Legislature(2013 - 2014)BARNES 124

03/27/2013 03:15 PM LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 175 ELECTRONIC POSTING OF INSURANCE POLICIES TELECONFERENCED
Moved CSHB 175(L&C) Out of Committee
*+ HB 125 TOPICAL EYE MEDS PRESCRIPTION REFILLS TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+= HB 74 AIDEA: LNG PROJECT; DIVIDENDS; FINANCING TELECONFERENCED
Moved CSHB 74(L&C) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                         March 27, 2013                                                                                         
                           3:24 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Kurt Olson, Chair                                                                                                
Representative Lora Reinbold, Vice Chair                                                                                        
Representative Mike Chenault                                                                                                    
Representative Bob Herron                                                                                                       
Representative Charisse Millett                                                                                                 
Representative Dan Saddler                                                                                                      
Representative Andy Josephson                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 175                                                                                                              
"An  Act  allowing,  under  certain   conditions,  a  property  or                                                              
casualty  insurer  to  provide policies  and  endorsements  to  an                                                              
insured  by   posting  the  policies   and  endorsements   on  the                                                              
insurer's Internet website."                                                                                                    
                                                                                                                                
     - MOVED CSHB 175(L&C) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 125                                                                                                              
"An Act  prohibiting a health  care insurer from  denying coverage                                                              
for an  additional limited  quantity of  prescription topical  eye                                                              
medication under certain circumstances."                                                                                        
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 74                                                                                                               
"An Act  relating to development  project financing by  the Alaska                                                              
Industrial  Development  and  Export Authority;  relating  to  the                                                              
dividends  from  the  Alaska  Industrial   and  Export  Authority;                                                              
authorizing   the  Alaska   Industrial   Development  and   Export                                                              
Authority to  provide financing  and issue  bonds for  a liquefied                                                              
natural  gas  production  system   and  natural  gas  distribution                                                              
system; and providing for an effective date."                                                                                   
                                                                                                                                
     - MOVED CSHB 74(L&C) OUT OF COMMITTEE                                                                                      
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 175                                                                                                                  
SHORT TITLE: ELECTRONIC POSTING OF INSURANCE POLICIES                                                                           
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
03/18/13       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/18/13       (H)       L&C                                                                                                    
03/27/13       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 125                                                                                                                  
SHORT TITLE: TOPICAL EYE MEDS PRESCRIPTION  REFILLS                                                                             
SPONSOR(s): HOLMES                                                                                                              
                                                                                                                                
02/18/13       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/18/13       (H)       L&C                                                                                                    
03/27/13       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: HB 74                                                                                                                   
SHORT TITLE: AIDEA: LNG PROJECT; DIVIDENDS; FINANCING                                                                           
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
01/16/13       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/16/13       (H)       L&C, FIN                                                                                               
02/08/13       (H)       L&C AT 3:15 PM BARNES 124                                                                              
02/08/13       (H)       Heard & Held                                                                                           
02/08/13       (H)       MINUTE(L&C)                                                                                            
03/04/13       (H)       L&C AT 3:15 PM CAPITOL 106                                                                             
03/04/13       (H)       Mtg Recess & Reconvene 8:00 AM, 3/5/13                                                                 
03/05/13       (H)       L&C AT 8:00 AM BARNES 124                                                                              
03/05/13       (H)       -- Meeting Continued from 3/4/13 --                                                                    
03/11/13       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/11/13       (H)       Heard & Held                                                                                           
03/11/13       (H)       MINUTE(L&C)                                                                                            
03/13/13       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/13/13       (H)       Heard & Held                                                                                           
03/13/13       (H)       MINUTE(L&C)                                                                                            
03/15/13       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/15/13       (H)       Heard & Held                                                                                           
03/15/13       (H)       MINUTE(L&C)                                                                                            
03/21/13       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/21/13       (H)       <Bill Hearing Canceled>                                                                                
03/25/13       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/25/13       (H)       Scheduled But Not Heard                                                                                
03/27/13       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/27/13       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
KONRAD JACKSON, Staff                                                                                                           
Representative Kurt Olson                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 175 on behalf of the sponsor,                                                               
the House Labor and Commerce Committee, of which Representative                                                                 
Olson is the chair.                                                                                                             
                                                                                                                                
JOSH ZIELASKIESWISC, Attorney                                                                                                   
Progressive Insurance                                                                                                           
Mayfield Village, Ohio                                                                                                          
POSITION STATEMENT:  Testified during the discussion of HB 175.                                                               
                                                                                                                                
REPRESENTATIVE LINDSEY HOLMES                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as sponsor during the discussion                                                               
of HB 125.                                                                                                                      
                                                                                                                                
CHRISSY MCNALLY, Staff                                                                                                          
Representative Lindsey Holmes                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified on behalf of the sponsor of                                                                    
HB 125, Representative Lindsey Holmes.                                                                                          
                                                                                                                                
MICHAEL LEVITT                                                                                                                  
American Academy of Ophthalmology                                                                                               
San Francisco, California                                                                                                       
POSITION STATEMENT:  Testified during the discussion of HB 125.                                                               
                                                                                                                                
SHEELA TALLMAN, Senior Manager                                                                                                  
Legislative Policy                                                                                                              
Premera Blue Cross/Blue Shield of Alaska                                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified during the discussion of HB 175.                                                               
                                                                                                                                
TED LEONARD, Executive Director                                                                                                 
Alaska Industrial Development & Export Authority (AIDEA)                                                                        
Department of Commerce, Community & Economic Development (DCCED)                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified and answered questions during the                                                              
discussion of HB 74.                                                                                                            
                                                                                                                                
