Legislature(2003 - 2004)

05/13/2003 02:20 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
          SENATE LABOR AND COMMERCE STANDING COMMITTEE                                                                        
                          May 13, 2003                                                                                          
                           2:20 p.m.                                                                                            
TAPE(S) 03-32                                                                                                                 
MEMBERS PRESENT                                                                                                               
Senator Con Bunde, Chair                                                                                                        
Senator Ralph Seekins, Vice Chair                                                                                               
Senator Gary Stevens                                                                                                            
Senator Bettye Davis                                                                                                            
Senator Hollis French                                                                                                           
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
Confirmation Hearings                                                                                                         
 Colleen Scanlon - Alaska Labor Relations Agency                                                                                
 Charlotte Lushin - Board of Barbers and Hairdressers                                                                           
 Joylene A. Marrs - Board of Barbers and Hairdressers                                                                           
 Dr. David Mulholland - Board of Chiropractic Examiners                                                                         
 Brad J. Fluetsch - Real Estate Commission                                                                                      
 Barbara Parker-Ramsey - Real Estate Commission                                                                                 
 David B. Somers - Real Estate Commission                                                                                       
 Z. Kent Sullivan, Esq. - Real Estate Commission                                                                                
 Steven Torrence - Board of Veterinary Examiners                                                                                
 Mr. John Abshire - Workers Compensation Board                                                                                  
 Mr. Richard Behrends - Workers Compensation Board                                                                              
 Mr. Andrew Piekarski - Workers Compensation Board                                                                              
 Mr. Marc Stemp - Workers Compensation Board                                                                                    
CS FOR HOUSE BILL NO. 135(HES)                                                                                                  
"An Act relating to marital and family therapists."                                                                             
     MOVED SCS CSHB 135(HES) OUT OF COMMITTEE                                                                                   
SENATE BILL NO. 218                                                                                                             
"An Act authorizing a pilot program relating to state                                                                           
procurement and the use of electronic commerce tools; and                                                                       
providing for an effective date."                                                                                               
     MOVED SB 218 OUT OF COMMITTEE                                                                                              
SENATE CONCURRENT RESOLUTION NO. 14                                                                                             
Relating  to  requesting  the Governor  to  negotiate  a  40-hour                                                               
workweek with state employees.                                                                                                  
     MOVED SCR 14 OUT OF COMMITTEE                                                                                              
SENATE CS FOR CS FOR HOUSE CONCURRENT RESOLUTION NO. 21(FIN)                                                                    
Relating to establishing the Alaska Energy Policy Task Force.                                                                   
     MOVED SCS CSHCR 21(FIN) OUT OF COMMITTEE                                                                                   
CS FOR HOUSE BILL NO. 234(RLS) am                                                                                               
"An Act extending the termination  date of the Alcoholic Beverage                                                               
Control Board;  relating to  the sale of  beer manufactured  at a                                                               
brewpub; and providing for an effective date."                                                                                  
     MOVED SCS CSHB 234(L&C) OUT OF COMMITTEE                                                                                   
HOUSE BILL NO. 83                                                                                                               
"An Act  adopting a  version of  the Revised  Uniform Arbitration                                                               
Act; relating  to the state's  existing Uniform  Arbitration Act;                                                               
amending  Rules 3,  18, 19,  20, and  21, Alaska  Rules of  Civil                                                               
Procedure,  Rule 601,  Alaska Rules  of Evidence,  and Rule  402,                                                               
Alaska  Rules  of  Appellate  Procedure;  and  providing  for  an                                                               
effective date."                                                                                                                
     HEARD AND HELD                                                                                                             
PREVIOUS ACTION                                                                                                               
HB 135 -  See HESS minutes dated 4/23/03. See  Labor and Commerce                                                               
minutes dated 5/8/03.                                                                                                           
SB 218 - No previous action to record.                                                                                          
SCR 14 - No previous action to record.                                                                                          
HCR 21 - No previous action to record.                                                                                          
HB 234 - No previous action to record.                                                                                          
HB 83 - No previous action to record.                                                                                           
WITNESS REGISTER                                                                                                              
CONFIRMATION HEARINGS                                                                                                         
Ms. Colleen Scanlon - Alaska Labor Relations Agency                                                                             
Ms. Charlotte Lushin and  Ms. Joylene Marrs - Board of Barbers                                                                  
and Hairdressers                                                                                                                
Mr. Steve Torrence - Board of Veterinary Examiners                                                                              
Mr. Richard Behrends and Mr. Andrew Piekarski - Worker's                                                                        
Compensation Board                                                                                                              
Mr. David Jacobs                                                                                                                
Staff to Representative Peggy Wilson                                                                                            
Alaska State Capitol                                                                                                            
Juneau AK  99801-1182                                                                                                           
POSITION STATEMENT: Commented on HB 135 for the sponsor.                                                                      
Mr. Scott Hawkins, General Manager                                                                                              
Alaska Supply Chain Integrators                                                                                                 
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported SB 218.                                                                                         
Mr. Vern Jones, Chief Procurement Officer                                                                                       
Department of Administration                                                                                                    
PO Box 110200                                                                                                                   
