Legislature(2007 - 2008)CAPITOL 17

04/02/2007 03:00 PM House LABOR & COMMERCE


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 146 PAYMENT DATE FOR BILLS FOR SERVICES TELECONFERENCED
Heard & Held
*+ HB 211 HOMEOWNERS INSUR. FEE/FIRE STDS. COUNCIL TELECONFERENCED
Heard & Held
HB 211-HOMEOWNERS INSUR. FEE/FIRE STDS. COUNCIL                                                                               
                                                                                                                                
CHAIR OLSON announced  that the final order of  business would be                                                               
HOUSE  BILL  NO. 211,  "An  Act  imposing  a fee  on  homeowner's                                                               
insurance policies issued  or renewed in the  state; requiring an                                                               
insurer  issuing or  renewing a  homeowner's insurance  policy to                                                               
collect the  fee; and creating  a special account in  the general                                                               
fund,  allowing money  in  the  fund to  be  appropriated to  the                                                               
Department  of  Public  Safety  for  the  Alaska  Fire  Standards                                                               
Council, and repealing the Alaska fire services personnel fund."                                                                
                                                                                                                                
3:33:56 PM                                                                                                                    
                                                                                                                                
BARBARA  COTTING,  Staff  to Representative  Jay  Ramras,  Alaska                                                               
State  Legislature,  sponsor,  explained that  according  to  the                                                               
Alaska  Fire  Chiefs  Association  (AFCA),  fire  departments  in                                                               
Alaska are not  financially able to achieve  the current national                                                               
fire  protection  standards.   This  places  residents and  their                                                               
property in more  jeopardy than is needed.  She  pointed out that                                                               
the AFCA has  been trying for many years to  find funding sources                                                               
in order  to fund the  Alaska Fire Standards Council  (AFSC), and                                                               
have the means  to implement the training standards.   She stated                                                               
that in  1998, the  legislature established  the AFSC,  which was                                                               
intended  to  develop and  regulate  training  for Alaska's  fire                                                               
departments.   However, the  legislature did  not fund  the AFSC.                                                               
The sponsor's  office has worked with  the AFCA to find  a way to                                                               
fund the council.   She stated that thus far, HB  211 is the best                                                               
funding source.   The Division of Insurance  ("the Division") has                                                               
advised  the  sponsor   that  this  fee  should   only  apply  to                                                               
homeowners insurance,  adding that  homeowners benefit  the most.                                                               
A $3  fee would  be added  to each  homeowner's policy  issued or                                                               
sold in  Alaska.  This  fee would  be collected by  the insurance                                                               
company, and paid to the  Division.  Additionally, HB 211 creates                                                               
an  account in  the  general  fund (GF)  called  the Alaska  Fire                                                               
Standards  Council  Fund,   into  which  the  $3   fee  would  be                                                               
deposited.    She  said  that  HB 211  repeals  the  Alaska  Fire                                                               
Services Personnel Fund, which was  established in 1988 to mirror                                                               
a similar fund  created for the Alaska  Police Standards Council,                                                               
but has  never been used.   With the establishment of  the Alaska                                                               
Fire  Standards Council  Fund, the  personnel fund  is no  longer                                                               
needed.                                                                                                                         
                                                                                                                                
REPRESENTATIVE RAMRAS added that  this will not lower homeowner's                                                               
insurance premiums.   He pointed  out that when  police officer's                                                               
write a citation,  a fraction of the citation goes  to the Police                                                               
Safety Standards Council.   Firefighters do not  have the ability                                                               
to  raise money  in that  capacity.   He said  "We are  not crazy                                                               
about  this funding  source.    But it's  quite  clear, from  the                                                               
history  of the  Fire  Safety Standards  Council,  that no  other                                                               
funding source  has ever  emerged."  He  stated that  he recently                                                               
met  with firefighters  who explained  that adequate  training is                                                               
not  received,   however,  when   there  is  an   emergency,  the                                                               
firefighters must be able to perform  a variety of functions.  He                                                               
explained that there  is a "quilt" of  volunteer fire departments                                                               
working with  paid fire departments  across the state.   However,                                                               
the notion that  volunteer firemen and paid firemen  are not able                                                               
to  integrate their  skills because  they have  not been  able to                                                               
integrate their training puts individuals at risk.                                                                              
                                                                                                                                
