Legislature(2017 - 2018)HOUSE FINANCE 519
04/17/2017 01:30 PM House FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| HB91 | |
| HB124 | |
| HB25 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 124 | TELECONFERENCED | |
| + | HB 91 | TELECONFERENCED | |
| + | HB 25 | TELECONFERENCED | |
| + | SB 88 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 17, 2017
1:26 p.m.
1:34:53 PM
CALL TO ORDER
Co-Chair Seaton called the House Finance Committee meeting
to order at 1:26 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Paul Seaton, Co-Chair
Representative Les Gara, Vice-Chair
Representative Jason Grenn
Representative David Guttenberg
Representative Scott Kawasaki
Representative Dan Ortiz
Representative Lance Pruitt
Representative Tammie Wilson
Representative Mark Neuman (Alternate)
MEMBERS ABSENT
Representative Steve Thompson
Representative Cathy Tilton
ALSO PRESENT
Representative Sam Kito; Crystal Koeneman, Staff,
Representative Sam Kito; Tom Lucas, Paralegal II,
Administration, Alaska Public Offices Commission (APOC);
Bianca Carpeneti, Staff, Representative Sam Kito; Terry
Bannister, Legislative Legal Services, Alaska State
Legislature; Stephen Trimble, Founder and CEO, Arctic Solar
Ventures, Anchorage; William Clark, Attorney, Drinker,
Bindle, and Realth, Pennsylvania; Representative Matt
Claman, Sponsor; Lizzie Kubitz, Staff, Representative Matt
Claman; Margaret Brodie, Director, Division of Health Care
Services, Department of Health and Social Services; Michele
Michaud, Chief Health Official, Division of Retirements and
Benefits, Department of Administration; Anna Latham, Deputy
Director, Insurance Division, Department of Commerce; Sarah
Bailey, Insurance Specialist III, Insurance Division,
Department of Commerce; Alyson Currey, Legislative Liaison,
Planned Parenthood Votes Northwest and Hawaii; Elizabeth
Figus, Self, Sitka; Elizabeth Eilers, Self, Juneau; Alica
Cargill, Policy Specialist, Alaska Network on Domestic
Violence and Sexual Assault; Pamela Samash Self, Right to
Life, Nenana; Paige Hogson, Self, Anchorage; Robin Smith,
Self, Anchorage; Justine Webb, Self, Fairbanks; Vhemia
Peterson, Self, Anchorage.
PRESENT VIA TELECONFERENCE
SUMMARY
HB 25 INSURANCE COVERAGE FOR CONTRACEPTIVES
HB 25 was HEARD and HELD in committee for further
consideration.
HB 91 APOC REGISTRATION FEES; LOBBYIST TAX
HB 91 was HEARD and HELD in committee for further
consideration.
HB 124 BENEFIT CORPORATIONS
HB 124 was HEARD and HELD in committee for
further consideration.
SB 88 AK MENTAL HEALTH TRUST LAND EXCHANGE
SB 88 was SCHEDULED but NOT HEARD.
[See meeting held on April 18, 2017 at 9:45 a.m.
for detail]
Co-Chair Foster reviewed the agenda for the day.
HOUSE BILL NO. 91
"An Act relating to fees for certain persons filing
disclosure statements or other reports with the Alaska
Public Offices Commission; relating to a tax on
legislative lobbyists; and providing for an effective
date."
1:34:53 PM
REPRESENTATIVE SAM KITO, introduced HB 91. He explained
that the Alaska Public Office Commission (APOC) was granted
increased receipt authority but not the statutory authority
to adjust its fees. The bill provided the statutory
authority, a $50 financial disclosure form filing fee per
legislative or public official, a $100 fee for candidates,
and a fee schedule for lobbyist registrations based on a
contracted amount. The fees added up to approximately $280
thousand of additional receipt authority.
CRYSTAL KOENEMAN, STAFF, REPRESENTATIVE SAM KITO, read the
sectional analysis:
Section 1: Amends AS 15.13.054. Administrative
registration fee. Adds a new section that requires a
candidate, group, or nongroup entity to pay a $100
registration fee. This does not apply judges,
constitutional convention delegates, exempt municipal
candidates, or nongroup entities with an operating
budget of $250 or less.
Section 2: Amends AS 15.13.390(a). Civil penalty; late
filing of required reports. Includes language
referencing the administrative registration fee.
Section 3: Amends AS 24.45.041(g) Include language
referencing the administrative registration fee and
removes the current $250 registration fee and sets a
fee of $350 for a contract with a value of less than
$30,000; $650 for a contract with a value of between
$30,000 and $60,000; and $850 for a contract with a
value of over $60,000.
Section 4: Amends AS 24.60 to include a new section AS
24.60.238. Administrative registration fee. Requires
legislators, public members or the committee, and
legislative directors filing financial disclosures to
pay an administrative registration fee of $50.
Section 5: Amends 24.60.240. Civil penalty for late
filing. Allows APOC to assess a civil penalty of not
more than $10 a day for failure to pay the
administrative registration fee as levied under
section 4 of the bill.
Section 6: Amends 37.03.146(c). Definition of program
receipts and non-general fund receipts. Add fees
collected by APOC to the list of program receipts.
Section 7: Amends AS 39.50 to include a new section AS
39.50.132 Administrative registration fee. Requires
governors and lieutenant governors filing financial
disclosures to pay an administrative registration fee
of $50.
Section 8: Civil penalty; late filing of required
reports. Allows APOC to assess a civil penalty of not
more than $10 a day for failure to pay the
administrative registration fee as levied under
section 7 of the bill.
Section 10: Establishes a January 1, 2018 effective
date.
1:40:43 PM
Co-Chair Foster noted that Representative Neuman joined the
committee.
Co-Chair Foster asked whether the fees were payable online.
TOM LUCAS, PARALEGAL II, ADMINISTRATION, ALASKA PUBLIC
OFFICES COMMISSION (APOC), responded in the negative and
indicated that the reason was due to a lack of funding.
Currently, payments were mailed or brought to the
commission's office. Co-Chair Foster asked how the
collection system worked. Mr. Lucas answered that a
provision in the legislation required payment on or before
registration.
Representative Kawasaki asked what amount of funding APOC
needed to operate each year. Mr. Lucas was unable to answer
the question due to lost positions caused by the last two
fiscal year's budget cuts. He noted that the commission was
"struggling to hire a data person."
1:44:08 PM
Representative Kito replied that APOC's FY17 budget was
$1.05 million. He detailed that $800 million was general
funds (GF) and $245 thousand in program receipt authority.
However, the current statutory authority for program
receipts was limited to $107 thousand.
Representative Kawasaki asked in regards to APOCs
historical budget, what the highest level of full funding
was. Ms. Koeneman replied that in FY 15 the budget was
approximately $1.3 million GF resulting in actuals of $1.1
million GF and $119 thousand in program receipts.
Representative Kawasaki asked whether the bill impacted
"representational" lobbyists. Representative Kito answered
in the negative and added that a fee was also not charged
to volunteer lobbyists. Representative Kawasaki appreciated
the bracketing for lobbyist fees, which he thought was a
fairer system. He suggested a smaller fee bracket for
lobbyists making a very small fee. He asked whether the
fiscal note reflected the fee brackets. Ms. Koeneman was
aware that APOC was working on a revised fiscal note. She
added that the fiscal note from the Department of Revenue
(DOR) FN 2 (REV) was no longer applicable due to the
changes in the House State Affairs Committee version.
Representative Guttenberg commented that he thought APOC
had suffered from budget cuts. He wondered whether APOC
differentiated between program receipts and fines.
Representative Kito replied that currently the only program
receipts available were the lobbying registration fees of
$250 and were used for the commission's work. The penalties
that were assessed by APOC were deposited into the GF and
were not used to support the commission. Representative
Guttenberg asked whether the additional fees in the bill
were program receipts. Representative Kito responded in the
affirmative. Representative Guttenberg asked whether the
program receipts resulting from the bill would cover the
additional administrative costs or were more available to
cover other APOC functions. Representative Kito responded
that the legislation allowed for a slightly higher receipt
authority in anticipation of the same budget. He indicated
that the objective was for APOC to eventually hire another
person with policy experience to address lobbying issues.
He wanted the commission to ultimately strengthen their
mission.
1:50:24 PM
Vice-Chair Gara asked what proportion of the fess were
generated from lobbying and what proportion from other
fees. Representative Kito was uncertain of the exact
percentages but relayed that a much higher portion was
received from lobbying and a much smaller portion from
candidate and financial disclosure fees.
Ms. Koeneman shared that an updated fiscal note from APOC
was not available. However, she confirmed that the previous
fiscal note reported that APOC expected to receive $15
thousand from candidates, $18 thousand from groups, $3
thousand from entities, $67.6 thousand from public
officials, and $3 thousand from legislators totaling
$106,600. The figure did not included the $120 thousand
from lobbying. Vice-Chair Gara had received complaints from
school board members and "public officials from smaller
governmental entities" that they had to comply with the
same reporting requirements as legislators. He queried
whether the entities were subject to the fees. Ms. Koeneman
responded in the affirmative. She offered that she
completed a historical review of the genesis of APOC. The
commission was established via a citizens' initiative in
1974 and was upheld by a court decision, which determined
that the citizens had the right to know whether a conflict
of interest existed with any elected official, "no matter
how great or small" the position. Vice-Chair Gara asked
whether the financial disclosures included information
regarding sources of income and investments. Ms. Koeneman
responded in the affirmative.
Vice-Chair Gara commented that the reporting requirement
became more stringent after the 2006 legislative corruption
issue. He did not agree with charging school board members
for financial disclosure reporting. Representative Kito
responded that the fees were a legislative policy call. He
elaborated that some of the financial disclosures were
reviewed and reported on and he wanted the reporting
supported by fees. Currently, the Division of Elections
charged a $30 registration fee for its administrative
costs. Campaigns and candidates were currently not charged
an APOC fee.
1:54:54 PM
Representative Neuman asked whether APOC was planning to
hire additional personnel in the future. Mr. Lucas answered
that APOC was currently seeking an individual to fill an IT
position. Representative Neuman asked whether the position
was funded but unfilled. Mr. Lucas replied in the
affirmative.
