Legislature(1995 - 1996)

04/25/1996 01:50 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                     HOUSE FINANCE COMMITTEE                                   
                         APRIL 25, 1996                                        
                            1:50 P.M.                                          
                                                                               
  TAPE HFC 96 - 138, Side 1, #000 - end.                                       
  TAPE HFC 96 - 138, Side 2, #000 - end.                                       
  TAPE HFC 96 - 139, Side 1, #000 - end.                                       
  TAPE HFC 96 - 139, Side 2, #000 - end.                                       
  TAPE HFC 96 - 140, Side 1, #000 - #98.                                       
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Mark  Hanley called  the  House  Finance Committee                 
  meeting to order at 1:50 P.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Martin                          
  Co-Chair Foster               Representative Mulder                          
  Representative Brown          Representative Navarre                         
  Representative Grussendorf    Representative Parnell                         
  Representative Kelly          Representative Therriault                      
  Representative Kohring                                                       
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Senator Dave Donley; Amber Ala,  Staff, Senator Dave Donley;                 
  Dugan  Petty,   Director,  Division  of   General  Services,                 
  Department of  Administration; Teri Fronsen,  (Testified via                 
  teleconference),    Attorney,    Women's     Law    Project,                 
  Philadelphia, Pennsylvania; John George, American Council of                 
  Life   Insurance,   National   Association  of   Independent                 
  Insurers,  Juneau;  Marcia  McKenzie,  Program  Coordinator,                 
  Council  on  Domestic Violence  and Sexual  Assault, Juneau;                 
  Lauree  Hugonin,  Executive   Director,  Alaska  Network  on                 
  Domestic Violence and Sexual Assault, Juneau.                                
                                                                               
  SUMMARY                                                                      
                                                                               
  SB 175    An Act  relating to correctional  institutions and                 
            their administration; providing the  Department of                 
            Corrections   with   the   authority  to   require                 
            prisoners  to   assist  in   paying  for   medical                 
            treatment;  relating to  the  authority  of a  law                 
            enforcement  agency  to  charge   a  prisoner  for                 
            medical  costs for  a  preexisting condition;  and                 
            relating to service of criminal sentences.                         
                                                                               
            SB  175  was rescheduled  to  April 26,  1996 A.M.                 
            meeting.                                                           
                                                                               
                                                                               
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  SB 197    An Act prohibiting  increases in health  insurance                 
            premiums if the  insured is  a victim of  domestic                 
            violence."                                                         
                                                                               
            SB  197   was  HELD   in  Committee   for  further                 
            discussion.                                                        
                                                                               
  HB 91     An Act  amending the area within designated marine                 
            park units of  the Alaska  state park system,  and                 
            adding marine park units to  the Alaska state park                 
            system.                                                            
                                                                               
            CS HB 92 (RES) was reported out of Committee  with                 
            "no recommendation" and with a  fiscal note by the                 
            Department of Natural Resources.                                   
                                                                               
  HB 482    An Act relating to state procurement practices and                 
            procedures; and providing for an effective date.                   
                                                                               
            CS HB 482 (FIN) was reported out of Committee with                 
            a "no recommendation"  and with zero fiscal  notes                 
            by   the   Department   of   Administration,   the                 
            Department of Commerce  and Economic  Development,                 
            the Department of  Community and Regional Affairs,                 
            the  Office of  the  Governor, the  Department  of                 
            Health and  Social  Services,  the  Department  of                 
            Labor,  the Department  of Law, the  Department of                 
            Military and Veterans  Affairs, the Department  of                 
            Corrections,  the  Department  of  Education,  the                 
            Department  of  Environmental   Conservation,  the                 
            Department  of Fish  and Game,  the Department  of                 
            Natural  Resources,  the   Department  of   Public                 
            Safety, the  Department of Revenue,  and Statewide                 
            Budget Office all dated 2/09/96, and fiscal impact                 
            notes by  the  Department  of  Transportation  and                 
            Public Facilities dated 2/09/96 and the Department                 
            of Administration.                                                 
  HOUSE BILL 91                                                                
                                                                               