3:39:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAMRAS noted  that  he  previously voted  against                                                               
having  a   fishing  license  fee  that   taxed  recreation,  and                                                               
introduced  this bill  with  trepidation.   The  director of  the                                                               
Division is not  crazy about the bill, but  acknowledged that the                                                               
application  is  possible.    He  said  "We're  not  crazy  about                                                               
imposing a  tax on homeowners, either.   But the fact  is that we                                                               
need  paid firemen  to be  able to  integrate with  the volunteer                                                               
firemen."  He then gave examples  of other groups that are unable                                                               
to get funding  through the state, such as  the Community Service                                                               
Patrol.  While the state has made  it clear that it does not want                                                               
to  use state  dollars for  community funding  efforts, the  Fire                                                               
Safety  Standards  Council is  statewide,  and  this concern  was                                                               
expressed  by  all  the  fire chiefs  that  visited  the  Capitol                                                               
Building.    He said  that  he  finds this  "quite  appropriate,"                                                               
although  an additional  tax is  unwelcome.   He  noted that  the                                                               
director  of  the  Division   previously  stated  that  insurance                                                               
premiums and  taxes on  these premiums  represent the  number two                                                               
revenue stream to the state.   He reiterated that the legislature                                                               
must  find a  way  to  fund the  Fire  Safety Standards  Council,                                                               
because it will  ultimately lead to the  integration of volunteer                                                               
and  paid  services.    He pointed  out  the  difference  between                                                               
integrating volunteer  firemen with  paid firemen,  and volunteer                                                               
policemen  and  paid  law  enforcement  individuals.    Volunteer                                                               
firefighters are  just as valuable as  professional firefighters.                                                               
He said "So,  it was with great frustration, and  some angst over                                                               
the funding mechanism, that we drafted  this bill.  But, we don't                                                               
know of a better way."                                                                                                          
                                                                                                                                
3:43:42 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEUMAN asked  if  the  $3 fee  is  annual or  per                                                               
policy.                                                                                                                         
                                                                                                                                
MS. COTTING replied that the fee is annual, per policy.                                                                         
                                                                                                                                
REPRESENTATIVE NEUMAN  noted that  the AFCA  supported a  $5 fee,                                                               
which has been reduced to $3.                                                                                                   
                                                                                                                                
REPRESENTATIVE RAMRAS,  in response  to a question  regarding the                                                               
budget, stated  that there is a  cost to the Division  to collect                                                               
the funds.   The AFCA indicated  that there is a  myriad of grant                                                               
money  that can  be applied  for, which  can be  put towards  the                                                               
prime mission.   He said that  $3 was not found  to be "heinous,"                                                               
with  respect to  insurance premiums  and what  is expected  when                                                               
emergency services  are needed.   He  shared a  recent experience                                                               
that   involved   the   integration   of   paid   and   volunteer                                                               
firefighters,   and  said   that  he   is  interested   in  these                                                               
firefighters continuing to work together.  He said:                                                                             
                                                                                                                                
     It's impractical  in some ways,  it creates  a slippery                                                                    
     slope, it's  dangerous in the  precedent that  it could                                                                    
     be   setting.     It's  difficult   to  collect,   it's                                                                    
     cumbersome, there's  a thousand things wrong  with it -                                                                    
     except  for the  fact  that  when I  dial  911, I  want                                                                    
     competent, trained,  integrated people  to show  up and                                                                    
     help me out, and my neighbors as well.                                                                                     
                                                                                                                                
3:47:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER, in  regard  to the  resolution from  the                                                               
AFCA, pointed out  that the AFCA suggested that the  fee apply to                                                               
all  fire insurance  policies,  while the  bill  applies only  to                                                               
homeowners.   She questioned  the reasoning for  this.   She then                                                               
commented that  a homeowner  with a $200  thousand home  would be                                                               
paying the  same as  a homeowner  with a  $1.5 million  home, and                                                               
expressed  concern with  this.   Finally, she  asked whether  the                                                               
budget estimate provided  by the AFCA is  currently happening, or                                                               
is a "best case scenario."                                                                                                      
                                                                                                                                
REPRESENTATIVE RAMRAS replied  that it is simpler  to collect the                                                               
$3 fee  from homeowners than  businesses with  multiple policies.                                                               
It is not  regressive relative to the value of  homes, as this is                                                               
also simpler.  He reiterated that  the Division does not like the                                                               
bill, but feels  this is simpler and less cumbersome.   He stated                                                               
that he  does not have the  answer to the question  regarding the                                                               
AFCA budget estimate.                                                                                                           
                                                                                                                                
REPRESENTATIVE GARDNER  commented that  homeowners would  then be                                                               
subsidizing  businesses and  other  policy holders  that are  not                                                               
required to participate.                                                                                                        
                                                                                                                                
