HOUSE LABOR AND COMMERCE STANDING COMMITTEE March 6, 2000 3:28 p.m. MEMBERS PRESENT Representative Norman Rokeberg, Chairman Representative Andrew Halcro, Vice Chairman Representative John Harris Representative Tom Brice Representative Sharon Cissna Representative Jerry Sanders MEMBERS ABSENT Representative Lisa Murkowski COMMITTEE CALENDAR CS FOR SENATE BILL NO. 176(RLS) "An Act permitting a physical fitness facility to limit public accommodation to only males or only females." - MOVED CSSB 176(RLS) OUT OF COMMITTEE HOUSE BILL NO. 224 "An Act requiring a public employee labor organization representing employees of a school district, regional educational attendance area, or a state boarding school to give notice before striking." - HEARD AND HELD HOUSE BILL NO. 247 "An Act revising the nonprofit corporations code and the religious corporations code; relating to disclosures and reports by certain nonprofit corporations; amending Rules 3, 4, 8, 17, 19, 23.1, 24, 25, 65, 79, and 82, Alaska Rules of Civil Procedure, Rule 803, Alaska Rules of Evidence, and Rules 602 and 609, Alaska Rules of Appellate Procedure; and providing for an effective date." - HEARD AND HELD HOUSE BILL NO. 370 "An Act relating to a short-term exemption from the minimum wage for newly hired young employees." - HEARD AND HELD PREVIOUS ACTION BILL: SB 176 SHORT TITLE: SEX DISCRIMINATION IN HEALTH CLUBS Jrn-Date Jrn-Page Action 5/15/99 1488 (S) READ THE FIRST TIME - REFERRAL(S) 5/15/99 1488 (S) L&C 1/13/00 (S) L&C AT 1:30 PM BELTZ 211 1/13/00 (S) MINUTE(L&C) 1/18/00 (S) L&C AT 1:30 PM BELTZ 211 1/18/00 (S) Bill Postponed 1/25/00 (S) L&C AT 1:30 PM BELTZ 211 1/25/00 (S) Moved CS (L&C) Out of Committee 1/25/00 (S) MINUTE(L&C) 1/26/00 2078 (S) L&C RPT CS 4DP NEW TITLE 1/26/00 2078 (S) DP: MACKIE, LEMAN, DONLEY, TIM KELLY 1/26/00 2078 (S) ZERO FISCAL NOTE (GOV) 2/02/00 (S) RLS AT 11:45 AM FAHRENKAMP 203 2/02/00 (S) Heard & Held 2/02/00 (S) MINUTE(RLS) 2/16/00 (S) RLS AT 11:15 AM FAHRENKAMP 203 2/16/00 (S) MINUTE(RLS) 2/21/00 2362 (S) RLS TO CALENDAR AND 1 OR 02/21/00 2/21/00 2363 (S) READ THE SECOND TIME 2/21/00 2363 (S) HELD IN SECOND READING TO 2/24 CALENDAR 2/22/00 (S) RLS AT 12:00 PM FAHRENKAMP 203 2/22/00 (S) 2/22/00 (S) MINUTE(RLS) 2/22/00 2382 (S) RETURN TO RLS COMMITTEE 2/22/00 2382 (S) RULES WAIVED NOTICE, UNIFORM RULE 23 2/24/00 2406 (S) RLS TO CAL W/CS & 1 OR 02/24 NEW TITLE 2/24/00 2407 (S) PREVIOUS ZERO FISCAL NOTE (GOV) 2/24/00 2408 (S) IN SECOND READING 2/24/00 2408 (S) RLS CS ADOPTED UNAN CONSENT 2/24/00 2409 (S) ADVANCED TO THIRD READING UNAN CONSENT 2/24/00 2409 (S) READ THE THIRD TIME CSSB 176(RLS) 2/24/00 2409 (S) PASSED Y17 N3 2/24/00 2414 (S) TRANSMITTED TO (H) 2/25/00 2297 (H) READ THE FIRST TIME - REFERRALS 2/25/00 2298 (H) L&C 2/25/00 2298 (H) REFERRED TO LABOR & COMMERCE 3/01/00 2376 (H) CROSS SPONSOR(S): HALCRO 3/06/00 (H) L&C AT 3:15 PM CAPITOL 17 BILL: HB 224 SHORT TITLE: PERA: NOTICE BEFORE STRIKE Jrn-Date Jrn-Page Action 5/05/99 1180 (H) READ THE FIRST TIME - REFERRAL(S) 5/05/99 1180 (H) HES, L&C 5/06/99 1214 (H) COSPONSOR(S): OGAN 5/07/99 1247 (H) COSPONSOR(S): DYSON 1/25/00 (H) HES AT 3:00 PM CAPITOL 106 1/25/00 (H) -- Meeting Canceled -- 2/03/00 (H) HES AT 4:00 PM CAPITOL 106 2/03/00 (H) -- Meeting Canceled -- 2/08/00 (H) HES AT 3:00 PM CAPITOL 106 2/08/00 (H) Heard & Held 2/08/00 (H) MINUTE(HES) 2/15/00 (H) HES AT 3:00 PM CAPITOL 106 2/15/00 (H) Moved CSHB 224(HES) Out of Committee 2/15/00 (H) MINUTE(HES) 2/16/00 2202 (H) HES RPT 1DP 1DNP 1NR 2AM 2/16/00 2202 (H) DP: GREEN; DNP: BRICE; NR: COGHILL; 2/16/00 2202 (H) AM: DYSON, KEMPLEN 2/16/00 2203 (H) ZERO FISCAL NOTE (ADM) 2/16/00 2203 (H) REFERRED TO LABOR & COMMERCE 2/21/00 2249 (H) CORRECTED HES RPT CS(HES) 1DNP 4AM 2/21/00 2249 (H) DNP: BRICE; AM: DYSON, COGHILL, KEMPLEN 2/21/00 2249 (H) GREEN 2/21/00 2249 (H) ZERO FISCAL NOTE (ADM) 2/16/00 3/03/00 (H) L&C AT 3:15 PM CAPITOL 17 3/03/00 (H) Scheduled But Not Heard 3/06/00 (H) L&C AT 3:15 PM CAPITOL 17 BILL: HB 247 SHORT TITLE: NONPROFIT CORPORATIONS Jrn-Date Jrn-Page Action 5/18/99 1596 (H) READ THE FIRST TIME - REFERRAL(S) 5/18/99 1597 (H) L&C, JUD 3/06/00 (H) L&C AT 3:15 PM CAPITOL 17 BILL: HB 370 SHORT TITLE: EXEMPTION FROM MINIMUM WAGE FOR TEENAGERS Jrn-Date Jrn-Page Action 2/11/00 2184 (H) READ THE FIRST TIME - REFERRALS 2/11/00 2184 (H) L&C, JUD 2/11/00 2184 (H) REFERRED TO LABOR & COMMERCE 3/06/00 (H) L&C AT 3:15 PM CAPITOL 17 WITNESS REGISTER SENATOR DRUE PEARCE Alaska State Legislature Capitol Building, Room 111 Juneau, Alaska 99801 POSITION STATEMENT: Testified as sponsor of CSSB 176(RLS). DAN COFFEY, Attorney at Law 207 East Northern Lights Boulevard, Suite 200 Anchorage, Alaska 99503 POSITION STATEMENT: Testified on CSSB 176(RLS). JOHN SANKEY, Owner Anchorage Women's Club 207 East Northern Lights Boulevard Anchorage, Alaska 99503 POSITION STATEMENT: Testified on CSSB 176(RLS). RANDALL LORENZ, Staff to Representative Vic Kohring Alaska State Legislature Capitol Building, Room 421 Juneau, Alaska 99801 POSITION STATEMENT: Presented HB 224 on behalf of the sponsor. DEBORAH OSSIANDER, Member Anchorage School Board P.O. Box 670772 Chugiak, Alaska 99567-0772 POSITION STATEMENT: Testified in support of HB 224. JOHN CYR, President National Education Association-Alaska 114 Second Street Juneau, Alaska 99801 POSITION STATEMENT: Testified on HB 224. DON ETHERIDGE, Lobbyist AFL-CIO [American Federation of Labor and Congress of Industrial Organizations] 710 West 9th Street Juneau, Alaska 99801 POSITION STATEMENT: Testified in opposition to HB 224. BARBARA HUFF TUCKNESS, Director Governmental and Legislative Affairs General Teamsters Local 959, State of Alaska 520 East 34th Avenue Anchorage, Alaska 99503 POSITION STATEMENT: Testified in opposition to HB 224. CARL ROSE, Executive Director Association of Alaska School Boards 316 West 11th Street Juneau, Alaska 99801-1510 POSITION STATEMENT: Testified in support of HB 224. PATRICK HARMAN, Staff to Representative Pete Kott Alaska State Legislature Capitol Building, Room 118 Juneau, Alaska 99801 POSITION STATEMENT: Presented HB 247 on behalf of the sponsor. FRED JENKINS, Session Executive Director United Way of Anchorage 1057 West Fireweed Lane Anchorage, Alaska 99503 POSITION STATEMENT: Testified on HB 247. RICHARD BLOCK, Christian Science Committee on Publication 360 West Benson Boulevard, Suite 301 Anchorage, Alaska 99503 POSITION STATEMENT: Testified on HB 247. JOHN BROWN, President Fairbanks Central Labor Council 819 1st Avenue Fairbanks, Alaska 99701 POSITION STATEMENT: Testified on HB 370. DWIGHT PERKINS, Deputy Commissioner Office of the Commissioner Department of Labor & Workforce Development P.O. Box 21149 Juneau, Alaska 99802-1149 POSITION STATEMENT: Testified in opposition to HB 370. RICH MASTRIANO, Investigator Wage & Hour Division of Labor Standards & Safety Department of Labor & Workforce Development 3301 Eagle Street, Suite 301 Anchorage, Alaska 99503 POSITION STATEMENT: Testified on HB 370. ACTION NARRATIVE TAPE 00-26, SIDE A Number 0001 CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce Standing Committee meeting to order at 3:28 p.m. Members present at the call to order were Representatives Rokeberg, Halcro, Harris and Brice. Representatives Cissna and Sanders arrived as the meeting was in progress. SB 176 - SEX DISCRIMINATION IN HEALTH CLUBS CHAIRMAN ROKEBERG announced the first order of business would be CS FOR SENATE BILL NO. 176(RLS), "An Act permitting a physical fitness facility to limit public accommodation to only males or only females." Number 0096 SENATOR DRUE PEARCE, Alaska State Legislature, came forward to testify as the sponsor of CSSB 176(RLS). She stated: Senate Bill 176 allows gender-based health clubs to provide services to members wishing to exercise in the presence of only persons of their own gender. Under the Alaska Constitution, Article 1, Section 22, the right of the people to privacy is recognized and shall not be infringed. The Alaska Human