2003 Business

Banking/insurance issues

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January 13, 2003
January 15, 2003
January 21, 2003
January 21, 2003 – Subcommittee
January 23, 2003
January 27, 2003
January 27, 2003 – Subcommittee
January 29, 2003

February 3, 2003
February 5, 2003
February 11, 2003
February 13, 2003 – Subcommittee
February 17, 2003
February 17, 2003 – Subcommittee
February 19, 2003
February 25, 2003
February 27, 2003

March 5, 2003
March 7, 2003
March 11, 2003
March 13, 2003
March 17, 2003
March 19, 2003
March 25, 2003
March 27, 2003

April 1, 2003
April 15, 2003

DATE: January 13, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/EXCUSED: Rep. Kellogg
GUESTS: Rayola Jacobsen, Roger Hales, Donna Jones, John Mackey
Meeting was called to order at 1:30 P.M. by Chairman Black, who welcomed
new and returning committee members. Chairman Black gave a brief
orientation of the committee’s functioning and listed the state agencies and
departments which have the most frequent business before the committee.
He also suggested that, if a committee member is asked to sponsor a bill, he
or she should attempt to work out any differences between interested parties
so that the bill will be handled more smoothly when it is considered by the
whole committee.



Chairman Black explained that it is his intent to have the agencies with
pending, temporary, and fee rules present a brief overview of those rules to
the entire committee, and then the rules will be submitted to subcommittees
for further study and recommendation.



Chairman Black also announced that he had arranged times for visits to
most of the state agencies that appear before the Business Committee.
These visits are scheduled on regular meeting days; all members are
welcome to participate; new members are particularly encouraged to do so.
Chairman Black explained that such visits are helpful because they
familiarize the legislators with agencies and enable them to better meet
constituents’ needs in the future.

Docket No.

24-0401-0201

Rayola Jacobsen, Director of the Occupational License Board, appeared
before the committee to present Docket No. 24-0401-0201. This rule change
will clarify high school education equivalency; clarify working floor space in
an establishment; establish that no original license fee is required for
relocation of contiguous shop within the same primary; establish
requirements for an out-of-business shop; establish requirements for
practical and written reexamination; delete the requirement that models for
nail technology exam not have artificial nails; and establish requirements for
instructor reexamination. Ms. Jacobsen stated that the Board had requested
public comment on proposed rules changes through their web page, in
Board meetings, and through advertisements in the state’s major
newspapers. They have received no comment, either pro or con, on the
proposed changes.



Rep. Tilman questioned Ms. Jacobsen about the equivalency exam portion
of the rules, asking whether the “Department of Education” meant the U.S.
Department of Education or the State of Idaho Department of Education.
Ms. Jacobsen responded that her licensing board, in an effort to establish a
more uniform measure of achievement, would use the State Board of
Education’s equivalency tests. Ms. Jacobsen agreed to provide Rep. Tilman
with a list of the tests offered by the State Board of Education. It was
suggested that this matter could be pursued in greater detail in the
subcommittee assigned to study the Board of Cosmetology Rules.



Rep. Gagner asked whether it was realistic to expect that an out-of-business
shop would notify the Cosmetology Board, and suggested that the Board
would know a firm was out of business if it didn’t renew its license. Ms.
Jacobsen responded that this was not always the case, and that this rules
change will give the Board a better gauge of who is in business and where
they are located.

Docket No.

24-1801-0201

Ms. Jacobsen then presented a brief overview of Docket No. 24-1801-0201,
which updates current rules for the Real Estate Appraiser Board to include
the most current publication date of 2002. This is a routine change that
needs to be implemented every year.
Chairman Black thanked Ms. Jacobsen for her presentations, and noted that
a more thorough review of the Rules will take place in subcommittees of the
Business Committee.
ADJOURN: There being no further business to come before the committee, the meeting
was adjourned at 2:00 p.m.






DATE: January 15, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

None
GUESTS: Mary Hartung, Shad Priest, Jim Genetti, Mark Larson, Alex LaBeau, Kim
Coster
Meeting was called to order at 1:43 P.M. by Chairman Black. Rep. Deal
made a motion to approve the minutes of the previous meeting as written;
motion passed on a voice vote.



Chairman Black explained that today’s meeting will include an overview of
Rules changes from the Department of Insurance and the Real Estate
Commission, as well as appointment of subcommittees to study the Rules
in greater detail and recommend action to the full committee.

Kimberly Coster, an attorney representing the Real Estate Commission,
appeared before the committee to explain the Commission’s pending, fee,
and temporary rules. Ms. Coster explained that all these rules were initially
adopted as temporary rules and are currently in effect. The temporary rules
were allowed either because they were necessary to implement changes put
in place by the Legislature, or because they conferred some benefit on the
licensees. Ms. Coster also stated that the Commission worked with the
Idaho Association of Realtors in drafting proposed changes, and that drafts
were provided for review and comment. Hearings were held, but no
additional public comment was received by the Commission. In response to
Chairman Black’s request, Ms. Coster also explained the process of
negotiated rulemaking.
Docket No.

33-0101-0201

Ms. Coster presented Docket No. 33-0101-0201, which deletes definitions
that were moved to statute on July 1, 2002, and changes the requirement
regarding display of license certificates in branch offices.
Docket No.

33-0102-0201

Ms. Coster then presented Docket No. 33-0102-0201, which is an overhaul
of the chapter dealing with the Commission’s handling of contested cases.
This change was drafted in collaboration with the Idaho Association of
Realtors. In response to questions raised by Legislative Services, the
Commission deleted Sections 153 and 456.
Docket No.

33-0101-0202

Ms. Coster presented Docket No. 33-0101-0202, which eliminates the $10
administrative fee for handling the Errors and Omissions Group Insurance
applications of licensees; since this function is handled directly by insurance
companies, the fee is no longer necessary. Additionally, this change
eliminates the requirement that licensees file their “certificate of coverage”
with the Commission; instead, they simply provide self-certification to the
Commission, subject to audit.
Docket No.

33-0101-0301

Ms. Coster presented Docket No. 33-0101-0301, which allows licensees to
self-certify that they have met continuing education requirements in order to
continue being licensed, rather than submitting a set of documents to the
Commission. This is a benefit to both the Commission and the licensee.
The Rules also list the approved CE topics, which had previously been listed
only in Policy.
In response to questions from committee members regarding certain aspects
of the appeals process, Ms. Coster explained that all cases have been
settled by stipulation, and that the Commission receives “sanitized” files
which do not contain identifying information. Since no two cases are exactly
alike, the Commission takes into account factors such as how long a
licensee has been in business, whether there are any victims harmed by the
action, and whether restitution should be made. She also stated that
Commission members can recuse themselves if they have a personal bias
in the case or if they know any of the parties involved.
Chairman Black thanked Ms. Coster for appearing before the committee, and
advised the committee that they could explore any further questions in the
context of subcommittee meetings, which will study these rules in greater
depth.
Shad Priest, Department of Insurance, appeared before the committee to
present an overview of the Department’s Rules changes. He first introduced
Mary Hartung, Director of the Department, Jim Genetti, and Mark Larson.
Mr. Priest explained that most of the Department’s changes in Rules were
required due to changes in state or federal law.
Docket No.

18-0119-0201

Mr. Priest presented Docket No. 18-0119-0201, which is a temporary rule
implementing a portion of Idaho Code relating to the use of credit rating or
credit history by insurers in determining rating and coverage of insurance.
The rule limits how insurers may use an insured’s credit history as a basis
for nonrenewing, canceling, or declining to issue certain types of policies, or
charging a higher premium rate than would otherwise be charged. Mr. Priest
said that the Department has received numerous comments and that,
although not all parties are pleased with the changes, the Department thinks
they are fair and equitable.
Docket No.

18-0117-0201

Mr. Priest then presented Docket No. 18-0117-0201, which deals with
requirements for Surplus Lines brokers. The rule deletes some old wording
and implements other changes in accord with the Model Producer Licensing
Act recently adopted. The Department consulted with the Surplus Lines
Association in drafting these Rules, and there were no objections to them.
Docket No.

18-0118-0201

Mr. Priest proceeded to Docket No. 18-0118-0201, which will allow the
director to approve a class or classes of business for export through the
surplus lines market without conducting a formal hearing, by issuing an order
or rule. The Department did not receive any negative comments on this
change.
Docket No.

18-0132-0201

Mr. Priest explained that Docket No. 18-0132-0201 is a complete repeal of
the rules dealing with qualifications of Licensed Insurance Consultants, since
it is unnecessary. Title 41, chapter 10, Idaho Code, was rewritten in its
entirety and replaced effective July 1, 2001. All references to “Consultants”
have been removed from the insurance code and the licensing category of
“Consultant” no longer exists in the present statute. Mr. Priest also reported
that the Department had received no negative comments with regard to this
change.
Docket No.

18-0142-0201

Mr. Priest presented Docket No. 18-0142-0201, which is also being
repealed in its entirety because it is unnecessary. Fees from this rule were
combined and incorporated within IDAPA 18.01.44, effective July 1, 2001.
Docket No.

18-0143-0201

Mr. Priest presented Docket No. 18-0142-0201, which is necessary to
conform to a statutory change from using the Uniform Fire Code to the
International Fire Code. Again, there is no opposition to this change.
Docket No.

18-0148-0201

Mr. Priest then presented Docket No. 18-0148-0201, which deals with
privacy of consumer financial information. This change is being made to
comply with federal law, to require an annual notice of consumer’s rights as
well as an “opt-out” feature for sharing financial information. There is no
opposition to this change.
Docket No.

18-0149-0201

Mr. Priest explained that Docket No. 18-0149-0201 deals with fire
protection sprinkler contractors, and is a change made necessary by the
statutory change from using the Uniform Fire Code to using the International
Fire Code; it also corrects a technical reference. There is no opposition to
this change.
Docket No.

18-0150-0201

Docket No. 18-0150-0201 is a proposed rule that adopts by reference the
2000 International Fire Code. The Department received no negative
comments on this change. In response to a question from the committee,
Mr. Priest noted that, at the top of page 156, part of the title should read
“Adoption of 2000 International Fire Code” rather than “Adoption of 1997
Uniform Fire Code.”
Docket No.

18-0152-0201

Docket No. 18-0152-0201 deals with rules governing disclosure
requirements for insurance producers when charging fees. It specifies that
the producer must provide a written statement to the consumer that will
describe the services to be performed and the fees that will be charged for
those services. In response to questions from the committee, Mr. Priest
noted that the disclosure form included on page 166 is a suggested or
sample format, not a mandated form. He also explained that this
requirement applies only to retail producers, not to broker/agent
transactions.
Docket No.

18-0153-0201

Mr. Priest presented Docket No. 18-0153-0201, which deals with continuing
education requirements. Program requirements have been rewritten to meet
the reciprocity requirements set forth under continuing education
agreements.
Docket No.

18-0154-0201

Mr. Priest explained that Docket No. 18-0155-0201 brings the Idaho
Medicare Supplement Rule into compliance with the new federal standards



created by Benefits Improvement and Protection Act. There has been no
opposition to this rules change.

Docket No.

18-0155-0201

Mr. Priest then presented Docket No. 18-0155-0201, which deals with fire
safety standards for day care facilities. The rule is being changed to
conform to a statutory change from using the Uniform Fire Code to the
International Fire Code. The Department has not received any negative
comments concerning this change.
Docket No.

18-0162-201

Docket No. 18-0162-0201 makes changes necessary to conform to the
changes in the NAIC model audit rule adopted in December 2001. The rule
is changed so an audited statement from an auditor who is indemnified from
liability for failure to adhere to certain standards is not acceptable.
Docket No.

18-0165-0201

Mr. Priest explained that Docket No. 18-0165-0201 deals with further rules
applicable to Surplus Lines Brokers, and is partly the result of the Model
Producer Licensing Act. The Department was in consultation with the
Surplus Lines Association during the drafting of this rule, and there has been
no opposition expressed to the Department.
Docket No.

18-0178-0201

Docket No. 18-0178-0201, dealing with Mutual Insurance Holding Company
rules, changes the filing date for a mutual insurance company’s annual
financial statement, making it coincide with the filing date of the affiliated
insurer’s audited financial statement. There is no opposition to this proposed
change.
Chairman Black thanked all personnel from the Department of Insurance for
their presence at the meeting, and for their willingness to help the committee
understand the rulemaking process.



Chairman Black then asked Vice Chairman Gagner to preside over the
meeting in order to explain the committee’s approach to dealing with Rules
reviews. Rep. Gagner passed out a copy of guidelines handed out at the
Administrative Rules Review Workshop, and suggested that members
familiarize themselves with the process as contained in the handout. He
also proposed a January 31 deadline for completing the work on Rules.
Rep. Gagner then assigned the following subcommittees:



Henbest Subcommittee: Rep. Henbest, Chairman; Reps. Eberle, Douglas.
This subcommittee will study Rules from Occupational Licensing, Board of
Accountancy, Engineers & Land Surveyors, and Real Estate Commission.



Collins Subcommittee: Rep. Collins, Chairman; Reps. Block, Rydalch,
Deal. This subcommittee will study Rules from the Department of Insurance.



Smith Subcommittee: Rep. Smith (30), Chairman; Reps. Cannon,
Snodgrass, Gagner. This subcommittee will study Rules from the Division
of Building Safety.



Chairman Black recognized Karen Gustafson, Office of Administrative
Rules, to respond to questions and to explain the options open to
committees with regard to acceptance or rejection of Rules. Ms. Gustafson
stated that a committee may reject an entire docket or any part of a docket,
but may not revise the portions to which they object. Pending Rules will
automatically go into effect if they are not rejected; Pending Fee Rules and
Temporary Rules will not go into effect without affirmative action by the
Legislature.



Chairman Black advised the subcommittees that they can take public
comment in their meetings on Rules. He also recommended that they work
through the Business Committee secretary to coordinate subcommittee
meeting dates, times, and rooms, in order to assure that someone will be
available to take minutes and provide an official record of the meetings.
Chairman Black also noted that, if a particular Rule does not seem to be
controversial, it may not be necessary to have those agency personnel
appear at the subcommittee’s meeting.



Chairman Black reminded the committee that any interested members were
invited to visit the offices of the Board of Accountancy and the Bureau of
Occupational Licenses immediately following adjournment, to meet their staff
and take a brief tour of their operations.

ADJOURN: There being no further business to come before the committee, the meeting
was adjourned at 3:05 p.m.






DATE: January 21, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

Rep. Eberle
GUESTS: David Curtis, John E. Mackey, Barbara Porter, Melissa Nelson, David
Couch, Woody Richards
Meeting was called to order at 1:34 P.M. by Chairman Black. Rep. Meyer
made a motion to approve the minutes of the January 15 meeting; motion
carried on voice vote.
Barbara Porter, Executive Director of the Idaho State Board of
Accountancy, appeared before the committee to present an overview of the
three rule dockets issued by the Idaho Board of Accountancy. By way of
introduction, Ms. Porter explained that last year’s Legislature passed into law
House Bill 485, which updated the Idaho Accountancy Act to reflect national
model language. This legislation was favorably supported by the Board of
Accountancy because the modifications contained therein would provide
better protection of the public interest.
Docket No.

01-0101-0201

Docket No.

01-0101-0202

Ms. Porter explained that Docket No. 01-0101-0201 repeals the Board of
Accountancy’s old rules. Docket No. 01-0101-0202, which was initially
located in the pending rules, was relocated to the fee rules at the
recommendation of the Office of Administrative Rules. This change reflects
the fact that the new rules contain fees, most of which are unchanged, and
therefore more appropriately belong in the Pending Fee Rules.



Rep. Henbest asked why the fee for a licensee in an inactive/retired status
is $100. Ms. Porter responded that this is a lower amount than the $120
charged for an active accountant, and it allows persons in industry or
academia who are not providing accounting services to maintain a license
without having to meet continuing education requirements. The license fee
is lower because the cost to the Board to administer these licenses is lower.

Rep. Gagner asked why the license fee increases by $50 each succeeding
month, and wondered why a person with an expired license would not simply
apply for reinstatement, which may cost less. Ms. Porter replied that if one
applies for reinstatement, he or she would have to complete 80 hours of
continuing education, which is double the usual amount for renewing a
license.



Ms. Porter continued to explain the changes involved in the new rules. She
stated that the fees associated with this docket are all the same as
previously assessed, with three exceptions: First, examination fees have
increased by approximately $14 to cover the higher charges from the
American Institute of CPAs. The other two fee changes are tied to new
license categories: Inactive or Retired, and Practice Privileges for licensees
residing in other states.

Docket No.

