Legislature(2017 - 2018)BARNES 124

03/26/2018 03:15 PM LABOR & COMMERCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 165 COMPREHENSIVE HEALTH INSURANCE FUND TELECONFERENCED
Heard & Held
-- Public Testimony --
+= HB 379 COMM FISHERMEN'S FUND:VESSEL OWNER CLAIMS TELECONFERENCED
Scheduled but Not Heard
-- Public Testimony --
+= SB 4 BARBERS/HAIRDRESSERS;CHEMICALS;BRAIDING TELECONFERENCED
Moved HCS CSSSSB 4(L&C) AM Out of Committee
-- Public Testimony --
+= HB 374 ON-BILL FINANCING OF ENERGY IMPROVEMENTS TELECONFERENCED
Scheduled but Not Heard
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+ SB 45 EXEMPTION: LICENSING OF CONTRACTORS TELECONFERENCED
Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
          HOUSE LABOR AND COMMERCE STANDING COMMITTEE                                                                         
                         March 26, 2018                                                                                         
                           3:18 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Sam Kito, Chair                                                                                                  
Representative Adam Wool, Vice Chair                                                                                            
Representative Andy Josephson                                                                                                   
Representative Louise Stutes                                                                                                    
Representative Chris Birch                                                                                                      
Representative Gary Knopp                                                                                                       
Representative Colleen Sullivan-Leonard                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mike Chenault (alternate)                                                                                        
Representative Bryce Edgmon (alternate)                                                                                         
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 165                                                                                                             
"An  Act relating  to the  Alaska  comprehensive health  insurance                                                              
fund; and providing for an effective date."                                                                                     
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
CS FOR SENATE BILL NO. 45(FIN)                                                                                                  
"An  Act  relating   to  an  exemption  from  the   regulation  of                                                              
construction contractors."                                                                                                      
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
CS FOR SS FOR SENATE BILL NO. 4(FIN) AM                                                                                         
"An  Act  relating  to the  Board  of  Barbers  and  Hairdressers;                                                              
relating   to  a   limited   license  to   practice   non-chemical                                                              
barbering;  relating  to  a license  to  practice  hair  braiding;                                                              
relating  to the  Department  of Environmental  Conservation;  and                                                              
providing for an effective date."                                                                                               
                                                                                                                                
     - MOVED HCS CSSSSB 4(L&C) AM OUT OF COMMITTEE                                                                              
                                                                                                                                
HOUSE BILL NO. 379                                                                                                              
"An  Act  relating  to claims  against  protection  and  indemnity                                                              
insurance policies of vessel owners."                                                                                           
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                                
HOUSE BILL NO. 374                                                                                                              
"An Act relating to on-bill financing by a utility for certain                                                                  
energy efficiency and conservation improvements."                                                                               
                                                                                                                                
     - SCHEDULED BUT NOT HEARD                                                                                                  
                                                                                                                              
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 165                                                                                                                  
SHORT TITLE: COMPREHENSIVE HEALTH INSURANCE FUND                                                                                
SPONSOR(s): SENATOR(s) MACKINNON                                                                                                
                                                                                                                                
01/26/18       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/26/18       (S)       L&C, FIN                                                                                               
02/22/18       (S)       L&C AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
02/22/18       (S)       Moved SB 165 Out of Committee                                                                          
02/22/18       (S)       MINUTE(L&C)                                                                                            
02/26/18       (S)       L&C RPT  5DP                                                                                           
02/26/18       (S)       DP: COSTELLO, STEVENS, MICCICHE, MEYER,                                                                
                         GARDNER                                                                                                
02/27/18       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
02/27/18       (S)       Heard & Held                                                                                           
02/27/18       (S)       MINUTE(FIN)                                                                                            
02/28/18       (S)       FIN RPT  6DP 1NR                                                                                       
02/28/18       (S)       DP: HOFFMAN, MACKINNON, BISHOP, VON                                                                    
                         IMHOF, STEVENS, MICCICHE                                                                               
02/28/18       (S)       NR: OLSON                                                                                              
02/28/18       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
02/28/18       (S)       Moved SB 165 Out of Committee                                                                          
02/28/18       (S)       MINUTE(FIN)                                                                                            
03/05/18       (S)       TRANSMITTED TO (H)                                                                                     
03/05/18       (S)       VERSION: SB 165                                                                                        
03/07/18       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/07/18       (H)       L&C, FIN                                                                                               
03/21/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/21/18       (H)       -- MEETING CANCELED --                                                                                 
03/23/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/23/18       (H)       -- MEETING CANCELED --                                                                                 
03/26/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: SB  45                                                                                                                  
SHORT TITLE: EXEMPTION: LICENSING OF CONTRACTORS                                                                                
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
02/01/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/01/17       (S)       L&C, FIN                                                                                               
02/07/17       (S)       L&C AT  1:30 PM BELTZ 105 (TSBldg)                                                                     
02/07/17       (S)       Heard & Held                                                                                           
02/07/17       (S)       MINUTE(L&C)                                                                                            
02/28/17       (S)       L&C AT  1:30 PM BELTZ 105 (TSBldg)                                                                     
02/28/17       (S)       Moved  SB 45 Out of Committee                                                                          
02/28/17       (S)       MINUTE(L&C)                                                                                            
03/01/17       (S)       L&C RPT  1DP 4NR                                                                                       
03/01/17       (S)       DP: COSTELLO                                                                                           
03/01/17       (S)       NR: HUGHES, MEYER, STEVENS, GARDNER                                                                    
04/07/17       (S)       FIN AT  9:00 AM SENATE FINANCE 532                                                                     
04/07/17       (S)       Heard & Held                                                                                           
04/07/17       (S)       MINUTE(FIN)                                                                                            
04/11/17       (S)       FIN AT  1:30 PM SENATE FINANCE 532                                                                     
04/11/17       (S)       Moved CSSB 45(FIN) Out of Committee                                                                    
04/11/17       (S)       MINUTE(FIN)                                                                                            
04/12/17       (S)       FIN RPT  CS  5DP 1NR    SAME TITLE                                                                     
04/12/17       (S)       DP: HOFFMAN, MACKINNON, BISHOP, VON                                                                    
                        IMHOF, MICCICHE                                                                                         
04/12/17       (S)       NR: OLSON                                                                                              
04/15/17       (S)       TRANSMITTED TO (H)                                                                                     
04/15/17       (S)       VERSION: CSSB 45(FIN)                                                                                  
04/16/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/16/17       (H)       L&C                                                                                                    
03/23/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/23/18       (H)       -- MEETING CANCELED --                                                                                 
03/26/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
BILL: SB   4                                                                                                                  
SHORT TITLE: NON-CHEMICAL BARBERING;HAIR BRAIDING                                                                               
SPONSOR(s): MICCICHE                                                                                                            
                                                                                                                                
