Legislature(2011 - 2012)CAPITOL 106
03/15/2012 08:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB333 | |
| HB219 | |
| SCR18 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 333 | TELECONFERENCED | |
| + | HB 219 | TELECONFERENCED | |
| + | SCR 18 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 219-FIRE AND EMERGENCY MEDICAL SERVICES
8:24:31 AM
VICE CHAIR KELLER announced that the next order of business was
HOUSE BILL NO. 219, "An Act exempting certain emergency medical
and fire department services from regulation as insurance."
8:24:35 AM
MICHAEL PASCHELL, Staff, Representative Eric Feige, Alaska State
Legislature, presented HB 219 on behalf of Representative Feige,
sponsor. He disclosed that he is the assistant chief and a
board member of the Rural Deltana Volunteer Fire Department and
Representative Feige is the chief of Chickaloon Fire Service,
and both organizations possibly could be impacted by HB 219.
MR. PASCHELL talked about the difficulty that local fire and
emergency medical agencies have in raising money. He said
fundraising events are common and include fish fries, pancakes
dinners, bake sales, and bingo, and those putting on the events
are usually the same volunteers who provide the emergency
services. He said donations are welcomed because they take less
time and input from the volunteers. Mr. Paschell said a popular
method of fundraising among fire and emergency medical service
(EMS) organizations in some parts of the country is to offer
those who give donations on an annual basis a "no charge policy"
when responding to an emergency; however, he indicated that
there are laws in Alaska that thwart that type of practice. One
option that is in place is to form a health services
corporation; however, that is considered insurance, and those
doing so are subject to regulations, including a prohibitive one
requiring a minimum $100,000 bond in order to provide services.
Some fire departments - often called subscription fire
departments - offer ambulance service, in which individuals pay
voluntarily for the service. Mr. Paschell said problems can
arise when the fire department responds to an emergency outside
of the area in which the subscription service is offered, and
the person who gets charged complains that one person is getting
a benefit over another.
8:29:08 AM
MR. PASCHELL said HB 219 would exempt "these types of
organizations" from regulation under the Division of Insurance.
He noted there was a committee substitute (CS) in the committee
packet.
8:29:47 AM
REPRESENTATIVE SEATON moved to adopt the proposed committee
substitute (CS), Version 27-LS0638\I, Bailey, 3/8/12, as a work
draft.
VICE CHAIR KELLER objected for the purpose of discussion.
MR. PASCHELL explained that the changes proposed in Version I
would insert language to expand the provisions to allow an
agreement to provide services and include "community-based" [in
subsection (g)] to limit the provisions of the bill to only
locally based organizations.
8:30:40 AM
REPRESENTATIVE SEATON asked if there are any large businesses
that offer those air ambulance services that would fall under
the nonprofit category, and "does that fall into this category,
as well?"
MR. PASCHELL answered that currently, "they" can operate as a
large, non-profit health services organization, with a slightly
different set of rules. He said the purpose of adding
"community-based" [in Version I] is to ensure that HB 219 is not
intended to include statewide or regional, large corporations.
REPRESENTATIVE SEATON asked Mr. Paschell to confirm that the
intent of the proposed legislation is to include community-based
organizations that provide services within those communities.
MR. PASCHELL answered that is correct.
8:32:35 AM
MR. PASCHELL, in response to a question from Representative
Johansen, offered information relating to Chickaloon Fire
Service, which he said is in the Matanuska-Susitna Borough, but
not within a fire district, and which operates as a
subscription-based department. He said he does not know how
many subscribers the department has, but said the volunteers
provide what they can for a remote community. He said the Rural
Deltana Volunteer Fire Department, which serves the area outside
Delta Junction and currently has 31 members, works with both the
city fire department and the Fort Greely Fire Department. He
relayed that the City of Delta Junction instigated HB 219,
because they had offered a service based on the aforementioned
up-front fee, and were told by the Division of Insurance that
that is insurance. He said the Rural Deltana Volunteer Fire
Department operates on a strictly volunteer-basis, so the
proposed legislation could affect the department, but would not
do so under its current operating plan.
