Legislature(2009 - 2010)BARNES 124

03/31/2009 01:00 PM House MILITARY & VETERANS' AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved Out of Committee
Moved Out of Committee
Moved CSHB 24(MLV) Out of Committee
HB 24-PROCUREMENT PREFERENCE FOR VETERANS                                                                                     
[Contains discussion of HJR 16]                                                                                                 
CHAIR GATTO announced  that the final order of  business would be                                                               
HOUSE  BILL NO.  24, "An  Act  relating to  a public  procurement                                                               
preference for Alaska veterans."                                                                                                
1:38:16 PM                                                                                                                    
CRYSTAL  KOENEMAN,  Staff   to  Representative  Anna  Fairclough,                                                               
Alaska  State   Legislature,  informed  the  committee   AS  Sec.                                                               
36.30.180,  states that  "The purpose  of  bidder preference  for                                                               
resident firms when the state acts  as a market participant is to                                                               
encourage local  industry, strengthen and stabilize  the economy,                                                               
decrease unemployment,  and strengthen  the tax and  revenue base                                                               
of the  state."   House Bill  24 will  expand this  preference to                                                               
include  Alaska  Veteran  Owned  Businesses.    Furthermore,  the                                                               
National Conference  of State Legislatures (NCSL)  identified 132                                                               
state  bills  that  address   the  veteran  business  communities                                                               
concerns at  the state level in  the past two years.   House Bill                                                               
24 brings Alaska into the national effort to honor veterans.                                                                    
1:39:49 PM                                                                                                                    
REPRESENTATIVE LYNN offered Amendment 1.                                                                                        
1:40:42 PM                                                                                                                    
The committee took an at-ease from 1:40 p.m. to 1:41 p.m.                                                                       
1:41:02 PM                                                                                                                    
REPRESENTATIVE LYNN moved Amendment 1, which read:                                                                              
     Page 1, Lines 12, following "bidder", through line 16,                                                                     
     until "In"                                                                                                                 
          Delete all material and insert:                                                                                       
     "and is a qualifying entity, a 5 percent preference                                                                    
     shall be applied to the bid price.  The preference                                                                     
     shall not exceed five thousand dollars."                                                                               
     Page 2, Lines 14 & 15                                                                                                      
          Delete all material.                                                                                                  
1:41:12 PM                                                                                                                    
There being no objection, Amendment 1 was adopted.                                                                              
1:41:29 PM                                                                                                                    
MS.  KOENEMAN explained  that Section  1  of the  bill amends  AS                                                               
36.30.170(a) to clean  up language for referencing  a new section                                                               
that defines  Alaska veterans' preference.   Section 2  amends AS                                                               
36.30  by adding  a new  section that  adds in  a preference  for                                                               
Alaska veterans and defines what  a qualified entity is.  Section                                                               
2 also incorporates Amendment 1,  that limits the cost preference                                                               
to 5 percent and not exceeding  $5,000.  Amendment 1 also deletes                                                               
the language  creating a register  of individuals who  qualify as                                                               
Alaska veterans.   Ms. Koeneman  explained the sponsor  felt this                                                               
requirement was not necessary.   Section 3 amends AS 36.30.250(b)                                                               
to clean up  language for referencing a new  section that defines                                                               
Alaska veterans'  preference.  Section  4 amends AS  36.30.335 to                                                               
clean  up language  for referencing  a new  section that  defines                                                               
Alaska veterans' preference.                                                                                                    
1:44:23 PM                                                                                                                    
CHAIR GATTO  confirmed the  change from 10  percent to  5 percent                                                               
and $5,000.                                                                                                                     
1:44:46 PM                                                                                                                    
REPRESENTATIVE BUCH observed there  was a similar bill introduced                                                               
in  the  House  Labor  and   Commerce  Standing  Committee.    He                                                               
suggested that the bills should be coordinated.                                                                                 
1:45:16 PM                                                                                                                    
MS. KOENEMAN indicated she would "follow up."                                                                                   
There followed  a brief discussion  about the subject  of another                                                               
