04/16/2009 03:45 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB60 | |
| HB108 | |
| HB177 | |
| HB175 | |
| HB222 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 60 | TELECONFERENCED | |
| + | HB 108 | TELECONFERENCED | |
| + | HB 177 | TELECONFERENCED | |
| + | HB 175 | TELECONFERENCED | |
| HB 222 | |||
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
April 16, 2009
3:49 p.m.
MEMBERS PRESENT
Senator Joe Paskvan, Chair
Senator Joe Thomas, Vice Chair
Senator Bettye Davis
Senator Kevin Meyer
Senator Con Bunde
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Ramras
Representative Coghill
COMMITTEE CALENDAR
SENATE BILL NO. 60
"An Act relating to the Uniform Probate Code, including wills,
trusts, nonprobate transfers, augmented estates, personal
representatives, and trustees; and amending Rules 3 and 8,
Alaska Rules of Civil Procedure, Rule 1, Alaska Rules of Probate
Procedure, and Rule 37.5, Alaska Rules of Administration."
MOVED CSSB 60(L&C) OUT OF COMMITTEE
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 108(JUD) AM
"An Act relating to real property foreclosures, to the sale of
property on execution, and to deeds of trust."
MOVED SCS CSHB 108(L&C) OUT OF COMMITTEE
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 177(L&C)
"An Act relating to marine products and motorized recreational
products; and providing for an effective date."
MOVED SCS CSHB 177(L&C) OUT OF COMMITTEE
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 175(L&C)
"An Act relating to insurance, including treating as
confidential certain information submitted to the director of
insurance by the National Association of Insurance funded
multiple employer welfare arrangements; repealing reasons that
the director of insurance may use to deny or revoke a license;
and providing for an effective date."
MOVED CSHB 175(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 222(TITLE AM)
"An Act prohibiting discrimination by health care insurers based
on genetic information; providing special enrollment
requirements related to Medicaid and state child health plan
coverage; requiring a health care insurer to offer coverage for
the treatment of alcoholism or drug abuse; providing continuity
of coverage for college students during medically necessary
leaves of absence from college; requiring health care insurers
in the group market to provide parity in the application of
mental health and substance abuse benefits that comply with
federal requirements; amending the definition of 'dentist' to
include out-of-state dentists for purposes of certain dental
insurance requirements; and providing for an effective date."
MOVED HB 222(title am) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 60
SHORT TITLE: UNIFORM PROBATE CODE; TRUSTS, WILLS
SPONSOR(s): SENATOR(s) MCGUIRE
01/21/09 (S) PREFILE RELEASED 1/16/09
01/21/09 (S) READ THE FIRST TIME - REFERRALS
01/21/09 (S) L&C, JUD
03/24/09 (S) L&C AT 1:30 PM BELTZ 211
03/24/09 (S) Scheduled But Not Heard
03/31/09 (S) L&C AT 1:00 PM BUTROVICH 205
03/31/09 (S) Heard & Held
03/31/09 (S) MINUTE(L&C)
04/16/09 (S) L&C AT 1:00 PM BELTZ 211
BILL: HB 108
SHORT TITLE: PROP. FORECLOSURE/EXECUTION/TRUST DEEDS
SPONSOR(s): REPRESENTATIVE(s) RAMRAS
02/02/09 (H) READ THE FIRST TIME - REFERRALS
02/02/09 (H) L&C, JUD
02/23/09 (H) L&C AT 3:15 PM BARNES 124
02/23/09 (H) Heard & Held
02/23/09 (H) MINUTE(L&C)
03/13/09 (H) L&C AT 3:15 PM BARNES 124
03/13/09 (H) -- MEETING CANCELED --
03/16/09 (H) L&C AT 3:15 PM BARNES 124
03/16/09 (H) Moved CSHB 108(L&C) Out of Committee
03/16/09 (H) MINUTE(L&C)
03/18/09 (H) L&C RPT CS(L&C) 1DP 5NR
03/18/09 (H) DP: CHENAULT
03/18/09 (H) NR: BUCH, COGHILL, NEUMAN, HOLMES,
OLSON
03/25/09 (H) JUD AT 1:00 PM CAPITOL 120
03/25/09 (H) Scheduled But Not Heard
03/30/09 (H) JUD AT 1:00 PM CAPITOL 120
03/30/09 (H) Heard & Held
03/30/09 (H) MINUTE(JUD)
04/03/09 (H) JUD AT 1:00 PM CAPITOL 120
04/03/09 (H) Moved CSHB 108(JUD) Out of Committee
04/03/09 (H) MINUTE(JUD)
04/07/09 (H) JUD RPT CS(JUD) 2DP 4NR 1AM
04/07/09 (H) DP: COGHILL, RAMRAS
04/07/09 (H) NR: LYNN, GRUENBERG, DAHLSTROM, GATTO
04/07/09 (H) AM: HOLMES
04/11/09 (H) TRANSMITTED TO (S)
04/11/09 (H) VERSION: CSHB 108(JUD) AM
04/13/09 (S) READ THE FIRST TIME - REFERRALS
04/13/09 (S) L&C, JUD
04/16/09 (S) L&C AT 1:00 PM BELTZ 211
BILL: HB 177
SHORT TITLE: MARINE & MOTORIZED RECREATIONAL PRODUCTS
SPONSOR(s): REPRESENTATIVE(s) COGHILL
03/12/09 (H) READ THE FIRST TIME - REFERRALS
03/12/09 (H) L&C
03/30/09 (H) L&C AT 3:15 PM BARNES 124
03/30/09 (H) Scheduled But Not Heard
04/06/09 (H) L&C AT 3:15 PM BARNES 124
04/06/09 (H) Moved CSHB 177(L&C) Out of Committee
04/06/09 (H) MINUTE(L&C)
04/07/09 (H) L&C RPT CS(L&C) 7DP
04/07/09 (H) DP: LYNN, BUCH, COGHILL, NEUMAN,
HOLMES, CHENAULT, OLSON
04/13/09 (H) TRANSMITTED TO (S)
04/13/09 (H) VERSION: CSHB 177(L&C)
04/14/09 (S) READ THE FIRST TIME - REFERRALS
04/14/09 (S) L&C
04/16/09 (S) L&C AT 1:00 PM BELTZ 211
