SENATE JUDICIARY COMMITTEE April 2, 1993 2:00 p.m. MEMBERS PRESENT Senator Robin Taylor, Chairman Senator Rick Halford, Vice-Chairman Senator George Jacko Senator Dave Donley Senator Suzanne Little COMMITTEE CALENDAR SENATE BILL NO. 158 "An Act relating to exemption amounts." CS FOR SENATE BILL NO. 99(L&C) "An Act relating to the powers, duties, financial administration, and operations of certain state agencies, including the duration and renewal of licenses issued by the Alcoholic Beverage Control Board, duties of and fees charged by the office of public advocacy, student loan fees, compensation of hunting and fishing license vendors, Department of Labor fees and licensing periods, police standards fees, motor vehicle registration and insurance and the definition of `vehicle', program receipts accounting, risk management administration, receipt of donations and charging of fees by the Department of Natural Resources, coverage of persons under Medicaid, and revising the order of priority for coverage of optional medical services under Medicaid; amending Alaska Rule of Probate Procedure 16(d); and providing for an effective date." SENATE BILL NO. 155 "An Act relating to landlords and tenants, to termination of tenancies and recovery of rental premises, to tenant responsibilities, to the civil remedies of forcible entry and detainer and nuisance abatement, and to the duties of peace officers to notify landlords of arrests involving certain illegal activity on rental premises." CS FOR SENATE BILL NO. 168(STA) "An Act relating to newspapers of general circulation." SCHEDULED BUT NOT HEARD THIS DAY. PREVIOUS SENATE COMMITTEE ACTION SB 158 - See State Affairs minutes dated 3/24/93. SB 99 - See Labor & Commerce minutes dated 2/16/93, 2/23/93, and 3/2/93. SB 155 - See State Affairs minutes dated 3/24/93. SB 168 - See State Affairs minutes dated 3/22/93 and 3/24/93. WITNESS REGISTER Joe Ambrose, Aide Senator Robin Taylor State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Testified on SB 158. Steve Phillips Alaska Collectors Association Ketchikan Credit Bureau Inc. 320 Bawden #312 Ketchikan, Alaska 99901 POSITION STATEMENT: Supported SB 158. David Teal, Director Division of Administrative Services Department of Labor P.O. Box 21149 Juneau, Alaska 99802-1149 POSITION STATEMENT: Supported SB 158. Kenny Leaf, Committee Aide Senator Robin Taylor State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Testified on SB 99. Juanita Hensley, Chief Driver Services Division of Motor Vehicles Department of Public Safety P.O. Box 20020 Juneau, Alaska 99802-0020 POSITION STATEMENT: Supported SB 99. Brent McGee, Director Office of Public Advocacy Department of Administration 900 W. 5th, Suite 200 Anchorage, Alaska 99501-2090 POSITION STATEMENT: Supported SB 99. Geron Bruce, Special Assistant II Department of Fish and Game P.O. Box 25526 Juneau, Alaska 99802-5526 POSITION STATEMENT: Supported SB 99. Donald Study, Director Division of Labor Standards & Safety Department of Labor P.O. Box 20630 Juneau, Alaska 99802-0630 POSITION STATEMENT: Supported SB 99. Arbe Williams, Special Assistant Department of Labor P.O. Box 21149 Juneau, Alaska 99802-1149 POSITION STATEMENT: Supported SB 99. Cheryl Frasca, Division Director Division of Budget Review Office of Management & Budget Office of the Governor P.O. Box 110020 Juneau, Alaska 99811-0020 POSITION STATEMENT: Supported SB 99. Raga Elim, Special Assistant Department of Natural Resources 400 Willoughby Ave. Juneau, Alaska 99801-1724 POSITION STATEMENT: Supported SB 99. David Skidmore, Aide Senator Steve Frank State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Testified on SB 155. Glenn Flothe State Troopers Department of Public Safety 5700 E. Tudor Road Anchorage, Alaska 99501 POSITION STATEMENT: Offered testimony on SB 155. Alice Brewer 1201 W. 4th Avenue Anchorage, Alaska 99503 POSITION STATEMENT: Supported SB 155 Mark Butterfield Alaska Legal Services 1016 W. 6th Avenue #200 Anchorage, Alaska 99502 POSITION STATEMENT: Opposed SB 155. Myrna Sheets 1028 Evergreen Street Fairbanks, Alaska 99709 POSITION STATEMENT: Supported SB 155. Jerome Byrd 2224 Eastland Fairbanks, Alaska 99707 POSITION STATEMENT: Supported SB 155. Merlyn Alden Box 81118 Fairbanks, Alaska 99708 POSITION STATEMENT: Supported SB 155. Sam Helms 1524 Stacia Street Fairbanks, Alaska 99701 POSITION STATEMENT: Supported SB 155. Doug Isacson Box 72739 Fairbanks, Alaska 99707 POSITION STATEMENT: Supported SB 155. Charles Lippitt 2203 McKinley Avenue Anchorage, Alaska 99517 POSITION STATEMENT: Supported SB 155. Dixie Dixon 2600 Cordova #100 Anchorage, Alaska 99503 POSITION STATEMENT: Supported SB 155. Rae Barger NHP Property Management 1019 E. 20th Avenue Anchorage, Alaska 99501 POSITION STATEMENT: Supported SB 155. John Todd 13320 Crestview Drive Anchorage, Alaska 99516 POSITION STATEMENT: Supported SB 155 Hans Metz 5305 E. 42nd Avenue Anchorage, Alaska 99508 POSITION STATEMENT: Supported SB 155. Richard Illgen 7061 Lowell Circle Anchorage, Alaska 99502 POSITION STATEMENT: Opposed SB 155. Jan Evensen 838 Irwin Street #6 Anchorage, Alaska 99508 POSITION STATEMENT: Supported SB 155. ACTION NARRATIVE TAPE 93-38, SIDE A Number 001 Chairman Robin Taylor called the Judiciary Committee meeting to order at 2:00 p.m. (There was a request for verbatim reporting for SB 158, and I have done a modified approach.) SENATOR TAYLOR presented SB 158 (REDUCING EXEMPTION AMOUNTS) introduced by the Senate