02/16/2012 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB264 | |
| Presentation: Yk Village Cluster Consolidated Services Model Plan | |
| HB219 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 264 | TELECONFERENCED | |
| *+ | HB 219 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
February 16, 2012
8:05 a.m.
MEMBERS PRESENT
Representative Cathy Engstrom Munoz, Chair
Representative Neal Foster, Vice Chair
Representative Alan Austerman
Representative Alan Dick
Representative Sharon Cissna
Representative Berta Gardner
MEMBERS ABSENT
Representative Dan Saddler
COMMITTEE CALENDAR
HOUSE BILL NO. 264
"An Act allowing a deferral of municipal property taxes on the
increase in the value of real property attributable to
subdivision of that property; and providing for an effective
date."
- MOVED CSHB 264(CRA) OUT OF COMMITTEE
PRESENTATION: YK VILLAGE CLUSTER CONSOLIDATED SERVICES MODEL
PLAN
- HEARD
HOUSE BILL NO. 219
"An Act exempting certain emergency medical and fire department
services from regulation as insurance."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 264
SHORT TITLE: MUNI PROPERTY TAX DEFERRAL: SUBDIVISIONS
SPONSOR(s): REPRESENTATIVE(s) MUNOZ
01/17/12 (H) PREFILE RELEASED 1/13/12
01/17/12 (H) READ THE FIRST TIME - REFERRALS
01/17/12 (H) CRA, FIN
02/14/12 (H) CRA AT 8:00 AM BARNES 124
02/14/12 (H) Heard & Held
02/14/12 (H) MINUTE(CRA)
02/16/12 (H) CRA AT 8:00 AM BARNES 124
BILL: HB 219
SHORT TITLE: FIRE AND EMERGENCY MEDICAL SERVICES
SPONSOR(s): REPRESENTATIVE(s) FEIGE
03/31/11 (H) READ THE FIRST TIME - REFERRALS
03/31/11 (H) CRA, STA
02/16/12 (H) CRA AT 8:00 AM BARNES 124
WITNESS REGISTER
KATHIE WASSERMAN, Executive Director
Alaska Municipal League
Juneau, Alaska
POSITION STATEMENT: Testified that she has agreed to work with
those in support of HB 264.
CHRISTOPHER CLARK, Staff
Representative Munoz
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented potential amendments to HB 264 on
behalf of the sponsor, Representative Munoz.
DAVE HANNA
Juneau, Alaska
POSITION STATEMENT: During hearing of HB 264, answered
questions.
CHRISTINE KLEIN, Chief Operating Officer
Calista Corporation
Anchorage, Alaska
POSITION STATEMENT: Provided a presentation regarding the YK
Village Cluster Consolidated Services Model Plan.
REPRESENTATIVE ERIC FEIGE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as the sponsor of HB 219.
MICHAEL PASCHALL, Staff
Representative Eric Feige
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During the hearing of HB 219, answered
questions.
LINDA HALL, Director
Division of Insurance
Department of Commerce, Community & Economic Development
Anchorage, Alaska
POSITION STATEMENT: Expressed concern with HB 219.
SEBASTIAN SAARLOOS, Member
City Council
City of Delta Junction
Delta Junction, Alaska
POSITION STATEMENT: Testified in support of HB 219.
ACTION NARRATIVE
8:05:41 AM
CHAIR CATHY ENGSTROM MUNOZ called the House Community and
Regional Affairs Standing Committee meeting to order at 8:05
a.m. Representatives Foster, Austerman, Dick, Gardner, and
Munoz were present at the call to order. Representative Cissna
arrived as the meeting was in progress.
HB 264-MUNI PROPERTY TAX DEFERRAL: SUBDIVISIONS
8:05:59 AM
CHAIR MUNOZ announced that the first order of business would be
HOUSE BILL NO. 264, "An Act allowing a deferral of municipal
property taxes on the increase in the value of real property
attributable to subdivision of that property; and providing for
an effective date."
8:06:40 AM
KATHIE WASSERMAN, Executive Director, Alaska Municipal League,
acknowledged that after speaking with some municipalities, she
had written a letter to the committee regarding HB 264. Since
that time she has spoken with Dave Hanna, who is involved with
the legislation, and agreed to work with those in support of the
legislation. For now, she said to ignore the letter she
submitted to the committee.
8:08:01 AM
CHAIR MUNOZ announced that public testimony was closed.