01-0101-0203

Ms. Porter noted that the Board has not changed its fees since the early
1990s. In analyzing its fee structure, the Board found that most fees and
fines could be maintained at their current level, with four exceptions, which
are addressed in Docket No. 01-0101-0203: 1) the late license renewal fine,
previously at $50, is being raised to $100, to better cover actual costs and
to correspond with other late filing fines. 2) During drafting of HB 485, it was
discovered that the fee structure adopted by the Board was not the rule that
was implemented by the Office of Administrative Rules concerning Firm
Registration fees. The current rule sets the fee at $100 per firm. The
proposed rule would charge $25 for a firm with one licensee, and an
additional $5 per licensee within the firm up to a maximum of $200 per firm.
3) Two administrative processes that provide services to candidates,
applicants or licensees are not generating the revenue to cover their costs.
Wall certificates cost about $20 each to generate, but the charge for them
is only $10. The proposed rule will raise this fee to $20. Interstate exchange
of information forms cost about $10 each to complete, but the Board
currently does not charge any fee for these. The proposed rule authorizes
a $10 charge to complete the form, which will allow the actual costs to be
recovered.



Rep. Rydalch asked Ms. Porter whether these fee changes had been
advertised to the public. Ms. Porter stated that they had been included in
mailings to individuals, and that there had been no negative comments
received by the Board of Accountancy.

Docket No.

10-0101-0201

Dave Curtis, Executive Director of the Idaho Board of Registration of
Professional Engineers and Professional Land Surveyors, appeared before
the committee to present Docket No. 10-0101-0201. Mr. Curtis explained
that in 1993, the Board’s office hours were set at 8:00 a.m. to noon and 1:00
to 5:00 p.m. However, during 2001, when Idaho Power was warning of
possible brown-out conditions in late afternoon, the Board approved hours
of 7:00-4:00, which would avoid possible down time in the late afternoon.
Mr. Curtis stated that these office hours have worked well since 2001, with
the additional benefit of allowing the office staff to avoid traffic congestion in
the morning and afternoon. Docket No. 10-0101-0201 will fix the new office
hours in rule. There was some concern that the earlier hours might
negatively impact northern Idaho members; however, after publishing the
new rule in their news bulletin two times, and after over a year of the new
hours being in place, Mr. Curtis reported that the Board had received no
negative comments and no messages left on their telephone about the hours
being inconvenient for northern Idaho callers. The Board does maintain a
fairly substantial Internet presence, and this offers an efficient means by
which licensees can communicate with the Board’s offices.



There are other minor changes effected by this rule docket, including
lowering the retirement age from 65 to 60. This extends retired status to
younger engineers or land surveyors who may want to continue receiving
mailings and continue their affiliation with the Board. The registration fee is
$5 for retired status, and those within this group are not allowed to practice.
Finally, this docket specifies that the Board may post disciplinary orders on
the Internet, for a period of up to ten (10) years. Responding to questions
from committee members, Mr. Curtis said that the 10-year time frame seems
fair, and that the Internet publication is in addition to notifications printed in
other publications.

Docket No.

01-0102-0201

Mr. Curtis explained that Docket No. 01-0102-0201 makes a change in
terminology that was suggested by the Legislative Council; the term
“infraction” is replaced by the term “violation,” which is more accurate. The
current rules address rule infractions, but not violations of Idaho Code. This
rule change addresses violations of both rules and statutes.
H 53 Mr. Curtis then presented H 53, which deals with examination requirements
for engineers and land surveyors. Currently, if candidates have an
engineering or surveying degree, they need four years of experience in order
to be licensed. If they possess a related science degree, and demonstrate
sufficient knowledge and skill equivalent to engineers or land surveyors, their
experience requirement is twice as long. This seemed to represent an
unnecessary inequity, and H 53 will equalize the experience component for
both groups. H 53 will also clarify that the evaluation of an applicant’s
credentials is the responsibility of the Board, and that equivalent credentials
can be accepted by the Board.



Rep. Henbest noted that the language on page 5, line 42, sounds arbitrary.
Mr. Curtis responded that the Board will request a copy of the actual
examination used by Canada, for instance, in order to judge the level of
competency required. If the examination is not shared, the Board will not
grant a license. Rep. Tilman asked whether this language is similar to that
used in other states, and Mr. Curtis responded that it is similar to the model
law.



David Couch, Legislative Chairman of the Idaho Society of Professional
Land Surveyors, appeared before the committee to testify in favor of H 53.

Rep. Henbest asked Mr. Curtis whether the Board would agree to remove
the phrase, “in the opinion of the board” on page 5, line 42. Mr. Curtis
replied that he would rather not send the bill to the amending order on the
floor of the House, and asked whether the phrase caused a problem with a
majority of the committee members. Rep. Tilman stated that he had no
problem with the language; Rep. Gagner concurred. No other objection was
voiced by committee members.
MOTION Rep. Meyer made a motion to send H 53 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Henbest will be the
floor sponsor for this bill.
H 31 Barbara Porter, Executive Director of the Idaho State Board of
Accountancy, appeared before the committee to present H 31, which
contains technical corrections to last year’s H 485. The changes call for
consistent use of the phrase “issuing compilation reports” instead of the
obsolete references to “compilation services.” Other changes include using
the word “initial” instead of “original” when referring to a first-time licensee,
using the word “active” instead of “valid” regarding a license, and defining
“re-entry” of inactive or retired licensees into active practice. One substantial
change in this bill involves allowing licenses that are not renewed within 30
days of the end of the renewal period to go into lapsed status. This will
avoid having the Board hold a hearing to suspend the licenses; this concurs
with the manner in which other regulatory boards in Idaho treat licensees
who fail to renew.
MOTION Rep. Henbest made a motion to send H 31 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Deal will be the floor
sponsor for this bill.
ADJOURN There being no further business to come before the committee, the meeting
was adjourned at 2:35 p.m.






DATE: January 21, 2003
TIME: 3:25 P.M.
PLACE: Department of Insurance Conference Room 3A
MEMBERS: Chairman Collins, Reps. Deal, Rydalch, Douglas
ABSENT/

EXCUSED:

None
GUESTS: Paul Jackson, Jim Trent, Diane Golder Keys, John E. Mackey
Chairman Collins called the meeting to order at 3:25 p.m. Mr. Shad
Priest, Department of Insurance, appeared before the committee to
explain the Department’s pending, temporary, and fee rules, and to
answer questions from the subcommittee.
Docket No.

18-0119-0201

Mr. Priest presented Docket No. 18-0119-0201, which is a temporary rule
implementing a portion of Idaho Code relating to the use of credit rating or
credit history by insurers in determining rating and coverage of insurance, a
practice commonly known as “credit scoring.” The rule limits how insurers
may use an insured’s credit history as a basis for nonrenewing, canceling,
or declining to issue certain types of policies, or charging a higher premium
rate than would otherwise be charged. Mr. Priest said that the Department
has received numerous comments and that, although not all parties are
pleased with the changes, the Department thinks they are fair and equitable.



Rep. Collins asked Mr. Priest about the method used for compliance to this
rule, and whether the Department would have to wait for a complaint against
a company before any action could be taken. Mr. Priest explained that there
were two options available: 1) The Department could require that every
company file a copy of its methods of credit scoring for Department review,
or 2) The Department could put the burden on the companies to make sure
that their use of credit ratings is within the parameters outlined by the new
rule, subject to penalties. Mr. Priest said that the first option is not a
workable solution because the Department does not have the staff to review
policies from every insurance company.

MOTION Rep. Deal made a motion that the subcommittee recommend approval of
Docket No. 18-0119-0201. He explained that this matter had been studied
thoroughly in the last legislative session, that the Department had held
hearings and sought input from all parties, and that insurance companies
had had ample time to share their views of the pending legislation. Rep.
Deal also noted that the new law had been in effect only since January 1,
2003, and that it would take some time before the benefits to the public could
be measured. Motion carried on voice vote.
Docket No.

18-0117-0201

Mr. Priest then presented Docket No. 18-0117-0201, which deals with
requirements for Surplus Lines brokers. The rule deletes some old wording,
such as the term “stamping office,” and implements other changes in accord
with the Model Producer Licensing Act recently adopted. The Department
consulted with the Surplus Lines Association in drafting these changes, and
there were no objections to them.
MOTION Rep. Deal made a motion that the subcommittee recommend approval of
Docket No. 18-0117-0201. Motion carried on voice vote.
Docket No.

18-0118-0201

Mr. Priest proceeded to Docket No. 18-0118-0201, which will allow the
director to approve a class or classes of business for export through the
surplus lines market without conducting a formal hearing, by issuing an order
or rule. There are also other minor technical changes in the rules. The
Department did not receive any negative comments on this change.



Rep. Deal asked if this replaced the “white list;” Mr. Priest answered that it
does not, explaining that the “white list” is a list of insurers authorized to offer
surplus lines in the state. Rep. Rydalch asked Mr. Priest to give an example
of a situation in which this rule would come into play. Mr. Priest cited the
example of race car insurance, noting that if no Idaho companies were
offering such insurance coverage, this could be an eligible line for export,
meaning that the race car owner could go directly to a surplus lines broker
without checking with three Idaho companies first.

MOTION Rep. Rydalch made a motion that the subcommittee recommend approval
of Docket No. 18-0118-0201. Motion carried on voice vote.
Docket No.

18-0132-0201

Mr. Priest explained that Docket No. 18-0132-0201 is a complete repeal of
the rules dealing with qualifications of Licensed Insurance Consultants, since
it is unnecessary. Title 41, chapter 10, Idaho Code, was rewritten in its
entirety and replaced effective July 1, 2001. All references to “Consultants”
have been removed from the insurance code and the licensing category of
“Consultant” no longer exists in the present statute. Mr. Priest also reported
that the Department had received no negative comments with regard to this
change.
MOTION Rep. Deal made a motion that the subcommittee recommend approval of
Docket No. 18-0132-0201. Motion carried on voice vote.
Docket No.

18-0142-0201

Mr. Priest presented Docket No. 18-0142-0201, which is also being
repealed in its entirety because it is unnecessary and redundant. Fees from
this rule were combined and incorporated within IDAPA 18.01.44, effective
July 1, 2001.
MOTION Rep. Deal made a motion that the subcommittee recommend approval of
Docket No. 18-0142-0201. Motion carried on voice vote.
Docket No.

18-0143-0201

Mr. Priest presented Docket No. 18-0142-0201, which is necessary to
conform to a statutory change from using the Uniform Fire Code to the
International Fire Code. Again, there is no opposition to this change.



MOTION Rep. Deal made a motion that the subcommittee recommend approval of
Docket No. 18-0143-0201. Motion carried on voice vote.
Docket No.

18-0148-0201

Mr. Priest then presented Docket No. 18-0148-0201, which deals with
privacy of consumer financial information and adopts the minimum required
privacy standards. This change is being made to comply with federal law,
to require an annual notice of consumer’s rights as well as an “opt-out”
feature for sharing financial information. There is no opposition to this
change.



Rep. Deal asked Mr. Priest whether it might be necessary or advisable to
make it easier for an insured to find out why his rate has increased so
substantially. Mr. Priest answered that the NAIC Rule did not deal with this
question, and that it would have to be done legislatively.

MOTION Rep. Deal made a motion that the subcommittee recommend approval of
Docket No. 18-0148-0201. Motion carried on voice vote.
Docket No.

18-0149-0201

Mr. Priest explained that Docket No. 18-0149-0201 deals with fire
protection sprinkler contractors, and is a change made necessary by the
statutory change from using the Uniform Fire Code to using the International
Fire Code; it also corrects a technical reference. There is no opposition to
this change.
MOTION Rep. Rydalch made a motion that the subcommittee recommend approval
of Docket No. 18-0149-0201. Motion carried on voice vote.
Docket No.

18-0150-0201

Docket No. 18-0150-0201 is a proposed rule that adopts by reference the
2000 International Fire Code. The Department received no negative
comments on this change.
MOTION Rep. Douglas made a motion that the subcommittee recommend approval
of Docket No. 18-0150-0201. Motion carried on voice vote.
Docket No.

18-0152-0201

Docket No. 18-0152-0201 deals with rules governing disclosure
requirements for insurance producers when charging fees. It specifies that
the producer must provide a written statement to the consumer that will
describe the services to be performed and the fees that will be charged for
those services.



Rep. Collins asked Mr. Priest to point out where it was required that the
disclosure take place up front, before the transaction. Mr. Priest pointed out
that on page 165, the disclosure is to take place “before charging a fee to a
consumer.” Rep. Deal asked whether this disclosure requirement applied
to transactions between brokers; in response, Mr. Priest noted that this
requirement applies only to retail producers, not to wholesale transactions.

MOTION Rep. Deal made a motion that the subcommittee recommend approval of
Docket No. 18-0152-0201. Motion carried on voice vote.
Docket No.

18-0153-0201

Mr. Priest presented Docket No. 18-0153-0201, which deals with continuing
education requirements. Program requirements have been rewritten to
comply with the Model Act, and to meet the reciprocity requirements set forth
under continuing education agreements. There has been no opposition to
this rule change.

MOTION Rep. Deal made a motion that the subcommittee recommend approval of
Docket No. 18-0153-0201. Motion carried on voice vote.
Docket No.

18-0154-0201

Mr. Priest explained that Docket No. 18-0155-0201 brings the Idaho
Medicare Supplement Rule into compliance with the new federal standards

created by Benefits Improvement and Protection Act. There has been no
opposition to this rule change. In response to a question from Rep. Collins,
Mr. Priest said that he was not sure what would happen if this new rule was
not adopted.



Rep. Rydalch asked Mr. Priest is there was any way to prevent a consumer
from paying premiums on two separate policies for Medicare supplement
insurance. Mr. Priest suggested that a consumer in this state could contact
the Department’s Senior Health Insurance Benefits Advisors (SHIBA)
program. He also said that it is not uncommon for a consumer to end up
with overlapping charges. Rep. Collins noted that, although an agent is
prohibited from duplicating coverage, there is nothing to prevent a consumer
from keeping both policies in place even though an agent has signed a
replacement form during the second transaction. In response to a question
from Rep. Deal, Mr. Priest stated that all the changes in this rule benefit
policyholders.

MOTION Rep. Deal made a motion that the subcommittee recommend approval of
Docket No. 18-0154-0201. Motion carried on voice vote.
Docket No.

18-0155-0201

Mr. Priest then presented Docket No. 18-0155-0201, which deals with fire
safety standards for day care facilities. The rule is being changed to
conform to a statutory change from using the Uniform Fire Code to the
International Fire Code. The Department has not received any negative
comments concerning this change.
MOTION Rep. Rydalch made a motion that the subcommittee recommend approval
of Docket No. 18-0155-0201. Motion carried on voice vote.
Docket No.

18-0162-201

Docket No. 18-0162-0201 makes changes necessary to conform to the
changes in the NAIC model audit rule adopted in December 2001. The rule
is changed so an audited statement from an auditor who is indemnified from
liability for failure to adhere to certain standards is not acceptable. It also will
allow mediation to settle disputes.
MOTION Rep. Deal made a motion that the subcommittee recommend approval of
Docket No. 18-0162-0201. Motion carried on voice vote.
Docket No.

18-0165-0201

Mr. Priest explained that Docket No. 18-0165-0201 deals with further rules
applicable to Surplus Lines Brokers, and is partly the result of the Model
Producer Licensing Act. Obsolete language is also deleted. The Department
consulted with the Surplus Lines Association during the drafting of this rule,
and there has been no opposition expressed to the Department.
MOTION Rep. Deal made a motion that the subcommittee recommend approval of
Docket No. 18-0165-0201. Motion carried on voice vote.
Docket No.

18-0178-0201

Docket No. 18-0178-0201, dealing with Mutual Insurance Holding Company
rules, changes the filing date for a mutual insurance company’s annual
financial statement, making it coincide with the filing date of the affiliated
insurer’s audited financial statement. This rule change will make the filing
dates less confusing for all parties involved. There is no opposition to this
proposed change.
MOTION Rep. Rydalch made a motion that the subcommittee recommend approval
of Docket No. 18-0178-0201. Motion carried on voice vote.
ADJOURN There being no further business to come before the committee, the meeting
was adjourned at 4:20 p.m.






DATE: January 23, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

Chairman Black, Rep. Deal, Rep. Henbest
GUESTS: Ted Hogander, Bob Rawlings, Rayola Jacobsen, Dave Munroe, Jack
Rayne, Gary Malmen, Cherie Simpson, Bob Corbell
Meeting was called to order at 1:34 P.M. by Vice Chairman Gagner, who
explained that, after consideration of H 33, the committee would hear a brief
overview of the rules from the Division of Building Safety. Following the full
committee meeting, the Smith subcommittee will meet to continue with a
further study of the Building Safety rules, and Rep. Gagner asked agency
representatives from that division to remain after the regular meeting to
answer any questions that might arise from the subcommittee.
H 33 Rayola Jacobsen, Director of the Bureau of Occupational Licenses,
appeared before the committee to present H 33. Before addressing the bill,
Ms. Jacobsen presented a brief overview of her agency, detailing the types
of occupations covered by the Bureau of Occupational Licenses.



