Legislature(2025 - 2026)SENATE FINANCE 532
05/12/2025 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB20 | |
| SB11 | |
| SB184 | |
| SB6 | |
| SB146 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 20 | TELECONFERENCED | |
| + | SB 11 | TELECONFERENCED | |
| += | SB 184 | TELECONFERENCED | |
| += | SB 6 | TELECONFERENCED | |
| += | SB 146 | TELECONFERENCED | |
| + | SB 37 | TELECONFERENCED | |
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."
9:51:53 AM
Co-Chair Hoffman relayed that it was the first hearing for
SB 11.
9:52:21 AM
Senator Bert Stedman, Sponsor, introduced the bill. He read
from a Sponsor Statement (copy on file):
Senate Bill 11 has been introduced to protect Alaskans
from financial abuse at the hands of the Federal
Emergency Management Agency (FEMA).
FEMA administers the National Flood Insurance Program
(NFIP). The NFIP was created to share the risk of
flood losses (nationwide) through flood insurance. The
program enables property owners in participating
communities to purchase insurance protection,
administered by the government, against losses from
flooding. FEMA requires flood insurance for all
residential loans or lines of credit that are secured
by a building located in the FEMA Flood Zone in a
community that participates in the NFIP.
The National Flood Insurance Program was historically
the only source of flood insurance. In 2012, congress
reauthorized the NFIP and included a provision
allowing private companies to offer flood insurance
policies. Another change occurred in 2021 when FEMA
adopted a new ratemaking method called Risk Rating
2.0. This new methodology attempts to make the NFIP
more solvent and has resulted in an expansion of flood
zones and an increase in premiums for 77 percent of
plans backed by the NFIP.
Homes and businesses in a new FEMA flood zone could
see significant negative impacts to property values
from requirements to purchase expensive flood
insurance (flood insurance must be purchased if the
owner uses a federally insured bank). The new and
expanded flood zones can also restrict how a structure
is built on private property and impact existing homes
and businesses that want to rehabilitate, upgrade,
expand, or repair buildings.
Currently, Alaskans are paying flood insurance to
offset the billions in hurricane losses in the Lower
48. Furthermore, the NFIP must be periodically
reauthorized by congress (next by March 14, 2025) and
has lapsed four times in the past, creating
significant hurdles for people seeking mortgages in
flood areas. Combine this with very few payouts to
flood victims and it can easily be concluded that the
NFIP doesn't work for Alaskans.
It is the intent of Senate Bill 11 to supplant the
NFIP with an Alaska based insurance program that keeps
the premium payments in Alaska, benefiting Alaskans.
9:56:27 AM
Co-Chair Stedman continued his remarks. He recounted that
when he had considered the issue a few years previously and
had concerns about the minimum insurance coverage ($250,000
for residential and $500,000 for commercial), he had
compared statewide premiums paid compared to losses. He had
found it alarming that Alaskans were paying large amounts
of money for a small amount of money back. He pondered that
the insurance was subsidizing the Mississippi River Basin,
the Gulf of Mexico, and the East Coast from hurricane
exposure. He cited that between 2008 and 2021 Alaskans had
paid almost $41 million in premiums for the National Flood
Insurance Program (NFIP) and received only $6.5 million in
claims paid.
Co-Chair Stedman referenced page 5 of a report to the
legislature from the Department of Commerce, Community and
Economic Development (copy on file). The report was
entitled "FEMA National Flood Insurance Program Premium
Analysis," and showed that while the city of Bethel paid
$2.2 million in premiums and received zero dollars in
claims. The city of Juneau paid $4.2 million in premiums
and had received $435,979; and Anchorage paid $2.2 million
and received $171,000. He described the balance as
lopsided. He discussed restrictions and considered that
FEMA intentionally wanted to push development off the coast
and did not want rebuilding with pilings or rock fill off
the coast. He discussed the topography of Southeast and the
challenge of building away from the coast. He noted that
FEMA had updated its flood maps and included new risk and
rating systems for Alaskans. He referenced changing home
designations to being within flood zones (with a
requirement for flood insurance) and mentioned Ketchikan
having hundreds of homes reclassified.