01/18/17       (S)       PREFILE RELEASED 1/9/17                                                                                
01/18/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/18/17       (S)       L&C, FIN                                                                                               
02/17/17       (S)       SPONSOR SUBSTITUTE INTRODUCED-REFERRALS                                                                
02/17/17       (S)       L&C, FIN                                                                                               
03/02/17       (S)       L&C AT  1:30 PM BELTZ 105 (TSBldg)                                                                     
03/02/17       (S)       Heard & Held                                                                                           
03/02/17       (S)       MINUTE(L&C)                                                                                            
03/14/17       (S)       L&C AT  1:30 PM BELTZ 105 (TSBldg)                                                                     
03/14/17       (S)       Moved SSSB 4 Out of Committee                                                                          
03/14/17       (S)       MINUTE(L&C)                                                                                            
03/15/17       (S)       L&C RPT  1DP 4NR                                                                                       
03/15/17       (S)       DP: COSTELLO                                                                                           
03/15/17       (S)       NR: HUGHES, MEYER, STEVENS, GARDNER                                                                    
04/14/17       (S)       FIN WAIVED PUBLIC HEARING NOTICE,RULE                                                                  
                         23                                                                                                     
04/15/17       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
04/15/17       (S)       <Bill Hearing Canceled>                                                                                
04/16/17       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
04/16/17       (S)       -- MEETING CANCELED --                                                                                 
04/17/17       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
04/17/17       (S)       Heard & Held                                                                                           
04/17/17       (S)       MINUTE(FIN)                                                                                            
02/02/18       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
02/02/18       (S)       Heard & Held                                                                                           
02/02/18       (S)       MINUTE(FIN)                                                                                            
02/05/18       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
02/05/18       (S)       Moved CSSSSB 4(FIN) Out of Committee                                                                   
02/05/18       (S)       MINUTE(FIN)                                                                                            
02/07/18       (S)       FIN RPT CS  4DP  SAME TITLE                                                                            
02/07/18       (S)       DP:     MACKINNON,    BISHOP,    STEVENS,                                                              
                         MICCICHE                                                                                               
02/09/18       (S)       TRANSMITTED TO (H)                                                                                     
02/09/18       (S)       VERSION: CSSSSB 4(FIN) AM                                                                              
02/12/18       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/12/18       (H)       L&C, FIN                                                                                               
03/16/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/16/18       (H)       <Bill Hearing Canceled>                                                                                
03/19/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
03/19/18       (H)       Heard & Held                                                                                           
03/19/18       (H)       MINUTE(L&C)                                                                                            
03/26/18       (H)       L&C AT 3:15 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
SENATOR ANNA MACKINNON                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Introduced SB 165 as prime sponsor.                                                                      
                                                                                                                                
ANNA LATHAM, Deputy Director                                                                                                    
Division of Insurance                                                                                                           
Department of Commerce, Community & Economic Development (DCCED)                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions in the hearing on SB                                                                  
165.                                                                                                                            
                                                                                                                                
MICAELA FOWLER, Legislative Liaison                                                                                             
Department of Commerce, Community & Economic Development (DCCED)                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions in the hearing on SB                                                                  
165.                                                                                                                            
                                                                                                                                