Representative Neuman referred to FN 2 (REV) and noted that
DOR would have to alter its tax management system to
accommodate the fee collection and wondered how it would
integrate into the department's existing tax collection
system. He wondered whether HB 91 created additional
administrative costs for the department. Representative
Kito recounted that the State Affairs Committee discovered
complications with implementing a tax instead of a fee. In
response, the committee substitute removed the tax
component, which eliminated the need for DOR's fiscal note
and a forthcoming updated APOC fiscal note would reflect
the change from a tax to a fee. Representative Neuman asked
whether the APOC fee collection could be integrated into
DOR's tax system. Representative Kito relayed that another
issue identified with a tax was the inability to designate
the revenue to APOC. He preferred to leave the tax
component out of the bill due to the difficulties of
administering a dedicated tax and ensuring APOC's receipt
authority from the fee revenue.
1:59:25 PM
Co-Chair Seaton had a question on page 1, line 11 of the
bill and read the following:
…a candidate shall pay an administrative fee of $100
to the commission when the candidate files the name
and address of the candidate's campaign treasurer
under AS 15.13.060(c).
Co-Chair Seaton assumed that the fee was in addition to the
fee charged by the Division of Elections. Representative
Kito responded in the affirmative.
Co-Chair Seaton asked whether the fee applied if the
candidate was acting as her own campaign treasurer. Ms.
Koeneman responded that all candidates were required to
register with APOC and pay the fee regardless if a
candidate was acting as their own treasurer. Co-Chair
Seaton wondered whether the provision was written
adequately to ensure that a candidate acting as his own
treasurer was required to pay the fee. Ms. Koeneman
responded that AS 15.13.060 (a) required the candidate or
group to designate a campaign treasurer.
Co-Chair Seaton referred to page 3, Section 4 and read the
following:
A person required to report under this chapter shall
pay an administrative registration fee of $50 to the
Alaska Public Offices Commission each year in which a
report is due.
Co-Chair Seaton queried whether the fee included the
candidate. He cited page 3, line 26 [27 through 29] as
follows:
… a public official or former public official required
to file a report under AS 39.50.020 shall pay the
commission an annual administrative registration fee
of $50 each year in which a report is due.
Co-Chair Seaton wanted to ensure that candidates and public
officials were both covered under the bill. Representative
Kito answered that the bill contained two separate
provisions: candidates were required to register and pay
the $100 fee and public officials were required to file a
financial disclosure form costing $50. Co-Chair Seaton
asked whether the $50 fee in section 4 was an additional
fee. Representative Kito responded in the negative. The
section addressed a different group of filers other than
candidates or elected officials.
2:03:32 PM
Representative Wilson asked whether the fees collected were
deposited into a specific designated fund. Representative
Kito replied that the fees were designated program receipts
which enabled APOC to receive and expend the funds.
Ms. Koeneman interjected that the fees were deposited into
fund code 1005 program receipts.
Representative Wilson wondered whether program receipts
were able to be spent as needed without legislative
appropriation. Representative Kito explained that the
legislature authorized the receipt and expenditure for
program receipts via the fund source code on a line item in
the appropriation bill. Representative Wilson asked whether
the sponsor intended to back out undesignated general funds
(UGF) and replace them with the additional fees or the fees
were in addition to UGF. Ms. Koeneman replied that the
intent was to offset a portion of APOC UGF. She furthered
that the amount depended on the level of funding
appropriated by the legislature. Ms. Koeneman detailed that
any amount collected in fees that were above the level of
funding APOC needed to function could replace UGF with
program receipts.
2:06:24 PM
Representative Kito added that the legislature appropriated
GF and an amount for program receipt authority. The
legislation enabled APOC to increase its ability to collect
the higher amount of program receipts in order to meet its
budget obligations. Representative Wilson provided a
hypothetical scenario where APOC collected a higher amount
in fees than the amount authorized by the legislature. She
deduced that APOC could not expend the amount above what
was authorized. Representative Kito answered that APOC
could expend the additional fee revenue through a request
for authorization approved by the Legislative Budget and
Audit Committee. Representative Wilson asked what the fee
schedule was for state and municipal candidates.
Representative Kito indicated that the bill contained
separate provisions for state and municipal candidates. The
state candidates were required to pay a $30 fee for the
Division of Elections and an additional $100 fee for APOC.
Candidates were not required to file a financial disclosure
form; only elected officials were mandated to file the $50
fee for financial disclosures. He noted that aside from the
APOC and Division of Elections fee, a municipal candidate
was required to file an APOC financial disclosure form that
carried the $50 filing fee in some municipalities where the
disclosure was mandated by law.
2:09:15 PM
Representative Grenn thought APOC provided a low income
exemption for the candidates filing fee and asked whether
the bill covered the exemption. Ms. Koeneman answered in
the affirmative and elucidated that the legislation did not
remove or alter the exemption.
Representative Pruitt asked about the fiscal notes and
whether they were current. Ms. Koeneman relayed that a
revised APOC fiscal note was forthcoming and the DOR fiscal
note would be zeroed out. Representative Pruitt spoke to
the difficulties for some public officials especially for
certain boards and commissions that had a difficult time
finding members. He asked about the sponsor's thoughts on
every public official paying the $100 fee. Representative
Kito corrected that the applicable fee would be the $50
financial disclosure fee. He acknowledged that although the
legislature was trying to protect the public from "undue
outside interests," on "low level boards" financial
disclosures and conflicts of interest "might not be as
pertinent." He reported that the issue was discussed in the
previous committee and they were unable to determine a way
to equitably identify what public officials could be waived
from the filing fees. The process to separate out certain
public officials became "unbelievably cumbersome."
Representative Pruitt asked whether the fee would hinder
the ability of boards and commissions to find members.
Representative Kito believed that the requirement for
financial disclosure was more of an obstacle than the fee.
He opined that once the individual committed to the
requirement for financial disclosure the $50 fee was a
negligible determinate. Representative Pruitt relayed that
APOC was not able to collect fees online. He wondered how
the inability to pay APOC fees online would affect
potential filers. Representative Kito was concerned with
the issue and wanted to address the issue with APOC. He
felt online filing was preferred.
2:14:32 PM
Representative Pruitt questioned the potential for all
people to be able to run for office with a fee of $100. He
wondered what impact the fee would have on people's ability
to run for office. Representative Kito thought
Representative Pruitt brought up a fair point and revealed
that the issue was discussed in a previous committee. He
explained that a candidate who planned to raise less than
$5 thousand were exempted from the APOC fees. He believed
that the APOC fees were nominal, once a candidate reached
the $5 thousand threshold and was still raising more
campaign funds. Representative Pruitt asked whether the
APOC fees could be paid with campaign funds. Representative
Kito responded in the affirmative and added that the fees
were "an eligible campaign expense." Representative Pruitt
inquired about the lobbyist's fees and the number of
lobbyists in each of the listed fee brackets in the bill.
He asked how many lobbyists in the lower brackets were
required to pay the APOC fees. Representative Kito answered
that the fee was based on the "client value" or contract
amount. He explained that if the lobbyist had 10 clients
the contracts might vary from $10 thousand to $60 thousand
or more. The fees had been split up in order to minimize
the costs for clients paying a lower lobbying contract as
opposed to the clients paying the higher lobbying
contracts. He indicated that changing the fees were in
recognition that clients who could pay more for a lobbying
contract could pay a higher registration fee for its
lobbyist.
2:19:29 PM
Representative Pruitt thanked Representative Kito for the
clarification. He asked for the definition of
"Representational Lobbyist." Representative Kito explained
that a representational lobbyist was a lobbyist who lobbied
on behalf of an organization without receiving any payment
for services, including per diem and lodging.
Representative Pruitt wondered how the APOC fees applied to
lobbyists who received a salary from and worked for the
organization she represented. Representative Kito
communicated that the employee lobbyist had to report how
much of their salary was attributed to lobbying and the fee
was calculated on the amount.
Representative Pruitt asked whether the language in HB 91
covered the employee salary situation and what the amount
the fees were based on. Ms. Koeneman related that currently
the lobbyist reported their entire salary but the bill
required that the lobbyist would have to determine how much
of the lobbyists salary was related to lobbying services.
The registration fee was based on the amount of salary
related to lobbying.
Representative Pruitt restated his concern about the term
"Lobbying Contract" covering the situation described.
Representative Kito stated he would confirm with
Legislative Legal Services that the language matched the
intent of the provision.
2:23:21 PM
Representative Kawasaki queried whether a lobbyist with two
$10 thousand contracts would pay the $350 registration fee
for each $10 thousand contract. Representative Kito
responded in the affirmative. Representative Kawasaki
wondered whether a lobbyist would ask for a contract fee of
$59,999 in order to save $200 for the higher fee.
Representative Kito deduced that the fee would be up to
negotiations between the client and lobbyist.
Representative Kawasaki remembered that members of the
planning commission in the Fairbanks North Star Borough
were required to fill out a financial disclosure. He asked
whether the intent of the sponsor was for municipal
planning commission members to pay the $100 registration
fee. Representative Kito relayed that they would not pay
the $100 registration fee required of candidates but would
pay the $50 fee for the financial disclosure form. He added
that the previous committee discussed the burden for public
officials serving voluntarily but could not find a fair way
to exempt them. The members determined that the $50 fee was
nominal and that actually filling out the financial
disclosure was "a higher hurdle." Representative Kawasaki
assumed that lobbyists were not supportive of the bill.
Representative Kito replied that he heard "very little
opposition" but was aware of some who were opposed to the
bill.
Ms. Koeneman interjected that some lobbyists acknowledged
the state's financial situation and were "willing to pay
their fair share" to keep APOC in operation.
Representative Wilson cited page 3, lines 1 through 5 of
the bill relating to the fee schedule. She provided a
hypothetical scenario where the client divided the contract
into two $30 thousand contracts and offered the second one
at a later date in order to save money in fees. She
wondered whether the language applied to the scenario since
the bill provision was by contract and not client.
Representative Kito responded that the scenario was
possible under the bill. He did not anticipate the scenario
in actual practice. Representative Wilson opined that the
scenario was likely to occur due to cost savings.