Rights Commission [AHRC] filed an action against the Anchorage Women's Club last year stating the club unlawfully discriminates against men because the club is a place of public accommodation. The AHRC based their decision on AS 18.80.230, which states that in places of "accommodation" it is unlawful to refuse, withhold from, or deny to a person any of its services, goods, or facilities based on sex. However, health clubs are not referenced in AS 18.80.300 (14), which is the list of places that are places of public accommodation. Senate Bill 176 establishes that health clubs are not designed for public accommodation and have no public policy interests. Gender-based health clubs offer a secluded environment allowing people to feel more at ease in what is often an intimidating setting. Through this measure, Alaska will recognize the unique setting of a male-only or female-only health club based on membership and employment. This bill in no way excludes any individual from the opportunity to exercise or work at a co-ed health club if he or she so desires. Number 0257 I introduced the legislation on behalf of the [Anchorage] Women's Club, which is the club that is being held with a big question mark over their facility. It's a facility in Anchorage, a physical fitness facility, that is open to women as members, and it has female employees. In 1998, an Anchorage man was denied membership in this club based on his gender, since the ... club caters exclusively to women. He filed a complaint to the [Alaska] Human Rights Commission. He later dropped his claim to the commission, but they went ahead, opened a case, and voted that the women's club violated [AS] 18.80.230 which (indisc.) the list of places of public accommodation that I mentioned. This bill merely clarifies that physical fitness facilities would not fit in that list. There are other states who have gone the same direction that we are proposing here. There's no state or federal court or legislative body in the United States that has prohibited the operation of same-gender physical fitness facilities. Illinois, New Jersey and Tennessee explicitly authorize same-gender centers. Pennsylvania, Colorado, New York and Hawaii authorize the existence of same-gender fitness and wellness centers. One of the reasons, Mr. Chairman, that we believe that there's a privacy interest, but also, if you will, a public interest in having facilities able to be open to women only or to men only, I don't have to tell anyone here that Americans, as a group, are getting less healthy. We're getting less exercise and doctors who try to get people to join health clubs find that it is an intimidating setting. It is particularly difficult to get women to join health clubs, and so I think that these clubs in Anchorage serve a very important purpose for the health of the individuals who are members. I believe that we dealt with all of the questions to make sure that we didn't catch gymnasiums somehow without meaning to. Over on the Senate side, gymnasiums are not mentioned. We've gone through the language in a number of permutations, and I think we've handled all of those questions of vagueness. Number 0446 REPRESENTATIVE TOM BRICE asked Senator Pearce whether the language in CSHB 176(RLS) is specific enough in relation to expressing a public need in order to withstand a court challenge. SENATOR PEARCE replied that there is a list of public accommodations in state statute. The law clearly says a person cannot discriminate in those places of public accommodations. The bill clarifies that physical fitness facilities are not a part of that list and therefore should withstand a court challenge. Number 0538 DAN COFFEY, Attorney at Law, testified via teleconference from Anchorage. He stated that he represented the Anchorage Women's Club in the AHRC action. He commented: We prepared and submitted to the committee and to the full House [of Representatives], for that matter, what's been documented as a memo to legislators dated December 19, 1999, which contains a variety of information on what has happened in other jurisdictions where this same issue has been considered. During the course of this process, we have heard nothing that hasn't been considered in other jurisdictions. The lines, if you would, are drawn clearly here as between the reasons why this should be permitted and those who argue against it, the reasons they believe it should not be permitted. There's clearly a question of balancing here. Mr. Chairman, we believe that there would be some legitimate concerns, things like the proliferation of men-only clubs and loss of some of the gains that ... people have made over the last 10 or 20 years in eliminating gender discrimination; and there's nothing about this bill that would permit that to occur in the manner that their fears are stated to you, and to us as we listen to them. So, we believe that when you come to balance the right to privacy and the needs that Senator Pearce identified, [those] clearly outweigh the potential and, we believe, unlikely risks that the opponents of this legislation voice to you. Number 0689 REPRESENTATIVE ANDREW HALCRO referred to a letter included in the bill packet [from Robert Tanenbaum, Licensed Psychologist] which states that some women, based upon their religious beliefs, are forbidden from exercising in the presence of men. He asked Mr. Coffey whether the Anchorage Women's Club has experienced this as one of the reasons for having a women-only club. MR. COFFEY said he is not familiar with that. He deferred the question to the owner and operator of the Anchorage Women's Club. Number 0758 CHAIRMAN ROKEBERG asked what the rationale was for making a turn in the direction of the definition of "public accommodation." MR. COFFEY answered that the idea is that it falls under the right of privacy in the state constitution. He said: The question is: Do we permit women, particularly, and men, if they so choose, particularly, to exercise in the presence of only their own gender for all of the reasons that are listed and put forth in that memo, including the studies done by Robert Tanenbaum and so forth? And, on the other hand, we have a statute that says, unclearly at best, that you shall not discriminate in gender and sex in places of public accommodation. The statute then goes on to list places of public accommodation. It doesn't list health facilities, but it says "and others", or something along those lines. So, it's sort of a catch-all at the end. The question I think that is legitimately posed by Senator Pearce and her testimony is: Do we want to specifically exclude these places from public accommodations and clarify the statute? And in reaching that decision, then you have to ask yourselves, I think, the legitimate public policy questions: What is the benefit? And what is the downside of doing this? Some of the downsides have been argued; well, then, you'll find a proliferation of men's clubs, and we'll step back to the time when women were excluded from ... the business decisions and the social atmosphere that occurred at ... private men-only clubs. Well, those concerns, like I say, have been addressed in every other jurisdiction that's considered it and the facts, again, are in this memo, but they show there has not been a proliferation of men-only clubs. In fact, the fears that the people have talked about haven't occurred ... when you balance the two issues, the right to privacy versus the potential fears, I think what you find is that the privacy rights and the things that are intended on that far outweigh what I believe to be unfounded fears about some bad consequences, ... and that's what we've heard from the opponents of this: "Oh, there'll be bad consequences." In fact, the history shows, no, there haven't been bad consequences. Number 0949 JOHN SANKEY, Owner, Anchorage Women's Club, testified via teleconference from Anchorage. He stated that he has a Bachelor's of