MARK R.DAVIS, Deputy Director                                                                                                   
Infrastructure Development                                                                                                      
Alaska Industrial Development and Export Authority (AIDEA)                                                                      
Department of Commerce, Community & Economic Development (DCCED)                                                                
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Testified and answered questions  during the                                                            
discussion of HB 74.                                                                                                            
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:24:49 PM                                                                                                                    
                                                                                                                                
CHAIR  KURT OLSON  called the  House Labor  and Commerce  Standing                                                            
Committee  meeting   to  order  at  3:24  p.m.     Representatives                                                              
Reinbold, Josephson,  Herron, Saddler,  and Olson were  present at                                                              
the call to  order.  Representatives Millett and  Chenault arrived                                                              
as the meeting was in progress.                                                                                                 
                                                                                                                                
        HB 175-ELECTRONIC POSTING OF INSURANCE POLICIES                                                                     
                                                                                                                                
3:25:11 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that the  first order of business  would be                                                              
HOUSE BILL  NO. 175, "An Act  allowing, under certain  conditions,                                                              
a  property   or  casualty   insurer  to   provide  policies   and                                                              
endorsements   to  an  insured   by  posting   the  policies   and                                                              
endorsements on the insurer's Internet website."                                                                                
                                                                                                                                
3:25:27 PM                                                                                                                    
                                                                                                                                
KONRAD  JACKSON, Staff,  Representative Kurt  Olson, Alaska  State                                                              
Legislature,  stated that  HB 175,  sponsored by  the House  Labor                                                              
and  Commerce   Standing  Committee,  would  permit   insurers  to                                                              
provide  standard property  and  casualty  insurance policies  and                                                              
endorsements  to  those  insured   by  posting  the  policies  and                                                              
endorsements  on  the insurer's  website.   Current  law  requires                                                              
companies  to mail  or deliver  policies in  all 50  states.   The                                                              
bill  would add  posting  as a  means of  access  to policies  and                                                              
endorsements.   Posting property  and casualty insurance  policies                                                              
on insurer's websites  will allow insurers to  dramatically reduce                                                              
the number  of bulky policy  contracts and endorsements  they mail                                                              
to  customers each  year  while  improving the  accessibility  and                                                              
usefulness  of the documents.   He  referred to  an example  of an                                                              
insurance policy  in members' packets from  Progressive Insurance.                                                              
Again,  the  documents  are  typically  lengthy  ones  so  posting                                                              
represents  a direct  savings  to the  consumer  and the  company.                                                              
The  intent of  the  bill  is to  post  policies that  contain  no                                                              
personally  identifiable information  and are  filed and  approved                                                              
before use.  Further,  public posting to the website  will pose no                                                              
privacy risk to  insureds or any competitive risk  to insurers and                                                              
are strictly  policy and endorsement  documents.   Market research                                                              
shows  consumers  often do  not  read  the entire  documents,  but                                                              
instead thumb  through the document  or read a  page or two.   The                                                              
website  access  to  lengthy  documents   such  as  these  is  not                                                              
uncommon,  since  consumers  often receive  software  licenses  or                                                              
other  agreements  on-line  when   purchasing  software  or  other                                                              
items.                                                                                                                          
                                                                                                                                
3:27:59 PM                                                                                                                    
                                                                                                                                
MR.  JACKSON said  some people,  including his  mother, would  not                                                              
use  website technology.    Thus,  a paper  copy  is available  to                                                              
those  who so  desire.   He  pointed out  the  documents would  be                                                              
searchable   and  paper   contracts  will   remain  available   to                                                              
consumers.   The U.S.  Postal Service  has increased postage  five                                                              
times  since 2006  and this  bill  is designed  to help  alleviate                                                              
some of the postage costs, as well.                                                                                             
                                                                                                                                
3:28:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HERRON  asked if those  opposed to this  bill would                                                              
likely be the U.S. Post Service and the paper supply companies.                                                                 
                                                                                                                                
MR. JACKSON  responded that  no one has  contacted the  sponsor in                                                              
opposition to the bill.                                                                                                         
                                                                                                                                
CHAIR OLSON recalled this is an opt-in program.                                                                                 
                                                                                                                                
MR.  JACKSON  agreed   that  this  bill  merely   would  authorize                                                              
companies  to  post  the  documents on  their  website  since  the                                                              
general  policies  do  not  contain  any  personally  identifiable                                                              
information  and thereby  anyone who  wished to  could access  the                                                              
policy via the website.                                                                                                         
                                                                                                                                
3:30:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD  moved to  adopt  the proposed  committee                                                              
substitute  (CS)   for  HB   175,  labeled  28-LS0327\O,   Bailey,                                                              
3/22/13, as the working document.                                                                                               
                                                                                                                                
CHAIR OLSON objected for purpose of discussion.                                                                                 
                                                                                                                                
3:31:11 PM                                                                                                                    
                                                                                                                                
MR. JACKSON,  referring to page 1,  line  7, pointed out  that the                                                              
language  "provide  a  policy  or   endorsement"  is  inserted  to                                                              
indicate  specifically  what  will  be  posted is  the  policy  or                                                              
endorsement.  The  second change on page 1, line  11, would insert                                                              
the   language  "or   endorsement,"   for  consistency   purposes.                                                              
Similar  changes  are  made  on  page  2,  lines  1-2,  where  the                                                              
language "and  endorsements," is inserted  and on page 2,  line 5,                                                              
after policy, the language "and endorsements" is inserted.                                                                      
                                                                                                                                
CHAIR  OLSON  removed  his  objection.   There  being  no  further                                                              
objection, Version O was before the committee.                                                                                  
                                                                                                                                
