair Seaton and Representative Gruenberg, he
explained that he thinks the intent of the amendment is to have
a person to satisfy both of these requirements, not one or the
other.
8:33:45 AM
REPRESENTATIVE GRUENBERG said he thinks Representative Gatto may
be right. He said he thinks there should be an "and" there. He
said he would accept Representative Gatto's suggestion as a
"friendly amendment."
[The committee treated Representative Gatto's suggestion as an
adopted Conceptual Amendment 2 to Amendment 11.]
8:35:59 AM
REPRESENTATIVE GRUENBERG spoke to the remainder of Conceptual
Amendment 11 - the portions of which address page 2, line 10,
and page 2, line 12. Regarding the former, Representative
Gruenberg said, "We do not want somebody to have an arrangement
where they have a sweetheart deal that they're going to be
providing personal services, and this just says, 'or have an
option to provide'." Regarding the latter, he said the same
goes for contracts; "we don't want them to either have a
contract or an option for a contract."
8:36:08 AM
CHAIR SEATON removed his objection to Conceptual Amendment 11,
[as amended]. He asked if there was any further objection to
Amendment 11, as amended. There being none, it was so ordered.
8:36:41 AM
REPRESENTATIVE RAMRAS expressed concern with the recent series
of conceptual amendments. He stated, "It just seems like that's
the whole nature of everything we're doing here is just
suggesting that somebody [who] applies for a job in the
executive branch must be dishonest to even make [an] application
...." He offered language to that effect.
8:37:25 AM
CHAIR SEATON responded that laying out a good groundwork for
saying what a member of the executive branch should not do is
not an accusation; it gives clarity to what is not acceptable.
8:38:57 AM
REPRESENTATIVE GRUENBERG moved to report HCS CSSB 186, Version
24-LS0874\X, Wayne, 1/30/06, as amended, out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, HCS CSSB 186(STA) was reported out of
the House State Affairs Standing Committee.
HB 347-MOTOR VEHICLE INSURANCE & NOTICE
[Contains discussion of HB 383.]
8:39:50 AM
CHAIR SEATON announced that the next order of business was HOUSE
BILL NO. 347, "An Act relating to mandatory motor vehicle
insurance, license suspensions, and notices relating to motor
vehicles and driver's licenses."
CHAIR SEATON offered his recollection of the end of the last
committee meeting as follows:
When we last concluded we had rescinded action in
adopting 7a .... So, Amendment 7 is before us and I
am not offering 7a. And I want to give everybody an
explanation of why not. For forfeiture of vehicle
that is available to the court, there is a "may" in
the current statute. This amendment would have made
it mandatory on the second offense; however, a vehicle
could have been wrecked, the state would have been
required to forfeit, take the forfeiture of the
vehicle, and would have been then required to pay off
the lien on the vehicle. And so, unintended
consequences we try to catch. So, 7a will not be
offered.
CHAIR SEATON announced that Amendment 7b has been offered.
* Sec. 6. AS 28.40 is amended by adding a new
section to read:
Sec. 28.40.080. Impoundment of motor vehicle when
arrested for certain offenses. On the arrest of a
person for a violation of AS 28.15.291, AS 28.33.030,
28.33.031, AS 28.35.030, or 28.35.032, the motor
vehicle used in the commission of the offense shall be
impounded. If the motor vehicle is not forfeited, the
motor vehicle shall be held for six months, unless the
person is acquitted of the offense. The cost of towing
and storage of the vehicle is a lien on the vehicle.
If another person claims an ownership or security
interest in the motor vehicle and establishes that the
interest predated the offense and was acquired by the
other person in good faith, the vehicle may be
released to that other person if the person pays the
accrued cost of towing and storage of the vehicle."
8:41:37 AM
REPRESENTATIVE GRUENBERG moved Amendment 1 to Amendment 7b, to
delete the sentence beginning on page 3, line 15 [as numbered on
the amendment], which read as follows:
"If the motor vehicle is not forfeited, the motor
vehicle shall be held for six months, unless the
person is acquitted of the offense."
CHAIR SEATON asked if there was any objection to Amendment 1 to
Amendment 7b. There being none, it was so ordered.
8:42:25 AM
REPRESENTATIVE GRUENBERG stated his understanding that he had
objected to Amendment 7b and, thus, removed his objection.
8:42:46 AM
CHAIR SEATON asked if there was further objection to Amendment
7b [as amended]. There being none, Amendment 7b, [as amended]
was adopted.
