ALASKA STATE LEGISLATURE  SENATE LABOR AND COMMERCE STANDING COMMITTEE  May 17, 2021 1:58 p.m. MEMBERS PRESENT Senator Mia Costello, Chair Senator Joshua Revak, Vice Chair Senator Peter Micciche Senator Gary Stevens Senator Elvi Gray-Jackson MEMBERS ABSENT  COMMITTEE CALENDAR  COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 125(L&C) "An Act relating to employment preferences for active service members, veterans, and spouses and dependent children of active service members and veterans; relating to employment preferences for surviving spouses of deceased service members and veterans; and relating to employment preferences for disabled veterans and former prisoners of war." - HEARD & HELD HOUSE BILL NO. 36 "An Act relating to an application for a license to operate as a dealer in motor vehicles; and requiring a dealer in motor vehicles to maintain liability and property insurance." - MOVED SCS HB 36(L&C) OUT OF COMMITTEE PREVIOUS COMMITTEE ACTION  BILL: HB 125 SHORT TITLE: MILITARY AND FAMILY EMPLOYMENT PREFERENCE SPONSOR(s): REPRESENTATIVE(s) NELSON 03/05/21 (H) READ THE FIRST TIME - REFERRALS 03/05/21 (H) MLV, L&C 03/16/21 (H) MLV AT 1:00 PM GRUENBERG 120 03/16/21 (H) Heard & Held 03/16/21 (H) MINUTE(MLV) 03/18/21 (H) MLV AT 1:00 PM GRUENBERG 120 03/18/21 (H) Moved HB 125 Out of Committee 03/18/21 (H) MINUTE(MLV) 03/20/21 (H) MLV RPT 6DP 03/20/21 (H) DP: CLAMAN, TARR, SHAW, NELSON, RAUSCHER, TUCK 04/16/21 (H) L&C AT 8:00 AM GRUENBERG 120 04/16/21 (H) Heard & Held 04/16/21 (H) MINUTE(L&C) 04/23/21 (H) L&C AT 8:00 AM GRUENBERG 120 04/23/21 (H) Moved CSHB 125(L&C) Out of Committee 04/23/21 (H) MINUTE(L&C) 04/26/21 (H) L&C RPT CS(L&C) NT 6DP 1NR 04/26/21 (H) DP: SCHRAGE, MCCARTY, SNYDER, NELSON, FIELDS, SPOHNHOLZ 04/26/21 (H) NR: KAUFMAN 05/07/21 (H) TRANSMITTED TO (S) 05/07/21 (H) VERSION: CSHB 125(L&C) 05/10/21 (S) READ THE FIRST TIME - REFERRALS 05/10/21 (S) L&C 05/17/21 (S) L&C AT 2:00 PM BELTZ 105 (TSBldg) BILL: HB 36 SHORT TITLE: MOTOR VEHICLE DEALERS: APPLIC.; INSURANCE SPONSOR(s): REPRESENTATIVE(s) CLAMAN 02/18/21 (H) PREFILE RELEASED 1/8/21 02/18/21 (H) READ THE FIRST TIME - REFERRALS 02/18/21 (H) L&C, FIN 03/03/21 (H) FIN REFERRAL REMOVED 03/03/21 (H) L&C AT 5:45 PM BARNES 124 03/03/21 (H) Heard & Held 03/03/21 (H) MINUTE(L&C) 03/12/21 (H) L&C AT 3:15 PM BARNES 124 03/12/21 (H) Moved HB 36 Out of Committee 03/12/21 (H) MINUTE(L&C) 03/15/21 (H) L&C RPT 6DP 03/15/21 (H) DP: SNYDER, NELSON, MCCARTY, SCHRAGE, KAUFMAN, SPOHNHOLZ 03/25/21 (H) BEFORE HOUSE IN THIRD READING 03/25/21 (H) TRANSMITTED TO (S) 03/25/21 (H) VERSION: HB 36 03/26/21 (S) READ THE FIRST TIME - REFERRALS 03/26/21 (S) TRA, L&C 04/09/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg) 04/09/21 (S) -- MEETING CANCELED -- 04/13/21 (S) TRA AT 1:30 PM BELTZ 105 (TSBldg) 04/13/21 (S) Heard & Held 04/13/21 (S) MINUTE(TRA) 04/15/21 (S) TRA AT 1:30 PM BELTZ 105 (TSBldg) 04/15/21 (S) Moved SCS HB 36(TRA) Out of Committee 04/15/21 (S) MINUTE(TRA) 04/16/21 (S) TRA RPT SCS 3NR 1AM SAME TITLE 04/16/21 (S) NR: MYERS, SHOWER, MICCICHE 04/16/21 (S) AM: KIEHL 04/28/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg) 04/28/21 (S) -- MEETING CANCELED -- 04/30/21 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg) 04/30/21 (S) Heard & Held 04/30/21 (S) MINUTE(L&C) 05/17/21 (S) L&C AT 2:00 PM BELTZ 105 (TSBldg) WITNESS REGISTER REPRESENTATIVE DAVID NELSON Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Sponsor of HB 125 VERDIE BOWEN, Director Office of Veterans Affairs Department of Military and Veterans Affairs Anchorage, Alaska POSITION STATEMENT: Answered questions and provided information during the hearing on HB 125. KIM SKIPPER, Staff Representative David Nelson Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Presented the sectional analysis for HB 125. KATE SHEEHAN, Director Division of Personnel and Labor Relations Department of Administration Juneau, Alaska POSITION STATEMENT: Answered questions during the hearing on HB 125. TAMMIE PERRAULT, Northwest Regional Liaison Defense-State Liaison Office U.S. Department of Defense Olympia, Washington POSITION STATEMENT: Testified on HB 125 by invitation. DAN WAYNE, Legal Counsel Legislative Legal Services Legislative Affairs Agency Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Answered questions about the drafting of HB 125. MELODIE WILTERDINK, Staff Senator Mia