Legislature(2025 - 2026)ADAMS 519
05/17/2025 10:00 AM House FINANCE
| Audio | Topic |
|---|---|
| Adjourn | |
| Start | |
| HB104 | |
| SB54 | |
| SB137 | |
| SB132 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 54 | TELECONFERENCED | |
| + | SB 137 | TELECONFERENCED | |
| + | SB 132 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 104 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
May 17, 2025
10:05 a.m.
10:05:50 AM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 10:05 a.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Andy Josephson, Co-Chair
Representative Calvin Schrage, Co-Chair
Representative Jamie Allard
Representative Jeremy Bynum
Representative Alyse Galvin
Representative Sara Hannan
Representative Nellie Unangiq Jimmie
Representative DeLena Johnson
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
None
ALSO PRESENT
Representative Donna Mears, Sponsor; Talia Eames, Staff,
Representative Donna Mears; Lauree Morton, Deputy Director,
Alaska Network on Domestic Violence and Sexual Assault,
Juneau; Brodie Anderson, Staff, Representative Neal Foster;
Senator Matt Claman, Sponsor; Kris Curtis, Legislative
Auditor, Alaska Division of Legislative Audit; Brodie
Anderson, Staff, Representative Neal Foster; Senator Jesse
Bjorkman, Sponsor; Lori Wing-Heier, Director, Division of
Insurance, Department of Commerce, Community and Economic
Development.
PRESENT VIA TELECONFERENCE
Keely Olson, Executive Director, Standing Together Against
Rape, Anchorage; Derek Bos, Chief of Police, City and
Borough of Juneau, Juneau; Brad Ewing, Director, Division
of Shared Services of Alaska, Department of Administration;
Mary Knopf, Self, Anchorage; Barbara Cash, Self, Anchorage;
Elizabeth Johnston, Self, Fairbanks; Larry Cash, Self,
Anchorage; Dana Nunn, Chair, Government Advocacy Committee,
American Society of Interior Designers, Alaska Chapter,
Anchorage; John Pekar, President, Alaska Professional
Design Council, Anchorage; Jessica Cederberg, Past
President, American Institute of Architects, Alaska
Chapter, Anchorage; Brian Meisner, Self, Anchorage; Ramona
Schimscheimer, Self, Anchorage; Melissa Tribyl, Self,
Anchorage; Kelsey Conway, Member, American Society of
Interior Designers, Eagle River; Colin Maynard, Chair,
Board of Architects, Engineers, and Land Surveyors; Sylvan
Robb, Director, Division of Corporations, Business and
Professional Licensing, Department of Commerce, Community
and Economic Development; Janette Schlaeder, Chair, Alaska
Board of Nursing; Leitoni Tupou, Chair, Alaska Board of
Parole.
SUMMARY
HB 104 ADDRESS CONFIDENTIALITY PROGRAM
HB 104 was HEARD and HELD in committee for
further consideration.
CSSSSB 54(FIN)
ARCH, ENG, SURVEYORS; REG INT DESIGN
CSSSSB 54(FIN) was REPORTED out of committee with
six "do pass" recommendations and five "no
recommendation" recommendations and with one
previously published fiscal impact note: FN2
(CED).
CSSB 132(FIN)
OMNIBUS INSURANCE BILL
CSSB 132(FIN) was HEARD and HELD in committee for
further consideration.
CSSB 137(FIN)
EXTND BDS:MIDWIVE/NURSING/VET EXAM/PAROLE
CSSB 137(FIN) was REPORTED out of committee with
seven "do pass" recommendations, one "no
recommendation" recommendation, and one "amend"
recommendation and with two previously published
fiscal impact notes: FN2 (COR) and FN3 (CED).
Co-Chair Foster reviewed the meeting agenda.
HOUSE BILL NO. 104
"An Act creating and relating to the address
confidentiality program; and providing for an
effective date."
10:07:44 AM
Co-Chair Foster asked the sponsor to introduce the bill.
REPRESENTATIVE DONNA MEARS, SPONSOR, introduced the bill
with prepared remarks:
There's a small but important group of people in the
state that have reasons to keep their addresses out of
the public record. This includes peace officers and
correctional officers who may be targets of
retribution due to their roles in the justice system.
It also includes victims of domestic violence,
stalking, sexual assault, and other people who have
protective orders. The purpose of a program like this
is to allow someone who faces these serious threats to
be able to participate fully in everyday life without
further endangering themselves or their families. HB
104 creates an address protection program for
survivors of sexual assault and domestic violence,
peace officers, correctional officers, and their
families. There are many times an address must be
provided in order to participate in society. This
includes voting, working, sending children to school,
and much more. HB 104 establishes a program whereby
these at risk individuals can receive mail at a
centralized, anonymized P.O. box. Mail received by the
state on behalf of enrollees will then be forwarded to
participants home address, which will remain
confidential under penalty of law.
Representative Mears asked her staff to provide a sectional
analysis of the bill.
10:09:27 AM
TALIA EAMES, STAFF, REPRESENTATIVE DONNA MEARS, reviewed
the sectional analysis (copy on file):
Sec. 1: Adds the program to the duties of the
Department of Administration.
Sec. 2: Creates the program.
(b) requires a Post Office Box as a substitute
mailing address for enrollees and instructs the
department to forward mail to participants. It
charges the department with protecting
confidentiality and requires regulations to
govern enrollment and withdrawal.
(c) describes eligible participants as people
sheltered by a protective order for domestic
violence, stalking, human/sex trafficking or
sexual assault, and their parents, guardians,
children, and household members. It also admits
peace officers and correctional officers.
(d) prevents registered sex offenders from
enrolling in the program.
(e) requires state and municipal agencies to
accept the P.O. Box.
(f) describes the eligibility period.
(g)prevents the department from charging a fee.
(h)allows access to confidential addresses
subject to a search warrant.
(i)establishes penalties for unlawfully revealing
a protected individual's address.
(j)defines certain terms.
Sec. 3: Establishes a transition period for the
department to adopt regulations to implement the
program.
Sec. 4: Lets the department begin promulgating
regulations immediately.
Sec. 5: Sets an effective date of Jan. 1, 2026 for the
rest of the bill.
10:11:39 AM
Representative Mears provided more context for who the bill
aimed to help. She explained it pertained to individuals
who were doing various things to protect their locations
such as moving and anonymizing their voter records in
places the option was available. She explained that there
was not the ability to be anonymous in other places where
individuals needed to protect their identity. The bill
would provide additional layers in order for individuals to
be safe. She detailed that an individual could be anonymous
with their address by obtaining a P.O. box, but if the
individual was being stalked and they moved to a small
community, just knowing the community a person was living
in would be a threat to their safety. She noted there was
invited testimony to help provide more context.
10:13:24 AM
KEELY OLSON, EXECUTIVE DIRECTOR, STANDING TOGETHER AGAINST
RAPE (STAR), ANCHORAGE (via teleconference), testified in
support of the bill. She considered it to be a critical
piece of legislation. She read from prepared remarks:
Prior to working at STAR, I have worked as a victim
advocate with the prosecuting attorney's office in
Washington State and managed a domestic violence
shelter program in Montana. Both states had address
confidentiality programs, which were essential tools
used by victim advocates to assist someone with
stalking or highly bodily risk to be safer. These
efforts were combined with comprehensive safety
planning and emergency relocation plans. The address
confidentiality program helps save lives and helps
survivors cope with the constant fear of their address
being compromised. I applaud making the program
accessible to law enforcement and peace officers. I
have worked with those in law enforcement who either
go by a different professional name or to try to keep
their locations from being searched. I know people who
work in the public sector who placed their homes in a
family member's name to protect their address,
particularly in places where residential property can
easily be searched, and people can be located through
that.
Ms. Olson thanked Representative Mears for sponsoring the
legislation. She explained that it was not a program for
everyone. She noted it was not a substitute for a P.O. box
for example. She added that it was not convenient as it was
her understanding that only first class mail could be
transferred. She shared that in the 30-plus years of her
domestic violence and sexual assault advocacy, she had only
worked with a handful of people who were appropriate for
the address confidentiality program. She elaborated that
the program was beneficial for individuals whose lives were
uprooted sometimes repeatedly in their efforts to escape an
obsessed stalker. Usually, the stalker was a person of
means who was able to hire private investigators. She
expounded that the stalker may have moved on with their
life and have another relationship, but they were obsessed
with the particular person. The stalker hired private
investigators to surveil the person's immediate and
extended family members, they scoured the social media of
the person's friends and manipulated and tricked the
friends into providing information about the victim's
location. She explained that the stalker did not give up
and was not dissuaded when the victim moved to another
state.
Ms. Olson explained that in domestic violence shelters it
was not unusual for a victim to be transferred from another
state to escape stalking. She highlighted that there were
certain things that made people particularly vulnerable in
Alaska, such as property owners, voter registration, and
DMV. She noted that the program would not be suitable for
someone with shared custody agreements or where continuing
contact was forced on a person by the court. She relayed
that children were a liability in the situation because
they could be forced or manipulated into sharing a private
location. She thanked the committee for its attention to
the matter. She reiterated her support and greatly
appreciated the committee's work to increase safety for
survivors of domestic violence, sexual assault, and
stalking.
10:17:54 AM
Co-Chair Foster moved to the next invited testifier.
DEREK BOS, CHIEF OF POLICE, CITY AND BOROUGH OF JUNEAU,
JUNEAU (via teleconference), spoke in favor of the
legislation, which created an address protection program
for survivors of sexual assault, domestic violence, peace
officers, correctional officers, and their families. He
read from prepared remarks:
As a law enforcement officer, I have witnessed first-
hand the trauma sustained by victims of sexual assault
and domestic violence. That trauma is only exacerbated
when they are stalked, harassed, and continually
targeted by the offenders who initially assaulted
them. Address confidentiality protects these
individuals from further victimization. Further, law
enforcement officers are frequently the target of
unwanted harassment, stalking, and physical
retaliation by offenders, offenders' families, or
arbitrary members of the public who are just angry
with law enforcement in general. As a law enforcement
officer, I have personally experienced this. There
have been multiple occasions throughout my career
where I have been targeted at my home, by offenders
whom I have arrested. There have been other occasions
where random members of the public who are angry with
police in general, who have no relationship with me
whatsoever, have come to my home intent on causing me
physical harm, just because I am a police officer. Far
worse, there have been other occasions in which
dangerous individuals have come to my home, intent on
causing harm to my family, targeting them because they
are related to me. They've done this as a means simply
to retaliate against me. My family has been innocent
in all of this.
I would also like to highlight the 2013 assassination
of the Colorado Department of Corrections Executive
Director Tom Clements who was targeted by a prison
gang and murdered at his home in the presence of his
family because of his position. Home should be a place
of peace and relaxation. Coming home should not be a
thing that triggers stress, anxiety, or fear. In
closing, I would like to state that from a law
enforcement officer's perspective, House Bill 104 is
pivotal for supporting the safety of our survivors and
victims of sexual abuse, domestic violence, human
trafficking, as well as essential for enhancing safety
of our law enforcement and correctional officers who
protect our communities day in and day out. Again,
thank you very much for letting me testify this
morning.
10:20:58 AM
Co-Chair Foster OPENED public testimony.
LAUREE MORTON, DEPUTY DIRECTOR, ALASKA NETWORK ON DOMESTIC
VIOLENCE AND SEXUAL ASSAULT, JUNEAU, read from prepared
remarks:
Thank you for the opportunity to testify on HB 104,
Address Confidentiality Program. My name is Lauree
Morton. I'm the Deputy Director for the Alaska Network
on Domestic Violence and Sexual Assault; the
membership organization of domestic violence and
sexual assault response service providers. The Network
supports HB 104 and thanks Rep. Mears for bringing it
forward.
Address confidentiality programs are one tool in part
of a larger safety plan. Safety planning will explore
the necessity of subscribing to the program and afford
the victim an opportunity to balance the potential
gains in participating, against any detriments.
