HOUSE LABOR AND COMMERCE STANDING COMMITTEE March 3, 2000 3:26 p.m. MEMBERS PRESENT Representative Norman Rokeberg, Chairman Representative Andrew Halcro, Vice Chairman Representative Lisa Murkowski Representative John Harris Representative Tom Brice Representative Sharon Cissna MEMBERS ABSENT Representative Jerry Sanders COMMITTEE CALENDAR HOUSE BILL NO. 211 "An Act relating to liability for providing managed care services, to regulation of managed care insurance plans, and to patient rights and prohibited practices under health insurance; and providing for an effective date." - MOVED CSHB 211(L&C) OUT OF COMMITTEE HOUSE BILL NO. 378 "An Act eliminating certain taxes under AS 21.09 on premiums from the sale of workers' compensation insurance; relating to the establishment, assessment, collection, and accounting for service fees for state administration of workers' compensation and worker safety programs; establishing civil penalties and sanctions for late payment or nonpayment of the service fee; and providing for an effective date." - MOVED CSHB 378(L&C) OUT OF COMMITTEE HOUSE BILL NO. 398 "An Act relating to the Alaska Life and Health Insurance Guaranty Association." - MOVED CSHB 398(L&C) OUT OF COMMITTEE HOUSE BILL NO. 207 "An Act relating to the registration of persons who perform home inspections; and providing for an effective date." - HEARD AND HELD HOUSE BILL NO. 224 "An Act requiring a public employee labor organization representing employees of a school district, regional educational attendance area, or a state boarding school to give notice before striking." - SCHEDULED BUT NOT HEARD PREVIOUS ACTION BILL: HB 211 SHORT TITLE: MANAGED HEALTH CARE INSURANCE Jrn-Date Jrn-Page Action 4/22/99 914 (H) READ THE FIRST TIME - REFERRAL(S) 4/22/99 914 (H) L&C, JUD, FIN 5/10/99 (H) L&C AT 3:15 PM CAPITOL 17 5/10/99 (H) HEARD AND HELD 5/10/99 (H) MINUTE(L&C) 10/22/99 (H) L&C AT 10:00 AM ANCHORAGE LIO 10/22/99 (H) MINUTE(L&C) 2/04/00 (H) L&C AT 3:15 PM CAPITOL 17 2/04/00 (H) -- Meeting Canceled -- 2/16/00 (H) L&C AT 3:15 PM CAPITOL 17 2/16/00 (H) Heard & Held 2/16/00 (H) MINUTE(L&C) 2/16/00 (H) MINUTE(L&C) 3/03/00 (H) L&C AT 3:15 PM CAPITOL 17 BILL: HB 378 SHORT TITLE: WORKERS COMP AND WORKER SAFETY Jrn-Date Jrn-Page Action 2/16/00 2211 (H) READ THE FIRST TIME - REFERRALS 2/16/00 2212 (H) L&C, JUD, FIN 2/16/00 2212 (H) 4 FISCAL NOTES (ADM, DCED, 2-LABOR) 2/16/00 2212 (H) GOVERNOR'S TRANSMITTAL LETTER 2/28/00 (H) L&C AT 3:15 PM CAPITOL 17 2/28/00 (H) Heard & Held 2/28/00 (H) MINUTE(L&C) 3/03/00 (H) JUD AT 1:00 PM CAPITOL 120 3/03/00 (H) 3/03/00 (H) L&C AT 3:15 PM CAPITOL 17 BILL: HB 398 SHORT TITLE: LIFE AND HEALTH INSURANCE GUARANTY ASSN Jrn-Date Jrn-Page Action 2/16/00 2218 (H) READ THE FIRST TIME - REFERRALS 2/16/00 2218 (H) L&C, JUD 3/03/00 (H) L&C AT 3:15 PM CAPITOL 17 BILL: HB 207 SHORT TITLE: LICENSE HOME INSPECTORS Jrn-Date Jrn-Page Action 4/21/99 900 (H) READ THE FIRST TIME - REFERRAL(S) 4/21/99 900 (H) L&C, JUD, FIN 10/21/99 (H) L&C AT 10:00 AM ANCHORAGE LIO 10/21/99 (H) MINUTE(L&C) 2/18/00 (H) L&C AT 3:15 PM CAPITOL 17 2/18/00 (H) Heard & Held 2/18/00 (H) MINUTE(L&C) 3/03/00 (H) L&C AT 3:15 PM CAPITOL 17 WITNESS REGISTER JANET SEITZ, Staff to Representative Norman Rokeberg Alaska State Legislature Capitol Building, Room 24 Juneau, Alaska 99801 POSITION STATEMENT: Provided information on HB 211. JIM JORDAN, Executive Director Alaska State Medical Association 4107 Laurel Street, Anchorage, Alaska 99508 POSITION STATEMENT: Testified on HB 211. BOB LOHR, Director Division of Insurance Department of Community and Economic Development P.O. Box 110805 Juneau, Alaska 99811-0805 POSITION STATEMENT: Answered questions on HB 378. RICHARD L. BLOCK, Christian Science Committee on Publication for the State of Alaska 360 West Benson, Number 301 Anchorage, Alaska 99503 POSITION STATEMENT: Testified on HB 211. PAUL GROSSI, Director Division of Workers' Compensation Department of Labor and Workforce Development P.O. Box 25512 Juneau, Alaska 99802-5512 POSITION STATEMENT: Explained amendments to HB 378. BRAD THOMPSON, Director Division of Risk Management P.O. Box 110218 Juneau, Alaska 99811-0218 POSITION STATEMENT: Answered questions on HB 378. CHRIS ROSS, Corporate Health, Safety and Environmental Manager NANA Development Corporation 341 West Tudor Road, Suite 202 Anchorage, Alaska 99503 POSITION STATEMENT: Testified on HB 378. JOHN MANLY, Staff to Representative John Harris Alaska State Legislature Capitol Building, Room 110 Juneau, Alaska 99801 POSITION STATEMENT: Introduced HB 398 on behalf of the sponsor. JOHN GEORGE, Lobbyist for American Council of Life Insurance 3328 Fritz Cove Road Juneau, Alaska 99801 POSITION STATEMENT: Testified on HB 398. MARY BETH STEVENS, Legislative Director for Alaska American Council of Life Insurance 1001 Pennsylvania Avenue, Northwest Washington, DC 20004-2599 POSITION STATEMENT: Testified on HB 398. ROBERT SWEENEY, Counsel American Council of Life Insurance 1001 Pennsylvania Avenue, Northwest Washington, DC 20004-2599 POSITION STATEMENT: Testified on HB 398. DONALD THOMAS, Executive Director, Alaska Life and Health Insurance Guaranty Association P.O. Box 103415 Anchorage, Alaska 99510 POSITION STATEMENT: Testified on HB 398. TOM MANNINEN, Legislative Aide to Representative Norman Rokeberg Alaska State Legislature Capitol Building, Room 24 Juneau, Alaska 99801 POSITION STATEMENT: Explained HB 207, Version W. ACTION NARRATIVE TAPE 00-24, SIDE A Number 0001 CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce Standing Committee meeting to order at 3:26 p.m. Members present at the call to order were Representatives Rokeberg, Halcro, Harris and Brice. Representatives Murkowski and Cissna arrived as the meeting was in progress. Representative Sanders was absent. CHAIRMAN ROKEBERG informed listeners that public testimony on HB 224 would be taken at the House Labor and Commerce Standing Committee meeting on March 6, 2000. HB 211-MANAGED HEALTH CARE INSURANCE CHAIRMAN ROKEBERG announced the first order of business would be HOUSE BILL NO. 211, "An Act relating to liability for providing managed care services, to regulation of managed care insurance plans, and to patient rights and prohibited practices under health insurance; and providing for an effective date." Number 0284 CHAIRMAN ROKEBERG informed members that the Senate and House Conference Committee on the national Patients Bill of Rights had met the previous day and was expected to have a bill ready this year, and that it will include provisions for allowing causative actions against providers. Number 0424 REPRESENTATIVE HALCRO moved to adopt Version I [1-LS0472\I, Ford, 2/24/00], as the working document before the committee. There being no objection, it was so ordered. JANET SEITZ, Staff to Representative Norman Rokeberg, Alaska State Legislature, explained the changes in Version I. On page 3, lines 3 and 4, a change was made to clarify confusing language; a clarifying change also was made on line 18. On page 5, line 6, after "currently offered," the phrase "or that may be offered in the future" was added. In the same section, provisions concerning the Division of Insurance and its overview were deleted. Ms. Seitz explained that the change had been made to lessen the involvement of the Division of Insurance, limiting it to a fiscal note. REPRESENTATIVE HALCRO asked whether there was a revised fiscal note. MS. SEITZ said that was not yet available. She continued with the explanation of Version I. On lines 25-30, in response to concerns about services being reasonably available in the community, the