Legislature(2013 - 2014)BARNES 124
01/31/2013 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB28 | |
| HB40 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 28 | TELECONFERENCED | |
| *+ | HB 40 | TELECONFERENCED | |
HB 28-FIRE AND EMERGENCY MEDICAL SERVICES
8:05:58 AM
CO-CHAIR NAGEAK announced that the first order of business would
be HOUSE BILL NO. 28, "An Act exempting solicitations or
voluntary agreements to provide ambulance, emergency, or fire
department services from regulation as insurance."
8:06:13 AM
REPRESENTATIVE ERIC FEIGE, Alaska State Legislature, speaking as
the sponsor of HB 28, paraphrased from the following written
statement [original punctuation provided]:
HB 28 addresses an issue important to many
organizations: Money.
It is great to be able to look to someone, such as the
State of Alaska, for money. However, even if money is
available for projects, such as buying new equipment
or repairing a building, money is very rarely
available for operating expenses.
Fire Departments, ambulance services, and other
emergency service organizations often struggle to keep
the doors open. In many communities, the power to levy
taxes often provides sufficient funding to operate
these departments. When it doesn't, or isn't an
option, organizations turn to other types of sources
for money. Sometimes it's a pancake supper or a fish
fry. Maybe it's a bake sale or some other project. How
about BINGO? In different communities, different
things work. The problem with these types of
activities is they take even more of the emergency
volunteer's time. Time they need to spend training and
responding to emergencies.
Donations also are very helpful. But, it is becoming
increasing difficult to convince people to give money
to an organization.
One alternative to encourage people 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 regulations.
If you just charge the individual for an ambulance
transport, it's not a problem. But, if you ask for
money up front to keep gas in the ambulance and the
station heated in exchange for not charging the
individual if you transport them it's insurance and
subject to all of 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 help you.
Others ask for donations. In some areas, you might
hear it referred to it as a subscription. In a
subscription department, if you pay in advance to
receive the service, then the organization that agrees
to provide you with that service doesn't charge you
additional fees, you are providing insurance if others
are charged for the service.
This bill is fairly simple, it exempts municipalities
and community non-profit organizations from regulation
if they receive money in advance and then don't charge
for services offered to those that give donations.
Our intent is to provide a mechanism for an
organizations to entice donations and financial
support by allowing them to waive fees to those that
provide an agreed upon level of financial support in
advance of the possibility that services might be
provided at some time in the future. There is no
guarantee that the organization will be able to
provide the needed services, just as there is no
guarantee now.
This bill simply allows the organization, if it so
choses, to waive its fees to those that support the
organization and keep the doors open, the lights on,
the building heated, and fuel in the trucks - without
being regulated by the Division of Insurance.
I am happy to answer any questions you may have.
REPRESENTATIVE FEIGE then disclosed that he started the
Chickaloon Fire Service Department, of which he is currently the
chief. He noted that the Chickaloon Fire Department is a
subscription department that provides a basic level of fire
service for the Chickaloon community.
8:10:24 AM
CO-CHAIR LEDOUX inquired as to how the fire departments came to
know that [subscription service] is considered insurance and
should be regulated by the Division of Insurance.
REPRESENTATIVE FEIGE stated that the [Chickaloon Fire
Department] had no idea that subscription service wasn't
something it could do and other fire departments, including
Deltana and Salcha, did it as well. Representative Feige
clarified that HB 28 simply exempts [ambulance, emergency, or
fire department services] from regulation as insurance. In
further response, Representative Feige said that the violation
was brought to the attention of the Chickaloon Fire Department
in discussions with other departments. He noted that the
Division of Insurance really hasn't contacted the [Chickaloon
Fire Department] about this.
8:12:51 AM
MICHAEL PASCHALL, Staff, Representative Eric Feige, Alaska State
Legislature, began by disclosing that he is the assistant chief
and secretary to the Rural Deltana Fire Department, which could
be impacted by this legislation. In response to Co-Chair
LeDoux, Mr. Paschall clarified that the City of Delta Junction
asked the Division of Insurance for an interpretation [of the
subscription service] and the division responded that it was
insurance, and thus couldn't continue.
8:13:40 AM
REPRESENTATIVE DRUMMOND inquired as to how a subscription fire
and ambulance service works.
REPRESENTATIVE FEIGE explained that volunteer fire departments
have operating expenses for which they have to raise funds.
Under the subscription method, people would sign up and pay a
fee to the fire department; the fee would be good for perhaps a
year. In Chickaloon, the fire department would respond/provide
services to those who subscribed and paid the fee. The
Chickaloon Fire Department also decided to respond to all wild
land fires in the community. Although only responding to those
calls from subscribers is a liability, it reflects the reality
that it costs money to keep equipment in a state of readiness.
8:15:02 AM
REPRESENTATIVE DRUMMOND related her understanding that
frequently the cost of ambulance service is reimbursed to those
individuals with medical insurance. However, if HB 28 passes
and there is no charge to the individual with medical insurance
for receiving ambulance service, then there would be no
reimbursement by their medical insurance company.
MR. PASCHALL clarified that the scenario is one in which there
is an agreement between the individual patient and the insurance
company. He further clarified that the most common scenario in
this type of arrangement is one in which only the individual is
released from paying. With the ambulance service, the insurance
company is charged and from whom the funds are collected because
they are a third party. Again, it's a fundraising mechanism, he
remarked.
8:16:28 AM
REPRESENTATIVE FOSTER inquired as to whether this method of
raising funds is fairly common in other states.
MR. PASCHALL informed the committee that the subscription
service is actually how most fire departments started in the
late 1700s. The situation is one in which the interpretation of
Alaska statute has been that [subscription service] is
insurance. The intent of HB 28 is to allow organizations to
continue [subscription service] without having to bond, hire an
insurance agent, a broker, etcetera. He specified that this
exemption is for small nonprofit municipal organizations not for
private companies.