Violence frequently escalates when people who choose
to cause harm believe they are losing control of the
victim. One of the most dangerous times for victims
is when they attempt to leave. If victims are
successful in escaping, the person causing harm will
usually focus energy on finding and stalking the
victim; often searching public records for the new
address.
Stalking can include tactics like:
• Sending unwanted letters or emails
• Following or spying on the victim
• Driving by or waiting around at places frequented
by the victim such as home, work, or school
• Leaving or sending unwanted items, "presents", or
flowers for the victim to find
• Looking through the victim's property such as
trash cans, mail, or cars.
Stalking increases the risk of intimate partner
homicide by three times. Among female victims of
attempted and completed intimate partner homicide by
male partners, in the 12 months prior to the attack:
85 percent of attempted and 76 percent of completed
homicide victims were stalked.
The address confidentiality program will provide
enhanced safety options for survivors. Will the
program be used frequently? I think it will be used
occasionally when the circumstances are extreme, the
danger real, and secrecy is critical to a victim's
survival.
We appreciate the ability given to the department to
set standards in addition to protective orders when
making enrollment decisions. There are times and
situations where protective orders are not in the best
interest of the victim, when lethality is particularly
high and providing information through the protective
order is considered placing the victim at greater
risk. In such situations it will be even more
beneficial to allow the victim to enroll in the
address confidentiality program.
Thank you for taking public testimony today and for
your thoughtful consideration in moving the bill
forward.
10:24:56 AM
Representative Allard stated that she thought HB 104 was a
good bill, but she was not happy with the fiscal note. She
directed a question to Chief Bos. She provided a
hypothetical scenario where a person on the sex offender
registry was being stalked. She wondered if under the bill
the individual's address could be confidential.
Chief Bos asked for clarity on the question.
Representative Allard stated she was asking about a sex
offender.
Chief Bos replied that a sex offender was not eligible for
the address confidentiality program.
Representative Hannan thanked Chief Bos for his testimony
and work for Juneau.
Representative Jimmie stated that many survivors went back
to their home communities to reconnect with family and
cultural traditions. She asked how the program ensured they
could do so without compromising their safety.
10:27:05 AM
Representative Mears answered that if someone was returning
to their home community, their mail could go to a central
address rather that indicating they had returned to their
home community. She explained it would be a P.O. Box
located likely in Juneau or Anchorage so that it may appear
the individual was still living somewhere else.
Representative Jimmie asked about rural communities.
Representative Mears replied that the P.O. box would be
centralized in a larger city like Juneau or Anchorage so it
would appear an individual's mail was going there. Once the
mail was collected by the state it would be mailed out to
an individual's confidential address. The individual's
actual address was protected by the state so that it would
appear perhaps, they were living wherever the P.O. box was
located.
Representative Jimmie asked what resources were in place
for individuals to access programs if they were struggling
financially after relocating.
Representative Mears replied that she did not have
information on hand about other available resources. She
relayed that the program would not cost anything to
survivors.
Representative Jimmie asked how the program would
coordinate with local tribe councils and victim service
organizations to connect survivors with the service.
Ms. Eames replied the fiscal note included money for some
advertising working with different programs, which would
include heads of communities, often tribal councils in
rural communities. She added that one of the reasons the
bill was important for remote communities was that in small
villages, all a person had to know was what community an
individual was in and the first person on the street could
tell someone exactly where the individual was living. The
centralized P.O. box would be located in Juneau or
Anchorage and mail would be forwarded to the community
without mention of the community name.
Co-Chair Foster noted that the meeting would recess
shortly. He asked if any committee members had questions to
the three testifiers.
Representative Tomaszewski directed a question to Chief
Bos. He shared that he went out knocking on constituents'
doors and felt safer with an officer in the neighborhood.
He understood that sometimes police officers were required
to bring their police cruisers home. He asked there would
be something for police officers who were being targeted
where they did not have to bring their cruisers home and
park in front of their house.
Chief Bos responded that he could not speak to any other
agency, but the Juneau Police Department (JPD) would work
with an officer and would not mandate they take their
patrol car home or they would provide them with an unmarked
car or facilitate them driving a personal car to work. He
elaborated that JPD would not require an officer to take a
marked car home if there were any concerns, threats, or
known issues.
Co-Chair Foster relayed that the committee would come back
to the bill when the meeting resumed after floor session.
He reviewed the schedule for the remainder of the meeting.
10:32:50 AM
RECESSED
4:08:21 PM
RECONVENED
Co-Chair Foster asked his staff to review the fiscal note
for HB 104.
BRODIE ANDERSON, STAFF, REPRESENTATIVE NEAL FOSTER,
reviewed the fiscal note from the Department of
Administration, OMB component 2333. The note included a
request of $297,100 in personal services, $3,000 in travel,
$112,800 for services, and $10,600 for commodities, for a
total of $423,500 in FY 26. The funding source was the
general fund. The fiscal note included funding for two new
full-time positions in FY 26. He noted there was a
fluctuation in appropriations starting in FY 27, primarily
in the services and commodities lines. The department
recognized there would need to be regulation changes if the
bill went into law. The department highlighted that changes
from previous fiscal notes resulted from an increase in
personal services, services, and commodities due to
eligible participants. The second page of the fiscal note
explained that the two positions included a business
service projects manager 2 and an administrative officer.
The note included travel funding for the positions to
attend a three-day conference by the National Association
of Confidential Address Programs. Contractual services
costs were for the estimated number of participants and the
cost of getting mail to the participants. The commodities
line included a startup expense including the purchase of
equipment. The department noted that if the number of
participants increased, the cost of the program would
increase. He directed detailed questions on the fiscal note
to the department.
4:12:00 PM
Co-Chair Foster noted the Department of Administration was
available online for questions on the fiscal note.
Representative Hannan stated that the fiscal note changed,
but it was her understanding the legislation had not
changed. She asked why the calculation in the number of
participants had increased dramatically between the two
versions of the fiscal note.
BRAD EWING, DIRECTOR, DIVISION OF SHARED SERVICES OF
ALASKA, DEPARTMENT OF ADMINISTRATION (via teleconference),
relayed that the department had reviewed other states with
address confidentiality programs when developing the fiscal
note. He detailed that the bill was broader in scope in
terms of eligible participants when compared to other
states. He elaborated that there would likely be more
participants in the program due to the inclusion of
correctional officers and peace officers; therefore, the
department had increased the number in the fiscal note.
Representative Hannan asked what would change for the
department that would drive the cost so high.
Mr. Ewing answered that an increased number of participants
would increase postage cost and supplies for the program,
as well as department staff working with participants,
developing materials, and engaging with various agencies
and nonprofits to help share information about the program
and answer participants' questions.
Representative Hannan asked if the department was
anticipating the participants would need the same amount of
support whether they were a survivor of domestic violence
(who the outreach and services would be extended to) or a
police officer (who likely had a clear understanding of
programs and resources).
4:15:17 PM
Mr. Ewing replied that he imagined there would be
differences in the amount of work that would go into
engaging with the different potential participants in terms
of outreach, training, and materials. He did not know
exactly what it would look like, but he believed it would
be slightly different depending on the participant.
Co-Chair Foster CLOSED public testimony.
Representative Bynum understood the intent of the bill that
was trying to protect people in bad situations. He
referenced the inclusion of peace officers and correctional
officers. He stated that extending protection to people
that may have exposure to people who may not like what they
were doing would open the door up quite a bit. He used
officers of the court and elected officials at the
municipal and state level as examples. He asked why the
bill was not constrained only to victims of sexual assault
and domestic violence.
Representative Mears replied that the core of the bill and
the impetus was for protection of individuals with
protective orders, which is where the movement started
across the nation in many states. Since then, there was
recognition that there were other individuals who could use
protection and there had been advocacy for police officers
and correctional officers. She agreed there could be an
expansion of the program, but she supported expansion as a
phase 2. Under the bill, there was no fee to participants
and the number of potential participants was unknown. She
suggested that if the bill was extended to additional
categories of individuals, perhaps a subscription program
could be established as many of those individuals would
have more [financial] means and a more stable environment.
4:19:47 PM
Representative Bynum thought it would be better if the bill
contained a narrower window. He did not intend any offense
to police and correctional officers. He started it was not
generally a secret where officers lived. He thought the
bill should be aimed at protecting individuals with court
orders. He did not want to extend the program beyond those
individuals currently, especially given the fiscal note.
He asked what was preventing someone currently from having
their mail delivered somewhere differently than their home.
He stated that many people in his community and surrounding
areas used P.O. boxes.
Representative Mears shared a story provided by Senator
Jesse Keihl who was carrying the companion bill in the
Senate. Senator Keihl knew a woman who was under a
protective order and had a P.O. box. When the woman went to
get her mail, her stalker was there waiting for her. She
noted that the woman recognized the man and was able to get
out of the situation. She highlighted that particularly in
small communities, the location of P.O. boxes was known.
She explained that if a person's mail was being forwarded
to a larger community like Anchorage or Juneau where the
mail was centralized and sent out, it was not possible to
know where they were.
Representative Bynum asked if the services were not
currently available. He noted that in his community there
were services for forwarding mail. For example, there were
many people who lived out of state for half the year and
their mail received in Alaska was forwarded. He understood
it was very important to try to protect the individuals
[the bill aimed to protect], but he wondered if the
legislation tried to make solving a problem too
complicated.
Representative Mears responded that the bill applied to
anything that would generate a public record. She explained
that sometimes services could not be used because they
required a real address. She asked her staff to elaborate.
Ms. Eames explained that there were fees associated with a
post office box and many times people fleeing violence did
not have a lot of resources and had a lot of other things
going on. She explained that having a program that
centralized the mail for them, so they did not have to
think about that issue, was significant for people in the
situation. She explained that under the bill,
municipalities had to accept the centralized mail. Under
the program, an individual would be able to use an address
they would not otherwise be able to use in a different
situation. For example, for voting purposes, individuals
could have another address they could put in that otherwise
may not be accepted. She noted that in villages where the
only way in was via boat, even if there was a post office,
it was not hard to find someone just by knowing what
community they were in.
4:25:07 PM
Representative Bynum asked about the scope of the number of
people the bill aimed at helping. He remarked that the bill
had a pretty big fiscal note of $400,000 per year and if it
was only aiming to help a small group of people, he was
trying to understand the fiscal benefit was. He wondered if
there was a way to do something in the law to make records
confidential on public records. He thought there may be a
better way to protect the individuals without creating more
bureaucracy in the state. He highlighted that the state was
strained for funds and there were many agencies helping
people in the situations. He noted there were organizations
directly helping people in Alaskan communities that would
help. He wondered if alternatives had been explored.
Representative Mears deferred the question to Keely Olson
with STAR.
Ms. Olson replied based on her experience with the address
confidentiality programs she had worked with in Washington
State and Montana. She explained that while those programs
were constrained to domestic violence and sexual assault
survivors with protective orders or a letter vouching for
them from a domestic violence/sexual assault agency or
prosecutor's office, over her 30 years of experience, she
had only worked with a handful of people who needed the
program. She elaborated that it was not a common response
and went hand in hand with a lot of safety planning. She
detailed that meant coming up with plans for monitoring
one's safety and being responsive to any kind of threat
including alarm systems, changing patterns from day to day,
and sometimes relocating.
Ms. Olson explained that the Montana address
confidentiality program resided in the secretary of state's
office and had two staff who were the only individuals with
access to the addresses. The program had been implemented
in 2006 and in 2023 it had 68 participants with only 20
receiving mail on a regular basis. The staff processed the
mail and forwarded it to the confidential address. In 2006,
the program cost $50,000 to implement, with a total cost of
$375,000 over the subsequent 17 years.