Judiciary Committee and asked his Aide, JOE AMBROSE, to review the bill. MR. AMBROSE - "Senate Bill 158 revises Title 38, the Alaska Exemption Act, the statute establishes the dollar amounts of homestead, personal property, wages, and liquid assets that are exempt from attachment, garnishment, execution, and foreclosure by creditors. SB 158 lowers the exemptions in current law and will enhance the ability of our business community to collect outstanding debt. Last October, the exemption amounts increased significantly as the Department of Labor recalculated the allowances, using a complicated formula provided in AS 09.38.115. You have in your packets a draft committee substitute which would repeal this section as recommended by the Department of Labor. This is a brief overview of SB 158. STEVE PHILLIPS, representing the Alaska Collectors Association is here this afternoon to give you a more detailed explanation of the legislation." SENATOR LITTLE - "Thank you, Mr. Chairman. What section was it that was being repealed in the substitute." MR. AMBROSE - "The only change in the committee substitute is on page 3, line 9, which repeals AS 09.38.115(b)." SENATOR TAYLOR next called on STEVE PHILLIPS. MR. PHILLIPS from the Alaska Collectors Association - "Basically, what we are trying to accomplish here is fairness to the business community, to the people of Alaska. It has become obvious that when you are two and a half times the minimum of any other state in the union higher, there is a problem here. You have to make, basically, almost $2000 a month at this point in time, to have your wages garnished. Small claims is normally the last avenue that is available to you. You try to work with people to take care of the debt prior to going that far. The way the state law is set up at this point in time, we're not able to recoup most of our attorney fees, legal costs, court costs, etc. so when we go to court, its strictly a last ditch effort to collect the dollars and cents we are trying to collect. You're still going to be at a point where you are going to have to be making almost $1400 per month to have your wages garnished, so it's still a pretty substantial amount." Number 104 SENATOR LITTLE - "Does this bill specify how many members are in the family? $2000 a month might be a lot for a single individual, but if you are caring for a family of four people, that's barely scraping by. Is there anything that would address that eventuality." MR. PHILLIPS - "Well, it is not actually on the number of those within the family, but .... if there is a sole income for a household, the exemption is much higher." SENATOR LITTLE - "Is that specified here in the bill?" MR. PHILLIPS - "Yes, it is. It is in existing statute and that will not be changed." SENATOR LITTLE - "Do you happen to know the number of the existing statute?" SENATOR JACKO - "Do you know what the average income is in the State of Alaska?" MR. PHILLIPS - "Thirty two thousand six something." SENATOR JACKO - "What is that per month?" MR. PHILLIPS - "In the neighborhood of $2,700 per month." SENATOR JACKO - "Is the primary focus on low income people?" MR. PHILLIPS - "It could. The bottom line is .... we have a credit grantor lending money to a person, or a person buying a product, and what we are doing, the way the law is set up now, we have made them debtor proof. They don't have to pay their debts, and they know it, and it's something that is being used." Number 140 SENATOR JACKO - "Do they take that into consideration when they are loaning them the money?" MR; PHILLIPS - "They should, but when you sign a contract to pay back a debt, most people are going to take that on good faith. You're signing a contract, and when they fail to pay it back, then it ends up with us." SENATOR LITTLE - "I see a lot of arguments - in the cost of a home here in Alaska, and in many more rural areas in Alaska, it is much, much higher than in the State of Washington or Oregon, just because of transportation costs. I think there is justification to have home exemptions, and even personal property exemptions that are higher than the other states that have been laid out here before us. Is there a reason why the level that has been chosen, for instance for a home, at $36,000, is about the same as in Washington? I have never heard of someone buying a home for $36,000 in the state." MR. PHILLIPS - "I think we're missing the point here. This isn't buying a home. (SENATOR LITTLE said she understood that.) This is the equity. Under state law, it doesn't matter if they have zero equity in the home, the way it stands right now, we have to pay them $64,000 to be able to take the home, plus the first deed of trust. So, .... folks can have X amount of dollars in a home, we can't recoup the money, the way it stands right now. But again, in the six years that I've been in business, we have foreclosed on one home, and it was paid off prior to ever going to foreclosure." Number 190 SENATOR LITTLE - "Explain that to me again. You said you had to pay them." MR. PHILLIPS - "Under state statute, when the new law went into effect in October, it went to $63,000 some odd dollars. That has to be paid to them up front. (SENATOR LITTLE asked to whom.) To the owner of the house .... The personal exemption for that home is paid to them. Then you have to pay to whoever holds the first deed of trust. If these people have zero in the bank, or zero equity in the home, they just made $63,000, and