03/27/2012 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB223 | |
| HB131 | |
| SB157 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| = | SB 223 | ||
| = | HB 131 | ||
| = | SB 157 | ||
ALASKA STATE LEGISLATURE
SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
March 27, 2012
4:04 p.m.
MEMBERS PRESENT
Senator Donald Olson, Chair
Senator Thomas Wagoner
Senator Linda Menard
Senator Johnny Ellis
MEMBERS ABSENT
Senator Albert Kookesh
OTHER LEGISLATORS PRESENT
Representative Cathy Munoz
COMMITTEE CALENDAR
SENATE BILL NO. 223
"An Act relating to a credit against the net income tax for a
contribution made by a taxpayer to a nonprofit organization that
provides an emergency shelter for the homeless or a facility for
alcohol or drug detoxification."
- HEARD & HELD
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 131(TRA) AM
"An Act establishing the Alaska Community and Public
Transportation Advisory Board and relating to a long-range
community and public transportation plan; and providing for an
effective date."
- MOVED CSHB 131(TRA) AM OUT OF COMMITTEE
SENATE BILL NO. 157
"An Act allowing an insurer to cancel an insurance policy if
property becomes unoccupied and the vacancy increases the hazard
insured against."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 223
SHORT TITLE: TAX CRED: CONTR. TO HOMELESS SHELT/DETOX
SPONSOR(s): COMMUNITY & REGIONAL AFFAIRS
03/02/12 (S) READ THE FIRST TIME - REFERRALS
03/02/12 (S) CRA, FIN
03/15/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
03/15/12 (S) Heard & Held
03/15/12 (S) MINUTE(CRA)
03/27/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
BILL: HB 131
SHORT TITLE: COMMUNITY AND TRANSPORTATION ADV. BOARD
SPONSOR(s): MUNOZ
01/28/11 (H) READ THE FIRST TIME - REFERRALS
01/28/11 (H) TRA, FIN
03/15/11 (H) TRA AT 1:00 PM CAPITOL 17
03/15/11 (H) Heard & Held
03/15/11 (H) MINUTE(TRA)
03/22/11 (H) TRA AT 1:00 PM CAPITOL 17
03/22/11 (H) Moved CSHB 131(TRA) Out of Committee
03/22/11 (H) MINUTE(TRA)
03/23/11 (H) TRA RPT CS(TRA) 4DP 3NR
03/23/11 (H) DP: MUNOZ, PETERSEN, GRUENBERG,
P.WILSON
03/23/11 (H) NR: JOHNSON, FEIGE, PRUITT
04/14/11 (H) FIN RPT CS(TRA) 10DP
04/14/11 (H) DP: GUTTENBERG, T.WILSON, GARA, JOULE,
NEUMAN, COSTELLO, EDGMON, DOOGAN,
04/14/11 (H) STOLTZE, THOMAS
04/14/11 (H) FIN AT 8:30 AM HOUSE FINANCE 519
04/14/11 (H) Moved CSHB 131(TRA) Out of Committee
04/14/11 (H) MINUTE(FIN)
04/14/11 (H) FIN AT 1:30 PM HOUSE FINANCE 519
04/14/11 (H) <Bill Hearing Canceled>
01/27/12 (H) TRANSMITTED TO (S)
01/27/12 (H) VERSION: CSHB 131(TRA) AM
01/30/12 (S) READ THE FIRST TIME - REFERRALS
01/30/12 (S) TRA, CRA
02/09/12 (S) TRA AT 1:00 PM BUTROVICH 205
02/09/12 (S) Moved CSHB 131(TRA) am Out of
Committee
02/09/12 (S) MINUTE(TRA)
02/10/12 (S) TRA RPT 4DP
02/10/12 (S) DP: KOOKESH, THOMAS, MENARD, HUGGINS
02/22/12 (S) FIN REFERRAL ADDED AFTER CRA
03/22/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
03/22/12 (S) Heard & Held
03/22/12 (S) MINUTE(CRA)
03/27/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
BILL: SB 157
SHORT TITLE: CANCEL INSUR. ON CERTAIN VACANT PROPERTY
SPONSOR(s): LABOR & COMMERCE
01/17/12 (S) READ THE FIRST TIME - REFERRALS
01/17/12 (S) L&C, CRA
01/26/12 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
01/26/12 (S) Heard & Held
01/26/12 (S) MINUTE(L&C)
02/23/12 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/23/12 (S) <Bill Hearing Postponed>
02/28/12 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/28/12 (S) Moved CSSB 157(L&C) Out of Committee
02/28/12 (S) MINUTE(L&C)
02/29/12 (S) L&C RPT CS 5DP NEW TITLE
02/29/12 (S) DP: EGAN, GIESSEL, DAVIS, PASKVAN,
MENARD
03/05/12 (S) CORRECTED L&C CS RECEIVED NEW TITLE
03/05/12 (S) BILL REPRINTED 3/5/12
03/06/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
03/06/12 (S) -- MEETING CANCELED --
03/13/12 (S) CRA AT 4:00 PM BELTZ 105 (TSBldg)
03/13/12 (S) Heard & Held
03/13/12 (S) MINUTE(CRA)
03/27/12 (S) CRA AT 3:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
DAVID SCOTT, Staff
Senate Community and Regional Affairs Standing Committee
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Explained the committee substitute for SB
223.