3:32:44 PM                                                                                                                    
                                                                                                                                
JOSH ZIELASKIESWISC,  Attorney, Progressive Insurance,  stated his                                                              
primary  focus  is  e-commerce.    He  explained  that  his  chief                                                              
executive  officer  visited  the   Progressive  Insurance  mailing                                                              
center and  observed numerous boxes  of policy contracts  awaiting                                                              
mailing.    He related  the  Progressive  Insurance policy  is  35                                                              
pages in  length, which is  on the short  side for policies.   The                                                              
CEO subsequently  tasked him  to figure out  how to  limit mailing                                                              
out so many policies.   The company has conducted  product testing                                                              
and typically  the outcome is that  policies are thrown  out since                                                              
the   policyholders    are   typically    interested    in   their                                                              
identification  cards  and  their declarations  page  since  these                                                              
items  contain  the  information  on  deductibles,  vehicles,  and                                                              
drivers covered under the specific policy.                                                                                      
                                                                                                                                
MR. ZIELASKIESWISC  outlined the goal  of HB 175, which  is first,                                                              
to dramatically reduce  the number of paper property  and casualty                                                              
insurance  contracts  and  endorsements printed  and  mailed  each                                                              
year.   Next,  the  company would  like  to provide  property  and                                                              
casualty  insurance  contracts  and  endorsements  on  a  publicly                                                              
available website  for existing and potential insureds  to review,                                                              
save and  print whenever they  like.  Thus, Progressive  Insurance                                                              
would  like  to  post  their  policies  on  a  publicly  available                                                              
website so people  can read the policies and  perhaps compare them                                                              
to other  policies.  He  said one of  the added consumer  benefits                                                              
would  be to  allow comparison.    In fact,  consumer groups  have                                                              
asked  for  more  openness  and   transparency  between  carriers.                                                              
Additionally,  to assist  policyholders, each  form they  purchase                                                              
will be itemized  on their declarations page or  issued along with                                                              
it.   Finally,  the goal  of HB  175  would be  to provide  simple                                                              
mechanisms for insureds  to access their documents  and allow them                                                              
to request paper copies free of charge.                                                                                         
                                                                                                                                
MR.  ZIELASKIESWISC stated  that  even when  people buy  insurance                                                              
they  typically do  not  see the  printed  terms  of the  contract                                                              
until   the  insurance   company   mails   the  polices   to   the                                                              
policyholders.   This bill would  further benefit  consumers since                                                              
it  allows insurers  to fine-tune  their  efficiencies, which  can                                                              
lower  premium costs.    Further,  the policies  and  endorsements                                                              
will  be available  on  demand.   Typically,  people  are not  too                                                              
worried  about their  policies  until they  have  an accident  and                                                              
want  to check  specific  coverage and  exclusions.   Rather  than                                                              
necessitate calling  an insurance company  to ask for a  policy or                                                              
search  for it,  the policyholders  could check  on the  company's                                                              
website.                                                                                                                        
                                                                                                                                
3:38:12 PM                                                                                                                    
                                                                                                                                
MR. ZIELASKIESWISC  reiterated the benefits.   Additionally, there                                                              
are  green  considerations  and eliminating  these  saves  natural                                                              
resources  and   printing,  as  well   as  postage  costs.     The                                                              
electronic version  is searchable in  a PDF, consumers  can search                                                              
and find  specific sections within  the policy.  The  policies are                                                              
typically  printed  using a  10  or 12  point  font; however,  the                                                              
online  version   can  be  increased  in  size   for  readability.                                                              
Further,  this bill  is  good for  insurance  companies, too,  for                                                              
many of the same reasons that the bill is good for consumers.                                                                   
                                                                                                                                
3:40:17 PM                                                                                                                    
                                                                                                                                
MR.  ZIELASKIESWISC  related  that insurance  laws  typically  lag                                                              
behind  the  rest of  the  financial  services.   The  changes  in                                                              
HB 175 can  help modernize  insurance laws to  bring them  in line                                                              
with the rest of  the financial services.  He predicted  laws like                                                              
this  could  also  allow  more insurance  carriers  to  engage  in                                                              
commerce.   He reported that similar  changes have been  passed in                                                              
Virginia   and  Michigan.      Additionally,   other  states   are                                                              
considering   similar  bills  in   Arizona,  Illinois,   Missouri,                                                              
Kansas, Texas,  Florida, Idaho,  Ohio, Oregon, Alabama,  Colorado,                                                              
Minnesota, Oklahoma, and Pennsylvania.                                                                                          
                                                                                                                                
3:42:38 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked  whether  the  amendment  labeled                                                              
"O.1" has been discussed.                                                                                                       
                                                                                                                                
MR. JACKSON responded it has not yet been offered.                                                                              
                                                                                                                                
3:42:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER asked whether people could inadvertently                                                                 
change their policy or if this relates to elections that the                                                                    
policyholders have previously elected.                                                                                          
                                                                                                                                
MR.   ZIELASKIESWISC  agreed   it   only  applies   to  what   the                                                              
policyholders  have   elected  to   purchase.    The   items  they                                                              
purchased  will  be  itemized  on   their  declaration  page,  but                                                              
policyholders cannot change their policies inadvertently.                                                                       
                                                                                                                                
3:44:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD moved to adopt Amendment 1, labeled 28-                                                                 
LS0327\O.1, Bailey, 3/27/13, to HB 175, which read:                                                                             
                                                                                                                                
     Page 1, line 2:                                                                                                            
          Delete "and" in both places                                                                                         
          Insert "or" in both places                                                                                          
                                                                                                                                