       "An Act amending the area within designated marine park                 
       units  of  the  Alaska state  park  system,  and adding                 
       marine park units to the Alaska state park system."                     
                                                                               
  Representative Brown MOVED  to RESCIND action on  failing to                 
  adopt HB 91.  There being NO OBJECTION, it was so ordered.                   
                                                                               
  Representative Brown MOVED to  report CS HB 91 (RES)  out of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal  note.  There being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
                                                                               
                                2                                              
                                                                               
                                                                               
  CS  HB  91 (RES)  was  reported  out of  Committee  with "no                 
  recommendations" and with a fiscal note by the Department of                 
  Natural Resources.                                                           
  HOUSE BILL 482                                                               
                                                                               
       "An  Act  relating to  state procurement  practices and                 
       procedures; and providing for an effective date."                       
                                                                               
  DUGAN  PETTY,  DIRECTOR,   DIVISION  OF  GENERAL   SERVICES,                 
  DEPARTMENT OF  ADMINISTRATION, stated  that HB  482 was  the                 
  result of  an effort  which began  in the  Summer, 1995,  in                 
  order to streamline  the State's  procurement practices.   A                 
  Procurement   Advisory  Council   was   established.     The                 
  responsibility of the council is to:                                         
                                                                               
       *    Look at the  procurement law and note  the changes                 
            needed to be implemented to streamline it.                         
                                                                               
       *    Rewrite  regulations  and  review all  procurement                 
            policies to  conform with the  revised regulations                 
            and statutes.                                                      
                                                                               
       *    Target non-responsive procurement practices.                       
                                                                               
  Mr.  Petty  spoke  in support  of  HB  482  and provided  an                 
  analysis of the substantive changes  between current law and                 
  HB 482.  [Copy on file].  Mr. Petty provided four amendments                 
  which the Department requests be adopted.  [Copies on file].                 
                                                                               
  Representative  Parnell asked  why  Legal  Services was  not                 
  subject to the competitive  bid process.  Mr. Petty  replied                 
  that it did not make sense to award Legal Services contracts                 
  through the competitive bid  process.  An invitation  to bid                 
  usually  is awarded to the low-responsive  bidder.  The only                 
  specifications  would  be  that the  bid  complies  with the                 
  document.  Although, the process for legal services does not                 
  allow consideration of factors other than cost.                              
                                                                               
  Representative Parnell  questioned if the Department  of Law                 
  currently uses  the Request For Proposal (RFP) process.  Mr.                 
  Petty suggested  that they do  for some of  their contracts.                 
  Often  times,  a  suit will  be  brought  against the  State                 
  requiring legal services to defend the State.                                
                                                                               
  Representative  Parnell  indicated concern  with  a contract                 
  copy  which the  Department  of Law  entered  into in  1983,                 
  stipulating that  the  State should  not pay  more than  $75                 
  thousand dollars for the contract.  By 1995, the State added                 
  an amendment  to that  contract bringing  the  amount up  to                 
  $19.9  million  dollars.    He  objected  to  the  disparity                 
  implicated, and requested  proof that the Department  of Law                 
                                                                               
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  is not "sole  sourcing" contracts.  The  procurement process                 
  needs to be competitive.                                                     
                                                                               
  Mr.   Petty  pointed   out   that  Legislative   Audit   had                 
  investigated the Legal Services contracts, finding  problems                 
  with the Department of Law's procurement process.                            
                                                                               
  Representative Kelly  asked  the  difference  between  "sole                 
  source"  and "single source" return.  Mr. Petty replied that                 
  "sole source" means  that there is only one source available                 
  to do the work.  The  statute currently reads "sole source".                 
  HB 482  proposes  a "single  source" allowing  the State  to                 
  enter  into  a   contract  with  a  "single   source"  after                 
  determination is  made that  the bid  process  would not  be                 
  practical to use.                                                            
                                                                               
  Representative  Kelly questioned  the  need  for a  business                 
  proposing  to  bid to  be required  to  have a  valid Alaska                 
  business license.   Mr.  Petty interjected,  to receive  the                 
  license  would  cost $50  dollars  including and  a returned                 
  application.                                                                 
                                                                               