Juneau AK  99811-0200                                                                                                           
POSITION STATEMENT: Commented on SB 218.                                                                                      
Mr. Lynn Johnson, President                                                                                                     
Dowland-Bach Corporation                                                                                                        
6130 Tuttle Place                                                                                                               
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported SB 218.                                                                                         
Mr. Don Etheridge                                                                                                               
710 W. 10 St.                                                                                                                   
Juneau AK 99801                                                                                                                 
POSITION STATEMENT: Opposed SCR 14.                                                                                           
Mr. Tom Wright                                                                                                                  
Staff to Representative John Harris                                                                                             
Alaska State Capitol                                                                                                            
Juneau AK  99801-1182                                                                                                           
POSITION STATEMENT: Commented on HCR 21.                                                                                      
Mr. Eric Yould, Executive Director                                                                                              
Alaska Rural Electric Cooperative Association (ARECA)                                                                           
703 West Tudor Road Number 200                                                                                                  
Anchorage, Alaska  99503                                                                                                        
POSITION STATEMENT: Supported HCR 21.                                                                                         
Ms. Pat Davidson                                                                                                                
Division of Legislative Budget and Audit                                                                                        
Legislative Affairs Agency                                                                                                      
PO Box 113300                                                                                                                   
Juneau AK 99811-3300                                                                                                            
POSITION STATEMENT: Commented on HB 234.                                                                                      
Mr. Matt Jones, Founder                                                                                                         
Moose's Tooth                                                                                                                   
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported HB 234.                                                                                         
Ms. Lisa Weissler                                                                                                               
Staff to Representative Ethan Berkowitz                                                                                         
Alaska State Capitol                                                                                                            
Juneau AK  99801-1182                                                                                                           
POSITION STATEMENT: Commented on HB 83 for the sponsor.                                                                       
Mr. Grant Callow, Attorney                                                                                                      
Alaska Commissioner                                                                                                             
National Conference of Commissioners on Uniform State Laws                                                                      
Anchorage AK                                                                                                                    
POSITION STATEMENT: Supported HB 83.                                                                                          
ACTION NARRATIVE                                                                                                              
TAPE 03-32, SIDE A                                                                                                            
CHAIR CON  BUNDE called  the Senate  Labor and  Commerce Standing                                                             
Committee meeting  to order  at 2:20  p.m. Present  were SENATORS                                                               
STEVENS,  DAVIS  and BUNDE.  The  Chair  announced the  committee                                                               
would first take up the confirmation hearings.                                                                                  
^CONFIRMATION HEARINGS                                                                                                        
^Alaska Labor Relations Agency                                                                                                
MS. COLLEEN SCANLON, Alaska Labor  Relations Agency nominee, said                                                               
she was honored to serve. For  the last 11 years, she has managed                                                               
her  family art  gallery business  in Ketchikan  and has  been on                                                               
both the  Visitors Task  Force and the  Chamber of  Commerce Task                                                               
Force. She  has a lot  of involvement with state  regulations and                                                               
labor laws and has taken a class in human resource management.                                                                  
CHAIR  BUNDE thanked  her for  her comments  and said  they would                                                               
move her name forward to the joint session.                                                                                     
CHAIR  BUNDE turned  the gavel  over to  Senator Stevens  for the                                                               
Board of Barbers and Hairdressers as he had a conflict.                                                                         
^Board of Barbers and Hairdressers                                                                                            
MS.  CHARLOTTE  LUSHIN, nominee  for  the  Board of  Barbers  and                                                               
Hairdressers,  said she  had been  in  the field  since 1979  and                                                               
feels that she has the experience to represent barbers.                                                                         
SENATOR FRENCH arrived at 2:23 p.m.                                                                                             
SENATOR STEVENS  thanked her and  asked Joylene Marrs  to comment                                                               
on her nomination.                                                                                                              
MS.  JOYLENE  MARRS,  nominee  for   the  Board  of  Barbers  and                                                               
Hairdressers, said she feels that she  can add a lot to the board                                                               
as  the public  member. She  said that  barbers and  hairdressers                                                               
have been  mandated, on  a trial  basis for one  year, to  give a                                                               
standardized  test for  certification  and she  looks forward  to                                                               
working with that issue.                                                                                                        
SENATOR STEVENS thanked her for  her comments and said they would                                                               
forward her name to the joint session for consideration.                                                                        
^Board of Chiropractic Examiners                                                                                              
CHAIR  BUNDE  announced   that  the  nominee  to   the  Board  of                                                               
Chiropractic  Examiners, Dr.  Mulholland, had  to leave  and that                                                               
the  nominees  to  the Real  Estate  Commission,  Brad  Fluetsch,                                                               
Barbara Parker-Ramsey, David Sommers  and Z. Kent Sullivan, Esq.,                                                               
had a  teleconference conflict. He announced  the committee would                                                               
take up consideration  of nominee Steve Torrence to  the Board of                                                               
Veterinary Examiners.                                                                                                           