BILL: HB 175
SHORT TITLE: INSURANCE
SPONSOR(s): LABOR & COMMERCE
03/09/09 (H) READ THE FIRST TIME - REFERRALS
03/09/09 (H) L&C, FIN
03/11/09 (H) L&C AT 3:15 PM BARNES 124
03/11/09 (H) Heard & Held
03/11/09 (H) MINUTE(L&C)
03/13/09 (H) L&C AT 3:15 PM BARNES 124
03/13/09 (H) -- MEETING CANCELED --
03/16/09 (H) L&C AT 3:15 PM BARNES 124
03/16/09 (H) Scheduled But Not Heard
03/20/09 (H) L&C AT 3:15 PM BARNES 124
03/20/09 (H) Heard & Held
03/20/09 (H) MINUTE(L&C)
03/30/09 (H) L&C AT 3:15 PM BARNES 124
03/30/09 (H) Moved CSHB 175(L&C) Out of Committee
03/30/09 (H) MINUTE(L&C)
04/01/09 (H) L&C RPT CS(L&C) NT 2DP 5NR
04/01/09 (H) DP: COGHILL, OLSON
04/01/09 (H) NR: LYNN, BUCH, NEUMAN, CHENAULT,
HOLMES
04/11/09 (H) FIN RPT CS(L&C) NT 5DP 4NR
04/11/09 (H) DP: THOMAS, GARA, KELLY, HAWKER,
STOLTZE
04/11/09 (H) NR: AUSTERMAN, CRAWFORD, FAIRCLOUGH,
SALMON
04/11/09 (H) FIN AT 9:00 AM HOUSE FINANCE 519
04/11/09 (H) Moved CSHB 175(L&C) Out of Committee
04/11/09 (H) MINUTE(FIN)
04/15/09 (H) TRANSMITTED TO (S)
04/15/09 (H) VERSION: CSHB 175(L&C)
04/16/09 (S) L&C AT 1:00 PM BELTZ 211
BILL: HB 222
SHORT TITLE: MED. INS. ELIGIBILITY/NONDISCRIMINATION
SPONSOR(s): HOLMES
04/08/09 (H) READ THE FIRST TIME - REFERRALS
04/08/09 (H) L&C
04/10/09 (H) L&C AT 3:15 PM BARNES 124
04/10/09 (H) Moved Out of Committee
04/10/09 (H) MINUTE(L&C)
04/11/09 (H) L&C RPT 4DP
04/11/09 (H) FIN REFERRAL ADDED AFTER L&C
04/11/09 (H) DP: LYNN, BUCH, HOLMES, OLSON
04/14/09 (H) NR: AUSTERMAN, HAWKER, STOLTZE
04/14/09 (H) DNP: KELLY
04/14/09 (H) DP: FAIRCLOUGH, CRAWFORD, GARA, SALMON,
JOULE
04/14/09 (H) FIN RPT 5DP 1DNP 3NR
04/14/09 (H) FIN AT 8:30 AM HOUSE FINANCE 519
04/14/09 (H) Moved Out of Committee
04/14/09 (H) MINUTE(FIN)
04/15/09 (H) TRANSMITTED TO (S)
04/15/09 (H) VERSION: HB 222(TITLE AM)
04/16/09 (S) L&C AT 1:00 PM BELTZ 211
WITNESS REGISTER
TREVOR FULTON, staff to Senator McGuire
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Commented on SB 60 for the sponsor.
DAVID SHAFTEL, Estate Planning Attorney
POSITION STATEMENT: Supported SB 60.
DOUG BLATTMACHR, President and CEO
Alaska Trust Company
POSITION STATEMENT: Supported SB 60.
RICH HOMPESCH, Attorney
POSITION STATEMENT: Supported SB 60.
JANE PIERSON, staff to Representative Ramras
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Commented on HB 108 for the sponsor.
ROBERT SCHMIDT, Attorney representing himself and his law firm
POSITION STATEMENT: Supported HB 108.
STEPHEN ROUTH, Attorney representing himself
POSITION STATEMENT: Supported HB 108.
RENNIEVA MOSS
Staff to Representative Coghill
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Explained HB 177 for the sponsor.
KATHY VAN KLEEK
Specialty Vehicle Institute of America
POSITION STATEMENT: Opposed HB 177.
DAVID DICKERSON
National Marine Manufacturers
POSITION STATEMENT: Needed more time to review the significant
changes in HB 177 even though they seem to be good.
KEVIN HITE, President
Alaska State Snowmobile Association
POSITION STATEMENT: Supported HB 177.
DUDLEY BENESCH
Alaska Mining and Diving
Alaska Marine Dealers Association
POSITION STATEMENT: Supported HB 177.
DAVE MCCORMICK, owner
Back Creek Marine
POSITION STATEMENT: Supported HB 177.
CRAIG COMPEAU
Compeau's Inc.
POSITION STATEMENT: Supported HB 177.
CONRAD JACKSON
Staff to Representative Olson
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Introduced HB 175 for the sponsor.
LINDA HALL, Director
Division of Insurance
Department of Commerce, Community & Economic Development (DCCED
POSITION STATEMENT: Supported HB 175.
REPRESENTATIVE LINDSEY HOLMES
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Sponsor of HB 222.
JAMES WALDO, staff to Representative Holmes
State Capital
Juneau, AK
POSITION STATEMENT: Commented on HB 222 for the sponsor.
ACTION NARRATIVE
3:49:11 PM
CHAIR JOE PASKVAN called the Senate Labor and Commerce Standing
Committee meeting to order at 3:49 p.m. Present at the call to
order were Senators Meyer, Thomas, and Paskvan.
3:49:46 PM
SENATOR BUNDE joined the committee.
SB 60-UNIFORM PROBATE CODE; TRUSTS, WILLS
3:50:30 PM
CHAIR PASKVAN announced SB 60 to be up for consideration. [CSSB
60, labeled 26-LS0320\E, had been adopted on 3/31/09.]
TREVOR FULTON, staff to Senator McGuire, sponsor of SB 60, said
he was available to answer questions.
DAVID SHAFTEL, attorney in private practice, said his office
works with estate planning and estate and trust administration.
For 12 years he has been a member of an informal group of
attorneys and trust officers who have worked with the Alaska
Legislature on bills in this area. He summarized that SB 60 has
a provision to allow the designation of a representative for
incapacitated people, it updates and correlates a provision
relating to the augmented estate so it is consistent with other
provisions relating to self-settled discretionary spend-thrift
trusts.
3:53:00 PM
SENATOR DAVIS joined the committee.