8:43:29 AM
CHAIR SEATON, in response to a request from Representative
Gardner to review the outcome of the committee's actions
regarding impoundment, indicated that the amendment language
regarding forfeiture had not been adopted, but the amendment
language regarding impoundment had. He offered further details.
8:45:39 AM
REPRESENTATIVE GARDNER asked what happens if a vehicle is
impounded and never claimed.
8:45:55 AM
REPRESENTATIVE GRUENBERG related that Representative Gardner
could find the answer to her question in AS 28.10.502.
8:47:26 AM
REPRESENTATIVE GARDNER moved to report HB 347, as amended, out
of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, CSHB
347(STA) was reported out of the House State Affairs Standing
Committee.
HB 344-VEHICLE TRANSACTION AGENTS
8:48:05 AM
CHAIR SEATON announced that the next order of business was HOUSE
BILL NO. 344, "An Act relating to the commissioner of
administration's appointing agents to perform for compensation
certain transactions related to vehicles; and providing for an
effective date."
8:48:15 AM
REPRESENTATIVE VIC KOHRING, Alaska State Legislature, as one of
the prime sponsors of HB 344, said the bill would improve the
service the Division of Motor Vehicles (DMV) provides to the
public by allowing the [advanced business partnerships (ABPs)]
already doing contract work for DMV to keep a portion of the
revenue generated from the transactions they conduct. The point
of using ABPs is to lessen the workload of DMV, thereby
improving customer service. He related that the Alaska
Department of Fish & Game (ADF&G) contracted with private
entities to issue its fishing licenses. He said currently the
bill provides that the ABPs be paid 15 percent; however, he
suggested that amount could be lowered to 7.5 percent.
Representative Kohring described the bill concept as a win-win
situation, because it would benefit DMV, the ABPs, and the
public.
8:51:42 AM
REPRESENTATIVE KOHRING directed attention to the fiscal note,
which shows a $491,000 [change in revenues], and he noted that
no general fund monies would be involved. He brought attention
to letters of support from Capital Chevrolet - an ABP - and the
Alaska Auto Dealers Association (AADA). He said AADA noted it
would support the change from 15 to 7.5 percent.
8:53:03 AM
REPRESENTATIVE GATTO moved to adopt the proposed committee
substitute, Version 24-LS1082\Y, Bannister, 1/30/06, as a work
draft. There being no objection, Version Y was before the
committee.
8:53:36 AM
REPRESENTATIVE GATTO noted that there is a letter in the
committee packet from an individual concerned that "the money
will simply be reflected in additional markup." He asked, "Is
there anything in the legislation that ... keeps this separate
from the markup?"
8:53:56 AM
REPRESENTATIVE KOHRING answered no. He said the amount of a
surcharge would be left to the ABP's discretion. He surmised
that if the customer decides that the amount charged is too
high, then he/she would simply go elsewhere, for example, to the
DMV office or to another ABP.
8:54:30 AM
CHAIR SEATON asked Representative Kohring to confirm that there
is no requirement that a person must use an ABP; he/she could
choose to go the DMV.
8:55:00 AM
REPRESENTATIVE KOHRING answered that's right.
8:55:08 AM
REPRESENTATIVE GATTO asked, "[Excluding] taxes and fees, what's
left in a DMV registration?"
8:55:15 AM
REPRESENTATIVE KOHRING said that would be a question for the
director of DMV, Duane Bannock.
8:55:32 AM
REPRESENTATIVE GARDNER said she has bought only one new car, and
she said it was convenient to have the dealer do the paperwork.
She said she cannot remember whether or not she paid a fee at
the time. She stated her understanding that there is paperwork
related to the title, perhaps, that runs approximately $199.
She asked Representative Kohring, "Do you know ... what that fee
would ... [cover] besides title processing? Are there other
documents that are covered by a fee like that?"
REPRESENTATIVE KOHRING responded, "Not that I'm aware of." In
response to a request for clarification from Chair Seaton, he
confirmed that he is not aware of any restriction that charges
made for paperwork processing can be made only for DMV
paperwork.
8:56:57 AM
REPRESENTATIVE RAMRAS said he bought a used car recently and
paid a document fee of $199, which he was told was "an arbitrary
charge that dealerships just tend to include." He indicated
that that is a separate issue that the legislature may want to
address in the future. He revealed that he paid a registration
fee of $15, and he figured that 7.5 percent of that fee would be
about "one dollar and some cents," which would go to [the ABP]
instead of to the DMV. He stated, "Although it's a negative
fiscal note, I think we will learn from the director of DMV that
the [Division] of Motor Vehicles generates about $63 million to
the State of Alaska in fees, and this will certainly maintain
some of the efficiency at the DMV."
