04/24/2024 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB257 | |
| SB235 | |
| HB97 | |
| HB29 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 235 | TELECONFERENCED | |
| += | HB 97 | TELECONFERENCED | |
| *+ | HB 29 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 257 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
April 24, 2024
1:34 p.m.
DRAFT
MEMBERS PRESENT
Senator Jesse Bjorkman, Chair
Senator Elvi Gray-Jackson
Senator Kelly Merrick
Senator Forrest Dunbar
MEMBERS ABSENT
Senator Click Bishop, Vice Chair
COMMITTEE CALENDAR
SENATE BILL NO. 257
"An Act relating to the Regulatory Commission of Alaska;
relating to public utilities; relating to electric reliability
organizations; relating to the Alaska Energy Authority; relating
to the Railbelt Transmission Organization; and providing for an
effective date."
- HEARD & HELD
SENATE BILL NO. 235
"An Act relating to certified nurse aide training; and providing
for an effective date."
- MOVED SB 235 OUT OF COMMITTEE
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 97(JUD) AM
"An Act relating to self-storage facilities for personal
property, including vehicles and watercraft; distinguishing
self-storage facility liens from another type of storage lien;
and excluding self-storage liens from the treatment of certain
unclaimed property."
- HEARD & HELD
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 29(JUD) AM
"An Act prohibiting certain insurance decisions based solely on
a person's status as an elected official."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 257
SHORT TITLE: ELECTRIC UTILITY REGULATION
SPONSOR(s): RESOURCES
03/01/24 (S) READ THE FIRST TIME - REFERRALS
03/01/24 (S) L&C, RES, FIN
03/01/24 (S) L&C WAIVED PUBLIC HEARING NOTICE,RULE
23
03/04/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/04/24 (S) Heard & Held
03/04/24 (S) MINUTE(L&C)
03/04/24 (S) RES AT 3:30 PM BUTROVICH 205
03/04/24 (S) <Bill Hearing Canceled>
03/27/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
03/27/24 (S) Heard & Held
03/27/24 (S) MINUTE(L&C)
04/05/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
04/05/24 (S) Heard & Held
04/05/24 (S) MINUTE(L&C)
04/10/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
04/10/24 (S) Heard & Held
04/10/24 (S) MINUTE(L&C)
04/19/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
04/19/24 (S) -- MEETING CANCELED --
04/22/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
04/22/24 (S) <Bill Hearing Canceled>
04/24/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: SB 235
SHORT TITLE: CNA TRAINING
SPONSOR(s): GIESSEL BY REQUEST
02/15/24 (S) READ THE FIRST TIME - REFERRALS
02/15/24 (S) L&C
04/15/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
04/15/24 (S) Heard & Held
04/15/24 (S) MINUTE(L&C)
04/24/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: HB 97
SHORT TITLE: SELF-STORAGE UNITS: LIENS; SALES
SPONSOR(s): PRAX
03/06/23 (H) READ THE FIRST TIME - REFERRALS
03/06/23 (H) L&C, JUD
03/24/23 (H) L&C AT 3:15 PM BARNES 124
03/24/23 (H) Heard & Held
03/24/23 (H) MINUTE(L&C)
04/14/23 (H) L&C AT 3:15 PM BARNES 124
04/14/23 (H) Heard & Held
04/14/23 (H) MINUTE(L&C)
05/01/23 (H) L&C AT 3:15 PM BARNES 124
05/01/23 (H) Heard & Held
05/01/23 (H) MINUTE(L&C)
05/03/23 (H) L&C AT 3:15 PM BARNES 124
05/03/23 (H) Moved CSHB 97(L&C) Out of Committee