Ms. Olson stated that while she applauded making the bill
open to peace officers and law enforcement officers, she
believed that as they found out more about the constraints
of hiding their address and potential relocation that
domestic violence, sexual assault, and stalking victims
were faced with, they would not find it conducive to their
daily lives. She listed precautions that someone who was
being harassed and stalked went through including
relocating (sometimes to a different community), forgoing
voting, registering their vehicle with DMV, social media,
and removing themselves from their families' and friends'
lives to protect themselves. She explained that the program
did not replace a P.O. box that most people could get if
they wanted to keep their address secure. She underscored
that there were people who would not stop looking for their
victims and who would pay money to have someone surveil and
track their victims. The address confidentiality program
was for those extreme situations. She did not believe the
fiscal note matched the everyday use of the program. She
reiterated her earlier statement that over 17 years, the
Montana program had 68 participants and only 20 people who
were receiving mail on a usual basis. She stated it was her
experience with the type of program could and should help.
4:32:28 PM
Co-Chair Foster asked the sponsor for any closing comments.
Representative Mears thanked the committee for hearing the
bill. She was available for questions offline.
HB 104 was HEARD and HELD in committee for further
consideration.
CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 54(FIN)
"An Act relating to registered interior designers and
interior design; relating to project costs for the
construction, enlargement, or improvement of airports;
extending the termination date of the State Board of
Registration for Architects, Engineers, and Land
Surveyors; relating to the State Board of Registration
for Architects, Engineers, and Land Surveyors;
establishing requirements for the practice of
registered interior design; relating to the practice
of architecture, engineering, land surveying,
landscape architecture, and registered interior
design; relating to the scope of the certification
requirements for architects, engineers, land
surveyors, landscape architects, and registered
interior designers; relating to immunity for design
professionals; relating to the cost of construction
for recreation centers; relating to liens for labor or
materials furnished; relating to the procurement of
landscape architectural and interior design services;
relating to the cost of construction of safe water and
hygienic sewage disposal facilities in villages; and
providing for an effective date."
4:34:02 PM
SENATOR MATT CLAMAN, SPONSOR, introduced the bill with
prepared remarks:
Senate Bill 54 will extend the statutory authorization
for the Board of Architects, Engineers, and Land
Surveyors (AELS Board), add Registered Interior
Designers to the board's jurisdiction, and make
statutory changes requested by the board. This bill
will allow the AELS Board to continue the important
work of regulating design professionals in Alaska and
add a qualified interior designer to the board.
The 2024 Sunset Audit of the AELS Board concluded that
the board served the public's interest and recommended
that we extend it for eight years. In this bill, the
AELS Board is taking the opportunity to update
outdated language based on their analysis since the
last sunset audit.
SB 54 establishes the opportunity for qualified
interior designers to register with the AELS Board.
Those wishing to practice registered interior design
in buildings of public occupancy within a regulated
scope of services impacting public health, safety, or
welfare will now have a pathway to registration. It
will provide another measure of public safety
protection and risk-mitigation for commercial
buildings. And it will increase the number of design
professionals able to work independently within the
commercial real estate industry.
The National Council of Interior Design Qualifications
(NCIDQ) Exam is a three-part, 11-hour examination that
was established to identify interior design
professionals with the skills and experience to take
on additional responsibility. This test is designed to
assess the competency of candidates to protect the
public through the practice of interior design, and
covers subjects such as fire safety, ADA compliance,
emergency egress, and material flammability. A
candidate unable to prove their understanding of life
safety, codes, and standards would be unlikely to pass
the exam.
The goal is not to measure Interior Designers by the
standards used by architects. While there are shared
skillsets between architects and interior designers,
interior designers focus on a narrower scope of work.
By comparison, there are different licensing
requirements for nurse practitioners and doctors even
though they sometimes perform many similar activities.
Currently, there is no state licensing of the interior
design profession in Alaska. One consequence of this
licensing gap is that Registered Interior designers do
not have access to a construction stamp that would
allow them to submit their work for permitting.
Passage of SB 54 will allow Alaska to join other
forward-looking states in providing a construction
document stamp to allow registered interior designers
to submit their own work for permitting.
SB 54 does not restrict the requirements or daily
practice for any other professional in design or
construction including architects, engineers,
contractors, trades people, decorators, or residential
designers.
SB 54 is intended to be cost neutral to the State, as
it is self-funded within the AELS Registration Board
through application, registration, and renewal fees.
As shown in the attached fiscal note, the passage of
this bill would enable the AELS Registration Board to
hire a much-needed additional Occupational Licensing
Examiner and increase the salary of their Executive
Administrator.
We often talk about making Alaska open and ready for
business. This bill turns those words into action and
will make Alaska a better place to do business. Please
join me in supporting SB 54.
Co-Chair Foster OPENED public testimony.
MARY KNOPF, SELF, ANCHORAGE (via teleconference), shared
that she is a certified interior designer. She supported
the bill. She stated that SB 54 would support the health,
safety, and welfare of Alaskans in public buildings. The
bill would enable Alaska businesses to compete on federal
contracts, attract professionals to Alaska, and provide
another option for consumers with projects in the
commercial sector where there was a shortage of licensed
professionals who could take a project from conception into
permit and through construction. She asked the committee to
pass the legislation.
4:39:46 PM
BARBARA CASH, SELF, ANCHORAGE (via teleconference), shared
that she is a certified interior designer. She strongly
supported the legislation. She believed a failure to
recognize the interior design profession would directly
lead to loss of employment opportunities for interior
designers, deter skilled designers from relocating to
Alaska, and lose instate revenue to licensed outside
contractors. She asked the committee to pass the
legislation and thanked members for their hard work.
Co-Chair Foster appreciated testifiers' willingness to hang
in there and testify. He remarked that some individuals
calling in to testify had joined as early as 9:30 a.m.
4:41:01 PM
ELIZABETH JOHNSTON, SELF, FAIRBANKS (via teleconference),
testified in favor of the bill. She shared that she is a
registered electrical engineer and was the current
president of the National Council of Examiners for
Engineering and Surveying. She stated that interior
designers were qualified by examination, experience, and
education to perform the vital work. She supported the
bill's separation of the mechanical and electrical
engineering seats on the board. She had just been taken off
the board and was replaced by the governor with a
mechanical engineer; therefore, there was no longer the
expertise to review applicants in the field of electrical
engineering. There were more electrical engineers in Alaska
than architects, and architects had two dedicated seats on
the board. She encouraged passage of the bill in its
current form.
4:42:28 PM
LARRY CASH, SELF, ANCHORAGE (via teleconference), is an
architect and strongly supported voluntary state
registration for interior designers and permitting
privileges for qualified interior designers as provided in
SB 54. He urged the committee to pass the bill. He thanked
the committee for its time and service to the state.
4:43:22 PM
DANA NUNN, CHAIR, GOVERNMENT ADVOCACY COMMITTEE, AMERICAN
SOCIETY OF INTERIOR DESIGNERS, ALASKA CHAPTER, ANCHORAGE
(via teleconference), testified in favor of the current
version of the bill. She stated the bill was reasonable
regulation that represented nearly 10 years of
collaboration. In addition to extending the AELS Board for
another eight years and incorporating recommendations from
the AELS Board, the bill included compromise language to
move the needle forward substantively for interior
designers practicing in Alaska, while heeding the concerns
of related disciplines. She stated that the bill would
improve public health, safety, and welfare, while
establishing means for qualified interior designers to
become registered and practice independently with stamp and
seal privileges. She stated there had been whispers that
another amendment may come forward that would strip
interior design. She underscored that the organization was
unequivocally opposed to that idea. She asked the committee
to move the bill from committee.
Co-Chair Foster noted there were two invited testifiers and
the legislative auditor who would speak to the bill as
well.
Representative Bynum thanked Ms. Nunn for her testimony. He
asked for clarity on an amendment she had referenced.
Ms. Nunn replied that there was a rumor of a forthcoming
amendment to SB 137 that would strip out the interior
design language and limit action to the extension of the
board.
4:46:30 PM
Representative Allard believed only three other states had
similar legislation pertaining to interior designers. She
wondered why it was so important to include interior
designers, aside from financial gain. She remarked that the
bill did not define what interior designers were.
Ms. Nunn responded that with the advancement of interior
design regulation in Nebraska, there were currently 31 U.S.
jurisdictions and eight Canadian providences that regulated
interior design. She elaborated that 18 jurisdictions in
the U.S. allowed qualified interior designers to practice
independently with stamp and seal privileges. There were
three states and two jurisdictions that would mandate
regulation in order to practice. She shared that it was
frustrating and limiting to be required to have an
architect stamp the work an interior designer was qualified
to do independently. For example, in 2015 she had been
between firms and intended to open her own firm. Her
specialty was in commercial and institutional work. She
designed schools, hospitals, clinics within the corrections
system, court houses, and more. The specialty meant it was
not financially feasible to run her own firm and practice
independently because by statute, all of those
institutional clients had to hire a registered professional
in order to use public dollars. She explained it meant she
would have needed to hire an architect to do the work, or
the school district or boroughs would go directly to an
architect instead in order to eliminate the extra charge.
She relayed that it would be beneficial for interior
designers to have the freedom to practice in a firm or
independently.
4:48:50 PM
Representative Allard wanted to find out what work interior
designers did that architects needed to sign off on.
JOHN PEKAR, PRESIDENT, ALASKA PROFESSIONAL DESIGN COUNCIL
(APDC), ANCHORAGE (via teleconference), shared that APDC
represented 1,000 design professionals regulated by the
Board of Architects, Engineers, and Land Surveyors. The
group strongly supported the bill as written including the
board recommended changes and creating registration for
interior designers. He asked the committee to pass the
bill.
4:50:07 PM
JESSICA CEDERBERG, PAST PRESIDENT, AMERICAN INSTITUTE OF
ARCHITECTS-ALASKA, ALASKA CHAPTER, ANCHORAGE (via
teleconference), shared that the organization had worked
with the bill sponsor to address a primary concern with
previous interior design legislation. The organization
appreciated that SB 54 was now offered as a title act with
permitting privileges rather than a practice act. While the
organization did not feel that any regulation for interior
design was necessary, if the legislature chose to enact
legislation establishing a title act, the organization
could live with it. She elaborated that a title act was the
essential condition for the organization to remain neutral
on the bill. She countered a statement earlier in public
testimony that interior designers were required to be
registered to compete for federal contracts and that SB 54
would resolve a current practice of hiring non-Alaskan
interior designers. She explained that state registration
was one way to meet minimum federal qualifications. Another
way was to hold NCIDQ registration, which was already held
by many Alaskan interior designers. She noted that the
statement did not impact the nature of the bill, but she
wanted to correct the record. She thanked the committee.
Representative Allard asked for a repeat of the information
about the federal contracts.
Ms. Cederberg answered that there seemed to be some
misinformation about federal contracting requirements. She
relayed there were two ways for interior designers to get
federal work in Alaska. One was to hold NCIDQ
certification.
Representative Allard asked if it was the CIDANSID.
Ms. Cederberg replied it was the NCIDQ certification. She
relayed that she had sent the committee a written statement
including a white paper (copy on file) the prior evening
and it included a link to the information on the second
page related to federal requirements for interior design to
access federal contracts.
Representative Allard asked if Ms. Cederberg had heard of
the AIA-Alaska.
Ms. Cederberg answered that she was representing the AIA-
Alaska.
4:54:03 PM
Representative Allard referenced a whitepaper she had
received in February from AIA-Alaska. She read the first
sentence from the whitepaper: "Competing for federal
contracts does not require professional registration of
interior designers." She asked if the statement was
accurate.
Ms. Cederberg answered affirmatively. She explained that
interior designers could compete [for federal contracts] if
they held an NCIDQ certification. She stated that the
information showing federal work interior designers could
be found online.
Representative Allard was trying to compare the white paper
to what Ms. Cederberg was saying and she thought the two
things conflicted.
Ms. Cederberg answered that it was not necessary to be a
registered interior designer to do federal work. She
explained that if an individual had the NCIDQ certificate
they could do federal work without being registered.
