ALASKA STATE LEGISLATURE                                                                                  
             SENATE STATE AFFAIRS STANDING COMMITTEE                                                                          
                          April 8, 2010                                                                                         
                            9:06 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Linda Menard, Chair                                                                                                     
Senator Kevin Meyer, Vice Chair                                                                                                 
Senator Hollis French                                                                                                           
Senator Albert Kookesh                                                                                                          
Senator Joe Paskvan                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 225(FIN)(CORRECTED)                                                                     
"An Act  relating to the State  Procurement Code; relating  to the                                                              
procurement   of  supplies,   services,   professional   services,                                                              
construction   services,    state   fisheries    products,   state                                                              
agricultural products,  state timber,  and state lumber;  relating                                                              
to  procurement  preferences;  relating   to  procurement  by  the                                                              
office of  the ombudsman,  the Alaska  Industrial Development  and                                                              
Export Authority,  the Alaska  Energy Authority,  and other  state                                                              
agencies and public  corporations; and providing  for an effective                                                              
date."                                                                                                                          
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 24(MLV)                                                                                 
"An Act  relating to  a public procurement  preference  for Alaska                                                              
veterans."                                                                                                                      
                                                                                                                                
     - MOVED CSHB 24(MLV) OUT OF COMMITTEE                                                                                      
                                                                                                                                
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 251(JUD)                                                                                
"An   Act  relating   to  liens   on  vehicles   and  to   towing,                                                              
transporting,  and  storage  of vehicles;  and  providing  for  an                                                              
effective date."                                                                                                                
                                                                                                                                
     - MOVED CSHB 251(JUD) OUT OF COMMITTEE                                                                                     
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 225                                                                                                                  
SHORT TITLE: STATE PROCUREMENT CODE                                                                                             
SPONSOR(s): REPRESENTATIVE(s) FAIRCLOUGH                                                                                        
                                                                                                                                
04/10/09       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/10/09       (H)       STA, FIN                                                                                               
04/14/09       (H)       STA RPT CS(STA) 4DP                                                                                    
04/14/09       (H)       DP: GRUENBERG, WILSON, PETERSEN, SEATON                                                                
04/14/09       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
04/14/09       (H)       Moved CSHB 225(STA) Out of Committee                                                                   
04/14/09       (H)       MINUTE(STA)                                                                                            
04/16/09       (H)       FIN AT 8:30 AM HOUSE FINANCE 519                                                                       
04/16/09       (H)       <Bill Held Over to 1:30 Meeting>                                                                       
04/16/09       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
04/16/09       (H)       Scheduled But Not Heard                                                                                
02/08/10       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/08/10       (H)       Heard & Held                                                                                           
02/08/10       (H)       MINUTE(FIN)                                                                                            
03/11/10       (H)       FIN AT 9:00 AM HOUSE FINANCE 519                                                                       
03/11/10       (H)       Heard & Held                                                                                           
03/11/10       (H)       MINUTE(FIN)                                                                                            
03/17/10       (H)       FIN RPT CS(STA) 9DP                                                                                    
03/17/10       (H)       DP: THOMAS, GARA, DOOGAN, JOULE, KELLY,                                                                
                         AUSTERMAN, N.FOSTER, FAIRCLOUGH,                                                                       
03/17/10       (H)       STOLTZE                                                                                                
03/17/10       (H)       FIN AT 9:00 AM HOUSE FINANCE 519                                                                       
03/17/10       (H)       Moved CSHB 225(STA) Out of Committee                                                                   
03/17/10       (H)       MINUTE(FIN)                                                                                            
03/19/10       (H)       CORRECTED FIN RPT CS(FIN) 8DP 1NR                                                                      
03/19/10       (H)       DP: JOULE, AUSTERMAN, DOOGAN, N.FOSTER,                                                                
                         THOMAS, FAIRCLOUGH, KELLY, STOLTZE                                                                     
03/19/10       (H)       NR: GARA                                                                                               
03/22/10       (H)       CS(FIN)(CORRECTED) RECEIVED                                                                            
03/22/10       (H)       TRANSMITTED TO (S)                                                                                     
03/22/10       (H)       VERSION: CSHB 225(FIN)(CORRECTED)                                                                      
03/23/10       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/23/10       (S)       STA, FIN                                                                                               
04/01/10       (S)       STA AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
04/01/10       (S)       -- MEETING CANCELED --                                                                                 
04/06/10       (S)       STA AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
04/06/10       (S)       Heard & Held                                                                                           
04/06/10       (S)       MINUTE(STA)                                                                                            
04/08/10       (S)       STA AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
BILL: HB  24                                                                                                                  
SHORT TITLE: PROCUREMENT PREFERENCE FOR VETERANS                                                                                
SPONSOR(s): REPRESENTATIVE(s) FAIRCLOUGH, GATTO, LYNN                                                                           
                                                                                                                                