05/03/23 (H) MINUTE(L&C)
05/08/23 (H) L&C RPT CS(L&C) 4DP 2AM
05/08/23 (H) DP: PRAX, WRIGHT, SADDLER, RUFFRIDGE
05/08/23 (H) AM: FIELDS, CARRICK
02/05/24 (H) JUD AT 1:30 PM GRUENBERG 120
02/05/24 (H) Heard & Held
02/05/24 (H) MINUTE(JUD)
02/07/24 (H) JUD AT 1:00 PM GRUENBERG 120
02/07/24 (H) Heard & Held
02/07/24 (H) MINUTE(JUD)
02/09/24 (H) JUD AT 1:30 PM GRUENBERG 120
02/09/24 (H) <Bill Hearing Canceled>
02/14/24 (H) JUD AT 1:00 PM GRUENBERG 120
02/14/24 (H) Moved CSHB 97(JUD) Out of Committee
02/14/24 (H) MINUTE(JUD)
02/15/24 (H) JUD RPT CS(JUD) 4DP 2NR
02/15/24 (H) DP: CARPENTER, SUMNER, ALLARD, VANCE
02/15/24 (H) NR: GRAY, GROH
03/21/24 (H) TRANSMITTED TO (S)
03/21/24 (H) VERSION: CSHB 97(JUD) AM
03/22/24 (S) READ THE FIRST TIME - REFERRALS
03/22/24 (S) L&C, JUD
04/08/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
04/08/24 (S) Heard & Held
04/08/24 (S) MINUTE(L&C)
04/24/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
BILL: HB 29
SHORT TITLE: INSURANCE DISCRIMINATION
SPONSOR(s): MCCABE
01/19/23 (H) PREFILE RELEASED 1/9/23
01/19/23 (H) READ THE FIRST TIME - REFERRALS
01/19/23 (H) L&C, JUD
02/10/23 (H) L&C AT 3:15 PM BARNES 124
02/10/23 (H) Heard & Held
02/10/23 (H) MINUTE(L&C)
02/17/23 (H) L&C AT 3:15 PM BARNES 124
02/17/23 (H) Heard & Held
02/17/23 (H) MINUTE(L&C)
03/03/23 (H) L&C AT 3:15 PM BARNES 124
03/03/23 (H) <Bill Hearing Canceled>
03/06/23 (H) L&C AT 3:15 PM BARNES 124
03/06/23 (H) Moved CSHB 29(L&C) Out of Committee
03/06/23 (H) MINUTE(L&C)
03/08/23 (H) L&C RPT CS(L&C) 1DP 1DNP 5NR
03/08/23 (H) DP: CARRICK
03/08/23 (H) DNP: FIELDS
03/08/23 (H) NR: PRAX, WRIGHT, SADDLER, RUFFRIDGE,
SUMNER
04/28/23 (H) JUD AT 1:00 PM GRUENBERG 120
04/28/23 (H) Heard & Held
04/28/23 (H) MINUTE(JUD)
05/03/23 (H) JUD AT 1:00 PM GRUENBERG 120
05/03/23 (H) Moved CSHB 29(JUD) Out of Committee
05/03/23 (H) MINUTE(JUD)
05/08/23 (H) JUD RPT CS(JUD) NEW TITLE 3DP 1DNP 2NR
1AM
05/08/23 (H) DP: C.JOHNSON, ALLARD, VANCE
05/08/23 (H) DNP: EASTMAN
05/08/23 (H) NR: GROH, CARPENTER
05/08/23 (H) AM: GRAY
05/13/23 (H) TRANSMITTED TO (S)
05/13/23 (H) VERSION: CSHB 29(JUD) AM
05/15/23 (S) READ THE FIRST TIME - REFERRALS
05/15/23 (S) L&C, JUD
04/24/24 (S) L&C AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
JANE CONWAY, Staff
Senator Cathy Giessel
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided an overview of SB 235.
CINDY HARRIS, Board Member
Alzheimer Association Alaska Chapter
Soldotna, Alaska
POSITION STATEMENT: Testified in support of SB 235.
ERICK CORDERO-GIORGAN, Staff
Representative Mike Prax, Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented a recap of HB 97.
DANIEL BRYANT, Legal and Legislative Counsel
National Self Storage Association
Alexandria, Virginia
POSITION STATEMENT: Invited testimony for HB 97.
WILLIAM BREWER, representing self
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 97.
ELIZABETH MANN, Alaska Mini Storage
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 97.
ARTY FONOV, Eagle Eye Secure Storage
Wasilla, Alaska
POSITION STATEMENT: Testified in support of HB 97.
JAMES MACNAUGHTON, representing self
Blue Moose Storage
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 97.
TIM SULLIVAN, President
Alaska Credit Union League
Anchorage, Alaska
POSITION STATEMENT: Testified with concerns on HB 97.