8:08:34 AM
CHRISTOPHER CLARK, Staff, Alaska State Legislature, presented
[Amendment 1] labeled 27-LS1090\B.1, Bullard, 2/13/12, with the
attached explanation, which read as follows:
Page 1, line 8, following "to":
Insert "(1)"
Page 1, line 9, following "parcels":
Insert "; and
(2) any improvements made to the property
necessitated by its subdivision"
Explanation of Amendment B.1
Prepared by Christopher Clark, Aide, Rep. Cathy Munoz
The current language in HB 264 may limit a property
tax deferral to only those costs that are directly
attributable to subdividing a parcel such as surveying
and platting.
Some municipalities such as Juneau require subdivision
developers to make improvements for things like access
roads, drainage ditches, and utility corridors.
Adding the words "any improvements made to the
property necessitated by its subdivision" will allow
improvement costs to be part of a property tax
deferral.
8:09:57 AM
REPRESENTATIVE CISSNA asked if [Amendment 1] allows holding off
on the full extent of development and giving protections so that
the property owner isn't taxed. She expressed concern with
creating a situation in which the land is cleared and sits
vacant for 10 years, conceivably ready for development.
MR. CLARK reminded the committee that HB 264, as written, would
limit the tax deferral to up to five years or end when the
permit is issued. The idea is to wait for a building to be
constructed on the property and then the tax deferral would end.
CHAIR MUNOZ also reminded the committee that the proposed tax
deferral is optional.
8:11:46 AM
REPRESENTATIVE CISSNA recalled that in Anchorage in 1967 there
was property with partial development that was ready to sell and
build upon, but which sat empty and cleared for 30 years. She
asked if HB 264 allows the aforementioned.
MR. CLARK clarified that's not the intent, rather the intent is
to speed up development and avoid vacant fields. The idea is to
receive the tax deferral for five years, such that developers
have time to construct a building to sell.
8:13:06 AM
DAVE HANNA emphasized that HB 264 is a valuable tool to ensure
that Representative Cissna's concerns don't happen. The
language in HB 264 is broad enough to allow municipalities to
apply the deferral in any manner they see fit. These incentives
could be used in various ways to encourage the type of
development the municipalities want, such as wider green belts
or larger play grounds.
REPRESENTATIVE CISSNA surmised then that HB 264 provides
municipalities choices and it's optional.
MR. HANNA replied yes.
8:14:24 AM
REPRESENTATIVE AUSTERMAN asked if the language "any
improvements" that would be inserted per [Amendment 1] is
defined or needs to be defined.
MR. HANNA said that it would be left to the municipalities to
define. However, he informed the committee that most
municipalities allow phased development of a subdivision. He
surmised that municipalities would use [the language] as a tool
to specify that a certain amount of development occurs by a
certain point. He related that currently in Juneau, one can
apply for a plat and make improvements without recording the
plat or completing the improvements.
8:16:21 AM
REPRESENTATIVE GARDNER asked if it's the sponsor's intent that
the proposed property tax referral is not renewable.
MR. CLARK answered that since the legislation doesn't make a
provision for it to be renewable he presumed that it's not.
Therefore, the proposed property tax referral would be a one-
time allowance. Again, the legislation provides flexibility to
municipalities to implement the proposed property tax deferral
as they see fit.
8:17:47 AM
REPRESENTATIVE GARDNER moved to adopt Amendment 1, 27-
LS1090\B.1, Bullard, 2/13/12, [text provided previously]. There
being no objection, Amendment 1 was adopted.
8:18:07 AM
MR. CLARK moved on to [Amendment 2] labeled 27-LS1090\B.2,
Bullard, 2/13/12, with the attached explanation, which read as
follows:
Page 2, line 1:
Delete "the municipality grants a building permit
for all or a portion of"
Insert "a residential or commercial building is
constructed on"
Page 2, line 7:
Delete "the municipality grants a building permit
for a portion of"
Insert "a residential or commercial building is
constructed on"
Explanation of Amendment B.2
Prepared by Christopher Clark, Aide, Rep. Cathy Munoz
This amendment is aided at fulfilling the intent of
the bill to end a property tax deferral when a
property is improved and a building is constructed on
it - so long as that happens within five years.
The current language ends a deferral when a
municipality grants a building permit for all or a
portion of a subdivided parcel. There are two
concerns with this:
1. Some municipalities don't issue building
permits; and,
2. No improvements may have been done at the time
a permit is issued.
This amendment would end the deferral when a building
is constructed on the property.