Science Degree in Nursing and a Master's Degree in Psychiatric Nursing. He commented: My background was in those areas that you refer to as recovery areas. I have developed smoking cessation programs and presented them to the city [of Anchorage] and to people up on the Slope and have worked with people in the areas of recovery from alcohol and drug abuse. I became involved in the weight-loss field about 11 years ago. Probably 95 percent of the clients coming to the weight loss clinic were women and it tells me that these women were in a recovery process. There was more to what was going on there than simply reducing their caloric intake. Over a period of time, I would meet with them on a one-to-one basis or in a group setting and I would (indisc.) encourage exercise as one of the steps in this recovery process to lose weight and, more importantly, to keep weight off. Almost all the women refused to go to any of the clubs in town at that time, because they were co-ed and they were just too, some would say, ashamed of their bodies and too just self-conscious of their appearance. As time went on, the building that I'm in, space became available, and I built a women's-only fitness club. Prior to building it, though, I did do some research, went back and found out that all the other states here in the country have women's-only clubs, that some were tested in court, and they had passed. And with that in mind, I thought: Well, this is fine. I built a fitness club for women only, and it's been in place about seven years right now. The women go in there, like it, they feel comfortable, and it does help them a great deal to lose their weight and, more importantly, keeping the weight off. That's where I am right now, and I think it certainly does no harm to anyone and does a lot of good for the female population here in the state. Number 1119 CHAIRMAN ROKEBERG asked Mr. Sankey how many members there are, how many employees he has, and how much space he rents. MR. SANKEY responded that there are approximately 1,500 women who are members. He has 45 full-time and part-time employees. The space he rents is about 30,000 square feet. Number 1235 REPRESENTATIVE HALCRO made a motion to move CSSB 176(RLS) out of committee with individual recommendations and the attached zero fiscal note. There being no objection, CSSB 176(RLS) moved out of the House Labor and Commerce Standing Committee. HB 224 - PERA: NOTICE BEFORE STRIKE CHAIRMAN ROKEBERG announced the next order of business would be HOUSE BILL NO. 224, "An Act requiring a public employee labor organization representing employees of a school district, regional educational attendance area, or a state boarding school to give notice before striking." Number 1304 RANDALL LORENZ, Staff to Representative Vic Kohring, Alaska State Legislature, came before the committee to present HB 224 on behalf of the sponsor. He started by illustrating a hypothetical story of a family's dilemma between the demands of work and demands of a child in school in relation to the TOTEM [Association of Educational Support Personnel] strike last year. House Bill 224, he said, is not only a child safety bill, but it guards businesses as well. The bill guarantees parents in Alaska at least 24 hours' notice before a school bargaining unit can allow its members to strike; in that way, it provides parents with ample time to prepare for the safety of their children and the demands of business. The unions, he said, will indicate that this will never happen again; but the sponsor says that if positive steps are not taken, it will happen again. He noted that Ms. Debbie Ossiander, a school board member, was online to testify, since the bill was introduced on behalf of the Anchorage School District. Number 1455 DEBORAH OSSIANDER, Member, Anchorage School Board, testified via teleconference from Anchorage. She urged the committee members to support HB 224. The school board believes that this is a child safety issue for all public school children, especially for the medically fragile and very young students. Children's safety is at risk if they are dropped off at school and there is an inadequate number of adults present to watch over them. Some students, she noted, require one-on-one adult supervision. In that regard, it's essential that parents, families and employers have adequate time to prepare for a strike that closes the schools. MS. OSSIANDER explained that she uses the word "close" because just about every school district in the state would have to close if "hit by a bargaining group strike" as a result of a shortage of labor. She assured the committee members that the closure of schools due to a strike is not like a snow-day closure. Parents are able to look out the window and suspect a closure in relation to inclement weather, but authorization to strike may occur months before the actual labor stoppage. She pointed out that for the majority of strikes, there is adequate notice given. Number 1640 REPRESENTATIVE HALCRO asked Ms. Ossiander, excluding the TOTEM strike, how many times there has been a strike without notification. MS. OSSIANDER replied that a strike without notification has only happened once; it was significant, however. She also noted that the Anchorage School District is having trouble with labor negotiations at the present time. Number 1661 REPRESENTATIVE BRICE asked Ms. Ossiander where besides Anchorage there has been a strike without notification. MS. OSSIANDER said she can't answer the question. She noted that the Association of Alaska School Boards [AASB] voted unanimously to support HB 224. She therefore assumes that this is a concern for every school district in the state. Number 1685 CHAIRMAN ROKEBERG asked Ms. Ossiander whether it is correct to say that it would be a problem to find substitute supervision for the special education students without due notice. MS. OSSIANDER replied, "You're exactly right." It's very problematic. There were significant problems with that population during the TOTEM strike. She noted that there is special training for dealing with students who require nursing care. She further stated that, if there isn't an adequate number of adults to maintain order and discipline, the result is chaos, which she believes is unacceptable to everyone. Number 1751 REPRESENTATIVE HALCRO asked Ms. Ossiander what the parents of special education students do for care when school is canceled because of snow. MS. OSSIANDER replied that when school is canceled because of snow it is a problem for every family, and even more of a problem for families with children who have high needs. Luckily, she said, employers around the state are very aware of the needs of working families and oftentimes they grant personal leave days for parents to adequately care for their children. Number 1855 REPRESENTATIVE JOHN HARRIS asked Ms. Ossiander whether there is any provision at all for a strike notification in the union contracts. MS. OSSIANDER replied, "No." The board, she noted, was taken aback when they encountered the problem last year, and to a certain extent the board is reacting to that problem. Number 1879 REPRESENTATIVE HARRIS asked Ms. Ossiander whether her concern is related to the fear of the unknown rather than to an actual strike. MS. OSSIANDER replied exactly. House Bill 224 is just a safeguard that the school board feels needs to be in place. It's not because they have any real expectation that any particular bargaining groups is going to [strike] in the near future. But the potential exists, and there is some precedence to give a reason for concern. Number 1902 REPRESENTATIVE HARRIS asked Ms. Ossiander whether she has talked to any of the leaders of the bargaining groups about dealing with the fear in the form of a contract rather than [in the form of a bill] that changes the statute. MS. OSSIANDER replied that the issue has been discussed informally. According to her experience, informal or cordial