Legislature(2007 - 2008)CAPITOL 17
04/02/2007 03:00 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB146 | |
| HB211 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 146 | TELECONFERENCED | |
| *+ | HB 211 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 2, 2007
3:12 p.m.
MEMBERS PRESENT
Representative Kurt Olson, Chair
Representative Mark Neuman, Vice Chair
Representative Carl Gatto
Representative Gabrielle LeDoux
Representative Jay Ramras
Representative Robert L. "Bob" Buch
Representative Berta Gardner
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 146
"An Act requiring certain businesses to recognize postmark dates
as the date of payment."
- HEARD AND HELD
HOUSE BILL NO. 211
"An Act imposing a fee on homeowner's insurance policies issued
or renewed in the state; requiring an insurer issuing or
renewing a homeowner's insurance policy to collect the fee; and
creating a special account in the general fund, allowing money
in the fund to be appropriated to the Department of Public
Safety for the Alaska Fire Standards Council, and repealing the
Alaska fire services personnel fund."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 146
SHORT TITLE: PAYMENT DATE FOR BILLS FOR SERVICES
SPONSOR(s): REPRESENTATIVE(s) COGHILL
02/21/07 (H) READ THE FIRST TIME - REFERRALS
02/21/07 (H) L&C, JUD
04/02/07 (H) L&C AT 3:00 PM CAPITOL 17
BILL: HB 211
SHORT TITLE: HOMEOWNERS INSUR. FEE/FIRE STDS. COUNCIL
SPONSOR(s): REPRESENTATIVE(s) RAMRAS
03/21/07 (H) READ THE FIRST TIME - REFERRALS
03/21/07 (H) L&C, STA, FIN
04/02/07 (H) L&C AT 3:00 PM CAPITOL 17
WITNESS REGISTER
REPRESENTATIVE JOHN COGHILL
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 146.
BARBARA COTTING Staff
to Representative Jay Ramras
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 211 on behalf of
Representative Ramras, sponsor.
JACK SMITH, Director/Fire Chief
North Slope Borough Fire Department
Barrow, Alaska
POSITION STATEMENT: Testified in support of HB 211.
JEFF TUCKER, Fire Chief
North Star Volunteer Fire Department;
nd
2 Vice President
Alaska Fire Chiefs Association (AFCA)
North Pole, Alaska
POSITION STATEMENT: Testified in support of HB 211.
MITCH FLYNN, Fire Chief
Steese Area Volunteer Fire Department
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 211.
CAROL R. REED, President
Alaska State Firefighters Association (ASFA)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 211.
KENTON BRINE
Property Casualty Insurers Association of America (PCI)
Olympia, Washington
POSITION STATEMENT: Testified in opposition to HB 211.
st
DOUG SCHRAGE, 1 Vice President
Alaska Fire Chiefs Association (AFCA);
Deputy Chief
Anchorage Fire Department
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 211.
KATHY WASSERMAN
Alaska Municipal League (AML)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 211.
JEFFREY TROUTT, Deputy Director
Division of Insurance
Department of Commerce, Community, & Economic Development
(DCCED)
POSITION STATEMENT: Offered comments and answered questions
during hearing on HB 211.
ERIC MOHRMANN, Fire Chief
Capital City Fire/Rescue (CCFR)
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 211.
ACTION NARRATIVE
CHAIR KURT OLSON called the House Labor and Commerce Standing
Committee meeting to order at 3:12:49 PM. Representatives Buch,
Neuman, Gatto, Gardner, LeDoux, Ramras, and Olson were present
at the call to order.
HB 146-PAYMENT DATE FOR BILLS FOR SERVICES
CHAIR OLSON announced that the first order of business would be
HOUSE BILL NO. 146, "An Act requiring certain businesses to
recognize postmark dates as the date of payment."
3:13:25 PM
REPRESENTATIVE JOHN COGHILL, Alaska State Legislature, sponsor,
began by sharing his personal experience with mailing payments
for various services. He explained the process that major
credit card companies use for sending statements in the mail,
which can leave consumers with a five-day window before payment
is due. He said that this leaves "no comfort that if I put a
first class letter in the mail that day, they would be able to
get it in the time that has been allotted." He said that
including services such as electric and telephone in the bill
has "created no small stir." He stated that he resides in North
Pole, which is a "fairly decent" mail carrier system, and
pointed out that for those who live in more rural areas of the
state, it can take up to three or four days longer to receive
mail. He shared his hope that companies that deliver services
on a monthly basis, such as insurance carriers, would become
more sensitive to this concern, adding that his primary concern
is major credit card companies. He explained that credit card
companies process payments through a national clearinghouse, and
noted that while a consumer may make an electronic payment by
the due date, the company may take longer to process the
payment. This can result in late fees and higher interest
rates, even though the funds were taken from the bank account by
the due date. He said:
Maybe the best thing to do, is to have a definitive,
that when I mail the check to them, that is a
legitimate payment date. Because I can't prove when
they get it. That is the problem. They could hold
onto it for [three or four days]. ... The mail could
take ten days. The fact is, if you're going to do the
payment by mail, you're going to have to figure you're
going to pay a penalty.