1:46:23 PM                                                                                                                    
MS. KOENEMAN stated  HJR 16 was presented to the  House Labor and                                                               
Commerce Standing Committee.                                                                                                    
1:46:59 PM                                                                                                                    
CHAIR  GATTO  confirmed   that  HJR  16  contains   a  3  percent                                                               
preference for disabled veterans.                                                                                               
1:47:06 PM                                                                                                                    
REPRESENTATIVE  BUCH  pointed out  the  two  bills send  a  mixed                                                               
message.  House  Joint Resolution 16 is sending a  message to the                                                               
federal government;  HB 24 is  initiating a different  message at                                                               
the state level.  He questioned the level of consistency.                                                                       
1:47:35 PM                                                                                                                    
REPRESENTATIVE  RAMRAS opined  the procurement  procedures differ                                                               
for the  state and federal government.   He said, "I  think we're                                                               
1:47:54 PM                                                                                                                    
TIM WHEELER,  President, Alaska Veterans Business  Alliance, read                                                               
from the following statement [original punctuation provided]:                                                                   
     We are an alliance  that advocates for veteran business                                                                    
     opportunities at  the state,  city, and  private sector                                                                    
     and  advocate  why  the  Federal  Laws  for  the  SDVOB                                                                    
     community  are  not  working   in  Alaska  for  Federal                                                                    
     Contracting  Opportunities.    I stand  here  today  in                                                                    
     support  of  HB  24  for a  Veteran  State  Procurement                                                                    
     Preference.   Approval  of HB  24  will also  recognize                                                                    
     those  service  men and  women  who  paid the  ultimate                                                                    
     sacrifice  to protect  the rights  and freedoms  we all                                                                    
     It  is  imperative  that small  business  have  maximum                                                                    
     opportunity for State  Procurement Opportunities.  And,                                                                    
     to  the greatest  extent  practicable small  businesses                                                                    
     owned by  military Veterans should come  first in these                                                                    
     considerations.  These economic  and cultural times are                                                                    
     challenging from  Main Street  to Wall Street  and "NO"                                                                    
     group   of  small   business  entrepreneurs   are  more                                                                    
     deserving  of  preference  opportunity to  do  business                                                                    
     with  and for  the State  of  Alaska then  the men  and                                                                    
     women who  have defended this great  state and country.                                                                    
     More  and  more  the population  of  military  veterans                                                                    
     mirrors  the diversity  of this  state.   Veterans  are                                                                    
     made,  not born.   We  are  not torn  asunder by  race,                                                                    
     background, or  gender.   The "V"  in the  word Veteran                                                                    
     does  not   stand  for  victim   and  we   must  expand                                                                    
     preference  business  consideration  for  all  Veteran-                                                                    
     Owned  small business.    The passing  of  HB 24  would                                                                    
     significantly  expand opportunities  for many  minority                                                                    
     and  women veterans  in Alaska's  marketplace of  today                                                                    
     and the future.                                                                                                            
     You all  have seen the yellow  magnetic ribbon stickers                                                                    
     that say support  the troops.  Why is it  that when the                                                                    
     troops put  their weapons down  and take  their uniform                                                                    
     off why does the support stop?                                                                                             
     For  the record,  Mr. Chairman,  I  will be  submitting                                                                    
     numerous national  and state organizations  standing in                                                                    
     support  of veterans'  business  opportunities.   These                                                                    
     organizations  represent  a   membership  of  over  one                                                                    
     million  veterans  standing  with  Alaska  veterans  in                                                                    
     support of HB 24.                                                                                                          
1:50:12 PM                                                                                                                    
RIC  DAVIDGE,  State  Council   President,  Vietnam  Veterans  of                                                               
America;  Member, Board  of Directors,  Alaska Veterans  Business                                                               
Alliance,  disclosed that  he worked  briefly for  Representative                                                               