MR. SHAFTEL continued explaining that SB 60 enacts a new
provision dealing with the pre-mortem process of establishing
capacity of a person who has drafted a trust and where there are
issues concerning whether that person had capacity or whether
there was duress or undue influence, fraud or similar claims.
That person under this bill can file an action in court and have
a proceeding to determine that the capacity and the lack of
those improper influences so that the will or trust would be
upheld as valid. That person can participate in the process
while he or she is alive and has the best evidence available
concerning capacity and intent rather than waiting for the
person to die to go through the process.
3:55:24 PM
The bill also provides a venue provision for probate of the will
of a non-resident who may have property in the state or not. It
also allows a personal representative or trustee to make a
designation about discretionary distributions that are coming
from capital gains rather than principal, which allows for
income tax planning, and that the legislature knows affects
every resident in the state.
3:57:31 PM
SENATOR THOMAS said the court can establish validity of the will
and make other findings. Can the court find it invalid, as well?
MR. SHAFTEL replied yes; they could find a lack of capacity or
some other event took place and the instrument should not be
given legal effect in that case.
CHAIR PASKVAN said his question deals with section 4 and the
exclusion from the augmented estate of an irrevocable trust with
the settlor designating himself as a discretionary beneficiary.
He asked what policy reason there is for excluding that from the
augmented estate.
MR. SHAFTEL replied that this trust is created before a
marriage. For example if someone creates an irrevocable trust
for children from a first marriage, it would be treated the same
as if the property were transferred before marriage. The
augmented estate is property that the spouses have during
marriage; and that is what a spouse can collect against after
the death of his spouse rather than what he/she was left in the
will. For instance, he could choose to take a third of an
augmented estate rather than what was left in the will.
So, this provision says if you create this trust 30 days before
marriage, it will be excluded from the estate. It is an
irrevocable trust with an independent trustee and while the
trustee could make distributions to the person who created it,
it is treated as property that was not acquired during a
marriage. Eleven other states have excluded it along with
Alaska. This is not a manipulative tool to hide assets from your
spouse after you are married. It would have had to be created
before marriage.
CHAIR PASKVAN asked what prompted the change in policy if a
settlor is a beneficiary under the trust they themselves
established. He asked if it is includable in the augmented
estate currently.
4:02:54 PM
MR. SHAFTEL replied that it is included, and he said section 2
(page 2) clarifies if it's done prior to marriage it is
consistent with what law is today.
CHAIR PASKVAN asked if this change would apply to Alaskans only
or could it be used by non-residents to create trusts in Alaska
and have that potentially affect an augmented estate analysis in
another state.
MR. SHAFTEL replied it applies to probate in Alaska; this
provision couldn't apply in any other state.
CHAIR PASKVAN asked if the exclusion from the augmented estate
would apply only to Alaska residents.
MR. SHAFTEL replied that would be his understanding.
4:04:58 PM
CHAIR PASKVAN asked him to clarify the intent of excluding the
surviving spouse and child from the augmented estate.
MR. SHAFTEL replied that existing statute requires that in any
probate proceeding the surviving spouse and child will receive
notice of everything.
CHAIR PASKVAN asked if the irrevocable trust with the settlor as
a discretionary beneficiary is includable within the probated
estate.
MR. SHAFTEL replied, "No it would not be, if it was done before
marriage."
4:08:47 PM
SENATOR THOMAS remarked that the hearing and notice section on
page 11, AS 13.12.565, indicates that the spouse, the children,
the heirs of the testator and settlor shall be notified.
4:09:58 PM
DOUG BLATTMACHR, President and CEO, Alaska Trust Company,
supported SB 60.
4:10:57 PM
RICH HOMPESCH, Fairbanks attorney, supported SB 60.
4:11:44 PM
CHAIR PASKVAN closed the public hearing.
SENATOR THOMAS moved to report CS SB 60(L&C) from committee with
individual recommendations and attached zero fiscal note. There
were no objections and it was so ordered.
At ease from 4:12 p.m. to 4P14 p.m.
CSHB 108(JUD) am-PROP. FORECLOSURE/EXECUTION/TRUST DEEDS
4:14:24 PM
CHAIR PASKVAN announced CSHB 108(JUD) am to be up for
consideration.
4:14:51 PM
JANE PIERSON, staff to Representative Ramras, sponsor of HB 108,
testified that this bill will clarify, simplify and modernize
non-judicial property foreclosures and hopefully reduce
litigation. It includes an Internet publication provision that
will make it more likely that third-party bidders will be
attracted. Third party bidders are desirable because they will
drive up auction prices, which can result in funds going back to
the borrower at the completion of the auction. The Internet
publishing requirements are borrower-friendly and only kick in
when there is an unavoidable foreclosure and all other efforts
to rescue the loan have failed.
Other changes to the bill make the process more efficient and
less litigation-prone. Some of the state foreclosure laws were
enacted before fax machines were invented, let alone the
Internet. Foreclosures are on the upswing - California,
Washington and Oregon are now buried in foreclosures and there
has been a rise in Alaska. Modernizing the statutes will help
reduce the huge impact that foreclosures can have on the
economy. The bill will make property foreclosure auctions more
open and accessible, which will benefit borrowers, lenders,
title insurers, individuals and even neighbors and
neighborhoods. HB 108 was drafted with the knowledge of the best
practices of 11 other states.
MS. PIERSON stated that currently banks are averaging a loss of
$20,000 per foreclosure; so hopefully this will add more people
into the foreclosure auctions. It will also clarify how
foreclosure proceeds will be divided up. It will assure that
foreclosure trustees are fiscally responsible by imposing
reasonable bond requirements and creating deadlines to deter
chilled bidders and unnecessary delays. It allows trustees to
nullify sales when mistakes are made that negatively impact the
integrity of the sale. It sets up procedures to follow involving
a deceased borrower, creates common sense rules to govern times
and methods for posting foreclosure properties; it creates
Internet publication procedures and allows acceptance of
foreclosure auction bids via e-mail, Internet and telephone -
for greater accessibility to auctions.
She pointed out a House floor amendment to get rid of a
provision that said that the sale had to happen two days before
the auction in order to be cured. She explained that language on
page 5, lines 20-23, was inadvertently left in and is now
superfluous since the sale can happen up to the time of sale. So
it needed to be removed.
SENATOR BUNDE asked if a particular precipitating event inspired
this legislation.
MS. PIERSON replied no.