SENATOR MIA COSTELLO                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Introduced SB 45 as prime sponsor.                                                                       
                                                                                                                                
NATASHA MCCLANAHAN, Staff                                                                                                       
Senator Mia Costello                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented the sectional analysis of SB 45                                                                
on behalf of Senator Costello, prime sponsor.                                                                                   
                                                                                                                                
JANEY MCCULLOUGH, Director                                                                                                      
Division of Corporations, Business And Professional Licensing                                                                   
(DCBPL)                                                                                                                         
Department of Commerce, Community & Economic Development (DCCED)                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions in the hearing on SB 45.                                                              
                                                                                                                                
ALAN WILSON, Owner                                                                                                              
Alaska Renovators                                                                                                               
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of SB 45.                                                                           
                                                                                                                                
JIM DUNLAP, President                                                                                                           
Alaska State Homebuilding Association (ASHA)                                                                                    
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of SB 45.                                                                           
                                                                                                                                
RICHARD CARR                                                                                                                    
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT:  Testified in support of SB 45.                                                                           
                                                                                                                                
PATRICK DALTON                                                                                                                  
Delta Junction, Alaska                                                                                                          
POSITION STATEMENT:  Testified in opposition to SB 45.                                                                        
                                                                                                                                
SENATOR PETER MICCICHE                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Reintroduced SB 4 as prime sponsor.                                                                      
                                                                                                                                
RACHEL HANKE, Staff                                                                                                             
Senator Peter Micciche                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Presented   SB  4  on  behalf  of  Senator                                                            
Micciche, prime sponsor.                                                                                                        
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:18:57 PM                                                                                                                    
                                                                                                                                
CHAIR  SAM  KITO called  the  House  Labor and  Commerce  Standing                                                            
Committee   meeting  to   order  at   3:18  p.m.   Representatives                                                              
Sullivan-Leonard,  Stutes,  Knopp,  Wool,  Birch,  Josephson,  and                                                              
Kito were present at the call to order.                                                                                         
                                                                                                                                
           SB 165-COMPREHENSIVE HEALTH INSURANCE FUND                                                                       
                                                                                                                                
3:19:36 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that  the first order  of business  would be                                                              
SENATE   BILL  NO.   165,   "An  Act   relating   to  the   Alaska                                                              
comprehensive  health   insurance  fund;  and  providing   for  an                                                              
effective date."                                                                                                                
                                                                                                                                
3:19:54 PM                                                                                                                    
                                                                                                                                
SENATOR ANNA  MACKINNON, Alaska  State Legislature,  introduced SB                                                              
165  as prime  sponsor.   She  paraphrased  the sponsor  statement                                                              
[included in committee  packet], which reads as  follows [original                                                              
punctuation provided]:                                                                                                          
                                                                                                                                
     In 2015,  the individual  health care  market in  Alaska                                                                   
     was  in  a   precarious  state.  There  were   only  two                                                                   
     insurers   with   current    enrollees   in   individual                                                                   
     healthcare  plans  in  Alaska,   and  each  insurer  was                                                                   
     experiencing  significant losses.  Average premium  rate                                                                   
     increases in  2015 were 38.7% for one insurer  and 39.9%                                                                   
     for  the  other.  In  2016, one  of  Alaska's  only  two                                                                   
     remaining  insurers  gave  notice  that  they  would  be                                                                   
     withdrawing   from   the    Alaska   individual   market                                                                   
     effective January 2017.                                                                                                    
                                                                                                                                
     The  29th  Legislature  passed  HB 374  in  2016,  which                                                                   
     created  the  Alaska Reinsurance  Program,  and  allowed                                                                   
     the  Division  of  Insurance  to  apply  for  a  federal                                                                   
     Section   1332  state   innovation   waiver  under   the                                                                   
     Affordable Care  Act (ACA). That legislation  included a                                                                   
     sunset  date  of  June  30,  2018  to  ensure  that  the                                                                   
     diversion  of insurance premium  taxes from the  general                                                                   
     fund  was  not  relied  upon   as  a  long-term  funding                                                                   
     mechanism.  In July  2017,  the waiver  was approved  by                                                                   
     both the  Department of Health  and Social Services  and                                                                   
     the  Department of  Treasury  based  on the  application                                                                   
     submitted  by   the  division,  which   requested  pass-                                                                   
     through funding for the Alaska Reinsurance Program.                                                                        
                                                                                                                                
     The  federal award  for  this waiver  was  approximately                                                                   
     $322 million over  five years. The award is  to be used,                                                                   
     in conjunction  with the Alaska Reinsurance  Program, to                                                                   
     continue to  stabilize the individual  healthcare market                                                                   
     in Alaska.                                                                                                                 
                                                                                                                                
     This  legislation extends  the sunset  provision on  the                                                                   
     Alaska  comprehensive  health   insurance  fund  by  six                                                                   
     years,  from June  30, 2018  to June 30,  2024 to  allow                                                                   
     for the continuation  of the Alaska Reinsurance  Program                                                                   
     and receipt of the federal funding.                                                                                        
                                                                                                                                