REPRESENTATIVE RAMRAS opined that  most business owners own homes                                                               
in  Alaska.   He stated  that the  intent was  not to  single out                                                               
homeowners versus  commercial policies,  and reiterated  that the                                                               
Division does  not like the  nature of the  collection mechanism,                                                               
and  has indicated  that  it  would be  much  more cumbersome  to                                                               
involve commercial  policies.   He said that  he has  worked with                                                               
the Division to satisfy as  many objections as possible, in order                                                               
to concentrate on  the greater good that  comes with establishing                                                               
the AFSC.   He explained that the original intent  was to include                                                               
residence and business  policies.  He said "We're  trying to take                                                               
something that [the  Division does not] like very  much, and make                                                               
it as likeable as possible."                                                                                                    
                                                                                                                                
3:51:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER  asked if the Division  would be available                                                               
for testimony.                                                                                                                  
                                                                                                                                
CHAIR OLSON replied yes.                                                                                                        
                                                                                                                                
The committee took an at-ease from 3:51 PM to 4:02 PM.                                                                          
                                                                                                                                
4:02:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO  asked if  property that  is not  within the                                                               
fire service area would be charged the $3 fee.                                                                                  
                                                                                                                                
MS.  COTTING  shared her  understanding  that  the fee  would  be                                                               
charged.  The  intent is to keep the bill  as simple as possible,                                                               
and would  not discriminate  about the amount  of the  policy, or                                                               
where the property is located.                                                                                                  
                                                                                                                                
REPRESENTATIVE  GATTO commented  that homeowners  may be  able to                                                               
challenge this.                                                                                                                 
                                                                                                                                
MS. COTTING  pointed out  a discrepancy in  the fiscal  note from                                                               
Department  of   Commerce,  Community,  &   Economic  Development                                                               
(DCCED), which  estimates that there  are 160  thousand homeowner                                                               
policies in  the state.   The Division  estimated that  there are                                                               
178,500 policies in the state.   She surmised that the number may                                                               
be "somewhere in-between."  In  response to a question from Chair                                                               
Olson, she  stated that this  fee would  apply to any  person who                                                               
purchases homeowner insurance.                                                                                                  
                                                                                                                                
CHAIR OLSON asked  if this would include tenants that  do not own                                                               
the property but have insurance.                                                                                                
                                                                                                                                
MS. COTTING replied that she is not sure.                                                                                       
                                                                                                                                
CHAIR OLSON  stated that  he recently  resigned from  the Central                                                               
Emergency Service Area  Board, of which he was a  member for nine                                                               
years,  adding that  the last  five years  he chaired  the board.                                                               
The  organization is  40 percent  volunteer and  60 percent  paid                                                               
staff.   He said  "We handled our  training with  our mill-rate,"                                                               
and explained  that training was  both volunteer and  paid staff.                                                               
He questioned how the fire service area in Fairbanks is handled.                                                                
                                                                                                                                
MS. COTTING replied that there  are firefighters online who might                                                               
better answer this question.                                                                                                    
                                                                                                                                
4:05:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  NEUMAN asked  Chair Olson  whether he  feels this                                                               
would result in a savings.                                                                                                      
                                                                                                                                
CHAIR  OLSON   said  that   he  is  not   able  to   answer  this                                                               
specifically.    He  stated  that his  greatest  problem  is  the                                                               
funding source,  and shared his  belief that this is  a "slippery                                                               
slope."   He said that he  has a problem with  taxes, adding that                                                               
while he  feels that funding  the program is  a good idea,  it is                                                               
the wrong revenue source.                                                                                                       
                                                                                                                                
4:07:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN  commented that a tax  on emergency numbers                                                               
passed the previous  year, which applies to all  phone lines, and                                                               
pointed  out that  many  areas in  the state  do  not have  local                                                               
emergency numbers set up.                                                                                                       
                                                                                                                                
CHAIR  OLSON  clarified that  this  was  a  result of  a  federal                                                               
mandate.  He offered his understanding  that this began at $5 per                                                               
phone line, regardless of whether  it is a cell phone, land-line,                                                               
or fax.   The legislature  started at a fee  of "up to  $2," with                                                               
most cities  starting at $1.50.   He  explained that this  was to                                                               
generate enhanced 911  service, to determine the  location of the                                                               
caller.                                                                                                                         
                                                                                                                                
REPRESENTATIVE GARDNER inquired as  to how urban fire departments                                                               
are currently funded for training.                                                                                              
                                                                                                                                
MS. COTTING  replied that the  AFSC handles the funding,  and the                                                               
council is funded  by the AFCA and the  Alaska State Firefighters                                                               
Association (ASFA).                                                                                                             
                                                                                                                                
REPRESENTATIVE GARDNER shared her  understanding that the AFSC is                                                               
interested in  training firefighters across the  state, and urban                                                               
areas currently  have paid training  available.  She  inquired as                                                               
to the funding for firefighters in urban areas.                                                                                 
                                                                                                                                