Costello Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Summarized HB 36 and explained the proposed amendment. SOPHIE JONAS, Staff Representative Matt Claman Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Answered questions related to HB 36 and stated that the sponsor supported the amendment. MARTEN MARTENSEN, owner Contented Auto Group; and board member Alaska Auto Dealers Association Anchorage, Alaska POSITION STATEMENT: Testified in support of HB 36. ACTION NARRATIVE 1:58:33 PM CHAIR MIA COSTELLO called the Senate Labor and Commerce Standing Committee meeting to order at 1:58 p.m. Present at the call to order were Senators Gray-Jackson, Stevens, and Chair Costello. Senators Revak and Micciche arrived thereafter. HB 125-MILITARY AND FAMILY EMPLOYMENT PREFERENCE  1:59:09 PM CHAIR COSTELLO announced the consideration of CS FOR HOUSE BILL NO. 125(L&C) "An Act relating to employment preferences for active service members, veterans, and spouses and dependent children of active service members and veterans; relating to employment preferences for surviving spouses of deceased service members and veterans; and relating to employment preferences for disabled veterans and former prisoners of war." She noted that this was the first hearing. 2:00:08 PM REPRESENTATIVE DAVID NELSON, Alaska State Legislature, Juneau, Alaska, sponsor of HB 125, read the sponsor statement into the record. [Original punctuation provided.] HB 125 seeks to extend the current private sector and state employment hiring preferences to military spouses. In addition, seeks to extend employment preferences to the dependent children of military service members who died in the line of duty. Military spouses are among the highest unemployed and underemployed group. They are highly educated and qualified for a range of careers but because of frequent moves the unemployment rate among military spouses is 24% and there is a 26% wage gap compared to civilian counterparts. 2:00:51 PM REPRESENTATIVE NELSON continued: In 2019 the Blue Star Families Military Family Lifestyle Survey found that 49% of military spouses indicated that financial issues were the top stressor for military families, and 48% were concerned about employment. Of employed military spouses 75 % were considered underemployed. HB 125 can provide some help to reduce these concerns for military families by providing a hiring preference. 2:01:21 PM REPRESENTATIVE NELSON continued: A Covid-19 Military Support Initiative created by the Blue Star Families and the Association of Defense Communities found that an additional 17% of military spouses lost their jobs during the pandemic on top of the 24% unemployment before the pandemic. Currently 35 states and the District of Columbia provide hiring preferences to active-duty spouses or surviving spouses. HB 125 will add Alaska to this growing list of states that support our military community and honor the sacrifices these families make in service to our country. 2:02:06 PM SENATOR REVAK joined the meeting. 2:02:19 PM SENATOR STEVENS asked how the bill changes what is currently in statute to provide an advantage to military spouses. REPRESENTATIVE NELSON replied there is a hiring preference for military personnel in statute and HB 125 extends that preference to military spouses and dependents. SENATOR STEVENS expressed support for the concept and said he looked forward to hearing from the experts. CHAIR COSTELLO asked Verdi Bowen to answer Senator Stevens' question about how HB 125 deviates from current statute. 2:03:51 PM VERDIE BOWEN, Director, Office of Veterans Affairs, Department of Military and Veterans Affairs, Anchorage, Alaska, stated that veterans receive a point preference but that does not include military spouses or dependents. HB 125 would fix that gap help spouses to more readily find gainful employment. He described the bill as a good gesture to join the other 35 states that provide hiring preferences to active-duty spouses. SENATOR STEVENS asked what it means to have a point preference. MR. BOWEN explained that the points provide a hand up when a veteran applies for a job. Veterans with a disability automatically receive an interview. SENATOR STEVENS asked if that is only for veterans with a disability, and how that affects a spouse. MR. BOWEN replied that private industry can provide a hiring preference to a spouse but under existing statute, the state does not extend hiring preferences to military spouses. 