HOUSE FINANCE COMMITTEE May 5, 1999 2:02 P.M. TAPE HFC 99 - 118, Side 1 TAPE HFC 99 - 118, Side 2 CALL TO ORDER Co-Chair Therriault called the House Finance Committee meeting to order at 2:02 p.m. PRESENT Co-Chair Therriault Representative Foster Vice Chair Bunde Representative Grussendorf Representative Austerman Representative Kohring Representative J. Davies Representative Moses Representative G. Davis Representative Williams Co-Chair Mulder was absent from the meeting. ALSO PRESENT Dave Gray, Staff, Senator Mackie; Dawn Williams, Division of Banking Securities and Corporations, Department of Commerce and Economic Development; John Cyr, President, NEA-Alaska TESTIFIED VIA TELECONFERENCE Theresa Williams, Department of Law; John Cyr, President, NEA-Alaska; Dave Gray, Staff, Senator Mackie; Dawn Williams, Division of Banking Securities and Corporations, Department of Commerce and Economic Development. SUMMARY HB 85 "An Act relating to licensure and professional discipline of members of the teaching profession and providing for related penalties; relating to grounds for dismissal of a teacher; relating to the Professional Teaching Practices Commission; relating to limited immunity for procedures under the Educator Ethics Act; making conforming amendments; and providing for an effective date." CSHB 85 (FIN) was REPORTED out of Committee with "no recommendation" and a zero fiscal note by the Department of Education. CSSB 93(FIN) "An Act relating to the purposes of certain businesses and corporations; relating to the names of businesses and organizations; relating to the registration under the Alaska Trademark Act of marks that resemble the name of another business or organization; and providing for an effective date." CSSB 93(FIN) was REPORTED out of Committee with a "do pass" recommendation and with a fiscal impact note by the Department of Commerce and Economic Development. HOUSE BILL NO. 85 "An Act relating to licensure and professional discipline of members of the teaching profession and providing for related penalties; relating to grounds for dismissal of a teacher; relating to the Professional Teaching Practices Commission; relating to limited immunity for procedures under the Educator Ethics Act; making conforming amendments; and providing for an effective date." Representative J. Davies MOVED to ADOPT Amendment 1 (copy on file). Co-Chair Therriault OBJECTED for the purpose of discussion. Amendment 1 would add "person's" on line 19, page 7. Representative J. Davies spoke in support of the amendment. THERESA WILLIAMS, DEPARTMENT OF LAW stated that the Department of Law did not object to the amendment. Co-Chair Therriault WITHDREW his objections to the adoption of Amendment 1. There being NO OBJECTION, it was so ordered. Representative Foster MOVED to report CSHB 85 (FIN) out of Committee with the accompanying fiscal note. Representative Williams referred to page 9. He questioned if there were concerns regarding this section. JOHN CYR, PRESIDENT, NEA-ALASKA expressed concern with subsection (f) on page 9. He emphasized that the Commission acts as a body and comes to decisions in a fair and impartial manner. Subsection (f) gives administrators another level of appeal that teachers do not have. He spoke in favor of retaining an equal playing field. Ms. Williams stated that the Department of Law does not have a position on subsection (f). She noted that the language was a 1968 concession to the Association of School Administrators acknowledging that there are a majority of teachers on the Commission. There being NO OBJECTION, CSHB 85 (FIN) was moved from Committee. CSHB 85 (FIN) was REPORTED out of Committee with "no recommendation" and a zero fiscal note by the Department of Education. CS FOR SENATE BILL NO. 93(FIN) "An Act relating to the purposes of certain businesses and corporations; relating to the names of businesses and organizations; relating to the registration under the Alaska Trademark Act of marks that resemble the name of another business or organization; and providing for an effective date." DAVE GRAY, STAFF, SENATOR MACKIE spoke on behalf of the sponsor in support of the legislation. He explained that the legislation was at the request of the Division of Banking, Security and Corporations. He observed that there are three different standards for names under which business entities are allowed to file with the state of Alaska. The legislation would apply the standard used in AS 10.50 and AS 32.05 "the name is distinguishable on the records of the department (from all other entities filled)." He noted that the Department of Commerce and Economic Development feels that the legislation would allow the department to increase their revenues. Vice-Chair Bunde questioned if there would be any immediate changes as a result of the legislation. Mr. Gray did not think that the legislation would result in any immediate changes and noted that there has not been any testimony in opposition to the legislation. He stated that disputes would be handled in the court. He did not know of any businesses planning to make changes. He pointed out that the department feels that the legislation will allow them to stay out of disputes. Representative Grussendorf asked for examples of conflicting names. Representative J. Davies questioned why the standard was picked. Mr. Gray clarified that the department recommended the standard. DAWN WILLIAMS, DIVISION OF BANKING SECURITIES AND