Vice-Chair Gara thought that APOC required lobbyists to
report their annual income from lobbying. He asked whether
an alternative fee schedule could be based on lobbyists'
yearly income to quell the concern over split contracts.
Representative Kito relayed that the original bill based
fees on yearly compensation therefore; the fees were
considered a tax. He delineated that a tax became
problematic for reasons previously discussed. Revenue
collection based on compensation might be realized in the
future through inception of a statewide income tax.
2:29:26 PM
Vice-Chair Gara was "struggling with charging someone" for
financial disclosures. Representative Kito reminded the
committee that someone running an exempt campaign - $5000
or less - was excused from paying a registration fee. The
sponsor felt that the fee was nominal in support of APOC's
function. Vice-Chair Gara asked whether all of the
Political Action Committees (PACS) were required to pay.
Representative Kito responded that anyone required to
register would pay the same fees. Vice-Chair Gara wanted to
see additional fees towards PACs or other groups that
contributed "soft money." He stated that 65 percent of all
soft money was spent for negative campaign adds.
Representative Kito thought a "carve out" for certain
groups created "constitutional equitability issues."
2:31:35 PM
Co-Chair Foster OPENED Public Testimony.
Co-Chair Foster CLOSED Public Testimony.
Co-Chair Foster reported that amendments were due by 5:00
p.m. on Wednesday, April 19, 2017.
HB 91 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 124
"An Act relating to corporations, including benefit
corporations, and other entities; and providing for an
effective date."
2:32:25 PM
Representative Kito briefly reviewed the legislation. He
summarized that the bill established a separate corporate
classification called "benefit corporations." He voiced
that benefit corporations allowed corporations to follow
direction other than fiduciary and perform other functions
besides profit driven objectives in order to operate and
provide benefits to other organizations.
BIANCA CARPENETI, STAFF, REPRESENTATIVE SAM KITO, read from
a prepared statement:
My testimony will start with the aim of this bill,
some of the arguments in favor of a benefit
corporation, and then offer an overview of the bill
itself. After my presentation, there are two
individuals online for invited testimony. Also, Janey
Hovenden, Director of Division of Corporations,
Business & Professional Licensing is here to take
questions for the department. Finally, Terry
Bannister from Legislative Legal is on the phone to
answer drafting questions.
The purpose of HB 124 is to expand the options for
Alaskan entrepreneurs and investors by placing a new
type of corporate entity, a benefit corporation, in
Alaska statute. A benefit corporation is a for-profit
corporation that incorporates public benefits and
community improvements into their business practices,
no matter the principal services or products provided.
Corporate law generally requires corporations to
consider the financial impact to their shareholders as
the top priority when making decisions. Maximizing
corporate returns can interfere with other corporate
goals, such as electing to do something beneficial for
the community by enhancing social benefits.
A benefit corporation is a corporate entity that would
have an expanded purpose beyond maximizing share value
to explicitly include general and specific public
benefit;
· Considers/balances the impact of their decisions
not only on shareholders but also on their
stakeholders;
· Must make available to the public a regular
benefit report that assesses their overall social
and environmental performance against a third
party standard.
Three arguments in support of laws establishing public
benefit corporations:
· Creates legal requirements that regulate
corporations claiming to work towards social
good: Becoming a benefit corporation as a legal
entity means a business that says it is dedicated
to the public good will have to substantiate this
claim, similar to how qualifying as tax-exempt
helps define nonprofits as charitable. Moreover,
benefit corporations' reporting requirements to
shareholders, the state, and the public provide a
degree of transparency that corporations could
otherwise refuse to provide.
· Promotes societal benefits by clarifying
fiduciary duty: Entrepreneurs are more likely to
pursue lines of business in a socially beneficial
way when the law ensures that pursuit of profits
does not need to be the highest priority.
Likewise, investors concerned with the public
good are given an alternative.
· Provides legal protection for companies that seek
purpose-driven partnerships Benefit corporation
legislation allows entities to undertake
beneficial partnerships that conventional
corporations might shun out of fear that
shareholders would not see it as a venture likely
to be profitable.
Ms. Carpeneti read the sectional analysis of HB 124:
Section 1 10.06.633(a) Establishes how corporations
may be dissolved and is amended to include benefit
corporations; (a8) declares that a benefit corporation
is dissolved if delinquent for 6 months or more in
including its benefit report in the biennial report or
in paying the benefit report filing fee.
Section 2 Adds a new chapter to AS 10 Alaska
corporations code, chapter 60- Benefit Corporations.
Article 1
Establishes how a business corporation may incorporate
or amend its status to become a benefit corporation;
that the benefit corporation shall have a purpose of
creating general public benefit from all effects of
its business and operations and may identify a
specific public benefit; requires that any status
change must be approved by the minimum two-thirds
vote.
Section 10.60.010 Establishes how a new business
corporation or an existing entity may become a benefit
corporation; declares that an amendment of an existing
corporation must be adopted by at least the minimum
two-thirds vote.
Section 10.60.020 States that if an existing entity
that is not a benefit corporation will become one as a
result of a merger or other status change, the plan of
merger or status change must be approved by at least
the minimum required vote.
Section 10.60.030 In addition to its corporate purpose
under existing corporate statute AS 10.06.005, this
states that a benefit corporation shall have a purpose
of creating general public benefit from all effects of
its business and operations and creation of the
general public benefit is determined to be in the best
interest of the benefit corporation.
Section 10.60.040 Allows a benefit corporation to
identify or amend its articles to include a specific
public benefit purpose in addition to its general
public benefit purpose and lists examples of specific
public benefits.
Section 10.60.050 Clarifies that a professional
corporation formed under AS 10.45 does not violate
this statute by being a benefit corporation under
10.60.
Section 10.60.060 Provides that a benefit corporation
may terminate its benefit status by amending its
articles, or by being party to a merger or other
status change, which would terminate its benefit
corporation status; both must be approved by at least
the minimum required vote.
Section 10.60.070 States that if a benefit corporation
disposes of all or substantially all of its assets the
transaction, unless it is in the usual and regular
course of business, must be approved by the minimum
status vote required.
Article 2
Establishes the duties of the board and the directors
and enumerates seven factors that must be considered
while making decisions; clarifies that a director of a
benefit corporation is not personally liable for the
failure to create a general public benefit if they are
acting in compliance with the chapter and in good
faith.
Section 10.60.100 Establishes seven factors that the
board of directors and individual directors of a
benefit corporation shall consider while discharging
their duties. The directors of the benefit corporation
are not required to give priority to any one of these
listed factors unless the intention to prioritize has
been identified in the benefit corporation's articles
of incorporation.
Section 10.60.110 States that consideration of these
factors is not a violation of existing Alaska statutes
regarding the duties and rights of corporate boards
(AS 10.06.450).
Section 10.60.120 Except as provided in the articles
of incorporation, this states that a director of a
benefit corporation is not personally liable for
monetary damages for action, inaction, or failure of
the benefit corporation to create a general public
benefit if the duties of the director were performed
in compliance with this chapter or AS 10.06.450.
Section 10.60.130 Clarifies that a director of a
benefit corporation does not have a duty to a person
solely because that person is a beneficiary of the
benefit corporation's general or specific public
benefit purpose.
Section 10.60.140 Declares that a director of a
benefit corporation who makes a business judgment in
good faith fulfills their duties under this chapter if
they are not personally invested in the subject, are
informed on the subject of the judgment, rationally
believe the business judgment is in the best interest
of the benefit corporation, and consider the interests
and factors listed under AS 10.60.100 (above).
Article 3
Directs how the board of a benefit corporation my
designate a benefit director, who shall not have a
material relationship with the corporation; outlines
the benefit director's role, especially relating to
the biennial benefit report; allows that the benefit
director shall have the same role and rights as any
other director of the benefit corporation.
Section 10.60.150 Allows that a board of directors of
a benefit corporation may include a designated benefit
director. A benefit director shall have the same
duties and rights as other directors but shall also
have additional duties (described below), such as the
preparation of the annual compliance statement.
Section 10.60.160 States that the board of a benefit
corporation will elect and remove a benefit director
following the manner of general Alaska corporate law
under AS 10.06.453.
Section 10.60.170 Directs that a benefit director
shall not have a material relationship (defined under
AS.10.60.220) with the benefit corporation or its
subsidiaries and allows for additional benefit
director qualifications under the benefit
corporation's articles or bylaws.
Section 10.60.180 Declares that a benefit director
shall prepare a biennial compliance statement to be
included in the benefit corporation's annual report.
The compliance statement will include the benefit
director's opinion on the benefit corporation's
achievement of its general public benefit purpose, any
specific public benefit purpose, the director's
compliance with their duties, and any failures in
these sections.
Section 10.60.190 Equates the actions or inactions of
a benefit director with actions or inactions of any
director of the benefit corporation.
Section 10.60.200 States that a benefit director is
not personally liable for actions done in their
capacity as benefit director unless the action
constitutes willful misconduct or violation of law.
Section 10.60.210 Provides that a benefit director of
a professional corporation that is also a benefit
corporation is not prohibited from having a material
relationship with the benefit corporation or a
subsidiary.
Section 10.60.220 Establishes the guidelines for
determining whether a benefit director of a benefit
corporation has a material relationship with the
benefit corporation or a subsidiary.
Article 4
Directs an officer of a benefit corporation to
consider the factors enumerated under the board of
directors; clarifies the duties of an officer acting
in good faith; and allows that a benefit corporation
may designate a benefit officer, who shall have duties
similar to the benefit director.
Section 10.60.230 Directs an officer of a benefit
corporation to consider the factors listed in AS
10.60.100 (duties of the directors) if the officer is
in the position to act in a way that may influence the
creation of general public benefit or specific public
benefit.
Section 10.60.240 States that an officer does not
violate current general corporate statutes regarding
duties of officers (AS 10.06.483) when considering the
factors previously mentioned above.
Section 10.60.250 Except as provided in the articles
of incorporation, this states that an officer of a
benefit corporation is not personally liable for
monetary damages if their duties were performed in
compliance with Alaska statutes.