01/20/09       (H)       PREFILE RELEASED 1/9/09                                                                                
01/20/09       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/20/09       (H)       MLV, STA                                                                                               
03/31/09       (H)       MLV AT 1:00 PM BARNES 124                                                                              
03/31/09       (H)       Moved CSHB  24(MLV) Out of Committee                                                                   
03/31/09       (H)       MINUTE(MLV)                                                                                            
04/01/09       (H)       MLV RPT CS(MLV) 2DP 2NR                                                                                
04/01/09       (H)       DP: LYNN, GATTO                                                                                        
04/01/09       (H)       NR: RAMRAS, BUCH                                                                                       
04/07/09       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
04/07/09       (H)       Heard & Held                                                                                           
04/07/09       (H)       MINUTE(STA)                                                                                            
04/09/09       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
04/09/09       (H)       Moved CSHB  24(MLV) Out of Committee                                                                   
04/09/09       (H)       MINUTE(STA)                                                                                            
04/10/09       (H)       STA RPT CS(MLV) 5DP                                                                                    
04/10/09       (H)       DP: JOHNSON, GATTO, SEATON, PETERSEN,                                                                  
                         LYNN                                                                                                   
04/16/09       (H)       TRANSMITTED TO (S)                                                                                     
04/16/09       (H)       VERSION: CSHB 24(MLV)                                                                                  
04/17/09       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/17/09       (S)       STA                                                                                                    
03/25/10       (S)       STA AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
03/25/10       (S)       <Bill Hearing Canceled>                                                                                
                                                                                                                                
BILL: HB 251                                                                                                                  
SHORT TITLE: VEHICLE LIENS/TOWING/STORAGE/TRANSPORT                                                                             
SPONSOR(s): REPRESENTATIVE(s) RAMRAS                                                                                            
                                                                                                                                
01/08/10       (H)       PREFILE RELEASED 1/8/10                                                                                
01/19/10       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/19/10       (H)       STA, JUD                                                                                               
03/09/10       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
03/09/10       (H)       Heard & Held                                                                                           
03/09/10       (H)       MINUTE(STA)                                                                                            
03/11/10       (H)       STA RPT 1DP 4NR                                                                                        
03/11/10       (H)       DP: LYNN                                                                                               
03/11/10       (H)       NR: JOHNSON, GATTO, GRUENBERG, PETERSEN                                                                
03/11/10       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
03/11/10       (H)       Moved Out of Committee                                                                                 
03/11/10       (H)       MINUTE(STA)                                                                                            
03/25/10       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
03/25/10       (H)       Moved CSHB 251(JUD) Out of Committee                                                                   
03/25/10       (H)       MINUTE(JUD)                                                                                            
03/26/10       (H)       JUD RPT CS(JUD) NT 2DP 3NR 1AM                                                                         
03/26/10       (H)       DP: LYNN, RAMRAS                                                                                       
03/26/10       (H)       NR: HERRON, DAHLSTROM, HOLMES                                                                          
03/26/10       (H)       AM: GATTO                                                                                              
04/01/10       (H)       TRANSMITTED TO (S)                                                                                     
04/01/10       (H)       VERSION: CSHB 251(JUD)                                                                                 
04/02/10       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/02/10       (S)       STA, JUD                                                                                               
04/08/10       (S)       STA AT 9:00 AM BELTZ 105 (TSBldg)                                                                      
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
CRYSTAL KINEMAN                                                                                                                 
Aide to Representative Fairclough                                                                                               
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Presented HB 225 and HB 24 for the sponsor.                                                               
                                                                                                                                
SCOTT THORSON                                                                                                                   
Network Business Systems Today                                                                                                  
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Testified that the Alaska bidder's                                                                        
preference should be in statute.                                                                                                
                                                                                                                                
DENNIS MEINERS                                                                                                                  
Intelligent Energy System,                                                                                                      
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Testified in support of taking Section 6 out                                                              
of HB 225.                                                                                                                      
                                                                                                                                