the collection agency has to pay the first deed of trust." SENATOR LITTLE - "But then the person is responsible to the bank?" MR. PHILLIPS - "No ma'am, we are responsible. We have to pay the first deed of trust, also, the way the law is set up." SENATOR TAYLOR suggested MR. PHILLIPS explain further - "You have to take judgement against the individual. After having taken judgement, then to collect on the judgement you have to hire a trooper to execute. Once you have executed, you have to take some asset, or property, to pay the judgement. Let's assume that they have a house as SENATOR LITTLE is asking about. You've not found a bank account, not found any income sufficient to pay the judge. Explain to SENATOR LITTLE what is involved in the taking of a house on a writ of execution." MR. PHILLIPS - "Under Alaska state law, which I think is a good part of the law, if we were going to attach a home, we would go to the court system and ask for a writ to attach the home. The judge will look at the case and what we have tried to do. Once we have tried to go after real property, and could not, we would send the writ to court, the judge would look at it to make sure we have met all of the criteria. He (the judge) would sign it and say, "OK, you cannot dispose of this property for 30 days." At that point in time, we send a trooper, or process server, to serve them. Then, it is posted the next four months in the newspaper, the post office, and the court system, that there will be a lien sale of this home on a certain date. They have that time, plus the next year after the lien sale, to reclaim the house. .... You can't just walk in and take someone out of their home. It's a very long drawn out process. In six year of business, we have foreclosed on one home, and before we got to the final process, the people did recoup their home." SENATOR LITTLE - "So this bill would allow you to pay less to the individual whose home has been foreclosed upon?" Number 228 MR. PHILLIPS - "Yes ma'am, it will take it to $36,000, which is 20% higher than Washington or Oregon." SENATOR LITTLE - "Well, having built a house in Alaska, I would think that it's a 20% greater cost in building a house here, but I understand your point. Thank you." SENATOR TAYLOR - "Would you please explain to the committee the difficulty you encountered in executing upon a state employee, with deferred compensation available as a dodge." MR. PHILLIPS - "We have a young lady that works for the State of Alaska. She wrote 42 NSF checks within the City of Juneau. We tried to collect it by dealing directly with her. She refused to deal with us. We reduced it to judgement by taking it to court for a court awarded judgement. She had a chance to show up in court to defend her side. In this particular one, she did show. The court awarded the judgement against her, and we went to attach her wages, and at the point in time, it was $350 per week with the net due to them, which is an exemption right. She raised her retirement program to drop hers to $350 per week, so basically, we zeroed out. This is the kind of things we are running up against now. She makes very good money, but she can go out and write 42 checks and get away with it, because the way the law (is written). SENATOR HALFORD - "Isn't there any criminal prosecution available?" MR. PHILLIPS - "The police won't do that ... SENATOR HALFORD - "Can't you do anything to prosecute the theft?" MR. PHILLIPS - "It is federal offices, we cannot under the (unintelligible) Act, we cannot, under any circumstances, involve the police department or any other civil, we always use civil, can't go criminal." SENATOR HALFORD - "If somebody got a bad check, can they do anything criminally?" MR. PHILLIPS - "Yes, we can. In the City of Ketchikan, a husband and wife came through year before last, dumped $40,000 in bad checks in four days on three bank accounts. They went to the State of Washington. We tracked them down, brought them to the DA, and they (the DA) said they were too busy. The police department in Ketchikan will not handle them now because of that. SENATOR TAYLOR - "I think you will find its the same here in Juneau, isn't it? (MR. PHILLIPS said it was so.) You can take 30 NSF checks in on somebody who has bounced them all over town, and all they say is that it is a civil matter. Take it to court. You take it to court, and right now they have $450 of net take home exemption per pay period, and you cannot execute on them." SENATOR HALFORD - "Bankruptcy exemption is a different issue from intentional theft by pen v. theft by gun." SENATOR TAYLOR - "It may be, SENATOR HALFORD, but it works out the same way if you are in business. You will not get a police officer to help you." MR. PHILLIPS - "We are averaging 1600 checks a month in the City of Juneau that we are processing in the collection agency here. Ketchikan went down to about 300. SENATOR TAYLOR asked for any more questions and whether MR. AMBROSE had the citation requested by SENATOR LITTLE. Number 278 MR. AMBROSE - "Senator, I do not have. There is a formula, and I can't find it. I'll check with legal and get the exact citation. There is a formula showing, there is a scale based on whether it is an individual, head of household. That sort of thing." SENATOR TAYLOR invited DAVID TEAL, Director of Administrative Services for the Department of Labor, to testify. MR. TEAL - ".... Our involvement in this is limited to the automatic adjustment, which