Section 10.60.260 Clarifies that an officer of a
benefit corporation does not have a duty to a person
solely because that person is a beneficiary of the
corporation's general or specific public benefit.
Section 10.60.270 Declares that an officer of a
benefit corporation who makes a business judgment in
good faith fulfills their duties under this chapter if
they are not personally invested in the subject, are
informed on the subject of the judgment, rationally
believe it is in the best interest of the benefit
corporation, and if they consider the factors listed
in AS 10.60.100.
Section 10.60.280 Allows that a benefit corporation
may designate an officer as a benefit officer, who
shall have duties that are related to the creation of
general public benefits and specific public benefits.
The benefit officer shall prepare the annual benefit
report required in Article 6.
2:37:39 PM
Ms. Carpeneti continued reading prepared remarks:
Article 5
Identifies the persons that may bring actions or
claims against a benefit corporation for a failure to
pursue general or specific public benefit.
Section 10.60.300 States that persons identified under
AS 10.60.320 may bring an action or claim against a
benefit corporation for a failure to pursue general or
specific public benefits as set out in their articles
or for a violation of duties under this chapter.
Section 10.60.310 Clarifies that a benefit corporation
is not liable for monetary damages for a failure to
create a general or specific public benefit.
Section 10.60.320 Identifies the persons or entities
that may bring a claim or action against a benefit
corporation under AS 10.60.300.
Article 6
Defines what must be contained in the required
biennial benefit report; requires that the benefit
report must be held against a third party standard;
establishes a timeline for the delivery of the report
to shareholders; requires public availability of the
report; and directs the benefit corporation to file
the benefit report with the department as part of
their biennial report.
Section 10.60.500 Requires a benefit corporation to
file a biennial benefit report as a part of the
biennial report required by AS 10.06.805.
Section 10.60.510 Declares what must be contained in
the biennial benefit report. The report will include
descriptions of how the benefit corporation pursued
the general and any specific public benefit,
circumstances that hindered that pursuit, and why the
third-party standard was selected or changed; an
assessment of the overall performance of the general
public benefit purpose held against a third-party
standard; the name and address of the benefit director
and benefit officer, if any; the compensation paid to
each director; the compliance statement of the benefit
director; and any connection between the creator of
the third-party standard and the benefit corporation.
Section 10.60.520 Requires that, if a benefit director
resigns or is removed, the benefit report shall
include any written correspondence regarding the
resignation or removal.
Section 10.60.540 Establishes a timeline for delivery
of the benefit report to the shareholders.
Section 10.60.550 Directs the benefit corporation to
post all of its benefit reports on the benefit
corporation's public website, if the website exists.
The posted reports may omit director compensation,
financial or proprietary information that was included
in the report to the shareholders.
Section 10.60.560 Requires a benefit corporation that
does not have a website to provide a copy of the most
recent benefit report free of charge to any person who
requests it. The report may omit director
compensation, financial or proprietary information
that was included in the report to the shareholders.
Section 10.60.570 Requires the benefit corporation to
provide the Department of Commerce, Community, and
Economic Development with a copy of the biennial
benefit report for filing as a part of its biennial
reports (AS 10.06.805), omitting any director
compensation, financial or propriety information, and
requires the department to establish a fee for the
filing of the benefit report. A failure to deliver the
report or pay the filing fee within six months or more
constitutes a basis for involuntary dissolution of the
benefit corporation (AS 10.06.633). Subsection (c)
allows that the department may file the benefit report
in hard copy, rather than electronically.
Article 7
Identifies the process necessary for a benefit
corporation to effect a status change; allows for
shareholder dissent under a status change; defines
guidelines for the third-party standards; clarifies
that a benefit corporation is not eligible for any tax
exemptions beyond those available for a traditional
corporation; and states that this chapter does not
prevent a non-benefit corporate entity from
considering a general or specific public benefit.
Section 10.60.700 Establishes that a status change
(merger, amendment, etc.) for a benefit corporation or
domestic entity other than a business corporation must
be approved by at least a two-thirds vote of all
shareholders entitled to vote.
Section 10.60.710 Allows a shareholder to dissent if
the business corporation amends its article to become
a benefit corporation. Shareholder dissent is covered
under current business corporate statutes AS
10.06.574-10.06.582.
Section 10.60.720 Establishes statutory guidelines for
third-party standards used as an assessment tool in
the required annual benefit report.
Section 10.60.730 Clarifies that a benefit corporation
is not eligible for any tax exemptions beyond what is
available to corporations that are not benefit
corporations.
Section 10.60.740 Clarifies that this chapter does not
prevent a non-benefit corporate entity from including
the consideration of or donation to a general or
specific public benefit in its general powers.
2:38:29 PM
Ms. Carpeneti continued reading prepared remarks:
Article 8
Allows from the creation of regulations for this
chapter; clarifies that this chapter does not affect
non-benefit corporate entities; declares that benefit
corporations are subject to Alaska corporate law
unless specifically addressed; and defines terms used
in the chapter.
Section 10.60.910 Allows the department to adopt
regulations to implement chapter 10.60.
Section 10.60.920 Clarifies that this chapter does not
affect statutes or laws that apply to business
corporations that are not benefit corporations.
Section 10.60.930 Clarifies that a benefit corporation
is subject to general Alaska corporate law (AS 10.06
and AS 10.45) unless specifically addressed by this
chapter, in which case this chapter takes priority
over previsions in previous chapters.
Section 10.60.940 States that a provision of the
articles or bylaws of a benefit corporation may not
limit, be inconsistent with, or superseded a provision
of this chapter.
Section 10.60.990 Defines terms used throughout the
chapter.
Section 3 Allows the Department of Commerce,
Community, and Economic Development to adopt
regulations to implement this Act, not to take effect
before July 1, 2018.
Section 4 Implements Section 3 immediately.
Section 5 Provides an effective date of July 1, 2018
for this Act except for Section 4 (above).
2:38:40 PM
Ms. Carpeneti provided closing remarks about benefit
corporations. She delineated that benefit corporations were
formed voluntarily and had the same tax status of any other
for-profit corporation. The required bi-annual benefit
report was meant to provide accountability to shareholders
and offer transparency to investors. She concluded that the
bill established a strong foundation for benefit
corporations to achieve "mission alignment and value
creation" and "created more flexibility when evaluating
potential sale and liquidity actions."
Vice-Chair Gara asked where the Alaska Statutes addressed a
corporation's duty to maximize the benefit for
shareholders.
TERRY BANNISTER, LEGISLATIVE LEGAL SERVICES, ALASKA STATE
LEGISLATURE, replied that she was not aware of a specific
provision in the state's corporate code. She pointed out
that the issue was addressed in a number of out-of-state
court cases that decided the only allowable goal of a
corporation was "improving the finances of the
shareholder."
2:40:56 PM
Representative Neuman asked whether an existing corporation
could become a benefit corporation and how it would
accomplish the change. Ms. Carpeneti replied in the
affirmative. She detailed that the transition process was
delineated in Section 10.60.010, which included a
two/thirds vote by its shareholders.
Representative Neuman stated that throughout the bill and
on page 16 there was language related to a "specific public
benefit." He wondered how public benefits were defined in
regulation. He felt that excessive regulation would be
necessary to ensure a public benefit. Representative Kito
replied that public benefits would be defined by corporate
boards and shareholders and clearly identified in the
corporate bylaws. Representative Neuman asked whether the
benefit corporations could write their own regulations.
Representative Kito clarified that the benefits and goals
would be included in the corporation's bylaws and the only
guideline in Alaska Statute required that the benefit
corporation would provide a public benefit. Representative
Neuman asked how a "benefit partnership" would form.
Representative Kito clarified whether he was referring to a
type of a corporation. Representative Neuman answered in
the affirmative. Representative Kito understood that the
bill created a separate type of corporation and was
uncertain whether a partnership was applicable.
Ms. Carpeneti did not believe a partnership would qualify
as a benefit corporation.
Representative Neuman provided a hypothetical scenario
where another for-profit corporation provided funds to the
benefit corporation for its public benefit objective.
Representative Kito thought Representative Neuman was
suggesting that one corporation could provide monetary
support to another corporation. He offered that a benefit
corporation's goal was not to receive grants from other
corporations but to generate revenue from business services
or products and "interact with the community, state, or
other customers or partners" based on its bylaws.
Representative Neuman was concerned if there was any
opportunity for money to flow from one corporation to
another by entering into a partnership with a benefit
corporation that could write their own rules on what is a
public benefit or not a public benefit. He queried whether
the scenario was possible. Representative Kito ascertained
that a benefit corporation could enter into an agreement
with any other corporation as a standard business practice
and supposed that any agreements would be implemented
through a contract just like any corporation could have a
contract with another. The legislation would not change any
existing laws regarding how corporations could interact.
The legislation only allowed a corporation to have other
"goals, values, or directions" other than a fiduciary
responsibility to its shareholders. Representative Neuman
suggested that the for-profit corporation's shareholders
might be opposed to the public benefit of the benefit
corporation. Representative Kito thought that the
shareholders of the for-profit corporation approved
distribution of its monetary assets or profits and the non-
benefitted corporation had to proceed in accordance with
shareholder wishes. He thought the scenario was unlikely.
Representative Neuman believed that his scenario was
possible. Representative Kito judged that "a corporation
was not able to violate its fiduciary responsibility [to
its shareholders] in order to support a benefit
corporation."
2:50:14 PM
Co-Chair Seaton suggested a scenario where a sporting
outfitters benefit corporation had a benefit of extending
trails or supported little league or other community sports
teams. He surmised that the benefit corporation could not
be sued by its shareholders for supporting its public
benefit goal. He asked whether his understanding was
accurate. Representative Kito answered that a benefit
corporation could act even more broadly and allow its
employees to participate in trail building, which was
"counter to the fiduciary responsibility" of a for-profit
corporation. He furthered that if trail building supported
the activity of the benefit corporation's bylaws allowing
employees to help build trails, the activity was allowable.
Co-Chair Seaton added that corporations could provide
community benefits as long as it was justified as an
activity that would ultimately boost profit to
shareholders. He deduced that a benefit corporation allowed
social benefits without risking shareholder lawsuits.