REPRESENTATIVE CATHY MUNOZ
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of HB 131.
DANA OWEN, Staff
Senate Labor and Commerce Standing Committee
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced SB 157 on behalf of the L&C
Committee.
GLENDA FEEKEN, Trustee
Realtors Political Action Committee
Alaska Association of Realtors
Kenai, Alaska
POSITION STATEMENT: Did not support SB 157.
LINDA HALL, Director
Division of Insurance
Department of Commerce, Community, and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Answered questions and stated that DCCED was
neutral on SB 157.
ERROL CHAMPION, President
Southeast Board of Realtors
Alaska Association of Realtors
Juneau, Alaska
POSITION STATEMENT: Did not support SB 157.
DAVID SOMERS, Chair
Industry Issues
Alaska Association of Realtors
Fairbanks, Alaska
POSITION STATEMENT: Did not support SB 157.
SHELDON WINTERS, Lobbyist
State Farm
Lessmeier and Winters LLC
Juneau, Alaska
POSITION STATEMENT: Supported SB 157.
ACTION NARRATIVE
4:04:58 PM
CHAIR DONALD OLSON called the Senate Community and Regional
Affairs Standing Committee meeting to order at 4:04 p.m. Present
at the call to order were Senators Wagoner, Menard, Ellis and
Chair Olson
SB 223-TAX CRED: CONTR. TO HOMELESS SHELT/DETOX
4:05:08 PM
CHAIR OLSON announced the consideration of SB 223, "An Act
relating to a credit against the net income tax for a
contribution made by a taxpayer to a nonprofit organization that
provides an emergency shelter for the homeless or a facility for
alcohol or drug detoxification." He stated his intention to
introduce a committee substitute (CS) and set the bill aside for
further review.
DAVID SCOTT, Aide, Senate Community and Regional Affairs
Standing Committee Alaska State Legislature, identified the CS
for SB 223 as version D. It made the following changes to the
original bill:
1) Language on page 2, line [22], adds a five-year sunset.
2) Page 1, line 9, states that eligible organizations must be
established before 1/1/2012. The intent of the bill is to
support existing nonprofits providing these services, not
to encourage the establishment of new nonprofits.
3) Page 2, line 1, subsection (b) the tax credit changes from
a dollar-for-dollar match to 50 percent of the cash
contribution.
4) Procedural language was added on page 2, line 3, subsection
(c) so the department could provide the taxpayer a
preliminary determination as to whether the contribution
qualifies for the tax credit.
MR. SCOTT noted that he distributed sections of the FY10 and
FY11 revenue source book regarding tax credits offered by the
state.
4:07:39 PM
CHAIR OLSON asked why the dollar-for-dollar tax credit was
changed to 50 percent of the contribution.
MR. SCOTT answered that it conformed to other tax credit
programs offered by the state.
CHAIR OLSON asked if interest by the private sector would be the
same with the reduced credit.
MR. SCOTT said he did not have that impression, but only time
would tell if the bill were to become law.
4:08:34 PM
CHAIR OLSON found no further questions and held SB 223 in
committee.
HB 131-COMMUNITY AND TRANSPORTATION ADV. BOARD
4:08:50 PM
CHAIR OLSON announced the consideration of HB 131, "An Act
establishing the Alaska Community and Public Transportation
Advisory Board and relating to a long-range community and public
transportation plan; and providing for an effective date." He
noted this was the second hearing in this committee.