4:20:10 PM
SENATOR THOMAS pointed out an inaccuracy on page 2, line 3, that
says "an inaccuracy in the street address may now be used to set
aside a sale if the legal description is correct." It seemed a
little unusual that if someone put the wrong street address in,
either on purpose or by mistake, that it shouldn't have some
impact on the sale.
MS. PIERSON said that language is currently in statute.
4:21:00 PM
ROBERT SCHMIDT, representing himself and his law firm, said HB
108 was originally written by his colleague and competitor,
Stephan Routh, and his associate, Bridget Olstrom, and that his
law firm ran a distant second in terms of volume of foreclosures
handled at 100 per year. He supported HB 108. It significantly
modernizes Alaska foreclosure laws. Among the items already
mentioned, it adds a five-day do-over period where the trustee
under a deed of trust may elect to undo the foreclosure sale and
return ownership of the property to the borrower, a great
protection to borrowers.
MR. SCHMIDT explained how he had grappled with Mr. Routh over
the necessity and extent of Internet publication, but he
supports the current version of HB 108, which codifies the
current practice of a newspaper running a print ad and
simultaneously running an Internet ad.
SENATOR BUNDE said with the increasing demise of newspapers, Mr.
Schmidt leans heavily toward them for advertising, but he wanted
to know if he had other suggestions.
MR. SCHMIDT agreed that newspapers are falling on hard times.
His concerns with the Internet publication provisions as
previously written were that the Internet website would have to
have 5,000 unique visitors per month and would have to have
senior management located in the state; it would also have to
have been used primarily to advertise real property
foreclosures. Under that definition only one website would
qualify and that is owned by Mr. Routh. His firm has a website,
too, but it advertises things other than foreclosures.
He explained that at one point the Internet publications
provisions were pulled and language saying if you buy a print ad
and it simultaneously runs an Internet ad was inserted. He is
skeptical that an Internet site should be required to get 5,000
unique visitors a month. In his opinion about 1 percent of the
Alaskan population is interested in buying foreclosure property;
he wonders whether the website would have to be just a
foreclosure website and whether or not it would have to be
located in Alaska. He concluded saying that the current language
is acceptable to him.
4:26:40 PM
CHAIR PASKVAN asked if he was aware of any opposition.
MR. SCHMIDT replied the original provisions for Internet
advertisement were of concern to several people within the
foreclosure related industry, and they have been appropriately
addressed. But he might change the 5,000 hits per month to a
more appropriate number, because it lacks connection to the
reality of foreclosure sales in Alaska where perhaps a dozen
people know and follow them.
SENATOR BUNDE said Alaska has prohibitions against special
interest legislation, and asked if that one firm is an issue.
MS. PIERSON replied yes; they have worked to make this language
more open.
SENATOR BUNDE asked why choose 5,000 hits?
MS. PIERSON replied that they picked that number because it is
not a lot of hits for an Internet website. It was a number so
that someone couldn't say they had met the provision by
publishing on some secure website somewhere. The sponsor would
have no problem with changing the number.
4:30:32 PM
STEPHEN ROUTH, representing himself, said he has been an
attorney in Anchorage for over 27 years and supported HB 108.
His primary focus is representing mortgage banks. He said this
bill was drafted in response to problems other states have, as
well as Alaska, with selling foreclosures. Certain laws hadn't
been updated and were causing litigation and problems for
borrowers, banks and title companies. It should have been done
long ago. Many letters of support are in their packets - without
qualification.
He explained that current state law mandates that foreclosures
are posted in a post office, which made sense 60 years ago when
people went to the post office to get news, but today it
doesn't. Also it's against federal law to publish estate notices
in a post office; federal employees tear them down. It does
other things like change the three-month period to 90 days
because it the number of days varies depending on which months
you are going through.
Things in the past have caused tremendous amounts of grief for
borrowers and their families, title companies and financial
institutions - things like what happens if the borrower is
deceased. Current law doesn't provide any guidance whatsoever on
foreclosures for deceased persons. HB 108 cleans that up as
well.
MR. ROUTH said they looked at ways to reduce foreclosure
litigation -how to give notice, how to post a property, what to
do if you can't get to the property because there is no house
there, and little things like that. On the Internet piece he
said that 5,000 hits a month in Internet-speak is literally
nothing. The last time he looked, the Anchorage Daily News (ADN)
was getting over 80,000 hits a day. He thought Mr. Smith's
website would qualify if he actually would count the number of
hits he has.
4:35:31 PM
He stated that things are often going wrong by the time you get
to a foreclosure, and if there is equity in the house, the
borrower should get it. Foreclosures need transparency; people
can investigate it and help the neighborhood increase in value.
If that process is hidden from everyone but the elite few, the
light of transparency is not shining on it.
4:38:08 PM
CHAIR PASKVAN closed public testimony.
4:38:18 PM
SENATOR THOMAS moved conceptual Amendment 1 to delete language
on page 5, lines 20-23. There were no objections and it was so
ordered.
SENATOR BUNDE said he thinks Internet advertising is a wise idea
and expands opportunity to share information, but he was
concerned about only one firm being able to provide the service
because of the 5,000 hit qualification. So, he asked if there
was interest in adopting another conceptual amendment to insert
language on page 3, line 12(E), to indicate that advertising on
the Internet where at least one of the websites has 5,000 hits.
CHAIR PASKVAN recalled that he read that the ADN doesn't qualify
because it is not an Internet site exclusively devoted to real
estate sales.
MS. PIERSON said that was one of the changes they worked very
hard to get.
SENATOR THOMAS said he didn't read that language to be
exclusive.
SENATOR BUNDE said this is talking about one website and he
wanted it to apply to websites plural at least one of which
would have 5,000 hits per month.
MS. PIERSON remarked that language in (A)-(F) on page 3, also
describes the qualifications for a website.
4:44:12 PM
SENATOR MEYER moved to report SCS CSHB 108(L&C) from committee
with individual recommendations and attached fiscal note(s).
There were no objections and it was so ordered.
At ease from 4:44 p.m. to 4:47 p.m.
CSHB 177(L&C)-MARINE & MOTORIZED RECREATIONAL PRODUCTS
4:47:16 PM
CHAIR PASKVAN announced CSHB 177(L&C) to be up for
consideration.
SENATOR THOMAS moved to adopt SCS CSHB 177, labeled 26-LS0477\M,
for purposes of discussion. There were no objections and it was
so ordered.
