04/04/2025 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB148 | |
| HB60 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | HB 148 | TELECONFERENCED | |
| += | HB 60 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
April 4, 2025
3:18 p.m.
MEMBERS PRESENT
Representative Carolyn Hall, Co-Chair
Representative Ashley Carrick
Representative Robyn Niayuq Burke
Representative Dan Saddler
Representative Julie Coulombe
Representative David Nelson
MEMBERS ABSENT
Representative Zack Fields, Co-Chair
COMMITTEE CALENDAR
HOUSE BILL NO. 148
"An Act relating to insurance; and providing for an effective
date."
- HEARD & HELD
HOUSE BILL NO. 60
"An Act relating to municipal and state procurement preferences
for agricultural products harvested in the state and fisheries
products harvested or processed in the state; and providing for
an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 148
SHORT TITLE: OMNIBUS INSURANCE BILL
SPONSOR(s): LABOR & COMMERCE
03/21/25 (H) READ THE FIRST TIME - REFERRALS
03/21/25 (H) L&C, HSS
03/26/25 (H) L&C AT 3:15 PM BARNES 124
03/26/25 (H) Heard & Held
03/26/25 (H) MINUTE(L&C)
04/02/25 (H) FIN REPLACES HSS REFERRAL
04/02/25 (H) L&C AT 3:15 PM BARNES 124
04/02/25 (H) <Bill Hearing Canceled>
04/04/25 (H) L&C AT 3:15 PM BARNES 124
BILL: HB 60
SHORT TITLE: PROCURE PREF: AGRIC. & FISH PRODUCTS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/22/25 (H) READ THE FIRST TIME - REFERRALS
01/22/25 (H) FSH, L&C
02/06/25 (H) FSH AT 11:00 AM GRUENBERG 120
02/06/25 (H) Heard & Held
02/06/25 (H) MINUTE(FSH)
02/11/25 (H) FSH AT 10:00 AM GRUENBERG 120
02/11/25 (H) Moved HB 60 Out of Committee
02/11/25 (H) MINUTE(FSH)
02/12/25 (H) FSH RPT 5DP 2NR
02/12/25 (H) DP: VANCE, KOPP, EDGMON, ELAM, STUTES
02/12/25 (H) NR: HIMSCHOOT, MCCABE
02/21/25 (H) L&C AT 9:00 AM BARNES 124
02/21/25 (H) Heard & Held
02/21/25 (H) MINUTE(L&C)
04/04/25 (H) L&C AT 3:15 PM BARNES 124
WITNESS REGISTER
LORI WING-HEIER, Director
Division of Insurance
Department of Commerce, Community & Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
148.
HEATHER CARPENTER, Deputy Director
Division of Insurance
Department of Commerce, Community & Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
148.
ANNA LATHAM, Deputy Commissioner
Department of Commerce, Community & Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions on behalf of House
Rules, prime sponsor of HB 60 by request of the governor.
BROOKE CASHEN, Deputy Chief Procurement Officer
Procurement and Property Management
Department of Administration
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
60.
ACTION NARRATIVE
3:18:35 PM
CO-CHAIR CAROLYN HALL called the House Labor and Commerce
Standing Committee meeting to order at 3:18 p.m.
Representatives Nelson, Hall, Coulombe, Saddler, Burke, and
Carrick were present at the call to order.
HB 148-OMNIBUS INSURANCE BILL
3:19:33 PM
CO-CHAIR HALL announced that the first order of business would
be HOUSE BILL NO. 148, "An Act relating to insurance; and
providing for an effective date."
3:20:03 PM
REPRESENTATIVE SADDLER asked which provisions of HB 148 were
absolutely necessary and what might happen if the proposed
legislation was not passed.
3:20:36 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community & Economic Development (DCCED), replied that
there are a few sections related to the Division of Insurance's
accreditation. She explained that the division was judged on
how well it examined the financial status of insurance companies
in line with the 55 other jurisdictions under the National
Association of Insurance Commissioners (NAIC). She further
explained that accreditation means that companies in Alaska can
do business in other states with the security of solvency. She
stated that the division must meet or exceed national standards
to retain accreditation. She repeated that there are some
sections in the proposed legislation that address updates to
accreditation standards.