REPRESENTATIVE COGHILL then suggested that those who are able to
switch to electronic payments do so. However, this can still
result in a late payment. He opined that while there may be a
Federal Communications Commission (FCC) question, the bill
should be passed as a "matter of interest," adding that a
statutory provision would result in more notice than a
resolution. He said "I'm willing to send it up as a challenge."
He suggested amending Section 1(b)(2) by replacing "includes"
with "excludes".
3:19:41 PM
REPRESENTATIVE RAMRAS made a motion to adopt Amendment 1,
labeled 25-LS0515\A.1, Bannister, 3/20/07, which read:
Page 1, line 12:
Delete "including"
Insert "excluding"
Page 2, line 1:
Delete "includes"
Insert "does not include"
CHAIR OLSON objected for discussion purposes.
REPRESENTATIVE COGHILL reiterated that this would remove
electric and telephone services from the bill. He acknowledged
that he has caused consternation with these services, however,
it is worthy to note that this is a consumer problem.
REPRESENTATIVE RAMRAS noted that he shares the sponsor's
frustration, and is a cosponsor of this bill. In regard to
Amendment 1, he inquired as to whether this includes a broad
enough group of utilities. He has spoken with representatives
from utilities in rural areas, which would have to retain all
envelopes with postmarks in order to satisfy the requirements of
this legislation. He would like to ensure that this brings
enough relief to the various utilities and does not create a
problem for certain utilities.
REPRESENTATIVE COGHILL replied that he would look up the
statutory definition of "public utility," to ensure that it
includes all the utilities in question.
CHAIR OLSON stated that he is curious to know whether this
includes electrical cooperatives.
REPRESENTATIVE COGHILL noted that it is not his intention to
cause undue harm. This is a legitimate question of consumer
protection. He said that if he feels the issue, as it relates
to public utilities, can be worked on, he may come back and
request this. However, the larger concern is with the credit
card companies.
3:23:03 PM
REPRESENTATIVE COGHILL referenced the definition of "public
utility" in AS 42.05.990:
(4) "public utility" or "utility" includes every
corporation whether public, cooperative, or otherwise,
company, individual, or association of individuals,
their lessees, trustees, or receivers appointed by a
court, that owns, operates, manages, or controls any
plant, pipeline, or system for
(A) furnishing, by generation, transmission, or
distribution, electrical service to the public for
compensation;
(B) furnishing telecommunications service to the
public for compensation;
(C) furnishing water, steam, or sewer service to
the public for compensation;
(D) furnishing by transmission or distribution of
natural or manufactured gas to the public for
compensation;
(E) furnishing for distribution or by
distribution petroleum or petroleum products to the
public for compensation when the consumer has no
alternative in the choice of supplier of a comparable
product and service at an equal or lesser price;
(F) furnishing collection and disposal service of
garbage, refuse, trash, or other waste material to the
public for compensation;
REPRESENTATIVE NEUMAN commented that this is a very broad
definition, and requested that a list of the utilities that are
included in this definition be submitted to the committee.
3:24:50 PM
REPRESENTATIVE LEDOUX agreed that the definition of "public
utility" is broad. She questioned whether the foregoing
definition includes private utilities.
REPRESENTATIVE COGHILL pointed out that the definition includes
"individual, or association of individuals", in addition to "or
otherwise", which, if combined, would apply to the
aforementioned private utilities.
3:25:56 PM
REPRESENTATIVE GARDNER shared her understanding that Amendment 1
excludes utilities because the changes proposed by the bill are
expensive and inconvenient; however, other businesses are not
excluded.
REPRESENTATIVE COGHILL replied that this has very little to do
with the inconvenience, and more to do with the company's
ability to comply, which can be an issue with smaller companies.