TYLER SCOTT, Owner
Publix Self Storage
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 97.
KONRAD JACKSON, Staff
Senator Jesse Bjorkman
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided a summary of changes for HB 97,
version U.A to R.
REPRESENTATIVE KEVIN MCCABE, District 30
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of HB 29.
JULIE MORRIS, Staff
Representative Kevin McCabe
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Answered a question on HB 29.
LORI WING-HEIER, Director
Division of Insurance
Department of Commerce, Community and Economic Development
(DCCED)
Anchorage, Alaska
POSITION STATEMENT: Answered questions on HB 29.
ACTION NARRATIVE
1:34:35 PM
CHAIR JESSE BJORKMAN called the Senate Labor and Commerce
Standing Committee meeting to order at 1:34 p.m. Present at the
call to order were Senators Dunbar, Gray-Jackson, and Chair
Bjorkman. Senator Merrick arrived thereafter.
SB 257-ELECTRIC UTILITY REGULATION
1:35:43 PM
CHAIR BJORKMAN announced the consideration of SENATE BILL NO.
257 "An Act relating to the Regulatory Commission of Alaska;
relating to public utilities; relating to electric reliability
organizations; relating to the Alaska Energy Authority; relating
to the Railbelt Transmission Organization; and providing for an
effective date."
1:35:56 PM
CHAIR BJORKMAN said the committee would distribute a committee
substitute (CS) for SB 257. He stated that no discussion or
testimony would occur during the hearing.
1:36:21 PM
At ease
1:36:47 PM
CHAIR BJORKMAN reconvened the meeting and solicited a motion.
1:36:52 PM
SENATOR GRAY-JACKSON moved to adopt the committee substitute
(CS) for SB 257, work order 33-LS1047\H, as the working
document.
1:37:05 PM
CHAIR BJORKMAN objected for purposes of future explanation.
1:37:15 PM
CHAIR BJORKMAN held SB 257 in committee.
SB 235-CNA TRAINING
1:37:17 PM
CHAIR BJORKMAN announced the consideration of SENATE BILL NO.
235 "An Act relating to certified nurse aide training; and
providing for an effective date."
1:37:46 PM
JANE CONWAY, Staff, Senator Cathy Giessel, Alaska State
Legislature, Juneau, Alaska, provided an overview of SB 235. She
said the bill maps out specific skills CNAs would be trained for
to better help care for the fast-growing senior population,
particularly those affected by dementia and Alzheimer's. She
noted Alaska has the highest-growing senior population of any
state, ten years in a row. She said 34 percent of seniors in
residential care facilities, 49 percent of nursing home
residents and 36 percent of individuals using home health care
services have some form of dementia. By including comprehensive
training on the signs and symptoms of dementia as well as
person-centered care in CNA training programs, SB 235 would
enhance the quality of health care for seniors and others in
Alaska.
1:39:17 PM
CHAIR BJORKMAN opened public testimony on SB 235.
1:39:39 PM
CINDY HARRIS, Board Member, Alzheimer Association Alaska
Chapter, Soldotna, Alaska, testified in support of SB 235. She
said she cared deeply about ensuring Alaska has a dementia-
capable workforce. She said including [dementia training] for
CNAs is crucial because caring for people living with dementia
takes a different type of care.
1:40:51 PM
SENATOR BJORKMAN closed public testimony on SB 235.
1:41:06 PM
CHAIR BJORKMAN solicited the will of the committee.
1:41:08 PM
SENATOR GRAY-JACKSON moved to report SB 235, work order 33-
LS1169\S, from committee with individual recommendations and
attached fiscal note(s).
1:41:27 PM
CHAIR BJORKMAN found no objection and SB 235 was reported from
the Senate Labor and Commerce Standing Committee.
1:41:40 PM
At ease
HB 97-SELF-STORAGE UNITS: LIENS; SALES
1:43:28 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of CS FOR HOUSE BILL NO. 97(JUD) "An Act relating
to self-storage facilities for personal property, including
vehicles and watercraft; distinguishing self-storage facility
liens from another type of storage lien; and excluding self-
storage liens from the treatment of certain unclaimed property."
