Legislature(2001 - 2002)
04/22/2002 01:43 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
April 22, 2002
1:43 p.m.
MEMBERS PRESENT
Representative Norman Rokeberg, Chair
Representative Jeannette James
Representative John Coghill
Representative Kevin Meyer
Representative Ethan Berkowitz
Representative Albert Kookesh
MEMBERS ABSENT
Representative Scott Ogan, Vice Chair
COMMITTEE CALENDAR
HOUSE BILL NO. 489
"An Act relating to cruelty to animals."
- MOVED CSHB 489(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 180
"An Act requiring child services providers to obtain criminal
background checks for child services workers."
- MOVED CSHB 180(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 510
"An Act relating to the regulation of commercial motor vehicles
to avoid loss or withholding of federal highway money, and to
out-of-service orders concerning commercial motor vehicles;
amending Rule 43.1, Alaska Rules of Administration; and
providing for an effective date."
- MOVED HB 510 OUT OF COMMITTEE
HOUSE BILL NO. 246
"An Act relating to confidentiality of records and to cease and
desist orders of the division of insurance, to insurance company
investments, to unauthorized insurers, to surplus lines
insurance, to health insurance, to life insurance, to annuity
insurance, to consumer credit insurance, to title insurance, and
to hospital and medical service corporations; and providing for
an effective date."
- MOVED CSHB 246(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 460
"An Act relating to actions for monopolies and restraint of
trade, including proof of damages; amending Rule 82, Alaska
Rules of Civil Procedure; and providing for an effective date."
- MOVED HB 460 OUT OF COMMITTEE
CS FOR SENATE BILL NO. 222(FIN)
"An Act relating to certain motor vehicles that are required to
yield to following traffic."
- BILL HEARING POSTPONED TO 4/24/02
PREVIOUS ACTION
BILL: HB 489
SHORT TITLE:CRUELTY TO ANIMALS
SPONSOR(S): REPRESENTATIVE(S)CHENAULT
Jrn-Date Jrn-Page Action
02/19/02 2319 (H) READ THE FIRST TIME -
REFERRALS
02/19/02 2319 (H) JUD
02/22/02 2370 (H) COSPONSOR(S): KOTT
03/01/02 2450 (H) COSPONSOR(S): CROFT
03/06/02 2497 (H) COSPONSOR(S): JAMES, FOSTER
03/15/02 (H) JUD AT 1:00 PM CAPITOL 120
03/15/02 (H) Heard & Held
03/15/02 (H) MINUTE(JUD)
03/15/02 2564 (H) COSPONSOR(S): LANCASTER
03/20/02 2628 (H) COSPONSOR(S) REMOVED: JAMES
04/19/02 (H) JUD AT 1:30 PM CAPITOL 120
04/19/02 (H) Heard & Held -- Time Change
MINUTE(JUD)
04/22/02 (H) JUD AT 1:30 PM CAPITOL 120
BILL: HB 180
SHORT TITLE:BACKGROUND CHECK OF YOUTH WORKER
SPONSOR(S): REPRESENTATIVE(S)MCGUIRE
Jrn-Date Jrn-Page Action
03/13/01 0560 (H) READ THE FIRST TIME -
REFERRALS
03/13/01 0560 (H) HES, JUD
03/16/01 0636 (H) COSPONSOR(S): DYSON
04/10/01 (H) HES AT 3:00 PM CAPITOL 106
04/10/01 (H) <Bill Postponed to 4/19>
04/19/01 (H) HES AT 3:00 PM CAPITOL 106
04/19/01 (H) Heard & Held
04/19/01 (H) MINUTE(HES)
02/04/02 2152 (H) COSPONSOR(S): CROFT
04/18/02 (H) HES AT 3:00 PM CAPITOL 106
04/18/02 (H) Moved CSHB 180(HES) Out of
Committee
MINUTE(HES)
04/19/02 3048 (H) COSPONSOR(S): STEVENS
04/22/02 (H) JUD AT 1:30 PM CAPITOL 120
BILL: HB 510
SHORT TITLE:COMMERCIAL MOTOR VEHICLES:REGULATIONS
SPONSOR(S): TRANSPORTATION
Jrn-Date Jrn-Page Action
03/22/02 2644 (H) READ THE FIRST TIME -
REFERRALS
03/22/02 2644 (H) TRA, JUD
03/28/02 (H) TRA AT 1:00 PM CAPITOL 17
03/28/02 (H) -- Meeting Canceled --
04/02/02 (H) TRA AT 1:00 PM CAPITOL 17
04/02/02 (H) Moved Out of Committee
04/02/02 (H) MINUTE(TRA)
04/03/02 2777 (H) TRA RPT 4DP
04/03/02 2777 (H) DP: MASEK, SCALZI, WILSON,
KOHRING
04/03/02 2777 (H) FN1: ZERO(DOT)
04/22/02 (H) JUD AT 1:30 PM CAPITOL 120
BILL: HB 246
SHORT TITLE:OMNIBUS INSURANCE BILL
SPONSOR(S): LABOR & COMMERCE BY REQUEST
Jrn-Date Jrn-Page Action
04/17/01 1015 (H) READ THE FIRST TIME -
REFERRALS
04/17/01 1015 (H) L&C, JUD
04/15/02 (H) L&C AT 3:15 PM CAPITOL 17
04/15/02 (H) Moved CSHB 246(L&C) Out of
Committee
MINUTE(L&C)
04/17/02 2967 (H) L&C RPT CS(L&C) NT 5DP 1NR
04/17/02 2967 (H) DP: ROKEBERG, HAYES,
CRAWFORD, KOTT,
04/17/02 2967 (H) MURKOWSKI; NR: MEYER
04/17/02 2968 (H) FN1: ZERO(CED)
04/22/02 (H) JUD AT 1:30 PM CAPITOL 120
BILL: HB 460
SHORT TITLE:ANTITRUST CIVIL COURT ACTIONS
SPONSOR(S): REPRESENTATIVE(S)CROFT
Jrn-Date Jrn-Page Action
02/19/02 2312 (H) READ THE FIRST TIME -
REFERRALS
02/19/02 2312 (H) L&C, JUD
04/17/02 (H) L&C AT 3:15 PM CAPITOL 17
04/17/02 (H) Moved Out of Committee
MINUTE(L&C)
04/18/02 3001 (H) L&C RPT 3DP 3NR
04/18/02 3001 (H) DP: CRAWFORD, HAYES,
MURKOWSKI;
04/18/02 3001 (H) NR: ROKEBERG, MEYER, HALCRO
04/18/02 3001 (H) FN1: INDETERMINATE(LAW)
04/18/02 3019 (H) FIN REFERRAL ADDED AFTER JUD
04/22/02 (H) JUD AT 1:30 PM CAPITOL 120
WITNESS REGISTER
HEATHER M. NOBREGA, Staff
to Representative Norman Rokeberg
House Judiciary Standing Committee
Alaska State Legislature
Capitol Building, Room 118
Juneau, Alaska 99801
POSITION STATEMENT: Explained the changes made in the proposed
committee substitute (CS) to HB 489.