Co-Chair Stedman used the example of an older home with
flood damage that was out of compliance; which could only
utilize $150,000 for repairs, bringing it up to compliance,
or tearing it down. He mentioned lost equity and asserted
that the current policy restricted Alaskans from
maintaining older homes. He found the issue alarming. He
pointed out that the national program was periodically
reauthorized by Congress and noted that there were lapses.
He mentioned "complete chaos" in Washington D.C., and the
possibility that FEMA could be liquidated or substantially
reduced. He thought it would be good for the state to put
in its own program, with an increased limit of $250,000 for
residential homes and $2 million for commercial structures.
He thought the committee might want to ponder and amend the
amounts. He pointed out that $250,000 was not a large sum
to do much to a residential structure.
10:01:06 AM
Co-Chair Stedman shared a significant concern that Alaskans
were subsidizing other areas of the country while being
subjected to massive building restrictions. He mentioned
organized communities that had planning commissions, and
the state's desire that local communities go through the
planning and zoning processes and to make decisions. He
thought planning commissions were perfectly capable of
managing building on waterfronts, and that building
departments were perfectly capable of issuing permits to
build above the high-tide line. He noted that the original
inhabitants of the state did not build villages below high-
tide lines, nor were later buildings built below the high-
tide line. He thought the state could produce more coverage
for less premiums. He used the example of Sitka, which had
only had one loss since 1977; while Ketchikan had a few and
Juneau had a few. He mentioned issues with the Mendenhall
River in Juneau. He reiterated the concern of Alaskan
residents having to subsidize expenses in areas such as the
Mississippi Delta or Florida. He hoped to get the bill on
the table to be discussed during the interim.
10:03:47 AM
Senator Kaufman thought it seemed like the old homesteaders
were savvy and had not built below the tideline. He was
curious about the funding plan. He asked about potential
funding from the Alaska Housing Finance Corporation (AHFC)
and asked how the conversations had gone and if AHFC was
amenable.
Co-Chair Stedman considered a lot of the prices of the bill
to be "place holders." He thought there may be a need for
seed capital to get the proposed program up and running
until premiums kicked in. He asserted that more dialogue
was needed with AHFC as the legislation was refined.
Senator Kaufman mentioned that he had spent a lot of time
in the South in hurricane areas. He referenced conflicting
requirements that necessitated building so high that wind
damage was exacerbated. He echoed Co-Chair Stedman's
comments pertaining to FEMA not wanting people to settle on
the coast.
10:05:51 AM
ROSE FOLEY, STAFF, SENATOR BERT STEDMAN, relayed that she
had a Sectional Analysis (copy on file) available to
present if the committee wished.
Co-Chair Hoffman asked to forego the Sectional Analysis.
Senator Kiehl appreciated the bill, which he thought
covered more things that were currently uninsurable,
including landslides. He asked about the inclusion of
coverage to protect against losses from avalanches.
Co-Chair Stedman thought there had been interest in
landslide provisions. he mentioned landslides in recent
years that had resulted in loss of life. He pondered that a
bill might benefit from being more narrowly focused until
it was up and running, and adding expansions at a later
time. He relayed that there had been interest in covering
landslides, which required different analysis and
consideration of flood zones. He thought the Division of
Insurance might have some commentary on the topic. He
pointed out that Juneau had exposure to both landslides and
flooding. He mentioned the Mendenhall River.
Ms. Foley added that the bill as currently written included
coverage for mudflow but not landslides.
Senator Kiehl considered state finances and thought it
appeared as though the funds for the program would be
subject to the "sweep" and subject to annual appropriation.
He wondered if the sponsor had given thought to structuring
the funding to have more durability to carry over year
after year in case things went "haywire" in the building.