1:44:10 PM
ERICK CORDERO-GIORGAN, Staff, Representative Mike Prax, Alaska
State Legislature, Juneau, Alaska, presented a recap of HB 97.
He said HB 97 establishes self-storage lien law in Alaska, the
only state without self-storage lien laws. He said lien laws
protect both the renter and the [lessor]. The main purpose for
these laws is to recognize a voluntary agreement to store items
in the property, which automatically creates a lien on the
property. He said in the rare case that a renter fails to pay
and goes into default, HB 97 provides for a notification process
and in the case that the debt is not remedied, the lessor may
foreclose or sell the items stored. He said this is a rare
occurrence and when it does happen, it is because the [lessor]
wants to be able to rent [the storage space] again. He asserted
that even when the lessor sells [abandoned items], they do not
make enough money to capture lost revenue. He said HB 97
provides protection similar to that for landlords and tenants in
the landlord/tenant act.
1:46:09 PM
CHAIR BJORKMAN announced invited testimony for HB 97.
1:46:33 PM
DANIEL BRYANT, Legal and Legislative Counsel, National Self
Storage Association, Alexandria, Virginia, said HB 97 would
bring much needed certainty to businesses in Alaska to know the
precise legal process and steps to follow to lawfully enforce
their lien rights in the event of a default. He said the bill
further provides significant consumer protections in that it
would require every storage facility in the state to precisely
follow all the mandatory requirements outlined in the bill.
Additionally, the various requirements and elements contained in
HB 97 are consistent with the overwhelming majority of the 49
other states' self-storage laws. He acknowledged concerns raised
regarding HB 97, but respectfully disagreed with them. He
asserted that HB 97 would establish a floor or a minimum set of
requirements that every owner [lessor] must follow and no such
minimum requirements exist presently [in Alaska]. He said HB 97
would not establish a statutory ceiling and if an owner [lessor]
wishes to go above and beyond the minimum mandates established
by the bill, they may. Any owner that can afford to provide
their unit renters with a much longer enforcement timeline or
provide significantly more notice may do so. He said HB 97
establishes a minimum framework that every owner [lessor] must
comply with and creates a new baseline and rules of the road for
storage owners to enforce their lien rights in the event of
default. It would also set minimum guard rails to protect
consumers and let them know what to expect should a default
occur.
MR. Brant concluded that policy making is a balancing act
blending various viewpoints to reach a reasonable and fair
middle ground compromise; and HB 97 achieves that objective.
1:48:41 PM
CHAIR BJORKMAN opened public testimony on HB 97.
1:49:26 PM
WILLIAM BREWER, representing self, Fairbanks, Alaska, testified
in support of HB 97. He said it was scary, as a self-storage
business owner in Alaska, to operate his business with no
governed framework or set of laws to follow when the customer is
paying him to protect their personal items. He said he found it
very strange that any storage facility owner operating in Alaska
is comfortable with the current Alaska lien laws. He said,
without HB 97, there are no set of laws regarding self-storage
liens. Owners are instead using their own interpretation of
governing laws, or, he said, in his case copying the framework
from another state. He said HB 97 lien laws are no different
than the Alaska landlord-tenant act regarding non-paying tenants
or individuals who stop paying their car, phone or house
payments. As a business owner in Alaska, he found it ridiculous
that he would have to copy the self-storage laws from another
state to try to protect his family and business from lawsuits.
He urged the committee to support HB 97.
1:50:45 PM
ELIZABETH MANN, Alaska Mini Storage, Fairbanks, Alaska,
testified in support of HB 97. She referred to letters written
by Daniel Bryant representing the Self Storage Association. Mr.
Bryant's letters were in response to letters of concern from
Spirit of Alaska Federal Credit Union and Global Federal Credit
Union. She applauded his letters and explained that the
financial institutions were requiring tenants and lessors to
create lists of stored items when there is a lien owed to the
institutions. She said there is wide consensus among self-
storage owners that they are not willing to take on that
responsibility. She noted similar situations in which owners or
landlords are not responsible to care for or retain abandoned
items, for example vehicles left at airports in long-term
parking that are subject to impounding; motorcycles left to long
for repair and abandoned items left in a rented apartment. She
pointed out that these situations do not require landlords to
contact former tenants who have defaulted.