     The  bill  also  removes  the   requirement  that  funds                                                                   
     collected  under  AS  21.09.210 (tax  on  insurers),  AS                                                                   
     21.33.055  (unauthorized  insurance   premium  tax),  AS                                                                   
     21.34.180 (surplus  lines tax) and AS  21.66.110 (annual                                                                   
     tax  on title insurance  premiums)  are to be  deposited                                                                   
     into  the  Alaska comprehensive  health  insurance  fund                                                                   
     within the general fund.                                                                                                   
                                                                                                                                
     Passage of  HB374 by the  29th Legislature has  resulted                                                                   
     in  stabilization of  the individual  insurance  market.                                                                   
     The  Section  1332  state   innovation  waiver  provides                                                                   
     funding  for  the Alaska  Reinsurance  Program,  through                                                                   
     the  Alaska  comprehensive  health insurance  fund.  Now                                                                   
     this legislation  is necessary  to ensure the  continued                                                                   
     effectiveness  of the Alaska  Reinsurance Program,  meet                                                                   
     the  intent  of  the waiver,  and  receive  the  federal                                                                   
     funding.                                                                                                                   
                                                                                                                                
3:22:21 PM                                                                                                                    
                                                                                                                                
CHAIR KITO asked Senator Mackinnon to explain the funding that                                                                  
will go back into the general fund (GF).                                                                                        
                                                                                                                                
SENATOR  MACKINNON corrected  the  amount was  $63  million.   She                                                              
stated  $55 million  was  done several  years  ago  to create  the                                                              
reinsurance pool.   She said  high-risk insurance  recipients were                                                              
paid for  outside of  the regular insurance.   She explained  that                                                              
$63 million represents  current insurance premiums  that are being                                                              
deposited and moved back into GF.                                                                                               
                                                                                                                                
REPRESENTATIVE  WOOL asked  how many  people were  moved from  the                                                              
general pool to the high-risk pool.                                                                                             
                                                                                                                                
SENATOR MACKINNON  answered that  500 individuals were  driving 95                                                              
percent of  the high-risk costs.   She deferred to Ms.  Lori Wing-                                                              
Heier.                                                                                                                          
                                                                                                                                
3:24:04 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO  opened public  testimony  on  SB  165. [He  moved  to                                                              
invited testimony and did not close public testimony.]                                                                          
                                                                                                                                
3:25:01 PM                                                                                                                    
                                                                                                                                
MICAELA  FOWLER,  Legislative  Liaison,  Department  of  Commerce,                                                              
Community &  Economic Development  (DCCED), answered  questions in                                                              
the  hearing  on SB  165.    She  stated that  when  the  original                                                              
legislation  passed,  it directed  premium  tax dollars  into  the                                                              
Alaska  Comprehensive  Health  Insurance  Fund.    She  added  the                                                              
legislation  had a  sunset date  which  would be  extended in  the                                                              
proposed  bill.   The  original  legislation stipulated  that  the                                                              
department  would seek  additional funding.     She said that  was                                                              
carried out  through a 1332  Waiver.  She  added that  because the                                                              
federal government  pays a  portion of  premiums, the  amount that                                                              
is suppressed  is being given back  to the state for the  fund for                                                              
the next four years.                                                                                                            
                                                                                                                                
CHAIR KITO asked about the 1332 Waiver.                                                                                         
                                                                                                                                
3:27:04 PM                                                                                                                    
                                                                                                                                
ANNA LATHAM,  Deputy Director,  Division of Insurance,  Department                                                              
of Commerce,  Community &  Economic Development (DCCED),  answered                                                              
questions in  the hearing on SB  165.  She stated the  fiscal note                                                              
(FN) reflects the federal funds from the 1332 Waiver award.                                                                     
                                                                                                                                
REPRESENTATIVE  BIRCH  asked how  many  beneficiaries  are in  the                                                              
insurance pool.                                                                                                                 
                                                                                                                                
MS.  LATHAM  answered there  are  around  18,000 Alaskans  in  the                                                              
individual market.   She added the state fully  funded the program                                                              
in 2017.   She said  there had been  a $55 million  appropriation.                                                              
She  said the  Division of  Insurance  had applied  for a  federal                                                              
waiver  which  was  awarded  in  2018.   She  added  that  because                                                              
Alaska's  market  is highly  subsidized,  90  percent  of the  re-                                                              
insurance program  for the 5  years of the  waiver is going  to be                                                              
federally funded                                                                                                                
                                                                                                                                
REPRESENTATIVE  BIRCH  asked  whether   the  Alaska  Comprehensive                                                              
Health  Insurance Association  (ACHIA)  program  is expanded  from                                                              
hundreds to thousands over the years.                                                                                           
                                                                                                                                
MS.  LATHAM   spoke  to   the  Alaska   Reinsurance  Program   for                                                              
individuals with  high cost qualifying  conditions.   When Primera                                                              
see these qualifying  conditions, it lowers rates  for everyone in                                                              
the individual  market. She added  the individual market  has been                                                              
dropping in enrollment in recent years.                                                                                         
                                                                                                                                