8:19:41 AM
REPRESENTATIVE GARDNER pointed out that there is a dangling
modifier in the language being inserted by [Amendment 2].
8:20:19 AM
REPRESENTATIVE AUSTERMAN moved to adopt Amendment 2, 27-
LS1090\B.2, Bullard, 2/13/12, [text provided previously].
8:20:34 AM
REPRESENTATIVE GARDNER then moved to adopt an amendment to
Amendment 2 such that the language being inserted by Amendment
2: "a residential or commercial building is constructed on",
would be replaced with the following language: "on which a
residential or commercial building is constructed". There being
no objection, the amendment to Amendment 2 was adopted.
[The committee then treated Amendment 2, as amended, as
adopted.]
8:20:58 AM
REPRESENTATIVE AUSTERMAN moved to report HB 264, as amended, out
of committee with individual recommendations and the
accompanying fiscal notes. There being no objection, CSHB
264(CRA) was reported from the House Community and Regional
Affairs Standing Committee.
8:21:20 AM
The committee took an at-ease from 8:21 a.m. to 8:25 a.m.
^Presentation: YK Village Cluster Consolidated Services Model
Plan
Presentation: YK Village Cluster Consolidated Services Model
Plan
8:25:01 AM
CHAIR MUNOZ announced that the next order of business would be a
presentation of the Yukon Kuskokwim Village Cluster Consolidated
Services Model Plan.
8:25:13 AM
CHRISTINE KLEIN, Chief Operating Officer, Calista Corporation,
explained that she would discuss the concept of a village
clustering model in Southwest Alaska that would help sustain
some of the rural economy and some of the Southwest Alaska
villages. She told the committee that over the years, Calista
has noticed throughout Alaska that transportation and affordable
energy are critical to the survival of communities. In
reviewing U.S. history, over 2,700 communities have disappeared
with most of them being located in the Western U.S. Since the
1800s, 22 communities in Alaska have disappeared. The question
for many Western Alaska communities is how to survive as funding
decreases. Growing up in Southeast Alaska, she recalled living
through five cycles of boom and bust in Ketchikan. Some of the
stabilizing factors in [Ketchikan] were transportation and
energy. In 1903 one of the first hydroelectric power plants was
constructed in Ketchikan. Ketchikan also had the Alaska
steamships and was located on a main [transportation] corridor.
The aforementioned factors lead to the creation of a sustainable
economy in Ketchikan. In fact, today Ketchikan has one of the
highest per capita resident incomes in the state. Upon review,
it was apparent that Ketchikan was sustainable because of the
available transportation, accessibility, stable and affordable
energy, as well as some resource availability, and residents who
were adaptable and flexible. Referring to the map on the slide
entitled "Sustainability: Access", she pointed out that although
rural areas have some of the greatest resource potential, most
of those communities and resources are located off the Railbelt
and off the grid. Therefore, one of the greatest challenges is
transportation and energy. She then informed the committee that
the Fraser Institute surveyed mining companies worldwide, the
results of which ranked Alaska number 1 in mineral potential but
57th due to lacking infrastructure and development challenges.
Again, the greatest challenges are transportation and energy.
In reviewing old and new plans, she discovered the map presented
on the slide entitled "Sustainability: Affordable Access &
Energy". This map specifies some of the areas that the
Department of Transportation & Public Facilities (DOT&PF)
investigated in 2008 in terms of possible economic value hubs.
The map highlights access and energy corridors that are
necessary for both community and commerce survival. Some
communities, particularly in Southwest Alaska, would be good
models of demonstration for improving the economy and cost of
living. Southwest Alaska has nearly 30,000 citizens and has the
largest number of communities of any region in the state, with
56 communities and villages. As budgets tighten, [Western
Alaska] seems to be a perfect area where resources can be shared
and villages clustered. She noted that some of the villages are
within five miles of one another. Referring to the slide
entitled "Sustainability: Access", she informed the committee
that currently, the region is 58,000 square miles with very
little infrastructure and has the highest cost of living in the
state. Furthermore, 75 percent of the region is isolated due
to federal ownership of lands and 20 percent of the land is
owned by Alaska Native Claims Settlement Act (ANCSA)
corporations, with less than 5 percent privately owned. With a
population of close to 30,000 people and growing by 6 percent,
it's a great resource for future workforce development.