There is an inconvenience in the state, which he is less-than
sympathetic to. The real question, he said, is that Alaska
residents get "hammered" with credit cards much more than with
regular monthly billings, which is why he chose to address a
larger realm. He stated that this can be very difficult and
costly to impose on regulated utilities.
REPRESENTATIVE NEUMAN inquired as to whether it would be easier
to specify credit card companies.
REPRESENTATIVE COGHILL replied that many companies deal with the
state from a national perspective, including insurance
companies. He is less sympathetic to these companies.
REPRESENTATIVE NEUMAN opined that insurance companies are more
time sensitive than other types of companies. He stated that
there is "a lot of confusion" in the bill.
REPRESENTATIVE COGHILL replied that he erred on the side of
consumer protection, and shared a story involving an insurance
company that automatically canceled his policy when it did not
receive payment 30 days in advance of the policy's expiration.
He said that he found this objectionable.
3:30:22 PM
REPRESENTATIVE NEUMAN reiterated that Amendment 1 is very broad.
He said that while he thinks he is in support, there has not
been adequate clarification. He reiterated that he would like
to see a list of companies that are included, along with
companies that are not included.
REPRESENTATIVE COGHILL stated that he is willing to hold the
bill over, if that is the wish of the committee. He stated that
the bill is meant to bring policy discussion to the table, and
reiterated that this is an important consumer protection issue.
He said that local, in-state utilities are usually diligent with
billing, adding that those outside of Alaska create a problem.
CHAIR OLSON, in regard to the language of Amendment 1, stated
that it may be more appropriate to "flesh it out," and specify
which companies are included.
REPRESENTATIVE COGHILL said that he would come back before the
committee with an outline of what companies are effected by
Amendment 1.
CHAIR OLSON indicated that HB 146 would be held in committee.
3:33:44 PM
HB 211-HOMEOWNERS INSUR. FEE/FIRE STDS. COUNCIL
CHAIR OLSON announced that the final order of business would be
HOUSE BILL NO. 211, "An Act imposing a fee on homeowner's
insurance policies issued or renewed in the state; requiring an
insurer issuing or renewing a homeowner's insurance policy to
collect the fee; and creating a special account in the general
fund, allowing money in the fund to be appropriated to the
Department of Public Safety for the Alaska Fire Standards
Council, and repealing the Alaska fire services personnel fund."
3:33:56 PM
BARBARA COTTING, Staff to Representative Jay Ramras, Alaska
State Legislature, sponsor, explained that according to the
Alaska Fire Chiefs Association (AFCA), fire departments in
Alaska are not financially able to achieve the current national
fire protection standards. This places residents and their
property in more jeopardy than is needed. She pointed out that
the AFCA has been trying for many years to find funding sources
in order to fund the Alaska Fire Standards Council (AFSC), and
have the means to implement the training standards. She stated
that in 1998, the legislature established the AFSC, which was
intended to develop and regulate training for Alaska's fire
departments. However, the legislature did not fund the AFSC.
The sponsor's office has worked with the AFCA to find a way to
fund the council. She stated that thus far, HB 211 is the best
funding source. The Division of Insurance ("the Division") has
advised the sponsor that this fee should only apply to
homeowners insurance, adding that homeowners benefit the most.
A $3 fee would be added to each homeowner's policy issued or
sold in Alaska. This fee would be collected by the insurance
company, and paid to the Division. Additionally, HB 211 creates
an account in the general fund (GF) called the Alaska Fire
Standards Council Fund, into which the $3 fee would be
deposited. She said that HB 211 repeals the Alaska Fire
Services Personnel Fund, which was established in 1988 to mirror
a similar fund created for the Alaska Police Standards Council,
but has never been used. With the establishment of the Alaska
Fire Standards Council Fund, the personnel fund is no longer
needed.
REPRESENTATIVE RAMRAS added that this will not lower homeowner's
insurance premiums. He pointed out that when police officer's
write a citation, a fraction of the citation goes to the Police
Safety Standards Council. Firefighters do not have the ability
to raise money in that capacity. He said "We are not crazy
about this funding source. But it's quite clear, from the
history of the Fire Safety Standards Council, that no other
funding source has ever emerged." He stated that he recently
met with firefighters who explained that adequate training is
not received, however, when there is an emergency, the
firefighters must be able to perform a variety of functions. He
explained that there is a "quilt" of volunteer fire departments
working with paid fire departments across the state. However,
the notion that volunteer firemen and paid firemen are not able
to integrate their skills because they have not been able to
integrate their training puts individuals at risk.