2:06:23 PM SENATOR STEVENS asked if there was a reporting system for somebody who feels they did not receive the advantage. MR. BOWEN said private companies have veteran hiring standards and their hiring reports would go through the human resources offices and on to the regional offices. He offered his belief that those companies would follow the same process for military spouses. 2:07:25 PM At ease 2:07:49 PM CHAIR COSTELLO reconvened the meeting and advised that she asked Representative Nelson's staff to walk through a sectional analysis. She expressed particular interest in Sections 2 and 3. 2:08:12 PM KIM SKIPPER, Staff, Representative David Nelson, Alaska State Legislature, Juneau, Alaska, presented the sectional analysis for HB 125. Section 1. AS 18.80.200(c)  This section does not prohibit a private employer from having hiring preferences for persons described in Section 2 of this bill. Section 2. AS 23.88.010  This section repeals and reenacts the current statute by adding definitions removed from Section 1 for clarity. This section does not prohibit a private employer from having hiring preferences to active- military, veterans and families. This section adds language to include spouses and dependent children of deceased service members to the list. CHAIR COSTELLO asked her to read the language on page 2, lines 17-22 that talks about the people for whom private industry may provide a hiring preference. She said she reads the bill to include a spouse or dependent child of an active-duty military member in addition to a spouse or dependent child of a deceased military member. MS. SKIPPER suggested the drafter could also provide clarification. She offered her understanding that the House Labor and Commerce Committee amended the bill to include a preference for a surviving child of a Gold Star member. A hiring preference for the spouse of an active duty or deceased member of the military was included in both versions of the bill. 2:10:07 PM CHAIR COSTELLO read the language on page 2, paragraph (2), lines 23-24, and noted that paragraph (1) is the list of military service entities. Paragraph (2) read as follows: (2) the spouse or dependent child of a person described in (1) of this subsection; and MS. SKIPPER recognized that she was speaking to the wrong version of the bill. 2:10:27 PM At ease 2:11:34 PM CHAIR COSTELLO reconvened the meeting and asked Ms. Skipper to proceed. MS. SKIPPER interpreted the changes made in the House Labor and Commerce Committee as eliminating a private industry hiring preference for a dependent child of a member killed in the line of duty. CHAIR COSTELLO pointed out that the language in paragraph (2) on page 2, lines 23-24 says, "or dependent child." She asked if the drafter was available. SENATOR STEVENS asked the reason for the changes in the House Labor and Commerce Committee. 2:12:58 PM REPRESENTATIVE NELSON explained that the House Labor and Commerce Committee narrowed the focus to members of Gold Star Families. 2:13:28 PM SENATOR STEVENS asked if that change was a good idea. REPRESENTATIVE NELSON answered that he wanted to see the bill pass and he believes it was meaningful to maintain the Gold Star Family section. 2:14:05 PM CHAIR COSTELLO pointed out that the change on page 6 removed the hiring preference for state employment but on page 2, the hiring preference for a dependent child was maintained for private employment. She questioned whether that was the intention. 2:14:37 PM MS. SKIPPER advised that the preference in private sector employment is optional whereas the preference for state employment is mandatory. She offered her view that the previous committee wanted to limit the preference for state employment to just dependents of Gold Star Families. CHAIR COSTELLO recapped that the language on page 2 provides that the private employer may grant a hiring preference to active and former military members and the spouse or dependent child of those individuals. MS. SKIPPER agreed. 2:15:21 PM SENATOR REVAK said the narrow definition of "dependent child" on pages 2 and 3 gives him comfort. The definition read as follows: (b) In this section, "dependent child" means a natural child, stepchild, or adopted child who is (1) permanently disabled; or (2) under (A) 19 years of age; or (B) 23 years of age and registered at and attending on a full time basis an accredited educational or technical institution recognized by the Department of Education and Early Development. CHAIR COSTELLO invited Kate Sheehan to add to the discussion. 