Although there is one interconnecting road in Western Alaska, it
isn't passable. Nearly every village in Western Alaska has a K-
12 school, an independent diesel powered generator, an airport,
sometimes a health clinic, and sometimes water and sewer. As
illustrated by the chart on the slide entitled "Sustainability:
Energy, Lowest Energy Costs: Hydropower & Gas", rural Alaska
has the highest cost of energy in comparison to other areas of
the state. The areas of the state doing best are Southeast and
Southcentral Alaska, both of which have hydropower whereas other
areas of the state use diesel for their heat and electricity.
Last year, the cost for diesel ranged from $6-$10 per gallon and
this year it's projected to be $7-$12 per gallon. Electricity
is generated by small diesel generators, many of which are old
and unreliable. She highlighted that citizens [in rural Alaska]
tend to use less than half [the energy] a normal average family
would consume, simply because of the cost. Therefore, they are
already conserving. She then related that the average cost of
electricity in rural communities is $.83 per kilowatt hour and
ranges from $.58-$1.05 per kilowatt hour. Referring to the
charts on the slide entitled "Sustainability: Energy Rural
Citizens' Disproportionately High Costs", she informed the
committee that over the last 5 years the percentage of a
household's income that goes to energy has risen from 20 percent
to 65-70 percent, even with power cost equalization (PCE). She
then directed attention to the map on the slide entitled
"Village Cluster Model: Group Closely Located Villages". As
mentioned earlier, the areas doing best are Southeast and
Southcentral Alaska, where 24 percent of the electricity is
provided by hydropower. In fact, Southeast and Southcentral
Alaska already have 37 power facilities based on hydro and, on
average, are the lowest energy cost areas ranging from $.10-$.15
per kilowatt hour. The map also specifies areas the Alaska
Energy Authority (AEA) identified where rural PCE is already in
place and there is potential hydropower. There are at least 131
priority sites and in Southwest Alaska there is not one
hydropower plant. Therefore, it appears that Southwest Alaska
would be a good area to consider for improvement in terms of
energy as well as transportation. She then highlighted that
energy costs have more than doubled over the last couple of
years and it continues to increase, which results in a
disproportionate living cost in rural Alaska versus some of the
state's larger communities. Ms. Klein then referred to the
slide entitled "Village Cluster Model: Group Closely Located
Villages" and said that the time is ripe for clustering villages
and some villages have already "bought into" the concept. The
map circles feasible clusters of communities that could be a
demonstration model of linking communities to share some public
infrastructure assets. There are three sets of villages that
consist of 12 communities and over 6,000 people. Some
communities have asked to join this effort and for the
assistance of the regional corporation and the state. She told
the committee that Calista Corporation has briefed the
governor's office, which has expressed interest in implementing
something like village clustering. The first group of
communities is Nelson Island and consists of the following
communities: Toksook, Tununak, Nightmute, and Umkumiate.
Another group of communities consists of the following
communities: Hooper Bay, Chevak, and Scammon Bay. The third
group of communities consists of the following communities:
Emmonak, Alakaknuk, and Sheldon Point along with some other
smaller communities that may be linked into this group. Some of
these areas have existing needs for basic services, whereas
others already have infrastructure in place.
[8:39:54]
REPRESENTATIVE CISSNA highlighted that through the Alaska Native
Tribal Health Consortium Chevak had cooperation [with
surrounding] communities for safe water. However, because of
the cost of fuel, the arrangement is falling apart. This
proposal, on the other hand, meets the needs of the communities
and needs to be understood statewide. Representative Cissna
related her understanding that the cost of energy is a
difficulty not only in terms of heating the home but also for
obtaining food.
MS. KLEIN noted her agreement, and added that by necessity
families are sharing their resources, including their homes and
hunting trips. With respect to the village safe water program,
in the past there has been difficulty obtaining agreement with
nearby villages. However, the increased cost of living along
with regional leadership has helped work through some of the
difficulties with consolidation. She opined that the
aforementioned as well as the cooperation of state agencies is
key for the success of clustering. The primary item that will
make village clustering work is a road and energy link, which
doesn't exist in this area of Alaska.
8:43:39 AM
REPRESENTATIVE CISSNA commented on the difficulty of maintaining
roads in these areas, and asked if rail has been considered.
MS. KLEIN, speaking as an engineer, said rail is much more
expensive to construct [than a road] and the area needs to be
flat. Usually, rail is most effective when there are large
volumes of heavy industrial material being transported. She
acknowledged that this area has lots of permafrost and wetlands
and it would be difficult to maintain roads. However, she
reminded the committee that these don't have to be four-lane
roads, rather trails can suffice. Ms. Klein clarified that she
is trying to highlight areas where there have been studies
regarding whether the [village cluster model would be
successful] and where some roads could be constructed and
developed. Nelson Island has been studied numerous times over
the last 20 years, including some Department of Transportation &
Public Facilities studies indicating that constructing
infrastructure would be feasible and provide significant
economic benefits and savings to the state.
