SENATE LABOR AND COMMERCE COMMITTEE  May 18, 1999 1:30 p.m. MEMBERS PRESENT    Senator Jerry Mackie, Chairman Senator Tim Kelly, Vice Chairman Senator Dave Donley Senator Loren Leman Senator Lyman Hoffman   MEMBERS ABSENT    All members present   COMMITTEE CALENDAR    CS FOR HOUSE BILL NO. 167(L&C) "An Act repealing required registration for mobile home dealers; and providing for an effective date." -MOVED CSHB 167(L&C)OUT OF COMMITTEE Confirmation Hearing on members of the Regulatory Commission of Alaska: Wilfred Abbott, Patricia DeMarco, Burnell Smith, and G. Nanette Thompson PREVIOUS SENATE COMMITTEE ACTION    HB 167 - No previous action to consider.   WITNESS REGISTER    Mr. Peter Torkelson, Aide Representative John Cowdery State Capitol Bldg. Juneau, AK 99811-1182 POSITION STATEMENT: Commented on HB 167.   ACTION NARRATIVE  TAPE 99-23, SIDE A    Number 001   HB 167-REPEAL MOBIL HOME DEALER REGISTRATION    CHAIRMAN MACKIE called the Senate Labor and Commerce Committee meeting to order at 1:30 p.m. and announced HB 167 to be up for consideration. MR. PETER TORKELSON, aide to Representative Cowdery, said HB 167 is a simple deregulation bill for small Alaskan businesses that sell mobile homes. Currently, they must pay up to $1,500 to get bonded and, in some cases, much more than that. A small business just starting out must pay a $500 plus license fee. There is currently no need for any of these protections because not one claim has been made against a licensee for their bond. The result of these hoops is to drive the small operators out of business or, at least, outside the law. This bill levels the playing field for all Alaskans. CHAIRMAN MACKIE asked how many dealers there are. MR. TORKELSON answered there are 14 dealers licensed in the State - 10 of those sell primarily used mobile homes. Only four deal in new ones. SENATOR KELLY gave the committee some historical perspective saying the requirement for bonding was created because there were "a bunch of sleazy fly-by-night artists out there selling mobile homes." They caused enough problems that they came to the legislature and said they wanted to upgrade the professional image of the industry. The fact that there have been no claims is terrific. "That means it's working." MR. TORKELSON responded that the House Labor and Commerce Committee heard during testimony that the "fly-by-nighters" are still there. There is no reason for them to jump through the hoops to get bonded, so they operate out of the back of a pickup truck and it still occurs. Honest citizens comply, but they aren't the problem. CHAIRMAN MACKIE asked if people are still allowed to do the business. MR. TORKELSON replied that they don't operate legally, but enforcement is expensive and the last thing they want is a large enforcement bill. The 14 legitimate people pay their own way through fees the way the licensing program is set up. SENATOR KELLY asked who was asking for this. MR. MARCO PIGNALBERI, aide to Representative Cowdery, added that two of the exclusively used dealers requested this legislation. They don't need the bond because they "sell as-is/where-is." There was a dispute between the new and used dealers. The used dealers thought the new dealers want numbers of members to reduce fees. The Department of Commerce said essentially they don't think there is any good happening from regulating them at all. The dealers were asked to get together and work it out but they didn't. So the House decided to proceed with deregulation. CHAIRMAN MACKIE asked if the Department is supporting the bill. MR. PIGNALBERI answered that they have taken a neutral position. Number 139 SENATOR LEMAN said he wasn't real comfortable with this. He likes removing unnecessary government from business, but totally repealing their licensing and bonding requirements makes him apprehensive. MR. PIGNALBERI said they fully expect industry to come back with a new plan for regulation that satisfies all segments of the industry, not just the new dealers. SENATOR KELLY asked when this was introduced. CHAIRMAN MACKIE answered it was introduced on March 31. MR. TORKELSON said that new dealers offer their products with a warranty that is a guarantee of the manufacturer of the homes. The used dealers sell things as-is/where-is. SENATOR KELLY commented that they would be more likely to work something out with this hanging over their heads. SENATOR DONLEY said he likes the bill because there have never been any problems in this area and it is one thing they can do to lessen government. SENATOR KELLY asked if he was saying there hadn't been any problem with anyone who had been bonded. MR. TORKELSON said there had been no claims. SENATOR KELLY said this was a piece of deregulation that would come back and haunt them. SENATOR DONLEY asked if there was licensing of used car dealers. MR. TORKELSON said no. SENATOR KELLY said he thought you proved your competence and success by your ability to buy a bigger bond and climb up the ladder of success. Number 240 SENATOR LEMAN moved to report HB 167 from