Representative Hannan asked for verification that AIA-
Alaska had no opposition to the current version of the bill
where interior designers would be under a title act.
Ms. Cederberg agreed.
Co-Chair Josephson referenced scope of practice and asked
if was yet to be determined by the board.
Senator Claman replied affirmatively. He explained that
part of the process of making it a title act with
permitting privileges as distinct from a practice act, left
it to the board to define the scope of practice of what
interior design could do for permitting privileges. He
clarified that other states had done the same thing to give
interior designers stamping authority. He elaborated that
defining the scope of practice in statute would turn it
into a practice act, which the architects were opposed to.
He added that architects had long opposed a practice act
but had agreed to a title act with permitting privileges.
4:57:10 PM
Representative Allard asked if the sponsor thought interior
designers may be getting pushback because they may be able
to step out on their own and create competition.
Senator Claman replied that the legislative history on the
topic had been going on for some time. He explained that
the earlier proposals were for a practice act, which
brought on significant opposition from the architects. He
shared that his mother had been an architect and it was
common at the time and currently for there to be interior
designers working in architecture offices.
Senator Claman elaborated that in prior versions of the
bill he had largely seen architects reluctant to let
interior designers have any amount of permitting privileges
and with limiting stamping privileges because architects
did structural and weightbearing design involving
engineers, while interior designers did not. The compromise
had been made in the negotiations to make it a title act
with permitting privileges and where the board would
determine the scope of practice.
Senator Claman had heard from contractors who recognized
there were times in which, depending on the work being done
on a commercial building, having an interior designer
design and stamp the work (e.g., paint and what carpets to
put in), resulted in a lower price. He explained that in
the market competition, it gave the interior designers an
ability within the more limited scope of practice to
compete with architects for the same work. Currently, under
Alaska law, if someone wanted to go to the permitting shop
to get the paint and carpet stamped, an interior designer
could not stamp the work. The bill would allow interior
designers to open an independent shop. Unrelated to the
legislation, the majority of interior designers in Alaska
were not trying to do work in commercial buildings. He
elaborated that interior designers in Alaska were largely
doing home decoration, bathroom changes, kitchen remodels,
which were not structural, and it was highly unlikely they
would be registering to be a registered interior designer.
Co-Chair Foster continued with public testimony.
5:01:07 PM
BRIAN MEISNER, SELF, ANCHORAGE (via teleconference), shared
that he is an architect in Anchorage and spoke in strong
support of the bill. He strongly supported registration of
interior designers. He asked the committee to pass the
bill.
5:01:22 PM
RAMONA SCHIMSCHEIMER, SELF, ANCHORAGE (via teleconference),
shared that she is an architect in Anchorage and did not
support the bill. She did not understand how the bill was
being considered. She stated there was no public health and
safety issue to be solved by the bill. She asked how the
interior design portion of the bill could be implemented
given the governor's recent freeze on developing new
regulations. She thought the bill had become too
complicated. She supported the AELS Board but did not
believe interior design needed to be added to the board.
She thought the interior design portion of the bill should
be considered separately from the board extension. She
thought the board extension should be straightforward. She
asked the committee to amend the bill or hold it in
committee until the state's financial conditions improved.
5:02:53 PM
MELISSA TRIBYL, SELF, ANCHORAGE (via teleconference),
testified in support of the legislation. She is an NCIDQ
certified interior designer and local business owner of an
architectural firm. She stated that the bill would offer
more opportunities to the community and would encourage
growth in the state. She implored the committee to continue
its consideration of the bill and extend the AELS Board.
She clarified that to be a designer of record (DOR) for a
military project, an individual had to be a licensed
professional. She explained that an individual had to be
NCIDQ certified to do the job and if they wanted to be
responsible for the work the DOR they had to be a
licensed professional. Her firm had specifically gotten
around the issue by being licensed in Texas.
5:05:43 PM
KELSEY CONWAY, MEMBER, AMERICAN SOCIETY OF INTERIOR
DESIGNERS, EAGLE RIVER (via teleconference), testified in
support of the bill. She relayed that she is an Anchorage
business owner and NCIDQ certified interior designer. She
thanked the committee for its continued consideration and
asked for the passage of the bill.
5:06:06 PM
Co-Chair Foster CLOSED public testimony.
Co-Chair Foster asked to hear the invited testimony.
COLIN MAYNARD, CHAIR, BOARD OF ARCHITECTS, ENGINEERS, AND
LAND SURVEYORS (via teleconference), shared that at the
board's February 2025 meeting, the AELS Board voted 7/2 to
support the bill and at its April meeting it voted 8/1 to
support the amendments made in the Senate Finance
Committee. He stated he would email his written testimony
to the committee. He addressed the fiscal note cost and
explained that most of the cost was based on the addition
of a licensing examiner, which would expand the board's
staff from three to four. He explained it was necessary due
to the existing workload. The addition of interior
designers would add about 1 percent to the number of
registrants and the cost would be borne by the ~6,700
active registrants and 800 corporations and limited
liability companies. He thanked the committee and urged
passage of the bill.
Co-Chair Foster asked to hear from the legislative auditor.
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, relayed that members should have a copy
of the audit on the AELS board in their bill packets (copy
on file). She stated the audit was very clean, there were
no recommendations for improvements, and an eight-year
extension was recommended.
Representative Galvin observed that the work would take two
full-time licensing examiners. She asked if that was
standard.
Ms. Curtis deferred the question to the bill sponsor. She
relayed that her review was limited to the extension of the
board and did not include the addition of interior
designers.
5:10:48 PM
BRODIE ANDERSON, STAFF, REPRESENTATIVE NEAL FOSTER,
reviewed the fiscal impact note from the Department of
Commerce, Community and Economic Development (DCCED), OMB
component 2360. The fiscal note reflected an FY 26 request
of $101,700 in personal services, $9,100 for travel,
$49,800 for services, $12,000 for commodities, for a total
request of $172,600. The cost would come from receipt
services (designated general funds) from fees collected by
participating professionals. There would be one new
employee added and a change in receipt authority adding
additional fees collected. The department recognized it
would require regulation changes. He noted that the board
to be extended was already included in the FY 26 budget at
a total of $169,000 in personal services, $57,700 in
travel, $21,500 in services, and $2,000 in commodities, at
a total operating cost of $251,000. The new position was
one full-time licensing examiner. The FY 26 budget
appropriated $169,800 for the continuation of the executive
administrator position. There was an annual increase of
$9,100. Currently the budget included $57,700 for annual
travel for 11 board members and the new travel cost in the
fiscal note would cover the two new board members. There
were some one-time commodity costs for standing up the new
portion of the board. He relayed that DCCED was available
online for questions.
5:13:51 PM
Representative Bynum disclosed that he is licensed
electrical engineer and he paid fees for the board for
relicensing. He did not believe it would impact his opinion
on the bill because his work had nothing to do with
architects and/or interior designers. He remarked that the
bill added personnel to administer the new licensing
process. He did not see how many new registrants the state
expected to see come into the program.
Senator Claman replied that the need for the additional
examiner was not related to adding interior designers to
the group registered. He explained that the one examiner
was not enough to do the current work. He detailed that
adding an additional examiner was to address the existing
workload. Testimony indicated that the number of people who
would likely register as an interior designer was in the
range of 40 to 70.
5:15:52 PM
Representative Bynum thought the current fiscal note was to
cover existing workload and not the addition of a new
licensing class. He wondered why the department gave a
fiscal note for an existing need as opposed to a fiscal
note specifically tied to the impact of the passage of the
bill. He wondered if there would be a problem in the long
term executing the mission of the board without the
positions specifically related to the interior designers.
Senator Claman deferred the question to the department. He
had always understood that part of the bill was adding the
additional examiner. The bill specifically added the
additional examiner into the list of employees.
Representative Bynum was asking because if they were
covering between 40 and 70 people and the fiscal note
showed a cost of $389,000 continuing into the future, it
was a pretty big cost for the system as a whole and new
registrants would not be able to cover the additional cost.
He thought the fiscal note was indicating $389,000 was
directly associated with adding the new classification. He
was trying to get a better understanding of how people
paying into get registered for other classifications would
potentially be picking up the cost of adding the new class
[of interior designers].
5:18:31 PM
Mr. Anderson replied that the only new additional cost for
FY 26 was the $172,600. The AELS was already funded at a
level of $251,000. He explained that if the bill passed,
the new cost of the board would be $388,800 going forward.
the new position was only encapsulated in the FY 26
request.
Representative Bynum asked for verification that the full
burden of the $172,000 was not just for the 40 to 70 people
and it reflected the additional need for the board as a
whole. He asked if his understanding was accurate.
Mr. Anderson replied that it was his understanding. He
deferred to the department for additional detail.
SYLVAN ROBB, DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS
AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT (via teleconference),
asked for a repeat of the question.
Representative Bynum explained that he was trying to get a
better idea if the $172,000 cost was directly related to
managing the 40 to 70 new licensees or if it was also
associated with taking the burden off the board for ongoing
needs.
5:20:52 PM
Ms. Robb responded that a number of things contributed to
the increase of $173,000. The majority of the increase was
for a licensing examiner 2 that would handle the
registration of the interior designers. She noted that
while 70 individuals covered by a board with over 7,000
licensees was not a huge number, it still represented more
work than existing staff had the ability to absorb. There
had been growth in the number of licensees in the past
several years and the department was hitting the ceiling on
what it could absorb. The remainder of the new cost was
comprised of the addition of several more board members,
travel to board meetings for the individuals, and a salary
in statute for the executive administrator that was higher
than the current salary, which would increase the board's
cost by $48,000.
Co-Chair Josephson stated that the fiscal note suggested
$101,700 was dedicated to the interior design registrants.
He asked for verification it also included other duties as
assigned.
Ms. Robb responded affirmatively. She confirmed that the
work was not apportioned out by license type because it
would not be efficient. She explained that it was the
overall body of work that would be expanded by the
registration of interior designers. She elaborated that
after absorbing additional registrants for many years, the
department no longer had the capacity to do so without
additional staff in order to meet the needs of licensees.
5:23:37 PM
Representative Bynum asked how many current licensees the
board currently oversaw.
Ms. Robb answered that there were 7,803 licensees in FY 24,
which was an increase of almost 400 from the prior year.
Representative Bynum asked if the current cost of the board
was $251,000.
Ms. Robb replied that the current cost to run the program
inclusive of all of the costs to register the professions
covered by the board averaged about $600,000 per year.
Representative Bynum asked for a repeat of the last portion
of her statement.
Ms. Robb complied.
Co-Chair Foster set an amendment deadline the following day
at 5:00 p.m.
Representative Stapp stated they heard the bill numerous
times the previous year. He MOVED to REPORT CSSSSB 54(FIN)
out of committee with individual recommendations and the
accompanying fiscal note.
Representative Johnson OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Bynum, Galvin, Representative Tomaszewski,
Hannan, Stapp, Jimmie, Allard, Josephson, Schrage, Foster
OPPOSED: Johnson
The MOTION PASSED (10/1). There being NO further OBJECTION,
it was so ordered.
CCSSSB 54(FIN) was REPORTED out of committee with six "do
pass" recommendations and five "no recommendation"
recommendations and with one previously published fiscal
impact note: FN2 (CED).
Senator Claman thanked the committee.
CS FOR SENATE BILL NO. 137(FIN)
"An Act extending the termination date of the Board of
Certified Direct-Entry Midwives; extending the
termination date of the Board of Nursing; extending
the termination date of the Board of Veterinary
Examiners; extending the termination date of the Board
of Parole; and providing for an effective date."
5:28:47 PM
SENATOR JESSE BJORKMAN, SPONSOR, introduced the
legislation. The bill would extend the sunset date of the
Board of Certified Direct-Entry Midwives, the Board of
Nursing, the Board of Veterinary Examiners, and the Board
of Parole from their current sunset dates of June 30, 2025.
