05/12/1999 02:24 PM Senate HES

             SB 117-INSURANCE FOR SCHOOL DISTRICTS                                                                              
                                                                                                                                
ROBERT KROGSENG, staff to Senator Taylor, discussed a proposed                                                                  
amendment designed to address concerns raised about the definition                                                              
of earthquake zones at the last meeting.  He noted while doing                                                                  
research for the amendment, it came to his attention that the U.S.                                                              
Geological Survey (USGS) is in the process of changing its                                                                      
terminology and will be designating earthquake contours rather than                                                             
zones.  The national building code staff plans to adopt new                                                                     
terminology as well.  The proposed amendment replaces the words "an                                                             
active seismic area" with "areas where ground motions exceed 0.2 of                                                             
a second, spectral acceleration of 75 percent gravity, as                                                                       
delineated on a ground motion map for Alaska based on USGS Geologic                                                             
Investigation Series Maps 1-2679."  Committee packets contain a map                                                             
that outlines the areas that meet the new delineation; those areas                                                              
were previously referred to as zones 3 and 4. The USGS is in the                                                                
process of creating a map for the Legislature that will define the                                                              
areas more clearly.                                                                                                             
                                                                                                                                
SENATOR ELTON asked how such a map will affect insurance company                                                                
claims if insurance companies consider the entire state to be an                                                                
active seismic area.                                                                                                            
                                                                                                                                
MR. KROGSENG said it is his understanding that insurance companies                                                              
essentially work off of, and with, the building codes and that the                                                              
new terminology will be adopted into the building codes.                                                                        
                                                                                                                                
SENATOR ELTON asked whether municipalities with their own building                                                              
codes will have to make that change.                                                                                            
                                                                                                                                
MR. KROGSENG replied that all building codes are currently being                                                                
combined into one nationwide code.  Most municipalities have an                                                                 
automatic reference to the latest building code, others adopt each                                                              
new code as it is released.                                                                                                     
                                                                                                                                
Number 093                                                                                                                      
                                                                                                                                
SENATOR ELTON asked for an explanation of the definition.                                                                       
                                                                                                                                
MR. KROGSENG said that structural problems occur when the ground                                                                
motion is higher than the number contained in the definition.  Most                                                             
structural specifications can withstand less ground motion.                                                                     
                                                                                                                                
SENATOR WILKEN moved to adopt Amendment 1.  SENATOR ELTON objected                                                              
and said originally, the bill only addressed a perceived problem                                                                
with regulations that pertain to flood insurance for schools, and                                                               
he is not sure the bill is necessary at all.  The bill now attempts                                                             
to fix a problem with earthquake insurance when no school district                                                              
has testified that it is a problem.                                                                                             
                                                                                                                                
The motion to adopt Amendment 1 carried with Senators Pete Kelly,                                                               
Wilken and Miller voting "yea," and Senator Elton voting "nay."                                                                 
                                                                                                                                
SENATOR ELTON moved to delete, on page 1 line 9, "(1)" to put a                                                                 
period after "flood prone area" on line 11, and to delete the                                                                   
remaining language on lines 11 through 13.  The net effect of                                                                   
Amendment 2 will be to strike all references in the bill to                                                                     
earthquakes.                                                                                                                    
                                                                                                                                
SENATOR WILKEN objected and said the intent of the bill is to save                                                              
money, and that rather than have to revisit the issue in the                                                                    
future, it makes sense to address earthquake insurance now.                                                                     
                                                                                                                                
SENATOR ELTON maintained that legislating for problems that have                                                                
not occurred is difficult.  In addition, he is not convinced that                                                               
a new definition of earthquake zones will be used by insurance                                                                  
companies to determine rates.                                                                                                   
                                                                                                                                
The motion to adopt Amendment 2 failed with Senator Elton voting                                                                
"yea," and Senators Wilken, Kelly and Miller voting "nay."                                                                      
                                                                                                                                
There being no further discussion on SB 117, SENATOR WILKEN moved                                                               
SB 117 as amended out of committee with individual recommendations                                                              
and its accompanying fiscal note.  SENATOR ELTON objected.  The                                                                 
motion  carried with Senators Kelly, Wilken and Miller voting                                                                   
"yea," and Senator Elton voting "nay."