committee with individual recommendations. There were no objections and it was so ordered. CHAIRMAN MACKIE announced the confirmation hearing of the appointees to the Regulatory Commission of Alaska. He said the committee had copies of the resumes. MR. WILL ABBOTT briefly reviewed his qualifications and said he was looking forward to working on the Commission. Number 286 SENATOR LEMAN asked him to comment on competition in the market place. MR. ABBOTT said he believes strongly in the private sector and thought they could sometimes do things much better. He supported deregulation to do that as long as it is in the public interest. SENATOR DONLEY asked him to comment about his education. MR. ABBOTT said he went through two years of college before his time in the Air Force. After that he completed the school of hard knocks. He has a lot of public administration background and retired from the Air Force as a Wing Commander. CHAIRMAN MACKIE said he appreciated his military service and thanked Mr. Abbott for his service to the country. Number 316 MS. PATTI DEMARCO said she is a scientist by training and reviewed some of her past employment. She has a great interest in the policy implications of energy, especially in the regulated industries. This is a time of great change and Alaska is very different from other areas of the country because of wide disparities between the urban and rural areas. If we are to be fair with cost efficient reliable service for all citizens, they would have to find creative ways to do that that may not fit the mold that has been cast in the rest of the country. SENATOR LEMAN asked if she could offer any insights from her experience in Northeast America with energy issues. MS. DEMARCO said the electric issues are every bit as complicated as telecommunications. Alaska is as different from Connecticut as you can get because Connecticut is part of a tight pool integrated with eight other states with all of the pieces connected to each other with hard wire and uniform dispatch. Alaska doesn't even have all of its various parts connected to each other. She thought solutions would require an open mind and new approach. She is not bringing any preconceived solutions into this. SENATOR LEMAN asked if she was aware of the study funded by the Legislature and the APUC this past spring on electric utility restructuring. MS. DEMARCO said she is aware of it and is looking forward to studying it in some depth. MS. G. NANETTE THOMPSON briefly reviewed her education and experience. She graduated from Stanford with a law degree and worked for a small Anchorage firm with utility and government clients. As a private attorney since 1988, she continued to represent utility and municipal clients. She joined the APUC in 1995 and left in 1996 because the Supreme Court decided that the seat to which she was appointed was not vacant. She has worked on mining, oil, and gas issues in the Attorney General's office since then. Number 425 SENATOR LEMAN said the last time she was up for confirmation he voted against her, but it had nothing to do with her capabilities. He thinks she is extremely talented and doing a good job, but he believed that her seat was not available and the Supreme Court concluded the same thing. He looks forward to voting for her this time and working with her on the Commission. MR. JAMES STRANDBERG said he is a life long Alaskan and was educated at the University of Alaska. He spent his career in consulting engineering and has some experience with public service working with the University of Alaska Research Range at Poker Flat. SENATOR LEMAN asked him to comment on the implementation of competition in telecommunications or electric utilities. MR. STRANDBERG answered that nearly everyone in the State agrees that we are coming of age and competition will be a good thing for us. However, we cannot justify state-side solutions to Alaska. One of their biggest tasks is to recognize the special conditions that exist up here - both in the bush and urban areas. SENATOR LEMAN asked if he was a member of the American Society of Civil Engineers. MR. STRANDBERG answered no; he is a member of ASME, NSPE, and a number of others. His contact phone number is 278-5812. Number 461 MR. BURNELL SMITH said he came to Alaska in 1980 and fell in love with the State. SENATOR LEMAN asked him to comment on competition. MR. SMITH answered that he is a firm believer in competition and also in the regulation of semi-monopolies. We have to protect the people. SENATOR LEMAN noted that he has a B.S. in Engineering Technology and asked if he is registered in Alaska as a professional engineer. MR. SMITH replied that he is not. CHAIRMAN MACKIE congratulated the Administration on putting together a good group of people. SENATOR LEMAN moved to report the standard letter indicating they had heard from the five nominees and noted this was not their commitment to vote either for or against the appointees. There were no objections and it was so ordered. CHAIRMAN MACKIE adjourned the meeting at 2:10 p.m.