REPRESENTATIVE LESIL McGUIRE
Alaska State Legislature
Capitol Building, Room 418
Juneau, Alaska 99801
POSITION STATEMENT: Sponsor of HB 180.
JOANNE GIBBENS, Program Administrator
Central Office
Division of Family & Youth Services (DFYS)
Department of Health & Social Services (DHSS)
PO Box 110630
Juneau, Alaska 99811-0630
POSITION STATEMENT: Responded to questions during discussion of
HB 180.
JACK F. BOWEN, Alaska Fast Pitch Softball Association (ph)
11224 Via Balboa
Anchorage, Alaska 99515-2909
POSITION STATEMENT: Testified in support of HB 180.
MIKE KRIEBER, Staff
to Representative Vic Kohring
House Transportation Standing Committee
Alaska State Legislature
Capitol Building, Room 24
Juneau, Alaska 99801
POSITION STATEMENT: Presented HB 510 on behalf of the sponsor,
the House Transportation Standing Committee.
AVES D. THOMPSON, Director
Anchorage Office
Division of Measurement Standards & Commercial Vehicle
Enforcement
Department of Transportation & Public Facilities (DOT&PF)
12050 Industry Way
Anchorage, Alaska 99515
POSITION STATEMENT: Assisted with the presentation of HB 510
and responded to questions.
FRANK DILLON; Executive Vice President
Alaska Trucking Association, Inc.
3443 Minnesota Drive
Anchorage, Alaska 99503
POSITION STATEMENT: Testified in support of HB 510.
AMY ERICKSON, Staff
to Representative Lisa Murkowski
House Labor and Commerce Standing Committee
Alaska State Legislature
Capitol Building, Room 408
Juneau, Alaska 99801
POSITION STATEMENT: Presented HB 246 on behalf of the sponsor,
the House Labor and Commerce Standing Committee.
KATIE CAMPBELL, Actuary L/H
Central Office, Division of Insurance
Department of Community & Economic Development (DCED)
PO Box 110805
Juneau, Alaska 99811-0805
POSITION STATEMENT: Assisted with the presentation of HB 246
and responded to questions.
BRUCE GALE, Employee Benefit Consultant
Willis of Alaska, Inc.
4220 B Street
Anchorage, Alaska 99503
POSITION STATEMENT: Provided comments during discussion of HB
246.
CLYDE (ED) SNIFFEN, JR., Assistant Attorney General
Fair Business Practices Section
Civil Division (Anchorage)
Department of Law (DOL)
1031 West 4th Avenue, Suite 200
Anchorage, Alaska 99501-1994
POSITION STATEMENT: Presented HB 460.
ACTION NARRATIVE
TAPE 02-53, SIDE A
Number 0001
CHAIR NORMAN ROKEBERG called the House Judiciary Standing
Committee meeting to order at 1:43 p.m. Representatives
Rokeberg, Coghill, Meyer, and Berkowitz were present at the call
to order. Representatives James and Kookesh arrived as the
meeting was in progress.
HB 489 - CRUELTY TO ANIMALS
Number 0050
CHAIR ROKEBERG announced that the first order of business would
be HOUSE BILL NO. 489, "An Act relating to cruelty to animals."
[Before the committee was the proposed committee substitute (CS)
for HB 489, version 22-LS1580\O, Luckhaupt, 4/18/02, adopted as
a work draft on 4/19/02.]
Number 0060
REPRESENTATIVE MEYER moved to adopt the proposed committee
substitute (CS) for HB 489, version 22-LS1580\S, Luckhaupt,
4/22/02, as a work draft. There being no objection, Version S
was before the committee.
Number 0130
HEATHER M. NOBREGA, Staff to Representative Norman Rokeberg,
House Judiciary Standing Committee, Alaska State Legislature,
explained that in Version S, the "minimal standard" language was
removed as requested; the provision making a second offense a
felony was removed, thus cruelty to animals remains a class A
misdemeanor; and, as suggested by the Department of Law (DOL), a
provision was added stating that each instance of a violation is
a separate violation, thus a single situation can result in
multiple counts. She noted that members have been provided with
a memo from the drafter detailing why he rejected the suggestion
to move the special sentencing provisions to AS 12.55.
Number 0235
REPRESENTATIVE MEYER moved to report the proposed committee
substitute (CS) for HB 489, version 22-LS1580\S, Luckhaupt,
4/22/02, out of committee with individual recommendations and
the accompanying fiscal notes. There being no objection, CSHB
489(JUD) was reported from the House Judiciary Standing
Committee.
CHAIR ROKEBERG called an at-ease from 1:49 p.m. to 1:50 p.m.
HB 180 - BACKGROUND CHECK OF YOUTH WORKER
Number 0281
CHAIR ROKEBERG announced that the next order of business would
be HOUSE BILL NO. 180, "An Act requiring child services
providers to obtain criminal background checks for child
services workers." [Before the committee was CSHB 180(HES).]
Number 0289
REPRESENTATIVE LESIL McGUIRE, Alaska State Legislature, sponsor,
explained that HB 180 will update the statutes pertaining to
licensing of foster homes, residential child care facilities,
semi-secure residential child care facilities, secure
residential psychiatric treatment centers, child placement
agencies, and maternity homes, all of which are currently listed
in AS 47.35.010. She observed that the legislature has already
established a policy of protecting children through the use of
background checks. She mentioned that this update will conform
Alaska's statutes to the "Adoption & Safe Families Act" (ASFA),
which was passed by Congress and signed into law by President
Clinton in 1997. She noted that the goal of the ASFA was to
promote safety for the nation's children; Congress and the
administration became concerned after hearing reports that
children were being left in, or returned to, unsafe situations.
REPRESENTATIVE McGUIRE explained that the second part of HB 180
creates a task force that will research the topic of criminal
background checks for other entities that provide services to or
that have direct or immediate contact with children in Alaska.
She said that she has been researching ways to better protect
children who participate in various children's clubs and
activities. She relayed that the concept of HB 180 originated
when she learned that an individual with a history of sexual
predation had molested a constituent's child. The task force
created by HB 180 will analyze whether more can be done to
protect children in areas other than the aforementioned
institutions, and will be composed of five members of the
legislature, four members of the public who are child service
providers, and possibly commissioners or designees of certain
administrative departments. Because of concerns about budgetary
constraints, she added, rather than simply requiring background
checks for all groups that perform services for children, the
task force created by HB 180 will research the issue and provide
a report to the legislature.