8:58:42 AM
REPRESENTATIVE KOHRING, in response to a series of questions
from Representative Ramras, said he thinks people despise going
to the DMV because of the long lines involved, they don't like
going more than necessary, and they probably don't like going
during their lunch or dinner hour. He shared that his
experience at an ABP was a pleasant one. He emphasized that he
is not criticizing the fine DMV staff, only the laborious
process.
9:00:25 AM
CHAIR SEATON asked if the advanced business partners will be
able to do everything that the DMV does, other than issuing a
driver's test and a driver's license.
9:01:59 AM
REPRESENTATIVE KOHRING said he thinks the answer to that is yes,
but he would like the director of DMV to verify that is true.
9:02:22 AM
CHAIR SEATON directed attention to [the second paragraph of] the
third page of [a three-page document attached to the sponsor
statement, entitled "History of the DMV Business Partnership
Program"], which read as follows [original punctuation
provided]:
We propose that after completion of one year of good
standing in the departments [sic] discretion, the
ABP's [sic] be allowed to retain seven and one half
percent (7.5%) of all state revenue collected,
excluding MVRT and, of course, any surcharge of their
own.
CHAIR SEATON asked if that means someone would have to be a
business partner for a year before he/she could become an ABP.
9:02:52 AM
REPRESENTATIVE KOHRING said that is old information in the
committee packet and is not part of current proposed
legislation.
9:03:24 AM
REPRESENTATIVE GARDNER, regarding the aforementioned comparison
between this proposed legislation and ADF&G's contracting out of
fishing license services, pointed out that contractors that
issue fishing licenses are not allowed to charge any fee above
and beyond the percentage made on the sale, while the ABP could
practice "double dipping." She asked if that is correct.
9:04:30 AM
REPRESENTATIVE KOHRING answered yes. In response to a follow-up
question from Representative Gardner, he explained that the idea
for HB 344 was brought to his attention by the director of DMV.
9:05:09 AM
CHAIR SEATON said it seems like an ABP is similar to a contract
agent. He asked if that is true, and if ABPs will be able to
offer road permits, as well.
9:05:50 AM
REPRESENTATIVE KOHRING said he doesn't think the answer is yes
to that question, because the service that ABPs provide is
restrictive.
9:06:46 AM
REPRESENTATIVE KOHRING, in response to a question from
Representative Gatto, said he is not aware of any restriction in
state statute regarding the amount of surcharge that a dealer
can exact.
9:06:56 AM
REPRESENTATIVE GATTO opined, "They don't need to be asking for
any other money if they can simply adjust the surcharge to make
it comfortable for themselves."
9:07:35 AM
REPRESENTATIVE KOHRING said, "I think this legislation would
enable the consumer to continue to pay essentially the same
rates, without those rates having to go up."
9:08:26 AM
REPRESENTATIVE GRUENBERG asked Representative Kohring if when
Mr. Bannock suggested the need for this legislation, he
indicated that the car dealers in Alaska are in trouble and need
the extra help from the state.
9:08:38 AM
REPRESENTATIVE KOHRING answered no.
9:08:42 AM
DUANE BANNOCK, Director, Director's Office, Division of Motor
Vehicles, Department of Administration, relayed that his boss,
Commissioner Nordstrand, has described him as entrepreneur. Mr.
Bannock said his single goal in coming to the division was and
is to shorten the wait line at DMV. He stated that HB 344 would
create "a better free-market ability as it pertains to the
services of the DMV."
9:11:12 AM
MR. BANNOCK said the bill is design with two main functions:
one, to reinforce the ABP program as a strategy to shorten wait
times at the DMV; and two, to provide fundamental fairness to
those agents who are performing the statutory obligations of the
DMV. He stated, "It's important to remember that today there is
no alternative for the recovery of any of these fees, other than
that process." Mr. Bannock said another bill, HB 383, has been
filed, which addresses the subject of document "doc" fees, and
he asked that the committee keep the issue of doc fees separate
from the issue addressed through HB 344.