MS. COTTING  replied that she  does not  have the answer  to this                                                               
question.                                                                                                                       
                                                                                                                                
CHAIR OLSON  stated that on  the Kenai Peninsula, the  funding is                                                               
mostly mill-rate.                                                                                                               
                                                                                                                                
REPRESENTATIVE GARDNER  surmised, then,  that Anchorage  uses the                                                               
same  funding source.   She  shared her  understanding that  AFSC                                                               
would provide training to areas that are not currently served.                                                                  
                                                                                                                                
CHAIR OLSON shared his understanding  that the AFSC provides more                                                               
than training to the state.                                                                                                     
                                                                                                                                
REPRESENTATIVE   RAMRAS,  in   response   to   a  question   from                                                               
Representative Neuman,  stated that to  say that this  would save                                                               
money is an  over-statement.  He reiterated that this  is not the                                                               
preferable funding source.  However,  this program is needed, and                                                               
will not  be funded  through the House  Finance Committee  or the                                                               
Senate Finance  Committee.  A  uniform AFSC is needed,  which the                                                               
mill-rates  in  the  various  communities do  not  provide.    He                                                               
reiterated that fire  departments do not have  an inner mechanism                                                               
to fund the  AFSC.  He encouraged members to  hear testimony from                                                               
the firefighters  in order  to better  understand what  the funds                                                               
will be used for.  He said:                                                                                                     
                                                                                                                                
     If  we can  go to  the finance  committee, and  try and                                                                    
     find a source,  and they say "yeah, we'll  do it," than                                                                    
     right on.   But if  they say no,  and they say  it with                                                                    
     some conviction,  then I'd like  to have the  bill come                                                                    
     back before this  committee, and really take  a look at                                                                    
     this undesirable  funding source, for something  that I                                                                    
     think leads to safer communities across the state.                                                                         
                                                                                                                                
REPRESENTATIVE LEDOUX  commented that firefighters can  not write                                                               
citations that  can then be  used as  a funding source,  and said                                                               
that perhaps this should be considered.                                                                                         
                                                                                                                                
4:13:20 PM                                                                                                                    
                                                                                                                                
JACK  SMITH,  Director/Fire  Chief,   North  Slope  Borough  Fire                                                               
Department, stated  that he  is in  support of HB  211.   He said                                                               
that  Alaska's fire  services have  made  significant strides  to                                                               
obtain  recognition by  organizations such  as the  International                                                               
Fire  Service   Accreditation  Congress  (IFSAC),   for  training                                                               
provided.   Unfortunately,  attempts to  expand the  training and                                                               
education have  been hampered  due to the  lack of  a functioning                                                               
fire standards  council with needed  administrative support.   He                                                               
pointed out that  industry standard recognition is  common to all                                                               
professional  fields,  and has  proven  to  be an  incentive  for                                                               
career personnel  and volunteers that respond  to emergency calls                                                               
around the  state.  These  individuals must complete  written and                                                               
practical testing that  determines his or her  ability to perform                                                               
skills comparable  to other  firefighters in  the country.   This                                                               
certification is  known and recognized, and  thus allows Alaskans                                                               
to compete for jobs in-state and  around the country.  He pointed                                                               
out that  while most  advisory councils  and boards  receive some                                                               
type of financial assistance to  perform their basic mission, the                                                               
AFSC has  not.  Progress  to formalize and develop  Alaska's fire                                                               
training   programs    has   been   limited    without   adequate                                                               
administrative  support,   which  increases  the  risk   to  both                                                               
firefighters and the public.   He stated that most states develop                                                               
training and  certification programs,  and work  with departments                                                               
to  administer  these  programs, thus  ensuring  consistency  and                                                               
quality.  He shared a story  of a local firefighter that recently                                                               
obtained  a job  at  Capital City  Fire/Rescue  (CCFR), and  said                                                               
"Many would have never believed  training could have been offered                                                               
in a rural hub  of Alaska, to prepare an individual  for a job in                                                               
the big city.   While we were  sad to see him  leave, other young                                                               
adults recognized  the value of  education and training,  as well                                                               
as  its ability  to open  doors for  a career."   He  stated that                                                               
providing financial support to the  AFSC will enable it to become                                                               
more  effective  in  developing  and  coordinating  fire  service                                                               
training and education in Alaska.                                                                                               
                                                                                                                                
4:17:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO  shared his  understanding that most  of the                                                               
training that  occurs is a result  of the mill-rate for  the fire                                                               
service area, and asked if this is correct.                                                                                     
                                                                                                                                