^Board of Veterinary Examiners                                                                                                
DR.  STEVE   TORRENCE,  nominee   to  the  Board   of  Veterinary                                                               
Examiners, said  he primarily practices small  animal medicine in                                                               
Fairbanks and that  he was recently asked to serve  on the board.                                                               
He  thought  this  will  be  a  good  opportunity  to  serve  his                                                               
profession and his state.                                                                                                       
^Worker's Compensation Board                                                                                                  
CHAIR  BUNDE thanked  him  on  behalf of  the  committee for  his                                                               
willingness to serve and forwarded  his name to the joint session                                                               
for consideration. He announced the  committee would next take up                                                               
the  nominees to  the Worker's  Compensation Board  and that  Mr.                                                               
John Abshire was not present.                                                                                                   
MR. RICHARD BEHRENDS, nominee to  the Workers Compensation Board,                                                               
said  he  was  planning  on doing  his  civil  responsibility  by                                                               
serving on the board.                                                                                                           
CHAIR BUNDE  thanked him  for being here  and said  the committee                                                               
would forward his name to the joint session for confirmation.                                                                   
MR.  ANDREW  PIEKARSKI  and  MR. MARC  STEMP,  nominees  for  the                                                               
Workers Compensation Board, were not  present and the chair asked                                                               
if there  were any objections  to their confirmations.  None were                                                               
SENATOR STEVENS  moved to  forward the  nominations to  the joint                                                               
session. There were no objections and it was so ordered.                                                                        
           CSHB 135(HES)-MARITAL & FAMILY THERAPISTS                                                                        
CHAIR BUNDE  announced CSHB 135(HES)  to be up  for consideration                                                               
and  said the  last discussion  the committee  had was  about the                                                               
words "and/or".                                                                                                                 
MR. DAVID JACOBS, staff to  Representative Peggy Wilson, sponsor,                                                               
offered to answer questions.                                                                                                    
CHAIR BUNDE  said that committee  members have a letter  from Mr.                                                               
Holman  who  suggested that  it  wasn't  necessary to  add  "and"                                                               
rather than  "or" to allow  a practitioner to use  discretion and                                                               
asked  if  there  was  any   more  public  discussion.  None  was                                                               
SENATOR FRENCH  moved to  pass SCS  CSHB 135(L&C)  from committee                                                               
with  attached  fiscal   notes  and  individual  recommendations.                                                               
SENATORS  STEVENS, FRENCH,  DAVIS, and  BUNDE voted  yea and  the                                                               
motion carried.                                                                                                                 
             SB 218-STATE PROCUREMENT PILOT PROGRAM                                                                         
CHAIR BUNDE announced SB 218 to  be up for consideration. He said                                                               
folks  had talked  to  him about  the idea  of  creating a  pilot                                                               
program for  the state procurement  program that might  save some                                                               
money.  The  procurement  procedures  to be  used  in  the  pilot                                                               
program  have promoted  efficiency  and cost  savings in  private                                                               
enterprise. The bill has a zero fiscal note.                                                                                    
MR.  SCOTT   HAWKINS,  General   Manager,  Alaska   Supply  Chain                                                               
Integrators, said  his company  has a great  deal of  interest in                                                               
the  general  concept  of cost  savings  through  automation  and                                                               
process excellence  around supply  chain management.  The company                                                               
is  four  years   old  and  employs  160   people.  They  provide                                                               
procurement, requisitioning, receiving,  warehouse management and                                                               
a  whole host  of other  services that  support large  purchasing                                                               
institutions. Their  tool of choice for  automation efficiency is                                                               
e-commerce  and  they have  quietly  become  one of  the  largest                                                               
business-to-business  Internet e-commerce  sites in  the country,                                                               
transacting  several million  dollars a  year in  purchase orders                                                               
and tens  of thousands of purchase  orders per year. He  has been                                                               
able to  deliver savings  of 35  to 50% in  the overhead  cost of                                                               
transactions. Typically,  he has been  able to deliver  another 5                                                               
to 10% in the cost of items that are being procured.                                                                            
CHAIR BUNDE said he thought the  potential savings could be $5 to                                                               
$20 million.                                                                                                                    
MR. HAWKINS said he thought that was a conservative estimate.                                                                   
SENATOR SEEKINS arrived at 2:35 p.m.                                                                                            
SENATOR FRENCH asked if the state is engaged in e-commerce now.                                                                 
MR. HAWKINS  said his understanding  is that the state  uses some                                                               
e-commerce tools, such as ordering from websites.                                                                               
SENATOR FRENCH noted this bill is  exempt from AS 36.30 and asked                                                               
for a description of that statute.                                                                                              
MR. HAWKINS  replied AS 36.30  is the state procurement  code and                                                               
the exemption is for the purposes of the pilot program.                                                                         
MR. VERN JONES, Chief Procurement Officer, told members:                                                                        
     SB 218 would allow  the Department of Administration to                                                                    
     establish the pilot program  that includes a privatized                                                                    
     procurement  model   with  technological  advancements.                                                                    
     Under the bill, a  private sector contractor would take                                                                    
     over a governmental  unit's procurement activities with                                                                    
     the  goal of  achieving  savings on  both  the cost  of                                                                    
     goods  and services  purchased as  well  as savings  on                                                                    
     acquisitions costs. The  department believes that there                                                                    
     is potential  for cost  savings. The  administration is                                                                    
     interested  in  exploring  just how  significant  those                                                                    
     savings could be.                                                                                                          