REPRESENTATIVE McGUIRE noted that a sectional analysis has been
provided, adding that with the exception of a provision that
will allow for the discretionary denial of licenses, there are
no major policy changes in HB 180. Currently, a license is
automatically denied if an individual has been convicted of
certain crimes; this aforementioned provision - Section 4 -
lists other crimes for which the department will have the
discretion to deny a license. Section 4 allows the department
to analyze whether a person should be issued a license if,
within the preceding five years, that person has been convicted
of the crimes listed therein. She mentioned that Section 1
allows the department to accept licenses issued by other
entities that have state of federal licensing authority, and
that this provision will facilitate placement.
Number 0801
CHAIR ROKEBERG asked Representative McGuire how "wedded" she was
to the creation of the task force, and how the fiscal note could
be zero.
REPRESENTATIVE McGUIRE said that fiscal note is zero because the
plan is to use existing resources. In response to another
question, she said that with HB 180, the Joint Committee on
Administrative Regulation Review (JARR) is not creating new
regulations; rather, the JARR will simply "look at the
possibility that solving the problem may be addressed through
regulations, ... through laws, or perhaps ... through ...
something called the 'safe seal program' ... [which] is
patterned after the Better Business Bureau."
REPRESENTATIVE MEYER said he supports HB 180.
Number 0966
JOANNE GIBBENS, Program Administrator, Central Office, Division
of Family & Youth Services (DFYS), Department of Health & Social
Services (DHSS), in response to a question, said that Section 3
outlines the federal requirements in terms of denial of
licensure. There are two parts to Section 3, she explained:
one part - subsection (a) - provides for the mandatory denial of
a license if one has been convicted of any the crimes listed
therein, and the other part - subsection (b) - provides for the
mandatory denial of a license if one has been convicted within
the previous five years of any the crimes listed therein. She
noted that the federal law refers to felony convictions;
therefore, to conform with the federal law, if there have been
any felony convictions, the state is not allowed to issue a
license.
CHAIR ROKEBERG noted that Sections 3 and 4 refer to the issuance
of an initial license. He asked, "What if you already have a
license?"
MS. GIBBENS explained that that circumstance is addressed in
Sections 7, 8, and 10. For the first year, the state issues a
provisional license, and at the end of that year, the division
can authorize a biennial license, which must be renewed every
two years. During the renewal process, a background check is
performed again to ensure that none of the prohibited crimes
have been committed. Also, if a provider discovers that an
employee has committed one of the prohibited crimes, the
provider must notify the department and take appropriate action.
REPRESENTATIVE McGUIRE referred to Section 13, and mentioned
that it "comports with the federal-level effort at trying to get
kids in safe places." Section 13, she offered, says that "you
don't automatically have to shut down, putting those kids out of
a place to stay: if you're currently operating [a facility],
and an employee discloses that serious offense and ... you take
action to remove that employee, you can continue operating."
REPRESENTATIVE JAMES asked what other licensure requirements are
there that specifically relate to a person's ability to "do the
job." Are there any other criteria other than simply being free
of criminal charges?
MS. GIBBENS said that there are extensive licensing regulations
already in existence, both for foster homes and for residential
care facilities, that specifically address other safety issues
related to children, such as the type of facility, the size of
the rooms, the type of treatment, and the type of discipline.
Number 1230
REPRESENTATIVE McGUIRE noted that AS 47.35.017 contains the
statutory requirements for licensure of foster homes,
residential child care facilities, semi-secure residential child
care facilities, secure residential psychiatric treatment
centers, child placement agencies, and maternity homes. She
also noted that the department has promulgated regulations that
dovetail with these statutory requirements.
REPRESENTATIVE JAMES remarked that her concern centers on what
is required of the employees in those types of facilities.
MS. GIBBENS said that there are regulations governing employees'
qualifications. There are certain requirements for training;
the division prefers individuals to have at least a bachelor's
degree, but that may be waived, since grantees are required to
provide a certain level of training to staff.
REPRESENTATIVE JAMES said she is concerned about the
requirements for people who work in child care centers, adding
that it is unlikely that those employees will have bachelor's
degrees. Aside from checking an individual's criminal record,
she asked, what other protections are there with regard to how
much those employees are required to know.
MS. GIBBENS asked to defer that question to the Department of
Education and Early Development, which is the licensing
authority for daycare programs. She noted that HB 180 does not
have anything to do with child care workers in daycare centers.
REPRESENTATIVE COGHILL remarked that Section 2 refers to
domiciliary services, and that this is another situation where
"they've already done it and now we're going to put it in
statute." He opined that the emergence of boarding schools and
charter schools that provide boarding services has created the
need for Section 2.
Number 1418
REPRESENTATIVE JAMES opined that there ought to be a broader
application of the protections offered in [HB 180], so that they
also pertain to child care facilities offering daycare. She
reiterated that she wants to know "what kind of training these
people have."
REPRESENTATIVE McGUIRE offered that she does have another
proposal for a bill that would address the issues raised by
Representative James.
REPRESENTATIVE BERKOWITZ opined that the proposed language in
Section 5 appears to be somewhat of a retreat from the
protections that children currently enjoy, because under
existing statute, licenses can be pulled if someone is arrested
for, charged with, or convicted of a serious offense, whereas
the proposed language stipulates that a license can only be
pulled if someone is convicted of a crime listed in proposed AS
47.35.19(a). So even if there is probable cause to believe that
someone has committed any of these crimes, the protections that
currently exist would be taken away. He offered that although
the language proposed in Section 5 refers to a more discrete
list and is preferable to simply saying "a serious offense", he
would also like to see the insertion of "been indicted for or
convicted of" after "has" on page 4, line 25. He indicated that
he does not mind if the new language does not refer to the
arrest stage, since arrests are sometimes "charged high or there
might not be proof to bear it out." Whereas with an indictment,
he noted, at least it's gone through a modicum of process:
"it's a felony, a grand jury's heard it, there's been some
vetting."
REPRESENTATIVE McGUIRE said she would consider Representative
Berkowitz's suggestion to be a friendly amendment, adding that
it would make the bill stronger.
Number 1597
REPRESENTATIVE BERKOWITZ made a motion to adopt Amendment 1 on
page 4, line 25: After "has" delete "a conviction for", and
insert "been indicted for or convicted of". There being no
objection, Amendment 1 was adopted.
REPRESENTATIVE BERKOWITZ then noted that the task force to be
established by HB 180 appears to be focusing on a fairly
discrete question. He said: "I was wondering if there's any
other research on whether sufficient criminal background checks
exist, and have we done any budget audits? Are there a rash of
complaints? I was sort of wondering what the empirical evidence
is, that we're starting with today."