RENNIEVA MOSS, staff to Representative Coghill, sponsor of HB
177, said this is a consumer protection bill. The adopted CS
added language that was suggested by Attorney General Ed Sniffen
that mirrored motor vehicle lemon laws by adding venue and
jurisdiction language to the statutes.
4:49:33 PM
MS. MOSS said she wanted to review the bill for them and that
she had a couple of amendments for their consideration. The
first section clarifies in the motor vehicle section that
recreation vehicles, ATVs, and snow machines will be dealt with
in a new chapter, which is AS 45.27, known as the Marine
Products and Motorized Recreational Vehicle Recreational
Products. First it says that a manufacturer can't unreasonably
withhold consent of sale or transfer if the transferee meets the
criteria and agrees to be bound by all the agreements in the
dealership agreement. It also says that a manufacturer cannot
cancel or fail to renew an agreement unless they have shown good
cause and satisfy notice requirements. It then goes on to say
that notice requirements would be 60 days for material
provisions of an agreement, but in cases of fraud or insolvency,
that would result in cancelation of the contract with only to be
a 15-day notice.
It also says that a manufacturer cannot decline to renew a
dealership because of the death or incapacity of an owner,
specifically if the dealership was not granted solely on the
qualification of the owner. It defines "good cause" and repeats
in more specifics how the manufacturer would have to furnish
notification of cancelation or non-renewal. The notice has to be
in writing by certified mail. New provisions say that a
manufacturer cannot coerce or attempt to coerce a dealer into
dealership agreements to perform unfair acts - one would be
requiring a dealer to overstock.
It defines a manufacturer's representative as an employee or an
agent of the manufacturer and goes into cancelation and
repurchasing by saying if a manufacturer cancels or fails to
renew a dealer agreement without good cause, that dealer would
be obligated to purchase back the new product that is the
current model year and the previous year and that includes
product parts that have been listed in the manufacturer's parts
book for two years. The exceptions are if the parts or products
have been substantially damaged or altered and the repurchase
price would be based on the dealers landed costs.
The product warrantee section is where the manufacturer promises
to provide parts in a reasonable timeframe for warrantee work,
makes an obligation to pay the authorized dealer specific rates
for warrantee work, and then it makes some requirements on the
dealer not to misrepresent the warrantee and to agree to do the
warrantee work for the manufacturer. Language on page 6, line
21, sets out the basis for reimbursement and three ways for it
to occur.
4:54:01 PM
Line 24 is where she wanted the committee to consider an
amendment that sets out that the manufacturers shall pay the
highest rate of either what the dealer would customarily charge
in a non-warranty service or the manufacturer's printed flat
rate or in the future a flat-rate manual that has been produced
for the industry. She asked them to consider that this would be
the case if the authorized dealer has certified technicians
performing the warranty work. This is already common practice.
Another area for them to consider is whether language on page 7,
lines 2-7, is the proper wording. If subsection 2 is already
considered warrantee work, do they have to be specific in
listing those services and reimbursement for doing paperwork for
warrantee work? Now it has a minimum of one hour for the
authorized dealer shop standard labor rate, which is the
mechanics rate, not necessarily the rate of someone doing
paperwork.
Next, she said, timelines were set out for how claims should be
submitted and how manufacturers could address them. The
manufacturer would have 30 days to deny the claim and give
written notice as to why they have denied the claim or to pay
it. If neither happens it is assumed the claim has been accepted
and they will be charged interest until it is paid.
4:55:59 PM
MS. MOSS said language at the bottom of page 7 starts the "lemon
law." If the dealer and the manufacturer have made reasonable
attempts to correct non-conformity of a product unsuccessfully,
then the purchaser of that product would submit in writing what
the non-conformity is and then request that it be repurchased or
replaced. The manufacturer on a repurchase would refund a
reasonable amount of money with considerations for deductions
for straight line depreciation and damages to the product that
would reduce the value of the product. It also says if there is
a lien holder, then he would also be taken care of in the
repurchase.
4:56:59 PM
MS. MOSS said the exceptions to a repurchase are fairly obvious.
If the manufacturer or dealer can prove that it's not a
nonconformity, that it's something that the purchaser did to the
vehicle themselves, for instance, by letting it run out of oil
or if they let someone do something to the product that caused
the non-conformity.
The lemon law states specifically that if there is a non-
conformity to that product and the dealer has attempted to
repair it three or more times or if the product is out of
service for repair for a total of 30 or more days, then the
purchaser of the product can request that it be refunded or
replaced.
Article 3 is the consumer protection section. It requires
certain posting of labor rates including for non-warrantee work
and certification of technicians. It also requires a shop to
notice whether employees are paid on commission and when a
person brings a vehicle or product in for repair to furnish him
a written estimate of costs of repair including parts and labor.
For additional work, they have to contact the customer for
permission.
Content of factory recalls is a notice to the dealer and the
consumer letting them know that there is a recall on a certain
part and when they can expect that part to be supplied to the
dealer for repairs. It goes into not allowing a manufacturer to
resale a product that they have repurchased because of a non-
conformity unless they provide full disclosure of it to the new
purchaser.
4:59:44 PM
Miscellaneous provisions say that other laws and other civil
procedures on the books still apply; it's applicable to a dealer
and a manufacturer in an agreement. The jurisdiction is the
State of Alaska. The venue is the judicial district closest to
the dealer that sold the product. HB 108 doesn't allow a
manufacturer to use an affiliate partnership or subsidiary
corporation to avoid this law. It says that any part of a dealer
agreement that violates these sections of law would not apply.
5:00:27 PM
SENATOR BUNDE asked if a provision in the dealership agreement
section on page 11, line 30, violates this chapter because it is
a way to get out of the consumer protection.
MS. MOSS answered with an example - if somebody doesn't read a
lengthy contract, a provision says a company has the absolute
right and its sole discretion to terminate the agreement on 10-
days written notice. That provision won't apply here, but
violation of this statute says 15 days notice can be given with
cause and 60 days without cause.
MS. MOSS said on page 12, line 25, the definition of "marine
product" is changed in the CS to include gasoline motors
designed for recreation or commercial use on water. Some members
raised concerns that they were interfering in commercial
contracts between fishermen and manufacturers. Diesel engines
for fishermen are bought directly from manufacturers and have a
separate warrantee provision. Fishermen and dealers have told
her that adding gasoline motors would cover about 99.3 percent
of who they are trying to cover under this statute.
5:02:28 PM
An applicability section on page 15 says this new statute
applies to dealership agreements that are signed after this bill
is enacted, and it has an immediate effective date.