Representative Kito answered in the affirmative.
2:53:38 PM
Representative Pruitt cited Section 10.60.730 [page 15,
line 3] and read the following:
Sec. 10.60.730. Tax exemptions. A benefit corporation
may not claim a tax exemption under AS 43.20 (Alaska
Net Income Tax Act) if the tax exemption is not also
available to corporations that are not benefit
corporations.
Representative Pruitt asked whether benefit corporations
were taxed the same as other corporations. He asked for the
best comparison to other types of corporations in terms of
taxation. Ms. Carpeneti responded that a benefit
corporation would either be a C or S corporation and the
benefit designation did not affect its tax status.
Representative Pruitt asked if the position of benefit
director had the same voting authority as other directors
on corporate matters. Ms. Carpeneti answered in the
affirmative.
Representative Pruitt asked about specific language listed
in Article 2 under standards of conduct for directors. He
queried whether a benefit director was the professional
equal to and subject to the same Alaskan statutes as any
other type of corporate director. Representative Kito
understood that the one duty a benefit director performed
that was different from a regular corporate director was to
"manage and oversee the beneficial operations of the
corporation as identified in the bylaws." He continued that
the benefit director carried out duties without the
fiduciary goal but in accordance with the beneficial
purpose of the corporation. Representative Pruitt
hypothesized a scenario where the benefit director was a
"minority shareholder." He asked what the "rights of the
shareholders were to determine whether or not the benefit
director was operating within its bylaws." Representative
Kito replied that the articles of incorporation for the
benefit corporation designated the directors'
responsibilities. He elaborated that the other directors
had the ability to remove a questioned or underperforming
director and all directors had a responsibility to the
corporation and its bylaws. Representative Pruitt inquired
about the burden imposed on the other directors in the
process of removing the questioned benefit director and the
ability to determine his performance. Representative Kito
restated that the corporation's structure was contained
within its bylaws.
Ms. Carpeneti interjected that Article 5, Section 10.63.20
outlined the process and the right to bring action by the
shareholders. Representative Pruitt remarked that current
statute was "pretty extensive" regarding removing a
director that was not operating within the corporation's
bylaws and wanted to ensure the provisions applied to
benefit corporations to protect the shareholders.
Representative Pruitt questioned the definition of general
public benefit. He wondered who determined what a general
public benefit meant and who wrote the regulations
regarding what a public benefit was. He referred to page
16, line 8 and read the following:
(7) "general public benefit" means a material positive
effect on people and their surroundings, taken as a
whole, assessed against a third-party standard;
Representative Kito replied that a national B corporation
organization existed and worked with benefit corporations
around the country. He elaborated that the organization
identified standards and clearly identified what types of
public purposes a benefit corporation could participate in
or support.
Ms. Carpeneti added that B Lab Corporation was the national
organization that provided third party consultation and
lists of third party standards. She exemplified that a
third party standard existed for agriculture and offered to
provide the list. She informed the committee that many
kinds of third party standards existed in many other areas
that a benefit corporation evaluated itself against for the
purpose of its biannual report.
3:02:22 PM
Representative Pruitt requested a copy of the standards
list. He wondered whether the benefit had to correlate with
the type of business the benefit corporation engaged in.
Ms. Carpeneti responded that the benefit did not have to
correlate with the product or services the corporation
provided. Representative Kito provided a hypothetical
example to illustrate the point.
3:03:59 PM
Vice-Chair Gara appreciated the representative bringing the
bill forward and reminded the committee that a similar bill
was heard last year. He spoke of a philosopher who stated
that "the reward is the deed itself." He surmised that a
corporation who did perform public benefits to gain profits
from its good works, but did not alert the public could
expose it to shareholder law suits. He wondered whether the
benefit corporation could engage in public benefits without
the threat of shareholder law suits. Representative Kito
indicated that the "disposition of profits" for a for-
profit corporation was at the discretion of the directors.
However, without shareholders" support the corporation
could be sued. The benefit corporation was largely immune
to fiduciary shareholder lawsuits as long as the public
benefit was consistent with its identified beneficial
purpose. Vice-Chair Gara alluded to comparisons with Alaska
National Interest Lands Conservation Act (ANILCA) that
allowed native corporations to "benefit their shareholders"
and were also protected from lawsuits for creating social
service organizations. He believed the bill allowed for
more freedom and stated his support. Representative Kito
deduced that HB 124 offered additional benefits for native
corporations. He suggested that an Alaska Native Claims
Settlement Act (ANCSA) corporation might choose to
designate some beneficial functions to support cultural or
shareholder activities as a benefit corporation that was
restricted under current corporate statute.
Co-Chair Foster welcomed invited testifiers.
3:08:12 PM
STEPHEN TRIMBLE, FOUNDER AND CEO, ARCTIC SOLAR VENTURES,
ANCHORAGE, spoke in favor of the legislation. He relayed
that his company was a solar design and installation
company serving residential and commercial clients. He
remarked that his company wanted to become a benefit
corporation and he thoroughly examined the bills and laws
in other states pertaining to benefit corporations. He
shared that 30 states enacted legislation allowing benefit
corporations. He thought that the legislation was integral
to his company's survival. He mentioned the growing
interest in benefit corporations and reported having
coached at least 5 companies that wanted to peruse benefit
corporation designation out of many others that desired the
designation in Alaska. He elaborated on the involvement and
function of B Lab Corporation and explained that they were
the third party international certification organization
that helped benefit corporations who were accountable from
a reporting perspective. The company offered the "B Corp.
Certification" that was a business certification and
offered a compendium for the legal protections for benefit
corporations by state. He shared that his company received
the certification out of only two in Alaska and four
thousand worldwide. The certification and recording process
was extremely rigorous. He detailed that his company
enacted changes to its bylaws to state its beneficial
purpose and acted in the manner of a benefit corporation
but lacked the legal protection in the state. He pointed
out that "mission driven businesses were becoming
increasingly important to the future of business both
inside and outside of Alaska." He spoke of the millennial
workforce that would comprise 78 percent of the active
workforce by 2025. He relayed that 77 percent of the
millennial workforce considered mission driven business as
a factor for employment. He relayed that all of his job
candidates applied due to the fact that the company was a
certified B corporation and had a "commitment to society
and the environment.' He felt the B corporation status
attracted quality employees and investment.
3:14:04 PM
Representative Pruitt asked what type of corporation his
company was registered as in Alaska. Mr. Trimble responded
that the company was a C corporation that elected taxation
as an S corporation. Representative Pruitt asked about the
number of shareholders. Mr. Trimble replied that his
corporation had 5 shareholders and was small and privately
held. Representative Pruitt assumed that the percentage of
ownership among shareholders varied. Mr. Trimble answered
in the affirmative.
3:15:04 PM
WILLIAM CLARK, ATTORNEY, DRINKER, BINDLE, AND REALTH,
PENNSYLVANIA, reported that he was a corporate lawyer in
Philadelphia and worked in support of benefit corporation
enactment in a number of states pro bono. He offered that
Washington D.C. adopted the legislation along with 30 other
states. He delineated that the first law permitting benefit
corporations passed in 2010 and now over 5000 were in
existence. He reported that Delaware who "set the tone for
all United States (U.S.) [corporate] law" authorized the
legislation four years ago and had almost one thousand
registered B corporations. The Chief Justice of Delaware
supported the concept in order to avoid shareholder
lawsuits. He spoke to the discussion concerning corporate
governance issues and the removal of directors. He
emphasized that "the benefit corporate statute relied
completely on the normal existing rules for all
corporations with respect to the governance of the
corporation." How the benefit director was elected,
removed, or whether the shareholders approved of the
director's decisions were controlled by existing corporate
law. The B Corporations were "run exactly like other
business corporations" which was why the tax status was the
same as for-profit corporations. Therefore, the only change
was the new rules concerning governance and not structure.
He appreciated the committee discussion.
3:19:25 PM
Representative Ortiz asked whether there were any general
opposition in the country to benefit corporation. Mr. Clark
replied in the negative. He qualified that the one
persistent question was whether the law establishing B
Corporations was necessary. He elucidated that legal
challenges to director's decisions were rare. The lawsuits
that often occurred related to the change in control of the
corporation due to sale. In that scenario, the law was
"very clear" that the director's duty was to maximize
profit over mission in the transaction. He thought a
widespread understanding of the positive consequences of
the concept was evident due to the unanimous votes in 13
states in support of the legislation.
Representative Wilson asked about the tax status. She asked
whether a "C" Corporation that became a "B" Corporation was
taxed as a "C" Corporation. Mr. Clark answered in the
affirmative.
3:21:56 PM
Vice-Chair Gara recalled a situation where a corporation
created a daycare for its employees and the shareholders
sued the company. He asked whether Mr. Clark was aware of
the case. Mr. Clark was unaware of the situation but
maintained that the situation was what "B" Corporation
status addressed.
Representative Neuman asked whether there were any current
lawsuits from the general public that questioned the public
benefit of the benefit corporation. Mr. Clark responded in
the negative and added that the law prohibited the general
public to challenge the actions of its directors. However,
shareholders had sued directors of corporations.
Representative Neuman wondered about the amount of
shareholder challenges for benefit corporations. Mr. Lucas
responded that he was unaware of any shareholder challenges
to benefit corporations but they were common with
traditional corporations. He named Revlon, eBay, and
craigslist.
Representative Pruitt inquired whether a benefit
corporation that wanted to benefit its employees had to
list the benefit in its bylaws. Mr. Clark answered in the
negative and offered that two concepts in the law were
significant. He detailed that one concept was a general
public benefit that produced a "material positive effect"
for the company's stakeholders. The other concept was the
"ability to specify" an explicit public benefit. The
corporation that did not elect a specific public benefit
but was committed to a material positive effect on its
stakeholders could include activities or benefits that
benefitted its employees and how it acted in the community
as a corporate citizen. He summarized that there was a
general benefit approach and in addition a "precise
mission" if elected. Representative Pruitt clarified that
general benefits to the public were specific to "B"
corporations but benefits to employees were not exclusive
to benefit corporations. He asked whether a regular
corporation could include employee benefits in its bylaws
or had to register as a benefit corporation to provide
benefits to its employees in order to shield the
corporation from litigation. Mr. Clark speculated that two
different concepts were under discussion. He expounded that
every benefit corporation was committed to the first
concept as stated on page 3, [lines 1 through 9] Section
10.60.030 that was derived from the business and operation
of the benefit corporation and intended to result in
material positive impact. The corporation could also elect
to specify a particular mission [Section 10.60.040., page
3, line 10]. Both the general commitment and the specific
commitment were part of a benefit corporation. He pointed
out that a normal corporation could amend its bylaws to
include a specific benefit but was not subject to benefit
corporation statutes.