1:52:56 PM
ARTY FONOV, Eagle Eye Secure Storage, Wasilla, Alaska, testified
in support of HB 97. He said he was concerned about the
provision to provide adequate notice for customers who are
entering auction status. He noted that, as a lessor he tries
very hard to reach a customer prior to a unit entering auction
status. He said auction status is a last resort because lessors
receive pennies on the dollar for abandoned property. He said it
is best when a customer pays for their unit and moves out. He
said the lack of self-storage lien laws makes it difficult to
know how to protect his business and his customers' property.
1:54:37 PM
JAMES MACNAUGHTON, representing self, Blue Moose Storage,
Fairbanks, Alaska, testified in support of HB 97. He said, with
no laws in the State of Alaska to provide guidance, he worked
with national trade associations to use other states' laws as
models to develop his businesses policies. He said this created
an element of risk when trying to guess what will hold up in the
State of Alaska courts should there be a need to defend their
business practices. He said clear and transparent guidelines are
key to mitigating that risk and protecting the business. He
described Blue Moose Storage as being run by good local Alaskans
running a small business to support their families and not a
massive corporation looking to take advantage of neighbors. He
said the last thing he would want to do is foreclose on a tenant
and that foreclosure is a lot of work and not profitable. He
said over his twenty years in this business nearly one hundred
percent of foreclosures have resulted in loss for his business.
He urged passage of HB 97 for clear and transparent guidelines
for the protection of businesses and for tenants, and said the
bill was a win-win.
1:55:56 PM
TIM SULLIVAN, President, Alaska Credit Union League, Anchorage,
Alaska, testified with concerns on HB 97. He said the league
appreciates the introduction of HB 97 and noted that the bill
grants lien superiority already available in the 49 other
states. He highlighted several main concerns:
• the need for timely notice to other lien holders,
particularly those with publicly noticed liens
• the need for a limit on fees to prevent increasing
encumbered collateral and adding to consumers' compounding
debt
• the liability limitations for self-storage facilities,
which could conflict with their duty of care as
warehousemen under federal law
• the absence of consequences for violating the legislation's
provisions
1:57:28 PM
TYLER SCOTT, Owner, Publix Self Storage, Anchorage, Alaska,
testified in support of HB 97. He said the bill would give a
level playing field to the storage operators and the customers.
He said it would allow [both parties] to know what to expect
from the terms of the rental and what would happen if it doesn't
end successfully. He said the current situation is a crap shoot
and creates an unfair playing field for both operators and
renters. He said he would willingly return stored and abandoned
items without charge to the customers, had the customers made
the effort [to recover them] and when they do, he said his
business does simply give the items back. He said selling things
at auction is not worth the liability for the storage business
or for the renter when there is no legislation in place to
protect either party. He noted the irony that the credit unions
were objecting to fees.
1:59:38 PM
CHAIR BJORKMAN closed public testimony HB 97.
1:59:56 PM
CHAIR BJORKMAN solicited a motion.
2:00:00 PM
SENATOR GRAY-JACKSON moved to adopt the Senate committee
substitute (SCS) for CSHB 97, work order 33-LS0392\R, as the
working document.
2:00:13 PM
SENATOR BJORKMAN objected for purposes of explanation.
2:00:31 PM
KONRAD JACKSON, Staff, Senator Jesse Bjorkman, Alaska State
Legislature, Juneau, Alaska, provided a summary of changes for
HB 97, version U.A to R. He stated that on April 23, 2024
committee members received four proposed amendments that were
put into HB 97 to create the committee substitute HB 97, version
R. He reviewed the four amendments:
[Original punctuation included.]
33-LS0392\U.A.1
Dunmire
4/11/24
AMENDMENT 1
OFFERED IN THE SENATE
TO: CSHB 97(JUD) a
1 Page 3, lines 7 - 8:
2 Delete "certified mail"
3 Insert "by the United States Postal Service with
a certificate of mailing"
2:01:39 PM
MR. JACKSON continued to present the summary of changes for HB
97, version U.A to R.
[Original punctuation included.]