     Any  changes  to  our current  procurement  operations,                                                                    
     even   for  a   pilot   project,   would  require   the                                                                    
     administration to  do several  things. First,  we would                                                                    
     have to study the  organizational structure, the mix of                                                                    
     goods and  services procured by various  state entities                                                                    
     in order to  select an appropriate unit  for the pilot.                                                                    
     We would  also have to  conduct a feasibility  study as                                                                    
     required by  union bargaining  agreements. Any  time we                                                                    
     are  displacing  state employees  we  need  to do  that                                                                    
     under our various contracts.  If that feasibility study                                                                    
     indicates that there are  substantial savings, we would                                                                    
     then likely develop policies  and procedures that would                                                                    
     govern the privatized procurement process.                                                                                 
     Just   exempting   the   contractor  from   our   state                                                                    
     procurement  code, I  think, would  create  a void.  We                                                                    
     would  probably   have  to   have  some   policies  and                                                                    
     procedures  that people  had  some confidence,  insured                                                                    
     fairness  and some  sort of  due process  since we  are                                                                    
     spending  government  money.  We  would  then  have  to                                                                    
     select a  private sector provider to  operate the pilot                                                                    
     program. We would  intend to do that  through our state                                                                    
     procurement process  that's in  place now. If  the bill                                                                    
     becomes  law, those  are the  steps that  we intend  to                                                                    
CHAIR BUNDE  asked if  the agencies  that would  participate have                                                               
been chosen yet,  and whether the commissioner  of the Department                                                               
of  Administration in  collaboration with  Mr. Jones  will decide                                                               
who will participate.                                                                                                           
MR.   JONES  replied   the  selection   of   the  Department   of                                                               
Administration implies  that the  agencies are  going to  be from                                                               
the executive branch.                                                                                                           
SENATOR STEVENS  asked Mr.  Jones to explain  a little  about the                                                               
state procurement process  and whether a bid process  is used. He                                                               
also noted the  sunset date of 2006 and asked  if the procurement                                                               
bid will be awarded for a three-year period.                                                                                    
MR. JONES replied:                                                                                                              
     Yes, the  selection of any contractor  would be subject                                                                    
     to our procurement  code. The bill does  not exempt the                                                                    
     selection   of   the   contractor,   but   rather   the                                                                    
     procurement activities done by the contractor.                                                                             
     Would we do  a bid? We would probably not  do a bid. We                                                                    
     would  probably  do  a   request  for  proposals  [RFP]                                                                    
     whereby we select  the contractor based on  a number of                                                                    
     factors  including  cost.  I'm not  confident  that  we                                                                    
     could  write bid  specifications sufficiently  tight in                                                                    
     order to make  a selection based on low  cost alone. So                                                                    
     we would probably use an RFP.                                                                                              
     The  process that  I've outlined  would  likely take  a                                                                    
     number of  months to accomplish.  I'm not  certain how.                                                                    
     It's  been   a  long  time  since   we've  conducted  a                                                                    
     feasibility study and there's a  give and take with the                                                                    
     unions and  there's the  developing procedures  and the                                                                    
     procurement  process, itself...The  bill  allows for  a                                                                    
     pilot no  longer than  three years and  we feel  with a                                                                    
     sunset date of 2006 - that's possible, at least.                                                                           
SENATOR FRENCH asked  if the executive branch is  involved in all                                                               
electronic  purchasing now  and, if  so, how  this program  would                                                               
MR.  JONES  replied  that  the executive  branch  has  a  limited                                                               
involvement in electronic commerce,  mostly on the reconciliation                                                               
and payment side. He told members:                                                                                              
     It would be  a stretch, though, to say that  we had any                                                                    
     kind  of   a  procurement   system  really,   and  it's                                                                    
     definitely  not an  automated procurement  system. It's                                                                    
     more of  a manual  system. That's  one of  the inherent                                                                    
     problems we  have with efficiency in  state procurement                                                                    
     right now.  The Department of Administration  is trying                                                                    
     to address that through a larger project.                                                                                  
MR. LYNN  JOHNSON, President, Dowland-Bach Corporation,  said his                                                               
company is 28  years old and headquartered in Anchorage.  It is a                                                               
main supplier of  control systems, UL panels  and process control                                                               
systems,  instrumentation products,  stainless  steel piping  and                                                               
sheet metal  fabrication. They have  other business  interests in                                                               
Alaska  including manufacturing  and exporting.  They are  also a                                                               
minor affiliate of Alaska Supply  Chain Integrators. He testified                                                               
that SB  218 is a  great idea and has  the potential to  save the                                                               
state a great deal of money  by reducing costs and automating the                                                               
procurement process.                                                                                                            
SENATOR  FRENCH  thanked  Mr.  Johnson for  taking  the  time  to                                                               
testify today.  He moved to pass  SB 218 from committee  with the                                                               
attached fiscal  note. SENATORS  DAVIS, STEVENS,  SEEKINS, FRENCH                                                               
and BUNDE voted yea; and SB 218 was moved from committee.                                                                       