occurs in Section 115, and our position was that we had some technical problems because of amendments made in 1987. In going through the public notice process, we had some complaints from the public that the notice doesn't go to the correct people, the people that are interested. People who read labor regs tend to be those people who are interested in wage and hour, public safety, and health issues as opposed to finance issues, so that the people that probably needed to know, didn't get the proper public notice. The third issue was the changing of statute via regulations, and of course, that is up to the legislature to decide that one. Given that the section is being repealed, the problems for us would go away." MR. AMBROSE to SENATOR LITTLE - "If you will look at page 3, line 1, in either the committee substitute or the original bill, '(b) The exemption amounts under AS 09.38.030 may be increased when the individual submits an affidavit, under penalty of perjury, stating that the individual's earnings alone support the individual's household;'" SENATOR LITTLE - "And then I also found the section that is being repealed." SENATOR TAYLOR entertained a motion to adopt the committee substitute. SENATOR DONLEY asked for the difference in the committee substitute. SENATOR TAYLOR explained the only modification was on page 3, line 9, "Sec. 7. AS 09.38.115(b)" and the department had testified in favor of the change. SENATOR HALFORD - "So we're taking the exemption from $64,000 down to $36,000 with no cost of living escalator." SENATOR DONLEY moved to adopt CS FOR SENATE BILL NO. 158(JUD). Without objections, so ordered. SENATOR DONLEY moved, on the committee substitute, to delete, on page 1, lines 7 and 13, the $36,000 number, and leave the $54,000 in place. SENATOR TAYLOR reviewed the changes, and objected for purposes of discussion. Number 354 SENATOR DONLEY - "I think people have traditionally felt pretty strong about the homestead exemption. It allows people to maintain a home of reasonable value. I have been concerned about the escalator clause in there also, and I support the repeal of that, but it might be going too far to repeal that and also drop the homestead exemption. This is kind of a middle ground to repeal the escalator clause and leave the homestead exemption where it is, but still maintain these reductions back down to more appropriate levels for the individual exemptions ...." SENATOR TAYLOR withdrew his objection, and the amendment was adopted. SENATOR HALFORD - "We have gone back down from $64,000 to $54,000 because it really means $64,000 today, because it was in 1963 dollars." SENATOR DONLEY - "To clarify that, the new statutory amount would actually be $54,000, and it wouldn't be modified ...." SENATOR HALFORD moved to pass CS FOR SENATE BILL NO. 158(JUD) from committee with individual recommendations. The bill passed on a 3-2 vote. SENATOR TAYLOR introduced SB 99 (FINANCIAL ADMINISTRATION OF STATE GOVERNMENT) sponsored at the request of the Governor and said one person would be testifying on the teleconference. KENNY LEAF, Judiciary Committee Aide, explained the bill under consideration, CS FOR SENATE BILL NO. 99(L&C), would affect some of the departments. He said a number of persons wished to speak to the amendments and suggested beginning with JUANITA HENSLEY, Chief of Driver Services for the Division of Motor Vehicles. MS. HENSLEY explained the Division of Motor Vehicles has several sections of this bill beginning with page 14, Sections 50 through 58, all pertaining to motor vehicles. She proposed to outline each section. Number 417 Section 50 - is a technical amendment which would allow the DMV to retain $100 thousand in state revenue by selling the entire motor vehicle file, which is currently done. Section 51 - does the same thing as Section 50, but would delete the word, Vehicle Register, for clarification. Section 52 - would allow the department to design special license plates that depict Alaska flora and fauna for a $30 fee. They are projecting revenue of $300 thousand. Section 53 - clarifies the handicapped plates as defined in 23 C.R.F. 1235.2 of federal law, which uses "a disability that limits or impairs the ability to walk." This would bring in approximately $16.8 thousand to the state. SENATOR LITTLE clarified that some persons who currently receive free handicapped plates will now have to pay for them. MS. HENSLEY referred to the federal definition to explain the person must be mobility impaired, and she explained the extent of disability allowed for a free handicapped license plate. Section 54 - clarifies a court decision that has prompted the change to require a dealer to affix two plates to the vehicle owned by the dealer. SENATOR TAYLOR asked about the court case, and MS. HENSLEY explained it was a case brought against a dealer on the Kenai Peninsula. Because the statute was vague, the dealer won, so this would clarify the statute. Section 55 - would remove the division's authority to issue titles on mobile homes. DMV considers mobile homes real estate property and treated as such. She outlined the current problems in issuing titles. There would also be a modest saving in money. Number 499 SENATOR TAYLOR questioned how they could tell the difference when they come in to register - what about travel trailers that are used for living quarters. How does the department know the use of the trailer? MS. HENSLEY explained she was referring