Anna Fairclough,  sponsor of  HB 24.   He  explained that  HJR 16                                                               
deals with federal procurement and  calls for federal agencies in                                                               
Alaska to meet their legislated 3  percent mandate.  On the other                                                               
hand, HB  24 would establish  a veteran bidder preference  in the                                                               
state for  state procurements.   He expressed his support  of the                                                               
amendments to HB  24, although he still  supports the development                                                               
of a  pre-qualified register of  veteran-owned businesses  in the                                                               
state.   Mr.  Davidge addressed  the  concern of  those who  view                                                               
veteran preference  as "rent a vet."   He pointed out  there is a                                                               
provision in the bill, identified  as Section 2(c), that requires                                                               
the veteran in  the bidder preference to be  actively involved in                                                               
the day to day management of the business.                                                                                      
1:52:27 PM                                                                                                                    
CHAIR GATTO asked  for clarification on HJR 16 as  to whether the                                                               
resolution is  "asking the feds  ... to exercise what  is already                                                               
in  public  law  ...  the   3  percent  preference  for  disabled                                                               
MR.  DAVIDGE  confirmed that  there  are  public laws,  executive                                                               
orders, and  other federal actions  mandating the 3  percent goal                                                               
for  service  disabled   veteran-owned  businesses;  however,  in                                                               
Alaska, and in many other  states, the federal agencies refuse to                                                               
comply.    House  Joint  Resolution  16  calls  for  hearings  to                                                               
determine the  reason.  He stressed  that HB 24 "deals  only with                                                               
state procurements."                                                                                                            
1:53:34 PM                                                                                                                    
BARBARA BACHMEIER provided further  information regarding HJR 16.                                                               
Ms.  Bachmeier turned  to the  subject of  HB 24,  and said  this                                                               
legislation differs in scope and  intent from federal legislation                                                               
on this issue.   She said she strongly  disagrees with components                                                               
of the  bill and  is not  in favor  of the  legislation as  it is                                                               
written.  Ms.  Bachmeier opined Alaska and its  veterans would be                                                               
better  served by  legislation similar  to the  "service disabled                                                               
veteran business  enterprise opportunity  act" passed  in Florida                                                               
in  2008.   This  type  of  legislation  continues to  honor  and                                                               
provide opportunities  to disabled veterans, who  are persons who                                                               
served in  the military,  were discharged,  and were  disabled in                                                               
the  line  of  duty  during  their  service.    She  advised  the                                                               
readjustment   and  rehabilitation   challenges   of  a   service                                                               
connected disabled veteran are more  challenging than those faced                                                               
by other veterans; therefore, this  population of veterans should                                                               
be afforded  additional considerations.   Ms.  Bachmeier observed                                                               
the value of patterning the  state's program after federal law in                                                               
order  to stand  with  Congress and  recognize  the sacrifice  of                                                               
disabled  veterans,  realize the  need  to  rectify the  economic                                                               
disadvantage of  disabled veterans, and remedy  the circumstances                                                               
preventing disabled veterans from self-employment.                                                                              
1:58:32 PM                                                                                                                    
JOHN   YOUMANS,  Member,   Alaska  Veterans   Business  Alliance,                                                               
informed  the  committee  he  was  a  small  business  owner  and                                                               
expressed  his  support for  HB  24.   He  said  this  is a  very                                                               
important bill for  those who delay their entry  into business to                                                               
serve in  the military and  encouraged its passage.   In response                                                               
to Representative  Gatto, Mr. Youmans said  his business provides                                                               
janitorial, maintenance, and painting services.                                                                                 
1:59:57 PM                                                                                                                    
KARL LERAY,  Chair, Board of Directors,  Alaska Veterans Business                                                               
Alliance, compared the difficulties  faced by deployed members of                                                               
the military  to service by fireman  or policemen.  He  said that                                                               
soldiers are told to relinquish  their ties to family, community,                                                               
and  sometimes  to  their  religious beliefs.    Adding  to  this                                                               
disenfranchisement,  soldiers are  considered  transients in  the                                                               