2:16:32 PM KATE SHEEHAN, Director, Division of Personnel and Labor Relations, Department of Administration, Juneau, Alaska, advised that the existing state policy is to offer an interview to every 5-point and 10-point veteran. If the bill were to pass, a qualified dependent or spouse would receive the same consideration. 2:17:07 PM CHAIR COSTELLO pointed to the language on page 6 that says, "points equal to five percent of the points available ... shall be added ..." She asked Ms. Sheehan if she was saying the preference would be to offer an interview to the spouse. 2:17:21 PM MS. SHEEHAN answered that the state generally does not use the old rating system any longer. The current policy requires that every 10-point veteran who meets the minimum qualifications advance to the interview stage. However, the division currently offers an interview to both 5-point and 10-point veterans. Applications from a dependent or a spouse receive a more in depth review, but the current policy is to allow the interview if the applicant meets the minimum qualifications. CHAIR COSTELLO asked if that was in regulation. MS. SHEEHAN replied an interview is required for a 10-point veteran who meets the minimum qualifications but the division's policy is to offer an interview to qualified 5-point veterans as well. CHAIR COSTELLO asked if that was in regulation. MS. SHEEHAN said yes. 2:18:37 PM SENATOR STEVENS asked for further explanation of the 5-point and 10-point preference. He also asked how many points were in the system. MS. SHEEHAN acknowledged that the language was confusing because it refers to a rating system that is no longer used. She reiterated that under current statute, a 10-point veteran who meets minimum qualifications will receive an interview. Since she has been the director, she has had the policy that a qualified 5-point veteran also receives an interview. Should HB 125 pass, dependents and spouses would receive the preference too. CHAIR COSTELLO asked if it presents a problem to have the statute refer to a point system that is not used. MS. SHEEHAN answered that it did not present a problem. CHAIR COSTELLO asked Tammie Perrault to provide her testimony. 2:20:54 PM TAMMIE PERRAULT, Northwest Regional Liaison, Defense-State Liaison Office, U.S. Department of Defense, Olympia, Washington, Joint Base Lewis McCord, Washington, stated support for HB 125 to expand the protection of private sector employment preferences and to establish state employment preferences to spouses, dependents, and surviving spouses. She said the mission of her office is to be a resource for state policy makers. 2:21:28 PM MS. PERRAULT referenced a February 2020 letter to Governor Dunleavy in which the undersecretary of defense for personnel and readiness highlighted the need to support military spouses. She read the following excerpt: Military spouse employment and the associated financial and personal wellbeing is an important component of retention of service members. More than half of all active-duty military personnel are married, and 88 percent of employed military spouses indicate they wanted, or needed, to work. Not only are military spouses highly influential in general, regarding their service members' decision to remain in service, but over 28 percent of service members reported that their decision to leave the military would largely or moderately be affected by their spouses' career prospects. MS. PERRAULT highlighted that Alaska has approximately 8,000 active-duty military and 3,250 National Guard Reserve spouses so they are an important part of the workforce. She noted that this group is also among the highest unemployed, and underemployed group in the nation. These spouses report significant challenges obtaining employment due to frequent moves, which adds stress to family finances. MS. PERRAULT stated that the U.S. Department of Defense supports the policy in HB 125 and asks the committee to forward the legislation. 