MR. SMITH  replied that the  North Slope Borough  Fire Department                                                               
is funded  by the North  Slope Borough.   The fire  department is                                                               
accredited  by  the state  to  provide  Firefighter level  1  and                                                               
Firefighter   level  2   training,   which  is   funded  by   the                                                               
municipality.  The  concern, he said, is  developing new training                                                               
programs.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  GATTO  asked whether  adding  a  $3 fee  to  each                                                               
homeowner insurance  policy would  change the amount  of training                                                               
that occurs.                                                                                                                    
                                                                                                                                
MR.  SMITH shared  his  understanding that  funding  the AFSC  is                                                               
intended to provide  the state with the guidance  that is needed.                                                               
He said  that preparing  individuals to  provide training  at the                                                               
certification level is where the  state provides the guidance and                                                               
testing.                                                                                                                        
                                                                                                                                
REPRESENTATIVE GATTO shared his  understanding that the AFSC will                                                               
have  money for  travel  and contracts.   He  stated  that he  is                                                               
expecting the  AFSC to be  an organization that,  when requested,                                                               
can send  a representative to  the fire  house for training.   He                                                               
inquired as to whether this is correct.                                                                                         
                                                                                                                                
MR. SMITH shared  his understanding that there is  money to bring                                                               
the  members of  the council  together,  in order  to review  the                                                               
programs and  procedures.  He  stated that  the AFSC may  take on                                                               
the  role  of  the  accrediting  department,  and  explained  the                                                               
process  that  the  North  Slope  Borough  Fire  Department  went                                                               
through to become accredited.                                                                                                   
                                                                                                                                
4:21:10 PM                                                                                                                    
                                                                                                                                
JEFF TUCKER,  Fire Chief, North  Star Volunteer  Fire Department;                                                               
 nd                                                                                                                             
2   Vice   President,  Alaska  Fire  Chiefs  Association  (AFCA),                                                               
explained that  the AFSC  is intended to  be the  standard making                                                               
body that the fire departments in  the state can utilize to train                                                               
personnel.   The council  would put  forth the  minimum standards                                                               
for  firefighters, company  officers, engineers,  fire prevention                                                               
programs, and  arson investigation  programs.  The  council would                                                               
not  necessarily be  the trainers.   There  are several  programs                                                               
that  are  accredited,  and  there   is  a  need  for  additional                                                               
accredited programs.   He said that some of the  funding would go                                                               
toward  testing administration,  which is  currently not  funded.                                                               
He explained that  if the department does  firefighter testing, a                                                               
certified officer  would be sent  from the state to  validate and                                                               
grade  the   test.     This  is  more   of  a   standard  setting                                                               
organization, and is not there to train.                                                                                        
                                                                                                                                
4:23:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN questioned  whether the additional training                                                               
would have an effect on insurance rating.                                                                                       
                                                                                                                                
MR.  TUCKER  replied that  this  would  not directly  effect  the                                                               
insurance rating,  although it might improve  a fire department's                                                               
rating.   He stated that this  is not the direct  impact, nor the                                                               
purpose of the council.                                                                                                         
                                                                                                                                
4:25:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO shared his  understanding that the intent is                                                               
to "make people safer."   He pointed out that insurance companies                                                               
are a direct beneficiary, as this  will result in less claims and                                                               
emergency medical  care.   He questioned  whether this  should be                                                               
funded by the insurance companies.                                                                                              
                                                                                                                                
MR. TUCKER  replied that in  some states the  insurance companies                                                               
fund this type of organization; however,  have not seen fit to do                                                               
so  in Alaska.   He  stated  that the  fire departments  directly                                                               
affect  homeowners,  and adding  the  fee  to insurance  policies                                                               
seemed the most effective.                                                                                                      
                                                                                                                                
CHAIR OLSON  asked how  many service areas  are in  the Fairbanks                                                               
North Star Borough.                                                                                                             
                                                                                                                                
MR. TUCKER  replied that  the City  of Fairbanks  Fire Department                                                               
and  the  City of  North  Pole  Fire  Department are  within  the                                                               
borough.   Outside  of the  borough there  are five  fire service                                                               
areas.                                                                                                                          
                                                                                                                                
REPRESENTATIVE GATTO commented that  two thirds of the population                                                               
of Alaska is located between Homer  and Fairbanks.  He shared his                                                               
understanding that Anchorage has a  paid fire department that has                                                               
daily  training, and  that  Fairbanks  and the  Matanuska-Susitna                                                               
Valley have similar  fire departments.  He  questioned whether or                                                               
not passing the bill would  change the training that is currently                                                               
happening.                                                                                                                      
                                                                                                                                