REPRESENTATIVE McGUIRE replied that her staff has done extensive
research regarding what other states have done, and that there
have not been any budget and audit reports done because this
isn't currently an area that requires licensure. She offered
that establishing the task force involves making a fundamental
policy change regarding whether to step into an area that
doesn't currently require licensure, such as when a parent takes
a child and puts him/her under the direct supervision of an
adult in a volunteer situation. She said that there is a lot of
evidence showing that there are problems in this area. She
offered that such evidence "comes from the community," adding
that she has received over 100 e-mails from people in the
community whose children have been victimized, sometimes by
people who are prior offenders. At issue, she said, is that
sexual predators tend to seek out opportunities where they have
direct contact and control over children.
REPRESENTATIVE BERKOWITZ noted that [the task force] has a zero
fiscal note, adding that to "make things go away," it requires
an act of legislative legerdemain. He asked how that came to
pass.
REPRESENTATIVE McGUIRE reiterated that she, in collaboration
with the department, has decided to use existing resources.
REPRESENTATIVE BERKOWITZ said he has a concern regarding the
constitutionality of the first sentence in subsection (b) of
Section 14, located on page 9, lines 2 and 3. He elaborated:
"In essence, we are passing an act of specific legislation for
an individual - that would be the chair of the [Joint Committee
on Administrative Regulation Review]."
REPRESENTATIVE McGUIRE offered that instead, the language could
simply say, "the task force shall be appointed by the Speaker of
the House [of Representatives]."
Number 1785
REPRESENTATIVE BERKOWITZ made a motion to adopt Amendment [3]:
To delete the line beginning "The" and ending "force"
on page 9 [lines 2 and 3]. And then the
[commensurate] change would be on line 4: instead of
"two additional members", it would read "three members
of the House".
REPRESENTATIVE McGUIRE offered an amendment to Amendment [3]:
"one of which who will chair".
REPRESENTATIVE JAMES asked [of the report], "Is it going to get
done this summer?"
REPRESENTATIVE McGUIRE said that [lines 18 and 19] stipulate
that the recommendations will be presented to the legislature in
a written report by January 21, 2003. She said she would agree
to an amendment changing the date to February 21, 2003.
Number 1862
REPRESENTATIVE MEYER made a motion to adopt Amendment 2, on page
9, line 19: Delete "January" and insert "February".
REPRESENTATIVE BERKOWITZ asked: "What happens to legislative
members who are on the [task force] once there's a new
legislature?"
CHAIR ROKEBERG noted that the change being discussed pertains to
when the report is due.
REPRESENTATIVE JAMES suggested that perhaps those legislators
would become public members.
REPRESENTATIVE BERKOWITZ questioned that possibility.
REPRESENTATIVE McGUIRE noted that HB 180 does not specifically
require a legislator to present the report. She said that she
envisions that the task force will be doing the bulk of its work
during the interim.
Number 1910
CHAIR ROKEBERG noted that there were no objections to Amendment
2. Therefore, Amendment 2 was adopted.
Number 1946
REPRESENTATIVE BERKOWITZ restated his motion to adopt Amendment
3: After deleting all of the first sentence in subsection (b)
on page 9, it should read: "The speaker of the House of
Representatives shall appoint three members of the House as
voting members, one of whom shall serve as chair".
REPRESENTATIVE JAMES said she has concern with that amendment
because there will be three Representatives and only two
Senators, which doesn't seem balanced.
REPRESENTATIVE BERKOWITZ indicated that the language also ought
to stipulate that a member of the minority be on the task force.
CHAIR ROKEBERG noted that that is typically the case.
REPRESENTATIVE McGUIRE added that that is her intention as well.
Number 2025
CHAIR ROKEBERG restated Amendment 3, and noted that there were
no objections to the adoption of Amendment 3. Therefore
Amendment 3 was adopted.
Number 2040
REPRESENTATIVE JAMES made a motion to adopt Amendment 4, to have
only two members of the House appointed to the task force.
REPRESENTATIVE BERKOWITZ objected.
REPRESENTATIVE McGUIRE explained that originally, the task force
was set up to have an even number of voting members; because of
concerns expressed in another committee, however, the language
was changed to allow for an odd number of voting members - five
legislative members and four public members.
Number 2118
REPRESENTATIVE JAMES, after some discussion regarding possible
membership makeup, made a motion to adopt Amendment 4, which she
restated as providing that the Speaker of the House shall
appoint two members from the House, that the President of the
Senate shall appoint two members from the Senate, that there
shall be five public members, and that the task force shall
appoint its own chair.
Number 2144
CHAIR ROKEBERG made a motion to amend Amendment 4 such that each
body of the legislature appoint [a member from the majority
caucus and a member from the minority caucus] for a total of
four members. There being no objection, the amendment to
Amendment 4 was adopted.
REPRESENTATIVE JAMES, for clarification, indicated that the
Speaker of the House and the President of the Senate shall,
together, appoint the public members.
Number 2193
CHAIR ROKEBERG noted that there were no objections to Amendment
4, as amended. Therefore, Amendment 4, as amended, was adopted.
[For the benefit of the reader, the end result is that Amendment
3 merely deletes the first sentence of subsection (b) on page 9,
and Amendment 4, as amended, addresses the appointment to and
the composition of the task force.]
CHAIR ROKEBERG asked whether HB 180 only applies to licensure of
new facilities.
MS. GIBBENS indicated that HB 180 addresses licensure of
existing facilities, noting that currently such facilities have
to go through a licensure procedure. The only thing new, she
remarked, is the addition of boarding schools, which are not
currently explicitly addressed in statute.
Number 2223
JACK F. BOWEN, Alaska Fast Pitch Softball Association (ph),
testified via teleconference. He said that his organization
requires that a background check be run on individuals prior to
their being allowed to work with youth. He opined that HB 180
is a step in the right direction, and that one of the best
things about it is the formation of the task force, which will
be able to present information to the legislature regarding
other areas that need to be looked at with regard to licensing
and background checks.
REPRESENTATIVE JAMES commented that someday, background checks
may have to be performed on everyone who works with or around
children, although such a requirement may not necessarily need
to be legislated.
CHAIR ROKEBERG closed the public hearing on HB 180.
REPRESENTATIVE MEYER said he agrees with Representative James:
everyone who works in the field of daycare should have a
background check.
REPRESENTATIVE JAMES said that it is not so much that a person's
criminal history would preclude him/her from working in this
field, as it is that people should be made aware of what an
individual's history is.
MS. GIBBENS, in response to a question, noted that HB 180 does
not apply to private daycare centers, although the Department of
Education and Early Development has extensive, existing statutes
that address background checks for licensed child care centers.
REPRESENTATIVE McGUIRE, in response to a question, said that she
is not familiar with those particular statutes, but posited that
they are probably similar to DHSS's statutes regarding crimes
that disqualify a person from working in a given field. To
clarify, she reiterated that via HB 180: "We are updating the
licensing requirements for foster homes, residential child care
facilities, semi-secure residential child care facilities,
secure residential psychiatric treatment centers, child
placement agencies, [and] maternity homes."