MR. BANNOCK, regarding Representative Gardner's previous mention
of buying a new car, explained that it is important to remember
that the rules for someone who buys a car are different,
depending on whether the car is bought from a neighbor or a
dealer. He noted that AS 28.10.291 requires the dealer to
process paperwork, a law that Mr. Bannock said is a good one.
If it did not exist, then customers could say they will do the
work and then forget to do it.
9:14:36 AM
MR. BANNOCK said one of his goals has been to "expand the
ability of what the business partners can do." In 2003, ABPs
could only carry out a transaction for a title on a new car
sale. He said the division has since trained the ABPs to
execute used car titles and out-of-state titles. He said the
number of ABPs has expanded. He directed attention to a chart
in the committee packet showing the expansion in
responsibilities and participation, and he said it correlates
with a decreasing wait time for the public at the DMV offices.
MR. BANNOCK, regarding the issue of the surcharge, confirmed
that there is nothing in HB 344 that prevents, attempts to
limit, or even addresses a surcharge. Notwithstanding that, he
stated that, based on his opinion of the free market, if an
[ABP] continues to raise its surcharge to the point that it is
no longer generating any revenue, [the program] "will implode
...."
9:17:10 AM
MR. BANNOCK stated that a large portion of the DMV's revenue is
called, "Motor Vehicle Registration Tax (MVRT)." He described
MVRT as "local government's best friend." Some municipalities
in Alaska have adopted an MVRT, while others have not. Mr.
Bannock said HB 344 "does not pay the 7.5 percent on local
government fees." He said the typical customer in Alaska pays
$100 every two years for vehicle registration. He continued:
Sounds to me like the vehicle that Representative
Ramras purchased still had valid registration on it,
thus, the only fee that the dealership collected was
$15. It's important to note, however, that the work
that the dealership does in processing that $15
transaction is the same amount of work that they would
[do] if he was paying full fees of $115.
9:19:23 AM
CHAIR SEATON noted for the record that Representative Ramras is
the other prime sponsor of the bill.
9:20:14 AM
REPRESENTATIVE RAMRAS told Representative Gardner that for her
benefit he asked his staff to include a copy of the
aforementioned HB 383, sponsored by Representative Les Gara. He
said HB 383 addresses the issues of doc fees, and he reiterated
that that issue, although valid, is totally separate from the
issue of HB 344.
9:21:08 AM
REPRESENTATIVE GARDNER said after hearing Mr. Bannock speak, she
looked up AS 28.10.291 and now understands the issue of vehicle
dealers being required to process title and registration
documents. She asked if there is any reason to think that the
amount those dealers are currently charging doesn't cover their
costs.
9:21:58 AM
MR. BANNOCK responded that he is not qualified to answer that
question. Notwithstanding that, he offered a philosophical view
that there surely is a limit to what they charge, and that limit
is a direct correlation to how much a customer is willing to
pay. He said the aforementioned statute "is probably the
genesis of the business partnership program." He said dealers
are not only under statutory obligation to get the paperwork
done, they are also under a statutory timeline to do so.
9:23:53 AM
REPRESENTATIVE GARDNER asked if it would be reasonable to say
that the DMV is much more efficient and those who are submitting
the paperwork are no longer in any danger of being in default
because of slowness.
9:24:04 AM
MR. BANNOCK replied that there are still issues on the horizon
that will create work for the DMV and, thus, could slow its
process down. For that reason, he said, the division cannot
afford a preemptive strike of the ABPs, which would result in
the work now being done by them to be sent back to the DMV. Mr.
Bannock emphasized the value he places on the ABPs.
9:25:19 AM
MR. BANNOCK, in response to a question from Representative
Gardner, said almost 100 percent of the vehicle registrations
and titles are conducted through a computer, with the exception
that the DMV provides support and the necessary documents to the
ABPs.
9:26:29 AM
MR. BANNOCK, in response to a question from Representative Lynn,
reiterated that the surcharge limit is a market-based one, not
one set in statute.
9:27:05 AM
REPRESENTATIVE LYNN mentioned fees added on at the end of a
vehicle transaction.
9:27:52 AM
CHAIR SEATON asked that the discussion focus on the fees for
title and registration, not the doc fees that are addressed in
HB 383.
9:28:47 AM
MR. BANNOCK confirmed [the issue of doc fees] is not addressed
in HB 344, and he said it should not be.
9:29:18 AM
REPRESENTATIVE GATTO questioned why there would be any reason
for HB 344, if the dealer should have already included all
documentation costs in the doc fee.