     Page 1, line 9:                                                                                                            
          Delete "personal"                                                                                                 
                                                                                                                                
     Page 2, line 1, following "policy":                                                                                        
          Delete "and"                                                                                                          
          Insert "or [AND]"                                                                                                 
                                                                                                                                
     Page 2, line 3:                                                                                                            
          Delete "and"                                                                                                          
          Insert "or [AND]"                                                                                                 
                                                                                                                                
     Page 2, line 10, following "policy":                                                                                       
          Insert "or endorsement"                                                                                           
                                                                                                                                
     Page 2, line 12, following "policy":                                                                                       
          Insert "or endorsement"                                                                                           
                                                                                                                                
     Page 2, line 13, following "policy":                                                                                       
          Insert "or endorsement"                                                                                           
                                                                                                                                
     Page 2, line 18:                                                                                                           
          Delete "endorsements"                                                                                                 
          Insert "endorsement without the insured paying a                                                                  
     fee [ENDORSEMENTS]"                                                                                                    
                                                                                                                                
     Page 2, line 19:                                                                                                           
          Delete "endorsements"                                                                                                 
          Insert "endorsement [ENDORSEMENTS]"                                                                               
                                                                                                                                
CHAIR OLSON objected for purpose of discussion.                                                                                 
                                                                                                                                
MR.  JACKSON  explained that  Amendment  1  contains a  number  of                                                              
technical  changes.   He  referred  to  the language  "policy  and                                                              
endorsement"  which   he  said  is  the  preferred   language  for                                                              
consistency.  He  then referred to one substantive  change on page                                                              
2,   line  18,   of  Amendment   1,  which   would  add   language                                                              
"endorsement without  the insured paying a fee" to  ensure that no                                                              
one would be  required to pay for  a paper copy of  his/her policy                                                              
or endorsement.                                                                                                                 
                                                                                                                                
3:46:40 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CHENAULT  asked whether  page 2, line  18, attaches                                                              
a fee if a person requests a copy of his/her policy.                                                                            
                                                                                                                                
MR.  JACKSON  answered no,  that  a  person  could obtain  a  copy                                                              
without paying an  additional fee to ensure policyholders  are not                                                              
charged a fee for a printed copy of their policy.                                                                               
                                                                                                                                
CHAIR OLSON  [withdrew is  objection] and  upon determining  there                                                              
were  no  further  objections,  announced  that  Amendment  1  was                                                              
adopted.                                                                                                                        
                                                                                                                                
3:47:34 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON,  after  first  determining  no one  else  wished  to                                                              
testify, closed public testimony on HB 175.                                                                                     
                                                                                                                                
3:47:54 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHENAULT asked  if anyone  has addressed  concerns                                                              
by the  Alaska State Troopers or  police associations in  terms of                                                              
drivers using electronic  insurance policies.  He  understood that                                                              
officers  do  not want  the  driver  to  accompany them  to  their                                                              
police cars  for safety  reasons; however,  some concern  has also                                                              
been expressed  that if an officer  were to take the phone  to the                                                              
police vehicle,   the driver might  suggest calls were  made using                                                              
the phone during the time it was in the officer's possession.                                                                   
                                                                                                                                
3:49:09 PM                                                                                                                    
                                                                                                                                
MR.   ZIELASKIESWISC  stated   that   it  seemed   more  like   an                                                              
identification issue  than a policy contract or  endorsement issue                                                              
since people  do not typically  bring their policy  contracts with                                                              
them  in  their  vehicles and  instead  will  have  identification                                                              
cards in  their glove box.   The policy  cards would be  mailed or                                                              
e-mailed  to  them,  in whichever  manner  they  have  elected  to                                                              
receive them, he said.                                                                                                          
                                                                                                                                
3:50:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHENAULT related a  scenario in which  advertising                                                              
shows  a  cartoon character  handing  a  phone  to an  officer  in                                                              
response to  a request for  proof of insurance.   He  surmised the                                                              
only reason for  an electronic version would be if  the person was                                                              
in  a position  in which  he/she  did not  have his/her  insurance                                                              
card  in his  vehicle.   He also  recalled  some discussion  about                                                              
police not wanting to take the phone device.                                                                                    
                                                                                                                                
3:51:04 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON answered  that in  Alaska, the  vehicle insurance  is                                                              
required to physically be in the vehicle as a paper document.                                                                   
                                                                                                                                
CHAIR  OLSON,  after  first  determining  no one  else  wished  to                                                              
testify, closed public testimony on HB 175.                                                                                     
                                                                                                                                
REPRESENTATIVE  REINBOLD  moved  to  report HB  175,  labeled  28-                                                              
LS0327\O,  Bailey,  3/22/13, as  amended,  out of  committee  with                                                              
individual  recommendations  and  the accompanying  fiscal  notes.                                                              
There  being no  objection, CSHB  175(L&C) was  reported from  the                                                              
House Labor and Commerce Standing Committee.                                                                                    
                                                                                                                                
3:52:05 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 3:52 p.m. to 3:55 p.m.                                                                       
                                                                                                                                
          HB 125-TOPICAL EYE MEDS PRESCRIPTION REFILLS                                                                      
                                                                                                                                
3:55:16 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that  the next order  of business  would be                                                              
HOUSE  BILL NO. 125,  "An Act  prohibiting a  health care  insurer                                                              
from  denying  coverage  for an  additional  limited  quantity  of                                                              
prescription    topical     eye    medication     under    certain                                                              
circumstances."                                                                                                                 
                                                                                                                                