Co-Chair Seaton OPENED Public Testimony.
Co-Chair Seaton CLOSED Public Testimony.
HB 124 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 25
"An Act relating to insurance coverage for
contraceptives and related services; relating to
medical assistance coverage for contraceptives and
related services; and providing for an effective
date."
3:31:21 PM
REPRESENTATIVE MATT CLAMAN, SPONSOR, read a prepared
statement:
Good afternoon members of the Committee, for the
record, my name is Matt Claman, and I am the State
Representative for House District 21 in West
Anchorage. First off, I would like to thank you all
for hearing House Bill 25 this afternoon.
All across Alaska, women do not always have ready
access to women's health services. Women living and
working in rural areas, the tourism industry, the
military, and on the North Slope face additional
barriers, geographical and otherwise, to obtaining
greater access to family planning options.
Currently, women who use hormonal contraceptives must
return to the pharmacy every month to three months to
refill their prescriptions. House Bill 25 requires
health insurers to offer consumers the option to
receive a 12-month supply of hormonal contraception at
a time. The women in my family support House Bill 25,
and that tells me a lot. They support it not only
because it is often time consuming and inconvenient to
obtain a prescription contraceptive every 3 months or,
in some cases, every month, but they support it
because they know that improved access to
contraceptives means huge reductions in unintended
pregnancies.
Unintended pregnancy has a profound effect on the
overall well-being of Alaskan families. Unintended
pregnancy is associated with adverse maternal and
child health outcomes. Along with health concerns,
unintended pregnancy is a dramatic cost driver to
public health programs. I believe, and I hope the
members of the committee will agree, that with
Alaska's financial challenges, we should look for ways
to reduce costs in the short-term and long-term, and
this bill does exactly that.
House Bill 25 makes sense for Alaskan women and
families. With that, I will turn it over to my staff,
Lizzie Kubitz, to explain the details of the bill.
LIZZIE KUBITZ, STAFF, REPRESENTATIVE MATT CLAMAN, read from
a prepared statement:
Thank you members of the committee, for the record, my
name is Lizzie Kubitz and I am staff to Representative
Claman. Thank you all for hearing House Bill 25 today.
House Bill 25 would require health insurance companies
to, at the request of the consumer, provide coverage
for a 12-month supply of contraceptives at one time
and provide reimbursement to a health care provider or
dispensing entity. In the bill, prescriptive
contraceptives include hormonal contraceptives, namely
oral contraceptives, commonly known as "the pill."
Section 1 of the bill lays this out. Section 1 also
gives health care insurers the ability to enact
reasonable cost containment measures. In subsection
(d), cost containment is defined as incentivizing the
use of generic or lower cost medications or the use of
health care providers or pharmacies that offer
services or prescriptions at a lower rate.
The inclusion of this language gives insurers the
ability to steer towards generics as a cost
containment strategy-a provision that the Department
of Administration has advocated for as it could
substantially reduce their costs in covering a 12-
month supply of birth control.
However, subsection (e) states if the covered
therapeutically equivalent version of a prescription
contraceptive is not available or is considered
medically inadvisable by the health care provider of
the insured, a health care provider shall provide
coverage without cost sharing for an alternative
therapeutically equivalent version of the prescription
contraceptive that is prescribed for the insured.
The inclusion of this language makes it clear that
even though insurers will be allowed to steer towards
generics, if a particular generic or brand is
determined medically inappropriate by the health care
provider, then the insurer must accommodate the
insured.
3:35:55 PM
Ms. Kubitz continued to read a prepared statement:
Finally, Section 1 also includes a religious
exemption, so health plans sponsored by certain exempt
religious employers are not subject to the
requirements of Section 1.
Section 2 amends AS 39.30.090(a), which relates to
policies of group insurance covering state employees-
by adding a new subsection (13) to capture group
health insurance policies covering employees of a
participating governmental unit.
Section 3 amends AS 39.30.091, which relates to self-
insurance and excess loss insurance-by adding language
to capture a self-insured group medical plan covering
active state employees.
Sections 2 and 3 clarify that the requirements of
Section 1 apply to active state employees. I will note
for the record that Michele Michaud from the
Department of Administration is present to answer
questions relating to Title 39.
Section 4 directs the Department of Health and Social
Services to cover the 12-month supply of prescription
contraceptives for eligible recipients of medical
assistance.
Section 5 directs the Department of Health and Social
Services to amend and submit for federal approval a
state plan for medical assistance coverage consistent
with Section 4.
Section 6 is a conditional effect of Section 4 of the
bill, and
Sections 7 and 8 pertain to effective dates.
One major premise behind House Bill 25 is that when
women have greater access and availability to
contraceptives, unintended pregnancies are reduced.
Reductions in unintended pregnancies have a direct
cost savings to the state, which is reflected in the
fiscal notes from the Department of Health and Social
Services. And I will note for the record that Margaret
Brodie from the Department is online and available to
answer questions about the department fiscal notes.
According to a study, which I believe is in your bill
packets, in 2010, 48% of all pregnancies in Alaska
were unintended. Additionally, the study estimates
that 64.3% of the unintended pregnancies in 2010 were
publicly funded. As a State, Alaska spent $113.7
million on unintended pregnancies. Of that, $70.8
million was paid for by the federal government and
$42.9 million was paid by the state.
An additional study, included in your packet, looks at
84,000 women in California who were given various
supplies-1 month, 3 months, and yearlong-of oral
contraceptives . The researchers of that study
observed a 30% reduction in the odds of conceiving an
unintended pregnancy when given the yearlong supply of
oral contraceptives. That study also showed that over
the course of the year, California's family planning
program paid $99 more annually for women who received
3 cycles, and $44 more for women who received one
cycle, than it did for women who received a yearlong
supply all at once. This was mostly due to the costs
of associated visits and the higher use of pregnancy
tests among women who received fewer cycles. Women who
received 3 cycles were almost twice as likely as women
who received the 12-month supply to visit a clinic to
get a pregnancy test.
It is important to note that this bill does not change
who is eligible for coverage. What the bill does is
allow women, who already receive coverage for
prescription contraceptives, to receive, if she so
chooses, 12 months of that prescription at one time.
I wanted to take a moment to address some concerns we
have received from the Alaska National Federation of
Independent Business (NFIB) and America's Health
Insurance Plan (AHIP).
The NFIB has brought forward concerns about whether
this bill would apply to the state employee programs.
We have addressed that concern with the inclusion of
language found in Sections 2 and 3 of the bill.
An additional concern from the NFIB is the cost burden
of supplying 12 months of contraception at one time.
In response to that concern, multiple studies over the
past two decades have found that contraceptive
coverage does not raise insurance premiums and that
employers providing such coverage can, in fact, save
money by avoiding costs associated with unintended
pregnancy. The average commercial insurer payment for
all maternal and newborn care ranges from $18,000 to
$28,000. The average hormonal birth control costs
range from $100 to $600 a year. By preventing just one
unintended pregnancy, an insurer can save a minimum of
$17,000. That is enough savings to pay for 29
additional years of contraception.
AHIP also brought forward concerns.
Their initial concern is that a 12-month supply of
contraceptives could compromise patient safety, due to
potential decreased visits to a prescribing physician,
and efficacy, due to potential improper storage of a
12-month supply of birth control.
To address the concern of safety-research shows that
birth control pills can be safely prescribed based on
a careful review of your medical history and blood
pressure measurement. For most women, no further exams
are necessary. A Centers for Disease Control and World
Health Organization study in 2013 recommended
dispensing a year's supply of contraception and
advising women to return at any time to discuss side
effects, other problems, or changing the method being
used, but that no routine follow-up is required.
3:41:21 PM
To address the concern of efficacy-according to the
Centers for Disease Control and Prevention, oral
contraceptives have a shelf life of three to five
years, depending on the manufacturer. This timeframe
can be diminished depending on things like temperature
and moisture, but we trust that women who would opt
for a 12-month supply (women who are regular users of
hormonal contraception) know how to properly store
their medication.
Additional concerns from AHIP include waste, fraud,
and abuse.
To address the concern of waste-in the study included
in your bill packets, researchers in California found
that women who were dispensed a yearlong supply on
average "wasted" about one cycle of prescription
contraceptives. Wasting one cycle of pills is fairly
insignificant in comparison to the cost savings, such
as fewer total clinician and pharmacy visits, the
costs associated with pregnancy, and so on.
Overall, House Bill 25 would have huge advantages for
Alaskan women. From eliminating the inconvenience of
refilling their prescription every 1 or 3 months at a
time, to the real inability for some Alaskan women to
make it to the clinic, hospital, or pharmacy to refill
that prescription at all. Fisherwomen sometimes spend
3 to 4 months out on a boat at one time. Women who are
attending college often have busy schedules balancing
school and a job. Women in rural Alaska often have
trouble making it to the clinic or hospital due to
lack of transportation and limited operating hours.
This bill ensures the freedom for Alaskan women to
make decisions about their health and their futures.
Ms. Kubitz offered to answer any committee questions.
3:43:50 PM
Representative Wilson asked for the definition of
unintended pregnancy. Ms. Kubitz replied that the pregnancy
was not planned or desired by the individual.
Representative Wilson countered that it was necessary to
know which definition applied - unplanned or undesired. She
spoke to concern about the fiscal note. She spoke to
statistics and the distinction between unplanned and
unwanted. She believed that not all unplanned pregnancies
were unwanted.