8:35:22 AM
MR. PASCHELL, in response to follow-up questions, said the 31
members of the Rural Deltana Volunteer Fire Department are made
up of volunteer fire fighters, auxiliary members, and board
members; a person is a member by joining and serving the
department. He said the reason that the Chickaloon Fire Service
may be affected by HB 219 is because the department's current
operations are subscription-based.
8:38:06 AM
VICE CHAIR KELLER offered his understanding that there has been
no response to the proposed legislation from insurance
companies.
8:38:17 AM
LINDA HALL, Director, Division of Insurance, Department of
Commerce, Community, & Economic Development, indicated that the
division helped in the language of the bill, because it felt the
original version would fall under the division's definition of
transacting insurance. She stated, "The idea of a subscription
service falls under the definition of insurance." She drew
attention to a letter in the committee packet, [dated 9/9/08,
from Sarah McNair-Grove, an actuary with the department], in
response to a question [about the relation of fire protection
subscription service and insurance]. She indicated that the
answer provided is much of what has prompted HB 219, which would
allow small, community-based organizations to collect
subscription amounts of money in order to provide services to
their communities. She offered her understanding that it is not
the intent of the sponsor to exempt large, commercial
organizations that provide medical transport services. She
stated:
It's a policy for this body to determine whether you
want these to have regulation under the Division of
Insurance. ... If you have consumer complaints, there
is another branch that will see those: ... the
Consumer Protection Section in the Department of Law.
If it doesn't fall under our title, then that section
does take consumer complaints and investigate them.
So, it's not like they will just fall through the
cracks.
MS. HALL said the division's concern is, for example, that if
someone pays for ambulance service, then that service will still
be in business several years later.
8:41:28 AM
REPRESENTATIVE GRUENBERG asked if exempting these fire
departments from Title 21 would have any potential unintended
consequences.
MS. HALL answered that she is not aware of any. She said she
thinks Version I was intended to draw tighter lines around what
is being exempted and to make it community-based. She
reiterated that if these entities are not regulated under Title
21, there would still be a place for a harmed consumer to go to
seek relief through the system.
REPRESENTATIVE GRUENBERG said that is satisfactory, but asked
that the division let the legislature know promptly if it
becomes aware of any unintended consequences in the future.
MS. HALL acquiesced.
8:44:42 AM
REPRESENTATIVE GRUENBERG said he thinks the bill has merit. He
asked if there are any other entities that legislature should
consider exempting?
MS. HALL said she cannot think of any at this time. In response
to Representative Gruenberg, she said the division has no bills
before the legislature this session.
REPRESENTATIVE GRUENBERG thanked Ms. Hall for her service and
noted that she is about to retire.
8:47:53 AM
REPRESENTATIVE SEATON offered his understanding that "the
prospective recipient of the services was within the community,"
but noted that the bill does not state that. He suggested
adding "within the community" following "prospective recipient
of the services".
MS. HALL said she thinks the intent is there already; however,
she said the language Representative Seaton suggested would
clarify that intent. She indicated the word "local" was
considered during early discussions of proposed bill language,
but was not used.
8:50:25 AM
MS. HALL, in response to a question from Representative Johansen
regarding municipality size, said that while HB 219 does not
specify that Anchorage would not be included, she thinks the
intent of the bill is to benefit smaller communities. She
ventured that the intent could be clarified in the language of
the bill. In response to Vice Chair Keller, she confirmed that
such clarification would be necessary only if the intent was to
exclude large municipalities.
8:53:21 AM
VICE CHAIR KELLER questioned why a large municipality should be
restricted, because he pointed out that there may be a subset
within a large municipality.
8:54:07 AM
REPRESENTATIVE GRUENBERG recollected that the City of Anchorage
used to have a volunteer fire department, but does not have one
currently. He said he would not like to "bring them back under
the ... [Division] of Insurance" without finding out if "they
would want or feel that they ought to be regulated." He said
input from the City of Anchorage is needed, particularly
regarding the effect on Eagle River.