8:45:57 AM
REPRESENTATIVE DICK commented that the cost of energy is passed
through everything, including groceries and schools. He then
indicated that [a village cluster model] could help with the
out-migration from the villages and make regional schools in
this area possible.
8:46:56 AM
REPRESENTATIVE FOSTER expressed interest in obtaining the
studies, particularly the portions related to economics, in
order to determine the extent of the savings.
MS. KLEIN agreed to provide the information. She then informed
the committee that under the Murkowski Administration the
Department of Community & Regional Affairs did a report that
quantified some of the cost savings and benefits [of village
clustering]. Nelson Island was used as a good example of where
to use this model in the Southwest region. She explained that
one of the reasons to bring forward this model is that the
existing schools, energy plants, and fuel farms are aging and
need to be replaced. As illustrated by a recent court case, the
state has been very behind in its responsibilities in this
region. Therefore, it seems that it would be an appropriate
time to consolidate schools in these areas. She noted that she
is an example of a successful individual who left her home
community to attend a regional high school.
8:49:32 AM
MS. KLEIN told the committee that Nelson Island is an example of
a population that's growing and yet it has three schools within
25 miles of one another. On the other hand, students from
Girdwood are bused 35 miles through an avalanche zone to
Anchorage. She explained that the goal is to find areas where
there would be economies of scale as well as future
infrastructure and capital savings. Furthermore, this
consolidation could improve the dismal high school graduation
rate and very few elective classes in the Southwest Alaska
region. Referring to the slide entitled "Proposed Village
Cluster Model: Shared Services Consolidation", she stressed
that it's critical to start now on an infrastructure master plan
for these village clusters in order for savings to even occur.
There would have to be great work with regard to the equity
state each village would have, which is what some of the village
leadership has requested Calista Corporation perform.
8:51:26 AM
REPRESENTATIVE GARDNER asked if the expectation is that the
facilities would have to be balanced throughout the village
cluster.
MS. KLEIN replied yes, and added that is what takes time,
intimate knowledge of the region/communities, ability to speak
the language, and state agencies working together.
8:52:11 AM
MS. KLEIN, returning to the presentation, directed the
committee's attention to the slide entitled "Proposed Village
Cluster Model: Planning Project Request = $1.5M". The request
would entail putting together task forces of the state agencies
as well as public meetings to determine the available assets,
available infrastructure, and what would need to be done to link
these communities. She noted that some communities have already
started the process. For instance, transmission lines have been
built from Emmonak to Alakanuk. Still, the goal is to move
forward faster, particularly when reviewing the funding
projections in the future. From the state's perspective, this
consolidation would reduce some of the duplication. Currently,
in each cluster there are at least three airports that were
constructed with federal funds that will decrease. She further
highlighted that the state would benefit from this model by
sharing of resources, centralizing facilities such as schools,
increasing reliability, and reducing costs of energy. The local
benefits of this model include providing cheaper energy and
transportation and improving emergency services. She pointed
out that some of these communities don't have a village public
safety officer (VPSO) and thus pooling resources would provide
more leveraging of the available funds such that a VPSO could be
placed in these communities. She reminded the committee that
[Calista Corporation] is requesting capital funds to undertake
this effort and informed it that they have a commitment from the
regional corporations, Association of Village Council
Presidents, Yukon Kuskokwim Health Consortium (YKHC), Calista
Regional Corporation, and Nelson Island and Hooper Bay groups.
Ms. Klein said that if Calista Corporation isn't successful in
obtaining funding, it would consider bringing forward
legislation for a pilot project to start this process in
Southwest Alaska.
8:55:08 AM
REPRESENTATIVE CISSNA related her understanding that in a number
of communities there is an energy plan that identifies what they
believe can be done in their areas. She opined that to make it
renewable so that it's in perpetuity and cheap would create
sustainability.
MS. KLEIN replied yes, Calista Corporation is pursuing a
hydropower project in Southwest Alaska as well as a regionwide
energy program that would integrate many types of alternative
energy in this region. However, the area, which is larger than
the State of New York, has many things that work in different
areas. A situation in which various energy types are being
combined makes it more difficult to integrate the various plans.