TOM WICKWIRE, attorney,                                                                                                         
Power Corps Alaska                                                                                                              
Fairbanks, AK                                                                                                                   
POSITION STATEMENT: Testified that there is pending litigation                                                                
against AIDEA.                                                                                                                  
                                                                                                                                
VERN JONES, chief procurement officer                                                                                           
Division of General Services                                                                                                    
Department of Administration                                                                                                    
Juneau, AK                                                                                                                      
POSITION STATEMENT: Testified in support of HB 24 but noted it                                                                
does not fix any problems with the procurement system.                                                                          
                                                                                                                                
REPRESENTATIVE RAMRAS                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Sponsor of HB 251.                                                                                        
                                                                                                                                
DON HABBIGER                                                                                                                    
Aide to REPRESENTATIVE RAMRAS                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Provided information for HB 251.                                                                          
                                                                                                                                
SHAWN HESS                                                                                                                      
S&S Towing and Recovery                                                                                                         
Fairbanks, AK                                                                                                                   
POSITION STATEMENT: Testified in support of HB 251.                                                                           
                                                                                                                                
MARK DAVIS, owner                                                                                                               
Interior Towing and Salvage Inc.                                                                                                
Fairbanks, AK                                                                                                                   
POSITION STATEMENT: Testified in support of HB 251.                                                                           
                                                                                                                                
MARGARET RABY                                                                                                                   
Alaska Towing Association                                                                                                       
Fairbanks, AK                                                                                                                   
POSITION STATEMENT: Testified that most members support HB 251.                                                               
                                                                                                                                
ELIZABETH GRISWOLD, owner                                                                                                       
Gabe's Towing                                                                                                                   
Fairbanks, AK                                                                                                                   
POSITION STATEMENT: Testified in support of HB 251.                                                                           
                                                                                                                                
JEFF VANEYCH                                                                                                                    
Dirty Deeds Towing and Recovery                                                                                                 
Fairbanks, AK                                                                                                                   
POSITION STATEMENT: Testified in support of HB 251.                                                                           
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
9:06:28 AM                                                                                                                    
                                                                                                                                
CHAIR LINDA MENARD called the Senate State Affairs Standing                                                                   
Committee meeting to order at 9:06 a.m. Present at the call to                                                                  
order were Senators Meyer, Paskvan, Kookesh, French and Menard.                                                                 
                                                                                                                                
                  HB 225-STATE PROCUREMENT CODE                                                                             
                                                                                                                                
9:06:59 AM                                                                                                                    
CHAIR MENARD announced the first order of business to come                                                                      
before the committee would be HB 225. [CSHB 225(FIN)(CORRECTED)                                                                 
was before the committee. It was heard previously.]                                                                             
                                                                                                                                
SENATOR MEYER moved  to adopt the work draft  committee substitute                                                              
(CS) for  HB 225,  labeled 26-LS0791\C,  as the working  document.                                                              
Senator French objected for the purposes of discussion.                                                                         
                                                                                                                                
CRYSTAL KINEMAN,  staff to  Representative Anna Fairclough,  noted                                                              
that  Version   P  [CSHB   225(FIN)(Corrected)]  exempted   Alaska                                                              
Industrial  Development and  Export Authority  (AIDEA) and  Alaska                                                              
Energy  Authority  (AEA)  from  the   procurement  code.  The  new                                                              
committee substitute,  Version C, [CSHB 225(STA)]  eliminates that                                                              
wording  leaving  AIDEA  and  AEA   under  the  procurement  code.                                                              
Technical changes were  made to Section 36 of  Version P [amending                                                              
AS  36.30.999(l)] which  referred to  AIDEA and  AEA as  agencies.                                                              
Section 19  of Version P was taken  out of Version C  for purposes                                                              
of clarity; the offerors preference is left in regulation.                                                                      
                                                                                                                                
9:10:53 AM                                                                                                                    
SENATOR FRENCH  said the  committee wrestled  with two  provisions                                                              
at  the last  hearing:  whether to  put AEA  and  AIDEA under  the                                                              
procurement  code and  whether to  eliminate  the Alaska  offerors                                                              
preference. He asked if [Version C] does that or not.                                                                           
                                                                                                                                
MS.  KINEMAN  said Version  C  takes  AEA  and  AIDEA out  of  the                                                              
equation  and  leaves the  offerors  preference  as it  exists  in                                                              
regulation.                                                                                                                     
                                                                                                                                
SENATOR  FRENCH  clarified  that  Version C  leaves  the  offerors                                                              
preference as it is right now, untouched.                                                                                       
                                                                                                                                