3:39:33 PM
REPRESENTATIVE RAMRAS noted that he previously voted against
having a fishing license fee that taxed recreation, and
introduced this bill with trepidation. The director of the
Division is not crazy about the bill, but acknowledged that the
application is possible. He said "We're not crazy about
imposing a tax on homeowners, either. But the fact is that we
need paid firemen to be able to integrate with the volunteer
firemen." He then gave examples of other groups that are unable
to get funding through the state, such as the Community Service
Patrol. While the state has made it clear that it does not want
to use state dollars for community funding efforts, the Fire
Safety Standards Council is statewide, and this concern was
expressed by all the fire chiefs that visited the Capitol
Building. He said that he finds this "quite appropriate,"
although an additional tax is unwelcome. He noted that the
director of the Division previously stated that insurance
premiums and taxes on these premiums represent the number two
revenue stream to the state. He reiterated that the legislature
must find a way to fund the Fire Safety Standards Council,
because it will ultimately lead to the integration of volunteer
and paid services. He pointed out the difference between
integrating volunteer firemen with paid firemen, and volunteer
policemen and paid law enforcement individuals. Volunteer
firefighters are just as valuable as professional firefighters.
He said "So, it was with great frustration, and some angst over
the funding mechanism, that we drafted this bill. But, we don't
know of a better way."
3:43:42 PM
REPRESENTATIVE NEUMAN asked if the $3 fee is annual or per
policy.
MS. COTTING replied that the fee is annual, per policy.
REPRESENTATIVE NEUMAN noted that the AFCA supported a $5 fee,
which has been reduced to $3.
REPRESENTATIVE RAMRAS, in response to a question regarding the
budget, stated that there is a cost to the Division to collect
the funds. The AFCA indicated that there is a myriad of grant
money that can be applied for, which can be put towards the
prime mission. He said that $3 was not found to be "heinous,"
with respect to insurance premiums and what is expected when
emergency services are needed. He shared a recent experience
that involved the integration of paid and volunteer
firefighters, and said that he is interested in these
firefighters continuing to work together. He said:
It's impractical in some ways, it creates a slippery
slope, it's dangerous in the precedent that it could
be setting. It's difficult to collect, it's
cumbersome, there's a thousand things wrong with it -
except for the fact that when I dial 911, I want
competent, trained, integrated people to show up and
help me out, and my neighbors as well.
3:47:38 PM
REPRESENTATIVE GARDNER, in regard to the resolution from the
AFCA, pointed out that the AFCA suggested that the fee apply to
all fire insurance policies, while the bill applies only to
homeowners. She questioned the reasoning for this. She then
commented that a homeowner with a $200 thousand home would be
paying the same as a homeowner with a $1.5 million home, and
expressed concern with this. Finally, she asked whether the
budget estimate provided by the AFCA is currently happening, or
is a "best case scenario."
REPRESENTATIVE RAMRAS replied that it is simpler to collect the
$3 fee from homeowners than businesses with multiple policies.
It is not regressive relative to the value of homes, as this is
also simpler. He reiterated that the Division does not like the
bill, but feels this is simpler and less cumbersome. He stated
that he does not have the answer to the question regarding the
AFCA budget estimate.
REPRESENTATIVE GARDNER commented that homeowners would then be
subsidizing businesses and other policy holders that are not
required to participate.
REPRESENTATIVE RAMRAS opined that most business owners own homes
in Alaska. He stated that the intent was not to single out
homeowners versus commercial policies, and reiterated that the
Division does not like the nature of the collection mechanism,
and has indicated that it would be much more cumbersome to
involve commercial policies. He said that he has worked with
the Division to satisfy as many objections as possible, in order
to concentrate on the greater good that comes with establishing
the AFSC. He explained that the original intent was to include
residence and business policies. He said "We're trying to take
something that [the Division does not] like very much, and make
it as likeable as possible."
3:51:05 PM
REPRESENTATIVE GARDNER asked if the Division would be available
for testimony.
CHAIR OLSON replied yes.
The committee took an at-ease from 3:51 PM to 4:02 PM.
4:02:20 PM
REPRESENTATIVE GATTO asked if property that is not within the
fire service area would be charged the $3 fee.
MS. COTTING shared her understanding that the fee would be
charged. The intent is to keep the bill as simple as possible,
and would not discriminate about the amount of the policy, or
where the property is located.
REPRESENTATIVE GATTO commented that homeowners may be able to
challenge this.