8:17:49 AM
CO-CHAIR LEDOUX asked whether other states have a statute such
as this. If so, have insurance companies attempted to avoid
reimbursing for ambulance service, she further asked.
MR. PASCHALL answered that he wasn't familiar with such
situations, but noted that he hasn't done extensive research on
that. He suggested that representatives of the North Star Fire
Department and the Division of Insurance may be able to provide
an answer.
8:18:46 AM
REPRESENTATIVE REINBOLD thanked the sponsor and his staff for
starting and being a part of volunteer fire service. She asked
whether the volunteer fire departments have to have insurance.
MR. PASCHALL explained that the departments maintain a certain
level of insurance and HB 28 doesn't impact that. This
legislation only impacts the fee transaction between a donor to
the department and someone who later becomes a customer of the
department, HB 28 doesn't pertain to any of the rules that
govern the insurance of the organization itself.
8:22:01 AM
CO-CHAIR NAGEAK opened public testimony on HB 28.
8:22:45 AM
The committee took an at-ease from 8:22 a.m. to 8:24 a.m.
8:24:22 AM
MIKE TVENGE, City Administrator, City of Delta Junction, began
by relating the mayor and city council's support for HB 28. He
informed the committee that in 2008 when the city learned of the
subscription service and insurance conflict, it made an inquiry
to the Division of Insurance. Upon request, the division made a
clear legal response to the city that resulted in the city
amending its ordinance to reflect the state's position. After
amending the ordinance, there was an approximate 50 percent
decrease in voluntary donations. The aforementioned is why the
City of Delta Junction asked its representative to introduce
legislation addressing the matter. The intent of HB 28 is to
assist volunteer emergency services in the collection of revenue
to continue providing these volunteer services. Mr. Tvenge
opined that HB 28 could help smaller communities across the
state.
8:25:52 AM
JEFF TUCKER, Fire Chief, North Star Volunteer Fire Department;
Past President, Alaska Fire Chiefs Association (AFCA), related
AFCA's support for HB 28. With regard to the medical insurance
question, Mr. Tucker explained that nationally the subscription
fees typically pay for the upfront personal costs of the
individual, but third party billing of the insurance companies
is typical. This just relieves the obligation of the individual
to pay the insurance, he further explained.
8:26:48 AM
CO-CHAIR LEDOUX posed a situation in which the fire department
bills the insurance company for an individual who isn't
obligated to pay the insurance company. If the insurance
company pays the fire department, she asked whether the fire
department reimburses the funds to the individual who had a
subscription.
MR. PASCHALL explained that it's a situation in which an
individual who lives in a rural community supports the local
fire/ambulance service through a donation. In return, the
fire/ambulance service doesn't hold the individual personally
responsible for the charges, but will bill the insurance
company. The aforementioned typically isn't a formal written
contract for a defined service with a specified fee, which is
what the insurance laws were written to address. He further
clarified that this is not a situation regarding how to regulate
the provision of specific services for specific fees at certain
rates rather the individual is being rewarded for helping the
community provide a service on an ongoing basis. The fact that
a third party insurance company is involved is merely a result
of the fact that the individual has insurance that provides
medical transport coverage. The risk for the [fire/ambulance
service] is that some individuals have such insurance and some
do not. In most of these cases the cost of running a call is
relatively small, while the operating costs makeup the bulk of
the expenses.
8:30:54 AM
MARTY HESTER, Deputy Director, Division of Insurance, Department
of Commerce, Community & Economic Development, related that the
Division of Insurance does not have any objection to the
language in HB 28.
8:31:21 AM
CO-CHAIR NAGEAK closed public testimony.
8:31:35 AM
MR. PASCHALL closed by characterizing HB 28 as a good bill that
helps organizations with a current practice and refines the
statute as necessary.
8:32:05 AM
CO-CHAIR LEDOUX moved to report HB 28 out of committee [with
individual recommendations and the accompanying fiscal notes].
There being no objection, HB 28 was reported from the House
Community and Regional Affairs Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 28 ver A.pdf |
HCRA 1/31/2013 8:00:00 AM |
HB 28 |
| HB 28-DCCED-DOI-01-26-13.pdf |
HCRA 1/31/2013 8:00:00 AM |
HB 28 |
| HB 28 SPONSOR STATEMENT Emergency Service Subscriptions.pdf |
HCRA 1/31/2013 8:00:00 AM |
HB 28 |
| HB 28 Insurance Chapter 21 Select Statutes.pdf |
HCRA 1/31/2013 8:00:00 AM |
HB 28 |
| HB 28 Support Letter AFCA.pdf |
HCRA 1/31/2013 8:00:00 AM |
HB 28 |
| HB 40 ver U.pdf |
HCRA 1/31/2013 8:00:00 AM |
HB 40 |
| HB 40 Farm Food Storage sponsor statement.pdf |
HCRA 1/31/2013 8:00:00 AM |
HB 40 |
| HB 40-DCCED-DCRA-01-25-13.pdf |
HCRA 1/31/2013 8:00:00 AM |
HB 40 |
| HB 40 Farm Food Storage CS Comparison.pdf |
HCRA 1/31/2013 8:00:00 AM |
HB 40 |
| HB 40 AS 29.45.050.pdf |
HCRA 1/31/2013 8:00:00 AM |
HB 40 |
| CSHB 40 ver N draft.pdf |
HCRA 1/31/2013 8:00:00 AM |
HB 40 |
| HB 28 Tri Valley Program News Miner.pdf |
HCRA 1/31/2013 8:00:00 AM |
HB 28 |