8:56:11 AM
MS. HALL said [the division] does not regulate fire departments
or ambulances. She said HB 219 would regulate the selling of
subscription services, which is an insurance product. The
proposed legislation proposes exempting such a product for small
communities that may run a medical transport service or a
volunteer fire department that is not funded. She said she
assumes the Anchorage Fire Department is funded "in somebody's
budget."
REPRESENTATIVE GRUENBERG clarified that he is concerned about
the Chugiak and Eagle River volunteer organizations, because
they are not "as covered by the municipal fire department." He
said he wants to know how the bill would affect them. He
stated, "I agree with the vice chairman on this one."
8:58:33 AM
REPRESENTATIVE JOHANSEN noted that in the last committee of
referral, Representative Berta Gardner had asked the sponsor if
he would oppose language that would allow a fire department to
require subscription service in communities where property
owners were already paying property taxes. He said that brought
to mind the borough of Ketchikan, within which there are two
professional fire departments and two volunteer fire
departments. He said "everybody" pays property taxes, and city
residents pay city taxes. Representative Johansen related that
when a fire is big enough, a city department will cross over
city lines into the borough's jurisdiction to help out. He said
he would like more time to figure out all the "moving parts" to
the bill.
9:00:49 AM
REPRESENTATIVE SEATON said he does not think anybody is talking
about a mandatory agreement, and he suggested using the phrase
"a solicitation or a voluntary agreement" in the language of HB
219. He asked Ms. Hall for her opinion.
9:02:23 AM
MS. HALL said she has not thought about that possibility and is
not certain she is the one to give that advice. Notwithstanding
that, she ventured that if the committee wants to ensure the
solicitations cannot turn into mandatory assessments, then "it
probably should say so."
9:03:00 AM
VICE CHAIR KELLER removed his objection to the motion to adopt
the proposed committee substitute (CS), Version 27-LS0638\I,
Bailey, 3/8/12, as a work draft. There being no further
objection, Version I was before the committee.
9:03:47 AM
MR. PASCHELL, in response to Representative Johansen, said he
has held discussions with numerous departments around the state
about how the bill would impact them. He talked about a similar
plan used in his home town in North Carolina. He offered his
understanding that the Municipality of Anchorage has volunteer
fire departments in Girdwood and Chugiak. He said the Fairbanks
North Star Borough has a city-run municipal department that
operates within the City of Fairbanks and nonprofit entities
that operate throughout the borough, providing contractual
services throughout the borough, with the exception of North
Pole, which has municipality-provided services. He offered his
understanding that the borough does the billing for services and
pays the private non-profit entities a fee; therefore, it would
be possible for the borough to set a policy such that "if you
pay us $100, we won't bill you if we go out."
MR. PASCHELL, regarding mutual aid, said, for example, most fire
departments tend to respond to other agencies' needs. He said
work is being done by the legislature to improve "that
situation" statewide. He said the focus is on how to get base
funding. He said that in the previous committee of referral's
hearing of HB 219, Representative Berta Gardner had used the
term, "double dipping." Mr. Paschell said that occurs in the
City of Fairbanks, where the city funds the fire department, but
charges when an EMS call is made. He offered an example. He
concluded:
We're not trying to address any of those types of
things. It's only a way to say if you charge then we
can provide money up front and it not be insurance.
So, we're trying not to expand ... any services or
change how any of the services are taking place.
9:09:01 AM
MR. PASCHELL, in response to Representative Johansen, said he
has not had direct communication with the Alaska Municipal
League (AML) regarding HB 219. He said he does not see the
proposed legislation as directly affecting AML. He related that
he did speak to a fire chief who is also an AML member, and he
said he could follow up with him.