MS. COTTING pointed out a discrepancy in the fiscal note from
Department of Commerce, Community, & Economic Development
(DCCED), which estimates that there are 160 thousand homeowner
policies in the state. The Division estimated that there are
178,500 policies in the state. She surmised that the number may
be "somewhere in-between." In response to a question from Chair
Olson, she stated that this fee would apply to any person who
purchases homeowner insurance.
CHAIR OLSON asked if this would include tenants that do not own
the property but have insurance.
MS. COTTING replied that she is not sure.
CHAIR OLSON stated that he recently resigned from the Central
Emergency Service Area Board, of which he was a member for nine
years, adding that the last five years he chaired the board.
The organization is 40 percent volunteer and 60 percent paid
staff. He said "We handled our training with our mill-rate,"
and explained that training was both volunteer and paid staff.
He questioned how the fire service area in Fairbanks is handled.
MS. COTTING replied that there are firefighters online who might
better answer this question.
4:05:35 PM
REPRESENTATIVE NEUMAN asked Chair Olson whether he feels this
would result in a savings.
CHAIR OLSON said that he is not able to answer this
specifically. He stated that his greatest problem is the
funding source, and shared his belief that this is a "slippery
slope." He said that he has a problem with taxes, adding that
while he feels that funding the program is a good idea, it is
the wrong revenue source.
4:07:25 PM
REPRESENTATIVE NEUMAN commented that a tax on emergency numbers
passed the previous year, which applies to all phone lines, and
pointed out that many areas in the state do not have local
emergency numbers set up.
CHAIR OLSON clarified that this was a result of a federal
mandate. He offered his understanding that this began at $5 per
phone line, regardless of whether it is a cell phone, land-line,
or fax. The legislature started at a fee of "up to $2," with
most cities starting at $1.50. He explained that this was to
generate enhanced 911 service, to determine the location of the
caller.
REPRESENTATIVE GARDNER inquired as to how urban fire departments
are currently funded for training.
MS. COTTING replied that the AFSC handles the funding, and the
council is funded by the AFCA and the Alaska State Firefighters
Association (ASFA).
REPRESENTATIVE GARDNER shared her understanding that the AFSC is
interested in training firefighters across the state, and urban
areas currently have paid training available. She inquired as
to the funding for firefighters in urban areas.
MS. COTTING replied that she does not have the answer to this
question.
CHAIR OLSON stated that on the Kenai Peninsula, the funding is
mostly mill-rate.
REPRESENTATIVE GARDNER surmised, then, that Anchorage uses the
same funding source. She shared her understanding that AFSC
would provide training to areas that are not currently served.
CHAIR OLSON shared his understanding that the AFSC provides more
than training to the state.
REPRESENTATIVE RAMRAS, in response to a question from
Representative Neuman, stated that to say that this would save
money is an over-statement. He reiterated that this is not the
preferable funding source. However, this program is needed, and
will not be funded through the House Finance Committee or the
Senate Finance Committee. A uniform AFSC is needed, which the
mill-rates in the various communities do not provide. He
reiterated that fire departments do not have an inner mechanism
to fund the AFSC. He encouraged members to hear testimony from
the firefighters in order to better understand what the funds
will be used for. He said:
If we can go to the finance committee, and try and
find a source, and they say "yeah, we'll do it," than
right on. But if they say no, and they say it with
some conviction, then I'd like to have the bill come
back before this committee, and really take a look at
this undesirable funding source, for something that I
think leads to safer communities across the state.
REPRESENTATIVE LEDOUX commented that firefighters can not write
citations that can then be used as a funding source, and said
that perhaps this should be considered.
4:13:20 PM
JACK SMITH, Director/Fire Chief, North Slope Borough Fire
Department, stated that he is in support of HB 211. He said
that Alaska's fire services have made significant strides to
obtain recognition by organizations such as the International
Fire Service Accreditation Congress (IFSAC), for training
provided. Unfortunately, attempts to expand the training and
education have been hampered due to the lack of a functioning
fire standards council with needed administrative support. He
pointed out that industry standard recognition is common to all
professional fields, and has proven to be an incentive for
career personnel and volunteers that respond to emergency calls
around the state. These individuals must complete written and
practical testing that determines his or her ability to perform
skills comparable to other firefighters in the country. This
certification is known and recognized, and thus allows Alaskans
to compete for jobs in-state and around the country. He pointed
out that while most advisory councils and boards receive some
type of financial assistance to perform their basic mission, the
AFSC has not. Progress to formalize and develop Alaska's fire
training programs has been limited without adequate
administrative support, which increases the risk to both
firefighters and the public. He stated that most states develop
training and certification programs, and work with departments
to administer these programs, thus ensuring consistency and
quality. He shared a story of a local firefighter that recently
obtained a job at Capital City Fire/Rescue (CCFR), and said
"Many would have never believed training could have been offered
in a rural hub of Alaska, to prepare an individual for a job in
the big city. While we were sad to see him leave, other young
adults recognized the value of education and training, as well
as its ability to open doors for a career." He stated that
providing financial support to the AFSC will enable it to become
more effective in developing and coordinating fire service
training and education in Alaska.