  Representative Kelly recommended adding  language clarifying                 
  that the bidding  contender would only need  to have applied                 
  for an Alaskan  business license.   Mr. Petty repeated  that                 
  under current law, if a bidder submitted a bid, and they did                 
  not  have the license, the bid would  not be considered.  In                 
  order to be on that list,  there must be a business license.                 
  If the business has  a license, has operated a  business for                 
  six months in Alaska, and is a resident of the State,  or if                 
  in a partnership, all are residents of the State, they would                 
  then  qualify  for  the  Alaska  Bidders  Preference   which                 
  provides  a 5%  evaluation preference.   To  change the  law                 
  would encourage people  to compete  from other states;  that                 
  was not the intent of the original legislation  when passed.                 
  Mr.  Petty  added,  current   statutes  requires  that   the                 
  Department not send bids to out-of-state bidders.                            
                                                                               
  Representative  Mulder  asked  if  the  Division  of General                 
  Services  kept  a list  of  legal service  contracts  in the                 
  State.   Mr. Petty  noted  that they  do keep  on file,  the                 
  professional  service contracts  over $25  thousand dollars.                 
  Those reports are  kept in the Department  of Administration                 
  (DOA).    That  Division  is  required  by  law  to  keep  a                 
  procurement  report.    Representative Mulder  inquired  the                 
  number of contracts currently on file within the Department.                 
  Mr. Petty offered to provide that information.                               
                                                                               
  Representative Therriault referenced  Section #23, Page  11,                 
  the delivery of supplies.   Mr. Petty noted that  "supplies"                 
  is well defined  in statute as  equipment and services.   He                 
  referenced AS 36.36.90 which  requires that supply purchases                 
                                                                               
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  be delivered to  locations within the State.  The Department                 
  shall determine that  a point of delivery  outside the State                 
  must be in  the best interest of the  State.  The Department                 
  is not proposing a change under that statute to the existing                 
  reference.  Current  procurement code has sections  that are                 
  applied to preferences for Alaskan business.                                 
                                                                               
  (Tape Change, HFC 96-138, Side 2).                                           
                                                                               
  Representative Kohring agreed with  the legislation's intent                 
  to save costs,  although, pointed  out the excessive  fiscal                 
  notes attached.  Mr. Petty commented that some of the fiscal                 
  notes reflect savings.  The  central purchasing fiscal notes                 
  require  action which  will take  additional time to  show a                 
  savings.   He added, to date, the State of Alaska has widely                 
  decentralized procurement.  Regardless of the  fiscal notes,                 
  the legislation will make the State run more effectively.                    
                                                                               
  Mr. Petty spoke to Amendment #1.  [Copy on file].  Amendment                 
  Hanley noted that  the "a" should not be deleted.  Mr. Petty                 
  agreed.   Representative Parnell MOVED the amended Amendment                 
                                                                               
  Mr. Petty spoke to Amendment #2.  [Copy on file].  Amendment                 
  legislation with the Senate version.  Representative Navarre                 
  MOVED to adopt Amendment  #2.  There being NO  OBJECTION, it                 
  was adopted.                                                                 
                                                                               
  Co-Chair  Hanley  asked  if   bidder  preferences  would  be                 
  cumulative.    Mr.   Petty  replied   that  some  would   be                 
  cumulative.  The  net effect does not  always accomplish the                 
  intended  net  result.   The Department  requests to  have a                 
  uniform  way  of  applying  the   preferences.    Discussion                 
  followed between Co-Chair Hanley and Mr. Petty regarding the                 
  possible bidder preferential percentage reaching 20%.                        
  Representative  Brown  MOVED  to  change  the  semicolon  in                 
  Amendment #2 to  a comma so  that it would be  grammatically                 
  correct.  There being NO OBJECTION, it was amended.                          
                                                                               