MS. KINEMAN responded that was correct.                                                                                         
                                                                                                                                
SENATOR PASKVAN said  he sensed a major problem in  the system and                                                              
would like  to hear from Mr.  Jones. He asked about  the sponsor's                                                              
position on  Version C, Version P  or the original  legislation of                                                              
a $5,000 veterans preference.                                                                                                   
                                                                                                                                
9:12:51 AM                                                                                                                    
MS. KINEMAN replied  that the Alaska Veterans Preference  is still                                                              
important to  Representative Fairclough.  Questions about  Version                                                              
C  remain,  but  the  sponsor  will  adapt  to  the  will  of  the                                                              
committee.                                                                                                                      
                                                                                                                                
SENATOR PASKVAN  questioned how objective criteria  are determined                                                              
if  they  do   not  come  from  statutory  authority.   Perhaps  a                                                              
preference should not  be maintained if it can skew  a bid result,                                                              
has no basis in statute and may not have an objective standard.                                                                 
                                                                                                                                
MS. KINEMAN  replied that the sponsor  holds the same  concern and                                                              
the chair may decide whether that is addressed today or not.                                                                    
                                                                                                                                
9:15:57 AM                                                                                                                    
CHAIR  MENARD  said the  legislation  is  very confusing  and  she                                                              
wants to give it due diligence. She opened public testimony.                                                                    
                                                                                                                                
SCOTT THORSON, Network  Business Systems, said that  he would like                                                              
to see  the Alaska bidder's  preference clarified in  statute. The                                                              
state should  support locally  owned businesses  because the  vast                                                              
majority of Alaskans work for Alaskan small businesses.                                                                         
                                                                                                                                
9:18:37 AM                                                                                                                    
DENNIS  MEINERS, Intelligent  Energy  System, Anchorage,  supports                                                              
the  committee's   decision  to   take  Section  6   [amending  AS                                                              
36.30.015(f)]  out of  HB 225,  Version P.  Legislative Audit  08-                                                              
30048-08 found  that procurement  policies and procedures  for the                                                              
AEA   Rural  Energy   Group  Projects   need   to  be   rewritten.                                                              
Procurements for  the Rural Power Systems Upgrade  (RPSU) projects                                                              
were not  consistently made  in compliance  with the rural  energy                                                              
group,  bulk fuel  upgrade  program,  rural power  system  upgrade                                                              
program  project reference  manual  guidelines  or the  underlying                                                              
federal  regulations.  Section  6  of Version  P  strengthens  the                                                              
agencies' ability  to create their  own procurement  provisions in                                                              
spite of  past problems. They  are a small  section, maybe 3  or 4                                                              
people,  who have  managed about  $300 million  worth of  projects                                                              
over the last eight years. Very few of those have been bid out.                                                                 
                                                                                                                                
9:21:05 AM                                                                                                                    
AEA has  accumulated traditions or  ways of doing things  over the                                                              
years, surrounding  the way  bids are  put together.   Procurement                                                              
procedures  may  exist but  projects  are directed  to  particular                                                              
contractors;  innovation and  competition is  restricted. He  gave                                                              
an  example of  a 2007  multiple-year software  contract going  to                                                              
the  son  of  one  of  the workers  at  the  agency.  It  was  not                                                              
advertised; his  company and others  did not have  the opportunity                                                              
to bid.  The complexity and lack  of public information  about the                                                              
procurement  practices  at  AEA eliminate  some  contractors  from                                                              
even understanding the bids. The lack of oversight is harmful.                                                                  
                                                                                                                                
CHAIR MENARD asked Mr. Meiners to wrap up.                                                                                      
                                                                                                                                
MR. MEINERS  summarized that it  is not appropriate  to strengthen                                                              
the  procurement  abilities of  the  agency without  a  management                                                              
review.                                                                                                                         
                                                                                                                                
9:24:10 AM                                                                                                                    
TOM  WICKWIRE,  attorney,  Power  Corps  Alaska,  Fairbanks,  said                                                              
Power Corps  Alaska is a plaintiff  in pending litigation  against                                                              
AIDEA  and   one  of  its  employees.   HB  225  would   amend  AS                                                              
36.30.015(f),   effectively  allowing   AEA  to   draft  its   own                                                              
regulations  and adding  AIDEA to  the list of  agencies that  are                                                              
excluded from the  state procurement code. In  pending litigation,                                                              
Power Corps,  has proven  that AIDEA,  acting  through one  of its                                                              
employees,  has succeeding  in  giving over  $1  million worth  of                                                              
contracts to an out of state corporation.                                                                                       
                                                                                                                                