CHAIR PASKVAN asked if it applies to renewals of dealership
agreements.
MS. MOSS replied yes - cancellation as well as renewal.
CHAIR PASKVAN asked the industry standard for term of renewal
for any of the typical dealers in Alaska.
MS. MOSS said she didn't know, but some dealers would.
5:03:24 PM
KATHY VAN KLEEK, Specialty Vehicle Institute of America, opposed
HB 177. She said it would raise the cost of doing business and
ultimately increase the cost of recreational products to
Alaskans. They don't oppose reasonable franchise legislation and
don't oppose many of the bill's provisions. However, there are a
few very problematic provisions. One is the requirement that the
manufacturer reimburse the dealer for warranty service at the
dealer's retail rate. Some manufacturers do have cured
reimbursement systems depending on levels of factory training
that a technician has completed. This encourages dealers to
employ the most highly qualified technicians, which
significantly benefits consumers. Requiring the same
reimbursement for all only punishes those dealers who spend
considerable time and money to have and retain the most
qualified technicians.
She said they would support an amendment requiring an additional
hour's reimbursement for administration.
Another problematic provision is the lemon law requirement; the
language lacks in specificity and off road vehicles and ATVs
should not be included. Lemon laws were written to address
concerns with the automobile industry, and almost exclusively
every state law applies only to motor laws operated on highways.
The ATV has a number of unique factors and inherent differences
from cars that don't make sense with lemon laws. Off highway
vehicles are not included in the National Conference of State
Legislature's Model Lemon Law either. Use patterns are very
different from those of cars.
MS. VAN KLEEK explained that ATVs are used for recreational and
utilitarian purposes, and are many times subject to modification
and extreme use and abuse. Many are used for competition
purposes, and it's seems no more appropriate to cover these
products under a lemon law designed for cars than it does to
cover other products such as household appliances, all of which
are covered under the Uniform Commercial Code that offers
protection to buyers of defective products.
ATV manufacturers view warrantee repair policies as investment
in good consumer relations and future repeat sales. If customers
are dissatisfied, they simply won't buy another ATV of that
make. If this provision were enacted, good will repairs, which
are not uncommon for manufacturers to authorize, would end since
they would be included in the number of repairs allowed before
the lemon law provisions would kick in. Also ATV use is seasonal
and customers may leave their ATVs for service at dealerships
for extended periods of time.
5:08:10 PM
But if the law requires replacement or refund if the ATV has
been out of service for 30 days, that practice would end, as
well. This is more of a customer convenience, but the
manufacturer's exposure would overshadow the owner's convenience
and the dealer's efficiency. They don't believe that the small
incidence of problems in this area and the fact that ATV
manufacturers are currently acting in a responsible manner to
achieve customer satisfaction justify the downsides that would
be brought about with the passage of a lemon law.
5:08:28 PM
Finally, Ms. Van Fleek said, some terminology in HB 177 would
lead to confusion and conflict. The bill includes ATVs in the
definition of "recreational vehicles," but recreational vehicle
is defined elsewhere in Alaska statute to mean motor home type
vehicles and they are subject to numerous other types of laws.
So, she suggested removing that language. She urged that the
bill be amended to reflect these needed changes and to give it a
more thoughtful review.
5:09:29 PM
DAVID DICKERSON, National Marine Manufacturers, said they
represent the recreational boat and engine manufacturers. He
said he needs more time to review the significant changes in HB
177 even though they seem to be good.
He cautioned that the bill seems to be based on the assumption
that dealers are powerless against boat engine manufacturers.
That's not true in Alaska where there are few marine dealers. A
cancelation by a dealer can push a boat brand completely out of
a market here, because he doesn't have anywhere else to go
unlike in a lot of places with competition. The premise that
dealers need the protection from cancelation is turned on its
head in a state like Alaska.
Secondly, the lemon law doesn't differentiate very well for
boats that are an assembly of components with different
warrantees quite unlike other products under consideration. The
definition of "part" is also an "accessory" and makes it
difficult to determine who should provide those parts if one
should fail.
As far as the repurchase of a vessel, should there be a
cancelation or non-renewal, it doesn't discuss at all that the
boat should have no changes to it, no additional equipment or
other accessories that may make it substantially different than
the boat that was shipped up to the dealer. In addition to some
of these things, the idea of the parts needed for warrantee
repair is somewhat unclear. It says that the dealer should be
reimbursed at full retail for parts used in warrantee repair,
but if that part is being sent to the dealer for a specific
repair on a specific unit, why should that dealer be reimbursed
at full retain rate for a product that is dropped at his door?
It's hard to figure out the benefit in having these types of
mandates on private business.
He understands that not every unit coming off of every assembly
line is absolutely perfect and that's why warrantees exist; that
is why manufacturers try hard to see that those working on them
have the proper level of training.
5:14:27 PM
MR. DICKERSON said the marine industry uses training as a way to
attain 110 percent of the retail rate as an incentive to have
that proper training. Mandating that they cannot use that as
incentive puts dealers into a double bind. On one hand they have
to be sure that repairs are done right and don't exceed three
times of effort on the same problem, but on the other hand, they
are not put in the position of being able to require that those
techs, whether they are certified or not, have a continuing
level of education. It will require them to rethink how techs
are certified or how an authorized repair facility designation
is provided to a dealership. No longer will that be an incentive
to have the type of training that consumers and manufacturers
expect.
MR. DICKERSON echoed the concern regarding the additional hour
of payment for each warrantee repair claim. Since much of the
work is done by a lesser paid individual at most dealerships,
the idea of $110 for each warrantee claim for administrative
expenses seems excessive. He reiterated the request that they
delay action to give involved parties the opportunity to work on
the issue.
SENATOR THOMAS asked when he first became aware of this bill.
MR. DICKERSON replied he became aware of HB 303 in January 2008.
The bills have significant differences.
SENATOR BUNDE said one-hour of mechanic's time is too much.
MS. MOSS said she was hoping to get feedback from the dealers on
a reasonable amendment.
5:18:20 PM
KEVIN HITE, President, Alaska State Snowmobile Association,
supported HB 177. He stated that several levels of consumer
protection are in place for vehicles in Alaska that are
currently titled under DMV regulations, and HB 177 would provide
some of the non-road titled vehicles a good measure of the same
protections. Automotive dealers do such a good job of repairing
vehicles because their consumer protection level for them insure
that they get reimbursed at a rate equal or greater than repair
work. Automotive dealers are not losing money on repair work
regardless of where the original sale of the truck was.