  Mr. Petty explained Amendment #3.  [Copy on file].  He noted                 
  that  the   amendment  would   reduce  the  rent   threshold                 
  requirement   for  lease  concessions   from  15%   to  10%.                 
  Representative Kohring  suggested that  drop was  too steep.                 
  Mr. Petty replied, under authority granted, leases have been                 
  extended for 5 years in return for a 10% rent concession.  A                 
  number of lessors were  below market, and he thought  that a                 
  15% rent concession would be fair.                                           
                                                                               
  Representative Kohring  questioned the percentage  of profit                 
  on a lease payment received by  the lessee through the State                 
                                                                               
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  of Alaska.  Mr. Petty explained that the State considers the                 
  indirect costs to  be about  35% of the  lease; beyond  that                 
  would be operating and maintenance costs.  The 35% number is                 
  the one used by the State to determine the profit margin.                    
                                                                               
  Representative  Brown   asked  if   there   would  be   rent                 
  adjustments in the  10 year extensions.   Mr. Petty  pointed                 
  out that the base rent in the extensions would be reduced by                 
  10%,  and that the  Consumer Price Index  (CPI) always would                 
  affect the base rent.                                                        
                                                                               
  Representative Brown  MOVED to  adopt Amendment  #3.   There                 
  being NO OBJECTION, it was adopted.                                          
                                                                               
  Mr.  Petty  explained Amendment  #4.   [Copy  on file].   He                 
  stated  that  the  added  language  would  conform  to  that                 
  established  in  the Senate  State  Affairs Committee.   The                 
  intent would be  to use  the Government Service  Information                 
  (GSI) schedules when purchasing from State vendors.                          
                                                                               
  Co-Chair Hanley recommended amending the amendment by adding                 
  "made" and then insert "from persons located in the  state".                 
  Representative Mulder MOVED to adopt the  amended amendment.                 
  There being NO OBJECTION, it was adopted as amended.                         
                                                                               
  Representative  Martin  MOVED  to  adopt  Amendment  #5,  9-                 
  GH2020\F.3, Bannister, 4/24/96.  [Copy on file].  He pointed                 
  out that the  amendment would provide  a title change  while                 
  addressing lobbying  concerns.   Co-Chair Hanley noted  that                 
  the amendment would prohibit the agencies listed from hiring                 
  a contract lobbyist.                                                         
                                                                               
  Representative Navarre  commented that the language  on Page                 
  2,  Line   5,  would   prohibit   having  employees   lobby.                 
  Representative  Brown  disagreed,  indicating  that  it   is                 
  necessary  for the agencies listed to have some contact with                 
  the  Legislature  regarding  their   interests.    Following                 
  discussion  among  Committee  members, Representative  Brown                 
  MOVED to delete  Page 2, Line 5.  There  being NO OBJECTION,                 
  the amendment was amended.                                                   
                                                                               
  Mr.  Petty  advised  that  the  proposed amendment  did  not                 
  address procurement  issues.   He stated  that the  Division                 
  would   not  support  the   amendment  from   a  procurement                 
  perspective,  suggesting   that  these     were  operational                 
  decisions which should be made by each individual agency.                    
                                                                               
  Representative Navarre  OBJECTED to  Amendment  #5 in  order                 
  that Legal  Services could provide an opinion  on the single                 
  subject rule  prohibition.  He  noted that he  supported the                 
  intent.   Co-Chair Hanley  advised that  he would  request a                 
  legal opinion and if there was a problem, that portion would                 
                                                                               
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  be removed from the bill.  Representative Navarre agreed and                 
  WITHDREW the OBJECTION to the amendment.                                     
                                                                               
  Representative  Brown  asked  why   only  Alaska  Industrial                 
  Development and Export Authority (AIDEA) had been referenced                 
  in  the  title.   Representative  Martin responded  that the                 
  intent was to place  AIDEA under the procurement code.   Co-                 
  Chair  Hanley  understood the  intent  was to  include AIDEA                 
  under the prohibition on hiring.                                             
                                                                               
  (Tape Change, HFC 96-139, Side 1).                                           
                                                                               
  Co-Chair  Hanley  pointed   out  that  Senator   Pearce  had                 
  submitted the amendment.   He noted that he agreed  with the                 
  intent, although, questioned the referenced section.                         
                                                                               