Therefore, it takes a concerted effort to make things work
together, which takes time, energy, and resources to accomplish.
8:57:01 AM
REPRESENTATIVE CISSNA highlighted that renewable energy has to
be local. She then highlighted the fact that these people have
been in Southwest Alaska for a thousand years or more and kept
themselves warm. Therefore, she opined that the knowledge is
present [to utilize the appropriate alternative energy for the
area] in conjunction with today's technology.
8:58:02 AM
The committee took a brief at-ease.
HB 219-FIRE AND EMERGENCY MEDICAL SERVICES
8:59:41 AM
CHAIR MUNOZ announced that the final order of business would be
HOUSE BILL NO. 219, "An Act exempting certain emergency medical
and fire department services from regulation as insurance."
8:59:47 AM
REPRESENTATIVE ERIC FEIGE, Alaska State Legislature, speaking as
the sponsor of HB 219, paraphrased from the following written
sponsor statement:
HB 219 allows local fire and emergency medical
agencies to solicit funding as a form of prepayment
for services. This type of program has been successful
in allowing such organizations to raise needed
operating funds while limiting financial risk to those
that may need the agency's services.
In a typical scenario, an individual or family pays a
set fee to the local emergency medical service on an
annual basis. The agency then will respond and
transport the individual or family member without
additional charge to the individual.
Under current statute, it is the opinion of the
Division of Insurance that this type of activity is
deemed insurance and is regulated by that division. HB
219 will clarify that this type of program is not
insurance and is not regulated by the division.
9:02:05 AM
REPRESENTATIVE GARDNER requested the sponsor explain the
reference in the sponsor statement to "limiting financial risk
to those that may need the agency's services."
9:02:26 AM
MICHAEL PASCHALL, Staff, Representative Eric Feige, Alaska State
Legislature, began by clarifying that medical and fire services
are interchangeable in the scenarios presented. Basically, an
individual who pays a fee upfront for fire and emergency medical
services and who requests those services may see a bill for the
services, but won't have to pay it. To be clear, he pointed out
that the individual's insurance company may be billed, but the
individual wouldn't be held responsible for any of the
additional charges beyond the fee.
REPRESENTATIVE FEIGE highlighted that it takes funds in order to
have a fire department, staff, and equipment ready and warm.
Therefore, there has to be a mechanism to raise the funds ahead
of time to pay its bills, training costs, and insurance. He
related that even with an upfront fee, the service is still
dependent upon volunteer staff. The benefit of the upfront fee
for the community is that the insurance rates for the community
can be lowered if the fire department can reach a certain level
of proficiency, equipment, and staff. Therefore, there is a
financial benefit to the community to have a fire department as
well as an emotional benefit in terms of potential fires in the
community.
9:06:09 AM
REPRESENTATIVE GARDNER acknowledged that the current sources of
funding for fire and emergency medical services may be
inadequate to meet the needs or maintain the level of response
capability desired. She then inquired as to the proportions of
the funding for fire and emergency medical agencies, which she
assumed included some state funds, federal funds, grants,
donations, and insurance payments.
MR. PASCHALL answered that it varies per department. Therefore,
there are departments that are funded through tax levies and
departments that are funded totally from voluntary funds [and in
between]. In the case of the fire department with which he
works, over the last year about 20 percent of its funding was
generated from donations, about 40 percent of its funding was
from the community corporation, and the remaining 40 percent of
its funding was from the department's contract with the Alaska
Division of Forestry to provide additional assistance for wild
land fire protection. The contract funds are the single largest
source of revenue because they can earn enough money in one year
that it can be spread out over years when it doesn't earn money.
9:08:19 AM
REPRESENTATIVE GARDNER surmised that although the fire
department has made a contract with the Alaska Division of
Forestry and has an obligation to respond, the department still
has to rely on volunteers. She asked if that places the
department in a difficult position.
MR. PASCHALL noted that his fire department has additional
equipment available specifically for the contract services in
order to avoid depleting the response capabilities to the
community as a whole. Furthermore, volunteers are hired to
standby for the Alaska Division of Forestry contract. Since any
fire during high fire season is a risk to wild land fires, the
division allows the fire department to respond to a structure
fire because they respond as well. The only time the contract
services would take away from the local resources is when
equipment is moved to the location of a fire.