9:30:21 AM
MR. BANNOCK said the committee will hear from at least one
dealer that does not charge a doc fee. He told Representative
Gatto that 7.5 percent of the average $100 registration is
$7.50, which is "a long ways away from whatever the dealers may
decide that they need to charge for a documentation fee." He
opined that attempting to compare [the money made on a
registration fee] with [the documentation fee] is like comparing
apples and oranges.
9:31:16 AM
CHAIR SEATON asked for clarification of the following terms:
[commission] agents, business partners, and advanced business
partners.
9:31:49 AM
MR. BANNOCK said commission agents have the same authority as
state-operated DMVs, but where they differ is in funding; they
are based on contracts. Generally, he noted, the majority of
Alaska's 17 commission agents are with local governments. They
receive compensation at a minimum of 30 percent of the
transaction up to 100 percent. In addition to the
aforementioned supplies provided to the ABPs, the DMV also
provides commission agents with the hardware.
MR. BANNOCK said the next step down is the advanced business
partners. They are designed to perform every motor vehicle
transaction that the DMV can do, and are doing more now than
they were three years ago. A business partner that is not
advanced is not involved in ownership changes, title
transactions, or anything that is a "liability greater than only
the vehicle registration." Of the millions of transactions that
the DMV performs each year, the vehicle renewal is the simplest.
9:35:19 AM
CHAIR SEATON returned to his previous question related to the
history provided in the committee packet, regarding completing
one year in good standing, and he asked Mr. Bannock if that is a
policy for ABPs.
9:35:38 AM
MR. BANNOCK pointed to a sentence in Version I, on page 1,
[beginning on line 10], which read as follows:
The regulations must require, at a minimum, that the
agent be bonded, have an Alaska business license under
AS 43.70, and have been in existence for a minimum of
one year before entering into the agreement with the
commissioner.
MR. BANNOCK said that one-year requirement would not be
retroactive. In response to a follow-up question from Chair
Seaton, he stated his intent is that the agent be a business
partner for one year, not just be in any business for one year.
He said he thinks that should be clarified in regulations.
9:37:26 AM
CHAIR SEATON asked Mr. Bannock if, over time, the same number of
commission agents would be used, or if ABPs would take over.
9:37:59 AM
MR. BANNOCK said he thinks the same commission agents will be
exactly the same five years from now as they are today. He said
he bases that prediction on the fact that the commission agents
today are in far-flung areas not conducive to private, stand-
alone business partnership operations or large car dealerships.
9:38:42 AM
CARROL LYBERGER, Lyberger's Car & Truck Sales, LLC
("Lyberger's"), testified that she is "a partnership" with DMV.
She listed the qualities and benefits of the program as follows:
one, it is voluntary; two, the partners are well trained; three,
the transactions are processed faster; and four, service to
customers is expedited and, thus, improved. Ms. Lyberger
reviewed how the process used to be done before the business
partner program began, emphasizing the extended time that was
taken for documentation. She related that there is a cost to
the dealer who is in partnership with DMV, and she stated that
any compensation for that cost would be appreciated. She
articulated that any fees charged as doc fees are not payment
for any work done in the business partnership program; the fees
collected on behalf of the DMV are paid to the state. Ms.
Lyberger revealed that Lyberger's does not charge doc fees, but
if it did it would show up on a separate line [on the sales
contract], and would be clearly labeled as a doc fee, while the
DMV fees would be clearly marked on a separate line. She
offered further details and mentioned disclosure laws.
9:42:34 AM
CHAIR SEATON said the committee is trying to figure out how
significant the 7.5 percent would be, and whether or not
Lyberger's would discontinue the service it provides as a
business partner with DMV if the 7.5 percent fee were not
adopted.
9:43:13 AM
MS. LYBERGER replied by illustrating the commitment she has made
to the program, both in staff paid and special equipment bought
and maintained, such as a printer that takes special, expensive
ink. In response to the second half of Chair Seaton's question,
she said she would not drop the partnership if the legislature
does not pass the bill providing the 7.5 percent payback on
state fees collected, because the service Lyberger's offers as a
partner is a value to its customers. She indicated, however,
that she would appreciate whatever percentage the legislature
decides upon in order to offset her costs.
9:44:12 AM
JIM ARPINO, Affordable Used Cars, Fairbanks and Anchorage; Board
member, Alaska Automotive Dealers Association, characterized Ms.