MS. WING-HEIER further stated that there are some provisions of
HB 148 regarding licensing updates for efficiency and noted that
the division was not licensing people that "should have been
licensed." She noted that there were quite a few technical
changes in the proposed legislation as well to correct Alaska
Statute (AS). She stated that were HB 148 not to pass, the
division would request it again as the proposed fixes to Title
21 are important. She surmised that barring the accreditation
standards, no one section of the proposed legislation was more
important than the other. She stated that the staff at the
division felt that the proposed legislation was necessary to be
more efficient and more effective at protecting consumers. In
response to a follow-up question, she identified Sections 4, 5,
8, 9, 10, and 11 as dealing with accreditation standards.
3:23:31 PM
REPRESENTATIVE COULOMBE referring to the sectional analysis of
HB 148, citing "to align with NAIC model law 786," and asked
whether this section had to do with accreditation.
MS. WING-HEIER replied that the reason for model law was that
insurance companies would like to see that the laws are similar
or identical across all 50 states. She stated that NAIC does
spend time adopting model laws, and that it functioned similarly
to the legislature. She further stated that the National
Council of Insurance Legislatures (NCOIL) functions in the same
way. She noted that model law 786 refers to a licensing bill.
3:25:07 PM
The committee took a brief at-ease at 3:25 p.m.
3:25:26 PM
REPRESENTATIVE CARRICK noted there was concern regarding the
controlled insurance programs (CIPs) that would restrict the use
of CIPs to projects valued at $50 million or more.
MS. WING-HEIER reported that many years ago, the State of Alaska
was in a lawsuit with Alyeska Resort, and the current statutes
are a result of that lawsuit. She explained that current
statues require that an owner- or contractor-controlled
insurance program must be approved by the division.
Additionally, it must be over $50 million dollars with a
definitive length of time and location. She explained that CIPs
were purchased by either the owner or contractor of a major
project, which buys all of the insurance, including workers'
compensation, general liability, equipment, et cetera. She
noted it was money-saving for large projects. She reported that
a few years ago, she was told that the division could not
approve CIPs because current AS, as a result of the lawsuit with
Alyeska, was not written correctly. She offered her belief that
it was not the intent of the court case to prohibit CIPs;
rather, statute declared that there could not be "additional
insured." She explained that the division corrected the statute
to allow additional insured to correct what it believed was an
error when the statute was first passed.
MS. WING-HEIER stated that there was an amendment for multi-
residential projects floating around the Capitol building that
had passed in the other legislative body. She explained that
the amendment allowed CIPs at a lesser limit of $25 million,
with a requirement of at least 50 units and at least three
owners. She commented that the division felt the lesser limits
of $5 million or $10 million were too low for insurance
companies.
3:29:20 PM
REPRESENTATIVE CARRICK asked whether the revised threshold of
$25 million was too low.
MS. WING-HEIER opined that $25 million was a fair compromise and
noted the division was satisfied.
3:29:53 PM
REPRESENTATIVE BURKE referred to Section 6 and Section 62 of the
proposed legislation where wet marine transportation contracts
were previously excluded. She queried the justification for the
prior exclusion, citing "the State of Alaska is losing $300,000
in tax revenue."
MS. WING-HEIER replied that she did not know why the wet marine
transportation contracts were given an exclusion, but it goes
back years.
3:31:02 PM
HEATHER CARPENTER, Deputy Director, Division of Insurance,
Department of Commerce, Community & Economic Development,
replied that she had provided a written answer to Representative
Burke's question earlier in the week.
3:31:16 PM
REPRESENTATIVE SADDLER reiterated that $5 million or $10 million
CIPs were too low and asked who, business or insurers, would be
driven out of business.
MS. WING-HEIER clarified that it would not drive companies out
of business or drive businesses out of Alaska but explained that
the division was concerned about too much payroll or revenue
being taken from small contractors with numbers like $5 million
or $10 million. She noted that insurance companies have minimum
premiums, and small contractors may have a hard time finding
someone to write their insurance with numbers like $5 million or
$10 million.
3:32:16 PM
CO-CHAIR HALL referred to Section 53 of the proposed legislation
describing depreciation of labor and asked why depreciation of
labor was allowed in the first place.
MS. WING-HEIER answered that she missed it in a few insurance
policy forms stating that there would be depreciation of labor.
She reported that the division received complaints and talked to
colleagues in other states and found that states are adopting
measures to address the depreciation of labor. She stated that
when taken out completely, the division received some
resistance. She further stated that the division settled on an
amendment that would allow for conditional depreciation of
labor. She explained that an individual can choose to purchase
an insurance policy with labor depreciation to save money.