REPRESENTATIVE  WOOL asked  whether ACHIA  has "morphed"  into the                                                              
fund or whether they are separate things.                                                                                       
                                                                                                                                
MS. LATHAM answered  the small population in the  ACHIA program is                                                              
stable,  and  the reinsurance  program  from  2016 is  a  separate                                                              
program.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  WOOL  surmised  that  a few  people  remaining  on                                                              
ACHIA might  qualify for the  high-risk designation that  would be                                                              
taken out of the pool.                                                                                                          
                                                                                                                                
MS.  LATHAM said  the division  has not  seen a  migration to  the                                                              
reinsurance program.                                                                                                            
                                                                                                                                
REPRESENTATIVE WOOL  suggested the program was started  before the                                                              
division knew it was going to get a federal reimbursement.                                                                      
                                                                                                                                
MS.  LATHAM answered  that is  correct.   She  added the  division                                                              
knew it had to find an alternate funding source.                                                                                
                                                                                                                                
3:33:44 PM                                                                                                                    
                                                                                                                                
CHAIR KITO held over SB 165.                                                                                                    
                                                                                                                                
           SB  45-EXEMPTION: LICENSING OF CONTRACTORS                                                                       
                                                                                                                                
3:34:00 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO announced  that the  next order of  business would  be                                                              
SENATE BILL  NO. 45,  "An Act  relating to  an exemption  from the                                                              
regulation of construction contractors."                                                                                        
                                                                                                                                
3:34:31 PM                                                                                                                    
                                                                                                                                
SENATOR MIA COSTELLO,  Alaska State Legislature,  introduced SB 45                                                              
as   prime  sponsor.   She  paraphrased   the  sponsor   statement                                                              
[included in committee  packet], which reads as  follows [original                                                              
punctuation provided]:                                                                                                          
                                                                                                                                
     Senate Bill  45 provides  better protections for  buyers                                                                   
     of  homes and  other buildings  by requiring  unlicensed                                                                   
     owner-builders  to  disclose they  are  selling a  newly                                                                   
     built home as an unlicensed builder.                                                                                       
                                                                                                                                
     The intent of  the legislation, as stated  in Section 1,                                                                   
     is  to  continue  to  allow  individuals  to  enjoy  the                                                                   
     freedom  and ability  to construct  and  sell their  own                                                                   
     homes.                                                                                                                     
                                                                                                                                
     Following the  housing market  crash of the  1980's, the                                                                   
     Alaska  Legislature  raised professional  standards  for                                                                   
     homebuilders,  requiring residential contractors  to get                                                                   
     a  state license,  a residential  endorsement,  bonding,                                                                   
     and insurance.  The Alaska  Housing Finance  Corporation                                                                   
     was  specifically  directed   by  statute  to  establish                                                                   
     energy efficiency initiatives such as energy ratings                                                                       
     and  the Alaska  Craftsman Home  Program. These  efforts                                                                   
     helped   Alaska   become   a  place   where   the   home                                                                   
     construction   industry   provides  high   quality   and                                                                   
     affordable energy-efficient options for buyers.                                                                            
                                                                                                                                
     Construction  contractor  law  has  been  on  the  books                                                                   
     since  1968.  The current  owner-builder  exemption,  AS                                                                   
     08.18.161(12),  was first enacted  that year to  provide                                                                   
     an exemption  that allows individuals to build  one home                                                                   
     or  commercial  building  every   two  years  without  a                                                                   
     contractor license.                                                                                                        
                                                                                                                                
     Currently  state law provides  an exemption that  allows                                                                   
     individuals  to build  structures  without a  contractor                                                                   
     license.  Alaska  law  AS  08.18.161  allows  anyone  to                                                                   
     build one structure  every two years without  a license.                                                                   
     While the  exemption was intended  to allow  Alaskans to                                                                   
     build their  own home, the industry is seeing  a growing                                                                   
     number of individuals using the exemption to                                                                               
     operate construction businesses.                                                                                           
                                                                                                                                
     SB  45  requires anyone  who  builds  and sells  a  home                                                                   
     without  a  contractor  license   within  two  years  of                                                                   
     starting  construction  to  disclose  that they  do  not                                                                   
     have  a license. The  measure does  not prohibit  owner-                                                                   
     builder   construction.  It   does  not  require   state                                                                   
     approval  for  owner-builder construction.  Owners  have                                                                   
     the right  to build their own  homes and this  bill does                                                                   
     not  change that.  It  requires simple  disclosure  that                                                                   
     helps home buyers.                                                                                                         
                                                                                                                                
3:35:50 PM                                                                                                                    
                                                                                                                                
NATASHA  MCCLANAHAN, Staff,  Senator  Mia  Costello, Alaska  State                                                              
Legislature, presented  the sectional analysis of SB  45 on behalf                                                              
of  Senator  Costello,   prime  sponsor.    She   paraphrased  the                                                              
sectional  analysis [included  in committee  packet], which  reads                                                              
as follows [original punctuation provided]:                                                                                     
                                                                                                                                