Lyberger's testimony as "very accurate." He stated that the
fees that a customer would be charged [for registration and
title] at DMV are the same fees that are charged by [dealers who
are ABPs]. He said the proposed 7.5 percent would help to cover
the costs of data entry. In response to a question from Chair
Seaton, he said he currently is an ABP, but he may no longer
offer that service if the bill does not pass. He said being
involved in the program is time-consuming. In response to a
follow-up question from Chair Seaton, he said Affordable Used
Cars does charge a documentation fee.
9:47:21 AM
CHAIR SEATON asked Mr. Arpino for an estimate of the total that
Affordable Used Cars would make after a year of charging 7.5
percent on the state fee for titles and registrations.
9:47:37 AM
MR. ARPINO responded, "The transactions are all over the map,"
thus, the exact amount would be hard to pinpoint. He estimated
that the 7.5 percent would cover about 50 percent of his time
involved in the program. The amount originally proposed was 15
percent, which Mr. Arpino said would more closely cover his
costs.
9:48:24 AM
CHAIR SEATON asked if being a dealership that is also an ABP
gives that dealership a competitive edge over a dealership that
is not an ABP.
9:49:02 AM
MR. ARPINO replied that he would not describe it as a
competitive edge, but he said he can see a slight advantage to
having a business partnership, "more after the sale than before
the sale."
9:49:26 AM
DEANNA SLACK, General Manager, Cal Worthington Ford, said she
agrees with all comments made thus far. She indicated that Cal
Worthington Ford has been a business partner for approximately
four years, having taken on the cost of providing this service
to its customers "automatically." She said customers are happy
to get their license plates and registration earlier than they
often received them through DMV. She stated, "We feel that our
cost [in providing this service], ... based on the selling
volume, is in excess of approximately $50-55,000 a year." She
said Cal Worthington Ford hires two full-time and one part-time
employees to handle the partnership duties, and it covers the
costs of a computer, special printer, software, and telephone
line. She said the proposed 7.5 percent would not begin to
cover that cost. In response to Chair Seaton, she said Cal
Worthington Ford charges a documentation fee, but she emphasized
that the doc fee is for other services, not for DMV-related
services.
9:52:07 AM
REPRESENTATIVE GARDNER asked what doc fees cover.
9:52:16 AM
MS. SLACK answered that the doc fee covers "several other
services" relating to a car deal and is disclosed on its own
line.
9:52:42 AM
REPRESENTATIVE GARDNER asked Ms. Slack what a typical
explanation to a customer would be regarding the doc fee.
9:52:56 AM
MS. SLACK indicated that the customer would be told that the doc
fee covers other services provided, including paperwork and
delivering the documentation to the lien holder.
9:53:15 AM
REPRESENTATIVE GARDNER said when she bought her car, there was
no lien, and she paid cash. She said she would like to know the
purpose of the $199 fee she paid.
9:53:27 AM
MS. SLACK said there is paperwork and documentation to be done.
In response to a follow-up question from Representative Gardner,
she said doc fees cover "a numerous amount of things," each one
is different. It is one charge that shows on one line of an
application, "separate [from] everything else." She said if she
were to look at Representative Gardner's transaction, she could
explain her doc fee to her. In response to a request by Chair
Seaton, she agreed to send examples of a transaction showing a
doc fee to the committee.
9:55:24 AM
MS. SLACK, in response to a question from Representative Gatto,
reiterated that Cal Worthington Ford does not exact a surcharge
and, thus, does not make money "as far as collecting for the DMV
section."
9:56:14 AM
CHAIR SEATON asked Representative Kohring to get back to the
committee regarding the use of the word "surcharge," and whether
or not it means the same thing as doc fee.
9:56:19 AM
REPRESENTATIVE KOHRING said he would wait to answer the question
regarding surcharge. He stated his desire that the committee
"stay on course with the main thrust of this legislation," which
is to provide compensation for services currently being provided
at no charge by authorized auto dealers. He said statute
requires that auto dealers that sell new or used cars provide
title and registration service. He opined, "If we're going to
require that statute, in my mind it seems fair that we provide
them with a limited compensation to cover those costs."
9:57:15 AM
REPRESENTATIVE ELKINS said he thinks the committee is way of
[course] and could have moved the bill 30 minutes ago if it had
stayed on track.