          SCR 14-40-HOUR WORK WEEK FOR STATE EMPLOYEES                                                                      
CHAIR BUNDE announced SCR 40 to  be up for consideration. He said                                                               
that state  workers negotiated shorter  hours when the  state was                                                               
in different  fiscal circumstances and  that he had  heard unfair                                                               
criticism of state workers. He  frequently asks people to address                                                               
the  realities  of our  fiscal  situation  and to  also  consider                                                               
paying a  state income  tax. The  answer he gets  is that  no one                                                               
wants to  pay taxes until  state workers start working  a 40-hour                                                               
workweek. This resolution encourages  the administration in their                                                               
negotiations  with the  various  public employee  unions to  move                                                               
toward  a   40-hour  workweek.   He  maintained,   "It  increases                                                               
productivity  and, I  think, increases  public confidence  in the                                                               
efficiency of state employees."                                                                                                 
MR. DON ETHERIDGE, AFL-CIO, said  the AFL-CIO has negotiated this                                                               
issue  several  times  in  the  past.  It  was  ratified  by  the                                                               
memberships but rejected by the  legislature nine years ago. This                                                               
administration  asked the  unions  if they  were interested,  and                                                               
they  were,  but  then  the   administration  said  they  weren't                                                               
interested any more. The reason  they are on a 37.5-hour workweek                                                               
is  because hours  were reduced  years ago  as an  additional pay                                                               
increase. He explained:                                                                                                         
     Our memberships and our leaderships  feel that if we do                                                                    
     go back to  the 40-hour workweek, we  should be looking                                                                    
     at being  paid for those  additional hours that  we put                                                                    
     in, which  would be only  right. If you're  expected to                                                                    
     work more, you should be paid for those hours.                                                                             
     In the  past, the contracts  that we did  negotiate, we                                                                    
     negotiated a straight 40 hours  at the current rate, no                                                                    
     increases  for I  think the  one Local  71, did.  There                                                                    
     were no  increases for a  three-year period if  we went                                                                    
        on the 40-hour workweek and that was one of the                                                                         
     contracts that was rejected....                                                                                            
SENATOR STEVENS  asked how  many labor  unions he  represents and                                                               
how many the state is dealing with.                                                                                             
MR. ETHERIDGE replied  that the state bargaining unit  is made up                                                               
of 12 units. Some  of them are at the table  right now and others                                                               
will be  negotiating later this  year. Not  all 12 are  under the                                                               
37.5-hour workweek. Some work 40  hours; some work 80 hours, such                                                               
as the marine units.                                                                                                            
SENATOR  FRENCH  asked if  some  employees  work for  a  straight                                                               
hourly wage and submit a time sheet for hours worked.                                                                           
MR. ETHERIDGE replied yes, the  majority of employees are in that                                                               
SENATOR FRENCH asked  if the work hours are increased  to 40, the                                                               
employees would just get that  many more hours on their paychecks                                                               
every two weeks.                                                                                                                
MR. ETHERIDGE said that is right.                                                                                               
SENATOR FRENCH asked if some  employees are salaried but also get                                                               
MR. ETHERIDGE replied  that some are, but he  isn't familiar with                                                               
which ones.                                                                                                                     
SENATOR FRENCH said it sounds  like most employees are hourly and                                                               
salaried with no overtime.                                                                                                      
MR. ETHERIDGE agreed.                                                                                                           
SENATOR  STEVENS  asked if  overtime  is  paid for  hours  worked                                                               
between 37.5 and 40 hours.                                                                                                      
MR. ETHERIDGE replied that some are,  but the majority work up to                                                               
40 hours at the straight time rate.                                                                                             
SENATOR  SEEKINS moved  to  pass  SCR 14  out  of committee  with                                                               
individual  recommendations and  its attached  zero fiscal  note.                                                               
SENATOR  STEVENS, DAVIS,  SEEKINS  and BUNDE  voted yea;  SENATOR                                                               
FRENCH voted nay; and SCR 14 moved out of committee.                                                                            
             HCR 21-ALASKA ENERGY POLICY TASK FORCE                                                                         
CHAIR BUNDE announced HCR 21 to be up for consideration.                                                                        
MR. TOM  WRIGHT, staff  to Representative  John Harris,  said the                                                               
Representative  introduced this  resolution  because  he saw  the                                                               
need  for the  state to  come up  with a  comprehensive long-term                                                               
energy plan. A  long-term plan would help the  state promote more                                                               
economic  development, technological  advancement  and create  an                                                               
energy plan so the legislature has some guidelines.                                                                             
CHAIR BUNDE asked how the task force would be established.                                                                      
MR.  WRIGHT replied  it would  have a  member from  the Board  of                                                               
Directors  of the  Alaska Energy  Authority, the  commissioner of                                                               
the Department  of Revenue, two  members chosen by  the governor,                                                               
two members chosen by the Speaker  of House, three members by the                                                               
Senate  President, one  who  would be  selected  by the  minority                                                               
members from the  House and Senate from a list  of three names in                                                               
consultation with  the speaker.  The task  force would  elect its                                                               
own chair from the membership.                                                                                                  
CHAIR BUNDE noted the fiscal note of $78,000.                                                                                   
MR. WRIGHT  responded they want  to staff the task  force because                                                               
it  will  get technical  assistance  from  AIDEA and  the  Alaska                                                               