     Section   1.  Adds   legislative   intent  language   to                                                                   
     uncodified law to help assure that changes made by                                                                         
     Section  3 of  the bill  be construed  broadly to  allow                                                                   
     individuals the freedom and ability to construct and                                                                       
     sell  their own  homes based  on  their own  discretion.                                                                   
     Page 1, lines 3-7.                                                                                                         
                                                                                                                                
     Section   2.  Amends   AS  08.18.116   to  require   the                                                                   
     Department of Commerce, Community, and Economic                                                                            
     Development  or the  Department of  Labor and  Workforce                                                                   
     Development to  investigate and take appropriate  action                                                                   
     if  an owner-builder  tries  to sell  a structure  while                                                                   
     not  licensed  as  a  contractor   during  the  time  of                                                                   
     constructing   the   building   or   two   years   after                                                                   
     construction begins. Page 1, lines 8-14.                                                                                   
                                                                                                                                
     Section 3. Amends AS 08.18.161 to:                                                                                         
        • Exempt from construction contractor requirements                                                                      
          those who work on an existing structure on their                                                                      
         own property or their own existing residence.                                                                          
        • Require an owner-builder to notify the Alaska                                                                         
          Department  of  Commerce, Community,  and  Economic                                                                   
          Development on  a form provided by the  agency when                                                                   
          advertising  or selling a  home built if  an owner-                                                                   
          builder  tries to sell it  while not licensed  as a                                                                   
          contractor  during  the  time of  constructing  the                                                                   
          building or two years after construction begins.                                                                      
                                                                                                                                
     Section  4. Adds  applicability  language to  uncodified                                                                   
     law  that would  provide  clarity on  when  construction                                                                   
     begins  under   Section  3:   either  when  the   actual                                                                   
     construction  starts or  when  an owner  enters into  an                                                                   
     agreement  with  someone  to  provide labor,  act  as  a                                                                   
     subcontractor,    or   provide    materials   for    the                                                                   
     construction.                                                                                                              
                                                                                                                                
3:37:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked  the presenters  to  compare  the                                                              
proposed  bill to  that brought  forward  by Representative  Cathy                                                              
Tilton in a previous legislature [House Bill 81].                                                                               
                                                                                                                                
SENATOR COSTELLO answered  that the bill to which  he referred was                                                              
addressing a similar issue.                                                                                                     
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked what the remedy for abuse is.                                                                    
                                                                                                                                
MS. MCCLANAHAN answered  it's a notice issue. She  deferred to the                                                              
department.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KNOPP commented  that SB 45  is simply  a consumer                                                              
protection bill.                                                                                                                
                                                                                                                                
CHAIR KITO shared  his understanding that the proposed  bill would                                                              
not preclude  the ability of a  city to regulate  code enforcement                                                              
within its jurisdiction.   He said he thinks there  are either six                                                              
or  nine  communities  in  Alaska that  have  a  jurisdiction  for                                                              
building  codes.   He surmised  the provision  is to  try and  put                                                              
some  protections in  place  for  those people  who  don't have  a                                                              
municipal building code authority in their community.                                                                           
                                                                                                                                
SENATOR COSTELLO  said that was her understanding  but deferred to                                                              
the division.                                                                                                                   
                                                                                                                                
3:42:07 PM                                                                                                                    
                                                                                                                                
JANEY  MCCULLOUGH, Director,  Division  of Corporations,  Business                                                              
and  Professional  Licensing  (DCBPL),   Department  of  Commerce,                                                              
Community &  Economic Development  (DCCED), answered  questions in                                                              
the hearing  on SB 45.   She stated  the provision would  not have                                                              
any effect  on local municipalities'  ability to  enforce building                                                              
codes.   She underlined  it is  a consumer  protection bill.   She                                                              
said  it would  be  a requirement  to  notify  the department  and                                                              
would be another tool in the toolbox for buyers.                                                                                
                                                                                                                                
3:43:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH asked  whether the  requirement would  be to                                                              
disclose  within two  years of  the beginning  of construction  or                                                              
two years from the end.                                                                                                         
                                                                                                                                
SENATOR COSTELLO  answered the  starting point  is point  in which                                                              
the ground  is broken.  If the  home is  then completed  after two                                                              
years  and the  owner decides  to  sell it,  then notification  is                                                              
required.                                                                                                                       
                                                                                                                                
REPRESENTATIVE BIRCH  said he thinks  there is a federal  tax deal                                                              
for an owner who lives in the home for a certain amount of time.                                                                
                                                                                                                                
SENATOR  COSTELLO stated  she  is not  an expert  in  tax law  and                                                              
would defer to someone else for an answer.                                                                                      
                                                                                                                                