Ms. Jacobsen stated that the purpose of this bill is to revise the renewal
dates for occupational licenses, switching from two times a year, in January
and June, to correspond to each license holder’s birth date or to the date of
initial operation in the case of a business. This new renewal dating system
will spread the work load throughout the year and will save staff time and
money.



Rep. Gagner asked whether the Bureau would be able to reduce their staff;
Ms. Jacobsen replied that they would not, but that the time savings would
result in better service from their office. Rep. Meyer noted that currently,
athletes’ agents are required to register but are not required to obtain a
license; Ms. Jacobsen replied that her bureau will be bringing forth a bill to
require such licensing in the near future. Rep. Tilman asked whether the
Bureau anticipated any negative effects from the switch, and Ms. Jacobsen
replied that they expected the first year following the change to produce
more questions and dialogue with licensees until they understand the new
system. She also noted that the fees for the first year will be prorated,
depending on the person’s date of birth during the calendar year.



In response to further questions from the committee, Ms. Jacobsen stated
that the effective date for this change is July 1, 2003. There is no test
involved in license renewal; rather, the applicant simply pays a licensing fee
each year. The Board has considered multi-year licensing, but has not
agreed to implement it because there is some opposition to doing this.
Renewals can be registered online, and in the past year, over 700 licensees
took advantage of this method.

MOTION Rep. Cannon made a motion to send H 33 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Cannon will be the
floor sponsor for this bill.
Rep. Gagner then introduced Dave Munroe to the committee. Mr. Munroe
is Administrator of the Division of Building Safety. Mr. Munroe testified that
there had been no opposition from the industry with regard to the rules
changes in his division; Rep. Gagner noted that no one had signed up to
testify in opposition to the rules, and thus this rules review could be brief,
since a subcommittee will be studying the rules in more depth immediately
after the Business Committee adjourns today.
Docket No.

07-0103-0201

Gary Malmen, Electrical Bureau Chief, appeared before the committee to
present Docket No. 07-0103-0201, which coordinates licensing
requirements with Idaho Code. The change deletes the current requirement
for apprentices to wait until four (4) years have elapsed to apply for a
journeyman license. Rep. Rydalch asked how the Bureau notified interested
parties of this change; Mr. Malmen responded that it was promulgated at
Board meetings, on the website, and in the newsletter.
Docket No.

07-0104-0201

Mr. Malmen then presented Docket No. 07-0104-0201, which removes the
specialty license fee from rule to make it consistent with Section 54-1014,
Idaho Code, which changed the cost of a one-year license to the cost of a
three-year license. In addition, the $15 application fee was removed; Since
this fee is already stated in law, the Board thought it was redundant.
Docket No.

07-0106-0201

Docket No. 07-0106-0201 adopts the 2002 edition of the National Electrical
Code. Mr. Malmen stated that this national code is revised and published
every three years, and the rule change simply adopts the most recent
version.
Docket No.

07-0204-0201

Ted Hogander, Plumbing Bureau Chief, appeared before the committee to
present Docket No. 07-0204-0201. Mr. Hogander explained that this rule
change replaces an outdated edition of the Cross Connection Control
Manual with the most current edition of that manual. These books are
incorporated by reference into the Bureau’s rules.
Docket No.

07-0206-0201

Mr. Hogander then presented Docket No. 07-0206-0201, which adds some
wording to the current rule. The pending rule, rather than replacing the word
“adoption” in Section 011 as was proposed, adds the words “incorporation
by reference” to the current rule text, making the 2000 Uniform Plumbing
Code, as amended, adopted and incorporated by reference. Mr. Hogander
stated that there was no written opposition to this change, although there
was some verbal objection from north Idaho.
Jack Rayne, Bureau Chief of the Division of Building Safety, appeared
before the committee to present rules changes in his division. By way of
introduction, Mr. Rayne explained that last year’s H 586 included extensive
revisions to the Idaho Building Code Act and represented a consolidation of
three separate building codes into one code. Most of the resulting rule
changes are housekeeping matters, changing wording or making other minor
technical corrections made necessary because of last year’s legislation.
Docket No.

07-0301-0201

Mr. Rayne explained that Docket No. 07-0301-0201 removes a reference
to certification testing and removes other obsolete terminology.
Docket No.

07-0302-0201

Docket No. 07-0302-0201 also makes minor housekeeping changes, e.g.,
removing the word “advisory” from current rules.
Docket No.

07-0303-0201

Docket No. 07-0303-0201 makes minor revisions to existing rules governing
manufactured buildings, replacing the term “manufactured” with the term
“modular.”
Docket No.

07-0305-0201

Docket No. 07-0305-0201 also deals with rules governing manufactured
homes, and includes deletion of some fees.
Docket No.

07-0306-0201

Docket No. 07-0306-0201 makes minor revisions to existing rules governing
the use of and reference to the 2000 International Building Code. It also
includes a table delineating building permit fees; the inclusion of these fees
in the rules was done in order to make them more easily accessible in one
location.
Docket No.

07-0307-0201

Docket No. 07-0307-0201 creates a new chapter, which prescribes the use
of the 2000 International Energy Conservation Code by the Division of
Building Safety.
Docket No.

07-0310-0201

Docket No. 07-0310-0201 is the repeal of the existing chapter. The rule is
being repealed in its entirety and is being replaced by a new chapter.
Docket No.

07-0310-0202

Docket No. 07-0310-0202 is the new chapter replacing the rules repealed
by Docket No. 07-0310-0201. The new chapter adopts by reference the use
of the2000 International Residential Code.
Docket No.

07-0312-0201

Mr. Rayne explained that Docket No. 07-0312-0201 contains necessary
changes concerning foundations for manufactured home installations. The
new requirements are designed to help people meet HUD standards so they
can more easily obtain financing.
Docket No.

07-0308-0201

Mr. Rayne explained that Docket No. 07-0308-0201, which originally
appeared in the pending rules, has been moved into the pending fee rules.
This docket makes minor revisions to existing rules governing portable
prefabricated commercial modular structures regulated by the Building
Bureau of the Division of Building Safety. These changes involve no new
fees, and in fact eliminate some existing fees.
ADJOURN Rep. Gagner noted that the Business Committee has finished its review of
administrative rules submitted to it, and that subcommittees are handling a
more detailed examination of the proposed, temporary, and fee rules. Each
subcommittee is to submit a letter of recommendation to the whole
committee, detailing their recommendations concerning the rules they
reviewed. The Business Committee, in turn, will send a letter to the Speaker
which will state whether they have voted to approve or to reject the pending,
temporary, and fee rules submitted to them.



There being no further business to come before the committee, the meeting
was adjourned at 2:35 p.m.






DATE: January 27, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

None.
GUESTS: Shad Priest
Meeting was called to order at 2:55 p.m. by Chairman Black. Rep. Kellogg
made a motion to approve the minutes of the January 21 meeting as written;
motion passed on voice vote. Rep. Meyer made a motion to approve the
minutes of the January 23 meeting as written; motion passed on voice vote.
Rep. Collins made a motion to approve the minutes of the Collins
Subcommittee meeting on January 21 as written; motion carried on voice
vote.
H 30 Shad Priest, Administrator of the Department of Insurance, appeared before
the committee to present H 30. Mr Priest explained that the Department of
Insurance conducts investigations of insurance companies and other matters
dealing with insurance issues. Some of the investigators used for these
investigations are employees of the department; others are independent
contractors. H 30 clarifies that not all examiners are employees of the
department.



Rep. Kellogg asked whether the wording on the Statement of Purpose,
which reads,”There is expected to be no fiscal impact to the state’s General
Fund,” meant that there could, in fact, be a fiscal impact. Mr. Priest testified
that the wording probably should have been “There is no fiscal impact to the
state’s General Fund.” Rep. Kellogg suggested that the Statement of
Purpose should be corrected to reflect the new wording.

MOTION Rep. Gagner made a motion to send H 30, with a corrected Statement of
Purpose, to the floor with a DO PASS recommendation. Motion carried on
voice vote.
Rep. Snodgrass will sponsor the bill on the floor.
H 59 Mr. Priest then presented H 59 to the committee. This bill contains four
primary amendments to Chapters 6 and 7 of Title 41, regarding limitations
on how insurers may account for certain types of investments and assets for
regulatory filings. On page 1, lines 34-35, the bill clarifies that the interest
owed on a mortgage may not be counted as an asset if the mortgage is in
default. On page 2, lines 52-53, the bill adds foreign companies publicly
traded in the United States to the types of stocks in which insurance
companies are allowed to invest. On page 3, lines 24-25, the bill provides
that an insurance company’s investments in trust securities will be valued at
the lower of cost or market value for purposes of calculating the percentage
limitation on these types of investments. This ensures that the company will
not have to divest itself of those types of assets if the appreciation of the
assets causes the company’s investments to exceed the allowable
percentages. Finally, on page 4, line 31, the bill requires that the fair value
of property which is the basis of a mortgage loan be determined by an
independent appraiser.



Rep. Black asked what authority the department has to evaluate the types
of investments made by insurance companies. Mr. Priest responded that
other sections of the Code allow the department to evaluate investments and
to disallow certain types of investments that they think are inappropriate.
Rep. Gagner noted that appraisers have to be certified in Idaho, and asked
whether the department should specify that a “certified” inspector should be
used. Mr. Priest said that the department’s interest is in getting an
independent appraiser, and that the word “competent” in the proposed
legislation will cover the need for certification. Rep. Cannon asked whether
the bill would force companies to sell assets. Mr. Priest explained that the
intent was to avoid this. An insurance company can invest only a certain
percentage of its assets in any one fund family, and if that investment
appreciates, that appreciated value could cause the company’s percentage
in that fund company to exceed the allowable percentage. Thus, if the
department uses the initial cost of the investment rather than the appreciated
value, this will avoid the necessity of selling some investments to re-establish
the acceptable percentages.

MOTION Rep. Collins made a motion to send H 59 to the floor with a DO PASS
recommendation. The statement of purpose will be corrected to read that
there will be no fiscal impact to the General Fund. Motion carried on voice
vote.
H 60 Mr. Priest explained that H 60 repeals laws adopted more than 40 years
ago, which required insurers and holding companies to obtain a solicitation
permit from the Department of Insurance before offering securities. This will
eliminate potential conflicts with federal securities laws and duplication of
review between the Department of Finance and the Department of
Insurance.
MOTION: Rep. Deal made a motion to send H 60 to the floor with a DO PASS
recommendation. The Statement of Purpose will be corrected to read that
there will be no fiscal impact to the General Fund. Motion carried on voice
vote.
H 61 Mr. Priest presented H 61 to the committee, explaining that this bill will
provide for an administrative penalty for a violation of any rule promulgated
by the director of the department. The intent of this is to put some “teeth”
into the enforcement of administrative rules that do not have a greater
administrative penalty. This legislation will provide the same procedure for
the Department of Insurance as that used by many other state agencies,
including Health & Welfare, Electrical Contractors, Weights & Measures, the
Tax Code, and the Securities Act.






Mr. Priest also presented an amendment to H 61, which adds clarifying
language to the bill to make it clear that criminal action will arise only for a
violation of the Code, not for Rules violations.



In response to questions from the committee, Mr. Priest stated that this area
has not been a huge problem for the department, but that, without any
effective penalties, there is currently no good way to enforce the rules. The
$1,000 and $5,000 amounts are maximums that may be charged, and are
not automatically imposed. The director of the department has authority to
decide whether or not a penalty would apply.

MOTION Rep. Kellogg made a motion to send H 61 to General Orders, with
amendment attached. Rep. Deal seconded the motion. Motion carried on
voice vote
. Rep. Gagner and Rep. Rydalch requested that they be
recorded as voting no.
ADJOURN: There being no further business to come before the committee, the meeting
was adjourned at 3:25 p.m.






DATE: January 27, 2003
TIME: 3:37 P.M.
PLACE: Room 408
MEMBERS: Chairman Henbest, Reps. Eberle, Rep. Block
ABSENT/

EXCUSED:

None
GUESTS: Rayola Jacobsen, Barbara Porter, Melissa Nelson, Donna Jones, Dave
Curtis, Mark Dunham, Kim Coster, Jeremy Pisca
Meeting was called to order at 3:37 P.M. by Subcommittee Chairman
Henbest. Rep. Henbest asked committee members whether they wished to
have a full presentation of the proposed rules from the various departments,
or whether the previous presentation to the full committee was adequate.
Rep. Eberle and Rep. Block stated that they did not need a repetition of the
previous presentations, but would appreciate the opportunity to ask
questions about specific portions of the rules.
Docket No.

10-0101-0201

Docket No.

10-0102-0201

Dave Curtis, Board of Professional Engineers and Professional Land
Surveyors, appeared before the subcommittee to explain the two dockets
from his board. Mr. Curtis stated that Docket No. 10-0101-0201 fixes the
current office hours, 7:00 a.m. to 4:00 p.m., which have been in place since
June 2001 and that they have not presented a problem. No one has
registered a complaint about these hours. The docket also changes the age
for retired status from age 65 to age 60.



Mr. Curtis then explained that Docket No. 10-0102-0201, which changes
terminology from “infraction” to “violation.”

MOTION Rep. Eberle made a motion that the subcommittee recommend approval
of Docket Nos. 10-0101-0201 and 10-0102-0201. Motion carried on voice
vote.
Barbara Porter, Board of Accountancy, appeared before the committee to
present rules changes from her agency.
Docket No.

01-0101-0201

Ms. Porter explained that this docket repeals all rules, allowing for a
complete rewrite.
Docket No.

01-0101-0202

Docket No. 01-0101-0202 is the rewrite of the rules, which includes four
fees that are different from the prior rules.
Docket No.

01-0101-0203

Rep. Henbest asked Ms. Porter to explain some wording on page 18 of
Docket No. 01-0101-0202, contained in the “Complaints” section. Rep.
Henbest noted that the Board “may” forward a complaint to an individual, but
that in the next sentence the individual “shall” file a written answer. She
asked how someone can be required to respond to something that may or
may not be forwarded to him. Ms. Porter explained that not all complaints
are under their jurisdiction, and if the complaint is not forwarded to the
licensee, then no response is required from the licensee. However, if a
complaint is sent, then a response is required.



Rep. Block stated that she had heard some concern from constituents that
increasing the examination fee may discourage college graduates from
taking the exam. Ms. Porter stated that the Board had not addressed this
possibility, but that the individual applying for an exam should be responsible
for those fees. In some cases, a candidate for the CPA exam is already
working in a CPA firm, and many firms absorb the cost for that candidate’s
exam. Ms. Porter also pointed out that the proposed fee increase goes
directly to reimburse the actual cost of the exam, and that this is the first
increase in ten years. In response to Rep. Block’s concern about fewer
candidates taking the exam, Ms. Porter said that the number of examination
candidates had temporarily dropped, but that she thought the drop could be
attributed to the requirement for a fifth year of education before taking the
exam. The numbers of candidates sitting for the exam are now moving back
up.



Rep. Eberle asked Ms. Porter to explain what effect H 485 had. Ms. Porter
testified that H 485 was a comprehensive bill that was the result of several
years of negotiation throughout the state. It adopted model language used
at the national level, in an effort to establish more standardized procedures.

MOTION Rep. Eberle made a motion that the subcommittee recommend approval
of Docket Nos. 01-0101-0201, 01-0101-0202, and 01-0101-0203.
SUBSTITUTE

MOTION

Rep. Block stated that she had a problem with some of the higher fees, and
made a substitute motion to vote separately on each of the three dockets.
Rep. Block and Rep. Henbest voted in the affirmative; Rep. Eberle voted in
the negative. Motion carried.
MOTION Rep. Eberle made a motion that the subcommittee recommend approval
of Docket No. 01-0101-0201. Motion carried on voice vote.
MOTION Rep. Block made a motion that the subcommittee recommend rejection
of Docket No. 01-0101-0202.



In explanation of her motion to reject, Rep. Block again said she had
received communication from some constituents who were concerned that
the higher fees will discourage college graduates from taking the CPA exam.
Rep. Henbest stated that the proposed fee increases represent a pass-through expense, and that if the rule is rejected, the higher examination
costs will have to be absorbed by the Board of Accountancy, which will have
to recover those additional costs from the entire group of licensees in the
form of higher fees. Ms. Porter agreed, stating that the higher examination
fees were not developed by the Board, but rather were reflective of higher
charges by the American Institute of CPAs, who develop and provide the
examinations. Rep. Eberle pointed out that new college graduates who are
applying to take the CPA exam have gone to college specifically to become
accountants, and he doubted whether the slightly higher fees would have a
negative effect on the numbers of those graduates taking the exam.

UNANIMOUS
CONSENT
Rep. Block asked to withdraw her previous motion to reject Docket No. 01-0101-0202. Rep. Henbest requested unanimous consent to allow
withdrawal of Rep. Block’s motion. There being no objection, motion was
withdrawn.
MOTION Rep. Eberle made a motion that the subcommittee recommend approval
of Docket No. 01-0101-0202. Motion carried on voice vote.
MOTION Rep. Block made a motion that the subcommittee recommend approval
of Docket No. 01-0101-0203. Motion carried on voice vote.
Rayola Jacobsen, Board of Occupational Licensing, appeared before the
subcommittee to present rules from her department.
Docket No.