4:17:18 PM
REPRESENTATIVE GATTO shared his understanding that most of the
training that occurs is a result of the mill-rate for the fire
service area, and asked if this is correct.
MR. SMITH replied that the North Slope Borough Fire Department
is funded by the North Slope Borough. The fire department is
accredited by the state to provide Firefighter level 1 and
Firefighter level 2 training, which is funded by the
municipality. The concern, he said, is developing new training
programs.
REPRESENTATIVE GATTO asked whether adding a $3 fee to each
homeowner insurance policy would change the amount of training
that occurs.
MR. SMITH shared his understanding that funding the AFSC is
intended to provide the state with the guidance that is needed.
He said that preparing individuals to provide training at the
certification level is where the state provides the guidance and
testing.
REPRESENTATIVE GATTO shared his understanding that the AFSC will
have money for travel and contracts. He stated that he is
expecting the AFSC to be an organization that, when requested,
can send a representative to the fire house for training. He
inquired as to whether this is correct.
MR. SMITH shared his understanding that there is money to bring
the members of the council together, in order to review the
programs and procedures. He stated that the AFSC may take on
the role of the accrediting department, and explained the
process that the North Slope Borough Fire Department went
through to become accredited.
4:21:10 PM
JEFF TUCKER, Fire Chief, North Star Volunteer Fire Department;
nd
2 Vice President, Alaska Fire Chiefs Association (AFCA),
explained that the AFSC is intended to be the standard making
body that the fire departments in the state can utilize to train
personnel. The council would put forth the minimum standards
for firefighters, company officers, engineers, fire prevention
programs, and arson investigation programs. The council would
not necessarily be the trainers. There are several programs
that are accredited, and there is a need for additional
accredited programs. He said that some of the funding would go
toward testing administration, which is currently not funded.
He explained that if the department does firefighter testing, a
certified officer would be sent from the state to validate and
grade the test. This is more of a standard setting
organization, and is not there to train.
4:23:52 PM
REPRESENTATIVE NEUMAN questioned whether the additional training
would have an effect on insurance rating.
MR. TUCKER replied that this would not directly effect the
insurance rating, although it might improve a fire department's
rating. He stated that this is not the direct impact, nor the
purpose of the council.
4:25:11 PM
REPRESENTATIVE GATTO shared his understanding that the intent is
to "make people safer." He pointed out that insurance companies
are a direct beneficiary, as this will result in less claims and
emergency medical care. He questioned whether this should be
funded by the insurance companies.
MR. TUCKER replied that in some states the insurance companies
fund this type of organization; however, have not seen fit to do
so in Alaska. He stated that the fire departments directly
affect homeowners, and adding the fee to insurance policies
seemed the most effective.
CHAIR OLSON asked how many service areas are in the Fairbanks
North Star Borough.
MR. TUCKER replied that the City of Fairbanks Fire Department
and the City of North Pole Fire Department are within the
borough. Outside of the borough there are five fire service
areas.
REPRESENTATIVE GATTO commented that two thirds of the population
of Alaska is located between Homer and Fairbanks. He shared his
understanding that Anchorage has a paid fire department that has
daily training, and that Fairbanks and the Matanuska-Susitna
Valley have similar fire departments. He questioned whether or
not passing the bill would change the training that is currently
happening.
MR. TUCKER replied that it would. He explained that the
aforementioned departments are directly affected by the AFSC.
Without funding the council, the current programs will not be
maintained, and the fire departments could potentially lose any
accreditation. This would directly affect the fire department's
ability to recruit and train firefighters. He stated that all
fire departments, whether rural or urban, are directly affected
by the AFSC.
