SB 70-OWNER & CONTRACTOR CONTROLLED INSURANCE  1:55:17 PM VICE-CHAIR BISHOP announced the consideration of SENATE BILL NO. 70 "An Act relating to coverage for additional insureds under owner and contractor controlled insurance programs; and providing for an effective date." VICE-CHAIR BISHOP invited Ms. Wing-Heier to put herself on the record and introduce SB 70. 1:55:51 PM LORI WING-HEIER, Director, Division of Insurance, Department of Commerce, Community and Economic Development, Anchorage, Alaska, introduced SB 70 on behalf of the administration. She said a large construction project in Alaska: - is worth over $50 million; - has to be in a defined location, and - has a defined period, like two or three years. MS. WING-HEIER said the Trans-Alaska Pipeline and some improvement projects at the Anchorage International Airport would qualify as large construction projects. The owner buys all the insurance for a project instead of every contractor and sub- contractor buying their own. She said there is not really a limit to what an owner can purchase, naming workers' compensation, general liability, and professional liability insurance. The project owner controls a master program and insures employees and all the project workers under it. In some situations, the owner delegates that authority to the general contractor; that is called contractor-controlled instead of owner-controlled, which is basically the same thing. MS. WING-HEIER said she consulted attorneys representing the division to propose changing one sentence. The sentence clarifies that a contractor would be an additional insured or a sub-contractor would be an additional insured and have the full benefits of the insurance policy that the owner would buy. She said the original bill will be amended, but the intent will not change. The administration introduced SB 70, so the division is ready to help if a project exceeds $50 million; the division has to approve these projects. She believed a project like this could be on the North Slope. 1:58:10 PM SENATOR DUNBAR commented that SB 70 deletes paragraph (4). He asked how long this language has been in statute. MS. WING-HEIER replied since 2005. SENATOR DUNBAR asked whether there have been any large construction projects since 2005 that went through this process. MS. WING-HEIER expressed her assurance that projects have qualified since 2005. However, she has not approved one in her ten years with the division. She said the division reviewed the statutory language and noticed some ambiguity. The changes in SB 70 clarify the intent. 1:59:07 PM VICE-CHAIR BISHOP opened public testimony on SB 70. 1:59:43 PM ED MARTIN, representing self, Kenai, Alaska, testified in opposition to SB 70. He is a general contractor who is licensed, bonded, and insured. He has contracted in Alaska for many years. He said his concern is that the state is unnecessarily creating money for insurance companies. It is ironic that state attorneys want to change one word in a statute. It is also ironic that the state is not following AS 39.15.010-100. He said that public official bonds are not provided for any department heads who should carry a bond for malfeasance, misfeasance, and nonfeasance in office. It blows his mind that the attorneys want to change one word that would affect the private sector yet disregard AS 39.15.010-100. He said he would not turn down insurance if someone wanted to insure him, but he wants the state to be accountable for following the statutes that other citizens have to follow. He said he would like the committee to investigate and follow up on AS 39.15.010-100. 2:03:45 PM VICE-CHAIR BISHOP closed public testimony on SB 70. VICE-CHAIR BISHOP invited Ms. Wing-Heier to offer a closing statement. 2:04:06 PM MS. WING-HEIER said the division will offer an amendment to SB 70 during the next hearing that is likely to alleviate some concerns. VICE-CHAIR BISHOP held SB 70 in committee.