CHAIR ROKEBERG called an at-ease from 2:34 p.m. to 2:35 p.m.
Number 2372
REPRESENTATIVE MEYER moved to report CSHB 180(HES), as amended,
out of committee with individual recommendations and the
accompanying zero fiscal note. There being no objection, CSHB
180(JUD) was reported out of the House Judiciary Standing
Committee.
CHAIR ROKEBERG called an at-ease from 2:36 p.m. to 2:37 p.m.
HB 510 - COMMERCIAL MOTOR VEHICLES:REGULATIONS
TAPE 02-53, SIDE B
Number 2380
CHAIR ROKEBERG announced that the next order of business would
be HOUSE BILL NO. 510, "An Act relating to the regulation of
commercial motor vehicles to avoid loss or withholding of
federal highway money, and to out-of-service orders concerning
commercial motor vehicles; amending Rule 43.1, Alaska Rules of
Administration; and providing for an effective date."
Number 2375
MIKE KRIEBER, Staff to Representative Vic Kohring, House
Transportation Standing Committee, Alaska State Legislature,
said, on behalf of the sponsor, the House Transportation
Standing Committee (HTRA), that the Department of Transportation
& Public Facilities (DOT&PF) requested the introduction of HB
510. He indicated that HB 510 is intended to complete Executive
Order 98 by transferring from the Department of Public Safety
(DPS) to [the DOT&PF] the authority to promulgate regulations
pertaining to the transportation of hazardous materials.
Number 2324
AVES D. THOMPSON, Director, Anchorage Office, Division of
Measurement Standards & Commercial Vehicle Enforcement,
Department of Transportation & Public Facilities (DOT&PF),
testified via teleconference. He said:
We're the folks that operate the weigh stations, issue
permits, conduct driver/vehicle safety inspections, et
cetera. As Mr. Krieber mentioned, [HB 510], as
proposed, completes the consolidation of truck size,
weight, ... safety, and permitting regulatory programs
that was started with Executive Order 98 at the
beginning of fiscal year [FY] 98. Most of the
authority to effectively operate the truck, size,
weight, ... safety, and permitting programs was given
at the time to the department. The authority to
promulgate regulations for driver/vehicle safety
requirements and hazardous materials transport was not
transferred and currently resides in the Department of
Public Safety. House Bill 510 transfers that
authority to the [DOT&PF]....
The hazardous materials transport regulations deal
with notification, movement, labeling, and
documentation of hazardous materials loads. Federal
law requires that the state commercial motor vehicle
safety regulations be no less stringent than federal
law or regulations; under 49 U.S.C. 31141, state
commercial motor vehicle regulations are preempted if
the Secretary of Transportation finds that state
commercial motor vehicle regulations are less
stringent. In the past, Alaska has avoided that
result by incorporating, by reference, the federal
motor carrier safety regulations, which provide
equipment standards, working conditions for drivers,
and vehicle inspection standards. Federal law also
requires that hazardous materials transport
regulations be compatible with federal law. Again,
Alaska has avoided preemption by incorporating, by
reference, the federal motor carrier hazardous
materials transport regulations.
Number 2235
MR. THOMPSON continued:
Alaska has not received any formal sanctions from the
Federal Motor Carrier Safety Administration [FMCSA] on
our currently outdated driver/vehicle and hazardous
materials transport regulations. At the present time,
Alaska's regulations in this area ... incorporate, by
reference, the federal regulations as they existed in
1995. We have new regulation drafts prepared and
ready to go through the adoption process as soon as
this legislative change is effective.
In summary ..., passage of [HB 510] completes the
transfer of the regulatory authority over commercial
... motor vehicles to DOT&PF. It is in the best
interest of the state, and the trucking industry, for
this transfer to occur, because the people responsible
for the adoption of the commercial motor vehicle
safety and hazardous materials transport regulations
will also be enforcing the standards. With the
changes made through [HB 510], the trucking industry
can realize the objective of "one-stop shopping" in
terms of commercial vehicle operations.
REPRESENTATIVE COGHILL asked if, in adopting HB 510, the federal
laws would still be adopted by reference.
MR. THOMPSON said yes.
REPRESENTATIVE COGHILL asked whether, via adoption of HB 510,
the state's regulations will become too rigid to accept changes
in the federal regulations.
MR. THOMPSON replied:
The problem here is that the [DOT&PF] does not have
the authority to promulgate these regulations, and the
[DPS] had promulgated the set that is currently
enforced. And when ... we assumed that in Executive
Order 98 that that authority had come along with it,
when we went to adopt the later version of the federal
motor carrier safety regulations, we learned that we
in fact did not have the authority. What this piece
of legislation does is to correct that deficiency.
REPRESENTATIVE COGHILL surmised, then, that currently there are
federal regulations and the state will be adopting those
regulations into state statute.
MR. THOMPSON said that is correct, with some modifications,
though.
Number 2133
FRANK DILLON, Executive Vice President, Alaska Trucking
Association, Inc., testified via teleconference in support of HB
510. He said that HB 510 is truly a housekeeping mechanism; it
is truly something that should have been done with the exercise
of Executive Order 98, and it only affects a very small portion
of trucks in Alaska. The nature of the freight determines
whether a truck is involved in interstate commerce. Most
trucking activity involves freight that arrives by ship or
barge, or comes up the highway; this freight, therefore, is
already covered by the federal regulations as revised October,
2001. Thus most trucking companies are already complying with
regulations that are as stringent as state regulations will be
once they are adopted. He noted, however, that a small
percentage of drivers might make the argument that the federal
regulations that are more stringent, in particular those found
on page 2 of HB 510 regarding the consumption of alcohol or
other substances, have never been adopted by the state. He
urged members to move quickly on this issue.
MR. DILLON, in response to a question, noted that the provisions
regarding alcohol and other substances, found in Section 2 of HB
510, have changed substantially in the federal code since 1995,
and although many provisions have been adopted via reference, HB
510 will allow for the adoption of state regulations that will
be more in tune with federal regulations, particularly with
regard to hazardous materials issues. In response to another
question, he indicated his belief that provisions regarding
commercial motor vehicle impairment are currently located in
Title 28. He added that while it is an offense to drive a
commercial vehicle with a breath alcohol concentration (BAC) of
.04, the actual dispatch of a driver is prohibited if there is
even a hint of alcohol on the driver's breath.
REPRESENTATIVE JAMES asked Mr. Dillon whether he is comfortable
with the regulations that will be promulgated once HB 510
becomes law.
MR. DILLON said he is comfortable with what will be promulgated,
and confident in the public process should there be anything
that still needs to be addressed once the regulations are ready
for public comment. He added that his organization has a very
close working relationship with the [DOT&PF], and has pushed
very strongly for the tightest safety regulations that can be
provided for under the law, and those currently are the federal
standards.