relationships deteriorate rapidly when emotions get high and labor negotiations get close to a strike situation. The school board, however, believes that this transcends a bargaining issue and is a basic safety issue. Number 1962 REPRESENTATIVE BRICE asked Ms. Ossiander why a strike notification is not negotiated in good faith since it is a basic safety issue. MS. OSSIANDER answered that the school district believes that they are negotiating their contracts in good faith. She said, "If I may make a slight aside comment: It would certainly help if statewide educational funding had ... matched inflation." REPRESENTATIVE BRICE agreed with her aside comment. He further noted that a strike is the last [action] in a long process. In that regard, he doesn't see how the sides can't see the possibility of a "walkout." Number 2035 JOHN CYR, President, National Education Association-Alaska [NEA- Alaska], came before the committee to testify. The public employees got the right to strike a number of years ago, he explained, under the Public Employees Relations Act [PERA]. It was nothing that NEA-Alaska wanted. It was a compromise in relation to binding arbitration. The bargaining process, he said, is very lengthy. In that regard, the issue is not like a sudden snow storm, as Ms. Ossiander indicated earlier. When TOTEM went on strike, the Anchorage School District tried to hire replacement workers in order to keep schools open. He understands that is their job, but when talking about the health and safety of children he would like to see a provision that doesn't allow a school district to hire less qualified replacement workers. That, he said, would keep the playing field level. He doesn't believe that HB 224 is about health and safety; he believes it is about tilting the playing field in the direction of the Anchorage School Board over one incident. CHAIRMAN ROKEBERG asked Mr. Cyr whether he said that a 24-hour notification is tilting the playing field. Isn't there a scintilla of public safety and concern involved? MR. CYR replied that certainly, there is some public safety and concern involved. He said: I think the Anchorage School District, the last time the weather was bad, closed school at ten thirty in the morning; I think that's a mistake. I think to hire replacement workers is a mistake. I think there are things that can be done and should be done to bring negotiations to a close before it ever gets to this level. That's where the concern should lie. CHAIRMAN ROKEBERG agreed with Mr. Cyr's final point. Nobody, he said, likes strikes. They usually upset life and commerce, even if they are in the public sector. Number 2194 REPRESENTATIVE HARRIS asked Mr. Cyr why a strike option was preferred over binding arbitration. MR. CYR replied, from the point of view of NEA-Alaska, that a strike option was not preferred over binding arbitration. He said: We had on our books and as part of our records for years we looked for finality in bargaining around binding arbitration. We wanted to be placed in the same class because we think it is a public interest as law enforcement and fire people and the right to binding arb[itration]. We believe we needed some finality in bargaining and that was the way it should go. The legislative process, though, dictated otherwise. We went through this process a number of years ago trying to get binding arbitration. Could not agree to it. In the last hour, we got the right to strike under PERA. We agreed to the right to strike under PERA with the idea and we said publicly at the time that we would never again, or at least we would try not to, introduce a bill asking for binding arbitration. You know, that we had cut a deal and we were done. We didn't like it, but it was a deal. So, we got finality but we didn't get the finality we wanted. And we're happy with the law that we have. We believe ... the law that we have now works. Number 2260 REPRESENTATIVE HARRIS asked Mr. Cyr whether he thinks school districts now would prefer to have binding arbitration. It would seem to do away with their concern in relation to strikes and notifications. MR. CYR said he could not testify on behalf of school districts. Number 2286 DON ETHERIDGE, Lobbyist, AFL-CIO [American Federation of Labor and Congress of Industrial Organizations], came before the committee to testify. The AFL-CIO is opposed to HB 224 on the grounds that the parties involved know when there would be a strike. That, he said, is when the school district could react. In that regard, the bill would give the school districts another 24 hours to find replacements and extend a strike. Number 2332 REPRESENTATIVE BRICE asked Mr. Etheridge whether the "scab" employees are trained to the same level of those they are replacing. MR. ETHERIDGE replied, "No." REPRESENTATIVE BRICE replied, in that case, there would be a greater danger to children by exposing them to those who don't have the training in relation to the regular employees. Number 2354 REPRESENTATIVE HALCRO asked Mr. Etheridge whether the ability to strike or the requirements that surround strike notification are usually handled in the collective bargaining process. MR. ETHERIDGE said yes. During the bargaining process, language calling for the requirements to strike can be negotiated. CHAIRMAN ROKEBERG asked Mr. Etheridge whether he is aware of any contracts that contain strike notification provisions. MR. ETHERIDGE replied, "No." CHAIRMAN ROKEBERG asked Mr. Etheridge whether it is the same for the federal government. MR. ETHERIDGE replied that he doesn't know about the federal government. He noted, however, that a lot of federal government employees are prohibited from striking. Number 2401 BARBARA HUFF TUCKNESS, Director, Governmental and Legislative Affairs, General Teamsters Local 959, State of Alaska, came before the committee to testify in opposition to HB 224. She said: We're speaking against notice because we unfortunately - the Teamsters - represent the bus drivers for the Anchorage School District. We also have the maintenance workers and we also have the food services workers under the district contract. All three different contracts; all negotiated at separate times. At the time that the TOTEM association gave notice to go out on strike, we were also in a similar situation at the table. ... I don't know how many committee members have actually sat in an actual negotiating session, but John Cyr had mentioned earlier the balance or leveling the playing field out there. And collective bargaining, the negotiating process is a very, very delicate balance that unless you've actually sat across the table and negotiated and experienced that give-and- take, it doesn't take much from other side to really offset that very, very delicate balance of negotiations, especially from a union perspective, with the cards per se that really truly are more on the management side than they are on the union side. About the only thing that we do have as we're going through the collective bargaining process and ultimately end up after ... going through mediation and then through interest arbitration and then the finality of the management introducing their last best and final offer and giving us the right to strike. It is an impasse situation that actually is required a condition of both side. It's not one side or the other that declares while we're going out on strike or we're going to implement our last best offer. It actually is a very thought-out process that is also under government control because before we can even go out on strike we have to go through the state board. The state board conducts this particular election which is all public information and also requires that or allows for representatives from the management, in this particular case, the Anchorage School District, to also sit and ... [ends midspeech because of tape change]. TAPE 00-26, SIDE B Number 0001 MS. HUFF TUCKNESS continued: When TOTEM went out, unfortunately, the