REPRESENTATIVE FEIGE clarified that the contract with the Alaska
Division of Forestry isn't very specific as it's basically a
contingency situation in which the division agrees to pay so
many dollars per hour per day when it uses the department to
fight a state fire. He emphasized that it's not guaranteed
ahead of time, and thus that element of funding isn't steady.
9:10:39 AM
REPRESENTATIVE AUSTERMAN inquired as to how many local
organizations currently have a fee for service arrangement [such
that it's a fundraising method].
MR. PASCHALL related that he knew of two fire departments that
operate under the subscription arrangement and one ambulance
service that's part of a fire department that waives the fee if
they provide services. The City of Delta Junction had an
ordinance to do this, but discontinued it because the city's
attorney and the Division of Insurance told them it would be
regulated as insurance.
REPRESENTATIVE AUSTERMAN related the assumption that additional
cost would be the only reason to not offer [the subscription
arrangement].
MR. PASCHALL agreed.
REPRESENTATIVE FEIGE interjected that essentially it's a
hindrance for communities that aren't a municipality and don't
have the ability to raise funds through taxation on their own.
REPRESENTATIVE AUSTERMAN said he understands the principle
behind the [subscription arrangement].
9:13:45 AM
CHAIR MUNOZ directed attention to the committee packet in which
documents relate that there may be only 20 percent participation
in the subscription fee arrangement. She inquired as to what
happens to those who don't subscribe when they have a fire and
there is a reluctance to respond. She also inquired as to
whether the funds from 20 percent of the population would cover
the true costs of the service being provided.
REPRESENTATIVE FEIGE reminded the committee that HB 219 doesn't
mandate anything; rather it just allows such a subscription fee
to be charged. Each community will be different in terms of the
basic limitations on cost. He informed the committee that it
costs about $6,000 per year to run his local fire department,
which he characterized "as very bare bones." He noted that in
the past his fire department has received capital grants from
the legislature in the amount of about $250,000 and those funds
have been used to purchase equipment. He further noted that his
fire department is heated mainly with waste oil heaters, which
doesn't cost anything. He stated that the cost will be
dependent upon how much each community will be willing to pay
and how many in the community pay. Generally, about 35 folks in
his community sign up [and pay] for service, which when combined
with other funding sources covers his fire department's basic
cost of providing the service.
9:16:28 AM
CHAIR MUNOZ then asked whether those who don't pay the
subscription fee receive service.
REPRESENTATIVE FEIGE acknowledged that there is the desire to
take care of as many people as possible. However, the reality
is that money is necessary to pay the insurance and the money
has to come from somewhere. In his community, the policy is
that the fire department will respond to every wild land fire,
but will only respond to structure fires of subscribers. From a
legal perspective when the fire department responds to a
structure fire of a nonsubscriber and doesn't respond to a
subsequent nonsubscriber, the fire department is open to a
lawsuit. Therefore, the fire department has to commit to those
who subscribe to the service and no one else.
9:18:05 AM
REPRESENTATIVE CISSNA related her understanding that doing due
diligence in terms of safety would hold water in court.
9:20:04 AM
LINDA HALL, Director, Division of Insurance, Department of
Commerce, Community & Economic Development, noted that the
committee packet should include a letter from the Division of
Insurance that relates the division's belief, after legal
research, that these subscription programs would fall under the
definition of insurance, as statute is currently written. She
clarified that she's really speaking to the fire department
portion of the legislation, and opined that this is strictly a
policy call of the legislature. She noted that other things are
exempted from the broad definition of insurance. To offer
insurance [a fire department] can either become an insurance
company, which is an expensive and impractical route, or find an
insurance company that's willing to provide a backstop. The
latter has been utilized in the state with medical transports.
She explained that the membership group still has to be licensed
to sell the product, which is a fairly inexpensive process.
Although the aforementioned isn't difficult, there may be some
difficulty finding the backstop. As HB 219 proposes, the
subscription program can be exempted from the title requiring
insurance. She then expressed concern with subsection (f)
located on page 1, line 6 regarding "ambulance and emergency
services". The division's title, AS 21.87.010, already provides
almost the identical language and considers the transportation
for medical services to be part of health insurance, and thus is
covered in the definition of health insurance. She pointed out
that AS 21.87.010(5) says: "(5) ambulance or emergency medical
services provided by a municipality, nonprofit medical service
corporation, or nonprofit association if the person providing
the services is certified under AS 18.08.082." The reference to
AS 18.08.082 is part of the health and social services' statutes
that require the individual providing the emergency medical
services to obtain a certificate that is granted upon
[completion] of training. The language in subsection (f) of
Section 1 of HB 219 is very open and doesn't require any
certification, and therefore would allow any nonprofit or
municipality to start an ambulance service. The regulations
under health and social services already cover this type of
circumstance. Ms. Hall informed the committee that she has been
involved in the medical transport area in the fire department
service charges. There is one membership program that has an
insurance backdrop and another that would qualify as a nonprofit
and have been exempted under the aforementioned statute.