  Representative Mulder MOVED  to amend Amendment #5,  Page 1,                 
  Line 2, striking "," and then deleting material:  "Including                 
  entities  owned  and  operated   by  the  Alaska  Industrial                 
  Development  and Export  Authority,"; and deleting  Lines 16                 
  through 18 beginning with the ","  on Line 16.  There  being                 
  NO OBJECTION, it was amended.                                                
  Representative  Navarre  recommended  that   Legal  Services                 
  provide an opinion on the amended amendment.  There being NO                 
  OBJECTION, Amendment #5 was adopted.                                         
                                                                               
  Representative  Parnell  spoke to  Amendment  #6.   [Copy on                 
  file].  Mr. Petty noted that Amendment #6 would add language                 
  to  allow  for  accredited youth  education  programs  to be                 
  exempted  from  the  procurement  statute.    Representative                 
  Parnell  MOVED  to  adopt  Amendment  #6.    There  being NO                 
  OBJECTION, it was adopted.                                                   
                                                                               
  Co-Chair  Foster  MOVED to  report CS  HB  482 (FIN)  out of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal notes.  There being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  CS  HB  482 (FIN)  was reported  out  of Committee  with "no                 
  recommendations"  and  with  zero fiscal  notes  by  the (2)                 
  Department of Administration dated 2/9/96, the Department of                 
  Commerce   and  Economic   Development  dated   2/9/96,  the                 
  Department of Community and  Regional Affairs dated  2/9/96,                 
  the Department of  Health and Social Services  dated 2/9/96,                 
  the  Department of Labor dated 2/9/96, the Department of Law                 
  dated  2/9/96,  the  Department  of  Military  and  Veterans                 
  Affairs dated  2/9/96, the  Department of  Corrections dated                 
  2/9/96,  the  Department  of  Education  dated  2/9/96,  the                 
  Department of Environmental  Conservation dated 2/9/96,  the                 
  Department of  Fish and Game dated 2/9/96, the Department of                 
  Natural Resources  dated  2/9/96, the  Department of  Public                 
  Safety dated 2/9/96, the Department of Revenue dated 2/9/96,                 
                                                                               
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  Statewide  dated  2/9/96 and  a  fiscal impact  note  by the                 
  Department  of Transportation  and  Public Facilities  dated                 
  2/9/96, and the Department of Administration.                                
  SENATE BILL 197                                                              
                                                                               
       "An  Act  prohibiting  increases  in  health  insurance                 
       premiums  if  the  insured  is  a  victim  of  domestic                 
       violence."                                                              
                                                                               
  AMBER ALA, STAFF, SENATOR DAVE  DONLEY, testified in support                 
  of SB 197.  She noted that the bill would protect victims of                 
  domestic violence from insurance company discrimination such                 
  as refusing  to provide  coverage, concealing  a policy,  or                 
  increasing premiums on  the basis of domestic  violence.  SB                 
  197  would  require  the  insurer  to  disclose  the  reason                 
  insurance coverage was denied or cancelled.                                  
                                                                               
  Ms. Ala reported that SB 197 was drafted with the advise and                 
  support of  the Division of  Insurance.  She  continued, the                 
  statutory provisions contained  in SB 197 were  necessary to                 
  protect victims  of domestic  violence.   Eight states  have                 
  passed legislation similar  to SB 197.   Alaska's pro-active                 
  measures   follow   the   nation-wide  trend   by   adopting                 
  legislation  that  protects  innocent  victims  of  domestic                 
  violence from insurance discrimination.                                      
                                                                               
  Ms.  Ala  continued, currently,  there  is no  protection in                 
  Alaska for  victims of  domestic violence against  insurance                 
  premium increases, cancellation,  or denial.   SB 197  would                 
  protect  innocent victims  of domestic  violence from  being                 
  unfairly  discriminated  against  by   insurance  companies.                 
  Insurers  discriminating  against domestic  violence victims                 
  has been a serious  problem in the "lower 48"; SB  197 would                 
  prevent similar occurrences in Alaska.                                       
                                                                               