CHAIR  MENARD   interjected  and   said  a  committee   substitute                                                              
[Version C] is currently before the committee.                                                                                  
                                                                                                                                
MR.  WICKWIRE asked  if  Version C  allows AEA  to  draft its  own                                                              
procurement regulations.                                                                                                        
                                                                                                                                
CHAIR MENARD replied no.                                                                                                        
                                                                                                                                
MR.  WICKWIRE asked  if  Version  C excludes  AEA  from the  state                                                              
procurement code.                                                                                                               
                                                                                                                                
CHAIR MENARD replied no.                                                                                                        
                                                                                                                                
MR.  WICKWIRE  asked   if  AEA  will  be  subject   to  the  state                                                              
procurement code.                                                                                                               
                                                                                                                                
CHAIR MENARD replied yes.                                                                                                       
                                                                                                                                
MR. WICKWIRE  said if AEA is  excluded from the  procurement code,                                                              
this change  will occur while  litigation is pending  against AEA.                                                              
Trans Power  has alleged, and  submitted proof  to the AG,  that a                                                              
certain AEA  employee has  intentionally violated the  procurement                                                              
code. It looks like  the AEA has drafted this provision  of HB 225                                                              
to get itself out  of a difficult box. It is  inappropriate for an                                                              
agency to try to amend a law while litigation is pending.                                                                       
                                                                                                                                
9:28:00 AM                                                                                                                    
CHAIR MENARD closed public testimony.                                                                                           
                                                                                                                                
SENATOR  PASKVAN said  he is  uncomfortable rewriting  legislation                                                              
without more information and would like Mr. Jones to weigh in.                                                                  
                                                                                                                                
SENATOR MEYER  said the legislation  is attempting to  fix certain                                                              
areas of  the procurement code. Version  C deletes Section  20 and                                                              
Section 6,  which puts AIDEA and  AEA back under  procurement code                                                              
and  leaves  the   offerors  preference  the  way   it  was.  Some                                                              
testimony   supports  this,  however,   the  procurement   officer                                                              
remains frustrated  with the  number of accumulative  preferences.                                                              
He  suggested   getting  rid  of   the  offerors   preference  and                                                              
increasing  the Alaska bidders  preference.  He also believes  the                                                              
criteria,  six  months,  for Alaska  business  residency,  is  not                                                              
enough.                                                                                                                         
                                                                                                                                
9:30:20 AM                                                                                                                    
CHAIR MENARD asked if Mr. Meyer would suggest a year.                                                                           
                                                                                                                                
SENATOR  MEYER said  a year  requirement should  be considered  as                                                              
that is  consistent with other  Alaska residence  requirements. He                                                              
has also  heard concern about Sections  33 and 34 which  allow the                                                              
procurement officer  to go outside  the procurement code  and join                                                              
up  with  a cooperative  made  up  of several  western  states  in                                                              
attempt to  get a better  rate for the  state. AEA and  AIDEA also                                                              
want to  be outside the procurement  code. He reiterated  that the                                                              
state needs  to be able to keep  better track of money  spent with                                                              
an automated and  centralized system. His inclination  is to leave                                                              
the  procurement code  as  it is  and  take more  time  to find  a                                                              
comprehensive solution.                                                                                                         
                                                                                                                                
CHAIR MENARD  said that is  why she would  like to hold  Version C                                                              
and go back  to HB 24 which  deals with the  veterans' preference.                                                              
The procurement code needs more work and discussion.                                                                            
                                                                                                                                
SENATOR KOOKESH  said he has no  problem with Chair  Menard's plan                                                              
as long  as we have some  control over AEA  and AIDEA. He  said he                                                              
is not  willing to let  them have state  money and not  be subject                                                              
to the procurement code.                                                                                                        
                                                                                                                                
CHAIR MENARD  said she  appreciated  his argument  that it  is all                                                              
state money. [HB 225 was held in committee.]                                                                                    
                                                                                                                                
At Ease from 9:33 a.m. to 9:34 a.m.                                                                                             
                                                                                                                                
           HB  24-PROCUREMENT PREFERENCE FOR VETERANS                                                                       
                                                                                                                                
9:34:32 AM                                                                                                                    
CHAIR MENARD  said the next order  of business to come  before the                                                              
committee  would   be  HB  24.   [CSHB  24(MLV)  was   before  the                                                              
committee.]                                                                                                                     
                                                                                                                                