Therefore, she opined that the ability to provide these services
as a membership program is available for the nonprofits and thus
she expressed her preference to not enact subsection (f) of HB
219 because it seems to be covered in the division's title and
has worked. The actual exclusion of air ambulance services,
which HB 219 proposes, was proposed about five years ago. At
the time she said she supported the legislation while the House
Health and Social Services Standing Committee didn't want those
services exempted from the Division of Insurance's title. In
closing, Ms. Hall urged the committee to consider that HB 219
would allow services that don't meet any criteria.
9:27:44 AM
REPRESENTATIVE AUSTERMAN asked if HB 219 is broad enough to
include the air ambulance service for which [one can subscribe].
MR. HALL answered that the legislation is broad enough that it
would take away any of the Division of Insurance's oversight of
that type of an entity.
REPRESENTATIVE AUSTERMAN said that is of concern.
9:28:44 AM
REPRESENTATIVE CISSNA asked whether the sponsor would be willing
to specify a size of community in the legislation.
9:30:47 AM
REPRESENTATIVE GARDNER surmised then that the division doesn't
have much concern with the subscription service, but does have
concern about the ambulance carrier portion of the legislation.
MS. HALL replied yes.
9:31:18 AM
REPRESENTATIVE GARDNER asked whether the sponsor would oppose
language that would allow a fire department to require
subscription service for communities where property owners are
already paying property taxes to help support the fire
department. She indicated the need to make sure the
aforementioned isn't possible.
9:32:10 AM
SEBASTIAN SAARLOOS, Member, City Council, City of Delta
Junction, related support for HB 219. He also related that when
the City of Delta Junction had a subscription service the City
of Delta Junction fire department and the rural Deltana
volunteer fire department would respond to all calls, no matter
whether it was the property of a subscriber or nonsubscriber.
Since the Division of Insurance deemed the subscription plan
would be regulated as insurance, it was ended and the donations
from the community have decreased significantly.
9:33:37 AM
CHAIR MUNOZ reviewed the points raised today for the sponsor to
consider.
9:34:20 AM
MR. PASCHALL returned to the Division of Insurance's concern
regarding certification of ambulance services. He related that
after pointing out that statute does not require an ambulance
service to be certified in the state, Legislative Legal Services
agreed that there is only a provision for being certified in
order to collect insurance. He also noted that in Alaska there
is no requirement to have an emergency medical technician (EMT)
in the ambulance.
9:35:29 AM
REPRESENTATIVE GARDNER surmised then that an ambulance service
without certification can't obtain insurance for the transport
from that service.
MR. PASCHALL replied yes.
9:36:09 AM
MR. PASCHALL then returned to the type of organization and
informed the committee that the air service businesses are
typically for profit. The sponsor doesn't intend for HB 219 to
apply to for-profit businesses and doesn't believe that it's
written to apply to a for-profit business. The goal was to
primarily target smaller communities. In response to
Representative Cissna's comment regarding the size of the
community, such a provision could be inserted. With regard to
Representative Gardner's concerns about fire departments that
obtain funding from property taxes also charging a subscription
fee, Mr. Paschall related that currently almost all EMS services
charge, even if they receive tax funding. Fire departments are
also going to that model, particularly when there are multiple
calls [to the same location] for fire alarms. He recalled that
the City of Fairbanks charges for [fire and EMS services] called
to a motor vehicle accident.
9:37:54 AM
CHAIR MUNOZ announced that the committee will continue to work
on HB 219, and thus HB 219 was held over.
9:38:33 AM
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 9:38 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 219 Sponsor Statement.pdf |
HCRA 2/16/2012 8:00:00 AM |
HB 219 |
| HB219 Div of Insurance.pdf |
HCRA 2/16/2012 8:00:00 AM |
HB 219 |
| HB219 Tri Valley Support News miner.pdf |
HCRA 2/16/2012 8:00:00 AM |
HB 219 |
| HB219-DCCED-INS-02-10-12.pdf |
HCRA 2/16/2012 8:00:00 AM |
HB 219 |