phrase "or that adequate referrals outside the community be available" was added. That allows a patient from a rural area to go to a major regional hospital for care that is not available in his home community, or to an Outside facility, such as the burn center in Seattle, for care that is not available in Alaska. MS. SEITZ reported that on page 6, line 22, the phrase "benefits relating to and restriction on non-participating provider services" was added. On page 7, lines 8-15, language was reinserted that allows a non-network option, such as a copayment or higher premium, if it is actuarially sound. Number 0650 CHAIRMAN ROKEBERG referred to the state attorney general's 1995 memorandum, copies of which had been sent to committee members. In a nutshell, the State of Alaska has a formal opinion mandating that any health care policy must include individuals' choice of providers, so the issue of a "point of service option" is moot in the eyes of state law. The memorandum goes on to say that a differential in charges can be made. There is nothing in this legislation [HB 211] that changes the attorney general's ruling. Number 0733 MS. SEITZ resumed her review of changes in Version I. On page 8, line 12, through page 9, line 1, an addition was made to language regarding continuing treatment of the terminally ill, defining "terminal" as "life expectancy of less than one year." On page 15, a change was made adding a reference to "religious, non- medical providers." The only other changes delete references to the Division of Insurance. Ms. Seitz concluded by saying that this is the shortened version, and there is an amendment concerning the research options which the committee was discussing. CHAIRMAN ROKEBERG told the committee that in addressing the major issue of confidentiality, it was decided not to include that in the proposed CS because comparable federal regulations [binding on Alaska] already are in place. That lowered the fiscal note substantially by saving the cost of developing state regulations. Number 0875 MS. SEITZ noted that the committee had requested a legal opinion from Mike Ford, Legislative Counsel [drafter of the bill], asking if anything in the bill prohibits a surcharge for nonemergency treatment provided at a hospital emergency room; Mr. Ford said he sees nothing in the bill that prohibits that. CHAIRMAN ROKEBERG said that would allow a small charge as a gatekeeping device to keep people from overusing the emergency room or to share in the costs of that emergency room. Number 0938 JIM JORDAN, Executive Director, Alaska State Medical Association, participated by teleconference. He said the revisions appear to accomplish what was needed, and that the amendments look fine to him as well. Number 0979 CHAIRMAN ROKEBERG asked Ms. Seitz to explain the three amendments before the committee. MS. SEITZ said Amendment 1 removes the Director of Insurance from some tasks that remained in Version I. Amendment 1 [1- LS0472\I.1, Ford, 2/25/00] read: Page 9, line 27: Delete "director shall" Insert "managed care entity shall provide" Page 9, line 28: Delete "require" Page 9, line 31: Delete "provide" Page 10, line 2: Delete "require by regulation" Page 13, line 16: Delete "is certified by the director as meeting" Insert "meets" CHAIRMAN ROKEBERG commented that this change was being made not just to lower the fiscal note, but also to streamline the whole bill. MS. SEITZ explained Amendment 2. It was requested by some companies that do medical research who felt that without the amendment, they could not get the information necessary to their research. Amendment 2 has been added to the confidentiality section, saying that no individual's identity can be disclosed without the written consent of that individual. Any information provided without that written consent must be provided in a form that assures that the identity of the individual cannot be ascertained. The intent is to keep from hampering medical and pharmaceutical research. Amendment 2 [1-LS0472\I.2, Ford, 2/26/00] read: Page 9, line 4, following "information.": Insert "(a)" Page 9, following line 7: Insert a new subsection to read: "(b) This section does not apply to medical information that is disclosed for research purposes if (1) the individual whose identity is disclosed gives written consent to the disclosure; or (2) the information is released in a form that does not reveal the identity of an individual." CHAIRMAN ROKEBERG commented that this will assure the privacy of individuals participating in clinical trials of experimental drugs. MS. SEITZ explained Amendment 3. It makes some changes regarding the Division of Insurance's oversight. It deletes, for example, the requirement that the standard provisions of a contract have to be submitted to the division and approved by the director [which otherwise would mean that 1,000-2,000 forms would have to be reviewed]. It also deletes some references to the director, the regulations, and to certification by the director. There is also an addition in Amendment 3 related to unfair trade practices. Amendment 3 [1-LS0472\I.3, Ford, 3/3/00] read: Page 5, lines 15 - 17: Delete all material. Page 13, line 20, following ";": Insert "and" Page 13, line 23: Delete "; and" Insert "." Page 13, line 24, through page 14, line 9: Delete all material. Reletter the following subsections accordingly. Page 14, line 20: Delete "as determined under any regulations that the director may prescribe" Page 18, following line 8: Insert a new bill section to read: "* Sec. 4. AS 21.36.125 is amended by adding a new paragraph to read: (16) violate a provision contained in AS 21.07." Renumber the following bill sections accordingly. Page 19, line 7: Delete "sec. 6" Insert "sec. 7" [End of Amendment 3] Number 1248 BOB LOHR, Director, Division of Insurance, testified by teleconference from Anchorage, noting that he had been asked to comment. He said he had not seen Version I, but the Division of Insurance had been happy to work with Chairman Rokeberg and Miss Seitz to make specific suggestions for streamlining the bill, reducing the bureaucratic involvement, the need for regulation. He said he believes the bill is significantly improved in that regard, both from the point of view of operation of the bill and the cost of it. MR. LOHR said that originally the Division of Insurance had significantly underestimated the fiscal impact of the contract review provisions. In redetermining that, the division "tried to squeeze out any kind of regulatory responsibilities that could be handled in a different fashion." The bottom line is this: It will be possible to reduce the fiscal note. Mr. Lohr asked latitude to thoroughly review Version I, with the amendments, over the weekend and to provide a revised fiscal note on Monday [March 20]. Number 1413 CHAIRMAN ROKEBERG said he didn't mind moving it [HB 211] with the existing fiscal note and providing for a revision of the fiscal note down the pike. He requested confirmation that the fiscal note would be substantially reduced. MR. LOHR affirmed that it will be reduced. Number 1438 REPRESENTATIVE HALCRO made a motion to adopt Amendment 1, 1- LS0472\I.1,, Ford, 3/3/00 [text provided previously]. There being no objection, Amendment 1 was adopted. REPRESENTATIVE HALCRO made a motion to adopt Amendment 2, 1- LS0472\I.2, Ford, 3/3/00 [text provided previously]. REPRESENTATIVE BRICE objected. He expressed concern about the possibility that information about people and their illnesses might be passed beyond a research organization and potentially used against the person in future