  In response to Representative Martin, Ms. Ala stated that an                 
  insurance company  could identify  a person  as a  victim of                 
  domestic violence through medical records which specifically                 
  indicate that person  was abused.   Records can be  released                 
  through court orders  which an insurance company  has access                 
  to.   Representative Martin  pointed out  that most  medical                 
  records are confidential.   Ms.  Ala advised that  insurance                 
  companies do  check  out medical  records.    Representative                 
  Brown pointed  out that  medical records  are maintained  by                 
  large  credit  reporting  firms;  they  have  risk   factors                 
  checked.  People who apply  for medical insurance often have                 
  to reveal or give permission to get their medical records as                 
  a condition of obtaining insurance.                                          
                                                                               
  JOHN  GEORGE, AMERICAN COUNCIL  OF LIFE  INSURANCE, NATIONAL                 
  ASSOCIATION  OF  INDEPENDENT INSURERS,  JUNEAU,  stated that                 
                                                                               
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  insurance companies support passage of a bill which protects                 
  victims  of   domestic  violence   from  discrimination   by                 
  insurance  companies.   He  elaborated,  there are  no known                 
  cases of discrimination in the State of Alaska, adding  that                 
  the legislation  is trying to  "fix" something which  is not                 
  "broken".                                                                    
                                                                               
  Mr.  George stated  that  insurance  companies  support  the                 
  current version  of the  bill, although  would request  that                 
  property and casualty insurance  be removed.  Representative                 
  Brown  asked if  it  was possible  that  someone was  denied                 
  insurance  because  a  portion of  that  decision  took into                 
  account the domestic  violence risk  factor.  She  suggested                 
  that the  bill had become  "inoperative" by changes  made in                 
  the  House  Labor  and  Commerce  Committee,  which  deleted                 
  "only".    Mr.  George  interjected  that  change  had  been                 
  proposed by Senator Donley.                                                  
                                                                               
  SENATOR  DAVE   DONLEY  replied   that  language   had  been                 
  recommended  by  the  Division  of  Insurance  in  order  to                 
  guarantee  that  the legislation  would not  unfairly impact                 
  them.  Mr.  George clarified that  a person is  underwritten                 
  depending  on  their  condition,  not  how  their  condition                 
  originated.                                                                  
                                                                               
  Representative Brown asked  if everyone living in  a violent                 
  household had the  same rate.   Mr. George  stated that  the                 
  bill   as   currently   written   would   not   allow   that                 
  consideration.  A person is  underwritten depending on their                 
  condition,  from  information  provided from  their  medical                 
  records.                                                                     
                                                                               
  Representative  Parnell  asked  the problem  with  including                 
  property  casualties.  Mr. George responded, allegations are                 
  based on the  frequency of claims.   He reiterated that  the                 
  insurance industry  would  like to  support  the bill.    He                 
  recommended removing "property casualty"; to date there have                 
  no cases in Alaska.                                                          
                                                                               
  Representative  Martin  voiced  concern  with the  insurance                 
  companies   becoming  the   "goat"   of  domestic   violence                 
  situations.    Mr.  George  reiterated   that  it  would  be                 
  difficult for an  individual to receive information  from an                 
  insurance company.   Insurance companies  do not ask  if the                 
  party has been a  victim of abuse, although, there  could be                 
  an inadvertent disclosure.   He  reiterated that the  actual                 
  condition   could   not   be    used   against   a   client.                 
  Representative Martin maintained  that the legislation would                 
  place the insurance company in a vulnerable position.                        
                                                                               
  Senator Donley stressed that the legislation  only specifies                 
  that if there is discrimination against someone because they                 
                                                                               
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  are a victim of  domestic violence, that act is  against the                 
  law.    It  would be  essential  that  a  reason other  than                 
  domestic violence be shown indicating  why the insurance had                 
  been cancelled or  raised.  Mr.  George reiterated that  the                 
  bill as proposed is supported by insurance companies.                        
                                                                               