24-0401-0201

Ms. Jacobsen presented Docket No. 24-0401-0201. This rule change will
clarify high school education equivalency; clarify working floor space in an
establishment; establish that no original license fee is required for relocation
of contiguous shop within the same primary; establish requirements for an
out-of-business shop; establish requirements for practical and written
reexamination; delete the requirement that models for nail technology exam
not have artificial nails; and establish requirements for instructor
reexamination.
Docket No.

24-1801-0201

Ms. Jacobsen presented Docket No. 24-1801-0201, which updates current
rules for the Real Estate Appraiser Board to include the most current
publication date of 2002. This is a routine change that needs to be
implemented every year.
MOTION Rep. Block made a motion that the subcommittee recommend approval
of Docket Nos. 24-0401-0201 and 24-1801-0201. Motion carried on voice
vote.
Donna Jones, Director of the Real Estate Commission, introduced
Kimberly Coster, an attorney representing the Real Estate Commission, to
explain the Commission’s rules. Ms. Koster first pointed out that all the rules
were initially adopted as temporary rules and are currently in effect.
Docket No.

33-0101-0201

Ms. Koster testified that Docket No. 33-0101-0201 is basically a “clean-up”
measure which deletes definitions that were moved to statute on July 1,
2002. Rep. Henbest asked why there were still large portions of text
underlines on page 222; Ms. Koster said that this pending rule had been
superceded by a more recent version, dates 1-1-2003. Rep. Henbest also
asked whether the rule repeats the statute, on page 228. Ms. Koster said
that in the past, the rule was deficient and the Commission decided to put all
information in the rules. The rest of the rule has been reworded. Rep.
Henbest also questioned the language in Section 455; Ms. Koster said that
the language was pulled from the Attorney General’s language. In practice,
the Real Estate Commission does perform this adjudicatory function, but the
staff can also do an investigation, with review and approval by the
Commission.
Docket No.

33-0101-0202

Ms. Koster testified that this docket actually removes a $10 fee that used to
be charged to administer applications for errors and omissions insurance.
Since the Commission doesn’t handle these applications now, the fee is
unnecessary and is being removed. Also, the docket states that licensees
will no longer be required to file a certification of their continuing education
credits; rather, they can list them on a form which is available online.



Rep. Eberle asked how long real estate agents had been required to have
errors and omissions insurance. Ms. Koster replied that this requirement has
been in place since 1994. Ms. Koster also provided an explanation of the
kinds of things that E&O insurance might cover; Ms. Jones added that, in
some cases, a homeowner may also consider civil action or an action
through the Commission’s Enforcement Division.

Docket No.

33-0101-0301

Ms. Koster presented Docket No. 33-0101-0301, which is a new, temporary
rule dealing with continuing education requirements for licensees. She
noted that licensees can now simply report their continuing ed courses
online, and that the Commission will begin checking on those courses that
are from an outside source. At first, they will check 100% of those taking
outside courses; eventually, they will be performing a quality assurance audit
on a sampling of the courses.
MOTION Rep. Block made a motion that the subcommittee recommend approval of
Docket Nos. 33-0101-0201, 33-0101-0202, and 33-0102-0201. Motion
carried on voice vote.
MOTION Rep. Block then made a motion that the subcommittee recommend
extension
of Docket No. 33-0101-0301. Motion carried on voice vote.
ADJOURN There being no further business to come before the committee, the meeting
was adjourned at 4:50 p.m.






DATE: January 29, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

Rep. Block
GUESTS: Mark Dunham, John Eaton, Rayola Jacobsen, Kristina Carrier, Joel
Morden, Bob Corbell, Suzanne Schaefer
Meeting was called to order at 1:50 p.m. by Chairman Black. Rep. Rydalch
made a motion to approve the minutes of the January 27 meeting as written.
Motion carried on voice vote. Chairman Black asked for reports from the
three subcommittees assigned to study the administrative rules.
Rep. Collins reported that his subcommittee had finished its work and
recommends that the full committee approve all pending, temporary, and fee
rules submitted to it from the Department of Insurance.
MOTION Rep. Tilman made a motion to approve the administrative rules for the
Department of Insurance, based on the recommendation of the Collins
Subcommittee. Motion carried on voice vote.
Rep. Smith reported that her subcommittee recommends that the full
committee approve all pending, temporary, and fee rules submitted to it from
the Division of Building Safety.
MOTION Rep. Smith made a motion to approve the administrative rules for the
Division of Building Safety, based on the recommendation of the Smith
Subcommittee. Motion carried on voice vote.
Rep. Eberle reported that he was a member of the Henbest subcommittee
and that, in the absence of Rep. Henbest, he could report that her
subcommittee recommends that the full committee approve all pending,
temporary, and fee rules submitted to it from the Board of Accountancy, the
Board of Professional Engineers and Professional Land Surveyors, the
Bureau of Occupational Licensing, and the Real Estate Commission.
MOTION Rep. Tilman made a motion to approve the administrative rules for the
Board of Accountancy, the Board of Professional Engineers and
Professional Land Surveyors
, the Bureau of Occupational Licensing,
and the Real Estate Commission, based on the recommendation of the
Henbest Subcommittee.
RS 12445C1 John Eaton, Government Affairs Director for the Building Contractors
Association, appeared before the committee to present RS 12445C1, which
allows building contractors the right to cure construction defects before a
homeowner files a lawsuit to settle damages arising from those defects.
Under this legislation, the contractor can inspect the home for defects and
can make a settlement agreement to the homeowner. However, the bill does
not preclude the homeowner from filing a lawsuit.



Rep. Snodgrass asked whether this applied only to new construction. Mr.
Eaton stated that it would apply to new construction and also “substantial
remodel” of an existing home. Substantial remodel is defined as being a
remodeling project that costs in excess of 50% of the home’s assessed
value. Rep. Eberle asked whether a kitchen remodel, which may cost
$20,000, would not be covered under this legislation; Mr. Eaton replied that
it would not.

MOTION Rep. Gagner made a motion that RS 12445C1 be introduced; motion carried
on voice vote.
H 7 Rayola Jacobsen, Bureau Chief of the Bureau of Occupational Licensing,
appeared before the committee to present H 7. Ms. Jacobsen explained that
the Bureau was revising a section of the Code having to do with license
renewals, changing the renewal dates to a licensee’s birth date rather than
the twice-a-year system previously used. At the same time they made this
revision, they decided to update the licensure code on Athlete Agents, to
reflect the fact that agents need to be licensed, rather than registered, in the
State of Idaho.



Rep. Douglas asked Ms. Jacobsen whether there had been any objections
to this bill filed with the Bureau. Ms. Jacobsen said that the Bureau had
notified all high schools and coaches in the state and had posted this
proposed change on its website for many months, and no objections had
been filed. She also noted that Sen. Denton Darrington supports the bill.
Rep. Henbest commented that it appeared as if the licensing requirements
did not include any work experience or specific education in order to be
licensed as an athlete agent. She also asked whether other states are
licensing such agents. Ms. Jacobsen responded that most other states
register agents, but that Idaho does not have provision for “registration” of
agents, only for licensing.



Rep. Snodgrass asked whether this legislation will prevent parents of a
young athlete from acting as an agent unless they are licensed by the state.
Ms. Jacobsen stated that it would not. Rep. Gagner noted the importance
of making sure an athlete understands that he or she may lose eligibility for
scholarships if a contract is signed with an agent, and he wondered whether
the legislation should specifically state that. Ms. Jacobsen testified that the
language used in the bill is in compliance with national legislation. Rep.
Smith
asked whether other states are also moving toward licensing athlete
agents. Ms. Jacobsen said she did not have information about the number
of states that may be doing so, but she does know that other states are
concerned about this possible problem for student athletes.



Rep. Tilman noted that the difference between “registration” and “licensing”
is largely a semantic difference, and that the intent of the legislation is what
should be primarily considered. The intent is to allow the State of Idaho to
get out in front of a potentially large problem and, as far as possible, prevent
it from occurring. Rep. Henbest asked whether Ms. Jacobsen thought that
requiring licensing was going to bring about a higher level of compliance
than requiring registration. Ms. Jacobsen said she did not know whether it
would or not. Rep. Snodgrass noted that an unscrupulous agent can still
prey on athletes, whether he is licensed or not. Ms. Jacobsen stated that the
Bureau has made great effort to contact high schools and coaches
throughout the state to educate them about potential problems for athletes,
and that, if this bill passes, coaches can at least ask for proof of licensure
from agents, which may help to ameliorate the problem of unscrupulous
agents preying on athletes. The Bureau’s intent in this legislation is to be in
compliance with the Code in terms of licensing rather than registering
agents, and Ms. Jacobsen stated that the Bureau will continue to educate,
inform, and try to weed out any disreputable agents.

MOTION Rep. Cannon made a motion to send H 7 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Meyer will sponsor
the bill on the floor.
RS 12440 Suzanne Budge Schaefer, representing the Idaho Petroleum Marketers,
appeared before the committee to present RS 12440. She explained that
the Petroleum Clean Water Trust Fund was set up in 1990 to provide
financing required by the federal government for underground storage. This
bill will provide for a seven-member Board to oversee the fund; the Board will
also perform policy-making and guidance functions, and will be appointed by
the governor. The fund is a nonprofit state agency, administered under the
State Insurance Fund.



Ms. Schaefer explained that most of the changes contained in this bill are
changes in definitions and removal of outdated language. She stated that,
on page 9, the makeup of the board is detailed; the board will consist of a
member of the House of Representatives, a member of the Senate, an
expert in finance and insurance, an expert in groundwater mediation, and
three participants from the industry, to include a large petroleum distributor,
a small petroleum distributor, and a petroleum retailer.



Rep. Black asked about the compensation given to members of the Board.
Ms. Schaefer testified that the compensation of a $50 per diem, plus
expenses, is equivalent to the amount paid to members of other state boards
and agencies, as stipulated in Section 509. Rep. Douglas asked whether
this deals primarily or exclusively with gas station tanks, or whether farm
tanks were included. Ms. Schaefer stated that the Code allows different
types of petroleum tanks to be insured, although the vast majority are gas
station tanks. However, farm tanks could be included, as could above-ground tanks.

MOTION Rep. Deal made a motion to introduce RS 12440, stating that this subject
had been worked on extensively for the past couple of years, and
represented good legislation. Motion carried on voice vote.
RS 12588 Chairman Black asked the indulgence of the committee to remain in his
seat while he presented RS 12588, which limits the amount of information
that a retailer can print on a customer’s credit card transaction receipt.
MOTION: Rep. Tilman made a motion to introduce RS 12588; motion carried on voice
vote.
ADJOURN: There being no further business to come before the committee, the meeting
was adjourned at 2:25 p.m.






DATE: February 3, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

None
GUESTS: Bob Corbell, Suzanne Schaefer, Dennis Baird, Alan Cameron, Dave Munroe,
Dave Berent, James M. Alcorn, Pam Eaton, Terry Poyzer, Jack Lyman, Jerry
Peterson, Michael Backe
Meeting was called to order at 1:35 p.m. Rep. Eberle made a motion to
approve the Henbest Subcommittee minutes of January 27; motion carried
on voice vote. Rep. Collins made a motion to approve the minutes of the
Business Committee from January 29; motion carried on voice vote.
RS 12600 Bob Corbell, representing the Independent Electrical Contractors of Idaho,
appeared before the committee to present RS 12600. This legislation will
amend existing law to require continuation training of apprentice electricians
who have not taken or passed the journeyman’s examination within two
years of completing instructional training or who have not advanced in
apprenticeship training for a period of two years. Mr. Corbell explained that
all current licensed electricians are currently required to get continuing
education every two years. RS 12600 will also authorize the Electrical Board
to establish by rule requirements for continuation training.



Rep. Gagner asked whether this change will be included in the rules
submitted to the committee next year. Mr. Corbell answered in the
affirmative.

MOTION Rep. Deal made a motion to introduce RS 12600. Motion carried on voice
vote.
RS 12632 Rep. Jim Clark appeared before the committee to present RS 12632, which
contains amendments to the Idaho Uniform Gift to Minors Act. The
legislation will provide that termination of custodianship occurs at the age of
twenty-five, rather than the current age of twenty-one. Rep. Clark explained
that this proposed legislation will provide more flexibility to the custodian of
such an account, since the custodian can end custodianship at the child’s
age 18, age 21, or age 25. Rep. Clark asked the committee to introduce RS
12632 in order to open the matter to further discussion and input from all
interested parties.
MOTION Rep. Gagner made a motion to introduce RS 12632. Motion carried on
voice vote.
H 132 Suzanne Budge Schaefer, representing the Idaho Petroleum Marketers &
Convenience Store Association, presented H 132. This legislation will ament
a portion of Idaho Code pertaining to the Petroleum Clean Water Trust Fund
Act, to provide for an independent board of individuals knowledgeable and
experienced in the industry, and will also update outdated language. She
explained that the Petroleum Clean Water Trust Fund was set up in 1990 to
provide financing required by the federal government for underground
storage. This bill will provide for a seven-member Board to oversee the fund;
the Board will also perform policy-making and guidance functions, and will
be appointed by the governor. The fund is a nonprofit state agency,
administered under the State Insurance Fund. Ms. Schaefer stated that
there is no opposition to this bill, and she noted that several supportive
parties are available at the meeting to provide further testimony if necessary.



Ms. Schaefer explained that about 95% of the changes contained in this bill
are changes in definitions and removal of outdated language. She stated
that the makeup of the board is detailed on page 9; the board will consist of
a member of the House of Representatives, a member of the Senate, an
expert in finance and insurance, an expert in groundwater mediation, and
three participants from the industry, to include a large petroleum distributor,
a small petroleum distributor, and a petroleum retailer. Ms. Schaefer also
testified that other states are currently considering Idaho’s successful
legislation in this matter.



Ms. Schaefer acknowledged the presence of Jim Alcorn from the State
Insurance Fund, Dennis Baird from Baird Petroleum, and Michael Backe
from Olympus Technical Services.



Mr. Alcorn responded to several questions from committee members,
explaining that the State Insurance Fund acts as a third party administrator
for the Petroleum Storage Tank Fund. Mr. Alcorn noted that the Petroleum
Board will provide knowledgeable people in the field of petroleum who will
be able to help the State Insurance Fund in the administration of the storage
tank fund. The amount of the trust fund is currently $40 million; no new fuel
tax revenues are being generated at the present time. The current ceiling
for the fund is $20 million, and the floor is currently $15 million. Mr. Alcorn
explained that the $40 million total includes $28 million in unencumbered
surplus, plus “eligible but not insured” funds, plus reserves for claims. Mr.
Alcorn also testified that the Petroleum Clean Water Trust Fund has a
certificate of authority from the Department of Insurance, and the
Department oversees the Fund in the same way that it oversees insurance
companies.

MOTION Rep. Deal made a motion to send H 132 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Deal will sponsor
the bill on the floor.
H 134 Alan Cameron, President of the Idaho Credit Union League, appeared
before the committee to present H 134. Mr. Cameron explained that when
retailers produce a credit card receipt that includes the entire account
number and the expiration date, this information can be accessed and
misused by criminals. H 134 is intended to help avoid this problem, by
requiring that merchants print no more than the last five digits of the account
number and omit the expiration date on a credit card receipt. This bill covers
both debit and credit cards, but will only affect electronic receipts, not those
receipts made by mechanical means. The effective date of the legislation is
January 1, 2004 for equipment purchased after July 1, 2003. For all other
electronic equipment in use before July 1, 2003, the effective date will be
January 1, 2005. Mr. Cameron also stated that he had made various entities
and interested parties aware of this pending legislation. He pointed out that
Mary Hughes of the Department of Finance, Pam Eaton of the Idaho
Retailers, and Barbara Strickfaden of the Idaho Banking Association all are
supportive of this bill.



Rep. Tilman asked Mr. Cameron to explain how a cardholder could file an
action, as detailed on page 2, line 4 of the bill. Mr. Cameron stated that this
would be undertaken like any other civil lawsuit; any penalty paid would be
paid into the general fund, not to the individual. This provision should
discourage frivolous lawsuits. Rep. Meyer asked about the potential cost to
businesses who have to convert their credit card equipment. Mr. Cameron
explained that most businesses make changes by changing software and
thus the cost is minimal. Furthermore, businesses tend to update the
software periodically, and thus most of them recognize that they will need to
do this soon anyway. Mr. Cameron stated that the legislation did try to take
into account the expense to small retailers, and that was the reason for
exempting sliding (mechanical) credit card machines.