33-LS0392\U.A.2
Dunmire
4/17/24
AMENDMENT 2
OFFERED IN THE SENATE
TO: CSHB 97(JUD) am
1 Page 2, line 8:
2 Delete "Notwithstanding AS 28.10.371, if"
3 Insert "If"
4
5 Page 2, line 9:
6 Delete "superior"
7 Insert "junior"
8
9 Page 2, line 11:
10 Delete "A storage lien is superior to a
security interest perfected under AS 45.29."
11
12 Page 2, line 12, following "tax lien":
13 Insert "or security interest that was perfected
before the date the rental agreement was
14 entered into"
2:02:12 PM
MR. JACKSON continued to present the summary of changes for HB
97, version U.A to R.
[Original punctuation included.]
33-LS0392\U.A.3
Dunmire
4/17/24
AMENDMENT 3
OFFERED IN THE SENATE
TO: CSHB 97(JUD) am
1 Page 3, following line 28:
2 Insert a new subsection to read:
3 "(c) In addition to the notice required
under (a) of this section, a facility owner
4 shall, after a unit renter has been in default
for 20 days, notify a lienholder identified
5 in the rental agreement that the unit renter is
in default."
2:02:27 PM
MR. JACKSON continued to present the summary of changes for HB
97, version U.A to R.
[Original punctuation included.]
33-LS0392\U.A.4
Dunmire
4/22/24
AMENDMENT 4
OFFERED IN THE SENATE
TO: CSHB 97(JUD) am
1 Page 2, line 2, following "law":
2 Insert "not to exceed an amount equal to 60
days of accrued charges permitted under
3 the rental agreement, including rent, labor, and
other fees"
4
5 Page 3, line 10, following "days":
6 Insert ", but not more than 20 days,"
2:03:22 PM
SENATOR BJORKMAN removed his objection. He found no further
objection and SCS for CSHB 97 was adopted as the working
document.
2:03:43 PM
CHAIR BJORKMAN held HB 97 in committee.
2:03:47 PM
At ease
HB 29-INSURANCE DISCRIMINATION
2:06:22 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of CS FOR HOUSE BILL NO. 29(JUD) "An Act
prohibiting certain insurance decisions based solely on a
person's status as an elected official."
2:06:46 PM
REPRESENTATIVE KEVIN MCCABE, District 30, Alaska State
Legislature, Juneau, Alaska, sponsor of HB 29, provided a
statement promoting the bill. He said insurance companies are in
the business of discrimination. They segregate the insured into
separate risk pools based on their differences in risk profiles
for two main reasons: so that they can charge different premiums
to the different groups based on their risks and actuarial
tables, and to incentivize risk reduction by the insured.
REPRESENTATIVE MCCABE said there are, however, limits to the
type of discrimination that insurers can engage in. These
discrimination restriction decisions are decided at the national
and local levels of government, and laws on discrimination and
intensity of regulation vary a great deal in each jurisdiction.
He said insurance companies have been denying coverage to
Alaskans based solely on their political affiliation,
expression, and/or elected status. He said HB 29 aims to put an
end to such discriminatory practices by explicitly prohibiting
insurance discrimination based on expressly forbidding insurance
solely on factors such as political affiliation, expression or
elected status, especially elected status. Through a floor
amendment in the other body, the bill has been approved to its
current form, expanding the scope of protection to encompass all
aspects mentioned and now summarized as the person's status as
an elected official. Specifically, he said House Bill 29 amends
the insurance code in Alaska from using a person's status as an
elected official as the sole reason to refuse to insure or
refuse to renew insurance coverage, limit the scope of insurance
coverage, cancel an existing insurance policy, deny a claim
covered by an existing insurance policy or increase the premium
policy fees or rates charged on an insurance policy above what
their actuarial tables say it should be. He emphasized that HB
29 would not prohibit refusals, limitations or fees that are
based on sound underwriting or actuarial principles. Given that
insurance products are necessary to protecting health and
property, and in some instances are required by law, he said it
is in the public interest to ensure that consumers are protected
from discriminatory practices. He said HB 29 would help in that
effort.
2:10:08 PM
SENATOR DUNBAR commented that HB 29 would create a protected
class and asked what the other protected classes are. He
specifically asked what other factors insurance companies can
use to discriminate against people.