2:23:10 PM SENATOR STEVENS said he agrees with supporting military spouses, but wonders about the statutory reference to a point system that is no longer used. He asked if it was common in other states to use a point system. MS. PERRAULT replied that the use of a point system in prevalent nationwide, but there is significant variability in practice among the 35 states that have passed this type of legislation. 2:24:15 PM CHAIR COSTELLO asked the drafter to explain the difference between the hiring preferences for dependent children in Section 2 on page 2 and in Section 4 on page 6. She also asked how these provisions deviate from current statute. 2:25:14 PM DAN WAYNE, Legal Counsel, Legislative Legal Services, Legislative Affairs Agency, Alaska State Legislature, Juneau, Alaska, advised that the "may" in Section 2 and the "shall" in Section 4 is an important factor. He said the language in the two sections regarding the benefits for dependent children was more similar before the bill was amended. He believes that for policy reasons, the members in the previous committee felt it was important to narrow the scope of the benefit for dependent children in Section 4 to just the dependent children of Gold Star members. CHAIR COSTELLO observed that for both work in the private sector and state employment, the definition of "dependent child" is somebody who is under 19 years of age or 23 years of age if they are registered and attending an accredited educational institution on a full-time basis. MR. WAYNE agreed that both definitions of "dependent child" have the two ages. He advised that in statutes relating to a benefit, it is common to extend the qualifying age beyond age 19 if the dependent is attending an accredited school full time. He said he could not comment on the policy reasons for the ages. CHAIR COSTELLO said she assumes the rationale was to allow those who have chosen to go to college to still receive the preference. MR. WAYNE said that perhaps the assumption is that the parents in the military will be providing support while the child is in in college. 2:29:59 PM CHAIR COSTELLO opened public testimony on HB 125; finding none, she closed public testimony. She asked the sponsor if he had any closing comments related to the discussion. REPRESENTATIVE NELSON advised that a representative from NCSL was available to talk about the hiring benefit the other 35 states provide on a point basis. He noted that the information was also in the packets. He reiterated that the bill provides an option for private employers to extend this benefit; it is not mandatory. 2:31:35 PM CHAIR COSTELLO held HB 125 in committee for further consideration. 2:31:43 PM At ease HB 36-MOTOR VEHICLE DEALERS: APPLIC.; INSURANCE  2:33:08 PM CHAIR COSTELLO reconvened the meeting and announced the consideration of HOUSE BILL NO. 36 "An Act relating to an application for a license to operate as a dealer in motor vehicles; and requiring a dealer in motor vehicles to maintain liability and property insurance." She noted that this was the second hearing and there was an amendment for the committee to consider. She asked Ms. Wilterdink to summarize the bill and explain the amendment. 2:33:45 PM MELODIE WILTERDINK, Staff, Senator Mia Costello, Alaska State Legislature, Juneau, Alaska, explained that the bill creates stricter insurance requirements for licensed motor vehicle dealers and increases their bonding requirement. According to the sponsor, this better aligns Alaska with the insurance requirements in other states. Alaskans will be covered when they test drive a car and the bonding requirement will provide recourse for buyers who purchase used cars that were fraudulently represented. SENATOR MICCICHE joined the committee. 2:34:44 PM CHAIR COSTELLO moved Amendment [1], work order 32-LS0271\B.2. 32-LS0271\B.2 Fisher 5/14/21 AMENDMENT [1] OFFERED IN THE SENATE BY SENATOR COSTELLO TO: SCS HB 36(TRA) Page 1, line 1, following "vehicles;": Insert "relating to the duties of a motor vehicle  dealer;" Page 2, following line 17: Insert a new bill section to read:  "* Sec. 2. AS 08.66.040 is amended to read: Sec. 08.66.040. Filing application for  registration; identification of dealer. The application shall be filed with the department. Upon receipt of the application, the department shall examine it and may make an investigation of the information in it. If the department is satisfied that the dealer is entitled to registration, and the fees have been paid and a bond filed, the department shall assign a distinctive registration number to the dealer and file the dealer's application and index it alphabetically and numerically. A dealer is registered when the department assigns a registration number. A  dealer shall inform each person who purchases a  vehicle from the dealer that the dealer is registered  under this chapter and provide the dealer's  registration number."  