Rep. Henbest asked whether this legislation would affect online retailers or
catalog purchases; Mr. Cameron answered that those transactions are not
under the control of state legislation. Rep. Henbest also asked whether
governmental agencies would be covered by this new requirement; Mr.
Cameron stated that they would be, but that the cost to the agencies is not
anticipated to be a problem, since it will be minimal. Rep. Gagner asked
whether this requirement will eventually be extended to imprinted receipts as
well. Mr. Cameron stated that there is nothing planned in that regard; he
also stated that there are still many people who use mechanical card
machines.



Rep. Eberle asked why the restrictions had not, in fact, been extended to
imprinted receipts. Mr. Cameron explained again that this exemption was
included in order to lessen the possible financial burden on small
businesses, who are the majority users of that type of receipt. Rep. Eberle
asked whether it would be possible to block out the information on the extra
copies of such a receipt. Rep. Tilman noted that he had, in fact, seen
receipts with account numbers partially or totally blacked out on some of the
copies, and he thought this could be done eventually.

MOTION: Rep. Meyer made a motion to send H 134 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Black will sponsor
the bill on the floor.
Chairman Black advised the committee that there will be no meeting on
Friday, February 7. Furthermore, the committee will not meet next week on
Thursday, February 13, which is one of its regular meeting days. Rep. Black
explained that three members of the Business Committee, including himself,
Rep. Gagner, and Rep. Kellogg, will be attending an Economic Outlook
Committee meeting that afternoon.
ADJOURN: There being no further business to come before the committee, the meeting
was adjourned at 2:18 p.m.






DATE: February 5, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

None
GUESTS: Jack Lyman, Allyn Dingel, Teri Ottens, Kathy Smith, John Mackey, Steve
Gordon, Jim Trent, Bart Kline, Roger Hales, Roberta Crockett, Jim Opdahl,
Tim Gibson, John Eaton, Jean Boyles, Shane Huber, Scott Barton, Pam
Eaton, John L. Buck, Rayola Jacobsen, Pat Comp., David Yraguen, Ron
Whitney, David Dembowski, Bill Roden, Gavin Gee, Bob Corbell, Woody
Richards, Jeremy Pisca, Dwayne Speegle
Meeting was called to order by Chairman Black at 1:35 p.m. Rep. Deal
made a motion to approve the minutes of the February 3, 2003, meeting;
motion passed on voice vote.
RS 12413 John Mackey, representing the Idaho Association of Insurance and
Financial Advisors, appeared before the committee to present RS 12413.
Mr. Mackey explained that life insurers are n0ot currently required to pay
interest on death proceeds to Idaho residents. This legislation will require
that a life insurer pay interest on death proceeds if payment of the proceeds
is not made to the beneficiary within thirty days after satisfactory proof of
death is received by the insurer. Mr. Mackey also testified that he is not
aware of any opposition, and that the Department of Insurance is aware of
the legislation.
MOTION Rep. Tilman made a motion to introduce RS 12413; motion carried on
voice vote.
RS 12442 Mr. Mackey then presented RS 12442, which deals with annuity
nonforfeiture interest rates. Mr. Mackey testified that the current low interest
rate environment, combined with a minimum annuity nonforfeiture rate of
three percent, which was set nearly 30 years ago, has contributed to a lack
of availability of short-term fixed annuities for consumers. This proposed
legislation will reduce the minimum nonforfeiture interest rate for individual
deferred annuities to one and one half percent until July of 2005. Mr.
Mackey stated that this change is beneficial to Idaho’s consumers as well as
domestic life insurers. He also said that 18 other states have already
implemented this change, and the National Association of Insurance
Commissioners voted in support of this change in 2002.
MOTION Rep. Tilman made a motion to introduce RS 12442; motion carried on
voice vote.
RS 12491C2 Mr. Jack Lyman, representing the Idaho Manufactured Housing Association,
presented RS 12491C2, which will allow existing mobile home parks to be
subdivided into individual lots. Mr. Lyman stated that the RS had gone
through a C1 change in response to concerns from the Association of Idaho
Cities, and a C2 change in response to concerns from the Idaho Association
of Counties. Also, the bill could have been sent to the Local Government
committee, but since the Business Committee deals with mobile home and
manufactured housing issues, it was thought that this was the preferred
committee to deal with this legislation.
MOTION Rep. Gagner made a motion to introduce RS 12491C2; motion carried on
voice vote.
RS 12629 Bill Roden, representing the Idaho Beer & Wine Distributors Association,
presented RS 12629, which clarifies certain rights and duties governing the
business relationship between wine suppliers and distributors. Mr. Roden
testified that, if passed, this legislation will amend the Code section, 23-1328A, dealing with wine laws.



Rep. Deal asked Mr. Roden to briefly summarize the key points of the
legislation, including the differences from last year’s bill brought by the Beer
& Wine Distributors Association. Mr. Roden stated that, first, the bill adds
the stipulation “within the state of Idaho” when discussing restrictions
imposed on distributors. Also, this bill specifies that termination will not be
allowed “without good cause;” the time frame allowed to correct deficiencies
remains at 90 days. Mr. Roden stated that last year’s bill had retroactive
provisions, but that these had been removed, since the courts said the
conditions could not apply retroactively. Also, Mr. Roden pointed out that the
definition of “good cause” is taken directly from the beer code.



Mr. Roden further explained that, in the current climate, large conglomerates
are often buying up smaller vintners, and the large companies may have
existing distributors which take over from the distributors of the smaller
vintners. The small vintners’ distributors have already built up a retailer base
and are negatively impacted when such a transaction takes place. The bill’s
intention, according to Mr. Roden, is to level the playing field.

MOTION Rep. Meyer made a motion to introduce RS 12629; motion carried on
voice vote.
RS 12771 Pam Eaton, President of the Idaho Retailers Association, presented RS
12771
. This legislation would create an exemption for affiliates of creditors
and other companies that service creditors’ accounts and do not operate or
hold themselves out as third party collection agencies. It would also amend
Idaho law to make it parallel to the federal Fair Debt Collection Practices Act.
Ms. Eaton explained that the exemption is for those whose principal
business is not collections, such as J.C. Penney or other similar retailers.
MOTION Rep. Tilman made a motion to introduce RS 12771; motion carried on
voice vote.
RS 12876 Allyn Dingel, representing State Farm Insurance Company, presented RS
12876
, and stated that he also spoke on behalf of Phil Barber, Paul Jackson,
Larry Kibbee, and Woody Richards, all of whom support this legislation. Mr.
Dingel explained that this legislation will probably generate some
controversy, since it deals with awarding of attorney fees in cases of
uninsured and underinsured motorist coverage cases.
MOTION Rep. Tilman made a motion to introduce RS 12876; motion carried on
voice vote.
RS 12786 Rep. Black presented RS 12786, explaining that this is a joint memorial to
express the State of Idaho’s support for the Vancouver 2010 Olympic bid.
Rep. Black stated that the northwest states are all approving Vancouver’s bid
to host the winter Olympics in 2010, and asked that this memorial be
introduced.
MOTION Rep. Tilman made a motion to introduce RS 12786; motion carried on
voice vote.
H 28 Gavin Gee, Director of the Department of Finance, appeared before the
committee to present H 28, which contains amendments to the Residential
Mortgage Practices Act. The bill provides additional enforcement measures
for violations of federal mortgage laws, and pre-empts financial or lending
laws passed by cities or counties. Mr. Gee explained that this would have
a beneficial effect, since lenders currently have to contend with a patchwork
of various laws that may vary from city to city or county to county. Mr. Gee
stated that his department worked with the lending industry in writing this
legislation, and he is not aware of any opposition to it.



Rep. Deal asked whether local governmental agencies could license
mortgage agents; Mr. Gee responded that this would limit licensing to the
state. Rep. Gagner asked about the activities of an “agent” versus those of
a “licensee” as delineated on lines 32-34 of page 1. Mr. Gee said that an
agent would generally be an employee of a mortgage company.



Teri Ottens, Executive Director of the Idaho Association of Mortgage
Brokers, testified in favor of H 28. She noted that this legislation is the
result of three years of work with the Department of Finance, and that it will
protect and enhance the powers of the Department of Finance to enforce
federal laws with regard to predatory lending practices. Ms. Ottens stated
that she believes this legislation is good for consumers and for the lending
industry as well.



Rep. Black asked how this legislation would apply to mortgage bankers.
Ms. Ottens testified that she has been in touch with bankers and that they
have no problem with the legislation.



Kathy Smith, Millennium Mortgage, testified in favor of H 28. She stated
that the mortgage brokers are all in agreement with the proposed legislation.

MOTION Rep. Meyer made a motion to send H 28 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Gagner will sponsor
the bill on the floor.
H 29 Gavin Gee then presented H 29, which contains amendments to the Idaho
Credit Code, updating the Code to adopt more current federal laws. This
legislation incorporates federal changes so that Idaho law will be in accord
with current federal laws. Mr. Gee is not aware of any opposition.
MOTION Rep. Collins made a motion to send H 29 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Eberle will sponsor
the bill on the floor.
H 133 John Eaton, representing the Building Contractors Association of
Southwestern Idaho, presented H 133. The two main aspects of the bill are,
first, that it allows contractors to examine defects in residential construction
and attempt to fix them, and second, that it defines liability. Mr. Eaton stated
that this is an attempt to avoid lawsuits filed by homeowners against building
contractors. Currently, the proliferation of lawsuits against contractors is
causing higher building costs and higher insurance premiums, which in turn
causes some insurance companies to leave the Idaho market. The bill will
not limit the consumer’s right to file a lawsuit; rather, it attempts to solve the
problems before a lawsuit becomes necessary. Mr. Eaton explained the four
key terms that are defined in the bill, namely: action, construction contractor,
homeowner, and residence. Mr. Eaton also distributed copies of a chart
which illustrates the cure procedure contained in the second part of H 133,
noting that at any point in the process, the homeowner can still go to court
if the settlement is not progressing satisfactorily. The third section of the bill
places limitations on damages if the matter goes to court for settlement.
However, if the construction professional has failed to perform his
obligations, the limits don’t apply. Mr. Eaton also testified that he had held
meetings with builders to encourage them to include this kind of provision in
their building contracts. His organization has also produced a video on
home maintenance and has information available on their website.



Rep. Kellogg asked whether Mr. Eaton had any contact with northern Idaho
building contractors; he replied that they are members of the Idaho Building
Contractors Association, and they have had input on the bill. Rep. Henbest
asked what is behind the buildup in liability costs, and asked whether this is
a national problem or a local Idaho problem. Mr. Eaton stated that there are
always a few “bad actors” in any field, and the construction trades are no
different. He also said that some trial attorneys have taken a particular
interest in building defects, and that they are encouraging homeowners to
file lawsuits. He noted that, so far, Washington, California, and Arizona have
passed similar legislation, and that 15 or 20 other states are considering it.



Rep. Cannon asked whether this was unnecessary legislation, since
building contracts should contain provisions for settlement of disputes. Mr.
Eaton said that, although the Association has drawn up sample contracts for
its members to use, there is no way to force them to actually use contracts
that include provisions for dispute settlement. Rep. Cannon noted that it
seems strange to be asked to pass legislation to control the homebuilders
in this regard, since Idaho has no licensing requirements for builders. Rep.
Eberle
asked what would happen if a builder incorporated, then dissolved
the corporation in order to avoid settlements, and subsequently formed a
new corporation to continue in the construction business. Mr. Eaton noted
that unscrupulous people could do this, but that there may also be a way to
pierce the corporate veil and go after the offending builders.



Ron Whitney, Board Member of the Building Contractors Association,
testified in favor of H 133, stating that this bill would provide for a way to
cure building defects which surface after the final walk-through of a new
home with the homeowner.



Woody Richards, representing BMC West, a multi-state supplier of building
materials, and an occasional installer of materials, testified in favor of H
133.
Mr. Richards reiterated the fact that complaints against builders have
increased recently, and that this has had an effect on the liability insurance
industry, which has seen premium increases of 400% to 600% per year in
some years. These costs are eventually passed along to consumers and
result in higher building costs. Mr. Richards also spoke to the availability of
insurers willing to write policies, pointing out that in California, the previous
35 companies writing such policies is now down to just six.

MOTION Rep. Gagner made a motion to send H 133 to the floor with a DO PASS
recommendation. Rep. Gagner stated that he has used this process with
great success, and that in the process of building about 700 homes, he has
had no lawsuits filed against him. He also stated that his liability insurance
has increased 450%, even though he has had no claims in the last 18 years.



Rep. Deal stated that he is in favor of H 133, saying that it has become
necessary to draw a line in the sand, since construction defect claims have
escalated precipitously in recent years. He stated that attorneys do find this
area to be a source of potential income; furthermore, he noted that the bill
will help with the afford ability and availability of insurance in Idaho.



Rep. Snodgrass stated that, as a real estate professional, he is also in favor
of this bill. Since a home is the largest investment that many people make
in their lifetime, they may immediately hire an attorney when they have
construction problems with that investment. It would be preferable to deal
with such problems at the lowest level, directly with the builder, rather than
at the highest level, which is the court system.



Rep. Henbest noted that she is ambivalent about the bill, and wonders
whether it is necessary to place something in the Code that should be a
matter of common sense. In any case, she does not want this bill to stall the
efforts being made to license contractors in the state of Idaho.

VOTE ON
MOTION
Following this discussion, the chairman called for a vote on the motion to
send H 133 to the floor with a DO PASS recommendation. Motion carried
on voice vote.
Rep. Gagner will sponsor the bill on the floor.
H 9 Rayola Jacobsen, Bureau Chief of the Bureau of Occupational Licensing,
presented H 9 to the committee. She stated that H 9 incorporates revisions
of the crematory laws, and that H 11 revokes the old provisions of the
crematory law. Ms. Jacobsen briefly explained the new provisions, noting
that they involve changing definitions and clarifying language, and they
include requirements for funeral directors’ licensing. She also stated that
there is a slight amendment to H 9 which deals with changes in educational
requirements.



Steve Gordon, State Board of Morticians, testified in favor of H 9, explaining
that the industry has worked to come up with an alternative licensing
category. Currently, a “funeral director” and a “mortician” perform different
functions. In response to questions from the committee, Mr. Gordon stated
that the crematory license is incorporated into the same chapter, and that a
funeral director works under the supervision and direction of a mortician.
Also, a mortician can act as a funeral director, since the mortician’s license
includes the authority to act as a funeral director and an embalmer. A
separate embalmer’s license does not exist.



Bart Kline, a mortician, testified in favor of H 9, including the amendment,
noting that he was initially opposed to this bill but that he now favors it
because he believes that the educational standards need to be set.



Tim Gibson, owner of Cloverdale Funeral Home and Cemetery, testified in
favor of H 9
, noting that he was also initially opposed to the bill but now
believes that it should be passed in order to give the industry some time to
gauge what its effect will be. He does have some concerns about the
amount of education and the expenses associated with it. In Idaho’s rural
areas, the licensing requirement may work a hardship on small mom-and-pop operations. Mr. Gibson stated that if the curriculum becomes too
cumbersome, he thinks the industry should return to clear up such problems
with the Board and the Legislature. He is concerned about the lack of
availability of help for the funeral industry, noting that it took him one and a
half years to find a licensed mortician to replace one who left his business.

In response to questions from members of the committee, Mr. Gibson
testified that if the category of “funeral director” is defined as in this bill, the
people who greet the families and work with them to make funeral
arrangements would be able to be licensed as funeral directors without
having a mortician’s license. Mr. Steve Gordon was asked to respond to a
question about the locations of mortuary colleges. He stated that there are
none in Idaho, but that some schools do have online education, including
schools in Indiana and other Midwest states, and in Louisiana. Costs vary
greatly, from about $50 per credit to as much as $700 per credit.



Rep. Rydalch asked for further details on the impact of the current licensing
situation on rural funeral homes. Mr. Gibson explained that some of these
small-town funeral establishments are “mom and pop” operations, and that
it is difficult for such businesses to find someone to cover for them if they
wish to leave town for vacation or other reasons. The role of a licensed
“funeral director” could be filled by a minister, a spouse, or another qualified
person who could be licensed in that category. Rep. Kellogg asked Ms.
Jacobsen if she had worked with funeral directors in framing this bill; Ms.
Jacobsen replied that the legislation was drafted at the request of the State
Board of Morticians.

MOTION Rep. Kellogg made a motion to HOLD H9 in committee, saying that it
sounded as if the bill is not really ready to go to the floor.
Rep. Gagner asked Mr. Gibson if his testimony should be considered to be
in opposition of the bill. Mr. Gibson stated that he is not opposing the bill,
and that allowing more time to work on the bill will not result in an improved
version, since the Board of Morticians has been working on the bill and has
agreed that this is the best possible legislation.



Rep. Black commented that this is the third year that this type of legislation
has been proposed, and that last year there was considerable opposition to
the legislation. However, after cooperating on possible language, all
interested parties are satisfied that this is a good piece of legislation. Rep.
Black suggested that perhaps the legislation should be put in place and be
allowed to work for a year; then, if it doesn’t produce the additional numbers
of licensees that the industry needs, the educational requirements can be
revisited and perhaps revised next year.