Energy Authority.  They feel the  task force will  be undertaking                                                               
two comprehensive plans  - one being the Railbelt  portion (to be                                                               
submitted to the legislature by  December 31) and the other being                                                               
the  non-Railbelt  portion (to  be  submitted  by March  31),  so                                                               
fiscal note needs to cover staff time.                                                                                          
SENATOR STEVENS  said in the  case of  the Salmon Task  Force, it                                                               
was nice to have a legislator  on it that could shepherd the bill                                                               
through  the legislature.  He  wanted to  know  why a  legislator                                                               
would not be involved in this.                                                                                                  
MR. WRIGHT  replied that the reason  Representative Harris wanted                                                               
to keep this within the industry  is because there would be a lot                                                               
of discussions  around the technical  aspects and he  didn't want                                                               
to see a  lot of politics involved. He added  there is nothing to                                                               
preclude anyone  from the legislature  from participating  in the                                                               
task force.                                                                                                                     
CHAIR  BUNDE asked  since the  task  force will  focus mostly  on                                                               
electrical energy,  it would  be more  appropriate to  rename the                                                               
task force the "Electrical Energy Task Force."                                                                                  
MR.  WRIGHT agreed  that it  is focused  on electrical  needs and                                                               
said, "It could go one way or the other, Mr. Chairman..."                                                                       
CHAIR  BUNDE  stated,  for  the  record, that  this  will  be  an                                                               
electrical   task   force   that   will  not   be   involved   in                                                               
SENATOR FRENCH  asked for  an example  of a  state-owned Railbelt                                                               
energy asset.                                                                                                                   
MR. WRIGHT replied  Healy and possibly Bradley  Lake, because the                                                               
state financed half of that project.  He didn't know if the state                                                               
was an owner in it, though.                                                                                                     
SENATOR SEEKINS asked if this  obligates any legislature to adopt                                                               
any plan that is presented.                                                                                                     
MR. WRIGHT replied, "No, it does not."                                                                                          
MR.  ERIC  YOULD, Executive  Director,  ARECA,  said his  members                                                               
generate about 90%  of the electricity around the  state and feel                                                               
this  resolution  has  merit. Some  large  projects  on  Alaska's                                                               
horizon are beyond  the abilities of the  individual utilities to                                                               
pursue  -  for  instance,  a transmission  line  from  Nenana  to                                                               
Dominion Creek and  the Intertie from Anchorage  to Fairbanks and                                                               
Kenai. There is  a transmission line that could go  from Delta to                                                               
Tok, through  Glennallen and  back into  the Anchorage  area that                                                               
would be  very important  considering that there  might be  a gas                                                               
line  terminal facility  in the  Valdez  area in  the future.  In                                                               
order  to liquefy  that gas,  put  it in  barges and  ship it  to                                                               
market, tremendous amounts  of waste heat would  be generated and                                                               
that heat  alone could generate  up to 300 megawatts  of capacity                                                               
that could be fed back into the Railbelt area.                                                                                  
TAPE 03-32, SIDE B                                                                                                            
MR. YOULD thought a task force  would be much more effective than                                                               
an interdepartmental study by a  state agency, which would take a                                                               
long time.                                                                                                                      
SENATOR  SEEKINS moved  to pass  CSHCR 21(FIN),  version H,  from                                                               
committee  with  individual   recommendations  and  the  attached                                                               
fiscal note.  SENATORS FRENCH, SEEKINS, STEVENS,  DAVIS and BUNDE                                                               
voted yea and HCR 21 passed from committee.                                                                                     
CHAIR BUNDE  noted that Mr.  Kent Sullivan, nominee for  the Real                                                               
Estate  Commission, just  showed up  and that  the committee  had                                                               
already forwarded  his name  to the joint  session. He  asked Mr.                                                               
Sullivan to  introduce himself and comment  on his qualifications                                                               
for this appointment.                                                                                                           
MR. KENT SULLIVAN,  nominee for the Real  Estate Commission, said                                                               
he is  currently a  litigation attorney and  has lived  in Juneau                                                               
for 2.5 years. He came from Montana  and was a lawyer with a firm                                                               
that  specialized  primarily in  real  estate  and property  law,                                                               
including   transaction    work,   lobbying,    legislation   and                                                               
litigation.  He is  anxious to  serve on  the commission,  give a                                                               
little back  to the  state and  to work  in an  area that  is his                                                               
primary interest.                                                                                                               
CHAIR BUNDE thanked him for his willingness to serve.                                                                           
                   HB 234-BREWPUBS; ABC BOARD                                                                               
CHAIR BUNDE announced HB 234 to be up for consideration.                                                                        
MR.  KEITH  HILLIARD,  staff  to  Representative  Lesil  McGuire,                                                               
sponsor of HB  234, said it does basically three  things and that                                                               
there was a blank CS before the committee.                                                                                      
SENATOR SEEKINS  moved to adopt  SCSCSHB234 (L&C), version  B, as                                                               
the  working document.  There were  no objections  and it  was so                                                               
MR. HILLIARD  explained that the  committee substitute  they just                                                               
adopted  establishes  that  the Alcohol  Beverage  Control  (ABC)                                                               
Board under  the Department of Public  Safety for administration.                                                               
The department  felt that  the investigative  responsibilities of                                                               
the ABC Board needed to be  under their direction rather than the                                                               
Department of Revenue.                                                                                                          
     Second, it addresses  current inconsistencies in Alaska                                                                    
     statute found  in AS 04.111.135(d) regarding  the sales                                                                    
