02/17/2025 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB11 | |
| SB17 | |
| SB98 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 11 | TELECONFERENCED | |
| += | SB 17 | TELECONFERENCED | |
| *+ | SB 98 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
February 17, 2025
1:32 p.m.
MEMBERS PRESENT
Senator Jesse Bjorkman, Chair
Senator Kelly Merrick, Vice Chair
Senator Elvi Gray-Jackson
Senator Forrest Dunbar
Senator Robert Yundt
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 11
"An Act relating to flood insurance; relating to property
insurance; establishing the Alaska Flood Authority and the
Alaska flood insurance fund; and providing for an effective
date."
- HEARD & HELD
SENATE BILL NO. 17
"An Act establishing the crime of airbag fraud."
- MOVED SB 17 OUT OF COMMITTEE
SENATE BILL NO. 98
"An Act extending the termination date of the Board of
Veterinary Examiners; and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 11
SHORT TITLE: FLOOD INSURANCE
SPONSOR(s): SENATOR(s) STEDMAN
01/10/25 (S) PREFILE RELEASED 1/10/25
01/22/25 (S) READ THE FIRST TIME - REFERRALS
01/22/25 (S) L&C, FIN
02/10/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/10/25 (S) Heard & Held
02/10/25 (S) MINUTE(L&C)
02/17/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 17
SHORT TITLE: CRIME COUNTERFEIT/NONFUNCTIONING AIRBAG
SPONSOR(s): SENATOR(s) CLAMAN
01/10/25 (S) PREFILE RELEASED 1/10/25
01/22/25 (S) READ THE FIRST TIME - REFERRALS
01/22/25 (S) L&C, JUD
02/10/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
02/10/25 (S) Heard & Held
02/10/25 (S) MINUTE(L&C)
02/17/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 98
SHORT TITLE: EXTEND BOARD OF VETERINARY EXAMINERS
SPONSOR(s): LABOR & COMMERCE
02/12/25 (S) READ THE FIRST TIME - REFERRALS
02/12/25 (S) L&C, FIN
02/17/25 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
SENATOR BERT STEDMAN, District A
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 11.
LORI WING-HEIER, Director
Division of Insurance
Department of Commerce, Community and
Economic Development (DCCED)
Anchorage, Alaska
POSITION STATEMENT: Answered questions on SB 11.
LISA BUSCH, representing self
Sitka, Alaska
POSITION STATEMENT: Testified in support of SB 11.
LAURA CURTIS, Assistant Vice President
American Property Casualty Insurance Association (APCIA)
Rocklin, California
POSITION STATEMENT: Testified in opposition to SB 11.
SENATOR MATT CLAMAN, District H
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 17.
MATT CHURCHILL, Staff
Senator Jesse Bjorkman
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented an overview of SB 98.
KRIS CURTIS, Legislative Auditor
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified by invitation on SB 98.
SYLVAN ROBB, Director
Division of Corporations, Business and
Professional Licensing (DCBPL)
Department of Commerce, Community and
Economic Development (DCCED)
Juneau, Alaska
POSITION STATEMENT: Testified by invitation on SB 98.
HAL GEIGER, Public Member
Board of Veterinary Examiners
Juneau, Alaska
POSITION STATEMENT: Testified by invitation on SB 98.
ACTION NARRATIVE
1:32:38 PM
CHAIR BJORKMAN called the Senate Labor and Commerce Standing
Committee meeting to order at 1:32 p.m. Present at the called to
order were Senators Merrick, Gray-Jackson, Dunbar, Yundt and
Chair Bjorkman.
SB 11-FLOOD INSURANCE
1:33:30 PM
CHAIR BJORKMAN announced the consideration of SENATE BILL NO. 11
"An Act relating to flood insurance; relating to property
insurance; establishing the Alaska Flood Authority and the
Alaska flood insurance fund; and providing for an effective
date."
1:34:05 PM
SENATOR BERT STEDMAN, District A, Alaska State Legislature,
Juneau, Alaska, speaking as sponsor presented a brief recap of
SB 11 and stated that his office is working on a solution to
Alaska's challenges with the National Flood Insurance Program
for two main reasons:
• Alaskans pay far more in premiums than Alaskans receive in
claims.
• Federal building codes tied to the program are hindering
coastal development.
He said because this program is nationwide, Alaska is paying for
flood losses in high-risk areas like the Gulf Coast and East
Coast, even though Alaska has minimal exposure to floods losses.