SUBSTITUTE
MOTION:
Rep. Tilman made a substitute motion to send H 9 to the floor with a DO
PASS
recommendation.
John Buck, Potter Funeral Chapel, asked to testify in favor of H 9. Mr.
Buck explained that his business is located in Emmett, Idaho, and that he is,
in fact, a good example of the “mom and pop” operation that has trouble
finding coverage as well as finding qualified persons to hire. Although he
was initially opposed to H 9, he is now in favor of it, primarily because it
provides for educational requirements and a license for funeral directors. He
has had funeral directors from out of state who couldn’t get licensed in Idaho
because Idaho did not have a separate category for licensed funeral
directors.
UNANIMOUS

CONSENT

REQUEST

Rep. Tilman asked for unanimous consent to amend his previous motion
on H 9, explaining that, since there is an amendment to the bill, his motion
should have been to send the bill to the amending order. There being no
opposition, the previous motion was amended.
AMENDED

MOTION

Rep. Tilman then made an amended motion to send H 9 to General Orders
with amendment attached. Rep. Cannon seconded the motion. Motion
carried on voice vote.
MOTION Rep. Tilman made a motion to send H 11 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Black will sponsor
the bill on the floor.
H 10 Rayola Jacobsen then presented H 10, which will exempt clergy from the
licensing requirements for counselors. On page 2, lines 13-14 of the bill, “a
rabbi, priest, minister or clergy person of any religious denomination or sect”
is exempted from licensing requirements, “provided such activities and
services are within the scope of the performance of regular or specialized
ministerial duties.”



Rep. Douglas asked whether this bill would restrict a volunteer from using
the term “counseling.” Roger Hales, attorney for the Bureau of Occupational
Licensing, replied that such a volunteer could not represent himself as a
“licensed” counselor or a “licensed” marriage counselor; however, if he is
providing counseling services for free, he could call himself a “counselor.”
In response to further questions, Mr. Hales also explained that there are
three licensure classifications: 1) a licensed professional counselor; 2) a
licensed marriage and family life counselor; and 3) a licensed pastoral
counselor. Rep. Henbest asked whether a priest would be barred from
accepting compensation unless he were licensed; Mr. Hales responded that
if a priest wanted to call himself a licensed counselor, then he would have
to be licensed. However, he is not barred from accepting compensation for
counseling services.



Roberta Crockett, a member of the Board of Professional Counselors and
Marriage & Family Therapists, testified in favor of H 10. She explained that
her organization had been involved in the drafting of this bill and that it
provides good clarification and refinement of the licensing language in the
current Code.

MOTION Rep. Cannon made a motion to send H 10 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Henbest will
sponsor the bill on the floor
ADJOURN There being no further business to come before the committee, the meeting
was adjourned at 3:42 p.m.






DATE: February 11, 2003
TIME: 1:30
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

Rep. Henbest
GUESTS: Pam Eaton, John Mackey, Shad Priest, Julie Hoerner Simmons, Jim Genetti,
Dale Freeman, John Duvall, Mary Hartung, Kathy Cladis, Ken McClure,
Woody Richards, Rep. Wendy Jaquet
Meeting was called to order at 1:35 p.m. by Vice Chairman Gagner.
Chairman Black assumed control of the committee, and asked for a motion
to approve the minutes. Rep. Tilman made a motion to approve the minutes
of the February 5 meeting; motion passed by voice vote.



Chairman Black announced that there had been a lot of discussion between
the engineers and the landscape architects concerning H 8. Since there still
seem to be unresolved issues in the proposed legislation, Chairman Black
announced that he will place the bill before a subcommittee for further study.
The members of the subcommittee will be Rep. Cannon, Rep. Deal, Rep.
Block, and Rep. Douglas. Rep. Cannon will serve as subcommittee
chairman. Since the Business Committee is not meeting on Thursday,
February 13, the subcommittee will have an opportunity to meet at the
regular committee meeting time, 1:30 p.m., in Room 408.

H 58 Shad Priest, Administrator of the Department of Insurance, appeared before
the committee to present H 58. He also recognized the presence of the
director of the department, Mary Hartung, as well as Jim Genetti and Del
Freeman
, also from the department.



Mr. Priest explained that this legislation arises in response to the Gramm
Leach Blyley Act of 1999, which allowed a single financial entity or institution
to offer a variety of financial products. Financial institutions are regulated by
the federal government, while insurance companies are regulated by each
state’s insurance department. Mr. Priest explained that sometimes the state
Department of Insurance needs to exchange information with federal
financial services regulators, such as the Federal Reserve or the Federal
Deposit Insurance Corporation, and enter into exchange agreements with
them. H 58 will allow federal and state regulatory bodies to exchange
information with the assurance that the confidentiality of the information will
be protected.






Rep. Tilman asked Mr. Priest to explain in more detail what kind of
information this bill addresses. Mr. Priest gave an example of a federal
regulatory agency examining a bank which also sells insurance products.
If the regulatory agency uncovers evidence that the bank is engaging in
problematic or unfair practices in its insurance sales, the federal agency
might want to share that information with the state insurance department.
He also noted that when the Department of Insurance communicates with
federal agencies, the federal agencies ask what authorization the
department has and how the shared information will remain confidential.
Rep. Tilman then asked for an example of a “law enforcement agency” as
listed on line 15 of the bill; Mr. Priest said that the Federal Bureau of
Investigation would be an example of such an agency. He also explained
that this bill will provide protection to companies under investigation; such
companies should be assured that information will remain confidential if itis
shared with state regulatory agencies.



Rep. Cannon asked whether this bill would apply to individuals, in the sense
that it would allow personal information, which may be already floating
around, to be shared by agencies. Mr. Priest stated that if the information
“floats” to the Department of Insurance, this bill allows the department to
protect the confidentiality of such confidential information from other
agencies. It also extends the same protection to an insurance producer or
other licensee, if the information is used in the course of a regulatory action.

Rep. Black further clarified that an individual would not be able to go to the
Department of Insurance seeking confidential information; rather, this bill
addresses information sharing only between government agencies.

MOTION Rep. Meyer made a motion to send H 58 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Cannon will sponsor
the bill on the floor.
H 62 Mr. Priest then presented H 62, which deals with licensing and regulation of
persons offering bail bonds in the State of Idaho. Bail bondsmen currently
are required to be licensed as insurance agents. This legislation will
recognize that bail bondsmen are set apart as a separate category, by virtue
of the fact that they collect and hold collateral, and also track down and
return to custody persons who jump bail. Idaho has not had any laws
regulating this profession, and the Department of Insurance has worked with
the state bail bond organization to develop the legislation contained in H 62.

Mr. Priest then briefly reviewed the bill, explaining that it addresses specific
details of the bail bond field. For example, Section 5 addresses the types of
records that are required to be maintained, and specifies a five-year period
for retention of records on collateral, which is the same as that required of
other agents under Idaho Code. Section 6 contains the types of fees an
agent may charge and imposes limits on those fees. Section 7 details the
manner in which collateral must be handled. Mr. Priest noted that, although
the department receives only a small number of complaints about bail bond
agents, the highest number of those concern the handling of collateral. This
section also places limits on the amount of collateral that can be held,
stipulates that collateral funds must be maintained in a separate fund from
other funds, and requires that collateral must be returned within a
reasonable time after settlement. Section 8 deals with conditions for early
surrender of a defendant to custody, noting that the bail agent must have
good cause to surrender a defendant; without good cause, the bail agent has
to refund the premium. Section 9 states that bail bond agents are
responsible for their own employees in relation to bail transactions, and
clarifies that this section does not change any employer-contractor liability
laws.



Mr. Priest also presented a number of amendments to H 62, stating that
these represented clarifying language which was thought to be advisable
and necessary after consultation with bail bond agents.



In response to questions from committee members, Mr. Priest stated that the
number of complaints registered with the department about bail bond agents
is very small, and that this legislation will simply give the department a tool
to rein in that small number of abuses. He explained that the $15,000
amount for a surety bond was the figure agreed upon by all parties, this
amount was thought to be high enough without placing an undue burden on
smaller “mom and pop” operations.



John Duvall, charter president of the Professional Bail Agents of Idaho,
testified in favor of H 62. Mr. Duvall stated that his organization worked with
the proposed legislation drafted by the Department of Insurance, and the
resulting H 62 was submitted to all members of the organization for their
comments, revisions, or questions. Mr. Duvall said that members were
expressing concerns as late as yesterday about this bill, and that the
amendments noted by Mr. Priest resulted from this consultation and revision
process. Mr. Duvall testified that everyone now is in favor of this bill, and
that it is good for the Department of Insurance, because many of the current
codes don’t pertain to bail agents. It is also good for consumers, and good
for the state association of bail agents.



Rep. Black asked Mr. Duvall to explain how he has “control” over a
defendant, in order to allow the bail agent would be able to “surrender” such
a person. Mr. Duvall responded that the judge sets the amount of a bond on
a defendant, and that individual signs a civil contract with the bond agent.
The defendant then is under the control of the bail bond agent until he is
sentenced, at which time control is taken over by the judge. Rep. Black
asked how a bail bond agent maintains “control” over a defendant if that
person is not in physical custody. Mr. Duvall stated that the defendant is
usually reasonable and complies with the conditions of the bail bond agent’s
control over him.



Rep. Gagner asked whether bail bond agents lose money if a defendant
skips bail; Mr. Duvall responded that this is the case, since bail bond agents
have no insurance coverage to pay their losses. The bail bond agents carry
insurance coverage only against insolvency of their own business. Rep.
Gagner asked whether law enforcement personnel are available to assist a
bail bond agent when he goes out to retrieve a defendant who may be in
danger of skipping bail; Mr. Duvall said that generally speaking, the law
enforcement personnel will be on “civil standby” and will be ready to assist
if needed.



Rep. Douglas presented an example of parents pledging title to their home
as collateral for a bond to bail out their child from jail, and asked whether the
parents would lose their home if the child skips bail. Mr. Duvall said that this
would be the case. Rep. Douglas also asked whether the bail bond agent
is required to determine ownership for an item, such as a diamond ring, that
is presented as collateral; Mr. Duvall said that this kind of verification is
difficult to carry out at 2:00 a.m. when a lot of bail bond activity takes place,
but verification can take place later, which will ascertain whether the person
has equity in the property presented.

MOTION Rep. Deal made a motion to send H 62 to General Orders with
amendments attached; Rep. Gagner seconded the motion. Motion carried
on voice vote.
H 175 John Mackey, representing the Idaho Association of Insurance and
Financial Advisors, appeared before the committee to present H 175. This
legislation will require insurance companies to pay interest on the proceeds
of a life insurance policy if the proceeds are not paid in a timely manner,
which is designated as 30 days. Mr. Mackey briefly summarized sections of
the bill, noting that it specifies what interest rate is to be used, and states
that interest is to be paid only on lump sum payments. Mr. Mackey also said
that he is not aware of any opposition to this bill, and that the Department of
Insurance is aware of it.



Rep. Rydalch asked Mr. Mackey what the background of this bill is. Mr.
Mackey said that, although he thought all insurance companies did, in fact,
pay interest in situations where payments were delayed, a situation was
brought to his attention recently in which such interest was not paid. Only
after becoming aware of the details of this case, which was in the Sun Valley
area, did he realize that Idaho Code did not require such interest payments.

MOTION Rep. Eberle made a motion to send H 175 to the floor with a DO PASS
recommendation.
In further discussion, Rep. Cannon asked whether this bill would allow
insurance companies to delay payment of proceeds, as long as they were
willing to pay the required interest. Rep. Black gave an example of a
company making 4% interest on its investments and paying 2% interest on
the proceeds they are holding, and asked whether in this situation a
company could delay payment for a year. Mr. Mackey said that this kind of
behavior would definitely not be in the best interest of the insurance
company. Rep. Cannon stated that he wanted to state, for the record, that
he will be disappointed if this bill opens a door to slower payments from
insurance companies. Rep. Tilman pointed out that, without this bill, the
companies could still delay payment and would not be required to pay any
interest. Rep. Gagner also noted that most insurance companies do, in fact,
pay interest in these situations, and that this bill will help to encourage the
rest of the insurance companies to pay proceeds in a timely manner.



Jim Genetti, Department of Insurance, was recognized in order to respond
to questions from Rep. Tilman, who asked how the department currently
handles cases of slow payment of proceeds from a life insurance policy. Mr.
Genetti responded that, if the department receives a complaint, it would
instigate an investigation into the circumstances of the case. Since the Code
currently states that proceeds need to be paid in a “reasonable time,” the
department can issue fines or take other appropriate administrative actions.
Before fining a company, a determination would be made as to whether
there is a justification for not paying the proceeds, such as whether or not a
proper claim of death has been filed.



Mr. Genetti also stated that it is uncommon for a claim to remain unpaid after
30 days, although occasionally there are circumstances such as disputes
over ownership that cause such a delay. In any case, Mr. Genetti testified,
the department has never seen a problem that has extended many months,
although some cases do extend for 60 or 90 days. These usually are
protracted over that period of time for a reason, such as ownership disputes,
improper documents. However, the beneficiary still should be receiving
interest on the proceeds if the payment is delayed.



Rep. Black commented that anyone who may have a dispute with an
insurance company should know that the Department of Insurance is very
responsive to such complaints, and it is often surprising how quickly the
offending insurance company will respond to settle the matter, once it is
contacted by the department. Insurers know that the department has the
authority to suspend an insurance license, which provides considerable
leverage, since reinstatement of a license is an expensive and time-consuming process.

VOTE ON

MOTION

Chairman Black called for a vote on Rep. Eberle’s motion to send H 175 to
the floor with a DO PASS recommendation. Motion carried on voice vote.
Rep. Jaquet and Rep. Deal will co-sponsor the bill on the floor.
H 176 John Mackey, representing the American Council of Life Insurers and
United Heritage Financial Services, then presented H 176. Mr. Mackey
explained that the current low interest rate environment is incompatible with
the current 3% minimum interest rate specified by Code. This bill will lower
the minimum interest rate to 1.5 %. The bill will sunset after two years,
which will allow the industry sufficient time to develop a more permanent
solution, such as an indexing method. In response to questions from
committee members, Mr. Mackey stated that insurers need immediate relief
from the required 3% minimum, since they are experiencing a lack of
availability of short-term fixed annuities for customers. He also noted that
this legislation is not meant to provide a permanent solution, since there is
no consensus at the present time as to what that solution should be.
MOTION Rep. Deal made a motion to send H 176 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Deal will sponsor the
bill on the floor.
H 179 Pam Eaton, Idaho Retailers Association, appeared before the committee to
present H 179, which creates an exemption for affiliates of creditors and
other companies that service creditors’ accounts. This bill eliminates
burdensome licensing, bonding, and trust requirements for those not holding
themselves out as debt collectors. Ms. Eaton stated that, of the 33 states
that required licensing for debt collectors, all but five of them have created
this exemption. She also noted that the Department of Finance is in
agreement with this legislation. Ms. Eaton also corrected the “Fiscal Note”
on the bill’s Statement of Purpose, stating that the $2,000 figure is actually
a liberal estimate, and that the actual impact will be around $800.
MOTION Rep. Cannon made a motion to send H 179 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Collins will sponsor
the bill on the floor.
ADJOURN There being no further business to come before the committee, meeting was
adjourned at 3:12 p.m.






DATE: February 13, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Cannon, Rep. Deal, Rep. Gagner, Rep. Block, Rep. Douglas
ABSENT/

EXCUSED:

None
GUESTS: Rayola Jacobsen, Steve Drown, Jon Mueller, Dell Hatch, Michael Metcalf, Christine
Whittaker, Mary Grunewald McGown, Gina Fegler, Alan Giltzow, Jim Thomas, Jim
Mihan, Wendy Larimore, William J. Dial, Jr., Ellen Berggren, Lesa Stark, Jim Murray,
Molly Creswell, Kim Siegenthaler, Karen Doherty, David Bennion, Kirby Vickers,
Cory Riddle, Paul Baird, David Koga, Roger Hales, Jeremy Pisca, Debowden Bauer,
Beth Chandler, Kyle Hemly, Rodney Evans, Greg Gauer, John Eaton, Talena Dovel,
Tim Mokwa, Paul Norberg, Mark Dooley, Toby Norton
BILL #: Meeting was called to order by Chairman Cannon at 8:00 a.m. Rep. Cannon
announced that the purpose of the meeting was to analyze H 8, which is a prefiled
bill dealing with licensing of landscape architects. He also suggested that the
subcommittee would be in the learning mode at this meeting, and requested that
subcommittee members not ask questions of those giving testimony. Since several
members have committee meetings beginning at 9:00, Rep. Cannon stated that this
meeting would last one hour, and that another meeting will be scheduled to continue
receiving testimony on H 8.
H 8 Rayola Jacobsen, Bureau Chief of the Bureau of Occupational Licensing,
presented H 8, stating that the law dealing with licensing of landscape architects has
not been updated for 30 years and that this bill is a necessary update. She testified
that landscape architects are required to complete education, training, and testing
before they can become licensed. The proposed legislation has been developed
over the past three years, in close cooperation with Dave Curtis of the Board of
Professional Engineers and Professional Land Surveyors. Ms. Jacobsen also briefly
reviewed a Memo that had been provided to members of the subcommittee, pointing
out that the update will exempt certain professionals from compliance with the
Landscape Architect Act, including engineers, architects, land surveyors, planners,
and property owners. Contractors will also be exempt so long as their acts do not
impact the public health, safety and welfare.