     of  beer by  brewpubs in  quantities of  not more  than                                                                    
     five gallons per day, so-called growlers.                                                                                  
     Under  current statutory  language,  sales of  growlers                                                                    
     are limited  to brewpubs  that brew  their beer  on the                                                                    
     premises, but  this restriction  unfairly disadvantages                                                                    
     Alaskan brewpub  operators who  may brew  their product                                                                    
     in  one  location  of  the state  and  dispense  it  at                                                                    
     another.  So,  we're  going to  remove  that  arbitrary                                                                    
     restriction. Lastly, SCSCSHB  234(L&C) extends the life                                                                    
     to  the Alcoholic  Beverage Control  Board to  June 30,                                                                    
MS.  PAT   DAVIDSON,  Legislative  Auditor,  said   their  report                                                               
contained  eight  recommendations  and   two  of  them  were  for                                                               
legislative changes; five were  operational improvements; one was                                                               
to the  Governor's Office recommending  that they move  faster in                                                               
keeping the  board filled. There  was general concurrence  by the                                                               
ABC staff with the recommended operational improvements.                                                                        
MS.  DAVIDSON said  she recommended  a three-year  rather than  a                                                               
four-year extension  that would  provide for timely  follow-up of                                                               
issues  identified  during  the  course of  the  audit.  The  two                                                               
statutory  recommendations  are  first  to  have  the  ABC  Board                                                               
determine  the need  to  get  investigative responsibilities  for                                                               
gambling  and   prostitution.  While  the  idea   that  when  the                                                               
investigators are in the bars,  they be looking for other illegal                                                               
activity  is appealing  from  a  synergistic standpoint,  anytime                                                               
there is an  investigation, it takes time and  energy. Right now,                                                               
there  was  more  than  enough work  for  the  ABC  investigators                                                               
focusing  on  issues  critical   to  the  state  for  controlling                                                               
alcohol.  Investigating  prostitution  and gambling  expands  the                                                               
scope of  the work assigned  to the ABC investigators,  but there                                                               
was  no additional  funding for  additional investigators  and no                                                               
more  time  to do  their  job.  The  audit recommended  that  the                                                               
legislature refocus  any violations  on the  alcohol laws  of the                                                               
The second recommendation was to  consider whether or not the ABC                                                               
Board should  be given the  authority to do  summary suspensions.                                                               
Those are  powers that are allowed  on a great many  boards, like                                                               
occupational boards.  In recommending  that, she  recognizes that                                                               
there needs  to be a  clear presence  of an emergency,  because a                                                               
summary suspension has significant  economic impact on the owners                                                               
and employees  of the establishment. Careful  consideration would                                                               
have to be given to what  constituted the emergency and be put in                                                               
SENATOR  STEVENS asked  if she  had  seen the  letter from  Homer                                                               
Brewing Company.                                                                                                                
MS. DAVIDSON answered that she had not.                                                                                         
SENATOR  STEVENS said  his concern  was  over verbiage  regarding                                                               
CHAIR BUNDE commented that the turf battles would continue on.                                                                  
MR. MATT JONES, Moose's Tooth  in Anchorage, said this bill seeks                                                               
to amend  a drafting  oversight that  was made  in the  1999 bill                                                               
that  singled  them out  as  the  one  brewpub that  cannot  sell                                                               
     All other  brewpubs are allowed  to sell  growlers, but                                                                    
     because  our brewing  facility is  not co-located  with                                                                    
     our restaurant  facility and the  language of  the 1999                                                                    
     bill said that  growlers had to be sold  where the beer                                                                    
     is manufactured...                                                                                                         
     All other  brewpubs that are  covered under  a separate                                                                    
     section  were allowed  to sell  their growlers  where a                                                                    
     customer was  present on the  licensed premises  in the                                                                    
     retail area.  We have been  the one brewpub  that can't                                                                    
     sell their growlers  to a person who is  present at the                                                                    
     Representative  Rokeberg   said  this  was   never  the                                                                    
     intended consequence  when he drafted  this legislation                                                                    
     back in 1999.                                                                                                              
2:21 p.m.                                                                                                                       
SENATOR  STEVENS said  he  was  sure Mr.  Jones  didn't have  the                                                               
letter from Homer Brewing that  said this legislation would widen                                                               
the  gap  between brewpub  licensees  and  brewery licensees  and                                                               
would hurt present  and future breweries. He asked if  he had any                                                               
comments on that issue.                                                                                                         
MR. JONES responded  said he didn't think  this legislation would                                                               
change  the  position between  brewpubs  and  breweries. "All  it                                                               
would do is  put us back in  having the same bundle  of rights as                                                               
all other brewpubs currently have..."                                                                                           
CHAIR BUNDE asked  if there was a maximum gallonage  he could use                                                               
off premise.                                                                                                                    
MR. JONES replied yes, that they  have a total production cap and                                                               
a [indisc.] cap.                                                                                                                
CHAIR BUNDE asked if that cap wouldn't exist for a brewery.                                                                     
MR. JONES replied there is no cap for a brewery.                                                                                
SENATOR SEEKINS moved to pass  SCS CSHB 234(L&C), version B, from                                                               
committee    with   attached    fiscal   note    and   individual                                                               
recommendations.  SENATORS DAVIS,  FRENCH,  SEEKINS, STEVENS  and                                                               