He said that snow machines, primarily, don't enjoy the same
level of support in the warranty arena from the OEM dealer
system. Losing money on a current customer is one thing; losing
money on someone else's customer is not incentive for either
one. If a customer is outside the road system, that could mean
an expensive shipping bill to return the machine to the original
dealer. He explained that there have been issues with models
still used in Alaska that the OEMs have not fixed and this has
been ignored in large part due to the fact that the market here
is small.
The fact that snow mobiles are the main mode of transportation
for much of Alaska makes those same issues huge in the overall
picture. Dealers here are aware of manufacturing problems and
many times don't have a whole lot of support from the OEMs who
focus more on models that sell a whole lot more in the Lower 48.
Holding OEMs responsible for liability on vehicles that are
critical to our way of life regardless of geographic location
will result in a lot better operating and designed vehicles for
Alaska. This legislation will provide protections for consumers
and local businesses as well.
SENATOR BUNDE said the one-hour reimbursement of a mechanic's
time for paperwork seems excessive. Would he have a suggestion?
MR. HITE answered that those decisions are primarily driven by
the work load that comes in. Some warranty work is extremely
simple; some will be quite involved. The administrative effort
to get the warranty work correct may dictate different levels of
that. He would rely on the dealers for the information to verify
what actually went in to some warranty work. He couldn't make a
different recommendation.
5:23:35 PM
DUDLEY BENESCH, Alaska Mining and Diving, Alaska Marine Dealers
Association, supported HB 177. He said their association is
comprised of 28 member businesses and dealers throughout Alaska,
and have been working hard on the issues addressed in this bill
for a lot of years.
They researched a study of what other states had done and HB 177
has been crafted to address many of special needs of the Alaskan
consumers and the market up here; it has very broad support.
Elsewhere a snow machine might be a toy, but in Alaska these
products are the primary mode of transportation or the means to
earn a living, especially in the rural areas. Safety and
dependability are key issues for their customers.
In 2008 as a dealer, Mr. Benesch said, he invested over $37,000
in sending technicians to specialized schools to keep them
certified and current on the changing technology and sending his
management folks to mandatory dealer meetings in the Lower 48.
In addition, his dealership spends many thousands of dollars
each year purchasing new software, hardware and special tools
needs to fix everything they sell and to do a good job at
repairs. These are significant investments that they do
willingly to insure that customers get good help. What has
become more difficult is that more and more products have
warranty and significant defects and those costs are being
shifted on to the dealerships. The products seem to not be
tested properly and are maybe rushed to market to try and get
the edge on the competition. In essence HB 177(SB 173) will hold
those who create a problem more accountable for the real costs
to fix the problem.
MR. BENESCH said that his dealership has one full-time employee
whose whole job is just to handle the paperwork and details that
are required for a warranty claim to get paid to a dealership.
Warranty administration has become very complex.
5:28:54 PM
CHAIR PASKVAN asked if one hour is reasonable for administrative
costs.
MR. BENESCH answered the problem is that some jobs are more
complex than others. So they looked at a sampling and tried to
come up with an average. Without any doubt whatsoever, one hour
is realistic for administrative costs.
SENATOR BUNDE asked how much one hour would cost.
MR. BENESCH replied $110. Others charge from $80-$120.
5:31:13 PM
DAVE MCCORMICK, owner, Back Creek Marine, said that people in
Bethel depend on these recreation vehicles and supported HB 177.
They are used for rescue, getting wood, catching food and are
the main means of transportation. People spend the better part
of a year's family's income to buy one vehicle. Kuskokwim/Yukon
Delta consumers rely on his shop to repair their defects and
keep them going after they are off warranty. Normally they can't
afford to fix them after the warranties are over. However, he is
losing so much money and may be going bankrupt because he is
covering expenses that the manufacturers should be covering for
warranty work that he does. It's vital to pass this bill for his
people's sake.
5:36:26 PM
CRAIG COMPEAU, Compeau's Inc., supported HB 177. He said that he
feels one hour reimbursement is conservative for administrative
costs in a real world basis. It is for things like greeting the
customer, writing up the service order, transporting the
vehicles in and out of the shop, ordering parts, filing the
claim, contacting customer service, returning parts, tracking
the parts and tracking the reimbursement. He figures it is
actually closer to 1.3 hours. People don't realize that retail
service work gets bumped when they are having to work on factory
defects at a subsidized rate. "It's not fair."
5:38:31 PM
CHAIR PASKVAN closed public testimony.
SENATOR BUNDE moved to adopt Amendment 1 labeled 26-LS0477\M.2.
26-LS0477\M.2
Bannister
AMENDMENT 1
OFFERED IN THE SENATE
TO: SCS CSHB 177( ), Draft Version "M"
Page 6, line 24:
Delete "A"
Insert "If the technician performing the warranty service
work meets the certification standards in the dealership
agreement, a"
SENATOR MEYER objected for discussion purposes.
MS. MOSS explained that it addresses one of the manufacturer's
concerns on page 6, line 24, that if they're going pay full
retail non-warranty rates for warranty work, that the work is
done by certified technicians. This inserts "if the technician
performing the warrantee service work meets the certification
standards in the dealership agreement, a manufacturer shall pay"
and then goes to the pay scale.
SENATOR MEYER removed his objection and Amendment 1 was adopted.
5:40:18 PM
SENATOR BUNDE moved to adopt Amendment 2, 26-LS0477\M.3.
26-LS0477\M.3
Bannister
AMENDMENT 2
OFFERED IN THE SENATE
TO: SCS CSHB 177( ), Draft Version "M"
Page 7, line 8, following "parts":
Insert "in the authorized dealer's inventory"
Page 7, lines 9 - 10:
Delete "and shall ship each part to the authorized dealer
without cost for freight or handling"
SENATOR MEYER objected for an explanation.
MS. MOSS explained that this amendment is on page 7, line 8, and
clarifies something Mr. Dickerson addressed. It clarifies that
when a manufacturer pays a dealer retail for a part, it is for a
part that the dealer has on his shelf in his inventory. The
second part deletes lines 9-10 because it's a duplication in
wording that is already discussed on page 5.
5:41:49 PM
SENATOR MEYER removed his objection and Amendment 2 was adopted.
5:42:01 PM
MS. MOSS said the purpose of language on page 1 is to
distinguish between a recreational vehicle that could be a motor
home, an all-terrain vehicle, or a snow machine, and these would
be regulated under the new Chapter 27. She stated that these
vehicles are often the only means of transportation for many
Alaskans and should be covered by a lemon law.