MS.  KINEMAN said  HB  24  sets out  a  5 percent  preference  for                                                              
Alaska veterans  up to  $5,000. Most  procurements would  be under                                                              
$100,000  so the  $5,000 limit  would rarely  be applied.  Statute                                                              
currently  contains  several  other preferences  and  the  sponsor                                                              
believes that veterans  need to be taken care of  by giving them a                                                              
push into starting their own businesses.                                                                                        
                                                                                                                                
9:37:04 AM                                                                                                                    
VERN JONES,  chief procurement officer,  said he certainly  is not                                                              
opposed  to HB  24.  However,  HB 24  does  nothing  to solve  the                                                              
problems  with   the  procurement  code,  but  adds   yet  another                                                              
preference.  That makes a  total of  11 or  13 preferences.  HB 24                                                              
will  not  be difficult  or  expensive  to  implement but  HB  225                                                              
attempted to streamline and solve practical problems.                                                                           
                                                                                                                                
CHAIR MENARD  said the committee  recognizes that Mr. Jones  is in                                                              
a big dilemma but more work and time is needed.                                                                                 
                                                                                                                                
SENATOR  MEYER  said  a more  comprehensive  approach  could  take                                                              
place  over  the  interim  working   with  the  state  Chamber  of                                                              
Commerce and  businesses. He  thinks the  procurement code  can be                                                              
made less  confusing, lawsuits  might be  eliminated and  numerous                                                              
groups will  not need  to be  excluded. He  recognized that  HB 24                                                              
does not solve any problems.                                                                                                    
                                                                                                                                
SENATOR PASKVAN  said he understands  that something  that appears                                                              
to make sense, as applied, is actually anti-competitive.                                                                        
                                                                                                                                
9:41:34 AM                                                                                                                    
He said  HB 24 is  easy to  support but a  global analysis  of our                                                              
procurement  code  is  needed to  ensure  a  competitive  process,                                                              
based  on objective  standards,  and  to  track spending  in  each                                                              
preference category.                                                                                                            
                                                                                                                                
CHAIR  MENARD  commented  that  the  state's  lack  of  electronic                                                              
tracking is  disappointing. She  told Mr.  Jones the committee  is                                                              
not against revamping the procurement code.                                                                                     
                                                                                                                                
SENATOR FRENCH thanked  Mr. Jones for providing  him with examples                                                              
of how  the offerors  preference works.  That information  made it                                                              
clear that something  the offerors preference is  resulting in the                                                              
state  spending  millions of  dollars  for  projects with  only  a                                                              
tenuous connection to Alaskan employees and companies.                                                                          
                                                                                                                                
CHAIR  MENARD  said we  are  looking  for a  streamlined  tracking                                                              
system and what to do with the offerors preference.                                                                             
                                                                                                                                
9:44:01 AM                                                                                                                    
CHAIR MENARD closed public testimony.                                                                                           
                                                                                                                                
SENATOR  MEYER   moved  to  report  HB  24,   [26-LS0135\S],  from                                                              
committee   with  individual   recommendations  and   accompanying                                                              
fiscal notes.                                                                                                                   
                                                                                                                                
CHAIR MENARD announced  that without objection CSHB  24(MLV) moved                                                              
from the Senate State Affairs Standing Committee.                                                                               
                                                                                                                                
At Ease from 9:45 a.m. to 9:48 a.m.                                                                                             
                                                                                                                                
          HB 251-VEHICLE LIENS/TOWING/STORAGE/TRANSPORT                                                                     
                                                                                                                                
9:48:26 AM                                                                                                                    
CHAIR MENARD announced  the next order of business  to come before                                                              
the committee  would be HB  251. [CSHB 251(JUD),  26-LS0786\S, was                                                              
before the committee.]                                                                                                          
                                                                                                                                
REPRESENTATIVE  JAY RAMRAS, sponsor  of HB 251,  said the  bill is                                                              
helpful  to both tow  truck operators  and to  consumers who  have                                                              
had a  vehicle impounded. A  tow truck operator  incurs a  fee for                                                              
towing  and storage  of an impounded  vehicle.  The bank can  then                                                              
recover  the vehicle,  leaving  the tow  truck  company without  a                                                              
means to  recover their costs because  they stand behind  the lien                                                              
holder  or lender. HB  251 also  states that  tow truck  companies                                                              
must  notify consumers  that their  vehicles  have been  impounded                                                              
within five days.  Currently, up to 60 days elapse  while the fees                                                              
add up,  leaving the consumer  stunned by  the amount owed  to the                                                              
impound yard.                                                                                                                   
                                                                                                                                