3:45:00 PM                                                                                                                    
                                                                                                                                
ALAN WILSON,  Owner, Alaska  Renovators,  testified in support  of                                                              
SB  45.   He said  he is  a member  of  Alaska State  Homebuilders                                                              
Association  (ASHA).   He  said the  proposed  legislation was  an                                                              
effort to  ensure that homebuyers  had some information  about who                                                              
built  a  home.    He  identified  that  there  are  no  penalties                                                              
provided for in the bill.                                                                                                       
                                                                                                                                
3:46:25 PM                                                                                                                    
                                                                                                                                
JIM  DUNLAP,  President,  Alaska  State  Homebuilding  Association                                                              
(ASHA),  testified   in  support  of   SB  45.    He   stated  his                                                              
organization would  continue to work on community  building codes.                                                              
He said SB  45 attempts to  protect consumers.  He  underlined the                                                              
initiative does not involve penalties.                                                                                          
                                                                                                                                
3:48:51 PM                                                                                                                    
                                                                                                                                
CHAIR KITO opened public testimony on SB 45.                                                                                    
                                                                                                                                
3:49:04 PM                                                                                                                    
                                                                                                                                
RICHARD  CARR testified  in support  of SB  45.   He spoke to  his                                                              
experience  as  a   remodeler  and  shared  an   example  of  poor                                                              
workmanship  he had observed.   He  said he  believes SB  45 would                                                              
help  provide critical  information  for consumers  when they  are                                                              
seeking a home.                                                                                                                 
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD  asked Mr. Carr to  give testimony                                                              
on Mat-Su Homebuilder's position on the proposed bill.                                                                          
                                                                                                                                
MR. CARR  answered the  organization is "100  percent in  favor of                                                              
SB 45."   He said they think  it would improve the Valley  a great                                                              
deal.                                                                                                                           
                                                                                                                                
REPRESENTATIVE SULLIVAN-LEONARD  asked how many home  builders are                                                              
in Mat-Su Homebuilders Association.                                                                                             
                                                                                                                                
MR. CARR answered there are 145 members.                                                                                        
                                                                                                                                
3:52:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked  whether  Mr. Carr  is  currently                                                              
required  to submit  paperwork  to the  department  stating he  is                                                              
constructing a home for sale.                                                                                                   
                                                                                                                                
MR. CARR answered not in the Mat-Su Borough.                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  who in government  knows  when he                                                              
is building a home.                                                                                                             
                                                                                                                                
MR. CARR  answered no  one that he  knows of.   He added  that the                                                              
Alaska Housing Finance Corporation (AHFC) would know.                                                                           
                                                                                                                                
3:53:50 PM                                                                                                                    
                                                                                                                                
PATRICK DALTON  testified in opposition of  SB 45.  He  said a few                                                              
years  ago there was  a similar  bill which  exempted builders  in                                                              
the rural  unorganized boroughs.   He quoted  from a study  by the                                                              
Cato  Institute  from  an  article   entitled,  "Zoning,  Land-Use                                                              
Planning,  and Housing  Affordability,Policy    Analysis No.  823,                                                              
October 2017, by Vanessa Brown Calder.                                                                                          
                                                                                                                                
3:57:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked why the provision would  be such a                                                              
burden.  He pointed out the requirement involves a form.                                                                        
                                                                                                                                
MR. DALTON  answered that the  article addresses  that regulations                                                              
in  any form  create paperwork  which creates  uncertainty in  the                                                              
building market.   He said businesses always pass  the cost on the                                                              
consumer.    He added  uncertainty  is  created over  whether  the                                                              
application will be accepted.                                                                                                   
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  asked why  the  legislature should  not                                                              
exercise  caution  on  behalf  of  consumers  in  the  unorganized                                                              
boroughs.                                                                                                                       
                                                                                                                                
MR.  DALTON  asked  whether the  legislature  was  protecting  the                                                              
homebuilder from  increased prices.   He said  that houses  in his                                                              
area are cheaper than houses in Fairbanks, Alaska.                                                                              
                                                                                                                                
4:01:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BIRCH asked  whether Mr.  Dalton is  aware of  any                                                              
outside financing in Delta Junction.                                                                                            
                                                                                                                                
MR.  DALTON  answered  he  is a  specialty  contractor  and  can't                                                              
answer questions  on financing.  He  said people move to  his area                                                              
of  the  state  to  be free  from  the  regulations  in  organized                                                              
boroughs.  He said they want fewer regulations.                                                                                 
                                                                                                                                
REPRESENTATIVE BIRCH  asked Mr. Dalton  whether he has  a business                                                              
license.                                                                                                                        
                                                                                                                                
MR. DALTON answered in the affirmative.                                                                                         
                                                                                                                                
REPRESENTATIVE  BIRCH said  he did  not see the  proposed  bill as                                                              
more complicated than acquiring a business license.                                                                             
                                                                                                                                
MR. DALTON asked  how the legislature is protecting  the rights of                                                              
a homebuilder.                                                                                                                  
                                                                                                                                
REPRESENTATIVE  BIRCH shared  his understanding  that there  is no                                                              
prohibition on building one's own home.                                                                                         
                                                                                                                                