He said Federal Emergency Management Agency's (FEMA) rules also
override local planning and zoning, placing heavy burdens on
communities. With Alaska's vast coastline and many fishing
towns, these restrictions are especially harmful. He stated that
Alaska is a large state with a small population, and Alaska is
not being treated fairly. He said his office is hoping to work
with the Division of Insurance and the committee to refine the
issue and find a solution that works for Alaskans without being
dragged down by FEMA's massive deficits.
1:38:19 PM
CHAIR BJORKMAN requested to know how the FEMA flood maps will
affect the concept of SB 11 and what is the connection between
the flood maps and those taking up insurance.
1:38:44 PM
SENATOR STEDMAN answered that if flood maps are going to include
hundreds or thousands of Alaskans, it raises concerns,
especially with how inconsistently zones are drawn. He stated
that the issue of flood zones is growing, not shrinking, with
more people and communities affected over time. He gave an
example of Ketchikan's new maps that add 1,100 people to the
flood zone, that's nearly 10 percent of the town despite little
to no flooding along its waterfront. Theres also very little
flooding along the waterfront in Wrangell, Sitka, and Juneau. He
said the FEMA flood maps are a longstanding and growing problem
that need attention.
1:40:09 PM
CHAIR BJORKMAN asked how an insurance program will ensure risk
is shared fairly among those truly at risk of flooding so
people's property that is unlikely to flood aren't just paying
premiums that end up subsidizing high-risk areas.
1:40:49 PM
SENATOR STEDMAN answered that the Division of Insurance would be
able to answer that more technical question. He stated that the
goal isn't to exclude the 1,100 people in Ketchikan, but to
include them in a better system with lower premiums, better
coverage, and less federal control over local zoning. He said
it's not about avoiding insurance but creating a more efficient
and fairer program.
1:42:21 PM
SENATOR YUNDT stated his belief that shifting control from
federal government to the state or local level usually leads to
a more efficient system that better serves residents. He asked
if a borough or community like Ketchikan, creates an insurance
captive, where residents in flood zones pool together and self-
insure and asked if this is something that has been explored.
1:43:10 PM
SENATOR STEDMAN answered that his office didn't look at
individual communities in isolation but considered a statewide
approach. A broader pool helps manage risk more fairly. He said
the Division of Insurance can give more insight regarding the
possibility of local captives. Some areas also face risks like
landslides and earthquakes, so SB 55 would lay the groundwork
for a broader solution if done right. He expressed that the new
program won't be a free ride, premiums won't be state-subsidized
and if the state can't run the program more economically than
the federal government, the State of Alaska would end up back in
the federal system: high premiums, few claims, and heavy
restrictions.
1:45:35 PM
SENATOR YUNDT asked if the insurance captive would be at the
state level or broken down by communities and would the captive
just be for those in the pool or would others outside of the
pool be involved.
1:45:57 PM
LORI WING-HEIER, Director, Division of Insurance, Anchorage,
Alaska, answered questions on SB 11 and responded that the
captive would be for those in the pool.
SENATOR YUNDT asked how many captives operate in Alaska and has
she ever seen it used for [flood coverage].
MS. WINGHEIER answered that she's not aware of any captives for
flood coverage. Alaska doesn't have a captive law, so the
individual would need to go to another jurisdiction to start
one. She stated that there are a few captives for transportation
companies like Lynden and Carlyle, but they're based elsewhere.
She said most flood insurance nationwide is still handled
through the National Flood Insurance Program, with limited
private options.
1:47:29 PM
SENATOR DUNBAR asked if Alaska currently owns any insurance
programs, like the old high-risk pool before Obama care and does
that still exist. Second, are there other industries, like
earthquake or flood, where insurance is federally mandated to
access financing.
1:48:26 PM
MS. WINGHEIER answered that the high-risk pool is still active
but only has about eight members. The division keeps it going
mainly because Alaska lacks Medicare supplements. She said
Alaska is too small to attract products like Medicare Advantage.
She stated that she is not aware of any lender or state
requiring flood or earthquake insurance. She said lenders
typically ask for general property insurance, but not for
specific coverage like flood or earthquake, even in disaster-
prone areas.
SENATOR DUNBAR stated for this instance it's not a private party
requesting insurance, it's the federal government. He asked if
the federal government is asking in the capacity of a lender and
how does that mandate work.
MS. WINGHEIER responded that the federal government is asking as
a lender. She stated that she's not aware of any federal mandate
requiring people in specific geographic areas to buy flood
insurance.
SENATOR DUNBAR asked that in practice, since the federal
government is so involved in home lending, the federal
government can effectively require everyone in certain areas to
carry this insurance.
MS. WINGHEIER answered that is correct.
SENATOR DUNBAR asked if she was aware of a time the federal
government has tried to force certain insurance.