4:09:04 PM
REPRESENTATIVE CATHY MUNOZ, sponsor of HB 131, Alaska State
Legislature, paraphrased the following sponsor statement:
House Bill 131 creates an Alaska Community and Public
Transportation Advisory Board, which will assist in
the development and procedural recommendations for
existing programs of state, federal, and local
agencies that provide community-based transportation
services. Public and community transportation is
integral in connecting communities, supporting
development and serving our most vulnerable
constituent.
The designation of this board is a recommendation from
the Governor's Coordinated Transportation Task Force,
which was released in the February 2010
Recommendations Report. The board will continue
efforts to address public and community transportation
and help fill the gap in transportation for
individuals who require more specialized travel -
senior citizens, low-income individuals, persons with
disabilities, and those who are transit-dependent.
The board will consist of 13 members from departments
within state and local governments, Denali Commission,
Alaska Mental Health Trust Authority, nonprofits, and
those with expertise in transportation needs for
senior citizens, persons with disabilities, and
transit-dependent individuals. This broad range of
membership will facilitate communication and
strategies that will benefit communities of all sizes.
HB 131 has support from the Alaska Mobility Coalition,
the Governor's Council on Disabilities and Special
Education, Advisory Board on Alcoholism and Drug
Abuse, the Alaska Commission on Aging, Alaska Mental
Health Trust Authority, Alaska Brain Injury Network,
and the Alaska Suicide Prevention Council.
4:10:34 PM
SENATOR MENARD asked the sponsor to speak to the letter of
intent.
REPRESENTATIVE MUNOZ responded that during the previous hearing
Senator Wagoner expressed concern about committing very busy
commissioners to serve on yet another board. He wanted to insert
language to ensure that a commissioner designee would fill the
position. She said the language was already in the bill and the
intent language was ready to insert, but she understood that
Senator Wagoner did not want to include it at this time.
SENATOR WAGONER indicated the intent letter was not necessary.
CHAIR OLSON found no public testimony and no further committee
discussion. He asked the will of the committee.
4:12:15 PM
SENATOR WAGONER moved to report CSHB 131(TRA) am from committee
with individual recommendations and attached fiscal note(s).
CHAIR OLSON announced that without objection, CSHB 131(TRA) am
moved from the Senate Community and Regional Affairs Standing
Committee.
4:12:44 PM
At ease 4:12 to 4:14.
SB 157-CANCEL INSUR. ON CERTAIN VACANT PROPERTY
4:14:23 PM
CHAIR OLSON announced the consideration of SB 157, "An Act
allowing an insurer to cancel an insurance policy if property
becomes unoccupied and the vacancy increases the hazard insured
against." He noted the bill was heard previously.
4:14:48 PM
DANA OWEN, Staff to Senator Dennis Egan and the Senate Labor and
Commerce Committee, Alaska State Legislature, reminded the
committee that the current version of SB 157 represented a
compromise. The original proposal was to provide insurance
companies the ability to cancel insurance policies on homes that
were unoccupied or vacant. The Senate Labor and Commerce
Standing Committee members were opposed to the idea of policies
being canceled on unoccupied dwellings because Alaskans commonly
leave their homes for long periods. The current version kept the
provision of "vacancy" and defined the term.
SENATOR MENARD said she struggled with the bill because it
addressed real estate problems in the Lower 48 and Alaska had
not had problems of that magnitude. She said she continued to be
uncomfortable and realtors were, too.
MR. OWENS responded that Senator Egan's office was discussing
with realtors possible amendments to the bill.
4:17:35 PM
GLENDA FEEKEN, Realtor, Alaska Association of Realtors, said the
association understood and supported business, but not SB 157.
In its current form, it was not in the best interest of the
public. On the Kenai Peninsula she had seen policies canceled
because the home was vacant, but not abandoned or in
foreclosure. This was an emotional and financial hardship for
the public, she said.
SENATOR MENARD asked if it was a matter of the house being
vacant because the previous owners were waiting for the sale to
close.
MS. FEEKEN answered that people sometimes have to move before
their house sells. These homeowners did not abandon the
property, but insurance companies have sometimes interpreted the
situation differently and cancelled the policy. The homeowner
doesn't necessarily have the resources to fight it and the bank
imposes its more expensive insurance. She reiterated that unlike
the Lower 48, Alaska had not had too many problems with
foreclosures
SENATOR MENARD commented that while she had sympathy for those
situations, homes that were vacant in the winter could end up
with frozen and broken pipes and that costs the insurance
company money.