health insurance coverage or otherwise. What happens if information goes beyond the arena of research? Number 1570 MR. JORDAN said he thought "we are talking about two different things." He said that paragraph A is referring to medical information already in the possession of the insurance company. It can only be used for the purpose of the claim. under Paragraph B, an entity such as a pharmaceutical manufacturer [could access that]. REPRESENTATIVE BRICE withdrew his objection. [There were no further objections to Amendment 2.] Number 1695 REPRESENTATIVE HALCRO made a motion to adopt Amendment 3, 1- LS0472\I.3, Ford, 3/3/00 [text provided previously]. There being no objection, Amendment 3 was adopted. Number 1707 REPRESENTATIVE HALCRO expressed concern about the impact of HB 211 on small business in Alaska. He said he would vote to move it out of committee, but was not sure he was ready to support the bill in its entirety until it is a finished product. Number 1743 RICHARD L. BLOCK, Christian Science Committee on Publications for the State of Alaska, testified by teleconference from Anchorage. He said he had reviewed Version I and was pleased with it and the amendments. Number 1757 REPRESENTATIVE HARRIS said he still has some concerns, and believes he has received assurances from Chairman Rokeberg that this bill is still in progress. He said he would vote to move it out of committee with the understanding that Chairman Rokeberg is still working with various groups that have very serious concerns about this. He would reserve his support on the floor until comfortable that those concerns have been met. CHAIRMAN ROKEBERG said he is pleased that groups that have expressed opposition to this type of legislation in the past have now changed their positions. He predicted that this version, with the amendments, will win the support of those who have opposed [the bill] in the past. He assured Representative Halcro that he shares his concerns that there not be a negative impact on individual and small business insurance in this state. Number 1865 REPRESENTATIVE HALCRO made a motion to move the CS for HB 211, Version I [1-LS0472\I, Ford, 3/3/00], as amended, out of committee with individual recommendations and the accompanying fiscal note, with a revision to that fiscal note pending. REPRESENTATIVE BRICE objected. Number 1905 Upon a roll call vote, Representatives Murkowski, Harris, Halcro, and Rokeberg voted in favor of moving the bill out of committee; Representatives Cissna and Brice voted against it. Therefore, CSHB 211(L&C) was moved out of the House Labor and Commerce Standing Committee by a vote of 4-2. HB 378-WORKERS COMP AND WORKER SAFETY CHAIRMAN ROKEBERG announced the next order of business would be HOUSE BILL NO. 378, "An Act eliminating certain taxes under AS 21.09 on premiums from the sale of workers' compensation insurance; relating to the establishment, assessment, collection, and accounting for service fees for state administration of workers' compensation and worker safety programs; establishing civil penalties and sanctions for late payment or nonpayment of the service fee; and providing for an effective date." CHAIRMAN ROKEBERG asked Paul Grossi to explain the proposed amendments, which read as follows: Amendment 1 [1-GH2072\A.1, Ford, 3/2/00]: Page 5, following line 2: Insert a new subsection to read: "(g) The department shall grant a credit against the service fee imposed under (a) of this section to an employer if (1) the employer applies to the department for the credit on a form prescribed by the department; (2) the employer provides proof that the employer has paid a premium tax imposed under AS 21.09.210 on an insurance policy; and (3) the workers' compensation claims have been paid under the insurance policy described in (2) of this subsection and the claims are subject to the service fee imposed under (a) of this section. The credit allowed under this subsection is equal to the amount of the premium tax paid by the employer under the insurance policy, may not exceed the service fee imposed under (a) of this section, and only applies to premium taxes paid on or after January 1, 2000." [Note: The phrase "by the employer" was handwritten between "paid" and "on" in the final sentence on the committee's copy of the amendment.] Amendment 2 [1-GH2072\A.2, Ford, 3/2/00]: Page 6, following line 10: Insert a new bill section to read: "* Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to read: TRANSITION: COLLECTION AND REFUND OF PREMIUM TAX. Notwithstanding AS 21.09.210, the director of the division of insurance shall (1) beginning July 1, 2000, cease collecting quarterly premium taxes on workers' compensation insurance; and (2) subject to appropriation, refund premium taxes collected for workers' compensation insurance under AS 21.09.210 if the refund is required as a result of the application of the provisions of this Act." Renumber the following bill sections accordingly. Page 6, line 11: Delete "Section 10" Insert "Sections 10 and 11" Page 6, line 12: Delete "sec. 11" Insert "sec. 12" [End of Amendment 2] Amendment 3 [1-GH2072\A.3, Ford, 3/2/00]: Page 5, following line 2: Insert a new bill section to read: "* Sec. 7. AS 23.30.015(e) is amended to read: (e) An amount recovered by the employer under an assignment, whether by action or compromise, shall be distributed as follows: (1) the employer shall retain an amount equal to (A) the expenses incurred by the employer with [IN] respect to the action or compromise, including a reasonable attorney fee determined by the board; (B) the cost of all benefits actually furnished by the employer under this chapter; © all amounts paid as compensation and second-injury fund payments, and all service fees paid under  AS 23.05.067; (D) the present value of all amounts payable later as compensation, [(PRESENT VALUE TO BE] computed from a schedule prepared by the board; [),] and the present value of the cost of all benefits to be furnished later under AS 23.30.095 [(] as estimated by the board; [),] the amounts so computed and estimated to be retained by the employer as a trust fund to pay compensation and the cost of benefits as they become due and to pay any finally remaining excess sum to the person entitled to compensation or to the representative; and (2) the employer shall pay any excess to the person entitled to compensation or to the representative of that person." Renumber the following bill sections accordingly. Page 6, line 9: Delete "9" Insert "10" Page 6, line 11: Delete "10" Insert "11" Page 6, line 12: Delete "11" Insert "12" [End of Amendment 3] Number 1976 PAUL GROSSI, Director, Division of Workers' Compensation, Department of Labor and Workforce Development, came forward to explain the proposed amendments. He informed members that some self-insurers purchase excess insurance, which is a stop-loss insurance. The question asked in previous testimony on HB 378 was whether a premium tax is charged for that. He said the answer was yes. Amendment 1 provides a way for the employer to get credit on the annual fee for premium tax paid on any excess insurance. He brought a list [included in the bill packet] that shows the premium taxes collected. He said the division approximated the total amount of premium tax collected insurance to be $36,000 per year. CHAIRMAN ROKEBERG asked, "They want credit for it?" MR. GROSSI said that is correct. REPRESENTATIVE MURKOWSKI said the credit cannot exceed the service. She asked whether there is an occasion to have the credit exceed the service fee and then be able to carry the excess