Chairman Cannon noted that it would be necessary to plan how to handle the
succeeding testimony on H 8. He asked those who were present to indicate whether
or not they would be able to return on Monday afternoon for a second subcommittee
meeting, and assured them that they would be given an opportunity to offer their
testimony at today’s meeting. He also suggested that, in the interest of time, each
group wishing to testify might want to choose a single spokesman to present its
position, thus avoiding repetitious testimony. Rep. Cannon then announced that the
subcommittee would convene again on Monday afternoon, February 17, immediately
following adjournment of the Business Committee meeting.



Ms. Jacobsen then introduced Jon Mueller, representing the American Society of
Landscape Architects, which has about 80 members in the state of Idaho. Mr.
Mueller stated that he would first summarize the business and practice of landscape
architecture in the state of Idaho, since there is some misunderstanding of exactly
what a landscape architect is. Mr. Mueller explained that the profession of
landscape architect was granted professional status about 30 years ago, and at that
time, landscape architects worked primarily in one of two areas: the public sector
(government projects) and the nursery industry. During the 1970s, landscape
architects began opening private offices, and an accredited landscape architecture
program was instituted at the University of Idaho. In the 1980s and 1990s, the
profession grew, and engineers began hiring landscape architects as part of their
overall design team.



Mr. Mueller then presented a series of charts detailing various aspects of the
landscape architect profession, including the definition of “landscape architecture”
and some examples of projects completed by landscape architects. Mr. Mueller
stated that some landscape architectural firms act as general contractors on some
jobs, and that the average size of their projects is around $50,000, with some
exceeding $125,000. There are firms in Boise who have participated in the
development of over 40 subdivisions. Firms also engage in public practice, including
work for federal, state and local agencies such as the Bureau of Land Management,
the National Park Service, the Department of Water Resources, the Idaho
Transportation Department, and parks and cities.



Steve Drown, professor of landscape architecture at the University of Idaho,
appeared before the committee to continue the presentation on H 8. Mr. Drown first
made a slight correction to Ms. Jacobsen’s testimony, noting that a landscape
architect can have up to five years of formal education. He also provided an
explanation of the curriculum, which has changed over the years as the field of
landscape architecture has grown and developed. He testified that, at the University
of Idaho, the emphasis is on scale of projects, with beginning students working on
smaller scale projects and then moving on to specific construction technologies as
well as functional and aesthetic elements of landscape design. Mr. Drown also
stated that there is a substantial service component to the U of I’s program, in which
the students are required to go out and work on actual projects.



Dell Hatch, Idaho Board of Landscape Architects, appeared before the committee
to explain the preparation and testing of landscape architects. The examination
given to candidates for licensing is developed and distributed by the Council of
Landscape Architects Registration Boards (CLARB), whose mission is to foster
public health, safety and welfare. In producing the test, their purpose is to identify
the minimum competency expected of a candidate to be considered for licensure.
The test is the Landscape Architecture Registration Exam (LARE), a uniform
national exam developed through task analysis from industry professionals. The
exam is two days long, and consists of five sections: legal and administrative
aspects, analytical aspects, planning and site design, structural considerations,
including materials and methods of construction, and grading, drainage and
stormwater management.



Mr. Hatch also talked about the Landscape Architects state board, stating that the
board consisted of three members, appointed by the governor for four-year terms.
The board meets quarterly, or more often if necessary, and screens candidates for
the licensing exam as well as screening applicants from other states. They also
handle complaints and regulate licensees. Under the proposed legislation in H 8,
the board would deal with continuing education requirements and would also monitor
licensing compliance. All functions of the board are funded by license fees.

Mr. Hatch then presented a graphic which illustrates the three separate disciplines
of landscape architecture, engineering, and architecture, and shows how the three
fields overlap one another in instances such as storm water, drainage, and grading.



Alan Giltzow, a member of the State Board of Architectural Examiners, appeared
before the committee to testify in favor of H 8. Mr. Giltzow said that, in evaluating
this bill, his board asked the question, would it threaten the health, safety, and
welfare of the public. Their conclusion was that it would not, and the Board voted
6-0 in favor of supporting the proposed legislation.



Jeremy Pisca, representing the Idaho Building Contractors Association, testified in
opposition to H 8.
Mr. Pisca stated that the building contractors do appreciate and
applaud the work done by landscape architects. He also said that the verbiage of
H 8 is probably based on model legislation drafted at the national level, but that once
it is passed, it becomes Idaho law. The building contractors are concerned that
implementation of this legislation will have the effect of increasing the cost of
housing, since it would require more employees to be licensed as landscape
architects.



Mr. Pisca provided a one-page handout to members of the subcommittee which
illustrates current and proposed functions of landscape architects. Mr. Pisca stated
that the scope of practice is being expanded, and any time that scope of practice is
expanded, the number of people required to be licensed also expands. Noting that
H 8 is a prefiled bill, Mr. Pisca said that members of the contractors association did
not become aware of problems in the bill until mid-January, and that they have not
had an adequate opportunity to work out the potential problems. The building
contractors would be comfortable with leaving in the current exemptions.



Chairman Cannon announced that the subcommittee will continue hearing testimony
on H 8 on Monday afternoon, February 17, following adjournment of the Business
Committee meeting. At that time, it is his intention to begin hearing testimony from
the engineers and then continue with the rest of those wishing to testify.

ADJOURN: There being no further business to come before the committee, the meeting was
adjourned at 8:55 a.m.






DATE: February 17, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman, Kellogg,
Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Henbest, Smith(30),
Douglas
ABSENT/

EXCUSED:

None.
GUESTS: Stan Cole, Rayola Jacobsen, Jack Lyman, Bill Dial, Jim Murray, Patricia Nillson,
David Koga, Roger Hales, Kerry Ellen Elliott, Bob Corbell
Meeting was called to order at 1:32 p.m. by Chairman Black. Rep. Collins made
a motion to approve the minutes of the February 11 meeting. Motion carried on
voice vote.
H 143 Bob Corbell, representing the Independent Electrical Contractors, appeared
before the committee to present H 143, which deals with continuing education for
apprentice electricians. Mr. Corbell explained that there are two apprentice
training programs in electrical work; one is union and the other is independent.
Occasionally, an apprentice electrician will complete two years of training and
then drop out of the formal education program, but will continue working as an
apprentice electrician. Currently, there is no rule requiring such apprentices to
complete any additional training in order to continue working as an apprentice.
H 143 will require these apprentices to complete continuation training, and will
give authority to the electrical board to establish requirements for such training.



Rep. Gagner asked what would be required of an apprentice electrician who may
have been working without additional training for many years; in other words,
would he have to complete the required number of hours of additional training
corresponding to the number of years he had been practicing? Mr. Corbell
responded that if H 143 passes, such apprentices would not be required to “make
up” additional training, but would have to enter continuing education courses and
take the minimum number of hours required.



In response to further committee questions, Mr. Corbell stated that the
continuation training can be either from a university or technical college, or from
training offered by an employer; however, in order for on-the-job training to satisfy
the requirements, it would have to be approved by the state electrical bureau,
which is in charge of such continuation training. The specific requirements will
be set by the Rules of the electrical board, and a certificate will be issued to an
apprentice which will document the training. Mr. Corbell said that the specific
number of hours has not been set, but that the continuation training required of
journeyman electricians is eight hours, and it could be the same for apprentices.
Mr. Corbell also stated that H 143 will not “force” anyone to become



a journeyman electrician; rather, an electrical worker can choose to remain an
apprentice as long as he completes the continuation training.

MOTION Rep. Collins made a motion to send H 143 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Snodgrass will sponsor the
bill on the floor.
H 177 Jack Lyman, representing the Idaho Manufactured Housing Association,
presented H 177 to the committee. Mr. Lyman explained that this bill, which is
patterned after an Oregon statute, will allow existing manufactured housing
communities to be subdivided into individually owned lots. If the owner of an
existing park wishes to get out of managing the park, he will be able to subdivide
the park into lots which can then be sold to each home’s owner, rather than
selling the land and discontinuing operation of the park. This provides some level
of protection for current tenants, since they will not be displaced. Mr. Lyman
stated that there has been opposition to this bill from the counties, who maintain
that such lots will not meet minimum setback or lot size requirements. The
counties have suggested that mobile and manufactured home parks follow
existing statutes if they wish to subdivide. However, Mr. Lyman pointed out that
the existing statutes address undeveloped raw land and would not be workable
if applied to existing mobile home parks.



Rep. Deal asked whether there would be a review process when a mobile home
park is turned into a subdivision. Mr. Lyman replied that the existing park has
already gone through a review when it was established, and that it would have
to be in compliance with current regulations for parks before it would qualify for
subdivision, under this bill. The park would also have to be in compliance with
all health and environmental laws.



Rep. Black asked what would happen if tenants are given the opportunity to buy
their lot, but some tenants choose not to buy the lot. Would those tenants who
do not purchase the lot be forced to move out of the park? Mr. Lyman responded
that there may be a handful of tenants, or even a majority, who want to continue
renting their spaces. The owner of the park can continue renting their lots to
them, and in that case they would not be displaced. Although the ultimate goal
of subdividing a park is to move it to an owner-occupied park, the owner may
even find it desirable to sell the lots over an extended period of time rather than
all at once; for instance, he may be able to spread out the tax consequences of
a long-term capital gain on the property if he sells the lots gradually.



Rep. Gagner asked about the requirement stated on page 2, lines 25-27, that a
park be in existence for at least three years prior to the date of an application for
subdivision. Mr. Lyman said that this language responds to the counties’
concerns about the possibility of an owner getting a manufactured home park
approved with the intention of converting it to a subdivision. The three-year
requirement is an attempt to protect the counties from those who would quickly
convert from a park to a subdivision, once the park is approved.



Rep. Eberle expressed concern about the requirement that a homeowner’s
association be established, and stated that counties already have the ability to
regulate this kind of subdividing if they wish to do so. He also pointed out that the
counties may hesitate to approve new mobile or manufactured home parks if they
think the parks will be converted to subdivisions.

MOTION Rep. Eberle made a motion to table H 177.
SUBSTITUTE

MOTION

Rep. Tilman made a substitute motion to send H 177 to the floor with a DO
PASS
recommendation.



Rep. Meyer pointed out that a lot in an existing park, even if it were converted to
a subdivision, will still be used for a mobile or manufactured home and not for a
stick-built home. Mr. Lyman agreed, and also noted that the park owner cannot
sell an undivided interest in the lot until he has met all the requirements and
gotten a legal description of the lot. Mr. Lyman also stated that, without the ability
to own the lot, a mobile home owner has to finance the purchase of a home as
personal property, rather than as real estate. This requires that he pay a much
higher interest rate, perhaps 12% to 14%, rather than the interest rate for real
estate loans, which are around 6%.



Rep. Rydalch asked what happens to such a subdivision if the homeowner’s
association fails; in other words, who would maintain the subdivision? Mr. Lyman
stated that the provision for a homeowner’s association was included at the
request of the counties, since some entity needs to maintain roads within such
a subdivision. Rep. Rydalch said that some subdivisions do not allow private
roads; Mr. Lyman noted that the bill addresses existing parks which already have
their own road system.



Rep. Deal stated that some mobile home parks have small lots that would not
meet current requirements for parks. If such a park were to subdivide and not be
in compliance with current requirements, Rep. Deal wondered whether the city
would have the authority to rule on the viability of such a subdivision. Mr. Lyman
said that if an existing park is not in compliance with current requirements for a
park, then it would not be eligible for subdivision. The city’s or county’s role is to
verify that the statutory requirements have been met.



Patricia Nilsson, Planning Agent for Ada County, testified in opposition to

H 177, stating that it is difficult to testify against manufactured homes since they
offer affordable housing to many people, and in fact constitute 6% of the housing
in Ada County. Nevertheless, Ms. Nilsson enumerated several negative effects
of this legislation on Ada County. First several parks in the county are
nonconforming, although they did meet the requirements when they were
established. Ms. Nilsson said that she is not certain whether this bill would allow
subdivision of such parks. Second, the bill seems to allow a bypass of the review
that all plats undergo from the Planning and Zoning Commission, and would take
away the review process, which is a matter of fairness. Finally, this bill would set
up different standards for mobile and manufactured home subdivisions.



Rep. Gagner asked whether an owner of a mobile home park who requests
subdivision is automatically turned down. Ms. Nilsson said that the park needs
to be in compliance or can apply for a variance, and that such application would
be heard by the county commissioners. She also stated that she felt the current
standards protect the health, safety, and welfare of the public.



Rep. Gagner spoke in favor of the motion to send H 177 to the floor with a do
pass recommendation, noting that if parks are not allowed to subdivide, the
owner has no choice but to sell the property for an alternate use, in which case
all tenants are displaced. With regard to the existence of a homeowner’s
association, Rep. Gagner said that this is an important provision because
otherwise no right to lien exists in the event that the park becomes a mess. The
association needs to set budgets and demonstrate its viability. Rep. Gagner also
pointed out the serious problem of financing a mobile home purchase, noting that
if the home does not sit on real property and a permanent foundation, it cannot
be financed as real property and thus has to be financed at the higher rate for
personal property.



Rep. Cannon stated his opposition to H 177. He stated that a park may have
met the requirements in existence 20 years ago when it was developed, and
perhaps those requirements are acceptable for a rental situation. But H 177 is
now asking to make that arrangement permanent by allowing subdivision and
separate ownership of the lots. Rep. Gagner pointed out that subdividing the
park would not bring about any change in use; the only effect is that the tenant
would become a homeowner. Rep. Cannon replied that the use is not, in fact, the
same, because a rental is a temporary situation, while ownership is more
permanent. Rep. Rydalch asked whether this matter could be solved by local
ordinance.



Responding to Rep. Cannon’s concern, Mr. Lyman said that Rep. Cannon’s
question presumes that the original park approval was temporary; however,
“rental” does not mean temporary, and nothing in the original approval makes it
temporary. Also, ownership does not constitute a different use.



Mr. Lyman further testified that there should be no expectation that local
jurisdictions will waive setback requirements in order to approve subdivision of
existing parks. Rep. Eberle stated that the counties do have the power to do so
now, and that this local control should not be taken away from them. Rep.
Tilman
stated that the counties were the entities who previously requested this
type of legislation, so it would not be accurate to characterize this legislation as
“taking away” anything from the counties.



Rep. Tilman explained that the Business Committee had received long and
extensive testimony in previous years from the tenants in mobile home parks,
who were frustrated by rent increases and new rules being imposed on them, and
that this legislation would solve some of those problems. Rep. Tilman stated that
H 177 is one tool to help those who need affordable housing, and that it will
provide a process for them to become homeowners and obtain favorable
financing. Rep. Tilman said that there may need to be future modifications of this
legislation, but that the committee should pass it and see how it works in
alleviating some of these problems. He also noted that Mr. Lyman had worked
with interested parties to work out the details of this bill.



Rep. Rydalch stated that she has not perceived a need for this legislation and
that no one has approached her with complaints about the current situation. Rep.
Black noted that this could be because they have simply given up on seeing any
improvements in their situation.

MOTION Chairman Black called for a vote on the motion to send H 177 to the floor with
a DO PASS recommendation. Motion carried on voice vote. Rep. Rydalch
requested that she be recorded as voting no.
H 32 Roger Hales, representing the Bureau of Occupational Licenses and the Board
of Architectural Examiners, presented H 32 to the committee. This legislation will
allow the board to develop a continuing education program, by administrative
rule. Mr. Hales also presented an amendment to H 32, which expands the
architect’s scope of practice to allow them to design the space around buildings.
The language in the proposed amendment is taken from the architecture model
law.



Rep. Henbest asked whether this entails the same work as that performed by a
landscape architect. Mr. Hales said that the practices of the two professions do
entail some overlap. Rep. Henbest asked that the statement of purpose for the
amendment reflect the expansion of the scope of practice.



Rep. Gagner asked whether the additional language was controversial. Mr.
Hales stated that the need for the language came to light after the architects
reviewed the landscape architect act. The scope of practice for architects
currently allows them to design buildings and groups of buildings, and their intent
with this amendment is to allow them to include design of the site surrounding
those buildings. Rep. Block asked for some examples of what would be
designed by an architect in these spaces; Mr. Hales mentioned sidewalks and
entrances.