The 2024 audits of the Board of Certified Direct-Entry
Midwives, the Board of Nursing, and the Board of Veterinary
Examiners each recommended a six-year extension. The audit
for the Board of Parole recommended a four-year extension.
He noted that Kris Curtis would review the audits and the
department was available for questions.
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, reviewed the audit recommendations for
each of the boards beginning with the Board of Veterinary
Examiners (copy on file). The audit found the board to be
serving the public's interest, conducting meetings in an
effective manner, actively amending its regulations, and
effectively licensing veterinary professionals. The audit
also concluded that board related cases were not
consistently investigated in a timely manner, two board
members were serving with expired terms, and one board seat
had been vacant for 31 months. The audit recommended a six-
year extension of the board.
Ms. Curtis directed members' attention to page 6 of the
audit showing the schedule of licensing activity. As of
January 2024, the board had 716 active licenses and
permits. The board's schedule of expenditures was located
on page 8 of the audit and as of January 2024, the board
had a surplus of $200,000. There were three audit
recommendations beginning on page 11. The audit recommended
the Division of Corporations, Business and Professional
Licensing (CBPL) create procedures to ensure the
regulations for occupational boards were presented to the
boards for final review and approval before they were made
effective. The audit found the final version of the
veterinary and client relationship regulations omitted
language the board had intended to be enacted. She
explained it was due to changes made by the Department of
Law that were intended to be inconsequential. The second
recommendation was for the governor's Boards and
Commissions director to work with the board to identify
interested applicants to fill board seats in a timely
manner. The third recommendation was for the Department of
Commerce, Community and Economic Development (DCCED)
commissioner work with policy makers to improve the
recruitment and retention of investigators.
Ms. Curis next reviewed the audit findings for the Board of
Parole. The audit recommended a four-year extension, which
was half of the eight-year maximum allowed for in statute.
She reviewed the conclusions beginning on page 8 of the
audit (copy on file). The audit found that board staff
positions that had been added based on criminal justice
reform continued to be funded despite the subsequent repeal
of the reforms. The main criminal justice legislation, SB
91, was passed in 2017 and it awarded the board four
additional hearing officers and one additional criminal
justice technician, for an annual recurring cost of
$591,000. The positions helped the board effectively cope
with the increase in its workload. She explained that most
criminal justice reform laws were repealed in 2019 by House
Bill 49 and as a result the board was decreased. She
pointed to Exhibit 3 on page 9 of the audit report showing
that the discretionary parole hearings returned to the
level existing before criminal justice reform. The exhibit
also showed that the number of parole revocation hearings
were actually lower than prior to justice reform after HB
49 passed.
Ms. Curtis elaborated that despite the decrease in
workload, HB 49 continued to fund the positions. The audit
questioned whether the positions continued to be necessary.
Page 10 of the report showed the audit's conclusion that
the Board of Parole approved parole in accordance with
state law; however, the audit noted that parole was
approved at a much lower rate than before criminal justice
reform. Exhibit 5 on page 11 showed that on average, the
board granted parole 63 percent of the time before 2017
compared to only 25 percent of the time after 2020. She
relayed that the board could not provide a specific
explanation for the decrease.
Ms. Curtis reviewed the audit's three recommendations for
improvements for the Board of Parole beginning on page 14.
The audit recommended that the Department of Corrections
(DOC) commissioner and the board chair work together to
ensure all hearings were conducted in a confidential
manner. The audit found that the Hiland Mountain
Correctional Center was conducting preliminary revocation
hearings at times in the general population area that was
violating the offenders' rights to confidentiality. Second,
the audit recommended that the board chair should ensure
regulation changes occurred in a timely manner. The audit
found that parole eligibility regulations had not been
changed since 2015, despite significant statutory changes.
She noted the recommendation was recurring from the
previous audit. Third, the audit recommended the
commissioner ensure fiscal notes for pending legislation
reflect decreases as appropriate.
5:35:19 PM
Representative Tomaszewski referenced Exhibit 5 and thought
Ms. Curtis had stated that the board had not responded to
the specific finding. He observed a written response from
the board stated that the finding presented an inaccurate
comparison. He asked for detail.
Ms. Curtis responded that the board could find no
explanation or reason. She noted that the board's response
letter stated that they did not believe the finding was an
accurate representation. The board believed that all
discretionary parole hearings were unique and could not be
compared. She disagreed with the interpretation in that the
data was from the Board of Parole and it was presented to
the public to show the rate at which parole hearings were
occurring. In previous sunset audits where a change in the
rate parole was being approved was observed, the board had
been able to provide an explanation. For example, two
cycles back, there had been a change in the rate because
there were fewer providers in the community; therefore,
there were less available services for offenders and the
board was not approving parole at as high of a rate as a
result. She explained that in the current audit, the board
had been unable to provide an explanation of why the rate
had changed so dramatically.
Representative Hannan looked at page 8 of the Board of
Parole audit, which noted that the criminal justice reform
legislation SB 91 added positions and the positions had
been retained after subsequent legislation repealed most of
the reform. She asked whether the positions had been filled
with staff to the parole board or if only the money had
been retained.
Ms. Curtis answered that the board positions had been fully
staffed.
Representative Hannan asked if all of the positions were
working for the Board of Parole versus in other DOC
positions.
Ms. Curtis responded affirmatively. She highlighted that
the audit noted that HB 49, which repealed the reforms,
also added another position. The audit noted that the admin
position approved in the first bill had not been moved to
the Division of Administrative Services after HB 49 was
passed. She summarized that five positions had been added
as part of SB 91 and one position had been added under HB
49. Additionally, the department transferred one if its
other positions to the Division of Administrative Services.
Representative Hannan thanked Ms. Curtis and noted she had
a committee assignment already for next year's DOC budget.
5:38:37 PM
Co-Chair Josephson asked it could be that DOC was so
desperate for parole and probation officers that the
department seconded (loaned) them out for general parole
and probation work not exclusively for the board.
Ms. Curtis answered that DOC had not told auditors that the
positions were being used outside of the parole board in
the general institutions. She did not believe the
department provided any explanation.
Co-Chair Josephson looked at page 11 of the audit and noted
there was a change in Title 33 or 34 to the burden of
proof, effectively the lens the board had to look through
to make decisions. He stated it was an incredibly generous
lens after passage of SB 91, favoring the defendant. He
stated it had been repealed and brought back to the
previous burden of proof, which was not as favorable.
Additionally, under SB 91, even if someone did not apply
for parole, it required applications to be completed for
the individual. He thought it could explain a lot of the
statistics in Exhibit 5.
Ms. Curtis responded that she did not look at the burden of
proof but, the audit looked at the impact of SB 91 and the
fact that incarcerated individuals were eligible whether or
not they applied. She noted that it had driven the number
of hearings up. She elaborated that the change had been
repealed by HB 49 and the hearings went back to the level
that existed before the board was awarded the five
positions. The auditors could not get and explanation for
why the board needed to keep the five positions when its
workload appeared to revert back to the level prior to
being awarded the positions.
Co-Chair Josephson referenced the audit's third
recommendation pertaining to ensuring fiscal notes. He
stated his understanding that the recommendation meant the
[DOC] commissioner should cut the budget $591,000.
Ms. Curtis answered, "That is what the law says." The audit
included the criteria in recommendation 3. In the opinion
of the auditors, the department did not follow the law when
presenting the bill to reflect the decrease in its workload
and decrease in staff.
Co-Chair Josephson asked for verification that if the
department needed more probation and parole officers in the
normal course of events, it should have just said so. He
thought they were both saying the same thing.
Ms. Curtis responded that she did not know. She explained
that the department did not provide any explanation as to
why it was necessary to retain the positions. She remarked
that the department could have given auditors anything for
evaluation.
5:42:11 PM
Ms. Curtis reviewed the audit report for the Board of
Nursing. The audit found the board was serving the public's
interest, conducted its meetings effectively, actively
amended its nursing regulations, and effectively licensed
nursing professionals. The audit also found that board
related cases were not consistently investigated in a
timely manner and one board seat was vacant for an extended
period. The audit recommended a six-year extension. There
was licensing information on page 8 of the audit report
(copy on file) and the audit also looked at the rate at
which nursing licenses were approved. Page 7 summarized the
review of the timeliness of license issuances. The audit
found that 30 percent of the renewed licenses took over
four months to be issued due to turnovers and vacancies.
Page 8 showed why the board's workload increased. She
explained that as of February 2024, the board had just over
27,000 licenses and permits, which was a 37 percent
increase when compared to the 2018 sunset audit. She stated
it was a huge increase in the number of licenses, which the
board chair attributed to the increase of registered nurses
in Alaska serving during the [COVID-19] pandemic. The
board's schedule of revenues and expenditures was located
on page 10 of the audit. As of February 2024, the board had
a surplus of $3.4 million. The board was not planning on
decreasing fees because they believed the number of
licenses would naturally decrease as licensees did not
renew.
Ms. Curtis moved the audit's one recommendation on page 14.
The audit recommended that DCCED commissioner or the board
chair work with policy makers to improve the recruitment
and retention of investigators. The audit looked at 35
nursing related investigations and found nine of the 35 had
unjustified periods of inactivity. The nine audits were
listed on page 14. She detailed that the delays were caused
by turnover, vacancies, and the time to train new
employees.
Co-Chair Josephson pointed to the audit finding on page 7
that licensing delays had been caused by staff shortages.
He asked if it was DCCED division staff and not board
staff.
Ms. Curtis answered that statutes authorized an executive
administrator for the board and in addition DCBPL employed
the following board specific staff: a licensing supervisor,
eight licensing examiners, two office assistants, a nurse
consultant, and two investigators. The specific board had
dedicated DCBPL staff.
Co-Chair Josephson asked if there were vacancies [that
could be filled] so that applications could be processed
faster.
Ms. Curtis believed it was a result of the dramatic
increase in workload. She elaborated that the pandemic had
increased the workload significantly. She believed the
board thought it would decrease naturally. The rate at
which nursing licenses were being approved was found in the
preliminary phase of the audit and auditors had looked into
the issue in case there were complaints. The number was not
as bad as auditors anticipated, they found that 30 percent
were taking over four months. The main contributor being
the increase in workload.
5:46:02 PM
Ms. Curtis addressed the audit for the Board of Certified
Direct Entry Midwives (copy on file). The audit found the
board was serving the public's interest by conducting its
meetings in compliance with state law and by amending its
regulations to enhance public safety and approve the
certification process. The audit also concluded that the
board generally certified midwives in compliance with state
law; however, documentation improvements were needed.
Furthermore, the board did not audit compliance with
certification renewal requirements in a timely manner. The
audit recommended a six-year extension. The audit noted
there had been a change in how midwives were certified.
Starting January 2023, the board began requiring midwives
to obtain their certified professional midwife credential
for the North American Registry of Midwives (NARM). As a
result, some board functions duplicate functions of the
national organization. Prior to the change, midwives
already had one of the highest license fees of any
occupation. The change increased the cost to obtain and
maintain state certification. Exhibit 3 on page 7 of the
audit showed there were 41 certified midwives as of January
2024.
Ms. Curtis relayed that the audit included three
recommendations for improvement beginning on page 12. The
audit determined that the Office of the Governor Boards and
Commissions director should work with the Board of
Certified Direct Entry Midwives to identify potential
applicants to fill the board seat in a timely manner. The
physician board seat had been vacant for a number of years.
Second, the DCBPL director should improve training to
ensure certifications were supported by adequate
documentation and the board should adequately review
applications before approval. Third, the audit recommended
that the commissioner work with policy makers to improve
the recruitment and retention of investigators.
Co-Chair Josephson thought it felt almost like the direct
entry midwives were coming before the committee every year.
He noted the audit was recommending a six-year extension.
He asked what the concern had been in the past five years
that was less of a concern in the current audit.