MR.  TUCKER  replied  that  it  would.   He  explained  that  the                                                               
aforementioned  departments are  directly affected  by the  AFSC.                                                               
Without funding  the council,  the current  programs will  not be                                                               
maintained, and  the fire departments could  potentially lose any                                                               
accreditation.  This would directly  affect the fire department's                                                               
ability to  recruit and train  firefighters.  He stated  that all                                                               
fire departments,  whether rural or urban,  are directly affected                                                               
by the AFSC.                                                                                                                    
                                                                                                                                
4:29:35 PM                                                                                                                    
                                                                                                                                
MITCH FLYNN,  Fire Chief, Steese Area  Volunteer Fire Department,                                                               
stated that he strongly supports  this legislation.  He explained                                                               
that 80-85  percent of the  residents within the  Fairbanks North                                                               
Star Borough  are protected by  either the fire service  areas or                                                               
the two  city fire  departments.   He is  in support  for holding                                                               
paid  and  volunteer  firefighters  to the  same  standards.    A                                                               
functioning AFSC is needed in  order to provide the direction and                                                               
leadership that  is necessary for  firefighters to  perform their                                                               
jobs effectively.                                                                                                               
                                                                                                                                
4:31:01 PM                                                                                                                    
                                                                                                                                
CAROL  REED,  President,  Alaska State  Firefighters  Association                                                               
(ASFA),  said  that  she responds  with  the  Central  Matanuska-                                                               
Susitna  Fire Department,  and holds  a seat  on the  AFSC.   She                                                               
stated  that having  standards  for  training firefighters  would                                                               
create  a safer  firefighter, and  a more  efficient firefighting                                                               
effort.   She said that in  the past, the Training  and Education                                                               
Bureau   has   absorbed   the   costs   for   accreditation   and                                                               
certification, and is no longer able to  do so.  The ASFA and the                                                               
AFCA is not  able to cover these  costs.  She said  that this has                                                               
an impact on firefighters that may  be trained, yet are unable to                                                               
become certified.   In regard to  the $3 fee, she  stated that if                                                               
this is not  the appropriate funding source, than  state needs to                                                               
create a funding source in order to maintain the AFSC.                                                                          
                                                                                                                                
4:33:53 PM                                                                                                                    
                                                                                                                                
KENTON  BRINE,  Northwest   Regional  Office,  Property  Casualty                                                               
Insurers Association  of America  (PCI), stated that  PCI opposes                                                               
the bill as it is  currently written, although it does appreciate                                                               
the intended goal  and the thoughtfulness of the  sponsor and the                                                               
committee.    He  said  that  while PCI  is  concerned  with  the                                                               
inequity of  only applying the $3  fee to homeowners, it  is also                                                               
concerned that  this singles out  a "responsible" segment  of the                                                               
population.   He  stated  that this  is  troubling for  insurers,                                                               
because it is applied  to the policies that are sold.   He is not                                                               
aware  of any  requirement that  this be  separately listed  on a                                                               
policy, and  as a result, this  appears to be an  increase in the                                                               
insurance bill.   He commented  that some individuals  may choose                                                               
not  to  pay  the  fee,   and  the  insurance  company  would  be                                                               
responsible  for payment.   He  suggested that  this may  have an                                                               
impact on  in-state insurers,  which may  be worth  looking into.                                                               
He explained that  each state has an  insurance retaliatory pact,                                                               
which  is intended  to promote  fair  competition among  insurers                                                               
located  in various  states  around the  country.   An  insurance                                                               
company based  in a state,  but doing business in  another state,                                                               
pays the  rate for either the  home state, or the  state in which                                                               
the business is  being written, whichever is  higher.  Therefore,                                                               
if an insurer  is based in Alaska and writing  insurance in other                                                               
states, it  may see an increase  for in-state as well  as out-of-                                                               
state business.   This puts  in-state companies at  a competitive                                                               
disadvantage  to companies  located  elsewhere.   He stated  that                                                               
this is  a potential  problem, and may  become an  impediment for                                                               
companies considering a move to Alaska.   He pointed out that the                                                               
insurance  market in  Alaska  is a  challenging  market, and  the                                                               
Division and  the legislature have done  a lot of work  in recent                                                               
years  to  improve   the  marketplace.    He   opined  that  this                                                               
legislation goes in  a different direction, and  therefore PCI is                                                               
opposed to the legislation as it is written.                                                                                    
                                                                                                                                
4:38:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS reiterated that  finding the funding source                                                               
is  difficult.    He  said  that  one  funding  source  that  was                                                               
considered involved a  fee for when 911 is dialed.   However, the                                                               
fire  officials  do  not  want  individuals  to  hesitate  before                                                               
calling for emergency  services.  He agreed that this  is not the                                                               
ideal  funding source;  however, the  other choices  "seem to  be                                                               
worse."   He inquired as to  what funding source Mr.  Brine would                                                               
suggest.                                                                                                                        
                                                                                                                                