3:34:26 PM
REPRESENTATIVE SADDLER confirmed that under the proposed
legislation, an individual could lower their premium by taking a
higher deductible or lower coverage limits. He surmised that an
individual could take "a little hit" to make [insurance] more
affordable.
MS. WING-HEIER confirmed that was correct.
3:34:47 PM
CO-CHAIR HALL referred to Section 58 of HB 148 and queried the
history of health maintenance organizations (HMOs).
MS. WING-HEIER replied that the division has allowed HMOs for
years. She explained that HMOs are managed care, and because of
the high cost of healthcare, the division allowed HMOs as an
option for employers to purchase if it would reduce costs.
3:36:00 PM
REPRESENTATIVE SADDLER asked whether there were other amendments
or policy additions that existed for consideration that might
affect the proposed legislation.
MS. WING-HEIER replied that the Senate version of HB 148 had
passed out of one committee in the other body with two
amendments regarding the depreciation of labor and the change to
owner-controlled insurance programs. She stated that she had
not seen any other amendments or policy additions.
REPRESENTATIVE SADDLER commented that he had heard talk of
trying to repeal the 80th percentile rule and thanked Ms. Wing-
Heier.
3:37:14 PM
CO-CHAIR HALL thanked the invited testifiers.
[HB 148 was held over.]
HB 60-PROCURE PREF: AGRIC. & FISH PRODUCTS
[Contains discussion of HB 140.]
3:37:23 PM
CO-CHAIR HALL announced that the final order of business would
be HOUSE BILL NO. 60, "An Act relating to municipal and state
procurement preferences for agricultural products harvested in
the state and fisheries products harvested or processed in the
state; and providing for an effective date."
CO-CHAIR HALL noted that there would be a brief recap on the
proposed legislation and reminded committee members that the
house was also considering HB 140, a bill proposed to create a
Department of Agriculture.
3:38:10 PM
ANNA LATHAM, Deputy Commissioner, Department of Commerce,
Community & Economic Development (DCCED), answered questions on
behalf of House Rules, prime sponsor of HB 60 by request of the
governor. She stated that HB 60 would make incremental changes
to a Department of Administration (DOA) procurement statute that
has existed since 1986. She explained that state agencies,
municipalities, and school districts are currently required to
purchase Alaska-grown products or fisheries products harvested
in-state if they are available and within 7 percent of the cost
of out-of-state products. Additionally, she explained that
there is currently a permissible clause allowing state agencies,
municipalities, and school districts to purchase products that
are up to 15 percent higher than what is offered out-of-state.
MS. LATHAM further explained that HB 60 would increase the
requirement from 7 to 10 percent and would additionally change
the permissible amount from 15 to 25 percent.
3:39:19 PM
REPRESENTATIVE COULOMBE noted that the fiscal note is zero. She
asked whether this would increase costs for state agencies,
municipalities, and school districts even if there were no cost
to DOA.
MS. LATHAM replied that was correct if products grown in state
were more expensive. She noted that she has reached out to the
Department of Education and Early Development (DEED) and the
Alaska Municipal League (AML) regarding costs.
REPRESENTATIVE COULOMBE stated that she wanted to support
Alaska-grown products but asserted that there would be impacts
on local governments.
3:40:21 PM
REPRESENTATIVE CARRICK commented that she saw a survey of Alaska
saying that individuals are willing to pay $1.60 more on average
for Alaska-grown products. She opined that it was good for the
State of Alaska to take a position on Alaska-grown products.
She stated that she was largely in support of the proposed
legislation. She asked for clarification whether it was a
requirement or a choice to purchase Alaska-grown products that
fall within the threshold.
MS. LATHAM responded it would be a requirement for state
agencies, municipalities, and school districts if using DOA's
master contract with U.S. Foods. She noted that there are
currently very few items listed on the U.S. Foods contract. She
reminded committee members that HB 60 was introduced by
recommendation of the food security taskforce in order to
provide growers in state an entry to commercial markets so that
they might "ramp up their production."
3:42:46 PM
REPRESENTATIVE CARRICK asked whether there are products not
available at any cost she used lettuce growers as an example -
or whether there are not products available in state within the
current price differential.
MS. LATHAM replied that there is very little data on pricing in
Alaska, because there are so few products currently available.
She clarified that the intent of the proposed legislation was to
provide commercial entry to growers in state, who "can't
necessarily sell an additional five acres of potatoes unless
they know they have a buyer, and [HB 60] would provide a buyer."