to those mobile homes that required a permit to move along the highway, while a travel trailer is registerable and tagged. A mobile home just has a title. Section 56 - clarifies an exemption for senior citizens for one free registration a year, and she described some abuses of the exemption. Section 57 - would allow the department to charge a $10 registration fee if the person comes into the office to register a vehicle, when they have the opportunity to do so by mail. This fee could be waived for good cause. She figured this could bring in an additional $2 million to state revenue. MS. HENSLEY explained that Senate Finance has based the DMV budget on the passage of this bill and how it would affect the operation of the division. In addition she discussed the waiver provisions. Section 58 - clarifies that a company is required to register their vehicle as a commercial vehicle instead of a private vehicle. She estimated $400 thousand in revenue in improperly registered vehicles. Section 59 - is a section added to the bill by the Revisor of Statutes to clarify the deletion of a mobile home from the tax schedule. Section 61 - sets the definition for a mobile home. SENATOR LITTLE had some questions about the list defining the mobile homes, and MS. HENSLEY reviewed the list. She also explained Section 70 repealed the mobile home statutes. SENATOR TAYLOR asked for any additional questions from the committee and invited BRENT MCGEE, Director for the Office of Public Advocacy, to testify. MR. MCGEE thought Sections 33, 34, and 35 were relatively straight forward and would adopt regulations that would allow the office to charge a fee for public guardian services, based on the ability of the ward or protected person to pay for the guardian services. Before the fee schedule was adopted there would be comments and suggestions from affected interest groups and institutions. SENATOR LITTLE wanted to know from whom the Office of Public Advocacy would collect the fee. MR. MCGEE explained their clients are wards or protected persons, or conservatees, which are people for whom the court has ordered services. He detailed the list of services that might be provided to their clients. Number 586 SENATOR LITTLE asked whether most of these individuals were indigent. MR. MCGEE said the clients weren't necessarily so, and he explained the court procedure for deciding the competency of a person to manage their lives. He explained they were usually mentally ill, developmentally disabled, or suffer from some age related disability. He also explained the court only appointed a guardian when the court finds there is no friend, relative, person, or non-profit corporation able to accept those responsibilities. He claimed the Office of Public Advocacy was the last in statutory priority, and it was not usual for clients to have substantial resources. SENATOR TAYLOR thanked MR. MCGEE for his testimony and called on GERON BRUCE from the Department of Fish and Game. MR. BRUCE directed attention to Section 44 of SB 99 which deals with the Department of Fish and Game, and he referred to a position paper from the department. He reviewed the summary of the department's concerns with this section of the bill and a proposed amendment. TAPE 93-38, SIDE B Number 001 MR. GERON summarized the department's objections to the procedures through which hunting and fishing licenses are sold in the state - exclusively through vendors. Under current law, at the time of sale the vendor is entitled to retain 5% of the value of the transaction, while the remainder of the money and the receipts go to the department. On a quarterly basis the vendors are then entitled to receive one dollar of additional compensation, or $50, which ever is greater, based on the records they have supplied. MR. GERON explained this functioned for the Department of Fish and Game as a financial control and accounting mechanism, to enable the department to audit the records for errors. He further explained the value of the quarterly compensation was to provide an enforcement and correcting mechanism to the department for resolution of remittances that are delinquent or incorrectly calculated. MR. GERON explained how the proposed amendment would enable the department to continue their auditing practices, a copy of which was at the end of the position paper. He did praise Section 44 for changing the funding source for this additional compensation from a general fund appropriation to a Fish and Game fund appropriation, with a savings to the general fund of about $500 thousand. SENATOR TAYLOR moved to adopt the following amendment to Section 44 to read as follows: Section 44. AS 16.05.390(d) is amended to read: (d) Compensation provided by this section shall be paid from appropriations made to the department [FROM THE GENERAL FUND]. In answer to a question by SENATOR LITTLE, SENATOR TAYLOR explained the placement of the amendment on page 13, lines 6 through 12. MR. GERON further explained the language in current Section 44 would remain in statute and subsection (d) would be added to the end of the section. SENATOR TAYLOR checked to be sure everyone understood the amendment. SENATOR TAYLOR moved the Amendment #1 from committee with no objections. Next, SENATOR TAYLOR called on DONALD STUDY, Director of the Division of Labor Standards & Safety for the Department of Labor. MR. STUDY said he was here to address the sections, plus some amendments, for the Department of