MR. BRINE replied  that he is sympathetic to  this point, however                                                               
he pointed out  that this legislation is intended  to protect all                                                               
Alaskans.   He  stated that  from PCI's  perspective, it  doesn't                                                               
make sense  to approve legislation  to protect all  Alaskans, yet                                                               
only place  the fee on  those who purchase  homeowners insurance.                                                               
He acknowledged that this is  not tax on insurers, although there                                                               
is  potential for  the insurers  to pay  the cost  if the  policy                                                               
holders revolt against paying the $3 fee.                                                                                       
                                                                                                                                
4:41:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS commented that this  is the broadest way to                                                               
cover  the most  people, in  order to  offer safety  enhancement.                                                               
This  was  the  "easiest  possible  way, with  a  great  deal  of                                                               
undesirable choices."                                                                                                           
                                                                                                                                
               st                                                                                                               
DOUG SCHRAGE, 1   Vice President, Alaska  Fire Chiefs Association                                                               
(AFCA);  Deputy  Chief,   Anchorage  Fire  Department,  expressed                                                               
support  for  HB 211,  and  said  that  funding  is needed.    He                                                               
clarified that  fire departments, regardless of  funding, provide                                                               
as much training as possible.   When the fire departments are not                                                               
able  to  provide  training, the  state  Training  and  Education                                                               
Bureau  offers  assistance.    He  then  explained  the  training                                                               
process, and the difference between training and certification.                                                                 
                                                                                                                                
4:46:10 PM                                                                                                                    
                                                                                                                                
MR.  SCHRAGE,  in  regard  to   the  funding  source,  said  that                                                               
presently, the  state is able  to directly impact fire  safety in                                                               
commercial  occupancies through  the plan  review and  permitting                                                               
process.   This  is not  applicable to  residences.   Without the                                                               
AFSC, the  state has no way  to impact the fire  safety in homes,                                                               
other  than through  voluntary educational  programs.   He stated                                                               
that  funding for  the  AFSC has  been  at the  top  of the  AFCA                                                               
legislative agenda  since 1998.   The AFCA is very  encouraged by                                                               
this  legislation.   In closing,  he pointed  out that  the state                                                               
licenses  all manner  of public  services, yet  does not  license                                                               
firefighters, although  no other professional provides  the types                                                               
of services provided by firefighters.                                                                                           
                                                                                                                                
4:48:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAMRAS  inquired as  to what funding  sources were                                                               
considered by the AFCA.                                                                                                         
                                                                                                                                
MR. SCHRAGE  replied that the AFCA  and the ASFA have  funded the                                                               
council.   He said that  grants have  been applied for,  yet none                                                               
have  been successful.    The  AFCA has  also  looked into  other                                                               
states' funding sources, which include  funding from excise taxes                                                               
or  voluntary funding  from the  insurance industry.   He  opined                                                               
that direct  appropriation would  be the simplest,  yet is  not a                                                               
realistic option.                                                                                                               
                                                                                                                                
4:49:36 PM                                                                                                                    
                                                                                                                                
KATHY WASSERMAN,  Alaska Municipal League (AML),  stated that AML                                                               
is in full  support of HB 211, although not  "totally wild" about                                                               
the funding source.   She said "It's too bad  that the climate in                                                               
this  state is  such  that  we can't  go  [to  the House  Finance                                                               
Committee and the  Senate Finance Committee] and  get funding for                                                               
this."  She read from the AFSC mission statement, as follows:                                                                   
                                                                                                                                
     The mission of the Alaska  Fire Standards Council is to                                                                    
     establish training  and performance standards  for fire                                                                    
     service personnel, and  curriculum requirements for the                                                                    
     certification of training programs.                                                                                        
                                                                                                                                
MS. WASSERMAN stated that the AFCA  is an affiliate member of the                                                               
AML, and  the AML has  offered the  AFCA support over  the years.                                                               
She thanked  the sponsor for  taking this path, which  appears to                                                               
be the only path available.                                                                                                     
                                                                                                                                