Section 1 of HB  251 [amending AS 28.10.391(a)] is  helpful to the                                                              
tow  truck operators  and  Section  2 [amending  AS  28.10.502(b)]                                                              
requires  the tow  truck  company  to notify  the  owner and  lien                                                              
holder of  the towing,  transporting and storage  of a  vehicle by                                                              
certified letter. This is a consumer protection.                                                                                
                                                                                                                                
9:51:09 AM                                                                                                                    
CHAIR MENARD asked if other states have similar rules.                                                                          
                                                                                                                                
REPRESENTATIVE RAMRAS  said he does not know. He  noted that state                                                              
troopers  or local municipalities  will keep  different tow  truck                                                              
companies on a rotation index to call to an accident or DUI.                                                                    
                                                                                                                                
SENATOR  KOOKESH  said  HB  251  looks  clear  and  asked  if  any                                                              
objection exists.                                                                                                               
                                                                                                                                
REPRESENTATIVE  RAMRAS  replied  that  Representative  Fairclough,                                                              
who previously  served as the  presiding officer of  the Anchorage                                                              
municipal  assembly,  had  consumers   complain  about  fees  that                                                              
accrue while a vehicle  is in an impound yard. Some  people do not                                                              
pay attention  or cannot afford  to get  their vehicle out  of the                                                              
impound yard.  He told  Representative Fairclough  that HB  251 is                                                              
proactively improving  existing statutes by requiring  a certified                                                              
letter  from  the  tow  truck company  within  five  days  of  the                                                              
impoundment.                                                                                                                    
                                                                                                                                
DON HABBIGER, aide  to Representative Ramras, clarified  that five                                                              
days was  changed to seven  days in committee  on the  house side.                                                              
Tow truck  companies sometimes  have to go  out of state  to local                                                              
DMV's and five days was a bit tight.                                                                                            
                                                                                                                                
SENATOR PASKVAN clarified that it is seven working days.                                                                        
                                                                                                                                
REPRESENTATIVE RAMRAS  said Bill Satterberg,  attorney, previously                                                              
testified and suggested  that seven days, not  including weekends,                                                              
amounts to about ten days.                                                                                                      
                                                                                                                                
9:55:34 AM                                                                                                                    
SENATOR  FRENCH   said  some  towing  charges  in   Anchorage  are                                                              
outrageous.  While people who  perform the  work should  get paid,                                                              
there could  be an  opportunity to  address "predatory  practices"                                                              
in the future.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  RAMRAS  said HB  251  focuses on  notification  so                                                              
that consumers  know where  their vehicles are  and how  long they                                                              
have  been there.  Tow  truck operators  will  tell  you they  are                                                              
struggling as small businesses to make ends meet.                                                                               
                                                                                                                                
SENATOR PASKVAN  asked how a consumer  finds out what  happened or                                                              
where an  impounded car is. He  asked how a proactive  owner finds                                                              
out about his or her car.                                                                                                       
                                                                                                                                
9:58:39 AM                                                                                                                    
REPRESENTATIVE  RAMRAS said  he cannot  answer  that question.  He                                                              
noted  he  would   welcome  a  conceptual  amendment   to  improve                                                              
consumer protection in that regard.                                                                                             
                                                                                                                                
SHAWN HESS, S&S  Towing and Recovery, Fairbanks,  said he supports                                                              
HB  251. He  noted that  his  company calls  plate  numbers in  to                                                              
local law enforcement  when the impound request did  not come from                                                              
law enforcement.  The owner can  call the local police  department                                                              
and find out which company has the vehicle.                                                                                     
                                                                                                                                
10:01:04 AM                                                                                                                   
MARK DAVIS, owner,  Interior Towing and Salvage Inc.,  said he has                                                              
to do many  things when impounding  a car not at the  direction of                                                              
a police  officer. HB 251  corrects a problem  so that  the towing                                                              
company can get  paid; the lending institution cannot  walk in and                                                              
take the car without  paying any kind of a bill. He  said he is in                                                              
full support of HB 251.                                                                                                         
                                                                                                                                