Teamsters who represented the Anchorage school bus drivers also found ourselves in a similar situation. We, for the record, gave five days notice, and that was public notice. We are not crazy. We are not going to leave these kids in the middle of winter sitting at the bus stops without proper notice to the pubic. I mean, we also live and work in these communities. We have to deal with the parents with the children of which most of us also have children that attend these various schools around the state as well. And, I guess, in closing my statements, it is a very delicate process. It requires, I think, some political astuteness on the part of not only the management but the union negotiators from both sides and hopefully as we're going through this very delicate process there is that astuteness on both sides to assure that the public is given proper notice. I myself have given my son, at five-thirty in the morning, notice on a no-school day. Yes, I guess you could argue that all of the signs were out there hours before, but I can also sit here and argue that months before. I would predict that if things don't get better at the table with Anchorage School District and the teachers, and I'm not involved in those negotiations, that I would anticipate probably a strike coming down the road. But, I mean, this is all because of what I'm reading in the newspapers. I think that the way the rules are set forward right now do somewhat level that playing field, and we have been willing to work and play within those set rules. And I would request the committee [to] not support this bill. CHAIRMAN ROKEBERG asked Ms. Huff Tuckness whether he heard her say that Local 959 gave five days' notice in relation to the bus drivers' strike. MS. HUFF-TUCKNESS replied, "Yes." CHAIRMAN ROKEBERG asked Ms. Huff Tuckness whether there are provisions in Local 959's contracts to provide for strike notification. MS. HUFF TUCKNESS replied, "No." CHAIRMAN ROKEBERG stated, then, that Local 959 provided notification out of courtesy and public safety. MS. HUFF TUCKNESS replied, "That's correct." She explained that Local 959 provided paid advertisements in the newspapers for five days before they went on strike. Number 0098 REPRESENTATIVE HALCRO asked Ms. Huff Tuckness to indicate how public sentiment relates to a strike. He imagines that the public would get angry in regard to a lack of notification to the point that it wouldn't happen again. MS. HUFF TUCKNESS replied that she anticipates that this particular situation would probably never occur again. There was backlash, she noted, from the public and from the rank-and-file members of the union. Number 0163 CARL ROSE, Executive Director, Association of Alaska School Boards [AASB], came before the committee to testify. Historically, it was the desire of AASB to remain in the meet- and-confer status under Title 14. The issue, he noted, of binding arbitration was a desire at the time of NEA-Alaska. The compromise was made to allow for the right to strike that neither AASB or NEA-Alaska wanted. But they have lived with it ever since, and it has worked for the most part. In 1995, he explained, AASB passed a strike notification resolution calling for 72-hours of advance notice. They were told by members of the legislature that there was no need for such a bill, and last year TOTEM went on strike. MR. ROSE further stated that he is looking at HB 224 in relation to the issue of public confidence. An unannounced strike, he said, weakens the public's confidence; it creates security and child safety problems. As previous testimony has indicated, all parties involved understand when a strike is imminent. But a strike being imminent and knowing when people are going to strike, he said, are very different. MR. ROSE said HB 224 does not tip the balance of power, for a strike or job action is a serious matter. It's an economic and political tool that is used and in most cases the message is very clear. But he doesn't think that it's the intent of the state in its policy to strike communities and students. He thinks that the difference lies between the governing boards and organizations. In that regard, HB 224 is trying to get some accommodation for proper notification to communities in order to alleviate any security problems and most importantly to accommodate the children in relation to any safety concerns. The AASB, therefore, supports HB 224 and urges the committee members to pass it out of the committee. Number 0291 REPRESENTATIVE BRICE asked Mr. Rose how many strikes have taken place in the last ten years across the state, and where. MR. ROSE replied that he can think of two strikes in Anchorage and one strike in Ketchikan. REPRESENTATIVE BRICE asked Mr. Rose, outside of the TOTEM strike, how many strikes have taken place without any notification. MR. ROSE replied that to the best of his knowledge, the only strike without notification was the TOTEM strike. Number 0327 REPRESENTATIVE BRICE asked Mr. Rose to define what he means by an unannounced strike. He noted that before there is a strike, there is mandatory arbitration, a strike vote as well as other steps. In that regard, he sees an unannounced strike along the lines of "wildcatting." MR. ROSE clarified that he was not alluding to wildcatting. When negotiating, the parties involved know when a strike is imminent. The question is: Will the strike happen on Monday or Tuesday or Wednesday? In that regard, the AASB is looking for a 24-hour advance notice in order to make the proper accommodations. REPRESENTATIVE BRICE asked whether, in the cases when the parties involved know that a strike is imminent, isn't it prudent to have contingency plans? MR. ROSE replied that he believes there are contingency plans, but they don't know when to implement them if they don't know when a strike is going to occur. REPRESENTATIVE BRICE said a plan is implemented when a strike occurs. MR. ROSE replied: I guess my response remains the same. You have plans to implement, but you don't really know when that strike is going to happen. But ... you can't make accommodations for the community or kids. I mean, for schools and issues of security, I think, you can try to do that, but with regard to our communities and students, there is no way of knowing until you actually find out that there is a strike. REPRESENTATIVE BRICE said that is why there should be alternative plans. CHAIRMAN ROKEBERG announced that HB 224 would be held in the committee to allow for further public testimony. HB 247 - NONPROFIT CORPORATIONS CHAIRMAN ROKEBERG announced the next order of business would be HOUSE BILL NO. 247, "An Act revising the nonprofit corporations code and the religious corporations code; relating to disclosures and reports by certain nonprofit corporations; amending Rules 3, 4, 8, 17, 19, 23.1, 24, 25, 65, 79, and 82, Alaska Rules of Civil Procedure, Rule 803, Alaska Rules of Evidence, and Rules 602 and 609, Alaska Rules of Appellate Procedure; and providing for an effective date." There was a proposed committee substitute (CS). Number 0437 PATRICK HARMAN, Staff to Representative Pete Kott, Alaska State Legislature, came before the committee to present HB 247 on behalf of the sponsor. He noted that the bill has dramatically changed from its original version and that the nonprofit [corporations] have not had a chance to look at the latest version. House Bill 247, he said, is basically a disclosure bill. It asks that domestic and foreign nonprofit [corporations] file a Form 990, a form that they already produce and provide to the Internal Revenue Service [IRS], with the state. Nonprofit [corporations], he said, are exempt from paying certain taxes because they provide a service for the good of the public; in that regard, the bill asks that they prove their service on a regular basis. Number 0531 REPRESENTATIVE HALCRO made a motion to adopt the proposed CS for HB 247, Version I [1-LS0676\I, Bannister, 