Renumber the following bill sections accordingly. 2:34:54 PM SENATOR STEVENS objected for discussion purposes. 2:35:03 PM MS. WILTERDINK explained that the proposed amendment seeks to resolve the issue of registered vehicle dealers who go to closed auctions, which are only open to registered dealers, and they buy cars that are meant to be used for parts and sell them on sites like Craigslist, posing as an individual not a dealer. The buyers are unsuspecting and only later find out these cars are not meant to be on the road. Amendment [1] requires a dealer to identify to identify himself as a dealer whenever they sell a car. The buyer would know they purchased a vehicle from a dealer and that they have the avenues of recourse that HB 36 provides. 2:36:21 PM SENATOR STEVENS asked what stakeholders she had talked to. MS. WILTERDINK answered that she spoke to large and small motor vehicle dealers and some victims, most of whom are young and have just made the largest purchase in their life. 2:37:06 PM SENATOR STEVENS removed his objection. CHAIR COSTELLO found no further objection and Amendment [1] passed. She asked the bill sponsor's staff for the sponsor's position on the amendment. 2:37:46 PM SOPHIE JONAS, Staff, Representative Matt Claman, Alaska State Legislature, Juneau, Alaska, stated that the sponsor supports Amendment 1. CHAIR COSTELLO offered her belief that the amendment strengthens the consumer protection portion of the bill as well as the intent of the legislation. 2:38:19 PM SENATOR STEVENS offered his understanding that dealers currently are not required to identify themselves as a dealer when they sell a used car. HB 36 requires the dealer to inform the purchaser and guarantee the vehicle. MS JONAS answered yes and deferred further comment to the dealer who was available online to speak to the bill. 2:39:11 PM SENATOR MICCICHE asked the record to reflect that he heard the explanation of the amendment and he supports it. He asked how the bill proposes to differentiate between an individual who frequently buys and sells their personal vehicles and a dealer who buys vehicles at auction and poses as an individual when they sell the vehicle to an unsuspecting consumer. MS. JONAS answered that the existing statute has an annual five- vehicle threshold above which an individual is required to obtain a motor vehicle dealer license. However, her understanding is that the requirement is not enforced. 2:40:44 PM SENATOR STEVENS asked to hear from a dealer. CHAIR COSTELLO recognized that Martin Martensen with the Alaska Auto Dealers Association was available to provide comment and answer questions. 2:41:04 PM MARTEN MARTENSEN, owner, Continental Auto Group; board member, Alaska Auto Dealers Association, Anchorage, Alaska, stated support for the amendment the chair brought forward to require dealers to disclose that they are a dealer and that consumers have recourse. He highlighted that the bill also requires [the application for dealer registration] to include a phone number for the business so the consumer has recourse if the vehicle was misrepresented. SENATOR STEVENS asked if this is a large concern for legitimate dealers. MR. MARTENSEN answered yes; it has become a big issue in Anchorage and throughout Southcentral. He noted that dealer fraud on vehicles was one of the most frequent complaints to the Consumer Protection Unit when former Attorney General Ed Sniffen was head of the unit. CHAIR COSTELLO, finding no further questions, solicited a motion. 2:43:04 PM SENATOR REVAK moved to report SCS HB 36, work order 32-LS0271\B as amended, from committee with individual recommendations and attached fiscal note(s). CHAIR COSTELLO stated that without objection, SCS HB 36(L&C) passed from the Senate Labor and Commerce Standing Committee. 2:44:01 PM There being no further business to come before the committee, Chair Costello adjourned the Senate Labor and Commerce Standing Committee meeting at 2:44 p.m.