9:57:41 AM
JOHN IMMEL, Past Co-Owner, Gene's Chrysler, testified that
Gene's Chrysler was one of two dealerships to become ABPs in
Alaska. He stated that 8-10 years ago, there used to be long
wait times for titles and registrations, and he pointed out that
temporary licenses are only good for two months. Banks were
upset with the slowness of the system before the ABP program was
started. He stated that if the legislature does not grant the
7.5 percent, the new owners of Gene's Chrysler would never end
the program, because it is one of the best customer services
available from the car dealership. He concluded, "It's a great
benefit, and I just want to see it continue."
9:59:53 AM
REPRESENTATIVE RAMRAS reiterated that two issues have been
discussed: the doc fee and [the ABP program]. The latter, he
said is a good example of entrepreneurial spirit, and helps cut
down the wait times at the DMV, which in turn helps alleviate
the dislike consumers have towards government.
10:00:32 AM
MR. EMIL reemphasized how bad the wait time was before the
program began. He said he was responsible for convincing Mr.
Arpino to get involved in the program. He acknowledged that Mr.
Arpino is unhappy regarding the high costs of running the
program, but he reiterated the benefits of the program to
customers.
10:01:18 AM
CHAIR SEATON announced that HB 344 was heard and held.
SB 12-LIMIT RELATIONS WITH CERTAIN NATIONS
10:01:57 AM
CHAIR SEATON announced that the last order of business was CS
FOR SENATE BILL NO. 12(STA), "An Act relating to financial
relationships with persons conducting business in or having
headquarters in countries that support or ignore slavery and
trafficking in persons."
10:02:13 AM
SENATOR FRED DYSON, Alaska State Legislature, as sponsor of SB
12, told the committee that late in the Clinton Administration,
in response to the international problem of human slavery and
trafficking, the [Trafficking Victims Protection Act (TVPA)] was
passed, with support from virtually every member of U.S.
Congress. He stated, "The present administration has put a lot
of teeth in it." He explained that the Department of State
produces a report ranking how all the countries in the world are
doing in regard to human trafficking and slavery. It is
estimated that approximately 4 million people are in involuntary
slavery worldwide.
SENATOR DYSON spoke of tiers that the Department of State has
named to rank each country's efforts in regard to human
trafficking. [This information is shown in a handout in the
committee packet entitled, "Facts About Human Trafficking," and
read as follows, original punctuation provided:]
Tier 1: Countries that fully comply with the act's
minimum standards for the elimination of trafficking.
Tier 2: Countries that do not fully comply with the
minimum standards but are making significant efforts
to bring themselves into compliance.
Tier 2 Watch List: Countries on Tier 2 requiring
special scrutiny because of a high or significantly
increasing number of victims; failure to provide
evidence of increasing efforts to combat trafficking
in persons; or an assessment as Tier 2 based on
commitments to take action over the next year.
Tier 3: Countries that neither satisfy the minimum
standards nor demonstrate a significant effort to come
into compliance. Countries in this tier are subject
to potential non-humanitarian and non-trade sanctions.
SENATOR DYSON said he has engaged in extensive conversation with
the [Department of State] and has been told that being on "the
good guy list" is important in many countries, because there is
tremendous pressure to restrict money from international and
United Nations funds being sent to those on the Tier 3 list.
SENATOR DYSON reported that Alaska is the first state to
consider such legislation on a state level. He noted that the
[Department of State] is hoping that many other states will
follow. The State of Alaska is in a unique position, he said,
because of the $32 billion dollars it has in investments [from
oil revenue monies]. Furthermore, he said the international
petroleum industry is looking for places to invest and often
conducts business in Tier 3 countries, and he stated his belief
that Alaska's ability to leverage the petroleum companies to "be
good citizens" will have a salutary effect.
SENATOR DYSON said SB 12 "sailed" through the Senate committees
in which it was heard, and has almost every Senator as co-
sponsor. The administration issued [Administrative Order No.
227 on December 13, 2005], "to do exactly what this bill
requires," which he said he appreciates. He explained that the
reason he wants to pass this legislation is so that subsequent
legislations do not, because of financial pressure, back off in
helping "to solve this."
10:05:16 AM
CHAIR SEATON noted that the language regarding procedures is the
same for the legislature, the court system, and the
administration, but on page 3, line 15, of CSSB 12(STA), the
requirement for ["the fiduciary of a state"] adds, "or other
list of countries prepared by the United State Secretary of
State under 22 U.S.C. 7107(b)(1)(C)."