She noted that the Department of Corrections (DOC) was the
largest purchaser of Alaska-grown products. She further noted
that the state purchases very little overall.
3:44:13 PM
REPRESENTATIVE SADDLER share concerns about the validity of a
zero fiscal note if the proposed legislation would mandate
entities to buy more expensive products, despite his support for
Alaska agriculture. He referred to the first four sections of
HB 60 and asked for a definition of "state money".
MS. LATHAM replied that those sections referred to
municipalities and school districts. She further stated that
all school districts and, to her knowledge, all municipalities
received state money.
REPRESENTATIVE SADDLER asked for clarification that the
provisions did not specify receiving state money to support
purchase of food; rather, it was for any purpose.
MS. LATHAM offered her belief that it was a broad definition but
deferred to DOA.
3:45:48 PM
BROOKE CASHEN, Deputy Chief Procurement Officer, Procurement and
Property Management, Department of Administration (DOA), offered
her belief that it referred to any agency that receives any
state funding. She noted that she would want to double check
with the Department of Law for a definitive answer.
3:46:21 PM
REPRESENTATIVE COULOMBE asked if the food bank would fall under
this requirement, offering her understanding that the food bank
received state money.
MS. CASHEN replied that she would have to check DOA's master
agreement, of which she did not believe the food bank was
compulsorily contracted. She additionally offered her belief
that the Department of Corrections (DOC) had the only mandatory
contract. In response to a follow-up question, she explained
that the master agreement from DOA contracted with U.S. Foods,
the vendor that provides the bulk of state food purchases,
Alaska-grown or not. She noted that it was only mandatory for
some agencies to use DOA's U.S. Foods contract and stated that
other agencies are able to procure from other sources. She
noted that [DOA's] data was sourced from U.S. Foods. She
additionally offered her belief that the proposed legislation
would apply to all state food purchases, not just agencies on
the master agreement.
3:48:12 PM
REPRESENTATIVE SADDLER asked if school districts are unable to
purchase foods in-state due to the 7-percent restriction.
MS. LATHAM responded that is not her understanding. She stated
there has not been a lot of produce or fisheries products
available. She noted that Alaska imports over 95 percent of its
food.
REPRESENTATIVE SADDLER commented that the 3 percent increase
would make it easier to buy Alaska products even if they cost
more.
3:49:25 PM
REPRESENTATIVE COULOMBE asked if there had been discussions
around availability of products and what would be done if
products were unavailable.
MS. LATHAM state that the U.S. Foods master contract has a lot
of out-of-state vendors currently on the list. She stated that
if HB 60 were to pass, then if a food product in-state were not
within the proposed 10 percent restriction, DOC, for example,
would purchase from an out-of-state vendor. She confirmed that
Representative Coulombe's understanding was correct. She
further noted that the majority of purchases are of out-of-state
goods.
3:50:50 PM
CO-CHAIR HALL asked how many growers were prepared to jump into
commercial markets.
MS. LATHAM responded that she did not have an exact number. She
noted that she met with the Farm Bureau recently and stated that
there were a handful of growers that indicated they could
expand. In response to a follow-up questions, she stated she
did not currently have information about a timeline.
3:51:51 PM
REPRESENTATIVE SADDLER commented that the state would need to
buy more freezers.
3:51:56 PM
CO-CHAIR HALL asked what additional support the agricultural
industry would need to sustain commercial markets under HB 60.
3:52:13 PM
REPRESENTATIVE COULOMBE said she felt that the effective date
was too short. She asked whether Ms. Latham would oppose an
extension on the effective date.
MS. LATHAM replied that there was no effective date. She
explained that, as more products become available, they will be
listed on the master contract.
3:53:02 PM
REPRESENTATIVE BURKE asked how many municipalities and school
districts use U.S. Foods.
MS. CASHEN stated she could get that data for the committee
members.
3:53:58 PM
REPRESENTATIVE SADDLER remarked that it was his understanding
that HB 60 was applicable to any agency that used state funding
and was not limited to agencies participating in the U.S. Foods
agreement.
CO-CHAIR HALL thanked the invited testifiers.
[HB 60 was held over.]
3:54:58 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
3:55 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB148 Additional Document - DOI Response to HLC 4.2.25.pdf |
HL&C 4/4/2025 3:15:00 PM HL&C 4/23/2025 9:00:00 AM |
HB 148 |