4:51:19 PM                                                                                                                    
                                                                                                                                
JEFFREY  TROUTT, Deputy  Director,  Division  of Insurance  ("the                                                               
Division"),  Department   of  Commerce,  Community,   &  Economic                                                               
Development  (DCCED), stated  that  as a  matter  of policy,  the                                                               
Division  opposes   any  increase  to  the   cost  of  insurance.                                                               
However, everyone is  in support of doing  everything possible to                                                               
increase  the  professionalism  and standards  for  firefighters.                                                               
The Division would  prefer to see a  different funding mechanism.                                                               
In  response to  a question  from Representative  Gardner, agreed                                                               
that it would be  too difficult to collect a fee  on all types of                                                               
insurance.    He explained  that  homeowners  insurance is  well-                                                               
defined, adding  that everyone who  has a mortgage has  some type                                                               
of liability  and fire  protection.   In the  commercial context,                                                               
this might not be the case,  as several companies might share the                                                               
risk, creating a question with  regard to which company would pay                                                               
the $3 fee.  He said  that every company that provides homeowners                                                               
insurance  regularly submits  premium  taxes, and  it is  "fairly                                                               
simple"  to add  the  $3  fee to  this.   Additionally,  business                                                               
owners are most likely homeowners,  as well, and would already be                                                               
paying  the $3  fee.   He  said  that  it is  also  easier on  an                                                               
administrative  level,  requiring  a   few  lines  of  additional                                                               
computer code.                                                                                                                  
                                                                                                                                
4:52:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARDNER asked  if it would be  challenging to make                                                               
the fee a  percent of the policy value, rather  than a set dollar                                                               
amount.                                                                                                                         
                                                                                                                                
MR. TROUTT  replied that  this would  be more  difficult, because                                                               
insurance companies  do not currently  report the amount  of each                                                               
policy  to the  Division.    This information  would  need to  be                                                               
collected  before  the  Division  would   be  able  to  charge  a                                                               
percentage fee.                                                                                                                 
                                                                                                                                
4:55:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BUCH  asked what methods  have been used  in other                                                               
states.                                                                                                                         
                                                                                                                                
MR. TROUTT  replied that  while other states  have done  this, he                                                               
does not have details regarding these programs.                                                                                 
                                                                                                                                
REPRESENTATIVE  NEUMAN  asked  if  a statutory  change  would  be                                                               
required to increase the fee in the future.                                                                                     
                                                                                                                                
MR. TROUTT replied yes.                                                                                                         
                                                                                                                                
4:57:13 PM                                                                                                                    
                                                                                                                                
ERIC  MOHRMANN,  Fire  Chief, Capital  City  Fire/Rescue  (CCFR),                                                               
stated that  he is in  support of HB 211.   He explained  that he                                                               
requires   that   all   CCFR  applicants   have   Firefighter   1                                                               
certification,  and   if  the  individual  does   not  have  this                                                               
training, he  must provide it.   He  stated that the  training is                                                               
expensive,  adding that  he  must pay  overtime  to cover  shifts                                                               
while the individual  is away receiving the training,  as well as                                                               
paying  him  or  her  while  in training.    Two-thirds  of  CCFR                                                               
firefighters are volunteers who must be  able to work at the same                                                               
level as the paid staff.   He said that it is extremely important                                                               
to  know  that  when  a  firefighter is  ordered  to  go  into  a                                                               
building, as  part of a  group, he or  she will be  effective and                                                               
safe.   He stated that firefighter  training has come a  long way                                                               
since he began his career, and  the AFSC is needed to ensure that                                                               
firefighters are safe, effective, and  able to operate as part of                                                               
a team.   He pointed  out that investigators and  instructors are                                                               
state  certified,  and  noted that  the  Training  and  Education                                                               
Bureau can  no longer  support this  program.   The AFCA  and the                                                               
ASFA has  funded this  program through  raffle tickets  and pull-                                                               
tabs.   He shared a story  involving a structure fire  in Angoon,                                                               
and  said   that  firefighters  must  be   properly  trained  and                                                               
equipped.   He stated that rural  areas do not have  fires often,                                                               
but when  they do, if  the firefighters are not  properly trained                                                               
and equipped, people will die.                                                                                                  
                                                                                                                                
REPRESENTATIVE GARDNER asked how  the instructor and investigator                                                               
certification is funded.                                                                                                        
                                                                                                                                
MR. MOHRMANN replied that all  certification programs are covered                                                               
by the  Training and  Education Bureau, adding  that this  is not                                                               
included in its budget, and is being paid for by receipts.                                                                      
                                                                                                                                
REPRESENTATIVE RAMRAS thanked  Mr. Mohrmann for his  service.  He                                                               
encouraged members  to contact their  local fire  departments "to                                                               
find  out with  what low  regard we  treat our  fire departments,                                                               
until there's  an accident in  our home, in our  neighborhood ...                                                               
and then you expect everything."                                                                                                
                                                                                                                                
CHAIR OLSON indicated that HB 211 would be held for further                                                                     
consideration.                                                                                                                  
                                                                                                                                
5:02:48 PM                                                                                                                    
                                                                                                                                

Document Name Date/Time Subjects