04/18/2014 07:30 AM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB206 | |
| HB28 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 206 | TELECONFERENCED | |
| + | HB 28 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
April 18, 2014
7:34 a.m.
MEMBERS PRESENT
Senator Mike Dunleavy, Chair
Senator Peter Micciche, Vice Chair
Senator Donald Olson
MEMBERS ABSENT
Senator Bert Stedman
Senator Johnny Ellis
COMMITTEE CALENDAR
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 206(L&C)
"An Act relating to motor vehicle service contracts; exempting
motor vehicle service contracts from regulation as insurance;
and providing for an effective date."
- MOVED SCS CSHB 206(L&C) OUT OF COMMITTEE
HOUSE BILL NO. 28
"An Act exempting solicitations or voluntary agreements to
provide ambulance, emergency, or fire department services from
regulation as insurance."
- MOVED HB 28 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 206
SHORT TITLE: MOTOR VEHICLE SERVICE CONTRACTS
SPONSOR(s): REPRESENTATIVE(s) LEDOUX
04/12/13 (H) READ THE FIRST TIME - REFERRALS
04/12/13 (H) L&C
04/09/14 (H) L&C AT 3:15 PM BARNES 124
04/09/14 (H) Moved CSHB 206(L&C) Out of Committee
04/09/14 (H) MINUTE(L&C)
04/10/14 (H) L&C RPT CS(L&C) NT 1DP 6NR
04/10/14 (H) DP: MILLETT
04/10/14 (H) NR: CHENAULT, HERRON, REINBOLD,
SADDLER, JOSEPHSON, OLSON
04/16/14 (H) TRANSMITTED TO (S)
04/16/14 (H) VERSION: CSHB 206(L&C)
04/17/14 (S) READ THE FIRST TIME - REFERRALS
04/17/14 (S) L&C
04/18/14 (S) L&C AT 7:30 AM BELTZ 105 (TSBldg)
BILL: HB 28
SHORT TITLE: FIRE AND EMERGENCY MEDICAL SERVICES
SPONSOR(s): REPRESENTATIVE(s) FEIGE
01/16/13 (H) PREFILE RELEASED 1/7/13
01/16/13 (H) READ THE FIRST TIME - REFERRALS
01/16/13 (H) CRA
01/31/13 (H) CRA AT 8:00 AM BARNES 124
01/31/13 (H) Moved Out of Committee
01/31/13 (H) MINUTE(CRA)
02/01/13 (H) CRA RPT 5DP 1NR
02/01/13 (H) DP: OLSON, REINBOLD, FOSTER, NAGEAK,
LEDOUX
02/01/13 (H) NR: DRUMMOND
03/11/13 (H) TRANSMITTED TO (S)
03/11/13 (H) VERSION: HB 28
03/13/13 (S) READ THE FIRST TIME - REFERRALS
03/13/13 (S) L&C, CRA
04/18/14 (S) L&C AT 7:30 AM BELTZ 105 (TSBldg)
WITNESS REGISTER
STEVE RICCI, Aide
Senate Labor and Commerce Committee
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced the Senate CS for HB 206.
STEPHEN MCDANIEL, Assistant Executive Director
Service Contract Industry Council (SCIC)
Tallahassee, Florida
POSITION STATEMENT: Testified in support of HB 206.
MARTY HESTER, Deputy Director
Division of Insurance
Department of Commerce, Community and Economic Development
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 206.
REPRESENTATIVE ERIC FEIGE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of HB 28.
MARTY HESTER, Deputy Director
Division of Insurance
Department of Commerce, Community and Economic Development
Juneau, Alaska
POSITION STATEMENT: Testified that the Division of Insurance
does not oppose HB 28.
ACTION NARRATIVE
7:34:41 AM
CHAIR MIKE DUNLEAVY called the Senate Labor and Commerce
Standing Committee meeting to order at 7:34 a.m. Present at the
call to order were Senators Olson, Micciche, and Chair Dunleavy.
HB 206-MOTOR VEHICLE SERVICE CONTRACTS
7:35:09 AM
CHAIR DUNLEAVY announced the consideration of HB 206."An Act
relating to motor vehicle service contracts; exempting motor
vehicle service contracts from regulation as insurance; and
providing for an effective date." He noted that this was the
first hearing and there was a work draft committee substitute
(CS), Version P
7:35:19 AM
SENATOR MICCICHE moved to adopt the work draft Senate CS for HB
206, labeled 28-LS0501\P, as the working document.