Number 1943
REPRESENTATIVE JAMES moved to report HB 510 out of committee
with individual recommendations and the accompanying zero fiscal
note.
REPRESENTATIVE BERKOWITZ commented: "I've been sitting in these
chambers for a long time, and it always befuddles me how
Representative Kohring can move to adopt federal regulations; I
thought that was incompatible with his ten-point plan of the
universe."
Number 1906
CHAIR ROKEBERG noted that there were no objections to the
motion. Therefore, HB 510 was reported from the House Judiciary
Standing Committee.
CHAIR ROKEBERG called an at-ease from 2:47 p.m. to 2:50 p.m.
HB 246 - OMNIBUS INSURANCE BILL
Number 1900
CHAIR ROKEBERG announced that the next order of business would
be HOUSE BILL NO. 246, "An Act relating to confidentiality of
records and to cease and desist orders of the division of
insurance, to insurance company investments, to unauthorized
insurers, to surplus lines insurance, to health insurance, to
life insurance, to annuity insurance, to consumer credit
insurance, to title insurance, and to hospital and medical
service corporations; and providing for an effective date."
[Before the committee was CSHB 246(L&C).]
Number 1889
AMY ERICKSON, Staff to Representative Lisa Murkowski, House
Labor and Commerce Standing Committee, Alaska State Legislature,
said, on behalf of the sponsor, the House Labor and Commerce
Standing Committee, that HB 246 makes corrections and
clarifications to the insurance statutes. She elaborated:
The main areas addressed are: regulatory structure of
multiple [employer] welfare arrangements [MEWAs];
confidentiality of records; late payments for premium
taxes; annual fees to operate joint insurance
arrangements; revisions to property-casualty guaranty
fund assessments; and stop-loss insurance standards.
This is non-controversial; we've had no opposition in
the process, and the Division of Insurance can testify
to that as well.
CHAIR ROKEBERG noted that there is a proposed amendment,
hereafter known as Amendment 1, which read [original punctuation
provided]:
Page 9, Line 6:
Insert a new bill section to read:
*SEC. 23. AS 21.27.330(b) is amended to read:
(b) If a licensee that is a firm transacts
business at more than one place of business, [IN THIS
STATE], the licensee shall pay a license fee or each
place of business that transacts business in this
state or relative to a subject resident, located or to
be performed in this state.
Number 1849
KATIE CAMPBELL, Actuary L/H, Central Office, Division of
Insurance, Department of Community & Economic Development
(DCED), said that [Amendment 1] corrects a drafting error in
legislation passed last year, clarifying that any branch office
that is actually transacting business in Alaska shall pay a
licensing fee.
CHAIR ROKEBERG noted that [Amendment 1] will affect the statute
related to the Gramm-Leach-Bliley Act (GLBA).
MS. CAMPBELL confirmed this, adding that last year's bill
changed the provision so that instead of every single branch
location being licensed, it would just be the main office that
receives a license, and then the branch offices would pay a fee.
The intent was to not change the fee structure, but the words
"in this state" were mistakenly added, and this created some
interpretation problems; [Amendment 1] removes that language.
CHAIR ROKEBERG asked Ms. Campbell to explain to the committee
what a MEWA is and why there is substantial language pertaining
to MEWAs.
MS. CAMPBELL said:
A multiple employer welfare arrangement [MEWA] is ...
defined under ... federal ERISA [Employee Retirement
and Income Security Act of 1974] laws, and it's
basically [when] two or more employers can get
together and form a pool for purposes of issuing or
offering health insurance coverage to their employees.
And under our current regulatory structure, those
[MEWAs] would have to be licensed as insurance
companies, and there's quite onerous standards there:
they'd have to have $2 million in capital and surplus,
which is quite high; there's financial reporting
requirements; reserving requirements; and things that
just don't make sense for that entity. And so what
this bill does is it sets up an appropriate regulatory
structure for them, to encourage them to operate in
the state and provide a little bit of competition and
ability for the employers to pool for health insurance
purposes.
Number 1729
REPRESENTATIVE JAMES asked Ms. Campbell if she is saying that
these employers come together and become the insurer.
MS. CAMPBELL said that if [employers] self fund, that is true;
they form these arrangements and they become an insurer. She
noted that some employers actually go out and purchase an
insurance policy to cover the plan.
REPRESENTATIVE JAMES opined that being an insurer is a lot
different than purchasing something from a licensed insurer.
She asked why these employers that become insurers don't need a
license, since [regular] insurers must be licensed.
MS. CAMPBELL said: "They would need a license, and that's what
this is setting up; it's a separate chapter that deals with that
specific type of business that they're engaging in."
CHAIR ROKEBERG mentioned that there is a MEWA being formed in
Fairbanks now. What this is, he added, is a group of businesses
getting together and becoming, basically, an underwriter, and
"we would like to be able to encourage that"; thus these
provisions have been included in HB 246. Unfortunately, the
division currently has to look at this group as if it were a
full-blown insurance underwriter, which requires meeting very
high solvency standards. He asked whether the Division of
Insurance is going to be promulgating regulations, or if HB 246
contains the standards.
MS. CAMPBELL said that the standards would be in the bill.
CHAIR ROKEBERG mentioned that the solvency standard will be
lowered to $200,000, which is a huge difference, with the intent
of encouraging MEWAs to form and essentially become their own
underwriters.
REPRESENTATIVE JAMES mentioned that she would like to encourage
that as well; "we have a real struggle with people not even
being insured at all." However, she remarked, she doesn't know
where the controls are for the financial requirements that
determine whether a group can function as a MEWA. She opined
that there ought to be some requirement that a group show it can
follow through with the plan it engages in.
Number 1618
MS. CAMPBELL said that the provisions in proposed AS 21.85 will
create a new chapter in statute for MEWAs. This proposed
chapter lays out very specific requirements regarding licensing,
financing, certification by an actuary, stop-loss insurance, and
financial reporting.
REPRESENTATIVE COGHILL asked about the provision regarding
membership for MEWAs in the Comprehensive Health Insurance
Association.
MS. CAMPBELL said that that provision was added because "if we
have a separate license for [MEWAs], they wouldn't be considered
a member as an insurer, so we have to mention them separately as
a member." Thus MEWAs would be assessed for the Comprehensive
Health Insurance Association as well, she added.
CHAIR ROKEBERG referred to the stop-loss insurance provisions
[Section 35] located on page 13. He asked why the entities
listed therein may not issue a stop-loss insurance policy "that
has an annual attachment point of claims incurred for each
individual that is lower than $10,000".