REPRESENTATIVE JOHANSEN indicated that he would be interested in
hearing feedback from AML. He asked if any other volunteer fire
department across the state, other than [the Rural Deltana
Volunteer Fire Department and Chickaloon Fire Service], had
offered feedback regarding HB 219.
MR. PASCHELL said the impetus for the proposed legislation came
from the City of Delta Junction. He surmised that some
departments may not want to speak out because they don't want to
broadcast that they are already using a system that could be
perceived as violating insurance laws. He noted that he has
spoken with the Salcha [Volunteer Fire Department], which is in
support of [HB 219].
REPRESENTATIVE JOHANSEN said he is astonished by what he just
heard, and he expects that if HB 219 does not pass, then the
Division of Insurance will "figure out all of these people that
are running under the radar."
9:13:13 AM
MS. HALL, in response to Representative Gruenberg stated her
understanding that if insurance is available, then the companies
that sell the subscription plan bill the insurance, keep the
proceeds, and will not bill the balance if there are inadequate
limits of insurance. She added, "So, the insurance company's
paying, as well as the subscriber."
9:14:17 AM
REPRESENTATIVE SEATON suggested a conceptual amendment to add
"within the community", following "recipient of the services",
at the end of lines 8 and 12, on page 1 of Version I.
VICE CHAIR KELLER asked Representative Seaton to hold off on
making a motion to adopt that amendment in order to wait for the
chair's return.
9:15:41 AM
REPRESENTATIVE SEATON said he would also like to change "an
agreement" to "a voluntary agreement", on page 1, lines 5 and 9.
He said he would wait until the next hearing of HB 219 to move
that amendment.
9:16:33 AM
REPRESENTATIVE PETERSEN suggested asking Legislative Legal and
Research Services to look at those two amendment suggestions and
let the committee know whether the changes would produce the
desired results.
VICE CHAIR KELLER said the bill sponsor could take care of that.
9:16:58 AM
REPRESENTATIVE JOHANSEN emphasized that he wants the important
issues put on the table before the committee hears the bill
again. He said he thinks of insurance as something necessary to
have in case something bad happens and it involves "big money
and big risks."
9:18:05 AM
MS. HALL said she was shocked at the previous bill hearing to
hear testimony that subscription services were being sold. She
described the awkwardness of having both herself and those
offering fire services in the same room. She said the division
does not regulate the services, but does have a definition of
insurance that "brings the subscription pieces under our Title."
She said there is one air ambulance service today that has an
actual insurance program, because it found someone to write a
backstop, which allows the entity to continue its subscription
services.
9:20:17 AM
REPRESENTATIVE JOHANSEN expressed concern that in an unorganized
area "that has a volunteer deal," if there is a law suit and no
insurance, then the state would have to cover that.
REPRESENTATIVE GRUENBERG asked Representative Johansen if he is
considering an amendment.
REPRESENTATIVE JOHANSEN confirmed that he is.
REPRESENTATIVE GRUENBERG asked Representative Johansen to let
him know if he decides to do that. He then asked the sponsor to
"check if this is going to occur with Girdwood and Chugiak."
9:22:16 AM
REPRESENTATIVE SEATON remarked that in the Kenai Peninsula
Borough there are multiple cities and fire service areas, and he
cautioned against excluding by area when smaller nonprofit
service companies may be involved in the areas.
REPRESENTATIVE GRUENBERG said he would like the time to be able
to discuss with his community the amendment that Representative
Johansen may offer, before the amendment is offered before the
committee.
MR. PASCHELL stated that he does not think that these
departments realized that charging subscriptions and offering
the services violated the insurance laws. He said those
departments at this point are trying to figure out what to do.
9:24:51 AM
VICE CHAIR KELLER opined that there is too much regulation. He
said he thinks the bill is good, and he recommended that it be
kept as broad as possible.
9:25:12 AM
VICE CHAIR KELLER closed public testimony.
9:25:30 AM
REPRESENTATIVE GRUENBERG announced that he would take it upon
himself to check with Chugiak and Girdwood.
[HB 219 was held over.]