CHAIR DUNLEAVY objected for discussion purposes.
STEVE RICCI, Aide, Senate Labor and Commerce Standing Committee,
introduced the Senate CS for HB 206. He explained that the CS
clarifies the language in service agreements, focusing on the
replacement of fluids, oil filters, and replacement parts during
regular motor vehicle maintenance. The CS also provides
clarifying language about undercoating. He deferred technical
questions to Stephen McDaniel.
7:36:21 AM
CHAIR DUNLEAVY removed his objection.
7:36:32 AM
STEPHEN MCDANIEL, Assistant Executive Director, Service Contract
Industry Council (SCIC), Tallahassee, Florida, said that SCIS is
a national trade association that represents the service
contract industry before regulators and legislators. He
explained that HB 206 is based on a model that was adopted by
the NAIC in the early 1980s and is consistent with the national
trend for the regulation of this product. HB 206 will provide a
manner of doing business in Alaska that is consistent with how
service contract businesses are treated in a majority of the
country.
CHAIR DUNLEAVY asked him to describe what the bill does.
MR. MCDANIEL explained that the legislation establishes a
regulatory framework for offering motor vehicle service
contracts in Alaska. Anyone providing these products must
register with the Division of Insurance and demonstrate
financial responsibility to ensure that Alaskan consumers are
protected when they purchase the products. The bill also
establishes something like a consumer bill of rights so that the
service contracts have disclosures to ensure that consumers may
cancel the contracts at any time and receive pro rate refunds.
The Division of Insurance has enforcement authority over the
industry.
7:38:22 AM
SENATOR OLSON asked what problems or complaints the bill is
intended to rectify.
MR. MCDANIEL replied he didn't know that there have been
complaints, but the bill allows the industry to do business with
some regulatory certainty in the state by registering and
complying with requirements similar to those found in other
states.
SENATOR OLSON again asked what kind of direct consumer
complaints the bill rectifies, and expressed doubt about the
need for the law.
MR. MCDANIEL explained that this law protects Alaska consumers
who purchase these products. It ensures that providers adhere to
the promises they make in these contracts by requiring the
providers to carry insurance that backs their obligations. It
also outlines the types of coverage that could be offered within
a service contract in Alaska.
SENATOR OLSON asked for confirmation that the bill is not
responding to any complaints that have been made in the state of
Alaska.
MR. MCDANIEL deferred the question to the Division of Insurance.
CHAIR DUNLEAVY asked Mr. Hester if the Department of Commerce,
Community and Economic Development (DCCED) had a position on the
bill.
7:40:56 AM
MARTY HESTER, Deputy Director, Division of Insurance, Department
of Commerce, Community and Economic Development (DCCED), advised
that the division has worked on this legislation for years to
allow the industry to offer the products they've wanted to offer
while ensuring that Alaska consumers have the protections they
need. The division believes that HB 206 meets this goal.
SENATOR OLSON asked if Alaska law is unclear with regard to
motor vehicle service contracts.
MR. HESTER replied the law isn't unclear but the different types
of products that different companies offer does create a clarity
issue. HB 206 would address the issue by providing the
regulatory structure for the products to be similar in nature,
by establishing the financial responsibilities of the contract
providers, and by allowing the division to oversee the consumer
protection aspects.
SENATOR OLSON commented that he doesn't want somebody who isn't
from Alaska dictating what happens in Alaska.
CHAIR DUNLEAVY opened and closed public testimony. Finding no
further questions or comments, he solicited a motion.
7:43:32 AM
SENATOR MICCICHE moved to report HB 206, Version P, from
committee with individual recommendations and attached fiscal
note(s).
CHAIR DUNLEAVY announced that without objection, SCS CSHB
206(L&C) moved from the Senate Labor and Commerce Standing
Committee.
7:43:54 AM
At Ease
HB 28-FIRE AND EMERGENCY MEDICAL SERVICES
7:44:37 AM
CHAIR DUNLEAVY reconvened the meeting and announced the
consideration of HB 28. "An Act exempting solicitations or
voluntary agreements to provide ambulance, emergency, or fire
department services from regulation as insurance." This was the
first hearing.
7:44:42 AM
REPRESENTATIVE ERIC FEIGE, Alaska State Legislature, Juneau,
Alaska, sponsor of HB 28, introduced the bill stating the
following:
HB 28 addresses an issue important to many
organizations: money.