BUNDE voted yea and the motion carried.                                                                                         
             HB  83-REVISED UNIFORM ARBITRATION ACT                                                                         
CHAIR BUNDE announced HB 83 to be up for consideration.                                                                         
MS. LISA  WEISSLER, staff to  Representative Berkowitz,  said the                                                               
Revised  Uniform  Arbitration  Act   was  adopted  in  1968.  She                                                               
explained that  arbitration is essentially private  resolution of                                                               
a dispute;  it's a  voluntary process  and provides  a relatively                                                               
speedier,  lower  cost  and more  efficient  means  of  resolving                                                               
disputes. The uniform  acts around the entire country  need to be                                                               
revised because there  is an increasing use of  arbitration and a                                                               
variety of  issues have come  up that  were not addressed  by the                                                               
original  act. The  revised act  seeks to  address some  of those                                                               
The National  Conference of Commissioners  on Uniform  State Laws                                                               
drafted the act that is the  basis for this legislation and HB 83                                                               
essentially follows  what they have recommended.  Grant Callow is                                                               
the  Alaska  representative on  the  Conference  and can  provide                                                               
testimony  on this  issue. Representative  Berkowitz is  bringing                                                               
this forward on behalf of the Commission.                                                                                       
MR.  GRANT   CALLOW,  Alaskan  member,  National   Conference  of                                                               
Commissioners on  Uniform State  Laws, said  he practices  law in                                                               
Anchorage.  This act  was  drafted  by the  Commission  and is  a                                                               
revision of the  original act that was created in  1955. It is an                                                               
update  of the  Uniform Arbitration  Act, because  of changes  in                                                               
procedure.  It also  takes into  account certain  court decisions                                                               
and  other issues  that came  up over  the years  and need  to be                                                               
addressed. Those  can best be  addressed in a revision  that will                                                               
make revisions uniform across the states.                                                                                       
He  explained that  new procedures  have  been incorporated  that                                                               
allow  more   flexibility  in  terms  of   how  arbitrations  are                                                               
conducted -  for instance, when  multiple arbitrations  are going                                                               
on  involving similar  issues arriving  from similar  events like                                                               
contract interpretations,  the revised  act, among  other things,                                                               
allows all  those to be  consolidated. This is  important because                                                               
the number of disputes to be  resolved by arbitration seems to be                                                               
growing yearly  by significant amounts.  If more disputes  can be                                                               
resolved privately through arbitration  instead of in the courts,                                                               
the reduction in the caseload  will have a positive fiscal impact                                                               
on the state.                                                                                                                   
He  highlighted one  of  the revisions  that  provides that  [the                                                               
uniform act]  is a default  act and  that most of  its provisions                                                               
may be  waived by  contract, but there  are some  provisions that                                                               
may not  be waived or varied.  Those include the basic  rule that                                                               
any agreement  to submit  a dispute to  arbitration is  valid and                                                               
that  the rules  that govern  disclosure  of facts  by a  neutral                                                               
arbitrator  are   in  place.  In  addition,   rules  guaranteeing                                                               
enforcement  of an  appeal of  the act  cannot be  waived and  an                                                               
arbitration decision in a court cannot be waived.                                                                               
MR. CALLOW said it also sets  forth standards for when awards can                                                               
be vacated  and allows  the court  to order  provisional remedies                                                               
during  the  course  of  arbitration   before  an  arbitrator  is                                                               
selected.  That is  important because  it  prevents parties  from                                                               
delaying the  selection of  an arbitrator in  order to  delay the                                                               
proceedings and  somehow dissipate  the effect of  an arbitration                                                               
MR.  CALLOW  explained this  bill  also  addresses the  issue  of                                                               
arbitrators'  immunity to  civil liability.  Judges, unless  they                                                               
perpetrate some  kind of fraud,  are immune from  civil liability                                                               
for their decision-making and that  wasn't made clear in the 1955                                                               
act. The  upshot of  that is  in some  circumstances, arbitrators                                                               
have been  sued for  no good  reason. In  most cases  those suits                                                               
don't go  anywhere, but having a  provision in the act  that says                                                               
that arbitrators  are immune from  civil liability will  insure a                                                               
supply  of arbitrators.  It  also prevents  a  situation where  a                                                               
person who had arbitration would  have to have another proceeding                                                               
in court on the same issue.                                                                                                     
SENATOR FRENCH  asked if this bill  was modeled on a  uniform act                                                               
that is being adopted in other states.                                                                                          
MR.  CALLOW replied  yes; this  has  already been  enacted in  12                                                               
other  states and  was just  approved by  the Commission  and the                                                               
SENATOR FRENCH asked  if all the stakeholders  had an opportunity                                                               
to provide input into the uniform act.                                                                                          
MR. CALLOW replied yes, absolutely.                                                                                             
CHAIR BUNDE  said they were  running out  of time today  and held                                                               
the bill for further work.                                                                                                      
           SB  32-INSURANCE FOR MOTOR VEHICLE REPAIRS                                                                       
CHAIR BUNDE  announced that SB  32 needs more work.  He appointed                                                               
Senator Seekins  as the chair  of a subcommittee and  extended an                                                               
invitation to join the subcommittee  to any committee members who                                                               
might want  to work with  Senator Seekins and the  bill's sponsor                                                               
over the interim  to come up with a compromise  solution for next                                                               
CHAIR BUNDE adjourned the meeting at 3:35 p.m.                                                                                  

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