MS. CAMPBELL replied:
If you have a self-funded or a self-insured employer,
and they're taking the risk and paying for health
claims directly, they will go out and buy a stop-loss
insurance policy to cover excess losses. So if
there's excessively large claims, or [an] excessive
number of claims, they have insurance to cover
themselves.... This is saying, for any particular
individual, if they have a loss over $10,000, the
insurance would kick in to protect the employer
because they don't want to take as much risk. And
when that drops down too low, you end up having a
situation where it's basically health insurance
they're purchasing instead of excess loss insurance.
Number 1476
CHAIR ROKEBERG said: "But you could have a plan ... that ...
didn't kick in until [$5,000] or $10,000, if you offered that as
part of your menu selection to employees, for example, where you
had a deductible that was [$5,000 or $10,000], to lower the
cost."
MS. CAMPBELL indicated that situation would not be affected by
the provision in Section 35.
CHAIR ROKEBERG remarked that about the only way people can
afford to have insurance anymore is to have high deductibles.
REPRESENTATIVE JAMES, referring to lines 18 and 19 of page 13,
asked whether there are any health maintenance organizations
licensed under AS 21.86.
MS. CAMPBELL said that currently there are none, but noted that
the statutory language is in place should any ever form in the
future.
CHAIR ROKEBERG remarked that so much legislation has been
adopted regarding HMOs (health maintenance organizations), it is
unlikely that any ever will form in Alaska. He added, "I wish
we had an HMO as another alternate form of health care services
in the state."
REPRESENTATIVE JAMES indicated that she is not in favor of HMOs
because of their behavior.
CHAIR ROKEBERG said:
They're ... not all bad guys. Let's blame the U.S.
Congress for our health care problem, because they
won't reimburse Medicare and Medicaid to a reasonable
point, and that's what's called the phantom health tax
in this country, and that's the problem in this
country; it's not so much the HMOs or the health care
providers - it's our politicians.
Number 1352
BRUCE GALE, Employee Benefit Consultant, Willis of Alaska, Inc.,
testified via teleconference. He said:
I would like to talk to the committee about, first,
the provisions concerning stop-loss insurance, on page
13. And I believe the aggregate attachment point
requirements in today's hard stop-loss market are
somewhat unrealistic. For the past two years, it has
been almost impossible to find an aggregate attachment
point of 120 percent, for any large employer. The
lowest we have been able to obtain in the marketplace
is 120 percent. And I notice that [paragraph (3)] for
a large employer is lower than 110 percent of expected
claims. We have not been able to obtain those kinds
of aggregate attachment points for the last three
years in the stop-loss market.
The number of carriers that are offering stop-loss
insurance, both specific and aggregate - nationwide,
not just in the state of Alaska - to employers of
under 1,000 lives, has shrunk considerably. Those
insurance carriers that are offering stop-loss
insurance to these types of MEWA arrangements are very
few. Right now I believe we have two alternatives -
... possibly three - in the state, where we could
approach them for such insurance coverage. I
appreciate that the legislature or the [Division] of
Insurance is trying correct some deficiencies ... in
earlier drafted legislation.
I would like to remind the committee that there is
current Alaskan insurance law that allows for banding
together of various groups or employers strictly for
the purpose of insurance to be outside the law, ...
[but] there must be some other commonality in those
groups - an association, a professional association,
et cetera. I would also like to state that in most of
the MEWA arrangements that I have been involved in,
these arrangements are operated through a 501(c)(9)
trust, which is a tax-exempt trust under the IRS
[Internal Revenue Service] regulations. These trusts
are governed by a board of trustees that are held to a
fiduciary requirement - or standard - by ERISA. They
purchase ERISA-required bonding. They are required to
provide an annual statement - certified statement - by
an auditor. They hire, as a matter of course, a trust
auditor, a trust attorney, and a trust consultant.
Number 1190
MR. GALE referred to proposed SEC. 21.85.060 found on page 30,
line 29, which read in part:
Investments. A multiple employer welfare arrangement
shall maintain an amount at least equal to 85 percent
of net unpaid claim liability in ... cash and ...
equivalents; ... fully insured portion of a bank
deposit when the insurance is provided by a solvent
agency of the United States government ...; a bank
certificate of deposit ...; ... savings account...."
MR. GALE said, "I believe what we're talking about here is what
in the industry is known as 'incurred but no reported claims
liability (IBNR),'" defined as those claims that were incurred
prior to the termination date of the coverage, but presented for
payment afterwards; those claims would be covered by this
reserving. Referring to line 27 of page 30, which says, "30
percent of unpaid claim liability", he stated:
I don't quite understand what that means. I believe a
sufficient IBNR reserve should be in the area of 25
percent of annual health claims. And even that, in
today's market, would be considered a rather
conservative reserving amount, as today claims tend to
turn much quicker than they have in the past. But I
would like some clarification of the amount of
reserves to be established and the 85 percent. I
assume what the [division] would like to have is
confirmation that, in fact, these cash reserves exist
and are available to the trust.
CHAIR ROKEBERG referred back to the stop-loss provisions on page
13. He asked Mr. Gale if the 120 percent and the 110 percent
were the only figures that he took issue with, and if he could
recommend any other percentages instead.
MR. GALE said: "I would change those numbers to '125 percent of
expected claims', for both line 27 and line 31."
CHAIR ROKEBERG requested confirmation that this suggestion "has
to do with attainability and you're having difficulty even
getting those numbers."
MR. GALE said yes; "I would state that that is almost an
impossibility in today's marketplace as opposed to just
difficult," he added.
CHAIR ROKEBERG asked Mr. Gale whether he had any problems with
the other provisions regarding the "attachment point numbers."
Number 1003
MR. GALE said:
I would have to work those out. Four thousand dollars
seems, just as a gut reaction, to be relatively low.
In Alaska, our costs tend to run higher than most
states in the Lower 48. The $20,000, of course, would
depend upon the number of people covered by the trust,
and I would venture to say that a $20,000 figure might
be adequate for three or four people. And the cost
associated with establishing and maintaining a MEWA -
that's a totally unrealistic figure, in my opinion.
CHAIR ROKEBERG asked Mr. Gale to clarify which figure he is
referring to regarding MEWAs.
MR. GALE said:
The figure on line 29 [of page 13], the $20,000 for
[an] expected claim figure, which I assume is what
that number refers to. Mr. Chairman, it appears to me
... the regulations for the proposed bill [are] trying
to say ... that the aggregate attachment point would
be $4,000 times the number of individuals - my copy
has a typo; I assume that's "of", not "if" - covered
under the health benefit plan. In other words, we
would have a hard-dollar figure for the maximum claims
paid per individual per year under the policy, and
that number would depend entirely upon the benefits
that are actually covered by the aggregate insurance.