over to the next year to pay the service fee for that year. MR. GROSSI responded that it is unlikely to occur. In the event it does, the division does not want to have to owe any money. REPRESENTATIVE MURKOWSKI asked, "If it's in excess of, they don't get further credits?" MR. GROSSI answered no; that is the tax they would pay. He referred to Amendment 2. He said it addresses concerns with the transition period that a premium tax could be collected the same year that an annual fee is assessed. He explained that a premium tax is collected throughout the year. He stated: Let's just talk about the year 2000, which would be the first year that the user fee would be assessed on. The premium tax would be collected in increments over some of the larger insurance carriers; and I believe those dates are May 31, August 31 and November 30. What these provisions will do, will allow for the collection to stop on July 1, and it will also make sure that the Division of Insurance has a mechanism so that they can return the premium taxes that were collected. Premium taxes are collected through the year, but they're not actually due until March 1 of the following year. Number 2236 CHAIRMAN ROKEBERG asked which year. MR. GROSSI said it would be any year. [He illustrated concepts for the committee on a whiteboard. No hard copy was referenced.] He explained that the taxes are actually due on March 1. Some collections do occur on May 31, August 31 and November 30. CHAIRMAN ROKEBERG asked, "So, they're paying in arrears, basically?" MR. GROSSI said yes; he likened it to an income tax. The employer pays portions of the workers' compensation insurance policy. They pay a premium, but there is a tax on that premium. CHAIRMAN ROKEBERG indicated July 1 is a concern because it is the end of the fiscal year. He asked Mr. Grossi to show how a $1.5 million surplus is obtained in FY01, starting with July 1, 2000. MR. GROSSI explained that Amendment 2 allows for the collection of the premium tax to cease on July 1, 2000; it also allows for the refund of premium taxes. CHAIRMAN ROKEBERG wondered if there is a larger company that can do this on a quarterly basis. MR. GROSSI said yes. If HB 378 passes, the fee will be due March 1, 2000, based on any and all claims paid throughout the year. CHAIRMAN ROKEBERG said he thought the bill would become effective January 1. MR. GROSSI affirmed that. In response to a further question, he said there is no fee income until March 1, 2001. CHAIRMAN ROKEBERG stated, "There's a fiscal note with a $2 million (indisc.) fee?" MR. GROSSI explained: What is needed for both workers' comp[ensation] and for OSH, or safety programs, is approximately 3.5 ...[ends midspeech because of tape change.] TAPE 00-24, SIDE B ... and that's why we can reduce our budgets by $1.5 million in 2001. CHAIRMAN ROKEBERG asked what happens if refunding begins after July 1. He asked if the general fund would have lower revenue. MR. GROSSI replied, "There's never been a time." REPRESENTATIVE HALCRO said: That's why on Monday, when he talked about it, he talked about how the budget subcommittee really wanted this pushed forward, because they were going to be counting the fact that they only had to fund a portion of the fiscal year, because that last March through July they would obviously collect fees. CHAIRMAN ROKEBERG noted that a letter from Bob Lohr, Director, Division of Insurance, Department of Community and Economic Development, explains the time line proposed in HB 378. Number 0089 MR. GROSSI addressed subrogation of fees: The employer has the right to [recover] all the workers' comp[ensation] that they pay if there's a third-party malfeasor out there who's responsible for the injuries, say, if it's an automobile accident and there's someone at fault or a product liability or anything. ... So, what this amendment does [Amendment 3 - 1-GH2072\A.3, Ford, 3/2/00], we think that there's probably enough authority to collect this fee as well, but this clarifies that, and it ... names that fee as part of what can be collected as the result of a third- party lawsuit. CHAIRMAN ROKEBERG asked whether "the term recovered by the employer under an assignment" includes the rights of subrogation. MR. GROSSI responded yes. He clarified that an employee can make a claim against the third party or the employer can do it, if the employee chooses not to. Number 0171 BOB LOHR, Director, Division of Insurance, Department of Community and Economic Development, testified via teleconference from Anchorage. He said the division had provided an explanation of the time line in a concrete example [included in the bill packet] with the hope of clarifying that there would already be some funds paid under the premium tax, which would be necessary to refund if the proposed cut-over dates in HB 378 were adopted. CHAIRMAN ROKEBERG asked whether Mr. Lohr was comfortable with Amendment 2. MR. LOHR replied yes. REPRESENTATIVE MURKOWSKI said she thought Mr. Grossi was also going to look into tightening up the definition of a claim. MR. GROSSI said he believes the definition is tightened up. He referred to Section 6, page 3, lines 23 through 24, regarding the payment of the fee to the department each year at the time the annual report is filed. This is outlined in AS 23.30.155(m). He noted that he had a copy of the annual report form [included in the bill packet] which outlines all of the payments. For 12 years, payers have used these forms. Number 0312 BRAD THOMPSON, Director, Division of Risk Management, came forward to testify on HB 378. He commented: We, as a self-insured employer, an authorized self- insurer, file this annual report as do other self- insured or commercial insurers. Annually, under the law, and it's cited here under section (m) that we are required to report the total amount of all compensation by type. The compensation by type is detailed in the Department of Labor's reporting form, so each employer that is self-insured or a commercial insurer is required to complete for each claimant that is paid any amount of money in these categories or compensation by type, we need to file each year with the department. And this is a practice that is explicitly clear to those that do and file these reports. I think the confusion earlier in the week was from a question: ... What is the basis of the new fee assessment? It will be based on the total amounts reported in this annual filing. This is not unlike an IRS filing for those employers or insurers that use computers; there's a specific data file layout that we have to comply to. There's no question as to the amounts and types of payments that need to be reported in this filing, which will be the basis for the new fee. REPRESENTATIVE MURKOWSKI said: Recognizing that anything that's on the annual report is part of what will be construed as a claim, I used the term the other day, the one that makes me "squishy" is number 21, which is "other". What could go there? ... This is a form that is part of Department of Labor's; you came up with the form. I'm sure there's some regulations to it, but couldn't you decide tomorrow that you wanted to change this form ...? MR. GROSSI specified that it does have to conform with the statute in terms of the type. REPRESENTATIVE MURKOWSKI asked Mr. Grossi to address the issue regarding what could be considered "other". MR. GROSSI commented that travel could be part of "other". MR. THOMPSON interjected: There are other specific reimbursable expenses. ... I can tell you that for the state's report, I have a copy of our filing. There's few costs included