MS. WINGHEIER answered that she is not aware of a time that the
insurance was forced by the federal government.
1:50:25 PM
CHAIR BJORKMAN asked what the options are to create a viable
insurance pool for those who've had or may have flood damage in
the future.
1:50:47 PM
MS. WINGHEIER answered that for this program to work, it depends
on how many people buy insurance. She said if only a few people
join and there's a major flood, the pool won't hold but, if
enough Alaskans statewide participate, the risk can be spread
out. She stated that right now, few people buy flood insurance,
often because it's not required or it's too expensive on top of
homeowners' coverage. The division hasn't set rates yet, but
success depends on strong participation to keep the program
self-sustaining.
1:51:55 PM
CHAIR BJORKMAN opened public testimony on SB 11.
1:52:24 PM
LISA BUSCH, representing self, Sitka, Alaska, testified in
support of SB 11 and stated that she led the Sitka Sound Science
Center (SSSC) during the 2015 landslide. SSSC formed a group of
researchers, agencies, and communities, stretching from Yakutat
to Prince of Wales, to address natural hazards, not just
landslides. The SSSC meets with communities to discuss risks,
warning systems, and monitoring. SB 11 would help those at risk
from landslides, mudflows, and atmospheric rivers by offering
potential insurance options. She said every public meeting the
SSSC holds the first question is always about insurance. The
Science Center and RAND corporation published a white paper on
landslide insurance that can be shared with the committee. She
stated that she is working with Central Council of the Tlingit &
Haida Indian Tribes of Alaska, supported by United States
Geological Survey (USGS), to create a regional landslide
information hub. People want to know if insurance is available
and how it works. She said the Alaska people are a coastal
people, vulnerable not only to floods but also to landslides
triggered by extreme weather.
1:55:45 PM
LAURA CURTIS, Assistant Vice President, American Property
Casualty Insurance Association (APCIA), Rocklin, California,
testified in opposition to SB 11 and stated that APCIA
respectfully opposes SB 11, as it would create an unnecessary
financial burden on the state and duplicate flood insurance
options already available. SB 11 proposes a state run flood
insurance program to increase access, but flood coverage is
already available through the National Flood Insurance Program
(NFIP) and private insurers. She said any area that participates
in the NFIP is eligible, but many Alaska communities don't
currently participate. NFIP participation is crucial for setting
minimum standards that help reduce flood losses and insurance
costs. SB 11 would also mandate property insurers to join a new
state-run residual market something no other state requires. She
said Alaska can't afford to take on the full burden of flood
losses, especially compared to NFIP, which spreads risk
nationwide and is backed by the federal government. She said
requiring insurers to take on this extra risk would reduce
availability, not improve it. That's one reason NFIP was created
is to avoid overwhelming states with risk. She stated that
instead of creating a new program, APCIA believes the state
should focus on encouraging communities to join NFIP and invest
in mitigation, planning, and stronger building codes to improve
resilience and reduce costs. SB 11 also proposes up to $10
million in state funds to cover losses if premiums fall short.
That money would be better spent on reducing risks and expanding
NFIP participation. She said while the APCIA understand the
concerns about flood insurance access, mandatory participation
in a potentially underpriced program would be financially
disastrous.
2:00:07 PM
CHAIR BJORKMAN closed public testimony on SB 11.
2:00:23 PM
CHAIR BJORKMAN held SB 11 in committee.
2:00:27 PM
At ease.
SB 17-CRIME COUNTERFEIT/NONFUNCTIONING AIRBAG
2:02:48 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of SENATE BILL NO. 17 "An Act establishing the
crime of airbag fraud."
2:03:16 PM
SENATOR MATT CLAMAN, District H, Alaska State Legislature,
Juneau, Alaska, sponsor of SB 17 presented a brief recap as
follows:
[Original punctuation provided.]
To recap, Senate Bill 17 establishes airbag fraud as a
crime. It prohibits dangerous actors from knowingly
selling, installing, or manufacturing these dangerous
and improper devices.
Passage of this legislation will support federal
efforts to stop the importation of counterfeit or
nonfunctioning airbags through the federal Unfair
Trade Practices Act. It will allow federal authorities
to seize these products at Alaska's border.
Counterfeit airbags are a serious threat to drivers
and passengers in Alaska that is to say, almost each
and every one of us and our constituents.
2:04:10 PM
SENATOR DUNBAR stated in the last committee meeting, the
committee discussed generic airbags, and a member from the
industry noted that generic airbags essentially don't exist. He
said that raises concerns for him, possibly pointing to industry
capture, though he knows that it's not the intent of SB 17. He
emphasized that federal safety standards should not be used to
block airbags that are functionally identical due to trademark
or other industry-imposed barriers. He asked for an elaboration
on the issue.