MS. FEEKEN responded that when a property has actually been
abandon the bank is aware that payments aren't being made. The
bank steps in and puts the utilities in its name.
4:20:25 PM
SENATOR WAGONER asked how she would fix the problem.
MS. FEEKEN suggested holding discussions with the Alaska
Association of Realtors and others in the know to clarify what
constitutes a vacant property and what constitutes an abandoned
property.
CHAIR OLSON asked Ms. Hall if the state had a definition for
"vacant" versus "abandoned."
4:21:51 PM
LINDA HALL, Director, Division of Insurance, Department of
Commerce, Community and Economic Development (DCCED), said no.
Most states do not define "vacant," but there was some case law.
She opined that if SB 157 were to pass, it would probably be one
of the more rigid definitions, because it had requirements of
what constitutes vacant.
CHAIR OLSON asked if the state had a definition for
"abandonment."
MS. HALL answered no.
SENATOR WAGONER questioned why the bill was put forward, since
Alaska did not have problems with foreclosures or high vacancy
rates.
MS. HALL answered that she did not propose the bill.
SENATOR WAGONER asked if she felt that the bill was necessary.
MS. HALL responded that she had indicated that she could support
the bill. She said the role of the Division of Insurance was to
balance the protection of consumers against the healthy
competitive marketplace and needs of insurers. The division
involves itself in the correct interpretation and application of
the statutes and regulations.
SENATOR MENARD asked about the possibility of the insurance
company documenting vacancies and then communicating with the
mortgage company to determine whether the homeowner was "in exit
mode."
MS. HALL said she imagined that privacy laws would prohibit
banks from releasing that kind of information.
SENATOR MENARD commented that she was not happy with the bill.
4:27:34 PM
ERROL CHAMPION, President, Southeast Alaska Board of Realtors
and member, Alaska Association of Realtors, said he did some
research after he testified last on SB 157 and learned that
insurance companies in the state of Washington attach a rider on
policies that say that if the home becomes vacant - according to
a precise definition, the insurance company can cancel coverage.
It is done with a rider, not a law. A Snohomish County insurance
broker looked at the bill and felt the definitions for "vacant,"
"abandoned," and "unoccupied" needed work.
MR. CHAMPION questioned why the holder of the mortgage wouldn't
be singled out for notification. In an actual foreclosure
situation, the person who defaulted probably doesn't care if he
gets notice of cancelation, he said. The real loser is the
investor that owns the mortgage. Freddie Mac and Fannie Mae own
most mortgages, so the public loses if there is no insurance
coverage. He related a personal situation regarding an estate.
The home was unoccupied and winterized and had not had a
mortgage on it in 40 years, but if the bill were to pass someone
could decide there was no insurance and the estate could lose
everything, probably without notice.
MR. CHAMPION urged the committee to take the time to develop
better definitions and pass a law that protected both the
residents of the state and the investment in real property.
4:31:08 PM
DAVID SOMERS, Industry Issues Chair, Alaska Association of
Realtors, said the testimony of both Ms. Feeken and Mr. Champion
were spot on. He said the association appreciated the work in
the previous committee, but more was needed. He cited examples
of the people the bill would place at risk and observed that in
each instance it would be easy for an insurance carrier to
determine that the home was vacant.
He urged the committee to do more work and emphasized that the
Alaska Association of Realtors wanted to work with the insurance
industry to find a way to protect both the public and the
insurance business.
CHAIR OLSON asked if any entities other than insurance companies
supported the bill.
MR. SOMERS said he had not heard of anybody else that supported
the bill.
CHAIR OLSON asked where title companies stood.
MR. SOMERS responded they did not take a position.
4:33:28 PM
SHELDON WINTERS, Lobbyist, State Farm, Lessmeier and Winters
LLC, said State Farm had worked hard on the bill and had come up
with the narrowest definition in the country. He said it was not
that Alaska had high foreclosure rates. The issue was that
everybody pays when uninsurable property stays in the risk pool.
Insurance becomes more expensive and less available for
everyone. He disagreed with previous testimony that adding a
rider to the policy could solve the problem. Under current law
and according the interpretation by the Division of Insurance,
insurance companies cannot cancel the insurance in the situation
of a home where the door was open, the utilities were off, and
the pipes were freezing. That was the reason for the bill.