Ms. Curtis answered that in the past four cycles, the board
had been awarded a two-year extension three times and a
four-year extension once. She explained that the auditors
had not recommended the two-year extensions; the
legislature had reduced the recommendation several times.
There were several times where an investigation had not
been handled timely or appropriately on behalf of DCBPL.
She expounded that it had posed a public safety risk. Often
times, the details could not be published in the audit
report, but it was important enough to recommend a short
extension in order to ensure the public safety risk was
rectified. The one year she had recommended a four-year
extension, she had been very concerned about the high
licensure cost. She worried it was presenting a barrier to
the occupation; therefore, at the time, she recommended the
legislature consider alternate forms of regulating the
profession due to the high certification fee.
5:49:43 PM
Ms. Curtis relayed that none of the other medical boards
appeared to be interested, the legislature had not pursued
the recommendation, and the board was willing to accept the
high fees in order to regulate themselves; therefore, she
did not make the recommendation going forward. The audit
found that the investigative issues had been dealt with and
it did not find any compelling reason not to recommend at
least a six-year extension, but it did not recommend a full
eight-year extension.
Co-Chair Foster OPENED public testimony.
JANETTE SCHLAEDER, CHAIR, ALASKA BOARD OF NURSING (via
teleconference), spoke in support of the bill. She shared
that the board played a critical role in safeguarding
public health and ensuring the highest standards of nursing
in Alaska. She relayed that the board was due to vote in
favor of the bill. She detailed that doing so would protect
patients, support healthcare professionals, and
strengthened the healthcare system. She thanked the
committee.
Co-Chair Foster moved to the next testifier.
LEITONI TUPOU, CHAIR, ALASKA BOARD OF PAROLE (via
teleconference), relayed that he was available for
questions.
Co-Chair Foster CLOSED public testimony.
Co-Chair Foster asked for a review of the fiscal notes.
BRODIE ANDERSON, STAFF, REPRESENTATIVE NEAL FOSTER,
reviewed FN3 from DCCED, OMB component 2360. The note
reflected what was already included in the governor's FY 26
budget including $62,200 for travel and $5,500 for services
for a total cost of $67,700 funded by receipts collected by
professionals. The fiscal note also reflected a $67,700
change in revenue. He provided a breakdown of the cost
between the boards. He explained that $29,400 in travel was
allocated to the Board of Nursing, $5,200 in travel for the
Board of Certified Direct Entry Midwives, and $27,600 in
travel for the Board of Veterinary Examiners. Services were
broken down into $1,200 for board meeting advertising,
$4,000 for training and conference fees, and $300 for board
members attending meetings.
Mr. Anderson reviewed FN2 from DOC, OMB Component 695. The
funding shown in the note was already included in the
governor's budget. The note included $1.849 million for
personal services, $29,900 for travel, $26,700 for
services, and $33,200 for commodities, for a total cost of
$1,938,800 in general funds. The note included nine full-
time positions. The legislation amending the Board of
Parole extended the termination date. He noted that the
departments were available online for questions.
5:56:40 PM
Representative Bynum stated that the committee had just
heard a bill extending the Board of Architects, Engineers,
and Land Surveyors (AELS). He observed that the current
bill looked like a cleanup bill to make extensions to
current boards. He wondered why the eight-year extension
for the AELS Board was not included in the bill.
Senator Bjorkman replied that the sponsor of the AELS bill
included the extension in his bill [SB 54]. He explained
that he had taken on the task of drafting SB 137, which
contained the remainder of the board extensions that needed
to pass during the current session due to their summer
[June 2025] sunset date.
Representative Bynum saw that the AELS Board also expired
[in the coming summer]. He thought they were hinging the
extension of an existing board that provided an important
function for registration of architects, engineers, and
land surveyors on a bill. He thought it seemed a bit
abnormal to make the extension of a board contingent on the
passage of adding to the board. He asked if Senator
Bjorkman would object to ensuring the AELS Board was
protected in the event that SB 54 failed to pass.
Senator Bjorkman replied that after a sunset date was
passed, a board went into a wind down phase where a sunset
extension was needed, or work needed to wrap up and its
advisory and regulatory role was transferred back to CBPL.
He explained that the Board of Direct Entry Midwives was in
that exact position, and it was currently in the winddown
year. Without an extension in the current year, the direct
entry midwives would lose their professional voice in
crafting regulation for their profession. He relayed that
SB 54 had been extremely well vetted over the past three
years. He noted that it had reported out of the House
Finance Committee and was headed for the House floor. He
did not find it necessary to include the AELS Board
extension as a duplicative measure in the current bill, but
it was up to the will of the committee.
6:00:39 PM
Representative Bynum asked if there was cause for concern
when a board went into a wind down status and additional
duties the board had to take on to prepare for wind down.
The committee had heard earlier the [audit] recommendation
was to extend the [AELS] board an additional eight years.
He recognized there was hope that SB 54 would pass, but he
was a bit worried that if the bill did not pass that it
would create uncertainty for 7,803 licensees. He recognized
that the legislature could come back in January to fix the
issue.
Senator Bjorkman replied that the question would be more
appropriately addressed to the director of the CBPL. He
relayed that it was not an uncommon position for boards to
be in, albeit not a desirable one. He did not have many
doubts that the other bill [SB 54] would pass, but it was
up to the House. He stated it was up to the will of the
committee to decide whether it wanted to add a duplicative
board extension to the bill. He remarked that it would be
an uncommon thing to do. There had been a bill in the
Senate that sought to extend the Board of Parole and it had
been taken out of the other bill after he introduced SB
137. He personally felt confident SB 54 would pass. He
stated that if the committee wanted to amend SB 137 it was
the committee's prerogative.
6:03:37 PM
Representative Hannan stated that in her experience, the
only thing being tweaked in a sunset bill was the date the
board lived for, and sometimes multiple boards were
included in one sunset bill even though they may have
different extension dates. She elaborated that when a
change of duty to a board was proposed, it ran as a
separate bill. She would be very opposed to adding in the
AELS Board extension to the current bill. She explained it
meant there would be two bills dealing with the AELS Board
in two different forms, one where the board would have
expanded duties and membership and one with an extension of
the board's sunset date. She stated the two bills were like
oranges and tangerines they were related, but they were
not the same flavor. She did not believe she could support
blending the two together.
6:05:06 PM
Representative Allard asked if adding the AELS Board
extension to the bill would delay the processing of the
midwives board extension.
Senator Bjorkman replied affirmatively.
Representative Allard emphasized that it was very important
there was no delay. She had been working with the midwives
and they needed the bill to pass. She encouraged leaving
the bill in its current form.
Representative Bynum reasoned that if the bill was amended
it would have to return to the Senate for concurrence. He
asked if that was what Senator Bjorkman was referring to.
Alternatively, he wondered if Senator Bjorkman thought
amending the bill would make it unlikely for the
legislation to pass in the current session.
Senator Bjorkman replied that the delay would occur because
the committee would have to draft an amendment or a
committee substitute to the bill and it would take longer
to get out of the committee, which would delay when it
would arrive for a vote on the House floor. Additionally,
it would have to go back to the Senate for concurrence.
6:06:54 PM
Representative Hannan MOVED to REPORT CSSB 137(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes.
Representative Bynum OBJECTED. He did not agree with the
path forward. He thought the bill should be amended to
include the AELS Board. He stated that the AELS Board would
go into the sunset phase in less than two months, and he
did not like the situation when there was a bill before the
committee extending other boards and commissions. He had
provided an amendment to add the language to the bill. He
did not support moving the bill forward, when there was an
administrative amendment available that could correct the
problem. He remarked that the issue was no fault of Senator
Bjorkman. He would be a no vote on the passage of the bill.
He wanted to protect the board from unforeseen hazards that
would result if SB 54 did not pass. He was merely trying to
ensure the legislature was protecting boards and
commissions.
Co-Chair Schrage appreciated the concern; however, he
believed both bills [SB 54 and SB 137] would receive
bipartisan support based on conversations he had in the
building. He believed making amendments to the bills would
slow them down. He remarked that the legislative session
was in its final days, and he would prefer to keep the
bills moving on their way. He supported moving the bill in
its current form.
Representative Allard asked Representative Bynum was
looking at offering an amendment. She would support him if
so.
Representative Bynum responded that the motion at hand was
to move the bill from committee. He stated that if he
wanted to take up an amendment, he would have to offer it
on the House floor. He thought it did not sound like there
was the will of the body even if he offered the amendment
on the floor. He MAINTAINED the OBJECTION.
[Note: a first role call was taken and voided.]
A roll call vote was taken on the motion.
IN FAVOR: Johnson, Galvin, Jimmie, Tomaszewski, Hannan,
Schrage, Josephson, Foster
OPPOSED: Bynum, Allard
Representative Stapp was absent from the vote.
The MOTION PASSED (8/2).
CSSB 137(FIN) was REPORTED out of committee with seven "do
pass" recommendations, one "no recommendation"
recommendation, and one "amend" recommendation and with two
previously published fiscal impact notes: FN2 (COR) and FN3
(CED).
Senator Bjorkman thanked the committee.
6:13:16 PM
AT EASE
6:40:40 PM
RECONVENED
CS FOR SENATE BILL NO. 132(FIN)
"An Act relating to insurance; and providing for an
effective date."
Co-Chair Foster asked the sponsor to introduce the bill.
There would be a committee substitute (CS) forthcoming.
6:41:38 PM
SENATOR JESSE BJORKMAN, SENATE LABOR AND COMMERCE
COMMITTEE, SPONSOR, shared that the bill was a companion
omnibus insurance bill that had been heard multiple times
in the House Labor and Commerce Committee and elevated to
the House Finance Committee. He explained that SB 132
contained a number of provisions that were technical and
conforming changes throughout Title 21 including the
correction of drafting errors and updating insurance
technology to the National Association of Insurance
Controller Standards to ensure Alaska was "singing by the
same set of sheet music that other states are" when it came
to the world of insurance. He explained that the Department
of Commerce, Community and Economic Development (DCCED),
Division of Insurance director would take the committee
through the bill.
6:42:53 PM
LORI WING-HEIER, DIRECTOR, DIVISION OF INSURANCE,
DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT,
began with Section 1 of the bill. She explained that DCCED
asked to have the statute of limitations changed from five
years to 20 years because the Division of Insurance
received complaints and concerns from consumers who
discovered they had been taken on a life insurance or
annuity product after the statute of limitations passed.
She elaborated that it was typically an elder when they
went to cash it in or use it. Under the scenario, there was
nothing the department could do because the statute had
passed.
Ms. Wing-Heier moved to Sections 2 and 3. She stated that
she would talk about health maintenance organizations
(HMOs) throughout the bill. She explained that HMOs had
always been in the statute, but statute had been limited in
allowing the use of HMOs in Alaska. She elaborated that
because there was so much talk amongst employers, school
boards, municipalities, and individuals about the cost of
healthcare and healthcare insurance. She detailed that the
bill would put the teeth back in statute so an employer or
individual could choose to buy an HMO product to save a bit
of money. She expounded that it was a managed care product
that would cost a bit less than the common products
currently on the market in Alaska. She underscored it was
not a mandate. She relayed that the bill included a
provision that if there was a need for an out of network
provider in an emergency or that was not available to a
consumer, the HMO would be required to pay the bill as if
it were an in-network provider.
6:45:03 PM
Representative Hannan asked for clarification on which bill
version the committee was considering. She thought they
were looking at the Senate version of the bill.
Ms. Wing-Heir answered that bill version T [the version
passed by the Senate] was before the committee.
Ms. Wing-Heir moved to Sections 4 through 11 of the bill
pertaining to financial reporting, reinsurance credits,
taxes allowed on wet marine and transportation insurance,
and the use of principle-based reserving for valuation of
reserves. She explained that the sections would bring
Alaska into alignment with the National Association of
Insurance Commissioners (NAIC) model law 820. She would
elaborate on wet marine and transportation insurance later
in the bill. Sections 12 through 26 amended licensing
statutes. She explained that the applicable statutes had
been reviewed to determine primarily what was being
adjusted out of state. She explained it could include out
of state adjusters coming to Alaska to work (a non-resident
adjuster) or for example when a person had a claim on their
cell phone, and they had purchased the insurance package.