3:55:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LINDSEY  HOLMES,   Alaska  State  Legislature,  as                                                              
sponsor, stated  that the optometrists and  ophthalmologists agree                                                              
with  the  changes in  HB  125.    She related  she  is  currently                                                              
working  with the  insurance industry  on some  slight changes  to                                                              
the bill.                                                                                                                       
                                                                                                                                
3:56:42 PM                                                                                                                    
                                                                                                                                
CHRISSY  MCNALLY,  Staff, Representative  Lindsey  Holmes,  Alaska                                                              
State  Legislature,  on  behalf  of  the  sponsor,  Representative                                                              
Lindsey Holmes, stated  HB 125 would allow patients  with glaucoma                                                              
and other  related  eye diseases  to receive  a limited refill  of                                                              
prescription  eye drops if  an individual  runs out of  medication                                                              
before the  prescribed refill  date.   Prescription medication  is                                                              
dispensed in  a specific number  of dosages  and eye drops  are no                                                              
exception; however, when  a medication comes in a pill  form it is                                                              
still  usable if  it is  dropped, but  in contrast,  if a  patient                                                              
blinks  away an  eye drop,  the dose is  lost.   For patients  who                                                              
suffer  from degenerative  eye  diseases,  such as  glaucoma,  who                                                              
have  unsteady  hands this  may  mean  running out  of  medication                                                              
prior  to the  prescribed  refill  date  and these  require  daily                                                              
treatment from prescription  eye drops to maintain  proper vision,                                                              
which can worsen without regular application of drops.                                                                          
                                                                                                                                
MS.  MCNALLY  explained that  this  bill  will allow  patients  to                                                              
receive  a  limited  refill  of   prescription  eye  drops  if  an                                                              
individual  runs out of  medication before  the prescribed  refill                                                              
date so  long as  the doctor  agrees.   Currently, some  insurance                                                              
plans restrict  patients from  refilling medications  earlier than                                                              
the  typical  single month  or  90-day  refill  date.   A  typical                                                              
insurance  provider  will pay  for  a  standardized one  month  or                                                              
three  month  supply of  medication.    This  is not  an  uncommon                                                              
provision  for Medicare;  however,  a  gap exists  within  private                                                              
coverage  and simply  put, patients  who are  insured by  carriers                                                              
within that  gap run the risk  of running out of  their medication                                                              
before  the  refill is  allowed.    This  bill would  allow  their                                                              
doctor to extend the prescription and help keep them healthy.                                                                   
                                                                                                                                
3:58:31 PM                                                                                                                    
                                                                                                                                
MICHAEL  LEVITT, American  Academy of  Ophthalmology, stated  that                                                              
similar  legislation  has been  enacted  in  a number  of  states,                                                              
including  Connecticut, New  Mexico, and  Maryland.  The  proposed                                                              
changes  have  been  vetted through  fiscal  committees  in  those                                                              
states  with little  or no  impact  to the  state.   This bill  is                                                              
focused  on a  narrow  band of  patients,  not including  Medicare                                                              
patients  since the  provision  is already  covered  by a  similar                                                              
policy.   The goal  of this  bill is  to ensure patients  continue                                                              
their care for chronic diseases that are potentially blinding.                                                                  
                                                                                                                                
4:00:18 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  asked for the number  of states that  currently offer                                                              
the proposed provisions for refills.                                                                                            
                                                                                                                                
MR. LEVITT  answered four or  five states.   This effort  began in                                                              
2009, with some  states being more active than others  in terms of                                                              
proactive   legislation;   however,   the  American   Academy   of                                                              
Ophthalmology  has  had  a  high success  rate  when  the  state's                                                              
ophthalmological  society  decides   to  focus  on  this  specific                                                              
issue.                                                                                                                          
                                                                                                                                
CHAIR  OLSON asked  whether  any states  that  have adopted  these                                                              
changes have withdrawn from the changes.                                                                                        
                                                                                                                                
MR. LEVITT answered none.                                                                                                       
                                                                                                                                
4:01:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER asked whether  Mr. Levitt anticipated  any                                                              
increase  in the  cost for  eye  medication with  passage of  this                                                              
bill.                                                                                                                           
                                                                                                                                
MR.  LEVITT  responded  that  he  has  not  seen  any  reports  of                                                              
increases.   He reiterated that this  is focused on a  very narrow                                                              
but  serious problem;  however, there  have not  been any  reports                                                              
from insurance companies of an explosion in costs.                                                                              
                                                                                                                                
4:02:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER  asked whether there  is any risk  of abuse                                                              
of eye medication.                                                                                                              
                                                                                                                                
MR.  LEVITT explained  these are  chronic diseases.   He  surmised                                                              
that  any abuse  should  come to  the  attention  of a  physician.                                                              
Typically, the drugs  are used to treat glaucoma,  are anti-viral,                                                              
or are  antibiotics  and doctors  have not reported  this  type of                                                              
problem to date.                                                                                                                
                                                                                                                                
4:03:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER related  the bill  provides for a  limited                                                              
refill  of topical  prescription  medicine  and he  asked  whether                                                              
this has  been quantified  to be  limited to a  number of  days or                                                              
weeks left in the prescription.                                                                                                 
                                                                                                                                
MR.  LEVITT answered  this  is one  of the  issues  that is  being                                                              
discussed.                                                                                                                      
                                                                                                                                
REPRESENTATIVE HOLMES  answered that she  has been working  on one                                                              
potential  change to  the bill,  which would  limit the number  of                                                              
refills.                                                                                                                        
                                                                                                                                
