SENATE LABOR AND COMMERCE COMMITTEE May 5, 1998 3:07 p.m. MEMBERS PRESENT Senator Loren Leman, Chairman Senator Jerry Mackie, Vice Chairman Senator Tim Kelly Senator Mike Miller MEMBERS ABSENT Senator Lyman Hoffman COMMITTEE CALENDAR CS FOR HOUSE JOINT RESOLUTION NO. 65(L&C) Requesting that Alaska wild salmon be included as an organic food under federal law. - MOVED CSHJR 65(L&C) OUT OF COMMITTEE CS FOR HOUSE BILL NO. 486(L&C) "An Act relating to the Alaska Securities Act; and providing for an effective date." - MOVED CSHB 486(L&C) OUT OF COMMITTEE CS FOR HOUSE BILL NO. 343(TRA) "An Act excluding certain motor vehicles from the definition of commercial motor vehicle." - MOVED CSHB 343(TRA) OUT OF COMMITTEE CS FOR HOUSE BILL NO. 203(JUD) "An Act relating to actions for unlawful trade practices." - MOVED CSHB 203(JUD) OUT OF COMMITTEE CS FOR HOUSE BILL NO. 474(RLS) "An Act relating to the Alaska Police Standards Council and to municipal correctional officers." - MOVED CSHB 474(RLS) OUT OF COMMITTEE CS FOR HOUSE BILL NO. 458(RLS) "An Act relating to establishing a golf course alcoholic beverage license to allow sales of beer and wine; extending the termination date of the Alcoholic Beverage Control Board; and providing for an effective date." - MOVED CSHB 458(RLS) OUT OF COMMITTEE CS FOR HOUSE BILL NO. 347(L&C) "An Act relating to an exemption from overtime wage requirements for certain motor vehicle mechanics." - MOVED CSHB 347(L&C) OUT OF COMMITTEE SENATE BILL NO. 353 "An Act relating to property exemptions; and providing for an effective date." - SCHEDULED BUT NOT HEARD PREVIOUS SENATE COMMITTEE ACTION HJR 65 - No previous action to record. HB 486 - No previous action to record. HB 343 - See Transportation minutes dated 4/30/98. HB 474 - No previous action to record. HB 458 - No previous action to record. HB 347 - No previous action to record. SB 353 - See Labor and Commerce Committee minutes dated 4/28/98. WITNESS REGISTER Representative Bill Hudson State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Prime Sponsor of HJR 65 Terry Elder, Senior Securities Examiner Division of Banking, Securities & Corporations Department of Commerce & Economic Development P.O. Box 110807 Juneau, AK 99811-0807 POSITION STATEMENT: Testified in support of CSHB 486(L&C) Representative Gary Davis State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Prime Sponsor of HB 343 Pat Harman, Staff to Representative Fred Dyson State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Presented overview on HB 203 James Beveridge Alaska Public Interest Research Group 442 W. 5th Ave. Anchorage, AK 99501 POSITION STATEMENT: Testified in support of HB 203 Ms. Peggy Mulligan American Association of Retired Persons Box 240335 Douglas, AK 99824 POSITION STATEMENT: Testified in support of HB 203 Kevin Jardell, Staff Counsel House Judiciary Committee State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Presented overview on HB 474 Laddie Shaw, Director Alaska Police Standards Council P.O. Box 111200 Juneau, AK 99811-1200 POSITION STATEMENT: Offered information on HB 474 Representative Norman Rokeberg State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Prime Sponsor of HB 458 Ms. Shirley Armstrong State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Offered information on HB 458 Peter Torkelson, Staff to Representative John Cowdery State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Presented overview on HB 347 Ed Flanagan, Deputy Commissioner Department of Labor P.O. Box 21149 Juneau, AK 99802-1149 POSITION STATEMENT: Testified in support of HB 347 Steve Alwine Alaska Auto Dealers Association 8725 Mallard Juneau, AK 99801 POSITION STATEMENT: Testified in support of HB 347 ACTION NARRATIVE TAPE 98-27, SIDE A Number 001 CSHJR 65(L&C) - CLASSIFY WILD SALMON AS ORGANIC FOOD CHAIRMAN LEMAN called the Senate Labor and Commerce Committee meeting to order at 3:07 p.m., and brought HJR 65 before the committee. REPRESENTATIVE BILL HUDSON, prime sponsor of HJR 65, said Alaska is in probably one of the most competitive marketing efforts that it has ever been in marketing its vast quantity of salmon. HJR 65 requests supporting the congressional delegation in getting into the arena as they develop standards for organic foods, which is a major new market that is growing at the rate of 20 percent a year. The resolution urges the U.S. Department of Agriculture to give careful consideration to include Alaska wild salmon on its list of organic foods. SENATOR KELLY asked if there was any opposition to the resolution. REPRESENTATIVE HUDSON replied there was none that he knew of. There being no further testimony on HJR 65, CHAIRMAN LEMAN asked for the pleasure of the committee. SENATOR MACKIE moved CSHJR 65(L&C) and the accompanying zero fiscal note be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. CSHB 486(L&C) - ALASKA SECURITIES ACT CHAIRMAN LEMAN brought CSHB 486(L&C) before the committee as the next order of business. TERRY ELDER, Senior Securities Examiner, Division of Banking, Securities and Corporations, Department of Commerce and Economic Development, stated the legislation will bring the Alaska Securities Act into compliance with federal law that was changed in 1996. By doing so, it will preserve the state's ability to collect fees for federally covered securities, which currently amount to over $4 million a year, as well as preserve the state's ability