Insurance companies want to be able to cancel in the most
extreme situations. He noted that the previous committee had
concerns with the original, broader bill and State Farm worked
very hard to address those concerns.
SENATOR WAGONER asked if in the case of an abandoned home, the
insurance company was required to notify the mortgage company of
the decision to cancel the insurance.
MR. WINTERS said current statute required the insurance company
to give 30-days written advance notice of cancellation to the
insured, not the lender. State Farm does give notice to the
lender, but because of privacy laws it does not give the reason
for the cancellation. He suggested addressing notification in a
separate bill. The policy call in SB 157 was whether insurers
should be allowed to cancel abandoned property.
MR. WINTERS disagreed with a letter that realtors sent to the
committee. He said it was State Farm's understanding that with
the very narrow definition, none of the situations in that
letter would constitute vacancy or abandonment. The only
situation the bill was trying to address was true abandonment.
4:39:55 PM
SENATOR WAGONER asked how many times in the last several years
had State Farm had to cancel an insurance policy.
MR. WINTERS said the technical answer was zero because it was
against the law. However, between 2007 and 2011 State Farm did
not renew 369 policies because the property was abandoned,
vacant, or unoccupied.
4:41:26 PM
CHAIR OLSON commented that trailer houses were probably more
likely to be abandoned than a mansion.
SENATOR WAGONER disagreed with the statement.
MR. WINTERS continued to say that State Farm believed this
definition of "abandonment" was the most specific and narrow in
the country. If it were any more specific, it would render the
statute meaningless.
MR. WINTERS said contrary to what the realtors have said, the
proposed amendment provides six protections. Upon discovery of
potential abandonment, the agent will try to contact the insured
to determine the status of the property and work with the
insured to maintain coverage. The home would have to be entirely
abandoned. The vacancy must increase the hazard insured against.
The insurer had to give the insured 30-days written notice of
cancellation. Finally, the Division of Insurance watches to
ensure that the statute and regulations are not misinterpreted
or misapplied.
MR. WINTERS emphasized that State Farm had heard no evidence of
abuse of these laws in the Lower 48. He urged the committee to
move the bill forward.
4:46:32 PM
CHAIR OLSON offered his understanding that the Division of
Insurance was not totally in favor of the bill.
MR. WINTERS responded that he heard the testimony differently.
He understood that the division didn't believe it was an
overwhelming issue, but that amending the statute could be
useful.
CHAIR OLSON acknowledged that.
SENATOR MENARD commented that risk pools were the price of doing
business. She discussed medical risk pools and then expressed
concern about military personnel who have sales fall through
after they deployment.
MR. WINTERS responded that under the definition in the bill that
was not entire abandonment. If that were actually a problem,
there would be some evidence of that in this hearing. He
reiterated that State Farm was only getting pushback in Alaska
about cancelling entirely abandoned property. He then explained
the difference between a medical risk pool and a property
insurance risk pool. Health insurance assumes people are going
to get sick; the homeowner risk pool does not assume property
abandonment.
4:51:36 PM
CHAIR OLSON asked why he would suppose that so many people have
appeared to oppose the bill.
MR. WINTERS answered that State Farm reached out after receiving
the realtor letter and tried to explain that the insurance
company did not intend to cancel property in any circumstance
other than actual abandonment. He reiterated that he worked hard
on the definitions and didn't believe it could be more definite
without rendering the statute meaningless. The realtors were
well intention, but the evidence did not support their concerns.
CHAIR OLSON mentioned Mr. Champion's example and asked about
protecting a vacant home while the estate was being settled.
MR. WINTERS highlighted the six protections he mentioned
earlier.
CHAIR OLSON asked Ms. Hall if she had closing comments.
4:54:33 PM
MS. HALL said Mr. Winters was probably correct that the
definition was the most stringent in the country. "I'm all right
with it," she said. The division had the ability to enforce the
definition knowing the intent. With regard to notice, she
explained that frequently an insurance policy was endorsed to
have a loss payee and that endorsement, by contract, required
notice to the lender that the policy was being canceled. With
regard to an estate, it can well protect itself by changing the
name of the insured on a policy to the estate of the deceased.
That was common practice.
CHAIR OLSON announced he would hold SB 157 in committee.
4:56:52 PM
There being no further business to come before the committee,
Chair Olson adjourned the Senate Community and Regional Affairs
Standing Committee meeting at 4:56 p.m.
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