3/3/00], as a work draft. There being no objection, Version I was before the committee. Number 0547 MR. HARMAN pointed out that the essence of HB 247 is Section 4, which starts on page 2, line 31. He read the following language [Version I, page 3, lines 1-4]: (a) A foreign corporation transacting business in the state and a domestic corporation shall file with the department on or before July 1 of each year a copy of the most recent Form 990 filed by the foreign or domestic corporation with the federal government. MR. HARMAN noted that Form 990 is a public document, but it is very difficult to get from the IRS. Version I asks that the corporation pay the Department of Community & Economic Development a fee in order to keep it revenue-neutral [subsection (c), page 3, lines 10-11]. There are approximately 5,000 nonprofit [corporations] in the state; and, in that regard, the bill would increase the department's costs. He noted, however, that there isn't a fiscal note for the proposed committee substitute yet from the Administration. Number 0672 REPRESENTATIVE HALCRO asked Mr. Harman whether the federal government decides if a corporation is nonprofit. MR. HARMAN replied, "Yes." REPRESENTATIVE HALCRO asked Mr. Harman why the state has an interest in making sure that nonprofit corporations really should qualify for a tax-exempt status if the IRS already verifies the qualifying nonprofit [corporations]. Number 0695 MR. HARMAN replied that there are nonprofit organizations coming to the state which are trying to affect public policy on both the right and left of the political spectrum. He asked: Who are these people? Where are they getting their money? In that regard, it's hard to track them down and get their annual reports. CHAIRMAN ROKEBERG remarked that HB 247 is the APOC [Alaska Public Offices Commission] bill for nonprofit [corporations]. MR. HARMAN answered that it could be considered as such. He noted that most of the nonprofit [corporations] are nonpolitical. Number 0744 REPRESENTATIVE HALCRO asked: If a nonprofit [corporation] is taking a position in an election to influence the outcome of a race or ballot proposition, doesn't it fall under APOC anyway? MR. HARMAN said that is true but there are other public policy issues that don't have to do with an election. Number 0767 REPRESENTATIVE BRICE stated that nonprofit [corporations] are broken down as (c)(2), (c)(3), (c)(4), and so forth. Traditional nonprofit [corporations] such as the human services are designated as (c)(3), while labor unions are designated as (c)(6). He can see the benefit of getting that information for some, but for others it would be a little overburdensome. He asked Mr. Harman what the Form 990 shows. MR. HARMAN distributed to committee members a copy of Form 990 from the IRS. REPRESENTATIVE BRICE asked Mr. Harman what types of fees would be associated with this requirement for a nonprofit [corporation]. MR. HARMAN replied, if there were 5,000 filings and if $20 was collected for a filing fee, it ought to be close to revenue- neutral. He deferred the question to a representative of the Department of Community & Economic Development. Number 0889 FRED JENKINS, Session Executive Director, United Way of Anchorage, testified via teleconference from Anchorage. He had received notice of HB 247 last Friday, and he had not had a chance to really look at it. He hopes, therefore, that the committee can answer a few questions. He asked: What is hoped to be accomplished by the bill? Is what is being accomplished for the benefit of the public or for the benefit of the department? MR. HARMAN replied that HB 247 is based on a political philosophy of free and open disclosure. CHAIRMAN ROKEBERG asked Mr. Harman what the sponsor hopes to accomplish from the bill. MR. HARMAN replied that nonprofit corporations are essentially tax exempt - a privileged position. House Bill 247 would require nonprofit [corporations] to validate their status by filing annual reports stating where they get their funding and how they spend it. Furthermore, they already submit a Form 990 annually with the IRS; in that regard, the sponsor wants to make the disclosure open but not onerous. CHAIRMAN ROKEBERG stated that the sponsor is targeting the nonprofit [corporations] which engage in the political activity in the state that do not have to disclose where their sources of funds come from - the rationale behind HB 247. Number 1007 MR. JENKINS asked whether the rationale is to have nonprofit corporations which don't currently do so disclose their sources of funds. CHAIRMAN ROKEBERG affirmed that. He asked Mr. Jenkins whether the sources of funds are disclosed to the IRS. MR. JENKINS replied, "Yes." He asked whether HB 247 is for the benefit of the public or the department. CHAIRMAN ROKEBERG replied that he would say it is for the benefit of the public, not the department. Number 1034 MR. JENKINS asked why the definition of "transacting business" in Version I is being expanded [page 3, lines 18-19]. MR. HARMAN answered that the bill drafter expressed that the definition of "transacting business" was too broad and too hard to interpret. The language, therefore, was included to pin it down. MR. JENKINS said, "So, the intent is that if you're expending money in the state, you're transacting business?" MR. HARMAN answered, "That's correct." Number 1090 MR. JENKINS asked how nonprofit [corporations] know that they are to file a certificate of authority with the state. Does an organization that solicits in a newspaper or magazine and receives donations have to file a certificate of authority with the state? MR. HARMAN answered that it is not the intent of the sponsor to require nonprofit corporations to have a certificate of authority if they aren't already required to have one. He further said, "Transactions of business would be expending monies in the state. I think solicitations wasn't the intent. That, if you're buying media time, if you're renting office space, [if] you're procuring, distributing printed material in the state but not necessarily mailing it to the state or newspaper ad (indisc.), a national advertisement." MR. JENKINS said, "So, if you place an advertisement in the state in a periodical or any kind of publication then you're transacting business in the state and spending dollars in the state." MR. HARMAN replied that it depends on whether it's a national publication. MR. JENKINS said, "So, national, no. But state or local, yes." MR. HARMAN replied, if a merchant or business received the money in the state. CHAIRMAN ROKEBERG asked Mr. Jenkins whether he had any testimony to provide. MR. JENKINS replied, no, not at this point; he hadn't had enough time to really look at the bill. However, he appreciates Mr. Harman's answering his questions. Number 1238 REPRESENTATIVE BRICE asked Mr. Jenkins whether there are specific federal designations that the United Way of Anchorage will not support as a 501(c)(3) organization. MR. JENKINS replied that the United Way of Anchorage supports activities which are within their bylaws and articles of incorporation in relation to health and human services in the community. They do not contribute to political candidates, for example. REPRESENTATIVE BRICE asked Mr. Jenkins whether the United Way of Anchorage stays with the 501(c)(3) types of designations. MR. JENKINS replied, "Yes." REPRESENTATIVE HALCRO asked Mr. Jenkins whether the United Way of Anchorage completes a Form 990 every year. MR. JENKINS affirmed that. REPRESENTATIVE HALCRO asked Mr. Jenkins whether a person could request to see the form from the IRS. MR. JENKINS replied, "Yes." A person could come to the office and request to see the form as well. Number 1326 RICHARD BLOCK, Christian Science Committee on Publication, testified via teleconference from Anchorage. He noted that he is the person requested by Christian Science churches in the state to overlook legislation that may affect the practice of their