in the "other" column. They're mostly in the first four categories, which is the medical, and then the types of disability payment: temporary total, temporary partial or permanent partial impairment disability awards. That's the significant sums. The others are pretty nominal. But, again, the insurance carriers or the self-insureds understand and do file. Number 0449 REPRESENTATIVE MURKOWSKI stated: You say you're tied to what's in the statute, and that's correct. But if you're still allowing for an "other", and that other may include, to use a specific example, travel, ... I don't necessarily see how that's tied into the statutory language here. That's my concern with how we're defining claim. I don't want claim to be defined by a form that could be changed willy-nilly. MR. GROSSI handed out a summary of the totals for the last five years on all the various categories [included in bill packet]. He pointed out, "If you wanted to limit them to certain types of things, you'd need to change the formula in some fashion, which is fine. There's nothing wrong with doing it that way." REPRESENTATIVE MURKOWSKI indicated it helped, but she still had a problem with the "other" category on the annual report form. MR. GROSSI stated, "It would be up to the committee if you wanted to limit it to certain payments, but then we'd have to adjust the formula to deal with that." CHAIRMAN ROKEBERG asked, "In this report, if you had a small business, and you have more employers that get injured, do you have to fill this report out?" MR. GROSSI replied that for a self-insurer, yes. Generally, small employers will not be self-insurers. CHAIRMAN ROKEBERG said, "No, you'd go to your underwriter." MR. GROSSI answered, "Actually, it's the insurance company that would sell this. You'd be part of that pool." CHAIRMAN ROKEBERG commented, "Right. Then they fill out the form for you. That's part of their premium. So, it's not a burden or even a technical problem for a small business." MR. GROSSI replied: This is already being done. ... That's why we did it this way, actually, and that's what led to the March 1 problem, is because we didn't want to change the way we did business or the way that the employers and insurance companies did business. And so it does have that snafu period. CHAIRMAN ROKEBERG asked, "And your testimony was that the self- insureds submit to this currently?" MR. GROSSI answered yes. CHAIRMAN ROKEBERG wondered, "So, it's your responsibility to make sure they're fulfilling their obligation to the employee?" MR. GROSSI said that is correct. Number 0649 CHRIS ROSS, Corporate Health, Safety and Environmental Manager, NANA Development Corporation, came forward to testify on HB 378. He stated that the amendments fix all of the problems he previously had concerning subrogation. REPRESENTATIVE HALCRO made a motion to adopt Amendments 1, 2 and 3 [text provided earlier.] There being no objection, Amendments 1, 2 and 3 were adopted. Number 0710 REPRESENTATIVE HALCRO referred to previous testimony on HB 378 from Kevin Ritchie, Alaska Municipal League, and Kevin Smith, Joint Insurance Association (JIA). He pointed out that both had said passage of HB 378 would have negative effects on the JIA. He stated: As a matter of fact, in Mr. Ritchie's written testimony he says that "additional state mandates without raising taxes or cutting local services cannot be absorbed." And I noticed in Mr. Smith's correspondence he writes, "Unless there is an increase in services, I see no reason to cost shift from the private insurance industry to the public sector at a time when local government entities are struggling for their survival." But ... before we pass the tin cup for the [JIA], I'd like to bring to your attention a position paper dated just three weeks earlier for another piece of legislation, HB 404, where the executive director of the [JIA] says, and I quote, "The [JIA] presently exceeds all national pooling standards by a significant margin and has admitted assets of approximately $16 million. Since the [JIA] is never exposed to more than $250,000 on any loss, it would take more large losses in a single year than we have experienced in the past 12 years to exhaust the financial resources of the organization." So, ... in response to their concerns about financial harm, I would say that it looks like they're in pretty solid shape and they should be able to pay some fees. REPRESENTATIVE BRICE made a motion to move HB 378, as amended, out of committee with individual recommendations and the attached fiscal notes. There being no objection, CSHB 378(L&C) moved out of the House Labor and Commerce Standing Committee. CHAIRMAN ROKEBERG declared a brief at-ease at 4:38 p.m. The meeting was called back to order at 4:40 p.m. HB 398-LIFE AND HEALTH INSURANCE GUARANTY ASSN Number 0832 CHAIRMAN ROKEBERG announced that the next order of business would be HOUSE BILL NO. 398, "An Act relating to the Alaska Life and Health Insurance Guaranty Association." JOHN MANLY, Staff to Representative John Harris, Alaska State Legislature, introduced HB 398 on behalf of Representative Harris, sponsor. He read from the sponsor statement: The purpose of House Bill 398 is to make changes to the Alaska Life and Health Insurance Guaranty Association Act, AS 21.79, which provides a mechanism to protect policy holders and claimants in the event of the insolvency of a life and health insurer's license to sell policies in Alaska. The Alaska Life and Health Insurance Guaranty Association membership is mandatory for every life and health insurer licensed to sell policies in the state. The association, in order to fund certain outstanding obligations of life and health insurers that have been put into receivership assesses its members. The association works closely with the Director of Insurance, who is the receiver for insolvent insurers. Alaska's current law is based on an earlier of a National Association of Insurance Commissioners (NAIC) model Act. HB 398 updates Alaska Statutes to bring them into close conformity with the most recent NAIC model Act. The NAIC model Act has been updated to reflect lessons learned at a nationwide level from application of the model Act to actual insolvencies experience since the last revision. HB 398 will allow the Alaska Life and Health Guaranty Association to better meet its intended purpose of protecting Alaska policy holders and claimants. Updating the Act to comply with the latest model Act provides the added benefit of uniformity among the states in responding to insurer insolvencies. The Alaska Life and Health Insurance Guaranty Association supports passage of HB 398. Number 0976 JOHN GEORGE, Lobbyist for American Council of Life Insurance, Juneau, noted that two other representatives of the council, Mary Beth Stevens and Robert Sweeney, also were participating by teleconference from Washington, D.C. MR. GEORGE explained that the American Council of Life Insurance had asked Representative Harris to introduce HB 398. Uniformity among the states makes it much easier for insurers to deal with insolvencies. The bill is largely technical. The council has been working closely with the Division of Insurance, and they have reconciled 18 of 20 points of difference. The remaining two points will be dealt with in proposed amendments. CHAIRMAN ROKEBERG noted that the remaining controversy centers on the words "or intervene" in HB 398. Number 1086 REPRESENTATIVE HALCRO moved to adopt the proposed committee substitute (CS) for HB 398, Version G [1-LS1376\G, Ford, 3/3/00], as the working document before the