4:29:35 PM
MITCH FLYNN, Fire Chief, Steese Area Volunteer Fire Department,
stated that he strongly supports this legislation. He explained
that 80-85 percent of the residents within the Fairbanks North
Star Borough are protected by either the fire service areas or
the two city fire departments. He is in support for holding
paid and volunteer firefighters to the same standards. A
functioning AFSC is needed in order to provide the direction and
leadership that is necessary for firefighters to perform their
jobs effectively.
4:31:01 PM
CAROL REED, President, Alaska State Firefighters Association
(ASFA), said that she responds with the Central Matanuska-
Susitna Fire Department, and holds a seat on the AFSC. She
stated that having standards for training firefighters would
create a safer firefighter, and a more efficient firefighting
effort. She said that in the past, the Training and Education
Bureau has absorbed the costs for accreditation and
certification, and is no longer able to do so. The ASFA and the
AFCA is not able to cover these costs. She said that this has
an impact on firefighters that may be trained, yet are unable to
become certified. In regard to the $3 fee, she stated that if
this is not the appropriate funding source, than state needs to
create a funding source in order to maintain the AFSC.
4:33:53 PM
KENTON BRINE, Northwest Regional Office, Property Casualty
Insurers Association of America (PCI), stated that PCI opposes
the bill as it is currently written, although it does appreciate
the intended goal and the thoughtfulness of the sponsor and the
committee. He said that while PCI is concerned with the
inequity of only applying the $3 fee to homeowners, it is also
concerned that this singles out a "responsible" segment of the
population. He stated that this is troubling for insurers,
because it is applied to the policies that are sold. He is not
aware of any requirement that this be separately listed on a
policy, and as a result, this appears to be an increase in the
insurance bill. He commented that some individuals may choose
not to pay the fee, and the insurance company would be
responsible for payment. He suggested that this may have an
impact on in-state insurers, which may be worth looking into.
He explained that each state has an insurance retaliatory pact,
which is intended to promote fair competition among insurers
located in various states around the country. An insurance
company based in a state, but doing business in another state,
pays the rate for either the home state, or the state in which
the business is being written, whichever is higher. Therefore,
if an insurer is based in Alaska and writing insurance in other
states, it may see an increase for in-state as well as out-of-
state business. This puts in-state companies at a competitive
disadvantage to companies located elsewhere. He stated that
this is a potential problem, and may become an impediment for
companies considering a move to Alaska. He pointed out that the
insurance market in Alaska is a challenging market, and the
Division and the legislature have done a lot of work in recent
years to improve the marketplace. He opined that this
legislation goes in a different direction, and therefore PCI is
opposed to the legislation as it is written.
4:38:56 PM
REPRESENTATIVE RAMRAS reiterated that finding the funding source
is difficult. He said that one funding source that was
considered involved a fee for when 911 is dialed. However, the
fire officials do not want individuals to hesitate before
calling for emergency services. He agreed that this is not the
ideal funding source; however, the other choices "seem to be
worse." He inquired as to what funding source Mr. Brine would
suggest.
MR. BRINE replied that he is sympathetic to this point, however
he pointed out that this legislation is intended to protect all
Alaskans. He stated that from PCI's perspective, it doesn't
make sense to approve legislation to protect all Alaskans, yet
only place the fee on those who purchase homeowners insurance.
He acknowledged that this is not tax on insurers, although there
is potential for the insurers to pay the cost if the policy
holders revolt against paying the $3 fee.
4:41:00 PM
REPRESENTATIVE RAMRAS commented that this is the broadest way to
cover the most people, in order to offer safety enhancement.
This was the "easiest possible way, with a great deal of
undesirable choices."
st
DOUG SCHRAGE, 1 Vice President, Alaska Fire Chiefs Association
(AFCA); Deputy Chief, Anchorage Fire Department, expressed
support for HB 211, and said that funding is needed. He
clarified that fire departments, regardless of funding, provide
as much training as possible. When the fire departments are not
able to provide training, the state Training and Education
Bureau offers assistance. He then explained the training
process, and the difference between training and certification.
4:46:10 PM
MR. SCHRAGE, in regard to the funding source, said that
presently, the state is able to directly impact fire safety in
commercial occupancies through the plan review and permitting
process. This is not applicable to residences. Without the
AFSC, the state has no way to impact the fire safety in homes,
other than through voluntary educational programs. He stated
that funding for the AFSC has been at the top of the AFCA
legislative agenda since 1998. The AFCA is very encouraged by
this legislation. In closing, he pointed out that the state
licenses all manner of public services, yet does not license
firefighters, although no other professional provides the types
of services provided by firefighters.