Labor. Section 45 - would allow the department to adopt regulations establishing fees for administering special inspector examinations and for processing applications for special boiler and pressure vessel inspector commissions. He explained these functions were currently carried out without charge. He said the proposed application fees of $25 would generate approximately $400 in annual receipts to the general fund. SENATOR HALFORD questioned putting fees in regulation, and MR. GERON explained that was correct. He also explained there were few special inspectors, mainly from insurance companies. Section 46 - would shift the set time period for certificates of fitness for plumbers and electricians for a one or three year certificate to a two year certificate. He explained the section would not have a physical impact other than stabilizing revenues in the department, which are in support of the division and presently in the FY94 budget. Section 47 - would establish fees for an application examination and for duplicates of certificates of fitness for plumbers and electricians. It would also increase fees for the issuance, or renewal of a certificate. A $50 fee would generate approximately $23.8 thousand and reflects the cost of providing services. He described the remainder of the fee schedule, which is also in the FY94 operating budget. Section 49 - raises the fee for an employment agent's license from $10 to $100, which is valid for two years. He said this fee had not been increased since 1953. SENATOR LITTLE clarified that biennial was every other year. Number 094 MR. STUDY defended the employment license fee change and said there were eight licensed employment agencies operating in the state. He explained the permitting system kept the fly-by-nighters from coming into the state to take advantage of it. MR. STUDY next addressed the proposed amendments, which he said had been approved by the Senate Labor and Commerce Committee Chairman, SENATOR KELLY. He said these amendments would allow the phase in of the biennial licenses over a three period to stabilize the annual revenue stream. SENATOR TAYLOR said they would be taken one at a time. SENATOR TAYLOR moved to adopt Amendment #1, on page 13, lines 30 & 31, page 14, and lines 1 through 10, to provide for a two year term for certificates of fitness. There was an objection from SENATOR DONLEY, who thought the time and fees should be set in statute rather than by regulation. MR. STUDY explained the phasing in of a two year certificate so all of the revenue doesn't come in one year, with no revenue the following year, and to match more with the budget. SENATOR DONLEY said an amendment should be written to do as MR. STUDY described, not one that gives them more power than they need. SENATOR TAYLOR clarified the amendment was amending the section rather than replacing it, and he reviewed the changes. He asked why the days were taken out, and MR. STUDY referred the question to ARBE WILLIAMS, Special Assistant to the Department of Labor, for the answer. MS. WILLIAMS described working with the Senate Labor and Commerce Committee on the language for Sections 46 and 47, and explained they were only asking for a phase in period. She thought that had been accomplished by regulations, and she reviewed the legislation from this perspective. SENATOR TAYLOR agreed with SENATOR DONLEY'S assessment of the sections, and he articulated his concerns on the time frame. MS. WILLIAMS said they would be happy to implement SENATOR DONLEY'S suggestion. SENATOR TAYLOR read Section 49, which he thought might answer their concerns. MS. WILLIAMS said Section 49 was not related to the certificates of fitness program, but she was assured that drafting could work out the objections. CHERYL FRASCA, Division Director for the Division of Budget Review, asked the committee members to look at Section 72, which relates to transition language for the Alcoholic Beverage Control Board. She suggested a similar section to clarify the problems with Sections 46 through 48. SENATOR TAYLOR proposed to adopt Amendment #2, a conceptual amendment which would provide a similar transition to Section 72 to provide the Department of Labor with the opportunity to issue two year certificates. Without objections, so ordered. Number 185 SENATOR TAYLOR asked MR. STUDY to read his next amendment, Amendment #3, and he provided the following: Add a new section 47 to read *Sec. 47 AS 18.62.030 is repealed and reenacted to read: Sec. FEES. (a) An applicant shall pay a non-refundable application and examination fee of $50 when applying for a certificate of fitness; (b) an applicant for a trainee or journeyman level certificate of fitness shall pay a biennial fee of $160, to be prorated if the certificate is issued for a shorter period, for the issuance of a certificate or a renewal certificate; (c) an applicant shall pay a fee of $25 for the issuance of a duplicate certificate of fitness. MR. STUDY explained how the amendment would be referenced by other legislation for a master trades person. There was a general discussion about the different levels of applicants and the licensing fees for each. SENATOR TAYLOR moved to adopt Amendment #3 as outlined by MR. STUDY. Without objections, so ordered. SENATOR TAYLOR asked MS. FRASCA if she wanted to present additional testimony. She said only if the committee wanted to go through the other sections of the bill, and she listed police standards as well DNR