Capital grants from the State of Alaska and other
entities help many emergency service organizations
exist. Unfortunately, money is often available for
projects such as buying new equipment or repairing a
building, but money is very rarely available for
operating expenses.
House Bill 28 provides a mechanism to help emergency
service agencies maintain sustainability. Fire
departments, ambulance services and other emergency
service organizations often struggle to keep the doors
open. In some communities, the power to levy taxes
provides sufficient funding to operate these
departments. In others, it is not an option. When
sufficient funds are not available, organizations turn
to other sources for money. Sometimes it is a pancake
supper or a fish fry. Maybe it's a bake sale or some
other project. Maybe BINGO. In different communities,
different things work. The problem with these types of
activities is that they take even more of the
emergency volunteer's time. Time they need to spend
training and responding to other emergencies.
Donations also are very helpful, but it is becoming
increasingly difficult to convince people to give
money to an organization. People have come to expect
the government to provide these services.
One alternative to entice people to provide donations
to help support fire and EMS services in the community
is to offer a "no charge" policy to those that give to
the organization. Unfortunately, such a simple concept
is considered insurance in Alaska and subject to
numerous laws and regulation.
An ambulance service can become a health services
corporation and become exempt from many of the
insurance laws. To do so requires the organization to
put up a minimum bond of $100,000 along with other
requirements. Hardly feasible for a few people in a
remote village who want to create a service to take
those that are sick or injured to the local clinic.
The alternative [is to] hope someone comes along that
can take the injured or sick person because no
organized local ambulance service exists.
If you just charge the individual for the service,
it's no problem. But if you ask for money up front to
keep gas in the ambulance and to keep the fire station
heated in exchange for not charging the longtime donor
if you come to assist them, it falls under the
category of insurance and is subject to all the
regulations of the Division of Insurance.
In a similar situation, a community that has no fire
department might want to start one. Often
organizations charge if they have to come to help you.
Others ask for donations. You might hear it referred
to as a subscription fire department. In a
subscription department, you pay in advance to receive
the service and then receive a discount on costs if
you have to use the service. The State of Alaska
considers this insurance.
This bill does only one thing. It exempts
municipalities and community-based nonprofit
organizations engaged in emergency services from the
insurance regulations for donations received that
result in a production of fees charged.
CHAIR DUNLEAVY requested a synopsis of what the bill does.
REPRESENTATIVE FEIGE said it removes subscription-type emergency
organizations from the regulations of the Division of Insurance.
CHAIR DUNLEAVY observed that it would help rural areas of the
state.
REPRESENTATIVE FEIGE agreed.
SENATOR MICCICHE commented that the bill essentially calls
insurance something else.
REPRESENTATIVE FEIGE clarified that it establishes that
subscription services are not insurance.
SENATOR OLSON asked if the Division of Insurance is in favor of
the bill.
7:50:26 AM
MARTY HESTER, Deputy Director, Division of Insurance, Department
of Commerce, Community and Economic Development (DCCED), stated
that the division does not oppose HB 28. It is similar to
legislation that was carved out for the air ambulance industry.
HB 28 would carve out for municipalities and community-based
nonprofits to offer similar subscription services.
SENATOR OLSON admonished the division for taking a neutral
stance on legislation that obviously would help emergency
services in rural Alaska. He asked if it's true that the
division has a negative view of people that provide these
subscription-type services.
MR. HESTER replied it is not true. He said the division has to
enforce insurance statutes and it's been opined that these types
of subscription memberships are insurance. HB 28 would remove
municipalities and community-based nonprofits from regulation by
the division.
SENATOR OLSON asked if he had lived in rural Alaska.
MR. HESTER answered no.
CHAIR DUNLEAVY asked if he sees any harm resulting from the
bill.
MR. HESTER answered no.
SENATOR MICCICHE said he supports the bill because emergency
services are an appropriate application, but it shouldn't grow
beyond that.
CHAIR DUNLEAVY opened and closed public testimony.
7:53:17 AM
SENATOR MICCICHE moved to report HB 28 from committee with
individual recommendations and attached fiscal note(s).
CHAIR DUNLEAVY announced that without objection, HB 28 moved
from the Senate Labor and Commerce Standing Committee.
7:53:29 AM
There being no further business to come before the committee,
Chair Dunleavy adjourned the Senate Labor and Commerce Standing
Committee meeting at 7:53 a.m.