2:05:15 PM
SENATOR CLAMAN answered that from personal experience buying
auto parts, he often has used aftermarket partslike body
panelsthat fit well but aren't from the original manufacturer.
He said there's a strong market for many of those parts, but
with airbags, the tech and cost to develop them make it hard for
third-party companies to compete. That's not necessarily anti-
competitive, airbags are a tougher, more complex market compared
to something like bumpers.
SENATOR DUNBAR asked for confirmation, for the benefit of future
prosecutors of defense attorneys, if this crime were brought
against someone, it is the intent of the legislature that it
does not create a law punishing safe aftermarket products simply
because they do not meet industry proprietary standards.
SENATOR CLAMAN answered that's true.
2:07:21 PM
CHAIR BJORKMAN opened public testimony on SB 17; finding none,
he closed public testimony.
2:07:58 PM
CHAIR BJORKMAN solicited the will of the committee.
2:08:02 PM
SENATOR MERRICK moved to report SB 17, work order 34-LS0183\A,
from committee with individual recommendations and attached
fiscal note(s).
2:08:19 PM
CHAIR BJORKMAN found no objection and SB 17 was reported from
the Senate Labor and Commerce Standing Committee.
2:08:35 PM
At ease.
SB 98-EXTEND BOARD OF VETERINARY EXAMINERS
2:11:15 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of SENATE BILL NO. 98 "An Act extending the
termination date of the Board of Veterinary Examiners; and
providing for an effective date."
2:11:46 PM
MATT CHURCHILL, Staff, Senator Jesse Bjorkman, Alaska State
Legislature, Juneau, Alaska, presented an overview of SB 98 as
written:
[Original punctuation provided.]
The Board of Veterinary Examiners, the five-member
panel that regulates the profession of veterinary care
in the state, will currently sunset on June 30, 2025.
This Bill extends the sunset date of the Board by six
years to allow the Board to continue working in the
public interest.
The State's 2024 audit of the board concluded that the
board served the public's interest while recognizing
the continued need for legislative oversight.
The audit ultimately recommended that the legislature
extend the Board's termination to June 30, 2031. Kris
Curtis, Legislative Auditor, will speak further to the
Committee today regarding the details of the State's
audit.
The Committee will also be hearing today from Director
Sylvan Robb of the Division of Corporations, Business
and Professional Licensing.
Board member, Hal Geiger, is present today and Dr.
Robert Gerlach, Chair of the Board of Veterinary
Examiners will be on the line as well to help with any
questions the Committee might have.
2:13:17 PM
CHAIR BJORKMAN announced invited testimony on SB 98.
2:13:32 PM
KRIS CURTIS, Legislative Auditor, Alaska State Legislature,
Juneau, Alaska, testified by invitation on SB 98. She read the
provided report conclusions:
[Original punctuation provided.]
The Sunset Review of the department of Commerce,
Community and Economic Development (DCCED), Board of
Veterinary Examiners (board)
April 24, 2024
Audit Control Number 08-20142-24
REPORT CONCLUSIONS
The audit concluded that the board served the public's
interest by conducting meetings in an effective
manner; actively amending regulations to address
statutory changes, protect the public and improve the
licensing process; and effectively licensing
veterinary professionals. The audit also concluded
that board related cases were not consistently
investigated in a timely manner, two board positions
had expired terms, and as of January 31,2024, one
board position had been vacant for 31 months.
Additionally, the audit found that the final version
of regulation changes published in 2023 was not
reviewed or approved by the board.
2:14:23 PM
MS. CURTIS continued:
In accordance with AS 08.03.010(c)(22), the board is
scheduled to terminate on June 30,2025. We recommend
that the legislature extend the board's termination
date six years to June 30,2031, which is two years
less than the maximum allowed statute. The reduced
extension reflects the need for more routine oversight
of the board in light of the audit findings.
MS. CURTIS stated that on page 6 licensing information shows
that as of January 2024 the board had 716 active licenses, a 7
percent increase since the 2016 audit. Page 8 shows finances;
the board had a $200,000 surplus. She said the Legislative Audit
department made three recommendations starting on page 11:
Recommendation 1
She said the Division of Corporation, Business,
Professional Licensing (DCBPL) director should create
procedures to ensure the final draft of regulations are
provided to occupational boards for review and approval
before regulations are filed and made effective. She stated
that the final Veterinarian-Client-Patient Relationship
(VCPR) regulation omitted language the board intended, due
to technical edits by the Department of Law they believed
were minor.