She provided a scenario where the person called the 800
number, which was answered by a non-resident adjuster in
Arkansas. She elaborated that the division had found there
was an issue with those not being licensed because all
states did not license adjusters. The bill would allow
those adjusters to use Alaska as their home state. She
detailed that the individuals would have to be
fingerprinted and go through background checks just like a
resident. They could receive a license from Alaska, but
they would still be a non-resident adjuster. The bill would
make the change throughout the title and would make things
easier for the consumer and licensing staff to implement
and regulate.
Ms. Wing-Heier turned to Sections 27 to 33 that amended
taxes on surplus lines. The change allowed a broker to pay
taxes on behalf of a non-admitted marine and transportation
insurer. The bill also adjusted penalties, less for late
filing and more punitive for egregious conduct on behalf of
the surplus lines broker. Sections 34 through 45 amended
the unfair trade practices and consumer notices
requirements by requiring notices of cancelation. The
notice of cancelation would give an individual 20 to 45
days to replace their policy if necessary. Additionally,
the bill would prevent the cancelation of a homeowner's
policy in the event a consumer filed a claim simply to get
a denial knowing there was no coverage, but knowing a
denial was needed in order to qualify for state, local, or
federal aid, primarily from the Federal Emergency
Management Agency (FEMA). She explained that the situation
had occurred recently in Juneau when the glacial dam burst,
and several consumers had called the division.
Ms. Wing-Heier continued that the bill also amended the
contractor controlled insurance programs (CCIP). She
explained that when there were large projects such as the
Trans-Alaska Pipeline System (TAPS) and the Anchorage
airport, the projects were OCIPs [owner controlled
insurance programs] or CCIPs where the owner or prime
contractor buys insurance for everyone on the site. The
insurance had to be a value of $50 million with a defined
location and site. The option saved the contractor and the
subcontractors money because it eliminated any possibility
of subrogation because it did not matter what insurance
policy a claim was filed under, everyone was insured. She
noted the method was very common in large projects. She
referenced the existing housing shortage in Alaska and
explained that in the hard insurance market insurers were
having a difficult time getting the insurance necessary for
projects; therefore, the bill extended the number down to
$20 million and 40 units for multi-owner residential with
defined site and location. The bill also added a provision
requiring health discount plans to disclose that they were
not insurance. She detailed that the plans advertised the
availability of a plan for one week for $50. She
underscored that they were not insurance plans. She
recognized the option may be good and provide a benefit,
but consumers should understand the option was not an
insurance plan.
6:50:13 PM
Ms. Wing-Heir moved to Section 46 of the bill pertaining to
workers' compensation. She began with assigned-risk
workers' compensation and explained that small employers or
employers with a bad claim history put in the assigned risk
there were many reasons an employer could be put in the
category after $3,000 in premium, the employer was
surcharged 25 percent. In light of inflation, workers'
compensation rates, and payroll, the bill increased the
amount to $6,000. She noted that she had worked for the
division for 40 years and the number had never gone up.
Section 47 allowed notices to be sent via email in addition
to mail. Section 48 expanded coverage for colorectal cancer
screenings. Section 49 amended the interest rate for
individual deferred annuities to comply with NAIC model
805. Section 50 amended requirements for group life
contracts. Section 51 amended the grace period by extending
the number of days a person had to replace an insurance
policy. Section 52 was a technical correction from
agriculture to agricultural. Section 53 stipulated that the
division would be responsible for approving forms of motor
vehicle service contracts. She explained that the division
had received complaints from people in scenarios where they
purchased a new car and were told there was a policy they
could purchase to bring the car back to be fixed in
perpetuity. The division had never looked at those policies
to see what consumers were being offered at what price. The
bill would require the division to do so.
Ms. Wing-Heier moved to Section 55 that would ban the
depreciation of labor in residential property claims. She
explained it had been a concern of some consumers. There
could still be depreciation, but the policy itself could
not depreciate labor. The broker could offer an individual
an amendment showing what the price differential would be
and the individual would be able to choose whether to
depreciate the labor or not.
Representative Bjorkman asked Ms. Wing-Heier to explain
what it would mean for a person who purchased a plan who
later experienced a loss and needed to make a claim.
Ms. Wing-Heier explained that if a person lost their roof
in a terrible windstorm and the roof was 20 years old, the
labor would be depreciated considerably to the point that a
person could not afford to put the roof back on. She stated
the division was increasingly seeing the situation. She
elaborated that it was horrible when it was a full loss on
a house built in 1970 and insurers were depreciating labor
back to that date. She stated it was a significant problem
to consumers for large losses.
Ms. Wing-Heier turned to Section 56 that included a
technical change to the Joint Insurance Association and the
way excess loss insurance could be purchased. She advanced
to a technical change in Section 57 and explained that
several years back a bill had passed pertaining to the Life
and Health Guarantee Association and the full Medicare and
Medicaid program had been inadvertently included. She
explained that the error meant that if the federal programs
were to go broke, the state would have to pay the claims
through the guarantee association. Section 58 amended the
HMO board. Sections 59 through 60 pertained to HMOs to put
teeth back into statute and specifically state that out of
network providers would be allowed. Section 61 required
risk retention groups to file reports of their premiums
with the division. Section 62 was a technical change
pertaining to Section 1332 innovation waivers with the
federal government Centers for Medicare and Medicaid
Services (CMS). The bill added the U.S. Department of
Treasury at the request of the federal government.
Additionally, if the state were to come up with another
idea similar to the Alaska Reinsurance Program, the
division could apply for it without seeking approval from
the legislature for the particular waiver. She detailed
that there would be public hearings and the legislature
would know about it, but the division did not want to wait
one to two years to start the process if the opportunity
presented itself.
Ms. Wing-Heier stated that Section 63 would add a
definition for motor vehicles. Section 64 included
repealers. Section 65 was uncodified laws of the owner
controlled insurance program.
6:55:25 PM
Ms. Wing-Heir gave a summary of version T to version W. She
began by explaining there were currently bills before both
bodies, with the one on the Senate being SB 134. She
explained that the legislature had passed HB 226 the
previous year relating to pharmacy benefit managers. When
the department went to draft regulations, it had been told
by the Department of Law it did not have the authority
because pharmacy benefit managers were registered, and they
should be licensed. She elaborated that the actions taken
in HB 226 had to be amended to change the statute to
clarify that pharmacy benefit managers and third-party
administrators would be licensed in Alaska as opposed to
registered. The change gave the division much more
authority to deal with problems when they arose from
pharmacists or consumers. She explained it was the crux of
the summary of changes [between the bill versions]. Another
change pertained to the OCIP and the reduction to $20
million and 40 units. The House Labor and Commerce
Committee made a change to cost sharing for colorectal
cancer, which eliminated the cost sharing for biopsies and
consultation for mammograms and for the screening of
colorectal cancer. The age for colorectal cancer screening
had been changed to meet the guidelines from the American
Cancer Society. There was an immediate effective date for
the OCIPs and CCIPs and the remainder of the bill had an
effective date of January 1.
Co-Chair Foster thanked Ms. Wing-Heier for her summary. He
asked for verification the explanation was for version T as
well as the new changes in version W.
Ms. Wing-Heir responded affirmatively.
Representative Stapp declared a conflict with Section 20.
He shared that the bill would allow him to get a license
notification of expiration via email as opposed to mail.
6:58:42 PM
Representative Galvin asked for some clarity about the
change related to agricultural. She asked if anything was
changed other than a word.
Ms. Wing-Heir responded that the change was only the
correction of a word in statute.
Representative Galvin noted she had a question pertaining
to OCIP. She stated her understanding that the builders
would like to see the insurance plan modernized because the
ability to self-insure would enable them to get insurance
quicker and at a lower price.
Ms. Wing-Heir responded that there was nothing in statute
that allowed builders to self-insure or buy policies. She
elaborated that she would expect rather large contractors
with the [financial] means to self-insure a certain portion
such as the first $1 million or $5 million of the loss and
purchase umbrella insurance above that amount.
Representative Galvin asked if they were changing how much
a project needed to be insured.
Ms. Wing-Heir responded that it was not included in Title
21 and the bill did not change anything pertaining to the
amount of insurance required for a project.
Representative Galvin asked if it meant the state was
allowing contractors to come up with their own process. She
used an oil company as an example and stated companies had
to buy a large bond or something in case there was a
problem. She thought it was similar to insurance. She asked
if it was similar to the topic at hand where a builder
wanted to get their own insurance in order to protect
themselves in case something went wrong.
Ms. Wing-Heir responded that it pertained to mega projects
such as the North Slope, Anchorage airport, and schools
that included framers, plumbers, dirt work, engineers, and
architects. She explained that a contractor could buy a
policy to insure all of the individuals. The option cost
less money and they could get higher limits because many of
the projects wanted limits of $100 million or more, which
was cost prohibitive for smaller contractors. She explained
that the owner or the prime [contractor] would purchase the
policy and name everyone so all of the workers had
insurance protection.
Representative Galvin stated her understanding that the
amount of protection was unchanged. She asked if it was a
modernization to keep up with what other states were
already doing.
Ms. Wing-Heir responded, "No." She relayed that the
division had believed Alaska's statutes already allowed the
option. She thought she was the only director of insurance
who had to approve the projects. She elaborated that the
division thought the state's statutes were correct until
someone applied for an OCIP. She had been told by the
Department of Law that statute did not allow contractors to
name an additional insured person. She explained that the
whole premise was to have everyone [on a project] insured
under the policy. She noted that subsequently, the division
had heard from contractors building residential projects
and they had been added as well. She pointed out that the
particular part of the legislation passed the House in
2024, but the bill did not make it out of the Senate Rules
Committee.
7:03:20 PM
Representative Bynum which version he should refer to when
asking a question.
Ms. Wing-Heir replied, "version W."
Representative Bynum looked at Section 76 that increased a
workers' compensation premium from $3,000 to $6,000. He
asked who the provision would impact monetarily.
Ms. Wing-Heir answered that the change would be a benefit
to the employer. She explained that employers were
currently surcharged at $3,000 in premium. The bill
specified the 25 percent surcharge did not apply until they
reached $6,000 in premium. She expected that many small
employers and sole proprietors may not even get to the
surcharge at a $6,000 level.
Representative Bynum noted that employers were currently
paying the surcharge. He asked if it would be a loss of
revenue to companies.
Ms. Wing-Heier explained that the surcharge went to the
National Council on Compensation Insurance. The division
had spoken with the council, and it did not believe the
change would result in a negative impact to the council.
Co-Chair Foster noted that the committee needed to adopt
the new bill version as its working document.
7:05:17 PM
Co-Chair Foster MOVED to ADOPT the proposed committee
substitute for CSSB 132(FIN), Work Draft LS0415\W (Wallace,
5/17/25) (copy on file).
Co-Chair Schrage OBJECTED for discussion.
Co-Chair Schrage WITHDREW the OBJECTION. There being NO
further OBJECTION, it was so ordered.
Representative Tomaszewski wondered if Section 88
pertaining to motor vehicle service contracts pertained to
factory warranties or after market service contracts.
Ms. Wing-Heir responded that the section applied to both.
She explained that if it was a new car with a factory
warranty where a business would replace the transmission or
provide a certain number of oil changes. She explained that
the division was finding that consumers were taking the
policies home and not receiving the anticipated coverage.
The division did not realize the situation was such a
problem until it started receiving calls. She noted that
the division had not reviewed the forms previously, but it
would start to do so.
Representative Tomaszewski looked at Section 96 pertaining
to federal agency waivers. He asked if the state would
automatically enroll into new types of regulations or
health insurance requirements. He asked if it would cost
the state money. He requested more detail.