communities they  serve.  Mr.  LeRay stated it is  also difficult                                                               
for  families as  they get  "cut-off" when  military members  are                                                               
reassigned.   Disabled  veterans  have  additional challenges  as                                                               
they may view themselves as  failures because the disability does                                                               
not allow them  to be the person they were  before their service.                                                               
He provided a personal example  as to why veterans typically have                                                               
trouble  adjusting to  private  life.   Mr.  LeRay stressed  that                                                               
veterans are not  better than other professions  that serve under                                                               
difficult conditions; however,  the loss of community  is hard to                                                               
overcome.  In fact, when soldiers  return home they are not ready                                                               
to  immediately   integrate  into  the  community   and  start  a                                                               
business.  He encouraged the committee  to move HB 24 and support                                                               
veterans' businesses in the state.                                                                                              
2:03:56 PM                                                                                                                    
CHAIR GATTO closed public testimony on HB 24.                                                                                   
2:04:06 PM                                                                                                                    
REPRESENTATIVE  LYNN  moved  to  report HB  24,  26-LS0135\E,  as                                                               
amended,  out of  committee with  individual recommendations  and                                                               
forthcoming fiscal notes.                                                                                                       
CHAIR GATTO asked if there were any objections.                                                                                 
2:04:47 PM                                                                                                                    
REPRESENTATIVE BUCH  asked for any  available information  on the                                                               
fiscal notes.                                                                                                                   
2:04:57 PM                                                                                                                    
VERN  JONES,  Chief  Procurement  Officer,  Division  of  General                                                               
Services,  Department of  Administration, informed  the committee                                                               
he would  be responsible  for the  implementation of  HB 24.   He                                                               
anticipated a zero fiscal note,  given the amendment that removed                                                               
the veteran's  register and  the costs  thereof.   The department                                                               
plans  to work  informally to  monitor and  enforce registration.                                                               
Mr.  Jones  acknowledged  there  could  be  costs  pertaining  to                                                               
awarding bids to other than  the lowest bidder; however, with the                                                               
state's current  accounting system,  he was unable  to accurately                                                               
give an estimate on those increased costs.                                                                                      
2:06:55 PM                                                                                                                    
CHAIR GATTO  surmised the high side  of the fiscal note  would be                                                               
$5,000 to $50,000.                                                                                                              
2:07:05 PM                                                                                                                    
MR. JONES  reminded the committee  the bill authorizes  a maximum                                                               
benefit  for a  bidder of  $5,000;  however, it  is difficult  to                                                               
estimate  how  many  bidders would  participate  or  whether  the                                                               
preference would affect the amount of the award.                                                                                
2:07:33 PM                                                                                                                    
CHAIR GATTO remarked:                                                                                                           
     So, if we give a $2,000 preference to a veteran, than                                                                      
        that's a $2,000 fiscal note in the bill, that we                                                                        
     should at least anticipate.                                                                                                
MR.  JONES  restated  HB  24  anticipates  a  maximum  of  $5,000                                                               
preference per bid; thus "it's  probably anyone's guess as to how                                                               
many  bids the  preference would  apply  to and  what the  actual                                                               
difference between the qualifying  veteran's bids versus what the                                                               
low bid otherwise would have been."                                                                                             
CHAIR  GATTO suggested  the bill  may  garner a  referral to  the                                                               
House Finance Committee.                                                                                                        
2:08:42 PM                                                                                                                    
There being no objection, CSHB 24(MLV) was reported from the                                                                    
House Special Committee on Military and Veterans' Affairs.                                                                      

Document Name Date/Time Subjects
AMENDMENT to HB24 - Conceptual (revised).pdf HMLV 3/31/2009 1:00:00 PM
HB 24
HB 24 backup.pdf HMLV 3/31/2009 1:00:00 PM
HB 24
HJR 24 Article.pdf HMLV 3/31/2009 1:00:00 PM
HJR 24
HJR 24 letter of support.pdf HMLV 3/31/2009 1:00:00 PM
HJR 24
HJR 29 Article 2.pdf HMLV 3/31/2009 1:00:00 PM
HJR 29
HJR 29 Article.pdf HMLV 3/31/2009 1:00:00 PM
HJR 29
Letter of Support HB 24.doc HMLV 3/31/2009 1:00:00 PM
HB 24