committee. There being no objection, it was so ordered. MR. GEORGE explained that Amendment 1 presents the American Council of Life Insurance's recommendation to add the words "or intervene" after the word "appear" in two places on page 13, lines 20 and 27 of Version G. [The language on line 20 would then read, "(r) The association is entitled to appear or intervene in a court or agency proceeding ...." The language on line 27 (beginning on line 26) would then read, "The association also has the right to appear or intervene before a court or agency in another state ...."] Mr. George said that is the difference the council has with the Division of Insurance. He said the aforementioned two people on teleconference were the experts best qualified to comment. Number 1155 REPRESENTATIVE MURKOWSKI asked whether it was necessary to add two public members to the board, and whether the American Council of Life Insurance was in agreement with the insurance guaranty association regarding that. MR. GEORGE said that language is a part of the NAIC model, and the council has agreed to accept it. However, the council does not see a need for public members because the board is a technical body that is doing ministerial functions, closely supervised by the Division of Insurance, so already has public oversight. Also, there is no way to compensate public members for their service, and adding two more people complicates the logistics of meeting. REPRESENTATIVE MURKOWSKI said as she reads the language of the bill, "the director may appoint," it appears to be left to the director's discretion whether or not to appoint up to two public members. MR. GEORGE said that was a concession that Mr. Lohr had made. The NAIC model specifically says there "shall be" public members. Number 1377 MARY BETH STEVENS, Legislative Director for Alaska, American Council of Life Insurers, testified by teleconference from Washington, D.C. House Bill 398 is very important to the council, which has enjoyed a very good working relationship with the Division of Insurance. Robert Sweeney is the technical expert to whom questions should be addressed. Number 1446 ROBERT SWEENEY, Counsel, American Council of Life Insurers, testified by teleconference from Washington, D.C. He confirmed that he was available to answer any questions. CHAIRMAN ROKEBERG referred to the Property and Casualty Guaranty Fund Act, which the committee had reviewed earlier in the session. He asked how the "bar date issue" is handled in HB 398. MR. GEORGE said the "bar date issue" with respect to Property and Casualty had to do with bar dates for claims for workers compensation because they tend to come in long after the insolvency of an insurer. Life insurance guaranty associations treat claims a little differently because a life insurance policy tends to go on for a longer period of years before a claim is filed; therefore, life insurance guaranty associations try to find "new homes for those policies, to get them transferred to a viable insurance company." Bar dates are not an issue at all in this case. Number 1551 DONALD THOMAS, Executive Director for the Alaska Life and Health Insurance Guaranty Association, testified by teleconference from Anchorage. He said the current chair, James Jackson, apologizes for not being able to participate. However, he had sent a letter to Representative Harris dated March 2, stating that the Alaska Life and Health Insurance Guaranty Association (ALHIGA) is in favor of passage of the proposed CS to HB 398. CHAIRMAN ROKEBERG asked Mr. Thomas if he had seen the amendment. MR. THOMAS said he had not seen the amendment per se, but he understands what it says and is familiar with the basis of the controversy. CHAIRMAN ROKEBERG asked for an explanation of the controversy. MR. SWEENEY spoke in favor of the amendment, which the council considers to be fully consistent with the legislation's primary intent. Among other things, HB 398 is designed to streamline the appropriate, efficient and cost-effective handling of life and health insurance insolvencies. To provide ALHIGA the right to intervene before the receivership court, any appropriate Alaska agency, or foreign receivership court does not needlessly expand the role of ALHIGA. Rather, the amendment offers the state guaranty association the necessary authority to intervene when the rights of policy holders, member insurers, or the receiver is under attack. MR. SWEENEY said that in many instances, it is important to note that ALHIGA may be seeking to assist the Division of Insurance, acting as the receiver for a financially troubled or insolvent life or health insurance company. Unlike the Property and Casualty Guaranty Fund Act, which the committee reviewed earlier in the session, the Life and Health Act, Chapter 79 - like all state life and health guaranty association Acts - requires the guaranty association to continue coverage for policy holders. Moreover, the association is often the state's largest creditor. Providing ALHIGA the right to intervene will merely codify an appropriate right that will work to the benefit of member companies taking up the policyholders as well as state-appointed receivers. He agreed with Mr. George that the right to intervene is contained tn the most recent version of the NAIC Life and Health Insurance Guaranty Association model. Number 1854 REPRESENTATIVE HARRIS said in light of the time, he had no objection to holding the amendment, which would be considered in the House Judiciary Standing Committee instead. Number 1873 MR. LOHR commented on the productive and cooperative working relationship, which may be a model in resolving many fairly contentious issues before bringing legislation before the committee. In this one matter [regarding the right to intervene], he said, "We have just respectfully agreed to disagree." The Guaranty Fund Act and liquidation statutes already give the association [ALHIGA] standing to appear in receivership cases and to assert its interests. Providing for intervention is unnecessary and may imply that the legislature is granting broader authority to the guaranty fund on a par with the authority of the receiver. MR. LOHR indicated [legal counsel for the department] had not done an exhaustive search of case law, but one case they came across was a Court of Appeals case in Maryland. In that case, the court allowed intervention based on statutory language nearly identical to the language in [Alaska's] receiver statute and to that proposed in Version G of HB 398: that is "standing to appear" and the associated obligations. So there is at least one case that supports that the language [already] is adequate. Adding the phrase only adds confusion in that [the department's] attorneys were not able to establish a legal distinction between "standing to appear" and "the right to intervene." CHAIRMAN ROKEBERG inquired, "So your objection basically is that it creates ambiguity because it is redundant, because by 'appearance' you already have the right 'to intervene'?" MR. LOHR said that is correct. The language in current law is "a guaranty association or foreign guaranty association has standing to appear in a court proceeding." The language in current law, which this bill proposes to amend, says "the association is entitled to appear in the court proceeding in the (indisc.) insolvent insurer." Mr. Lohr said, "The bill that you have continues that approach and does not adopt intervention, and intervention could be ambiguous, seems unnecessary, and might conceivably be interpreted to interfere with the exclusive authority of the receiver.' Number 