to continue regulating large investment advisors and helping Alaskans in that regard. CHAIRMAN LEMAN asked if there was any objection from the industry or the public to this bill. MR. ELDER responded that he was not aware of any expressed opposition. SENATOR MACKIE asked if it was an accurate statement that failure to do this means a loss of revenue to the state, and MR. ELDER acknowledged that was correct. The informational fiscal note provided to the committee shows the impact on state general fund revenues if the statute is not amended. Number 150 There being no further testimony on HB 486, CHAIRMAN LEMAN asked for the pleasure of the committee. SENATOR KELLY moved CSHB 486(L&C) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. CSHB 343(TRA) - DEFINITION OF COMMERCIAL MOTOR VEHICLE CHAIRMAN LEMAN brought CSHB 343(TRA) before the committee. REPRESENTATIVE GARY DAVIS, prime sponsor of HB 343, said the legislation brings the state into compliance with federal law. The legislation amends the definition of "commercial motor vehicle" in statute by expanding the exceptions to include "special mobile equipment" (construction vehicles) that are driven on roads in order to relocate the vehicle to a job site. REPRESENTATIVE DAVIS said the Department of Administration has no objection to the legislation. There being no further testimony on the legislation, CHAIRMAN LEMAN asked for the pleasure of the committee on HB 343. SENATOR MACKIE moved CSHB 343(TRA) and the accompanying zero fiscal note be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. CSHB 203(JUD) - ACTIONS FOR UNLAWFUL TRADE PRACTICES CHAIRMAN LEMAN brought CSHB 203(JUD) before the committee. PAT HARMAN, staff to Representative Fred Dyson, explained the legislation provides for a dispute resolution procedure for consumer disputes. It provides that if there is a dispute, the individual has to submit a letter to the business stating the problem. It also contains a mediation option as a dispute resolution option. It further provides the ability of the court to grant injunctive relief so an individual doesn't have to experience actual damages to be granted injunctive relief. There are fairly severe penalties for frivolous lawsuits or lawsuits that are brought forward for competitive advantage, and it provides for the defendant to receive full reasonable attorney fees and costs if the action is found to be frivolous. JAMES BEVERIDGE, representing the Alaska Public Interest Research Group (AKPIRG) and testifying via teleconference from Anchorage, voiced the organization's support for CSHB 203(JUD). He noted Alaska ranks very low on the states' lists in terms of consumer protection, and the state has become somewhat of a haven for unscrupulous individuals and dishonest businesses that rip off millions of dollars each year from honest Alaskan businesses. AKPIRG believes the legislation is an important step in addressing this problem by empowering consumers and providing avenues for them to more easily address their grievances. Number 390 PEGGY MULLIGAN, representing the American Association of Retired Persons (AARP), voiced AARP's support for the legislation. She said the bill will put Alaskans pretty much in line with a lot of the other states as far as protection for all of its citizens against fraud. There being no further testimony on CSHB 203(JUD), CHAIRMAN LEMAN stated the bill would be set aside until a quorum could be reestablished. CSHB 474(RLS) - CERTIFY MUNICIPAL CORRECTIONAL OFFICERS CHAIRMAN LEMAN brought CSHB 474(RLS) before the committee as the next order of business. KEVIN JARDELL, staff counsel for the House Judiciary Committee, said the Alaska Police Standards Council contacted the committee and asked that they introduce legislation that would place a new section of officers called "municipal correctional officers" under their authority. By doing this, the Alaska Police Standards Council would have the ability to set minimum training standards and minimum hiring standards for municipal correctional officers. This would allow municipalities to hire less trained individuals to staff holding cells, which are currently staffed by full-time police officers. SENATOR KELLY if these people would be commissioned officers wearing badges and possessing firearms. LADDIE SHAW, Director, Alaska Police Standards Council, explained that these will not be gun carrying corrections officials. Their primary purpose is to be a jailer, and the standards they will be meeting are slightly less than a state correctional officer. SENATOR KELLY asked what retirement system these individuals would fall under. MS. KREITZER responded that they are employees of the municipality so they would be covered by whatever agreement the municipality already has in place for its public safety officers, not withstanding the fact that they are not peace officers. MR. SHAW explained it costs approximately $5,700 to train a police officer who is presently running the small jails, and it costs approximately $1,500 to train a municipal correctional officer who will be working for the same municipality in place of a police officer. A municipal correctional officer's salary would be based on that municipality's salary cost, which could be anywhere from $8 an hour to $12 an hour, but much less than a police officer. Number 433 CHAIRMAN LEMAN asked how many municipalities this legislation would apply to. MR. SHAW