park fees. SENATOR LITTLE said she was interested in parks fees, which sparked a discussion of the fees, and SENATOR TAYLOR asked MS. FRASCA to review those sections. MS. FRASCA explained when the bill was proposed it included a section that would authorize the Division of Parks to set by regulation fees that involved day use of parks and park facilities such as visitor centers. It would be to recover some of the cost of developed sites. MS. FRASCA said the Labor and Commerce Committee changed that to set the fee amount in statute, as opposed to regulation. MS. FRASCA reviewed the provisions of Sections 65, 66, and 67, and she referred to page 20, line 16, where the Labor and commerce Committee inserted the word, overnight. SENATOR LITTLE questioned where this would be. RAGA ELIM, Special Assistant to the Department of Resources, explained the idea was to be able to assess a nominal fee to the users of developed facilities for day activities. He gave two reasons for the removal of the word, overnight, because it would reduce any revenue that could be generated, and DNR does not want people using these facilities overnight. SENATOR LITTLE moved to adopt Amendment #4 which would remove "overnight" on page 20, line 16. Without objections, so ordered. Number 253 SENATOR DONLEY asked if the fees were mandated, such as $1 for a visitor center or an historic site? MR. ELIM said it provides the authorization, and he explained the intent of the original bill which would have allowed the promulgation of fees using public comment. SENATOR TAYLOR asked if there were any other problems with the bill, and the response was none. He explained it was not his intent to move the bill today, but he wanted to allow more time for a reflection on the changes. MS. FRASCA suggested a sectional analysis in their bill packet that might be more user friendly. SENATOR TAYLOR introduced SB 155 (USE OF RENTED PROPERTY/LAW VIOLATIONS), noted the prime sponsor was SENATOR STEVE FRANK, and invited SENATOR FRANK'S aide, DAVID SKIDMORE, to review the bill. SENATOR TAYLOR said there would be teleconference testimony from Anchorage and Fairbanks. Number 307 MR. SKIDMORE explained that SB 155 related to Landlord/Tenant Law and incorporated most of SB 35 from the last legislative session. He further explained it was introduce in response to constituent concerns over tenants who were abusive of rental units, and the bill makes five basic changes: (1) It reduces the time a landlord must wait before beginning the eviction proceedings from 10 to 5 days, when tenants fail to pay rent; (2) it makes the legal obligations of the tenant in statute more stringent; (3) it creates a check list process that describes the condition of the unit at the beginning of lease, in order to substantiate later claims for damages; (4) it amends the nuisance abatement statutes to include drugs and alcohol offenses; (5) and it creates a summary eviction process for violation of the tenant obligations in statute and in the rental agreement. MR. SKIDMORE said SENATOR FRANK did wish to introduce two amendments to the bill today. SENATOR TAYLOR said he preferred to only take testimony on the bill today. He also noted that SENATOR DONLEY has a series of amendments, and he suggested MR. SKIDMORE could examine those with SENATOR FRANK. SENATOR TAYLOR promised the bill would be rescheduled quickly. SENATOR TAYLOR opened the teleconference site in Anchorage to hear GLENN FLOTHE. MR. FLOTHE indicated he was representing the Department of Public Safety in the event there were any questions. There were no questions, but he was invited to stand by. SENATOR TAYLOR next called on ALICE BREWER in Anchorage. Number 353 MRS. BREWER identified herself as the Executive Secretary for the Landlord & Property Managers Association and the owner of a four-plex. She praised the introduction of the bill and explained why she thought it was greatly needed to combat the threat of violence and social disintegration that accompany drug dealing. MARK BUTTERFIELD, representing the Alaska Legal Services, explained that 95% of both the landlords and tenants were good, and stressed there were a minor number of people, who, he conceded, could do a great deal of damage. He reviewed the remedies available to the landlords, with few available to the tenants. In reference to Section 15, he suggested there should be more of a reasonableness in handling the tenants. (It became increasingly difficult to hear the conclusion of his testimony.) Number 425 SENATOR TAYLOR reviewed the amendments that were proposed for the bill, two from the sponsor, SENATOR FRANK, and eight from SENATOR DONLEY. He urged anyone else wishing to amend the bill, to send their amendments to him. SENATOR TAYLOR said the bill would be tentatively scheduled for April 6, 1993. SENATOR TAYLOR turned to the teleconference site in Fairbanks to hear MYRNA SHEETS. MS. SHEETS didn't understand how there could be opposition to landlords being ripped off and no recourse from the law. She thought it was time that the laws were changed. JEROME BYRD from Fairbanks, as a short term landlord, related his bad experiences and strongly urged the legislators to pass the bill. He thought it would make everything right for the landlords. MERLYN ALDEN from Fairbanks and a landlord for 15 years, reviewed the good tenants v. the bad ones. He described how he tried to protect the good tenants, even the mediocre tenants, but he wanted to