MARGARET  RABY, Alaska Towing  Association,  said most members  of                                                              
the  Towing Association  are in  full support  of HB  251. HB  251                                                              
fixes  a  problem  whereby  towers   may  perform  their  services                                                              
without  getting  paid.  Most members  also  support  the  section                                                              
about  notification  because that  does  eliminate  what could  be                                                              
considered predatory  towing. Legitimate towers want  to make sure                                                              
that owners get their vehicles back.                                                                                            
                                                                                                                                
SENATOR  PASKVAN asked  if  the Alaska  Towing  Association has  a                                                              
policy that plate numbers be called in upon towing.                                                                             
                                                                                                                                
MS. RABY  said Alaska Towing Association  does not set  policy but                                                              
that  practice  is generally  regulated  by  municipalities.  Both                                                              
Anchorage and Fairbanks  municipal code require any  towing within                                                              
city  limits  to  be  called  in.   Most  towers,  and  the  state                                                              
troopers, consider  it standard operating  procedure though  it is                                                              
not  required.  If  a  tower  does   not  call  in  a  plate,  law                                                              
enforcement  generally  gets involved  and  suggests  the tow  was                                                              
illegal.                                                                                                                        
                                                                                                                                
10:04:14 AM                                                                                                                   
SENATOR  PASKVAN  suggested  that   adopting  a  consumer-friendly                                                              
policy, such as  providing notice promptly, would  keep government                                                              
off the industry's back.                                                                                                        
                                                                                                                                
MS.  RABY  said  the Alaska  Towing  Association  is  a  fledgling                                                              
association and is growing to that point.                                                                                       
                                                                                                                                
ELIZABETH  GRISWOLD,  owner,  Gabe's  Towing, said  she  and  Mark                                                              
Davis  brought this  problem to  the  attention of  Representative                                                              
Ramras to get the  loophole in the statutes fixed.  A credit union                                                              
found  the  loophole;  they  have  the  perfected  lien  over  the                                                              
possessory lien.  She summarized an  incident in which  the credit                                                              
union took  possession  of a vehicle  without  paying for the  tow                                                              
bill. She  noted that  her company  and others  are on  the towing                                                              
ordinance committee  and must follow  local ordinances and  can be                                                              
audited at any time.                                                                                                            
                                                                                                                                
10:07:23 AM                                                                                                                   
She  pointed out  that Alaska  does  not have  a stipulation  that                                                              
some  other states  have: if  a tow bill  is not  paid, it  counts                                                              
against one's driver's license.                                                                                                 
                                                                                                                                
JEFF VANEYCH,  Dirty Deeds  Towing and  Recovery, Fairbanks,  said                                                              
he supports  HB 251.  He just wants  to get paid  for the  work he                                                              
does. Once  the bank  comes in and  takes the  vehicle, he  has no                                                              
way to recoup his costs.                                                                                                        
                                                                                                                                
10:08:46 AM                                                                                                                   
CHAIR MENARD closed public testimony.                                                                                           
                                                                                                                                
SENATOR  MEYER  moved  to  report  HB  251,  from  committee  with                                                              
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
CHAIR MENARD announced  that without objection CSHB 251(JUD) moved                                                              
from Senate State Affairs Standing Committee.                                                                                   
                                                                                                                                
                  HB 225-STATE PROCUREMENT CODE                                                                             
                                                                                                                                
10:09:42 AM                                                                                                                   
SENATOR KOOKESH asked  Chair Menard not to adjourn  before stating                                                              
for the record what she would like to do with HB 225.                                                                           
                                                                                                                                
CHAIR MENARD replied that HB 225 is being held in committee.                                                                    
                                                                                                                                
10:10:22 AM                                                                                                                   
SENATOR PASKVAN  wanted to recognize Representative  Ramras on the                                                              
record. Senator  Paskvan commended  Representative Ramras,  who is                                                              
in  the final  weeks of  representing  his district  to the  state                                                              
legislature, for his service to Alaska and Fairbanks.                                                                           
                                                                                                                                
CHAIR MENARD said  Representative Ramras is a  good legislator and                                                              
business man.                                                                                                                   
                                                                                                                                
SENATOR MEYER  said he  appreciated all  the bills  Representative                                                              
Ramras  has brought  forth and  his  effort to  present the  bills                                                              
himself.                                                                                                                        
                                                                                                                                
SENATOR KOOKESH said he and Senator French agree.                                                                               
                                                                                                                                
10:12:26 AM                                                                                                                   
CHAIR  MENARD,  seeing no  further  business  to come  before  the                                                              
committee, adjourned at 10:12 a.m.