MR. DALTON shared  his understanding that the proposed  bill would                                                              
require paperwork.   He said  he thinks  it is an  infringement on                                                              
private property rights.                                                                                                        
                                                                                                                                
4:08:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KNOPP   commented  that  the  proposed   bill  has                                                              
nothing to  do with  planning or  zoning.  He  added that  it does                                                              
not require seeking  permission.  He said the  proposed bill would                                                              
require that the  homeowner notify the prospective  buyer that the                                                              
house was  not built by  a licensed contractor.   He noted  that a                                                              
young builder  may not  know all  the regulations.   He  opined it                                                              
doesn't limit  rights in any  shape or form.   He stated  where he                                                              
lives  the borough  has not adopted  codes but  the cities  within                                                              
the borough have.                                                                                                               
                                                                                                                                
4:11:15 PM                                                                                                                    
                                                                                                                                
CHAIR KITO held over SB 45.                                                                                                     
                                                                                                                                
          SB   4-NON-CHEMICAL BARBERING;HAIR BRAIDING                                                                       
                                                                                                                                
4:11:32 PM                                                                                                                    
                                                                                                                                
CHAIR KITO  announced that  the final order  of business  would be                                                              
SENATE BILL  NO. 4, "An Act relating  to the Board of  Barbers and                                                              
Hairdressers; and  relating to a limited license  to practice non-                                                              
chemical barbering."                                                                                                            
                                                                                                                                
4:12:27 PM                                                                                                                    
                                                                                                                                
SENATOR  PETER MICCICHE,  Alaska  State Legislature,  reintroduced                                                              
SB  4  as prime  sponsor.    He  stated the  proposed  bill  would                                                              
clarify  that   owners  must  conspicuously  display   their  shop                                                              
licenses  so that practitioners  in the  shop are  not cited.   It                                                              
would allow shops  to self-certify. The bill would  create two new                                                              
license types  for non-chemical  barbers and left  the traditional                                                              
barber license.  He added that bill would reduce training hours.                                                                
                                                                                                                                
4:14:11 PM                                                                                                                    
                                                                                                                                
RACHEL  HANKE,   Staff,  Senator  Peter  Micciche,   Alaska  State                                                              
Legislature, presented  SB 4 on behalf of Senator  Micciche, prime                                                              
sponsor.   She added  the bill would  also separate  tattooing and                                                              
cosmetic  coloring into  two separate  licenses  and would  expand                                                              
the   definition  of   tattooing  to   include  microblading   and                                                              
microneedling.                                                                                                                  
                                                                                                                                
4:14:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL asked  about the hours  of training  required                                                              
for  non-chemical  barbers.    He asked  whether  the  hours  were                                                              
determined by the board.                                                                                                        
                                                                                                                                
SENATOR MICCICHE answered it would be the board's decision.                                                                     
                                                                                                                                
4:15:46 PM                                                                                                                    
                                                                                                                                
CHAIR  KITO opened  public testimony  on SB  4. Upon  ascertaining                                                              
that  no   one  was  available   to  testify,  he   closed  public                                                              
testimony.                                                                                                                      
                                                                                                                                
CHAIR KITO commented that it makes sense to look at and fix                                                                     
outdated statues.                                                                                                               
                                                                                                                                
4:17:25 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WOOL moved to report SB 4 out of committee with                                                                  
individual recommendations and the accompanying fiscal notes.                                                                   
There being no objection, it was so ordered.                                                                                    
                                                                                                                                
4:18:18 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Labor and Commerce Standing Committee meeting was adjourned at                                                                  
4:18 p.m.                                                                                                                       

Document Name Date/Time Subjects
SB004 Sectional Analysis ver. N 3.19.2018.pdf HL&C 3/26/2018 3:15:00 PM
SB 4
SB004 ver N.pdf HL&C 3/26/2018 3:15:00 PM
SB 4
SB004 Explanation of Changes ver. U.A to ver. N 3.19.2018.pdf HL&C 3/26/2018 3:15:00 PM
SB 4
SB004 Legal Memo Tattooing.pdf HL&C 3/26/2018 3:15:00 PM
SB 4
SB045 Sectional Analysis.pdf HL&C 3/26/2018 3:15:00 PM
SB 45
SB045 Sponsor Statement.pdf HL&C 3/26/2018 3:15:00 PM
SB 45
SB045 Support Letters 3.22.18.pdf HL&C 3/26/2018 3:15:00 PM
SB 45
SB045 Ver. O.PDF HL&C 3/26/2018 3:15:00 PM
SB 45
SB45 Opposition Letter 3.23.18.pdf HL&C 3/26/2018 3:15:00 PM
SB 45
SB045 Fiscal Note DCCED-CBPL 2.3.17.pdf HL&C 3/26/2018 3:15:00 PM
SB 45
SB045 Fiscal Note DCCED-CBPL 3.15.18.pdf HL&C 3/26/2018 3:15:00 PM
SB 45
SB004 ver N.pdf HL&C 3/26/2018 3:15:00 PM
SB 4