replied that it would apply to 15 municipalities, but it would not include Anchorage because it does not have a contract jail. SENATOR KELLY asked if this group of correctional officers would qualify for the 20-year and out provision under their retirement system. MS. KREITZER replied that if a municipality had such a provision in place for its employees, it would then be up to the municipality to make that decision. MR. SHAW added that if all of the jails were manned by municipal correctional officers, it would probably be less than 40 individuals for the entire state. There being no further testimony on CSHB 474(RLS), CHAIRMAN LEMAN stated the bill would be set aside until a quorum was reestablished. CSHB 458(RLS) - GOLF COURSE BEER/WINE LICENSE CHAIRMAN LEMAN brought CSHB 458(RLS) before the committee as the next order of business. SHIRLEY ARMSTRONG, staff to Representative Norman Rokeberg, said this issue was brought to Representative Rokeberg's attention by a gentleman at the Palmer golf course where they wanted to be able to have beverages on the golf course as do some of the larger courses outside the state. The legislation repeals the regulatory municipal golf course beer/wine license and outlines in statute exactly what a golf course alcoholic beverage license is. REPRESENTATIVE ROKEBERG said the legislation provides for the ability of a golf course to monitor and control the consumption of alcohol on the golf course while still allowing it to be sold from a motorized vehicle for food and beverages. He emphasized that the legislation is not creating a new license, it's repealing one and replacing it. TAPE 98-27, SIDE B CHAIRMAN LEMAN asked if there had been any testimony in opposition to the bill. REPRESENTATIVE ROKEBERG stated the executive director of the Governor's Advisory Board on Alcoholism and Drug Abuse took exception to the bill voicing concern about creating a new license and the control of alcoholic beverages on the course. However, Representative Rokeberg believes the bill gives more control over the consumption of alcoholic beverages on the golf course. There being no further testimony on CSHB 458(RLS), CHAIRMAN LEMAN stated the bill would be set aside until a quorum was reestablished. CSHB 347(L&C) - OVERTIME WAGE EXEMPTION FOR MECHANICS CHAIRMAN LEMAN brought CSHB 347(L&C) before the committee as the next order of business. PETER TORKELSON, staff to Representative John Cowdery, said the legislation was drafted in cooperation with the Department of Labor and the Alaska auto dealers. It is essentially a compromise that all parties believe addresses the key concerns, and will allow flat-rate employers to work overtime to finish up a job or to simply allow the flat-rate mechanic more by working extra hours. MR. TORKELSON said employers currently prohibit their flat-rate mechanics from working overtime because of complications in existing regulations. HB 347 clarifies this by establishing a floor and minimum conditions that an employer must meet to pay overtime to a flat-rate employee. ED FLANAGAN, Deputy commissioner, Department of Labor, stated the department had objections to prior versions of the legislation, but they worked extensively with the industry, the sponsor, and other interested parties and were able to come up with a draft that enables them to remove their opposition to the bill. MR. FLANAGAN said the original bill would have protected the employer against a recalculation of the hourly wage. That worked to the benefit of the employee, but it had no floor for times when the work is slow, other than minimum wage. The current version of the bill has at least doubled the minimum wage or three-quarters of the agreed upon flat rate as the minimum rate for all hours worked, whether they are billing or not, would at least be available as a minimum guarantee. It also preserves the concept of overtime after eight hours at that rate and over forty hours. SENATOR KELLY asked if there was any opposition to HB 347. MR. FLANAGAN said the department was not aware of any opposition to the legislation. STEVE ALWINE, representing the Alaska Auto Dealers Association, affirmed that the legislation was a compromise, and based on the input from their employees, the Department of Labor, the AFL/CIO, and the member dealers, they feel it is an excellent compromise. MR. ALWINE said he knew Chairman Leman had a concern about the twice Alaska minimum wage. However, that issue has been reviewed at length and they don't feel that it will be an issue based on the way these mechanics are paid and the abilities that they have. He added it is an option to what already exists in state statute and federal law so it gives the employers and the employees two ways to approach this. There being no further testimony on HB 347, CHAIRMAN LEMAN requested a motion on the legislation. SENATOR MACKIE moved CSHB 347(L&C) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. CHAIRMAN LEMAN requested motions on the legislation that had been set aside earlier in the meeting due to the lack of a quorum. SENATOR MACKIE moved CSHB 474(RLS) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. SENATOR MACKIE moved CSHB 203(JUD) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. SENATOR MACKIE moved CSHB 458(RLS) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. There being no further business to come before the committee, the meeting adjourned at 4:15 p.m.