2133 CHAIRMAN ROKEBERG observed that the limits on both the life insurance and health insurance coverage don't really appear to have been expanded. He asked: When was this statute last redone, and how long have these limits been in place? MR. THOMAS said those limits have been effect since the statute was adopted in 1990. CHAIRMAN ROKEBERG asked if there was need to adjust those because of inflation. MR THOMAS said he wanted to check the language of the model Act. CHAIRMAN ROKEBERG asked how current that was. MR. THOMAS said the most current version is dated 1999, and those same limits are in the model Act as well. Number 2291 MR. SWEENEY noted that the coverage limits before the committee are based on the most recent version of the NAIC model. Those amendments to the model Act were adopted in 1997. CHAIRMAN ROKEBERG said, "I'm not sure I understand the distinction between the $100,000 and the $500,000." MR. SWEENEY said those amounts establish limits for individual policy owners for different types of policies. In a life and health insurance insolvency, the objective is to continue coverage and keep it going. TAPE 00-25, SIDE A Number 0014 MR. SWEENEY noted that in a life and health insolvency, the goal is to continue coverage. Therefore, the goal obviously would be not to hit that cap. CHAIRMAN ROKEBERG asked whether anyone else wished to testify, or if there was any objection to closing testimony on HB 398. There being no objection, it was so ordered. Number 0080 REPRESENTATIVE MURKOWSKI said she did not think Amendment 1 was as problematic as the director had indicated. If one has the right to appear anyway, one also is going to have the right to intervene. CHAIRMAN ROKEBERG agreed but said that if it is only a matter of redundancy, and if everybody wants it in here to be consistent with the model Act, so be it. REPRESENTATIVE MURKOWSKI made a motion to adopt Amendment 1. There being no objection, it was so ordered. Number 0175 REPRESENTATIVE HALCRO made a motion to move HB 398, Version G [1- LS1376\G, Ford, 3/3/00], as amended, out of committee with individual recommendations and attached fiscal note. There being no objection, CSHB 398(L&C) moved out of the House Labor and Commerce Standing Committee. CHAIRMAN ROKEBERG declared a brief at-ease. The meeting was reconvened at 5:09 p.m. HB 207-LICENSE HOME INSPECTORS Number 0222 CHAIRMAN ROKEBERG announced consideration of HOUSE BILL NO. 207, "An Act relating to the registration of persons who perform home inspections; and providing for an effective date." JOHN MANNINEN, Legislative Aide to Representative Norman Rokeberg, Alaska State Legislature, clarified that the draft of the bill under consideration was Version W. Number 0273 REPRESENTATIVE HARRIS moved to adopt the proposed CS for HB 207, Version W [1-LS0132\W, Lauterbach, 3/3/00], as the working document before the committee. There being no objection, it was so ordered. Number 0300 MR. MANNINEN compared Version W with the preceding Versions S and V: Page 1 retains the title and added "relating to home inspection requirements for residential loans purchased or approved by Alaska Housing Finance Corporation". Page 2, under Licensure, deleted line 23, "directly", from the S version and deleted .050(b)(3), "has not performed home inspections for more than two years without being licensed under this chapter." The intent of that was to allow an associate home inspector to be able to work performing home inspections beyond two years, whether or not the associate becomes a licensed home inspector. Page 3, line 1-3, under Qualifications, deleted "practical" under Section 08.57.060. CHAIRMAN ROKEBERG clarified that that was the change regarding the examination, requested by the department. MR. MANNINEN noted that also deleted, on line 8, was "in consultation with representatives of the construction industry". CHAIRMAN ROKEBERG pointed out that it now just says "passed the appropriate examinations." As Ms. Reardon had recommended, the change loosens it up. MR. MANNINEN continued: Page 4, line 6 [paragraph (4)], under Fees, it added, after "registration", "and renewal of registration". Under insurances in the W version, page 4, lines 25-31, deleted workers' compensation because it is redundant to the law now, and we deleted errors and omission (E&O) insurance. The question that arose at the last meeting was in a one-person shop; and legislative counsel said under AS 23.30.239, workers' compensation insurance is permissive for one-person shops, so that solved that problem without having it in the bill. CHAIRMAN ROKEBERG asked whether the words "public liability" were still included. MR. MANNINEN said that is correct. Number 0552 CHAIRMAN ROKEBERG said he would like to discuss the E&O insurance deletion. It was a policy call. He has been in negotiations with the engineering and architecture community for the last several weeks trying to placate their concerns. On the recommendation of Senator Loren Leman, a civil engineer, the requirement for home inspectors to have E&O insurance has been deleted. The rationale is this: There is not one licensure in Alaska that mandates any kind of E&O insurance. The Senator's concern was that to mandate it statutorily creates a problem. So it was the decision of the chairman and the bill sponsor to remove the entire clause. Number 0711 MR. MANNINEN continued: The S version's advertising prohibition was deleted in the W version, and that was based on Catherine Reardon's comments at the last meeting that the current construction contractor law already provides for that and it was redundant to have it in here. Under Section 08.57.210, line 3, Suspension of License, immediately before "suspended", added "if the required insurance ceases to be in effect". Residence language was moved from the Inspection Report on page 6 to the Definitions on page 8, lines 26 and 29, defining residence, single family, duplex, and so forth. Number 0791 On page 7, to Prohibited Acts were added "unless the disclosure is made (a) more than one year after the date of the report, and (b) to a subsequent client who requests a home inspection of the same premises." The intent of that is that home inspector would basically own the home inspection report after one year. In the previous versions, the home inspector would not be able to divulge that to anyone, and this would allow that home inspector to own the report and to resell it or reuse it for a subsequent client. CHAIRMAN ROKEBERG said he wasn't sure the draft had captured that exactly right. The idea is to have a one-year life of the report. It will be out of date after that. He suggested the need to work further on that. Number 0873 MR. MANNINEN mentioned that deleted was some language in AS 08.57. CHAIRMAN ROKEBERG clarified that on page 8, line 2 of Version W, it takes "civil" out of engineer, which allows any engineer to do that. Also deleted was E&O insurance and continuing education for the engineers. MR. MANNINEN further stated that language was deleted on page 10, lines 3-6. It basically grandfathers in the International Association of Electrical Inspectors' ICBO license until January 1, 2002, at which time they would have to become relicensed as home inspectors in order to continue to do home inspections. That allows them the same transition period as the others. CHAIRMAN ROKEBERG concluded, "What we tried to do was to accommodate some of the objections and make the whole simpler." Number 1037 REPRESENTATIVE CISSNA said it was her understanding in talking with representatives of the engineers and architects