Some self-funded clients elect to cover only medical
and prescription drugs, while others would include
medical, prescription drugs, dental and vision claims,
so that number would be suspect. And I believe, since
that would result to less than some $350 - $375 per
employee per month, that appears low to me. The
number shown under [subparagraph] (C) in line 29
appears to be an alternative, saying that the
aggregate stop-loss attachment point, overall for a
year for a group, would be $20,000. This again, to
me, would be an extremely low number, and probably
there should not be a reference to an overall minimum
or maximum because this would depend entirely upon the
number of people covered by that policy.
Number 0877
MS. CAMPBELL, in response, said:
These are actually minimums, so if the availability in
the market is that you can't get anything under 125
[percent], this is not saying that you have to have
these. This is just saying, if you could get that,
you can't get any lower than what is here; it's trying
to prevent something from becoming health insurance.
The other point is that these figures ... and these
provisions are based off of a National Association of
Insurance Commissioners' model law, and that was
highly debated on the national level, and there was an
actuarial firm that they had hired to look at these
limitations to make sure that they were reasonable.
And when you have, in the first part, a small employer
- ... someone with 2 to 50 employees - you could have
a small group out there with 2 employees. And that's
why there's a $20,000 minimum, because it wouldn't
make any sense to say $4,000 times 2 and say you could
have [an] $8,000 aggregate stop-loss limit. So, ...
it's the [lower] of the greater of all of those.
CHAIR ROKEBERG asked Ms. Campbell to comment on Mr. Gale's
remarks regarding pages 30 and 31.
MS. CAMPBELL said:
In [regard] to the 30 percent of unpaid claim
liability in the minimum reserving section on page 30,
line 27, there's ... an "or" there to allow for a
different amount if it's certified by an actuary that
that's the appropriate reserve level. So we felt like
we've covered that; that 30 percent may be ... perhaps
more conservative than 25 [percent], but if it's
certified by an actuary that you can have something
less than that and that's appropriate, then it would
be okay. The investment section is basically saying
what types of securities you have to put your money
in, so that you can feel safe that you're actually
going to have the money if ... and when you need it.
Number 0731
REPRESENTATIVE BERKOWITZ, referring to the minimum reserve
provision, noted that reserves must equal the greater of either
30 percent of the unpaid claim liability or the amount
recommended and certified by a qualified actuary.
MS. CAMPBELL indicated that she stands corrected; it is the
greater of those two amounts, rather than the lower.
CHAIR ROKEBERG suggested changing the amount [on line 27 of page
30] to 25 percent, as recommended by Mr. Gale. He asked Ms.
Campbell to comment.
REPRESENTATIVE BERKOWITZ noted that this recommendation comes
from only one person.
MS. CAMPBELL said that according to her understanding, on a
nationwide basis, a lot of MEWAs have struggled financially, and
that is why the states have been given specific authority to
regulate them; it's because they have gone under and left people
without health insurance and with unpaid claims. The reserves
are intended as a safety valve, she explained, to make sure that
MEWAs have the money necessary to pay claims.
REPRESENTATIVE BERKOWITZ noted, "It seems to me [that] the
consequence ... of not having ... [reserves] at all, is that ...
then you run the risk of ... not having any insurance at all."
CHAIR ROKEBERG asked: "Why not allow for a small section of
equity investments in their whole portfolio?"
MS. CAMPBELL pointed out that proposed Sec. 21.85.060 only
specifies how 85 percent of net unpaid claim liability is
invested; the other 15 percent of that liability could be
invested in other ways.
REPRESENTATIVE BERKOWITZ asked why is it 85 percent? Where does
this [number] come from?
MS. CAMPBELL said, "Much of this is based off of existing state
laws that have MEWA laws on the books, and that provision - ...
that percentage - came from Montana; ... they've had ... [MEWA]
laws on their books for some time and haven't had any issues
with it."
CHAIR ROKEBERG asked if the division stipulates the percentage
of investment and the method of investment for other regulated
insurers.
Number 0557
MS. CAMPBELL said, "Yes, we do; in fact, ... last year the
legislature passed HB 184, and then regulations were adopted
specifically to insurance company investments, telling them
where they can put their money."
REPRESENTATIVE BERKOWITZ said that it seem to him that "the
lower you go, the more people get insured; ... the lower these
numbers are, the more MEWAs could exist."
MS. CAMPBELL asked Representative Berkowitz if he is talking
about the reserving levels.
REPRESENTATIVE BERKOWITZ said yes.
MS. CAMPBELL replied: "It's just the lower amount of money they
actually have to have sitting there to pay claims when they need
it. I don't know that that means that more people could afford
it."
CHAIR ROKEBERG said: "This is the degree [of] risk you want to
have on ... the retained capital base."
REPRESENTATIVE BERKOWITZ offered that he did not know whether
"this is as low [or as high] as you can prudently go, for the
degree of risk."
CHAIR ROKEBERG indicated that he is surmising from the testimony
that the department is taking a conservative stance because of
the failure rate of the MEWAs. On the other hand, he added, "we
want to try to encourage them too."
Number 0420
REPRESENTATIVES BERKOWITZ and JAMES made a motion to adopt
Amendment 1. There being no objection, Amendment 1 was adopted.
Number 0413
REPRESENTATIVE JAMES moved to report CSHB 246(L&C), as amended,
out of committee with individual recommendations and the
accompanying zero fiscal note. There being no objection, CSHB
246(JUD) was reported from the House Judiciary Standing
Committee.
HB 460 - ANTITRUST CIVIL COURT ACTIONS
Number 0375
CHAIR ROKEBERG announced that the last order of business would
be HOUSE BILL NO. 460, "An Act relating to actions for
monopolies and restraint of trade, including proof of damages;
amending Rule 82, Alaska Rules of Civil Procedure; and providing
for an effective date."
CHAIR ROKEBERG offered that HB 460 "allows us to participate in
large ... 'interstate antitrust cases' such as the tobacco
settlement, which we are now prohibited from so doing."
Number 0330
CLYDE (ED) SNIFFEN, JR., Assistant Attorney General, Fair
Business Practices Section, Civil Division (Anchorage),
Department of Law (DOL), testified via teleconference and said:
This bill will allow the attorney general to bring
claims on behalf of consumers who make these indirect
purchases. We've been directly involved in several
lawsuits where the inability to have this authority
has resulted in the loss of significant sums of money.
Last year we lost about $700,000 in a case we felt -
I'm involved with three other cases right now
involving drug manufacturers - that if we had the
ability to bring these types of claims, would
certainly increase the likelihood that we would
recover more money. So it's something that's in line
with what other states have been doing, it's not going
to increase the cost of doing business from our
office, and it's something [that] I think would result
in significant resources for consumers.
Number 0235
REPRESENTATIVE JAMES moved to report HB 460 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, HB 460 was reported from the
House Judiciary Standing Committee.
ADJOURNMENT
Number 0206
There being no further business before the committee, the House
Judiciary Standing Committee meeting was adjourned at 3:23 p.m.
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