4:04:58 PM                                                                                                                    
                                                                                                                                
SHEELA TALLMAN,  Senior Manager, Legislative Policy,  Premera Blue                                                              
Cross/Blue  Shield  of  Alaska   (Premera),  stated  that  Premera                                                              
provides  coverage   to  over  100,000   members  in   Alaska,  to                                                              
individuals, families,  small employers, large employers,  as well                                                              
as provides service  to larger self-funded employer  groups in the                                                              
state.   She advised that Premera  has an early  refill medication                                                              
policy for  members.   Initially, Premera  had concerns  about the                                                              
early  refill   of  refills   of  prescription  eye   medications.                                                              
However,  she   has  appreciated  the  sponsor's   willingness  to                                                              
address   Premera's  concerns,   which  she   believed  would   be                                                              
addressed  in  subsequent changes  to  HB  125 the  committee  may                                                              
choose to adopt.                                                                                                                
                                                                                                                                
4:06:39 PM                                                                                                                    
                                                                                                                                
[HB 125 was held over.]                                                                                                         
                                                                                                                                
The committee took an at-ease from 4:07 p.m. to 4:08 p.m.                                                                       
                                                                                                                                
         HB 74-AIDEA: LNG PROJECT; DIVIDENDS; FINANCING                                                                     
                                                                                                                                
4:08:44 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that the  final order of business  would be                                                              
HOUSE  BILL  NO.  74, "An  Act  relating  to  development  project                                                              
financing  by   the  Alaska  Industrial  Development   and  Export                                                              
Authority; relating  to the dividends  from the Alaska  Industrial                                                              
and   Export   Authority;  authorizing   the   Alaska   Industrial                                                              
Development and  Export Authority  to provide financing  and issue                                                              
bonds for  a liquefied natural  gas production system  and natural                                                              
gas distribution system; and providing for an effective date."                                                                  
                                                                                                                                
4:09:01 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  explained that  the committee  previously heard  this                                                              
bill and  public testimony  has  been closed.   He explained  that                                                              
the liquefied  natural gas (LNG)  and trucking of LNG  and propane                                                              
was removed  from this  bill, and  therefore  what remains  in the                                                              
proposed committee  substitute (CS) for HB 74 is  the authority to                                                              
allow  the  Alaska Industrial  Development  and  Export  Authority                                                              
(AIDEA) the ability to provide direct financing on projects.                                                                    
                                                                                                                                
4:09:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD  moved to  adopt  the proposed  committee                                                              
substitute (CS)  for HB 74, labeled 28-GH1738\N,  Bailey, 3/20/13,                                                              
as the working document.                                                                                                        
                                                                                                                                
CHAIR OLSON objected for the purpose of discussion.                                                                             
                                                                                                                                
4:10:08 PM                                                                                                                    
                                                                                                                                
TED LEONARD, Executive  Director, Alaska Industrial  Development &                                                              
Export  Authority (AIDEA),  Department of  Commerce, Community,  &                                                              
Economic Development (DCCED), introduced himself.                                                                               
                                                                                                                                
MARK   R.DAVIS,  Deputy   Director,  Infrastructure   Development,                                                              
Alaska  Industrial  Development   and  Export  Authority  (AIDEA),                                                              
Department   of  Commerce,   Community   &  Economic   Development                                                              
(DCCED), introduced himself.                                                                                                    
                                                                                                                                
MR. LEONARD  summarized that  for the past  three years  AIDEA has                                                              
been  working with  the legislature  to help  modernize the  tools                                                              
AIDEA has to use.   He offered his belief that  this bill contains                                                              
one tool  to assist AIDEA in  development projects.   This vehicle                                                              
will  assist  AIDEA  in  working  with  the  banking  industry  in                                                              
Alaska,  as partners  on development  projects.   For example,  he                                                              
related that  AIDEA's loan participation  program has  been wildly                                                              
successful,  with  over  $468  million  of  financing  for  Alaska                                                              
businesses.   He offered  his belief  that this  tool will  assist                                                              
AIDEA  in moving forward  with banks  and by  helping AIDEA  match                                                              
financing to  specific projects.   He explained in  some instances                                                              
AIDEA  should  own   a  portion  of  a  project,   such  as  major                                                              
infrastructure   industrial  road   projects  in  which   numerous                                                              
entities use  the project.  However,  in some instances,  it makes                                                              
more sense  for AIDEA  to promote  the project through  financing.                                                              
Certainly, reasons  exist in which AIDEA  would not want  to own a                                                              
portion of the projects,  such as for mineral projects.   In those                                                              
instances,  AIDEA might  be involved  in  promoting a  mill in  an                                                              
area to  provide major  resource development;  however, AIDEA  may                                                              
not  want to  take  on environmental  risks.    As the  financier,                                                              
AIDEA's role  is as the lender  but not in dismantling  a project,                                                              
reclamation  of tailings, or  other aspects  of a mining  project.                                                              
He  concluded  that  this  direct   financing  will  provide  risk                                                              
mitigation  since  AIDEA  would  not  be  involved  as  an  owner.                                                              
Finally, he  offered that this tool  will be a very  efficient and                                                              
effective  vehicle to  work with  Alaska's financial  institutions                                                              
to promote projects in Alaska.                                                                                                  
                                                                                                                                
4:13:24 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  was unsure of  what it meant  to finance                                                              
a project  but not own  it.  He  understood the economic  or legal                                                              
reasons, but he was unsure of the separation.                                                                                   
                                                                                                                                
MR. DAVIS replied  he believes AIDEA's issue is not  to avoid risk                                                              
but  to manage  risk.    He explained  that  when  investing in  a                                                              
large-scale  project that  may be extended,  the financing  entity                                                              
does  not have  any  day-to-day authority  over  the project,  but                                                              
could  become unintentionally  liable for  an operator's  mistake.                                                              
Therefore,  traditionally, lenders  don't have  liability for  the                                                              
project,  but owners  do.   Further, if  AIDEA were  to act  as an                                                              
owner,  AIDEA would  need  to engage  in  more transaction  costs,                                                              
which  are costs that  don't move  the project  forward, but  cost                                                              
the state money.                                                                                                                
                                                                                                                                