  Discussion  followed  between   Representative  Martin   and                 
  Senator  Donley  regarding  potential  suits  to   insurance                 
  companies.   Senator  Donley reminded  Representative Martin                 
  that the bill allows to rate for actual injuries and not the                 
  circumstances  leading to  the injury.   The  bill had  been                 
  drafted  to   address  inappropriate  underwriting   in  the                 
  insurance industry.                                                          
                                                                               
  (Tape Change, HFC 96-139, Side 2).                                           
                                                                               
  Senator  Donley  responded  to   Representative  Therriault,                 
  noting that it was inappropriate to use domestic violence as                 
  a classification of  people.  Insurance companies  should be                 
  allowed factual reasons for their rating determinations.                     
                                                                               
  Representative Brown  asked how  the language in  Subsection                 
  (b) would  be applied.  She understood  that language  would                 
  allow  discrimination  against  the abused  party  based  on                 
  medical conditions.  There could be  assigned a risk factor.                 
  Senator Donley  agreed that it  would if  those people  were                 
  treated  differently  than anyone  else.   He  stressed that                 
  domestic  violence  is  not  an  appropriate  reason  to  be                 
  discriminated against.                                                       
                                                                               
  Representative Parnell suggested  that Subsection (b)  would                 
  modify Subsection (a), stating that the provision of (a) may                 
  not  prevent  an  insurer  from  underwriting a  rating  for                 
  medical conditions.  It  would not be the  domestic violence                 
  relationship  that  would  be  underwritten but  rather  the                 
  medical condition.                                                           
                                                                               
  TERI  FRONSEN,  (TESTIFIED  VIA  TELECONFERENCE),  ATTORNEY,                 
  WOMEN'S LAW PROJECT,  PHILADELPHIA, PENNSYLVANIA,  testified                 
  as  a  consumer representative  for  the legal  and economic                 
  status of women.  She pointed out that she had represented a                 
  woman  in  Pennsylvania who  was  denied insurance  from two                 
  different  insurance  companies  because  of  a  "so-called"                 
  history  of  domestic   violence.    She  was   denied  life                 
  insurance,   health   insurance   and  mortgage   disability                 
  insurance.                                                                   
                                                                               
  In  a  1994  survey,  the  Commonwealth Fund  reported  four                 
  million battered women.   Calls  to sixteen major  insurance                 
  companies  in   the  United   States  revealed  that   eight                 
  considered  domestic violence  an  underwriting standard  in                 
  both  issuance  and  reading  of  policies.  Some  of  those                 
                                                                               
                               10                                              
                                                                               
                                                                               
  insurance  companies  have modified  their  policy following                 
  Congressman Shumer's efforts, although, they still  consider                 
  domestic violence a factor to be considered.   Companies are                 
  behaving on misperceptions about what domestic violence  is.                 
                                                                               
                                                                               
  Ms. Fronsen pointed  out that  women are  confined to  these                 
  circumstances for all sorts of reasons, including economics,                 
  housing, children, and  fear of retaliation.   Violence does                 
  not  leave when you leave  the household.  Domestic violence                 
  advocates have  worked hard  to educate  people to  the fact                 
  that  domestic  violence  is  a   crime.    Law  enforcement                 
  personnel have treated it as a private matter.  She stressed                 
  that it is a crime; and, under the law, it should be treated                 
  that way.   With respect  to insurance companies,  they also                 
  need  to know  that it  is  a crime.   It  is not  a medical                 
  condition.  She reiterated that it is a crime and should not                 
  be   used  as  a  basis  for  denying  or  treating  victims                 
  differently.                                                                 
                                                                               
  Ms.  Fronsen urged the  Committee to  move forward  with the                 
  proposed model legislation and support the bill.  [Testimony                 
  on file].                                                                    
                                                                               
  In response to Representative Martin's comment, Ms.  Fronsen                 
  noted  her  concern  regarding  confidentiality,  and   that                 
  information not be disseminated by  the insurance company in                 
  a  way to  cause  harm to  a victim.    In some  situations,                 
  information has  been provided  to the  batterer.   Insurers                 
  also provide  information to  data bases  that collect  risk                 
  information.                                                                 
                                                                               