10:07:29 AM
SENATOR DYSON explained:
First of all, we included exact language for the
permanent fund and the other investment funds, and
those guys got pretty concerned, and what you have
before us is ... compromise language. Because they
are bound by what's called the prudent investor rule,
and we have by and large said that the permanent fund
investments will not be used for anything except
enhancing the investment. So, using - as many of us
have thought - the permanent fund for projects in
Alaska, for instance, they are encouraged to not do
that. So, ... this language you have before you here
is trying to take advantage of the prudent investor
rule.
SENATOR DYSON indicated that the reference to the "other list"
is in regard to the Tier 2 Watch List.
10:08:28 AM
JASON HOOLEY, Staff to Senator Fred Dyson, Alaska State
Legislature, testifying on behalf of Senator Dyson, sponsor of
SB 12, stated, "I don't think it was intentional that the
language does not match. ... I think that when we drafted this,
the reference to the federal code, [22 U.S.C. 7107(b)(1)(C)],
... specifically mentions this trafficking persons report, and
the drafter felt that we need to be a little broader just in
case they change the name of the list, but it would be the same
type of list."
10:09:15 AM
CHAIR SEATON asked the sponsor to consider making the language
in the bill consistent by removing the additional citation to
the "other list". He stated that it could be problematic for
there to be more than one list noted.
10:10:08 AM
REPRESENTATIVE RAMRAS highlighted the fact that the bill has 17
cosponsors in the other body, and he said he would like to
expedite its passage out of committee.
10:10:25 AM
REPRESENTATIVE GRUENBERG directed attention to page 3, line 13:
"restrict direct financial investments with countries listed in
Tier 3". He stated that he doesn't think Alaska has an
investment with a country. He said Alaska's investments would
normally be with a company or in an asset somewhere, and he
recommended looking at that phrase. He added that the bill
looks like a good one.
10:11:18 AM
CHAIR SEATON stated his appreciation for the handout in the
committee packet entitled, "Tier Placements," and he read a
selection of countries listed on the page: United Arab
Emirates, Venezuela, Saudi Arabia, Qatar, Kuwait from the Tier 3
list; and Russia, People's Republic of China, India, and Mexico
from the Tier 2 Watch List. He queried whether the sponsor has
asked the Permanent Fund Corporation what the implications would
be of having to divest from its dealings with any of those
countries listed. He said, "It seems to be that we have half of
the world's oil-producing countries there, and ... Mexico,
China, India, [and] Russia are huge trading partners. I'm just
trying to figure out what the implication of the [bill] is."
10:12:19 AM
SENATOR DYSON said SB 12 would only require that Alaska not do
business with firms that are headquartered in Tier 3 countries.
He stated, "If a country moves from Tier 2 to Tier 3, and that
costs us money, I think that that's fine. I am not willing to
deal [with], nor am a willing to make money from countries that
are trafficking in children, and if that hurts our investment
and saves some children the horrendous impact of being
prostituted with largely government assent - which is all the
Tier 3 countries - I'm glad for us to lose that investment and
whatever bit of marginal income that we get from it." He added
that he has had pointed discussions with the permanent fund
board and its members are in agreement.
10:13:30 AM
CHAIR SEATON said the bill, under Section 4, would require
restriction of direct financial investments. He echoed
Representative Gruenberg's question as to whether that means
with the countries, or with companies that have headquarters in
those countries. He said, "That's listed out under the
administration, under the court, and under the legislature, but
that's not listed under the permanent fund, and I'm not sure, as
I see it here, that it restricts it that way."
10:14:34 AM
MR. HOOLEY told Chair Seaton that he would supply the committee
with information from the Permanent Fund Corporation that would
answer that question.
10:14:43 AM
SENATOR DYSON offered his understanding that in "most of those
countries" the petroleum industry has been nationalized.
10:14:48 AM
REPRESENTATIVE ELKINS, in response to a question from
Representative Gruenberg, said Great Britain is listed [under
Tier 1] as "United Kingdom."
10:15:11 AM
REPRESENTATIVE GARDNER applauded Senator Dyson for bringing this
legislation forward. She stated, "I just want to clarify my
understanding that this is not optional; ... it's definitive."
[SENATOR DYSON nodded yes.]
CHAIR SEATON thanked Senator Dyson for his work on the issue and
said the committee would take up SB 12 again as soon as the
information that it had requested is received.
10:15:50 AM
REPRESENTATIVE GRUENBERG commended Senator Dyson for "coming up
with something here that can unite us all."
[SB 12 was heard and held.]
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at
10:16:03 AM.
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