Co-Chair Seaton asked Representative Wilson for
clarification. He provided the scenario where a woman
misses taking the pill due to a one month or three month
prescription and wondered what distinction she inquired
about. Representative Wilson referred to analysis in the
fiscal note and expected savings regarding the number of
unintended pregnancies due to the twelve month
prescription. She deduced that the "whole premise behind
the savings in the fiscal notes" was based on unintended
pregnancies. She relayed from personal experience that it
was not a problem to obtain contraceptives for an extended
period. She believed the distinction between unplanned and
"unwanted" was germane to the fiscal notes.
3:46:13 PM
Ms. Kubitz replied that the statistics only applied to the
rates of unintended pregnancies. She cited the study
["Increased Contraceptive Supply linked to Fewer Unintended
Pregnancies" University of California San Francisco (copy
on file)] statistics that reported a 30 percent reduction
in the odds of a pregnancy and a 46 percent decrease in the
odds of an abortion for women given a one-year supply of
birth control. She noted that the "whole point" of the bill
was for women to receive the entire supply of the
contraceptive prescription for a 12-month period. She
stated that if women had access they were more likely to
use it which limited the chance of pregnancy.
Representative Wilson reiterated her belief that women had
access to contraceptives. She asked whether the bill made
contraceptives available for men as well.
Representative Claman replied that "sadly" hormonal
prescription contraceptives were not available for men.
Representative Wilson opined that condoms could be provided
for men. She remarked that women must remember to take the
pill on a scheduled basis or they risk pregnancy. The issue
did not apply to condom use. She believed the legislation
placed the burden and fault on women. Ms. Kubitz discerned
that adding condoms would erode the cost savings in the
fiscal note. The cost savings in the fiscal note was
predicated on the amount of unintended pregnancies avoided
when women were prescribed a twelve month supply of
contraceptives. Representative Wilson wondered whether
current statute prohibited a twelve month prescription.
MARGARET BRODIE, DIRECTOR, DIVISION OF HEALTH CARE
SERVICES, DEPARTMENT OF HEALTH AND SOCIAL SERVICES,
responded that currently all prescriptions were available
for the maximum of 90 days. Representative Wilson asked
where she could find the provision in statute. Ms. Brodie
was uncertain and offered to provide the information later.
Representative Wilson referred to Page 1, line 11 of the
bill concerning voluntary sterilization procedures and
wondered whether the provision applied to both men and
women. Ms. Kubitz thought the provision applied to both
sexes. She stated that the provision was added to ensure
sterilization was a covered service.
Ms. Brodie conveyed that sterilization was covered for both
sexes.
3:52:24 PM
Representative Neuman understood that contraceptive pills
were also used for other purposes such as migraines. He
inquired whether other uses were covered. Ms. Kubitz
answered in the affirmative. Representative Neuman asked
Representative Claman about facts in the sponsor statement.
He referred to the $42.9 million cost to the state for
unintended pregnancies and asked for a breakdown of costs.
Ms. Kubitz reported that the number was based on a study
included in members bill packets from the Guttmacher
Institute titled, "State Facts About Unintended Pregnancy"
(copy on file). She informed the committee that the data
was from 2010 and was the most recent available. In Alaska,
the state and federal governments spent $113.7 million for
unintended pregnancies broken down to $70.8 million or 52
percent was spent by the federal government and $42.9
million was spent by the state.
Co-Chair Seaton verified that the cost savings resulted in
the avoidance of the unintended pregnancies. Ms. Kubitz
nodded affirmatively.
Representative Neuman maintained that he wanted a better
understanding of the costs associated with the savings. Ms.
Kubitz deferred to Ms. Brodie to clarify the numbers.
3:57:10 PM
Ms. Brodie relayed that the cost savings to the Medicaid
program was $1.355 million that represented the cost of 420
unintended pregnancies for the cost of delivery, medical
services, and prenatal doctor visits. Representative Neuman
was "trying to add validity" to the statements provided.
Representative Grenn quoted the following from the
Guttmacher Institute document:
In 2010, 3000 or 64.3% of unplanned births in Alaska
were publically funded…
Representative Grenn calculated from the $43 million figure
that the cost was roughly $14.3 thousand per unintended
pregnancy. He deduced that the amount was approximate to
the cost per delivery from his personal experience. He
deemed that the facts provided in the sponsor statement
were accurate. He thought that complicated births were
factored into the calculations. Ms. Brodie answered in the
affirmative.
Co-Chair Seaton wondered whether the fiscal note reflected
the cost of the contraceptives or savings from avoided
births. Ms. Brodie explained that the fiscal note reflected
the savings from unintended pregnancies. The state
currently paid for the cost of the contraceptives four
times a year along with dispensing fees each time
therefore; no additional funding for the contraceptives
were necessary. She added that the costs for contraceptives
would likely decrease due to fewer dispensing fees.
Representative Grenn suggested that the intent of the bill
was to provide access. He wondered whether the intent of HB
25 was providing access or cost savings. Representative
Claman responded that the intent was both, a cost savings
to the state and better access.
4:02:02 PM
Representative Kawasaki agreed with the underlying bill. He
had personally obtained a 90-day prescription for the
legislative session and had to go to Fred Meyer to have it
refilled. He wondered whether a physician typically
prescribed for twelve months or did length of prescriptions
correspond with refills. Ms. Kubitz understood that length
of prescription was dependent on what the insurance
companies covered. Representative Kawasaki wondered whether
there might be some situations where a physician would not
want to prescribe a 12-month prescription for birth
control. Ms. Kubitz responded that the purpose of the bill
allowed a woman to opt for a 12-month prescription but
ultimately the decision belonged to the doctor.
Representative Kawasaki inquired whether the choice was
ultimately up to the patient if the 12-month prescription
was advisable. Ms. Kubitz responded that a twelve month
supply was an option rather than mandatory.
Representative Guttenberg relayed information from personal
experience about the difficulty of obtaining the refills
for his personal prescriptions that was prescribed every 30
and 90 days. He suggested that the way pharmaceuticals were
prescribed was part of the inherent problem of escalating
costs. He thought that the way drugs were prescribed by
statute was burdensome and expensive for the state. He
remarked that Alaska was doing health care by statute. He
asked for clarification. Ms. Brodie responded that
prescribing had to be addressed in statute so the insurance
company would know coverage was possible for the entire
period of time.
4:07:44 PM
Vice-Chair Gara appreciated and supported the bill.
Representative Wilson asked whether Alaska Care prohibited
a woman from receiving a 12-month prescription for
contraceptives.
MICHELE MICHAUD, CHIEF HEALTH OFFICIAL, DIVISION OF
RETIREMENTS AND BENEFITS, DEPARTMENT OF ADMINISTRATION,
replied that currently the plan allowed for 90 days but the
plan administrator who was the Commissioner of the
Department of Administration could change the amount of
coverage. Representative Wilson asked whether a
contraceptive prescription could be extended before the 90
day period ran out through a phone call. Ms. Michaud
responded in the affirmative and added that Alaska Care
allowed for vacation overrides. Representative Wilson asked
whether any type of contraceptive coverage was available
for men. Ms. Michaud responded in the negative and
elucidated that condoms were not covered under the plan.
Representative Wilson asked whether she was aware of other
provider's practices regarding contraceptive extensions.
Ms. Michaud responded that she was uncertain of how other
providers handled the situation. She assumed other insurers
had similar provisions. Representative Wilson requested
more information identifying the problem and wondered what
the bill was "trying to fix."
Representative Guttenberg asked for a definition of a
vacation override. Ms. Michaud explained that the vacation
override was variable and was based on the individual's
circumstances and needs. She elaborated that the override
had to be requested each time it was necessary, even if
work travel was routine and overrides were needed for each
90-day prescription.
Vice-Chair Gara also mentioned problems when getting his
personal prescriptions refilled. He wondered whether a
person's doctor had to be contacted when a contraceptive
prescription needed to be refilled. Ms. Kubitz responded
that it depended on whether refills were part of the
prescription. She reminded the committee that the point of
the bill was access to a twelve month supply all at once.
She pointed out that other circumstances interfered with
women getting to a pharmacy and/or obtaining refills every
90 days.
4:13:41 PM
Representative Pruitt asked what percentage of insurance
plans were separate from Alaska Care in the state. Ms.
Kubitz responded that the bill encompassed Alaska Care,
Medicaid recipients, and private health insurers. She did
not know actual percentages.
Representative Pruitt asserted that the state was unable to
regulate all private insurers. He wondered what percentage
of private insurances the bill affected. Representative
Claman responded that the bill applied to private sector
insurers and underwriters who covered employees in the
state.
ANNA LATHAM DEPUTY DIRECTOR, INSURANCE DIVISION,
DEPARTMENT OF COMMERCE COMMUNITY AND ECONOMIC DEVELOPEMNT,
replied that roughly 50 percent of the plans were captured
under the bill. She detailed that the Employee Retirement
Income Security Act (ERISA) plans and the self-insured were
exempt but large and small group plans and State of Alaska
plans were covered under the legislation. Representative
Pruitt asked that if Alaska Care and Medicaid recipients
were carved out what percentage of covered plans were left.
He felt the legislation's mandate affected small "mom and
pop" companies.
4:17:30 PM
SARAH BAILEY INSURANCE SPECIALIST III - INSURANCE
DIVISION, DEPARTMENT OF COMMERCE, responded that the
division regulated approximately 20 percent of the health
care market in Alaska including, individual, small and
large employer.
Representative Pruitt asked whether there was anything that
prevented private insurers from implementing the twelve
month contraceptive coverage. Ms. Bailey responded in the
negative.
Representative Pruitt determined that the bill mandated 12-
month contraceptive coverage to 20 percent of the insurance
market in the state. He wondered whether his statement was
accurate. Ms. Latham answered in the affirmative.
Representative Pruitt asked about the religious exemption
in the bill. He read the following [page 3, lines 1 through
10]:
the state a health care insurance plan in the group
market 1 to a religious employer is exempt from the
requirements of this section with respect to the
health care insurance plan of the religious employer
if the religious employer opposes the coverage
required under this section and is an
(1) organization that meets the criteria set out in
26 U.S.C. 6033(a)(3)(A)(i) or (iii) (Internal
Revenue Code of 1986), as amended; or
(2) eligible organization that has self-certified in
the form and manner specified by the United States
Secretary of Labor or has provided notice to the
United States Secretary of Health and Human Services,
under the requirements set out in 45 C.F.R.