  Ms.  Fronsen  noted that  it  was  not in  the  clients best                 
  interest to not record  the violence.  She pointed  out that                 
  the abused person may need to seek legal help.   The purpose                 
  of the legislation  is to  clarify that insurance  companies                 
  can not use information on domestic violence to take adverse                 
  insurance action.                                                            
                                                                               
  Discussion  followed  between Representative  Therriault and                 
  Ms. Fronsen  regarding  the  application  of  when  violence                 
  occurs within the  home.  The  law stipulates when there  is                 
  abuse.                                                                       
                                                                               
  LAUREE  HUGONIN,  EXECUTIVE   DIRECTOR,  ALASKA  NETWORK  ON                 
  DOMESTIC VIOLENCE AND SEXUAL ASSAULT, JUNEAU, explained that                 
  advocates working  to end violence against  women, encourage                 
  battered women to document their injuries by seeking medical                 
  care and by  requesting that violent  incidents be noted  in                 
  their medical records.                                                       
                                                                               
  Identification of abused women through routine screening and                 
                                                                               
                               11                                              
                                                                               
                                                                               
  accurate  diagnosis can break the  cycle of violence.  Early                 
  intervention can prevent or ameliorate many of the long-term                 
  health    and    social    consequences   associated    with                 
  victimization.                                                               
                                                                               
  Ms. Hugonin  continued, national health  initiatives require                 
  medical institutions to develop domestic violence protocols,                 
  plans for training and  improving their facilities  response                 
  to  domestic  violence.    Surveys  indicate that  insurance                 
  discrimination  against  victims  of  domestic  violence  is                 
  widespread.    An  informal  survey  by  the  staff  of  the                 
  Subcommittee on Crime and Criminal Justice of the U.S. House                 
  Judiciary Committee in 1994, found that eight out of sixteen                 
  of the largest insurers  in the country were using  domestic                 
  violence as a factor when deciding whether to issue a policy                 
  and how much to charge for that policy.                                      
                                                                               
  She concluded, it seems that the industry as  a whole is not                 
  interested or willing to look  at medical conditions without                 
  regard to cause.  The reality is that every woman is at risk                 
  of becoming a victim of domestic violence.  Just as their is                 
  no excuse  for domestic violence, there is  no excuse, legal                 
  or  otherwise,  for the  insurance  industry to  justify and                 
  continue the discriminatory practice.                                        
                                                                               
  MARCIA MCKENZIE,  PROGRAM COORDINATOR,  COUNCIL ON  DOMESTIC                 
  VIOLENCE AND SEXUAL  ASSAULT, JUNEAU, spoke to  the concerns                 
  that the Council on Domestic Violence and Sexual Assault has                 
  regarding  the  current  version of  the  legislation.   She                 
  advised  that the  confidentiality  protection for  domestic                 
  violence victims had  been removed.   A provision should  be                 
  added for coverage and  rating based on a medical  condition                 
  as  long  as  there  is no  discrimination.    Ms.  McKenzie                 
  stressed that violent  behavior was criminal  and deliberate                 
  and that  abuse received  was not  the result  of a  medical                 
  condition.                                                                   
                                                                               
  (Tape Change, HFC 96-140, Side 1).                                           
                                                                               
  She  added,   the  Council  was  concerned   that  insurance                 
  companies would not  be responsible to inform  the applicant                 
  why  they had  been  denied coverage.    Ms. McKenzie  urged                 
  Committee  members  to  amend  the  bill  to  reinstate  the                 
  provisions of confidentiality,  prohibiting the  "so-called"                 
  non-discriminatory consideration of  medical conditions  and                 
  requiring the insurers  to inform  applicants of the  reason                 
  coverage would be denied.                                                    
                                                                               
  CS  SB   197  (L&C)  was  HELD  in   Committee  for  further                 
  consideration.                                                               
  ADJOURNMENT                                                                  
                                                                               
                               12                                              
                                                                               
                                                                               
  The meeting adjourned at 4:40 P.M.                                           
                                                                               
                                                                               
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