be able to get rid of the bad ones. SAM HELMS from Fairbanks claimed he had $10,000 worth of damage to his rental, with was no recourse from the police or the district attorney. He thought the bill might partially correct such criminal damage, and he described the dilemma of late payments from state welfare agencies. He thought the 24 hour notice might help alleviate the malicious vandalism. SENATOR TAYLOR thanked the participants for waiting to testify and called on DOUG ISACSON in Fairbanks. MR. ISACSON explained he was the Director of Credit Services for the State of Alaska, a credit recording bureau, providing consumer credit reports throughout the state. He described one of their services, Credit Watch, which helped landlords screen out individuals with poor track records. He said the service was available in Fairbanks, Anchorage, and Juneau, and he had heard the same stories from all of the tenant watch members. He reviewed the problems with trying to evict tenants who are trying to abuse the system. TAPE 93-39, SIDE A Number 001 He concluded with an appeal to get rid of the poor tenants and safeguard the community. *SENATOR TAYLOR announced that time constraints and lack of quorum prevented the hearing of SB 168, but he promised it would be rescheduled for April 6, 1993. He thanked ANNETTE SHACKLETT, STEPHEN ROUTH, RICHARD ULLSTROM, BOB GOULD, and PAT LYNN for waiting to testify on SB 168. Next, SENATOR TAYLOR returned the teleconference network to Anchorage for the remainder of the testimony. CHARLES LIPPITT thought five days was sufficient for the tenant to pay the landlord, and he discounted some of the reasons given by the tenants for not paying. He encouraged the legislature to pass the bill. Number 086 DIXIE DIXON explained she was representing the Mountain View Landlord group, as well as being a property owner and a real estate broker with Remax. She further explained the landlords could no longer depend on the police department to back them up for the moderate to severe violent disturbances, drug, or alcohol abuses. She said they were told to do the evictions themselves, and she described the immunity received by welfare recipients for damage or back rent. She said it cost a minimum of $3,000 to do an eviction, and she described the problems landlords have with this. She asked for a copy of the proposed amendments before the committee, so they could use them to make some proposals of their own. SENATOR TAYLOR said he would fax the amendments to them at the Anchorage L.I.O. He then called on RAE BARGER. MRS. BARGER said she was a property manager for 280 units in Anchorage and does low income housing. She explained why the legislation was important to her as a landlord to help expedite evictions, and she described the difference the 5 days would make in her business. She also described damage that ranged from $500 to $5000 per unit, and how that affected her rental to low income persons. She explained presently there were families living in shelters who need her units but must wait for evictions and damage repair. Number 156 JOHN TODD has owned and managed property for over 20 years, and he explained about 80 to 95% of the tenants are very good. He also explained how he got along with the marginal tenants, but he deplored the bad apples. He said the 5 or 10 day notice didn't make much difference, and he described $5000 worth of vandalism to one of his apartments. Between insurance and the small claims court he had managed to get most of the cost of repairs, but he didn't think the landlords should have to put up with such damage. SENATOR DONLEY expressed his support for the bill and promised to be working on the legislation. MR. TODD continued to describe the unruly tenants and how difficult it was to get rid of them. He said even tenants supported the bill. HANS METZ explained he is a small landlord and his livelihood depends on his rental business. He gave his reasons for supporting the bill because the present system is slow and cumbersome, the notice system doesn't work well, and there are problems with the court. He said the bill would allow screening out the tenants, who were abusing the current system and protect the good tenants. Number 224 RICHARD ILLGEN said he was an attorney, has represented both landlords and tenants in residential and commercial settings, and has conducted legal education seminars on forcible entry and detainer proceedings in Alaska. He explained how the legislation would adversely affect commercial tenants in the area of economic pressures particularly with the shorter time frame of five days rather than ten. The last person to testify on SB 155 was JAN EVENSEN from Anchorage. Number 284 MS. EVENSEN wished to address some of the time problems with verification of welfare payments and the eviction of drug dealers and bad tenants. She thought this was an abuse of good tenants, and she noted a packet of information she had sent to the committee, documenting some of the problems she listed. She asked for a shorter time limit on all parts of the notice and eviction procedures, because of the stress factor of evicting a person. SENATOR TAYLOR announced the committee was leaving the teleconference network, but he reiterated his promise to fax copies of the amendments and his intent to return SB 155 to committee next Wednesday, April 6, 1993. There being no further business to come before the committee, the meeting was adjourned at 3:55 p.m.