147.131(b)(1) - (3).
Representative Pruitt commented that there were employers
that had legitimate religious concerns. He wondered what
protections the legislation provided to employers with
religious affiliations. Ms. Latham responded that based on
her assessment religious groups were exempt.
Ms. Kubitz pointed out that the bill was tailored to match
provisions in the Affordable Care Act (ACA) regarding
religious employers and organizations exemptions. She
believed that the 12-month contraceptive mandate did not
apply to the religiously exempt group.
Representative Pruitt remarked that ACA could be repealed.
He asked whether religious entities would be able to
maintain their exemptions. Ms. Latham responded that if the
ACA was repealed so would the contraception mandate and
religious organizations and would "probably need an
exemption." Representative Pruitt suggested that the bill
created a mandate regardless of the ACA. He disagreed and
asserted that HB 25 was based on the ACA as a guideline to
some of the provisions in the bill. Representative Claman
was unsure how a court would handle the situation. He
predicted that the department and courts would provide
exceptions. The intent in the bill provided for religious
exemptions and he thought that a court would interpret the
exemption to apply even if the ACA was repealed or altered.
4:24:41 PM
Representative Pruitt remembered that years ago a previous
proposed constitutional amendment meant to protect the
Permanent Fund Dividend referenced an existing statute. A
legal opinion regarding the amendment determined that
attaching it to existing statute that was possible to alter
was tenuous. He believed that the same argument applied to
the religious exemption provision in HB 25. Representative
Claman thought that the number of hypothetical arguments
were limitless and maintained that he answered the question
to the best of his ability.
Vice-Chair Gara recommended adding a date to the statues
that referenced the ACA provisions and noted that there was
precedent for that type of clarification. He exemplified
the language, "as existed on January 1, 2017" and suggested
that the language could be added later by amending HB 25.
Representative Claman agreed to examine the issue.
Co-Chair Seaton surmised that Section 1 contained the
language, "the health care insurer that offers" and
interpreted that if the ACA was repealed the provisions
would not apply. If the insurer no longer offered
contraceptive coverage due to the repeal the statute no
longer applied to those insurers. He thought that the
scenario was "frustrating." Healthcare was driving much of
the budget and economy of the state. He believed that the
discussion should focus on passing bills that help control
costs and improve efficiency in the health care system.
4:28:32 PM
Representative Wilson shared her concern that Alaska Care
and Medicaid could change the policy on its own and if so,
why it wasn't changed. She wondered if the legislation
would force a doctor to prescribe a 12 month prescription.
She stated that some doctors wanted to see patients every
three months. Ms. Kubitz replied that the bill did not
place a mandate on the doctors. Most doctors who prescribed
contraceptives would not think that numerous checkups were
necessary. Representative Wilson inquired whether any
insurance company could provide information regarding the
necessity of the legislation and what if anything prevented
them from covering a 12 month supply of contraceptives.
Vice-Chair Gara was given the gavel to temporarily chair
the meeting.
Vice-Chair Gara OPENED Public Testimony.
ALYSON CURREY LEGISLATIVE LIAISON, PLANNED PARENTHOOD
VOTES NORTHWEST AND HAWAII, read a prepared statement:
Thank you, Mr. Chair and members of the committee for
the opportunity to testify today. My name is Alyson
Currey. I am a resident of Juneau and I represent
Planned Parenthood Votes Northwest & Hawaii.
Planned Parenthood has provided birth control and
other high-quality health care across the nation for
more than 100 years and we strongly support HB 25. In
Alaska, we currently serve more than 7,700 patients,
which includes providing birth control to nearly 3,000
women. There are many different kinds of birth
control, and no one method will work for every person
at every stage of their life. Women who are not
satisfied with their contraceptive method, are less
likely to use it consistently. Therefore, every person
should have full access to the birth control method
that works best for them, without barriers based on
cost and regardless of their insurance plan, in order
to increase consistent use. House Bill 25 would
remove such barriers.
Family planning is a basic economic issue for women
and families. Unintended pregnancies put women at
greater risk of homelessness, family hunger, poor
birth outcomes, and long-term dependence on publicly
funded programs. Family planning also creates costs
savings for public and private insurance plans.
Allowing women to access a full range of FDA-approved
contraceptives and providing a year's supply of birth
control instead of limiting dispensing to one or three
cycles lowers direct costs on follow-up visits,
pregnancy tests, and long-term costs associated with
unintended pregnancies.
Eight other states have passed legislation similar to
HB 25, including Washington, Virginia and California.
In an analysis of California's bill, the California
Health Benefits Review Program found that the
reduction in unintended pregnancies and doctor visits
would result in about $42.8 million in savings for the
state in its first year of existence. AK's cost-
savings analysis of HB 25 shows a higher savings per
capita.
By taking steps to decrease unintended pregnancies,
the state will decrease its long-term social service
spending and save money. Please support comprehensive
birth control access for all women and vote yes on HB
25.
4:35:23 PM
ELIZABETH FIGUS, SELF, SITKA, spoke in favor of HB 25. She
shared that she was a doctoral student at the University of
Alaska in Fairbanks and Juneau resident and in the summer
months she skippered a troll fishery tender. She felt that
the bill was a "no brainer" in a state where so many people
worked in remote locations seasonally. She spoke about the
unnecessary expense and difficulty in finding any time for
doctor's appointments or pharmacy visits during her busy
fishing season. She believed the bill was only about
streamlining prescription pick-ups. She was certain that
the committee "understood the importance of economic
efficiency for all Alaska residents." She urged members to
vote "yes" on the bill.
4:37:04 PM
ELIZABETH EILERS, SELF, JUNEAU, spoke in favor of HB 25.
She stated that "politicians cannot grow the economy and
simultaneously limit access to birth control" and thought
that the "state's economic health and women's reproductive
health were linked." She indicated that she paid a high
amount for birth control and believed that created numerous
challenges to access. She spoke of the high costs of all
types of birth control in out-of-pocket expenses. She
thought meaningful access to a variety of methods was
"critical" and a women's right. She maintained that without
insurance coverage the cost of birth control was
unattainable. She urged members to support HB 25 and "not
leave women behind."
4:38:58 PM
ALICA CARGILL, POLICY SPECIALIST, ALASKA NETWORK ON
DOMESTIC VIOLENCE AND SEXUAL ASSAULT, supported the
legislation. She spoke to "contraceptive coercion," access,
and equity. She relayed that in FY16 her agency served over
6,300 women and was "heavily invested in reproductive
health, access, and equity." She explained that "power and
control was the overall basis of domestic violence and
sexual assault." She stated that "a victim's autonomy was
fundamental in both preventing and responding to violent
acts. One critical element of this autonomy was access to
both affordable and consistent reproductive healthcare."
She felt that the bill enabled a women's autonomy. She
explained that contraceptive coercion was when an abuser
controlled a woman's ability to contraceptive access and
use. She explained that the bill expanded coverage for
long-acting reversible contraceptives such as intrauterine
devices and implants and assisted the woman living as
safely as possible in the short-term. She felt that
unintended pregnancies could occur without the long-acting
reversible contraceptives. She noted the correlation
between unintended pregnancies and domestic violence that
imposed "an even greater vulnerability for the victim." She
added that the bill increased women's access in underserved
rural populations.
4:41:25 PM
Representative Wilson asked whether she was concerned
because the bill only applied to insurers who already
covered contraceptives and some might choose to halt
coverage due to increased costs related to the bill. She
wondered if she was concerned with the possibility of less
coverage. Ms. Cargill responded that she had not considered
the scenario and would like to do further research. She
guessed that her agency would still support the bill.
Representative Wilson was concerned about any unintended
consequences.
4:42:53 PM
PAMELA SAMASH SELF, RIGHT TO LIFE, NENANA, opposed HB 25.
She expressed concern over the discussion regarding cost
savings from unintended pregnancies in rural populations
and equated it to a discussion about "rural population
control." She talked about doctors wanting to have routine
follow-ups as a way to prevent serious side effects. She
believed that unintended pregnancies were called
"miracles." She said children were the "future" and not
"dollar signs." She restated her opposition to HB 25. She
did not believe in giving women 12 months of birth control
and did not want to pay for emergency contraceptives.
4:45:56 PM
PAIGE HOGSON, SELF, ANCHORAGE, spoke in support of HB 25.
She offered that a lot of research existed that supported
the benefits of the legislation; for women, their families,
cost saving for the state, and society. She related that
the access delayed child bearing until planned. She thought
Alaska needed to be proactive. She urged members to support
the bill.
4:47:04 PM
ROBIN SMITH, SELF, ANCHORAGE, indicated that she was
driving and would prefer to testify the following morning.
Vice-Chair Gara agreed to the request.
4:47:38 PM
JUSTINE WEBB, SELF, FAIRBANKS, spoke in favor of HB 25 She
shared that she was a social work student at the University
of Alaska in Fairbanks and grew up in Sitka. She relayed
from personal experience the issues and difficulties
regarding her limited access to contraceptives receiving
only a 30 day supply at a time. She had missed classes and
experienced other inconveniences accessing contraception.
She conveyed that she was not able to refill her
prescription with only 2 days of pills left. She could not
imagine the added difficulties of accessing birth control
in remote areas of the state in light of her experiences
living in urban areas. She asked members to support the
legislation.
4:50:04 PM
VHEMIA PETERSON, SELF, ANCHORAGE, supported the
legislation. She relayed that she graduated from the
University of Alaska in Anchorage and currently worked two
jobs and volunteered and participated in the community. She
felt that her access to a long term supply of birth control
contributed to her success. She noted the high sexual
assault and abuse rate for women as well as a wide wage gap
between men and women. She urged members to support the
bill.
4:51:38 PM
Vice-Chair Gara indicated the meeting would recess until
April 18, 2017 at 9:45 a.m. He relayed the agenda for the
afternoon meeting.
^RECESSED UNTIL TUESDAY, APRIL 18, 2017 AT 9:45 A.M.
ADJOURNMENT
4:52:31 PM
The meeting was adjourned at 4:52 p.m.