CHAIR OLSON  provided an example  in which  AIDEA owns a  rig, but                                                              
every time  it is used  the rig hits gas.   He offered  his belief                                                              
the company is on its fourth well.                                                                                              
                                                                                                                                
MR. LEONARD  clarified that  AIDEA has  collateral on  Buccaneer's                                                              
rig moving out, but not for the on-land operation.                                                                              
                                                                                                                                
4:15:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  recalled  that  AIDEA  participates  in                                                              
loan assistance programs.                                                                                                       
                                                                                                                                
MR.  LEONARD  answered   that  AIDEA  has  three   main  programs,                                                              
including  the   loan  participation   program,  in   which  AIDEA                                                              
partners with  banks on loans.   He summarized that AIDEA  can buy                                                              
up to  90 percent  of the  loan up  to $20  million.  In  essence,                                                              
AIDEA  partners with  banks on  these loans  to provide  long-term                                                              
financing.   In  response  to a  question,  he  clarified that  is                                                              
different than direct financing.                                                                                                
                                                                                                                                
MR.  LEONARD  explained   that  the  second  program   is  AIDEA's                                                              
development  financing,  in  which AIDEA  provides  financing  for                                                              
projects,  but must  have  an ownership  stake.    Thus AIDEA  can                                                              
either invest  in a  project via  a limited liability  corporation                                                              
(LLC) or  have direct ownership.   Over  the last couple  of years                                                              
one of the tools  AIDEA has worked with the committee  on has been                                                              
the ability  to own  investments through  corporations instead  of                                                              
direct  ownership.    Third,  AIDEA   can  also  issue  bonds  for                                                              
projects  using   its  revenue  bond  or  conduit   bond  program.                                                              
However,  this  bill would  allow  AIDEA  the ability  to  provide                                                              
financing for  projects and instead  of having an  ownership stake                                                              
in  a  project,  AIDEA would  provide  direct  financing  for  the                                                              
project - with no  intention of direct ownership -  or AIDEA could                                                              
provide guarantees  on a project.   For example, if a  bank wanted                                                              
to partner  with AIDEA,  the corporation  could layer  a guarantee                                                              
of the financing for the project.                                                                                               
                                                                                                                                
MR. DAVIS concurred.                                                                                                            
                                                                                                                                
4:18:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked  if  this  bill  is  not  passed,                                                              
whether AIDEA would  still consider ownership in  projects such as                                                              
the Niblack  Project in  Southeast Alaska or  whether the  lack of                                                              
direct financing would end the possibility of involvement.                                                                      
                                                                                                                                
MR. LEONARD  said it becomes  a potential  in how to  consider the                                                              
project, since  risk assessment is a  portion of the project.   It                                                              
could  change the  cost of  the financing;  however, he  suggested                                                              
that changing  this  type of financing  tool  does not change  the                                                              
projects  or the amount  of the  investment.   Instead, this  bill                                                              
provides   a  tool  that   AIDEA  believes   is  more   effective.                                                              
Therefore,   no;  it   would  not   change   AIDEA's  ability   to                                                              
participate in the  Niblack Project, but it would  carry more risk                                                              
with the financing of the project.                                                                                              
                                                                                                                                
MR.  LEONARD  recalled  an advantage  previously  discussed,  such                                                              
that with  direct financing  the transactional  cost is  much less                                                              
than for ownership.   He explained AIDEA would need  to spend more                                                              
money  to write  up,  in essence,  a  partnership,  than it  would                                                              
spend through  direct financing, and  as Mr. Davis  mentioned, all                                                              
different scenarios  must be  considered when  AIDEA is  a partner                                                              
versus being limited as a financier.                                                                                            
                                                                                                                                
4:20:27 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  what  other development  projects                                                              
AIDEA is considering  for direct financing.  The one  that came to                                                              
his mind was the rare earth project.                                                                                            
                                                                                                                                
                                                                                                                                
MR.  DAVIS answered  that AIDEA  is  considering direct  financing                                                              
for  any  industrial   plant  it  may  wish  to   finance  due  to                                                              
operational issues,  as well as  for financing opportunities.   He                                                              
stated that  AIDEA might not do  a project because AIDEA  tries to                                                              
work with  the private sector,  and with project  financing, AIDEA                                                              
can attract  commercial bank  financing; however,  if AIDEA  is an                                                              
owner,  it  seeks  equity partners  such  as  investment  banking.                                                              
Thus,  AIDEA would  be limited  in the  type of  banking it  could                                                              
approach.   Thus, AIDEA  would tend to  use direct financing  when                                                              
it would  like to work  with commercial  banks; and  use financing                                                              
when  it would  like  to invest  in  a plant  or  facility with  a                                                              
limited  life.   Additionally, as  Mr. Leonard  said, AIDEA  would                                                              
invest when  it did not see a  purpose for state ownership  of the                                                              
infrastructure,  but again,  as previously  mentioned with  a road                                                              
with access needed,  AIDEA may wish to require  ownership interest                                                              
in order to require the influence.                                                                                              
                                                                                                                                
4:22:05 PM                                                                                                                    
                                                                                                                                
MR.  LEONARD outlined  three  projects  AIDEA would  consider  for                                                              
direct financing,  including Ucore,  Prince of Wales;  Niblack; or                                                              
oil production  facilities and industrial facilities,  which would                                                              
be more effective with direct financing than with ownership.                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  recalled  that  AIDEA has  done  direct                                                              
financing with hotels and office buildings.                                                                                     
                                                                                                                                