Recommendation 2
She said the Boards and Commissions director should work
with the board to identify potential applicants to fill
board seats in a timely manner. The board had five members,
with two serving on expired terms and one seat vacant for
31 months.
2:15:58 PM
MS. CURTIS continued:
Recommendation 3
Department of Commerce, Community and Economic Development
(DCCED) commissioner should work with policymakers to
improve the recruitment and retention of investigators. She
said the Legislative Audit reviewed nine cases open for
over 180 days and found four with significant, unjustified
delays some lasting 111 to 695 days, often due to staff
vacancies and competing priorities.
MS CURTIS stated that the commissioner of DCCED, board chair and
governor's board and commissions' director agreed with all three
recommendations. The response can be found starting on page 23
in the audit report.
2:17:14 PM
SYLVAN ROBB, Director, Division of Corporations, Business and
Professional Licensing (DCBPL), Department of Commerce,
Community and Economic Development (DCCED), Juneau, Alaska,
testified by invitation on SB 98 and stated that the first
recommendation that ensures the board reviews regulations and
make sure the regulations align with intent before adoption and
finalization has been resolved. She stated the Department of Law
changed a law on how regulation process flows. The Department of
Law now reviews proposed regulations before they go to public
comment, instead of after. She said this change prevents public
input on regulations that may later be rejected for legal
reasons and has improved the process for boards, the public, and
licensees. She stated that all five board seats are currently
filled. The division works with the Governor's Office to notify
active licensees of vacancies and encourages them or their peers
to apply. She said as for the third recommendation, the division
continues working to improve investigator recruitment and
retention. While the division struggled during the pandemic with
35 percent vacancies, the DCBPL now has only a few open
positions. She stated that the division has better training, and
stronger oversight. She said the DCBPL expect future audits to
reflect shorter investigation timelines.
2:21:48 PM
HAL GEIGER, Public Member, Board of Veterinary Examiners,
Juneau, Alaska, testified by invitation on SB 98 and stated that
the board has handled many complex technical issues responsibly,
always mindful of how public resources are being used. While
most people think of veterinarians as caring for pets,
veterinarians also play critical roles in food security and
public health, like managing rabies, a fatal disease in humans.
He said veterinarians also handle controlled substances and
treat high value animals in hatcheries being released in the
marine environment. He said the board is needed to fulfil the
complex, technical, and essential work that needs to be
completed. He stated that one major challenge the board faced
was addressing the unintended consequences of the prescription
drug monitoring program, and the board appreciates the
Legislature's help in resolving that. He said the board also
supports adding a licensed veterinary technician to the board,
as many states have done. With only five members, vacancies
strain the board's capacity, especially when emergencies arise.
He said the board agrees fully with the audit recommendations.
He said the issue with the Department of Law altering the
finalized Veterinarian Client Patent Relationship (VCPR)
regulation is serious. He stated that the board has worked for
years on getting expert testimony and a key provision for
allowing associate vets to treat an animal after another vet's
exam was removed. He said the current regulation is impractical,
and despite the boards repeated requests since late 2023, the
board hasn't received help from the Department of Law to fix it.
2:28:58 PM
CHAIR BJORKMAN stated that as the board reviews regulations and
related matters he asked whether the board makes recommendations
on larger policy questions such as food security or the clean
list of animals allowed into Alaska and asked whether the board
offers any kind of professional position from the veterinary
community on those types of issues.
2:29:31 PM
MR. GEIGER answered that generally, the board has left those
broader policy issues to the Alaska Veterinary Medical
Association (AVMA) and focused on regulations within the boards
statutory authority. He said the only time the board really
stepped in was with the prescription drug monitoring program,
which caused significant issues for the board.
2:30:15 PM
CHAIR BJORKMAN held SB 98 in committee.
2:30:50 PM
There being no further business to come before the committee,
Chair Bjorkman adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:30 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB98 ver. A.pdf |
SL&C 2/17/2025 1:30:00 PM |
SB 98 |
| SB98 Sponsor Statement ver A.pdf |
SL&C 2/17/2025 1:30:00 PM |
SB 98 |
| SB11 Public Testimony-Email-Susan Allmeroth 02.08.25.pdf |
SL&C 2/17/2025 1:30:00 PM |
SB 11 |
| SB11 Public Testimony-Letter-NAMIC 02.14.25.pdf |
SL&C 2/17/2025 1:30:00 PM |
SB 11 |
| SB11 Public Testimony-Letter-APCIA 02.14.25.pdf |
SL&C 2/17/2025 1:30:00 PM |
SB 11 |
| SB98 Supporting Documents-Audit Vets Examiners Brd.pdf |
SL&C 2/17/2025 1:30:00 PM |
SB 98 |