Ms. Wing-Heir replied that in 2015 and 2016, healthcare
insurance had almost doubled in the individual market. She
noted it was right after the Affordable Care Act (ACA).
Representative Tomaszewski noted he had lost his insurance
policy at the time.
Ms. Wing-Heier elaborated that health insurance had become
incredibly expensive in a number of years. She detailed
that Alaska lost Moda off the individual market for a
number of years and it was not a good time in Alaska for
individuals trying to procure insurance for themselves or
their families. She explained that the division had come up
with an idea and the legislature had allocated $55 million.
She detailed that the division took the highest cost claims
out and the state paid them. The idea was that because the
market was so highly subsidized, the division went to CMS
(that was already paying the subsidies) and offered to
lower the premiums through a reinsurance program. The
division had provided a scenario where CMS was paying
$200,000 in subsidies and the number was reduced to
$140,000 because the state took the highest claims out. The
division had asked if it could have the $60,000 if CMS was
only paying $140,000. She explained that the offer had been
accepted. She relayed that the program had been operating
for close to ten years and it had brought in over $800
million in federal funds from the advance premium tax
credits or subsidies. She explained that if the opportunity
presented itself to apply for another 1332 waiver to
address the cost of healthcare insurance, that the division
would have the flexibility to do so without having to make
the request to the legislature and possibly delaying the
project for two years.
7:10:09 PM
Representative Galvin asked if the state currently had
managed care. She asked how the new insurance section
played a role.
Ms. Wing-Heir responded that Alaska had managed care in
"bits and pieces." She relayed that she was the director
under Title 21, and it included 118,000 Alaskans in the
individual market, small group, and some large group. She
explained there was not much managed care in those areas.
She expounded that self-insured such as AlaskaCare and
union plans with the coalition were managed care. The state
had not been able to offer managed care to the
aforementioned consumers under Title 21. The bill would
"put the teeth back into" an HMO as an option for employers
or individuals to choose a managed care plan. She remarked
that the Alaska did not have a Medicare Advantage program
and it could not get the program without some type of
managed care statute. She recognized there had been some
issues with how the programs were sold or distributed in
the Lower 48. The division was hoping to get some offers of
Medicare Advantage and to give consumers an option. She
reasoned it made sense to give consumers an option to
select a less expensive health insurance for employees and
their families.
Representative Galvin stated that hearing the context
around Medicare Advantage made sense. She thought Ms. Wing-
Heier had stated previously there would also be some
protections in place for individuals or an employer
choosing a managed care plan to ensure they receive
coverage for items like congenital conditions or cancer.
She asked for more details.
Ms. Wing-Heir responded that she did not know of any
product under Title 21 that would do that. She knew there
had been some short-term limited plans with some
conditions, but most plans were pretty heavily regulated.
She explained that under an HMO, typically because it was a
managed care product, an individual went to a primary care
physician who would provide a referral to a specialist if
needed. She elaborated that they could do a capitated
agreement where they took a given number of people. She
noted there were all kinds of ways a managed care provider
could manage costs. She relayed that there were limited
medical resources in Alaska and some things that were not
available, such as a burn unit. The bill specified that if
an individual needed a specialist and there was not one in-
network or the HMO, the insurance agency could not deny
coverage. The same applied in the event of an emergency
when an in-network provider was not available, the HMO had
to accept and pay for a service as though it were in-
network.
7:14:44 PM
Co-Chair Foster asked his staff to review the fiscal note.
BRODIE ANDERSON, STAFF, REPRESENTATIVE NEAL FOSTER,
reviewed the zero fiscal note from DCCED, OMB Component
354, control code mnqAV. The note showed an increase of
$110,000 in receipt services collected. He deferred to the
department for additional details.
Ms. Wing-Heir clarified that the fiscal note reviewed by
Mr. Anderson was to version T of the legislation. There was
a bit of an addition to the fiscal note for version W. She
apologized that the committee did not have the updated
note. She explained that the fees and penalties on surplus
lines brokers and the wet marine and transportation tax had
been adjusted. The bill deleted a provision that allowed
the deduction for seating premiums and paid claims, which
was in line with other insurers. The result was an expected
revenue increase of approximately $110,000. She explained
how the fiscal note was impacted by version W of the bill.
She detailed that when HB 226 passed the previous year, the
division had been unable to get a fee in the new
regulations resulting from the bill. She expounded that
when the licensing bill had come back to the legislature,
the legislature added a biannual fee of $2,000 for third-
party administrators and $15,000 for pharmacy benefit
managers (there were 34 who did business in the state). She
believed the change added about $300,000 in revenue;
therefore, the total change in revenue under version W was
about $400,000.
Co-Chair Josephson asked for verification that the House
had its own version of the bill.
Ms. Wing-Heir responded affirmatively.
Co-Chair Josephson asked how many hearings the House Labor
and Commerce Committee had on the bill.
Ms. Wing-Heir responded that there had been four or five
hearings.
Co-Chair Josephson assumed that Ms. Wing-Heier had the
state's Aetna plan the way House Finance Committee members
did.
Ms. Wing-Heier responded affirmatively.
Co-Chair Josephson asked if it was better than an HMO plan.
Ms. Wing-Heir responded that it was probably better, but
she did not know for certain. She stated there was still
some directed or managed care within AlaskaCare. For
example, AlaskaCare set up the surgery center providers,
which was managed care. She believed AlaskaCare may be a
bit better, but the two should be close.
Co-Chair Josephson asked if the bill would enable employers
in Alaska to opt out of a plan like Aetna's and move their
employees into an HMO, which they currently could not do.
Ms. Wing-Heir responded that employers could currently do
it, but no one offered it because there were no teeth in
the current HMO statutes. Current statutes allowed
employers to have an HMO, but employees would get to go
wherever they wanted, meaning there was no benefit. The
bill would put the benefit back in. She stressed that it
was an option, not a mandate. Additionally, the bill
included language allowing for out of network services when
necessary.
Co-Chair Josephson asked if committee members should be
concerned about a race to the bottom in terms of quality of
care that employers might opt their employees into.
Ms. Wing-Heir responded, "I don't believe that at all." She
believed there would be the same fine doctors that were
currently providing services. She thought perhaps those
doctors would like the changes better. She compared it to
the direct health care agreement that was passed in the
prior year where more capitated agreements could be done.
For example, a clinic could agree to see all of the
employees of Joe's Plumbing for a given amount under an HMO
insurance plan. She noted that all of Joe's employees would
have to go to the same clinic.
Co-Chair Josephson asked if the bill Ms. Wing-Heier was
referring to was former Senator David Wilson's bill.
Ms. Wing-Heier responded affirmatively.
Co-Chair Josephson recalled that there had been controversy
associated with the bill.
Ms. Wing-Heier answered that the controversy was not so
much about the direct healthcare, but about whether
regulation should be taken on by the division. She
elaborated that "they wanted it to be regulated somehow,
somewhere," and it had ended up on the division's doorstep.
She clarified that the division had not asked to be
responsible for the regulation, but it had accepted it and
the bill passed.
7:20:32 PM
Representative Bynum wished there was a way to get three
more zeros added to the revenue projected in the fiscal
note, but he understood that was not currently possible. He
asked about a couple of hypotheticals that were not
included in the bill. He stated there had been many
conversations about having an opportunity for cities and
boroughs, particularly for employees in Teachers'
Retirement System (TRS) programs, to be able to partake in
health insurance in a different way. He asked if the topic
had been discussed or considered as part of the omnibus
package.
Ms. Wing-Heir responded that Title 21 did not extend to the
NEA [National Education Association] plans school districts
were under and did not extend to AlaskaCare. She clarified
that relatively speaking, Title 21 pertained to 118,000 of
730,000 Alaskans and represented a small piece of the
insured market. She explained that Title 21 did not pertain
to unions, self-insured individuals, Medicare, Medicaid, or
Tricare.
Representative Bynum remarked that he would not provide
another hypothetical because he was certain it would not be
included.
Senator Bjorkman added that it was important to reiterate
what Ms. Wing-Heier had said about the private insurance
market and its ability to have managed care. He explained
that many school districts were self-insured, including the
Kenai Peninsula Borough School District, the Mat-Su Borough
School District, and the Public Education Health Trust. He
detailed that all of the aforementioned entities had
managed care with a network and preferred providers. He
explained that the bill would set up HMO options for the
private market. He clarified that it was not a substandard
option and gave the private market an option that many
people in the public market already had.
7:23:15 PM
Representative Bynum stated there had been substantial
discussion over the past six months to a year in the
insurance market, specifically about Alaskan homeowners
being able to have their homes covered in the event of a
landslide. He noted it had been a big discussion for
Southeast Alaska. He asked if the topic had been under
discussion pertaining to the bill.
Ms. Wing-Heir responded that it had been discussed almost
daily. She did not know if there was anything she could do
in statute. The division had spoken with insurers and there
was not currently a market or company for landslide
insurance. She elaborated that the property market was
shrinking and natural disasters including wildfires,
atmospheric rivers, and storms causing billions of dollars
of property damage worldwide were impacting the cost of
property insurance. She noted that landslides were on the
list among other including wildfires in Central Alaska and
melting permafrost. She emphasized that because of changes,
it was becoming harder and harder to insure. She knew that
Southeast Alaska had a huge problem with landslide and
mudslide insurance.
Representative Bynum stated it was difficult to tell
community members living in the middle of town that their
homes and live savings could be lost with no way to recoup
them. He understood there was insurance against fire and
other things. He stated that living right in the middle of
a community with no assurances made people lose confidence
in their ability to live in Alaska communities. He remarked
that it was a big concern for him.
Co-Chair Foster asked if the fiscal note would be
forthcoming later in the evening or the following day.
Mr. Anderson shared that he had been notified by DCCED that
it trying to get the fiscal note to the committee hopefully
for distribution during the current evening, so that if and
when the bill moved, the attached fiscal notes would
reflect the current version of the bill.
7:26:05 PM
AT EASE
7:29:19 PM
RECONVENED
Co-Chair Foster relayed that a bill could be passed without
the updated fiscal note as long as the updated note was
received before the bill was sent on from the committee to
the House floor. He planned to have the updated fiscal note
by the time the bill was heard by the committee the
following day.
Representative Galvin referenced Ms. Wing Heier's earlier
discussion about changing some fees from $3,000 to $6,000.
She understood the fees had not been changed in many years.
She asked if the updated fees would fall in line with other
existing fees and move the target to the right number.
Ms. Wing-Heir responded that the $3,000 to $6,000 was a
threshold for a surcharge on a workers' compensation policy
and did not go to the state in any way. She explained that
there was currently a $300 biannual fee for third-party
adjusters and the legislature was asking to increase the
number to a biannual fee of $5,000. There was not currently
a fee on pharmacy benefit managers and the bill would add a
$15,000 biannual fee. She explained that those fees fell
right in the middle of fees charged in other states. She
relayed that Arkansas charged $40,000 for a pharmacy
benefit manager. She estimated that Alaska was probably on
the low end, but there were other states like New York with
a fee of $25,000 for three years.
Co-Chair Foster noted that due to the complexity of the
bill, some committee members had indicated they would like
to sleep on it. He discussed his schedule plan for the
following day.
7:33:25 PM
AT EASE
7:35:16 PM
RECONVENED
Co-Chair Foster believed the soonest the bill could be read
across on the floor was Monday.
Co-Chair Schrage relayed that the soonest the bill could be
on the floor was Monday. He suggested holding the bill
until the following day to receive the fiscal note and
report it out.
CSSB 132(FIN) was HEARD and HELD in committee for further
consideration.
Co-Chair Foster reviewed the schedule for the following
day.
Mr. Anderson reviewed the bill numbers for the following
day's meeting.
ADJOURNMENT
7:38:36 PM
The meeting was adjourned at 7:38 p.m. HBHh