2:10:28 PM
REPRESENTATIVE MCCABE said he did not think HB 29 would create a
protected class. He said it would protect a class from
discrimination just because they are an elected official. He
reported that he selected an umbrella policy prior to his
election and after his election was informed that he could no
longer purchase that policy, because he had been elected. He
learned that other lawmakers had similar experiences. He
subsequently learned that the same limitation applied to
assembly members and school board members.
2:12:09 PM
SENATOR DUNBAR said there may be a semantic disagreement about
what a protected class is. He said HB 29 would be an example of
the law inserting itself in a private business contract to say
that an individual cannot be discriminated against based purely
on a given status, for example, veteran status, race, gender,
etc. He noted that is done frequently in law, because some
groups need that protection and pointed to the sponsor's
experience in which he was discriminated against based purely on
a status unrelated to the transaction in question. He restated
his question, asking what other groups are protected in that
insurance coverage can not be denied to them based on their
status.
2:13:28 PM
REPRESENTATIVE MCCABE deferred the question to his staff.
2:13:36 PM
JULIE MORRIS, Staff, Representative Kevin McCabe, Alaska State
Legislature, Juneau, Alaska, said the director of the Division
of Insurance was available to answer questions.
2:14:00 PM
CHAIR BJORKMAN asked whether the actuarial tables are public
information. He further asked whether someone seeking insurance
could research the tables to determine whether they were getting
[information that aligns with the actuarial tables] from an
insurance company.
2:14:20 PM
REPRESENTATIVE MCCABE said he had seen actuarial tables. He said
he wasn't sure they were publicly available. He deferred to the
representative from the Division of Insurance.
2:14:56 PM
SENATOR GRAY-JACKSON asked for the definition of an umbrella
policy.
2:15:05 PM
REPRESENTATIVE MCCABE replied that an umbrella policy offers
higher value because it covers multiple items under one policy
and gave examples. He said an umbrella policy may also raise
limits for unusual or atypical damages or injury.
2:16:37 PM
SENATOR GRAY-JACKSON asked whether the limitation he described
was only for umbrella policies or if there were other
limitations that the insurance company imposed. She asked if
there were other limitations on an insurance policy due to his
status as an elected official.
2:16:57 PM
REPRESENTATIVE MCCABE replied he did not explore the issue
beyond discovering ineligibility for an umbrella policy because
he was an elected official.
2:17:50 PM
SENATOR MERRICK joined the meeting.
2:17:59 PM
LORI WING-HEIER, Director, Division of Insurance, Department of
Commerce, Community and Economic Development (DCCED), Anchorage,
Alaska, said statutes are written so insurance companies can
discriminate but cannot unfairly discriminate, meaning that
anything to do with race, gender, religious affiliation, the
state would not allow refusal of a policy on that basis. She
said she contacted several independent brokers and they
confirmed that they would not be able to underwrite umbrella and
certain other policies for members of the legislature, as well
as elected officials of municipalities. She also noted that
several other states are dealing with the same thing and are
working to pass similar legislation. She said she was previously
unaware of the issue. She said HB 29 has merit for people
occupying all levels of elected positions.
2:19:37 PM
SENATOR DUNBAR asked whether the limitation to insure was issued
at a local level or at the direction of a national insurance
company with an established policy [to deny coverage].
2:19:54 PM
MS. WING-HEIER affirmed the policy not to underwrite would be at
the national level as a rule of underwriting.
2:20:27 PM
CHAIR BJORKMAN asked how [someone seeking insurance] would know
the rate they are offered by an insurer coincides with an
actuarial table.
MS. WING-HEIER said insurance rates are available to the public
once the Division of Insurance approves them. She said they can
be accessed through the National Association of Insurance
Commissioners (NAIC).
2:21:19 PM
CHAIR BJORKMAN asked for confirmation that there is a database
provided by the NAIC that the public can access to verify all
types of insurance rates.
MS. WING-HEIER affirmed that, though the tables may be difficult
for the general public to understand, the information is
available and if there is a concern, the Division of Insurance
is available to assist [the public].
2:21:53 PM
CHAIR BJORKMAN [held HB 29 in committee].
2:22:11 PM
REPRESENTIVE MCCABE expressed appreciation to the committee for
hearing HB 29.
2:23:06 PM
There being no further business to come before the committee,
Chair Bjorkman adjourned the Senate Labor and Commerce Standing
Committee meeting at 2:23 p.m.