that there is some real concern about the use of the individual seal of the engineer or the architect by people who are in training. CHAIRMAN ROKEBERG explained that this mandates that the person in training cannot use the seal; only the person who has the authority to use the seal can use it. MR. MANNINEN explained that the person who is licensed and has the seal has the authority and the responsibility to use that seal appropriately. That person's name and reputation goes with it. There are engineers and architects in training who are working for them and do this work, and they [the licensed professionals] directly supervise the work. The seal is the guarantee for the homeowner, for the person buying the service, and is a consumer protection guarantee for the home buyer. Number 1129 CHAIRMAN ROKEBERG said this provision is basically a compromise. If the engineers and architects don't want to be licensed as home inspectors, then they have to use their seals, to put their seals on the line. REPRESENTATIVE CISSNA said the compromise is [between this and] paying fees and updating education and becoming a licensed home inspector. There are, apparently, architects and engineers who feel that the seal means something quite different from being a home inspector. That home [being inspected] is not the creation of the architect or engineer. CHAIRMAN ROKEBERG said it is the inspection that is their work. REPRESENTATIVE CISSNA said an inspection is different from having designed the home and built it, however. CHAIRMAN ROKEBERG acknowledged that some people object. The issue here is to [ensure that] the home inspection people who are not engineers will be licensed, will have continuing education, and will have a regulatory scheme overlooking them to protect the consumer. Right now, engineers and architects have their professional board of architects, engineers, land surveyor and landscape architects to oversee them. But they don't have any provisions to regulate home inspectors. An architect or engineer who does work that is not sealed basically has no liability. The seal puts one's professional competency and standing behind that work, which makes one liable under one's engineering certification; one could be disciplined and that board could come after the person. The idea is a level playing field. Engineers want to be able to do home inspections without being licensed home inspectors. They can't have it both ways. What the law is saying is that if one does not want to use one's seal, then one needs to become a licensed home inspector. Number 1326 REPRESENTATIVE CISSNA noted that the concern that was voiced to her was about those in training. CHAIRMAN ROKEBERG concurred that she might have an interesting point there. REPRESENTATIVE CISSNA said it would be better, in that case [of a person in training], to have the person go through the licensing, as every other home inspector does, because that person really isn't qualified to put on the seal. CHAIRMAN ROKEBERG explained that there is an attempt being made to accommodate some "peculiar things." There is a gentleman [a licensed engineer] here in Juneau; his son is an engineer but doesn't have his stamp. The son works [for the father] like an associate home inspector. The bill provides that an associate home inspector can be supervised by the licensed home inspector, and [this provision provides] the same thing for the associate engineer who works under the supervision of a licensed engineer whose stamp has to be applied [to the associate's work]. MR. MANNINEN said the associate engineer in training or associate architect doesn't use the employer's seal, but can become a licensed home inspector. That still wouldn't allow such people to use the seals of the registered architect or engineer. CHAIRMAN ROKEBERG restated that Representative Cissna may have a good point about the associates. He said he thought her question was how the architect or engineer can seal somebody else's work. REPRESENTATIVE CISSNA affirmed that, reiterating that apparently there is some real concern about that aspect. MR. MANNINEN noted that the concern that one of the engineers had expressed to him was a little different from that. It was regarding not having any time off if they were to required to seal; since they couldn't authorize anyone else to use their seals, that would be against the law, and that the associates wouldn't be able to do the work without their direct supervision. CHAIRMAN ROKEBERG countered: Does that mean doctors can't take a vacation and look after patients? Of course they can, because they make arrangements for other competent professionals to look after the patients. In this case, if an engineer wants to leave town, he gets someone else who has a stamp to supervise the associate's work. REPRESENTATIVE CISSNA said if an engineer or architect left town, she would not want somebody in training to take over. However, she could see that it would be valuable experience for an assistant who was working toward engineering licensure to inspect homes as a way to really get the grounding. CHAIRMAN ROKEBERG explained that the engineer/architect has to seal the plan under HB 207 because he/she is responsible and liable for the activities; the same is done with building designs. The engineer/architect doesn't have to do the actual design; one can put one's stamp on it if the person reviews it and approves it, and he or she stands responsible for it. That's what the issue is here. If engineers and architects insist on being able to operate because they are engineers and architects, they have to put their stamp on it, because that's what makes them architects and engineers. REPRESENTATIVE CISSNA asked about their assistants. CHAIRMAN ROKEBERG said it is typical for assistants to draw the plans and the architect to stamp the drawing. REPRESENTATIVE MURKOWSKI cited another example: The first-year attorney drafts the pleadings and the boss signs them, and it has the boss's name in it because there is insurance through the firm, and, ultimately, the senior partners are responsible. Number 1674 CHAIRMAN ROKEBERG again said he appreciates what Representative Cissna is saying. There is the responsibility there, so they [architects and engineers] are stamping somebody else's work. But if they want to operate like that with employees and associates, somebody has to be responsible for them or they have to be licensed. Consumer protection is the objective here. [CHAIRMAN ROKEBERG asked anyone remained online at the Legislative Information Office office in Anchorage. That office replied that everyone had left there.] CHAIRMAN ROKEBERG said he wouldn't mind moving the bill, and asked Representative Cissna how she felt about it. REPRESENTATIVE CISSNA said she did not feel comfortable with moving it. There is some sense in having licensure and training in this other field [home inspection], and it seems like a different field than the engineering and the design of homes. CHAIRMAN ROKEBERG concurred that they are different fields, and said that is one of the issues here. The building inspectors don't want to exempt [from licensure] the architects and engineers. REPRESENTATIVE CISSNA said she wants to look into the point of contention further. In response to Chairman Rokeberg, she indicated she could do that by Monday afternoon. CHAIRMAN ROKEBERG appointed her "a subcommittee of one to check it out." [HB 207 was held over.] ADJOURNMENT There being no further business before the committee, the House Labor and Commerce Standing Committee meeting was adjourned at 5:40 p.m.