Co-Chair Stedman appreciated Senator Kiehl's point. He did
not want the funding subject to the sweep, so that premiums
would accumulate and exceed claims and the margin. He hoped
to get premiums lowered.
Ms. Foley added that the bill set up the Alaska Flood
Authority Fund as a fund in the treasury outside the
General Fund, and not subject to the sweep.
10:09:20 AM
Co-Chair Hoffman OPENED public testimony.
10:09:30 AM
Co-Chair Hoffman CLOSED public testimony.
10:09:36 AM
Senator Kiehl reviewed the first of four fiscal notes. He
addressed FN 1 from DCCED, OMB Component 1027. The
commissioner's office did not anticipate costs in the
current fiscal year, and had an indeterminate assessment on
setting up and capitalizing of the new fund.
Senator Kiehl addressed a new fiscal note from DCCED, OMB
component 2879. The difference from the earlier version of
the fiscal note showed in FY 26 $569.9 thousand of UGF. In
FY 27 the amount went down to $539.9 of DGF. The amount
dropped to $41.9 thousand in FY 28. The fiscal note called
for three permanent full-time positions. The note also
marked the new fund.
Senator Kiehl spoke to FN 3 from DCCED's Division of
Insurance, OMB Component 354. The fiscal note started with
an FY 26 cost of $521.6 thousand of receipt supported
services, as well as two full-time positions and a
temporary position. In FY 27 the amount went down to 472.6
DGF. In FY 29 the amount went down to just below $300,000
and the temporary position went away.
Senator Kiehl addressed FN 4 from the Department of
Revenue's Alaska Housing Finance Corporation (AHFC), OMB
Component 110. The department provided an indeterminate
note and did not know how much of the $500,000 backstop
would be called upon.
Co-Chair Stedman commented that he did not think the shore-
front residents of the state were not interested in a free
ride. He thought the project would have to pay for itself
and might need some seed capital that could be paid back.
He commented that the premiums being paid to the federal
government were so excessive, it should be possible to make
the program pay for itself. He thought in the end the
program would be a net zero for the state. He affirmed that
he was not looking for the state to subsidize or pay for
the proposed program.
Co-Chair Stedman volunteered Senator Kiehl's office to work
on the bill with his office over the interim. He mentioned
Juneau's landslide [flood] and water issues.
SB 11 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 20 CPR Curriculum Sectional Analysis Version N._.pdf |
SFIN 5/12/2025 9:00:00 AM |
SB 20 |
| SB 20 CPR Curriculum Sponsor Statement Version N._.pdf |
SFIN 5/12/2025 9:00:00 AM |
SB 20 |
| SB 20 Hands-Only CPR Research Links.pdf |
SFIN 5/12/2025 9:00:00 AM |
SB 20 |
| SB 20 NEA-Alaska letter from Tom Klaameyer in support of SB 20 2.19.2025 (1).pdf |
SFIN 5/12/2025 9:00:00 AM |
SB 20 |
| SB 20 Supporting Documents.pdf |
SFIN 5/12/2025 9:00:00 AM |
SB 20 |
| SB 20 Written Letter of Support From Brian Webb.pdf |
SFIN 5/12/2025 9:00:00 AM |
SB 20 |
| SB 11 Backup - 2022 DCCED NFIP Report published 12.22.pdf |
SFIN 5/12/2025 9:00:00 AM |
SB 11 |
| SB 11 Sectional Analysis ver A 4.9.25.pdf |
SFIN 5/12/2025 9:00:00 AM |
SB 11 |
| SB 11 Sponsor Statement ver A 4.9.25.pdf |
SFIN 5/12/2025 9:00:00 AM |
SB 11 |
| SB 11 DCCED DCRA 050925.pdf |
SFIN 5/12/2025 9:00:00 AM |
SB 11 |
| SB 11 AML Testimony.pdf |
SFIN 5/12/2025 9:00:00 AM |
SB 11 |
| SB 20 Coons Testimony.msg |
SFIN 5/12/2025 9:00:00 AM |
SB 20 |