MR. LEONARD answered yes.                                                                                                       
                                                                                                                                
MR.  DAVIS  clarified  the projects  in  question  really  weren't                                                              
direct  financing, but  loan  participation  since those  projects                                                              
are tied  to commercial real estate  and cannot be used  for other                                                              
purposes;  however,  it is  difficult  since AIDEA  needs  secured                                                              
interest which  is easier to do  with real estate since  it has an                                                              
appraised  value than  with a chattel.   He  clarified that  AIDEA                                                              
has  participated  in  hotels  and   bed-and-breakfast  operations                                                              
throughout   the   state   and    on   investment   through   loan                                                              
participation  in  a  production  facility  in  Sitka.    He  also                                                              
mentioned  AIDEA  has  office  building   projects  in  Fairbanks,                                                              
Anchorage, and Juneau.                                                                                                          
                                                                                                                                
4:23:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked whether  Mr. Davis has a  sense of                                                              
the  reason   the  enabling  act   for  AIDEA  restricted   it  to                                                              
development projects with an ownership interest.                                                                                
                                                                                                                                
MR.  DAVIS  answered  that his  research  indicated  that  AIDEA's                                                              
statutes  were based  on a  West  Virginia development  authority,                                                              
using a  model of project  ownership.   It appears this  model was                                                              
popular in  the 60s and 70s; however,  there has been  a change in                                                              
the U.S.  such that  New Jersey,  Massachusetts, and Indiana  have                                                              
moved  to  project  financing.   That  doesn't  mean  that  having                                                              
ownership interest  isn't a  bad tool, so  AIDEA is  merely asking                                                              
to have all the tools.                                                                                                          
                                                                                                                                
4:24:30 PM                                                                                                                    
                                                                                                                                
MR.  LEONARD explained  that AIDEA  can  still influence  projects                                                              
with direct  financing if a state  interest exists.   For example,                                                              
one  of  the  reasons  to have  ownership  of  the  rig  mentioned                                                              
earlier  was to  keep it in  Alaska waters.   He  said that  could                                                              
still  be done  with  direct financing  through  contracts in  the                                                              
loans.                                                                                                                          
                                                                                                                                
MR.  DAVIS  offered  his  belief   that  not  moving  out  of  the                                                              
jurisdiction would represent a reasonable commercial covenant.                                                                  
                                                                                                                                
4:25:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD moved  to report  the proposed  committee                                                              
substitute (CS)  for HB 74, labeled 28-GH1838\N,  Bailey, 3/20/13,                                                              
out  of   committee  with   individual  recommendations   and  the                                                              
accompanying   fiscal   notes.     There   being   no   objection,                                                              
CSHB 74(L&C)  was  reported  from  the House  Labor  and  Commerce                                                              
Standing Committee.                                                                                                             
                                                                                                                                
4:26:07 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being  no further business  before the committee,  the House                                                              
Labor and  Commerce Standing  Committee meeting  was adjourned  at                                                              
4:26 p.m.                                                                                                                       

Document Name Date/Time Subjects
HB175 ver C.pdf HL&C 3/27/2013 3:15:00 PM
HB 175
HB175 Sponsor Statement.pdf HL&C 3/27/2013 3:15:00 PM
HB 175
HB175 Fiscal Note-DCCED-DOI-03-22-13.pdf HL&C 3/27/2013 3:15:00 PM
HB 175
HB175 Supporting Documents-AK PGR Policy Contract.pdf HL&C 3/27/2013 3:15:00 PM
HB 175
HB175 Supporting Documents-Letter NAMIC 3-26-2013.pdf HL&C 3/27/2013 3:15:00 PM
HB 175
HB175 Supporting Documents-Sample Declaration Page.pdf HL&C 3/27/2013 3:15:00 PM
HB 175
HB175 Supporting Documents-Written Testimony of Joshua M Zielaskiewicz.pdf HL&C 3/27/2013 3:15:00 PM
HB 175
HB175 Draft Proposed CS ver O.pdf HL&C 3/27/2013 3:15:00 PM
HB 175
HB125 ver N.pdf HL&C 3/27/2013 3:15:00 PM
HB 125
HB125 Sponsor Statement.pdf HL&C 3/27/2013 3:15:00 PM
HB 125
HB125 Fiscal Note-DCCED-DOI-03-26-13.pdf HL&C 3/27/2013 3:15:00 PM
HB 125
HB125 Fiscal Note-DOA-DRB-3-22-13.pdf HL&C 3/27/2013 3:15:00 PM
HB 125
HB125 Supporting Documents-Letter Alaska Optometric Association 2-26-2013.pdf HL&C 3/27/2013 3:15:00 PM
HB 125
HB125 Supporting Documents-Letter Amerian Academy of Opthalmology 2-25-2013.pdf HL&C 3/27/2013 3:15:00 PM
HB 125
HB125 Opposing Documents-Letter Premera 3-12-2013.pdf HL&C 3/27/2013 3:15:00 PM
HB 125
HB74 Draft Proposed CS ver N.PDF HL&C 3/27/2013 3:15:00 PM
HB 74
HB74 Supporting Documents-Letter Heatherdale Resources 3-25-2013.pdf HL&C 3/27/2013 3:15:00 PM
HB 74
HB74 Supporting Documents-Letter Ucore 3-26-2013.PDF HL&C 3/27/2013 3:15:00 PM
HB 74
HB175 Draft Proposed Amendment O.1.PDF HL&C 3/27/2013 3:15:00 PM
HB 175