CORPORATIONS, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT provided information on the legislation. She explained that the standard of "deceptively similar" has been changed to "distinguishable on the record." This allows more entities to file with the state. "Distinguishable on the record" is a less prohibited record. She gave examples of disputes over names. Representative J. Davies felt that the use of "deceptively similar" would better protect the public. He observed that several names are rejected each week on the grounds of "deceptively similar". Co-Chair Therriault questioned if the department or the court would be left to determine the standard. Representative J. Davies argued that more lawsuits would occur under the change. Ms. Williams noted that it is up to each business to check to see if a proposed name is currently being used. Any business can get a business license under any name. However, if two businesses wish to use the same name it is up to them to decide who uses the name. If they cannot decided then the issue is resolved in court. If the Division receives a name that is the same or deceptively similar the department returns the request indicating that there is a name on file. The business can then attempt to get consent from the entity or chose another name. A key word can be added to change the name. There is no requirement to register a business name. Most names would be available with the statute change. Representative J. Davies summarized that under the legislation business would file whatever name they want. The only remedy for existing businesses is to take someone who uses the same name to court. Ms. Williams agreed and added that distinguishable would allow more businesses to file. She argued in support of the legislation and observed that Silver Salmon Charters could be deceptively similar to Silver Salmon Fishing. Representative J. Davies estimated that the legislation would result in a greater percentage of lawsuits between entities out-side-of the state. Co-Chair Therriault felt that the legislation would clarify the language and reduce lawsuits. He noted that it would be easier to argue that a name is "deceptively similar". Representative J. Davies maintained that the legislation reduces the standards. He stressed that additional lawsuits would occur between entities. He emphasized that the state has provided a filtering service to avoid private causes of action. He reiterated that the standard is being reduced. Representative Foster suggested that if entities are arguing among themselves that they should take their arguments to court and not utilize state resources. Vice-Chair Bunde maintained that deceptively similar is a judgement call. Ms. Williams agreed and emphasized the difficulty of judging "deceptively". She referred to a dispute over the Divisions decision that the "Wild Iris" and the "Wild Iris Caf " were not deceptively similar. She pointed out that "The Wild Iris" is distinguishable from "Wild Iris Caf ". Representative Austerman asked if a business could file as "Custom Tours". Ms. Williams stated that there are several businesses that have "custom tour" in their name. She stated that she would have to look at the database to determine if "Custom Tours" could be used. Representative J. Davies observed that the department would have to accept names that are distinguishable. Ms. Williams reiterated that it would be up to the business to take the other entity to court to prevent the use of a name that would be deceptively similar to their name. In response to a question by Vice-Chair Bunde, Ms. Williams explained that under "deceptively similar" a business could sue the state of Alaska if the department registered a name that they felt was deceptively similar. Vice-Chair Bunde pointed out that the statute is vague and would allow suits against the state. He emphasized that clarification of the statutes would prevent lawsuits against the state. Ms. Williams noted that there could be a conflict with businesses that are not registered with the state. She gave the example of a business that has been in operation for 20 years, but had not registered its name. If a new corporation came into the state and registered the name it would be up to the existing business to take the new entity to court in order to protect their name. It is not up to the state to determine who should be able to the use a name. It is up to the state to register the use of names. Representative Grussendorf expressed concern that the courts would be tied up with cases over common names. Ms. Williams clarified that "the" or "company" would not be distinguishing or key words. "Charter" or "airlines" are distinguishing words. She noted that under current statutes the Wild Iris Caf would have to obtain permission to use the name from the Wild Iris. If the legislation is adopted the Wild Iris Caf could use the name without consent because it would be distinguishable. Co-Chair Therriault pointed out that there is a positive fiscal note from the Department of Commerce and Economic Development. Representative Foster MOVED to report CSSB 93 (FIN) out of Committee with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSSB 93(FIN) was REPORTED out of Committee with a "do pass" recommendation and with a fiscal impact note by the Department of Commerce and Economic Development. ADJOURNMENT The meeting adjourned at 2:48 p.m. House Finance Committee 6 5/5/99