religion. He noted that under Section 6033 of the IRS churches - among other organizations - are specifically and mandatorily exempted from filing a Form 990. MR. BLOCK said the bill, however, requires a nonprofit corporation to file a statement of information with the state. The Christian Science Committee would find that to be objectionable because of the burden of filing a form and disclosing the internal workings of a church. It also mixes church and state activities, which he supposes is why at the federal level the IRS has mandated that churches be exempt from the filing requirement. He pointed out that the legislature is considering HB 387, which requires that there shall be no legislation or act by a state, municipal or school district entity unless there is a showing of a compelling state interest that it interferes with the practice of religion. If there is a compelling state interest, the least restrictive means has to be used. In the case of churches, he doesn't see a compelling state interest so far in relation to HB 247 other than a general curiosity of who is contributing money to the organization. If there was a compelling state interest, he's sure that there are lesser restrictive means in which to accomplish whatever may be the compelling state interest. In that regard, he urged the committee members to remove subsection (b) [page 3, lines 5-9, of Version I] so that churches are not required to make the filings. CHAIRMAN ROKEBERG stated, to Mr. Block, he's sure that it's not the sponsor's intent to "throw his net so wide that it catches his organization." He asserted that a committee substitute with an exemption section or provisions to that effort would be made. CHAIRMAN ROKEBERG announced that HB 247 would be held in the committee for further consideration. HB 370 - EXEMPTION FROM MINIMUM WAGE FOR TEENAGERS CHAIRMAN ROKEBERG announced the next order of business would be HOUSE BILL NO. 370, "An Act relating to a short-term exemption from the minimum wage for newly hired young employees." CHAIRMAN ROKEBERG called for a brief at-ease, then called the meeting back to order. CHAIRMAN ROKEBERG, speaking as the sponsor of HB 370, stated that the intent of the bill is to permit an employer to pay an employee a training wage. There are two theories, he said, in relation to minimum wage. One camp believes that higher minimum wages reward workers; while another camp believes that minimum wages are artificial and uneconomical so that it hurts the job market by becoming a barrier of entry for youngsters who don't have any training or experience. The sponsor of the bill falls into the latter camp. A large number of states have provisions that allow for a training wage for persons under the age of 20. Alaska, however, does not have that statutory foundation, which is why he brought the bill forward. He noted that such a provision would provide for consistency with the federal Wage and Hour Act. Number 1864 JOHN BROWN, President, Fairbanks Central Labor Council, testified via teleconference from Fairbanks. He said a minimum wage law was established because it's the right thing to do. A civil society needs to protect workers from exploitation for profit. House Bill 370 would allow employers to pay less than what has been established as the minimum wage. He pointed out that the vast majority of training involves minutes or hours at the most. In that regard, he can't see a justification for allowing an employer to pay less than minimum wage for persons under the age of 20 for jobs that don't have many training requirements. Number 1980 CHAIRMAN ROKEBERG asked, "Well, Mr. Brown, don't you think it's the American way to make a profit?" MR. BROWN replied: I ... do, but in a civil society I think there ... should be a minimum that employers should be allowed to extract a profit from somebody from. You know, I know there should be. I mean, the minimum wage levels already, if you're raising a family, [are] well below the poverty level in this country. And I don't understand why anybody would think that that's an okay thing to do, to ... have somebody working at that kind of a wage. Number 2027 CHAIRMAN ROKEBERG asked Mr. Brown whether he believes that profit is good but shouldn't be made on exploiting people's labor. MR. BROWN said he believes that there should be a minimum to what somebody should be working for. He said: If ... we didn't have minimum wage laws, I mean, you see it in California here in our own country people working in bondage still. We need some language on the books that say, you know, enough is enough. You can't have slave labor. You can't have forced labor. You can't pay less than this. It puts everybody on an equal footing. They're competing based on how well they run their business, not on how little they can pay their people. Number 2097 CHAIRMAN ROKEBERG said he's sure that there is language on the books. MR. BROWN said there is language on the books, but HB 370 talks about lowering the standard when it's already low enough. CHAIRMAN ROKEBERG asked Mr. Brown whether he thinks that every wage paid should put a "chicken in every pot" and a "car in every garage." This is not, he said, a living wage bill; this is a minimum wage bill. MR. BROWN replied that HB 370 talks about lowering the minimum wage, and he can't agree with that. He believes that if a person comes to work every day and works hard that person should be able to make a descent living. Number 2178 DWIGHT PERKINS, Deputy Commissioner, Office of the Commissioner, Department of Labor & Workforce Development, came before the committee to testify. He noted that AS 23.10.070 allows for an exemption from minimum wage for a training wage upon the approval of the commissioner. The department appreciates the working relationship with the chairman of the House Labor and Commerce Committee and the committee, but today the department would like to respectfully agree to disagree in relation to HB 370. The main reason is because there are provisions already in statute dealing with the issue of a training wage. He referred to the following sections: AS 23.10.055(11) - "Exemptions." AS 23.10.340 - "Children under 16." AS 23.10.350 - "Employment of person under 18." MR. PERKINS said under state statute, a person under the age of 18 but not under the age of 16 can work six days a week and five hours a day, and [an employer] is not required to pay minimum wage. CHAIRMAN ROKEBERG called for a brief at-ease in order to change the cassette tape, then called the meeting back to order. TAPE 00-27, SIDE A Number 0001 CHAIRMAN ROKEBERG asked whether AS 23.10.055(11), 23.10.340 and 23.10.350 are programs that have to be approved by the commissioner or whether they are programs that are self- actualizing. MR. PERKINS replied that the sections stand alone and are in addition to AS 23.10.070, "Exemptions from minimum wage." No, the sections do not have to be approved by the commissioner. CHAIRMAN ROKEBERG asked whether the exemptions are limited to persons under the age of 18 and 30 hours a week under the other program. MR. PERKINS replied that's correct. CHAIRMAN ROKEBERG pointed out that HB 370 raises the level to the federal standard of persons under the age of 19 [20] during the first 90 consecutive calendar days the employee is initially employed. MR. PERKINS stated the commissioner is concerned about a person working for the same employer who has three different businesses in which that person could theoretically work for each business for 90 days and fall within the purview of HB 370. There are also a lot of senior [citizens] who rely on this type of income to supplement their retirement. The department therefore sees this as a potential means to "put them out of work." Number 0126 CHAIRMAN ROKEBERG asked Mr. Perkins whether he is going to galvanize the AARP to try to stifle the bill. MR. PERKINS indicated that he would not. The commissioner feels that a person 19 years of