4:48:08 PM
REPRESENTATIVE RAMRAS inquired as to what funding sources were
considered by the AFCA.
MR. SCHRAGE replied that the AFCA and the ASFA have funded the
council. He said that grants have been applied for, yet none
have been successful. The AFCA has also looked into other
states' funding sources, which include funding from excise taxes
or voluntary funding from the insurance industry. He opined
that direct appropriation would be the simplest, yet is not a
realistic option.
4:49:36 PM
KATHY WASSERMAN, Alaska Municipal League (AML), stated that AML
is in full support of HB 211, although not "totally wild" about
the funding source. She said "It's too bad that the climate in
this state is such that we can't go [to the House Finance
Committee and the Senate Finance Committee] and get funding for
this." She read from the AFSC mission statement, as follows:
The mission of the Alaska Fire Standards Council is to
establish training and performance standards for fire
service personnel, and curriculum requirements for the
certification of training programs.
MS. WASSERMAN stated that the AFCA is an affiliate member of the
AML, and the AML has offered the AFCA support over the years.
She thanked the sponsor for taking this path, which appears to
be the only path available.
4:51:19 PM
JEFFREY TROUTT, Deputy Director, Division of Insurance ("the
Division"), Department of Commerce, Community, & Economic
Development (DCCED), stated that as a matter of policy, the
Division opposes any increase to the cost of insurance.
However, everyone is in support of doing everything possible to
increase the professionalism and standards for firefighters.
The Division would prefer to see a different funding mechanism.
In response to a question from Representative Gardner, agreed
that it would be too difficult to collect a fee on all types of
insurance. He explained that homeowners insurance is well-
defined, adding that everyone who has a mortgage has some type
of liability and fire protection. In the commercial context,
this might not be the case, as several companies might share the
risk, creating a question with regard to which company would pay
the $3 fee. He said that every company that provides homeowners
insurance regularly submits premium taxes, and it is "fairly
simple" to add the $3 fee to this. Additionally, business
owners are most likely homeowners, as well, and would already be
paying the $3 fee. He said that it is also easier on an
administrative level, requiring a few lines of additional
computer code.
4:52:17 PM
REPRESENTATIVE GARDNER asked if it would be challenging to make
the fee a percent of the policy value, rather than a set dollar
amount.
MR. TROUTT replied that this would be more difficult, because
insurance companies do not currently report the amount of each
policy to the Division. This information would need to be
collected before the Division would be able to charge a
percentage fee.
4:55:49 PM
REPRESENTATIVE BUCH asked what methods have been used in other
states.
MR. TROUTT replied that while other states have done this, he
does not have details regarding these programs.
REPRESENTATIVE NEUMAN asked if a statutory change would be
required to increase the fee in the future.
MR. TROUTT replied yes.
4:57:13 PM
ERIC MOHRMANN, Fire Chief, Capital City Fire/Rescue (CCFR),
stated that he is in support of HB 211. He explained that he
requires that all CCFR applicants have Firefighter 1
certification, and if the individual does not have this
training, he must provide it. He stated that the training is
expensive, adding that he must pay overtime to cover shifts
while the individual is away receiving the training, as well as
paying him or her while in training. Two-thirds of CCFR
firefighters are volunteers who must be able to work at the same
level as the paid staff. He said that it is extremely important
to know that when a firefighter is ordered to go into a
building, as part of a group, he or she will be effective and
safe. He stated that firefighter training has come a long way
since he began his career, and the AFSC is needed to ensure that
firefighters are safe, effective, and able to operate as part of
a team. He pointed out that investigators and instructors are
state certified, and noted that the Training and Education
Bureau can no longer support this program. The AFCA and the
ASFA has funded this program through raffle tickets and pull-
tabs. He shared a story involving a structure fire in Angoon,
and said that firefighters must be properly trained and
equipped. He stated that rural areas do not have fires often,
but when they do, if the firefighters are not properly trained
and equipped, people will die.
REPRESENTATIVE GARDNER asked how the instructor and investigator
certification is funded.
MR. MOHRMANN replied that all certification programs are covered
by the Training and Education Bureau, adding that this is not
included in its budget, and is being paid for by receipts.
REPRESENTATIVE RAMRAS thanked Mr. Mohrmann for his service. He
encouraged members to contact their local fire departments "to
find out with what low regard we treat our fire departments,
until there's an accident in our home, in our neighborhood ...
and then you expect everything."
CHAIR OLSON indicated that HB 211 would be held for further
consideration.
5:02:48 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
5:02 PM.
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