SENATOR BUNDE asked on page 3, lines 15-16, about allowing
immediate cancelation upon bankruptcy or felony conviction.
MS. MOSS answered that her only concern is that bankruptcy
requires court proceedings, and she wasn't sure what effect that
would have. She didn't think the sponsor would have a problem
with reducing that notification period.
CHAIR PASKVAN commented that 15 days is a relatively short time
in the scheme of things.
SENATOR BUNDE said he was wondering about "things wandering out
the back door."
5:45:10 PM
SENATOR THOMAS moved to report SCS CSHB 177(L&C), version M as
amended, from committee with individual recommendations and
attached fiscal note(s).
SENATOR BUNDE commented that he was concerned that adopting this
bill might discourage manufacturers from selling ATVs up here
because Alaska is a relatively small market. Testimony has
indicated that they are designed for occasional use about three
months a year and Alaskans use them every day for six months a
year.
SENATOR MEYER objected for discussion.
SENATOR THOMAS noted a zero fiscal note.
SENATOR MEYER removed his objection and SCS CSHB 177(L&C) moved
from committee.
At ease from 5:48 p.m. to 5:50 p.m.
CSHB 175(L&C)-INSURANCE
5:50:16 PM
CHAIR PASKVAN announced HB 175 to be up for consideration. [CSHB
175(L&C) was before the committee.]
CONRAD JACKSON, staff to Representative Olson, sponsor of HB
175, introduced Ms. Hall for the explanation.
5:51:34 PM
LINDA HALL, Director, Division of Insurance, Department of
Commerce, Community & Economic Development (DCCED), said she
considers a number of things in the bill "clean up;" several are
streamlining processes about issuing licenses to out of state
adjusters, providing third-party administrators be responsible
for their employees, and accepting another regulator's non-
resident felony evaluations. Other things clarify deposits of
domestic and other states' insurers and allow a little more
flexibility for the regulatory with domestic insured deposits.
"Working day" is defined uniformly now throughout the title.
Three sections are uniformity provisions that allow ratio
analysis in examinations submitted to the director from the
National Regulatory Association to be held confidential;
currently just the financial material is held. They have updated
products that can be sold for a limited lines travel license.
MS. HALL remarked that she just received notification that
Alaska is in compliance with all of the National Association of
Insurance Commissioners (NAIC) uniformity standards.
Two new issues are policy calls in sections 11 and 17. Section
11 of this bill permits a director to order a summary suspension
of a producer license if there is a finding that the protection
of the public requires emergency action. This past year she had
two instances of the worst agent behavior she had ever seen in
Alaska. A licensee was taking money from his clients and using
it and not purchasing insurance. Her investigation found 72
victims who were left with virtually no financial protection
should they have a loss. They have filed criminal charges that
have 32 felony counts. This is behavior that if they could not
do a summary suspension this individual could have gone on
taking money as long as he had asked for a hearing and that
order was stayed. The bill has enough protections to prevent
summary suspensions from being abused. The reasons for doing it
are subject to the same reasons in statute for denial or
revocation of a license today; so it doesn't broaden anything,
but it stops behavior that harms the public.
5:55:39 PM
Section 17 allows a health insurance plan to reward a wellness
program without making it considered as a rebate program or
discrimination. Its requirements would meet Health Insurance
Portability and Accountability Act (HIPAA) standards and other
non discriminatory requirements.
The bill defines eligibility for a high risk pool in the same
way as the Permanent Fund Dividend does today, a uniformity
issue. Also, the hospital and medical service corporations make
guaranteed renewability of individual health plans mandatory;
today it is done for group plans; they also make guaranteed
renewability applicable to individual health plans.
5:56:55 PM
CHAIR PASKVAN said the summary suspension for egregious conduct
makes a lot of sense, as do the rewards for wellness. He then
closed public testimony.
5:57:38 PM
SENATOR MEYER moved to report CSHB 175(L&C) from committee with
individual recommendations and attached fiscal note(s). There
were no objections and it was so ordered.
At ease from 5:58 p.m. to 5:59 p.m.
HB 222(title am)-MED. INS. ELIGIBILITY/NONDISCRIMINATION
5:59:38 PM
CHAIR PASKVAN announced HB 222(title am) to be up for
consideration.
5:59:52 PM
REPRESENTATIVE LINDSEY HOLMES, sponsor of HB 222, said this bill
will allow the Division of Insurance to implement new federal
regulations, which she thinks are quite good ones. She turned
the explanation over to James Waldo, her staff person.
JAMES WALDO, staff to Representative Holmes, explained that HB
222 conformed state law to federal regulation changes. It
prevents discrimination against individuals based on genetic
testing. Another section requires insurance companies to
continue covering college students for up to one year if they
have to take a medically necessary leave of absence; it prevents
them from getting caught in a catch-22. It provides parity in
mental health and substance abuse treatment by requiring there
be no additional restrictions on mental health or substance
abuse treatment other than what are placed on general medical
surgical treatment in an insurance plan. It also removes a
mandate that an insurance company provide substance abuse
treatment and just mandates that they offer substance abuse
treatment so that people aren't required to take it if it's not
what they want.
MR. WALDO said it has two changes to enrollment requirements for
employees that are related to Medicaid or Denali Kid Care.
Essentially if an employee of a company with an employer plan
opts out of that plan, but is on Medicaid or Denali Kid Care and
loses eligibility for Medicaid or Denali Kid Care, it allows
them 60 days to apply for their employer's health plan. The next
change is if they are not currently covered by the employer's
health care plan, but they become available for assistance under
Medicaid or Denali Kid Care, it will allow them to enroll in
that employer plan with that assistance they just became
eligible for. Finally, he said, it updates the definition of
"dentist" for insurance purposes so that it applies to dentists
licensed outside of Alaska as well as inside.
6:03:28 PM
SENATOR MEYER asked what change was made on the House floor.
MR. WALDO replied that the title was amended because some
language was inadvertently left out.
6:04:36 PM
CHAIR PASKVAN closed public testimony.
6:04:45 PM
SENATOR DAVIS moved to report HB 222(title am) from committee
with individual recommendations and attached fiscal note(s).
There were no objections and it was so ordered.
6:06:53 PM
CHAIR PASKVAN thanked everyone for their work on the committee
and adjourned the meeting at 6:06 p.m.
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