age is more than likely out of high school and has entered the workforce. In that regard, the department thinks that that person ought to be paid at the very least the Alaska minimum wage. CHAIRMAN ROKEBERG indicated that it's harder to make that assumption anymore. Number 0213 CHAIRMAN ROKEBERG asked Mr. Perkins whether any program, that requires the commissioner's approval, has been applied for and approved. MR. PERKINS replied, to his knowledge, the exemption was applied to confectioners and bakers in the "old days." In recent history, to his knowledge, the department has not been involved with any apprenticeship type of program. CHAIRMAN ROKEBERG referred to AS 23.10.055(11) and noted that the exemption is for a person "under" 18 years of age. It's not for a person 18 years of age. Number 0291 MR. PERKINS replied it breaks down into categories. Provisions for 16-year-olds contain requirements in relation to school hours, while provisions for individuals under the age of 18 contain other requirements. [He did not specify the other requirements.] CHAIRMAN ROKEBERG stated that the commissioner and the legislature have decided that 18-year-olds are worthy of a training wage. MR. PERKINS stated that when he was 18 years old, he was in the workforce making a living. He can imagine that Chairman Rokeberg was also in the workforce. CHAIRMAN ROKEBERG replied that in many instances an 18-year-old would be pleased to have a job. That, he said, is the thrust behind HB 370. He's not trying to lower compensation for a person to "get by on the cheap." He's trying to allow those who have never had a job before to break into the workforce in order to develop some experience. He further noted that HB 370 is important because there are distinctions between the exemption and what the bill says. In that regard, he wants to know why the department does not meet the federal Wage and Hour Act. He understands that the reason is partially legislative. He further pointed out that HB 370 contains a sideboard of 90 days and allows for 85 percent of the Alaska minimum wage. He said, "You could have a youngster working from 15, 16 or 17 years of age for about some two to three years, potentially for 30 hours a week, at the coolie wages that aren't even 85 percent that's in my bill, as a matter of fact." Number 0491 MR. PERKINS said he's sure that the department would be interested in working with the sponsor to strengthen the minimum wage. Number 0518 CHAIRMAN ROKEBERG stated that if a person under the age of 18 works less than 30 hours a week, there is nothing in law to prevent an employer from paying less than minimum wage. That person could be paid $1 per hour. He asked whether that is correct. MR. PERKINS replied that is correct. CHAIRMAN ROKEBERG asked Mr. Perkins whether there is any time limit in law relating to how long a wage can be paid as long as a person is under the age of 18 and works less than 30 hours a week. Number 0575 MR. PERKINS replied, "No." The law reads, "(11) an individual under 18 years of age employed on a part-time basis not more than 30 hours in a week" [AS 23.10.055, "Exemptions"]. CHAIRMAN ROKEBERG asked Mr. Perkins how old a person has to be in order to get hired. MR. PERKINS replied that the minimum age is 16. The law reads: (a) A minor under 16 years of age may not be employed for more than a combined total of nine hours school attendance and employment in one day. If employed, the minor's work may be performed only between 5 a.m. and 9 p.m. Employment outside school hours may not exceed 23 hours in one week, domestic work and baby-sitting excepted" [AS 23.10.340]. CHAIRMAN ROKEBERG asked how old a person has to be in order to work 22 hours in a week. MR. PERKINS replied 14 years is the minimum age at which a person can be hired to work. Number 0675 CHAIRMAN ROKEBERG noted that, under the law, an employer can work a person for 22 hours a week at 14 years of age, and all year long pay 50 cents an hour. A 16-year-old and a 17-year-old can work up to 30 hours a week. MR. PERKINS indicated that is correct. CHAIRMAN ROKEBERG said he's sure that Mr. Brown would be very concerned about the exploitation of this potential situation. Number 0675 CHAIRMAN ROKEBERG referred to the exemption for persons under the age of 18. He asked Mr. Perkins whether the department thinks most 18-year-olds are out of high school, or substantially out of high school. MR. PERKINS replied, "Yes." CHAIRMAN ROKEBERG asked Mr. Perkins whether there is any legislative history in relation to the exemption for persons under the age of 18. MR. PERKINS said he couldn't answer off the top of his head. Number 0698 CHAIRMAN ROKEBERG explained that he had asked the question because the federal government refers to persons under the age of 20. REPRESENTATIVE SHARON CISSNA said, "Well, I don't care. It's wrong." Number 0720 REPRESENTATIVE HALCRO said, "Since Alaska has the lowest minimum wage of any West Coast state, even if we adopted this and paid people 85 percent of minimum wage, we're still going ... to be paying them less. They're already getting paid less." CHAIRMAN ROKEBERG pointed out that other states have another step in relation to minimum wage. Number 0781 REPRESENTATIVE HALCRO said he wasn't sure he understood the intent of HB 370. He asked Mr. Perkins how many people are working for minimum wage. MR. PERKINS replied that he can't answer the question. He doesn't have the numbers with him. CHAIRMAN ROKEBERG indicated there are many minimum wage workers in the state. He asserted that, under existing law, a person could be abused worse than what's under HB 370. He is, therefore, willing to fix his bill in order to allow for the 90- day provision to apply only once. REPRESENTATIVE CISSNA asked Chairman Rokeberg whether he means for the 90-day provision to apply towards a person's first time in the workforce. Number 0863 CHAIRMAN ROKEBERG replied, "Right." That, he said, is the whole idea of a training wage and the issue of HB 370. Under federal law, the 90-day provision could be used recurrently, and the same is true under state statute. Number 0888 RICH MASTRIANO, Investigator, Wage & Hour, Division of Labor Standards & Safety, Department of Labor & Workforce Development, testified via teleconference from Anchorage. He pointed out that according to statute, persons under the age of 18 cannot be paid less than the federal minimum wage of $5.15. He also pointed out that the use of a subminimum wage for persons under the age of 20 was added in 1996 when some provisions of the Fair Labor Standards Act were changed. Number 0985 REPRESENTATIVE HALCRO noted that the fast-food industry traditionally pays minimum wage and provides positions that do not require a lot of skills. In that regard, he's not sure why the sponsor of the bill would want to give an employer the provision to pay an employee subminimum wages for 90 days. To learn how to work the fryer does not take 90 days. It usually takes a few days. CHAIRMAN ROKEBERG replied that the 90-day provision came from the federal law. He reiterated that his first intention was to amend HB 370 to include a "don't kick me out more than 90 days once" provision, then "cool" it. But, in light of the discussion today, he wants to work with the department to provide some sideboards, and he wants to look at a minimum payment of 85 percent of the federal minimum wage. He fully anticipates that the state minimum wage will go up substantially via a federal enactment. Number 1138 REPRESENTATIVE BRICE pointed out that the House Labor and Commerce Committee has a piece of legislation within its grasp that would boost the state minimum wage. He would be more than happy to move it along. CHAIRMAN ROKEBERG announced that HB 370 would be held in the committee for further consideration. ADJOURNMENT Number 1180 There being no further business before the committee, the House Labor and Commerce Standing Committee was adjourned at 5:22 p.m.