SB 12 - LIMIT RELATIONS WITH CERTAIN NATIONS 2:13:31 PM CHAIR McGUIRE announced that the first order of business would be 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." [Before the committee was HCS CSSB 12(STA).] 2:13:42 PM JASON HOOLEY, Staff to Senator Fred Dyson, Senate Health, Education and Social Services Standing Committee, Alaska State Legislature, explained on behalf of the sponsor, Senator Dyson, that SB 12 addresses the international disgrace of human trafficking, which, sadly, has occurred in both the U.S. and Alaska. Senate Bill 12 references a federal report produced annually entitled, "Trafficking in Persons Report", which is published under the authority of the Trafficking Victims Protection Act and which ranks countries according their stance on sex trafficking and human trafficking. Specifically, SB 12 imposes procurement restrictions on the State's three branches of government, thereby precluding the state from entering into or maintaining financial relationships with those companies that are headquartered in the countries identified by the aforementioned report as "Tier 3" countries. REPRESENTATIVE GARA said he sees no flaws in the bill. MR. HOOLEY, in response to questions, relayed that the aforementioned report is published annually through the U.S. Department of State, and that according to Anchorage Police Department reports, sex trafficking rings are currently operating in Alaska - the women [and children], often from Asian countries, are promised lucrative careers but are then held in captivity and forced to do sex acts. MR. HOOLEY, in response to another question, offered his understanding that SB 12 will have very little impact on the State's procurement process for any of the three branches of government. 2:16:44 PM CHAIR McGUIRE, after ascertaining that no one else wished to testify, closed public testimony on SB 12. REPRESENTATIVE GARA asked whether the proposed procurement prohibition is optional or mandatory. MR. HOOLEY explained that under the bill, the three branches of state government would be prohibited from procuring goods or services with any company/organization headquartered in a Tier 3 country. He added, "If the organization is not necessarily headquartered in a Tier 3 country but does business there, we may set up provisions for restricting that." REPRESENTATIVE GARA said he wants to make sure that the procurement restrictions would apply to any company making money in a Tier 3 country. MR. HOOLEY said that under the bill's current language, the State would not be required to cut off business with a country that merely does business in a Tier 3 country. REPRESENTATIVE GARA relayed that he will be attempting to amend the bill on the House floor such that the procurement restrictions would also apply with regard to companies doing business in Tier 3 countries. REPRESENTATIVE GRUENBERG relayed that in the House State Affairs Standing Committee, he'd offered an amendment to add, after the words, "that has headquarters", the phrase, ", is incorporated in, is established in, or is owned in whole or in major part by a person residing in"; however, that amendment was not adopted, perhaps because it was felt that "maybe the ownership thing was more cumbersome." MR. HOOLEY offered his recollection that there are a number of businesses and organizations that the State of Alaska does business with that do conduct business in, but don't have headquarters in, Tier 3 countries. For example, a lot of oil companies do business in Venezuela - a Tier 3 country. 2:20:38 PM REPRESENTATIVE GRUENBERG said he would support "such an amendment," adding his understanding that members of the House State Affairs Standing Committee felt that his suggested change was too broad. REPRESENTATIVE GARA indicated that he might consider adding language along the lines of, "or has a physical presence in". REPRESENTATIVE GRUENBERG noted that some companies have headquarters in several countries. REPRESENTATIVE GARA, in response to comments, indicated that he would consider limiting his forthcoming proposed House floor amendment to "those who have headquarters there or a physical location there as opposed to somebody who just does pass-through business." REPRESENTATIVE COGHILL, too, raised the point that many companies have headquarters in several countries. REPRESENTATIVE GARA, in response to comments, indicated that for him, the question is whether the state is really going to take a stand against companies that make money off of human trafficking and slavery, even if that means establishing procurement prohibitions against brand-name companies that are making substantial money in those countries. MR. HOOLEY, in response to a question, offered his understanding that the House State Affairs Standing Committee has introduced a title change resolution pertaining to SB 12. 2:24:52 PM REPRESENTATIVE GRUENBERG moved to report HCS CSSB 12(STA) out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, HCS CSSB 12(STA) was reported from the House Judiciary Standing Committee.