James Murray, past president of the American Institute of Architects-Idaho and
an officer of that group for the past seven years, testified in favor of H 32. He
stated that 28 states require continuing education for an architect’s license
renewal. Also, the American Institute of Architects, with 50,000 members,
currently requires continuing education as part of its membership requirements.
Mr. Murray also stated that the AIA board is in support of this legislation.



Rep. Black asked Mr. Murray to address the proposed amendment to H 32. Mr.
Murray introduced Stan Cole of the Idaho Board of Architectural Licensing. Mr.
Cole testified that architects often collaborate with landscape architects and civil
engineers on issues such as building accessibility and parking layouts. This
amendment will make it clear that architects are involved in this part of a project.



Rep. Snodgrass asked whether a specific number of hours had been set for
continuing education requirements. Mr. Cole said that the requirement would be
eight hours per year, and would focus on health and safety areas.



Rep. Block asked whether the architects had collaborated with consulting
engineers and whether they are in agreement with the amendment. Mr. Cole
testified that they had discussed it with landscape architects and that they had no
opposition. Rep. Block noted that the design of drainage systems, for example,
takes great technical knowledge, and she asked whether architects have that
necessary training. Mr. Cole stated that architect education includes an
understanding of site drainage, although it does not include a course in civil
engineering. However, when an architect needs to utilize that expertise, he will
hire an appropriate engineering consultant.



Rep. Cannon stated that he thought the amendment added a section which will
give architects the authority to actually perform this work, and that this goes
beyond the scope of practice of an architect. He also asked whether the architect
will be able to stamp the site plan, which is currently done by a civil engineer. Mr.
Cole stated that the amendment is not trying to expand, but rather to clarify, the
architect’s scope of practice.






Rep. Tilman said that it appears this amendment will add the ability to oversee
what architects have actually already been doing as a matter of practice. Mr.
Cole said that was exactly right. Rep. Black noted that the committee may be
trying to avoid causing another problem similar to the current discussion dealing
with landscape architect licensing.



David Koga, president of the Idaho/Montana division of the American Society of
Landscape Architects, testified in favor of H 32, explaining that architects,
landscape architects, and engineers work well together on site development. He
also noted that architects do have rules of professional responsibility, and that
they know when they need to consult with other experts in areas not included in
their scope of practice.



Bill Dial, currently a member of the Board of Idaho Landscape Architects,
testified in favor of H 32. He also supports the proposed amendment, stating
that it will recognize the site planning functions of architects.

MOTION: Rep. Deal made a motion to send H 32 to the floor with a DO PASS
recommendation, without the proposed amendment. Speaking in favor of this
motion, Rep. Deal said that he is in favor of continuing education for architects,
but that the amendment may be premature without further discussion. Rep.
Tilman pointed out that the amendment can always be brought forward later,
perhaps as a new bill. Motion carried on voice vote. Rep. Black will sponsor
the bill on the floor.
ADJOURN: There being no further business to come before the committee, the meeting was
adjourned at 3:00 p.m.






DATE: February 17, 2003
TIME: Upon Adjournment of Business Committee
PLACE: Room 408
MEMBERS: Chairman Cannon, Rep. Deal, Rep. Gagner, Rep. Block, Rep. Douglas
ABSENT/

EXCUSED:

None
GUESTS: David L. Curtis, Talena Dovel, Gina Fegler, Kim Siegenthaler, Mary McGown, Jim
Thomas, Bill Dial, Debowden Bauer, David Koga , Paul Norberg, Les Walker, Paul
Baird, Molly Creswell, Jerry Peterson, Roger Hales, David Bennion, Stan Cole,
Karen Doherty, Kirby Vickers, Scott J. Chandler, Beth Chandler, Woody Richards,
Wendy Larimore, John Eaton, Jim Murray
Meeting was called to order at 3:20 p.m. Rep. Deal made a motion to approve the
minutes of the subcommittee’s previous meeting on February 13. Motion carried on
voice vote.



Rep. Cannon reminded subcommittee members and those in attendance that at the
previous meeting, testimony was taken from the landscape architects and the
building contractors, and that at today’s meeting the engineers would be given the
first opportunity to offer testimony. He also requested that if others wished to testify,
they limit their remarks to new material and try to refrain from giving testimony that
would duplicate the testimony already submitted by others.

H 8 Les Walker, Idaho State Engineering License Board, testified in opposition to

H 8. He presented information about the comparative educational components of the
civil engineering and landscape architect programs at the University of Idaho. He
pointed out the significant differences in education, examination, and experience
required of the two fields.



Molly Creswell, representing the Consulting Engineers of Idaho, testified in
opposition to H 8. Ms. Creswell stated that her organization became aware of the
bill at its pre-filing, and that they contacted and met with Rayola Jacobsen and the
landscape architects in an effort to negotiate acceptable language regarding scope
of practice. However, no compromise or middle ground could be reached.



David Bennion, Consulting Engineers of Idaho, an engineer with CH2MHill, testified
in opposition to H 8. Specifically , he spoke to the language on page 2, item 5(b).
Mr. Bennion questioned whether landscape architects actually possess the
necessary technical knowledge to perform all the functions listed therein. This
creates a concern for the health and safety of the public, although this may not be
the intent of the bill.



Rep. Deal asked whether some of the designations in section 5a of page 2 are able
to fit into the definition of a landscape architect, such as erosion control or site forms.
Mr. Bennion said that, although some would be included under a landscape
architect’s practice, it is difficult to narrow the scope to a specific site, or a specific
campus or 10-acre project. Rep. Gagner asked what the response of the landscape
architects was to the request to strike items (a) through (e). Mr. Bennion said that
when the revised bill was drafted, those sections were kept intact.



Karen Doherty, president-elect of the Idaho Society of Professional Engineers,
testified in opposition to H 8. She stated that the ISPE promotes licensure and
thinks that licensing landscape architects is a good step. However, she is
concerned with the breadth of language found in the bill. Ms. Doherty said that her
organization is hopeful that acceptable language can be found, if not during this
legislative session, then sometime beyond the end of the session.



Rep. Douglas asked whether Ms. Doherty was willing to let the bill go forward, or
whether she would like to see the bill held in committee. Ms. Doherty stated that she
would not approve of the bill in its current form, but that she is willing to continue
working on it to make it acceptable to all interested parties.



Jerry Peterson, Consulting Engineers of Idaho, and past member of the Idaho
Engineering Licensing Board, testified in opposition to H 8. Mr. Peterson said that
the wording included in the definition of a landscape architect is too broad; for
instance, “land form” could be construed to mean a berm, an earth-filled dam, a
highway embankment, or even a landslide. A “pedestrian and vehicle circulation
system” might mean an interstate highway system. Mr. Peterson said that the intent
of the bill is good, but that it is too broad and leaves too much that could be
misinterpreted in the future.



James Murray, past president of the American Institute of Architects-Idaho, testified
in favor of H 8 in its amended form, stating that the newest amendments to the bill
meet all the concerns of his organization.



Jim Thomas, a landscape architect in practice for 20 years in Idaho, testified in
favor of H 8
. Mr. Thomas testified that landscape architects are often challenged
on their technical abilities, but that the landscape architect curriculum does cover
technical areas such as grading, storm drainage, and watershed. Also, with regard
to the definition of “land forms,” Mr. Thomas stated that the current practice
language involves the design and arrangement of land forms, as well as the
development of industrial and recreational sites, and H 8 actually narrows this. Mr.
Thomas also distributed copies of a document entitled “Landscape Architect Design
& Alignment Concepts,” which details the role of landscape architects in the work
done on Highway 93 in Montana. Finally, Mr. Thomas stated that landscape
architects abide by an ethics clause that directs them to refrain from performing work
for which they are not competent. It has been proposed that they adopt rules of
professional responsibility, which will need to be adopted by the landscape
architecture board. Mr. Thomas stated that this bill is simply asking that landscape
architects be granted some professional recognition for their work.



Rep. Deal asked whether the landscape architects would be willing to continue
working on this legislation to arrive at common verbiage. Mr. Thomas stated that
they would do so, although the language is too broad if only section 5 is included.
Rep. Cannon asked Mr. Thomas to explain what he, as a landscape architect,
would be able to do after passage of this bill that he cannot do now. Mr. Thomas
said that he would do nothing different than what is already in his scope of practice,
including grading and drainage, campground roads, and so forth.



Rep. Gagner questioned the need for this bill, given Mr. Thomas’ previous answer.
He noted that normally bills are brought forth to address a problem, but it seems as
if no one is violating the landscape architect’s right to perform the duties they
perform. Mr. Thomas stated that over the years, the engineers have objected to
areas of crossover in the respective practices, and have also questioned
exemptions. Rep. Cannon observed that just because a landscape architect is
licensed, that does not mean that he is qualified to do certain work. Thus, by
passing this bill, the public may be exposed to landscape architects who are not
competent to do what their licensing would allow.



David Koga, president of the American Society of Landscape Architects for Idaho,
testified in favor of H 8, and stated that he had received a letter in support from the
Idaho Nursery and Landscape Association, which consists of a mix of retail
nurseries, garden centers, and sprinkler system installers.



Mary McGown, a member of the Landscape Architect Board, testified in favor of

H 8 because she said that the issues in this bill are everyday concerns that need to
be addressed, including adoption of the rules of professional responsibility, adoption
of the continuing education rules, and use of the electronic seal, which is not in
current law.



Kirby Vickers, JUB Engineers, testified in opposition to H 8, stating that, if he
were to hire a landscape architect to do drainage, for example, he would be in
violation of the standard of care demanded of him.



Debowden Bauer, Landscape Architect Board, testified in favor of H 8, stating that
recently, the City of Boise rewrote previous language specifying the use of
engineers, to read “any qualified professional licensed to do this work.” Ms. Bauer
also testified that if a client sees a benefit to using a landscape architect, he should
have the freedom to hire one.



Stan Cole, architect and past president of the American Institute of Architects,
testified in favor of H 8, saying that the Architecture License Board voted to support
this legislation and that they do not anticipate any conflicts.



John Eaton, representing the Building Contractors of Southwest Idaho, testified in
opposition to H 8
, stating that some employees who perform this type of work
aren’t exempted from the licensing requirements and thus may be barred from doing
it in the future. An example of this would be irrigation system installers, who may
have to be licensed as a landscape architect to continue their work. In response to
a question from Rep. Cannon, Mr. Eaton stated that their concern is that requiring
licensing of such workers will have the effect of driving up the cost of home
construction.



Bill Dial, Idaho Board of Landscape Architects, testified in favor of H 8, saying that
this bill is a simple housecleaning bill. Since the landscape industry was established
30 years ago, there have been tremendous changes in the field, and it is necessary
to update the licensing requirements to reflect those changes. He also stated that
the landscape architects had made sure that the green industry would be exempt
from these requirements. Responding to a question from Rep. Cannon, Mr. Dial
stated that the work performed by landscape architects is currently covered under
today’s law, but that the new definitions in H 8 define this work more closely.









Roger Hales, Board of Landscape Architects and Occupational Licensing Board,
stated that landscape architects don’t claim to be engineers; rather, they retain
engineers to perform those functions that require engineers. Mr. Hales stated that
some of the concerns expressed by the contractors have been resolved; also, there
was specific language included to meet the concerns of the engineers. One problem
is that contractors are undefined and unregulated, and have no specific education,
testing, or training. Mr. Hales said that all parties have worked in good faith, but that
many don’t understand what landscape architects are all about.



Rep. Douglas asked whether the landscape architects had addressed the concern
expressed by John Eaton about irrigation system workers. Mr. Hales said that the
legislation won’t interfere with the basic activities they do today, as long as the
activities don’t impact health, safety, and welfare.



After hearing from all parties who wished to offer testimony, Chairman Cannon
asked for some committee discussion of H 8. Rep. Gagner said that normally when
a bill is sent to a subcommittee, it is in an attempt to see whether there is any new
testimony or whether a compromise can be effected. In this case, the parties do not
appear to have resolved their differences.

MOTION Rep. Deal made a motion that the subcommittee recommend to the Business
Committee that H 8 be held in committee. He also asked that all parties continue
working to resolve their differences and then bring back new legislation next year.
In support of his motion, Rep. Deal said that he thinks the committee process works
well, and that since the landscape architects and the engineers have not yet reached
some consensus on this matter, the suggestion to come back next year is a good
one. He also said that, in response to Mary McGown’s testimony that certain
housekeeping aspects of this bill need to be enacted now, Rep. Deal also said that
he would be willing to entertain a bill that would accomplish this.



Rep. Douglas stated her support of the motion, suggesting that the committee could
deal with the housekeeping aspects of the bill while still leaving out the scope of
practice and exemptions. She also noted that she had done some research into the
function of landscape architects, and that she was particularly impressed with their
work on the Highway 93 project, specifically how they worked with the public in a
sensitive and responsive manner.



Rep. Block stated that she also supports the motion, noting that engineers have
been working with the infrastructure of the state for 100 years, and that the
responsibilities of engineers are huge. She said she does not think it would be in the
best interest of the State of Idaho to ignore their expertise.

VOTE ON

MOTION

Chairman Cannon called for a vote on the motion to recommend that the Business
Committee hold H 8
. Motion carried on voice vote.
Chairman Cannon expressed appreciation for all those who testified on H 8. He also
made the point that he intended to ask Chairman Black for permission to continue
working with all interested parties in working out compromise language that will be
acceptable to the landscape architects as well as to the other groups who have
been involved in drafting and revising this legislation.
ADJOURN: There being no further business to come before the committee, the meeting was
adjourned at 4:55 p.m.






DATE: February 19, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

Rep. Block, Rep. Rydalch
GUESTS: Carl Wilgus
Meeting was called to order at 1:35 p.m. Rep. Meyer made a motion to
approve the minutes of the February 17 meeting, with corrections. Because
of the number of corrections, Rep. Meyer withdrew his original motion and
made a motion to have the committee secretary correct the minutes and
submit them for approval at the next meeting. Motion carried on voice vote.
HJM 3 Carl Wilgus, director of the Department of Commerce, presented HJM 3 to
the committee. Mr. Wilgus distributed two documents to committee
members: “Idaho’s 2002 Winter Games Strategy – A Report of Success,” and
“Idaho Winter Olympic Games Needs Assessment.” The first document
details the considerable economic impact that the 2002 Winter Games in
Salt Lake City had on Idaho’s economy. Mr. Wilgus stated that Idaho
enjoyed a $100 million economic impact, distributed between large and small
businesses in the state. For example, Washington Group International was
given a major grant to improve the highway system around Salt Lake City in
advance of the games. A small ski cap manufacturer in Sun Valley derived
20% of his 2002 revenue from sales at the 2002 winter games. An Idaho
rafting company sent three of their vans and three drivers to Salt Lake to
transport athletes and VIPs. Fleetwood Homes in Nampa sold $1.4 million
worth of trailers for use at the games. Finally, AA Porta Potty was awarded
a $2 million contract to supply portable restroom facilities at the games. Mr.
Wilgus stated that the net beneficiary of this economic impact was the State
of Idaho.



Mr. Wilgus noted that currently there are three sites under consideration for
the 2010 Winter Games: South Korea, Austria, and Vancouver. Washington
state has already passed a resolution of support similar to HJM 3; Oregon
and Montana are also considering similar statements of support, as are
British Columbia and Alberta. The International Olympic Committee is
visiting all three potential sites during the months of February and March,
and a final decision will be made on July 3, 2003. Mr. Wilgus also testified
that, if the 2010 Olympics does take place in Vancouver, an Idaho delegation
will be able to visit, in order to learn more about what needs to be done with
an eye towards hosting the games in Idaho in the future.

MOTION Rep. Deal made a motion to send HJM 3 to the floor with a DO PASS
recommendation.
Responding to questions from the committee, Mr. Wilgus pointed out that
Idaho does share its northern border with British Columbia, and that he
anticipates the same kind of benefit to Idaho as the 2002 Salt Lake City
games provided. The impact could be even greater because of Idaho’s
participation in the Pacific NorthWest Economic Region. Obviously, most of
the impact will be in north Idaho. Mr. Wilgus also stated that the reason Sun
Valley is the only Idaho ski resort to be mentioned in the joint memorial, this
is not to be construed as a slight to the other ski areas in the state; rather,
Sun Valley is the one resort that is highly recognizable to the international
community. Chairman Black also mentioned that the Pacific NorthWest
Economic Region would be cooperating in any effort with regard to the
Olympics.



Mr. Wilgus also commented on the second document he distributed, which
addresses Idaho’s possible hosting of a winter Olympics in the future. The
35-year time frame was chosen because it is thought that the state will
probably have grown to a point where it will have the capacity to handle the
Olympics at that point. Mr. Wilgus said that his department conducted
interviews with about 40 business and political leaders to assess Idaho’s
future readiness to host such an event. Since Idaho is a fiscally
conservative state, it is thought that there would not be support for building
facilities specifically for the Olympics; rather, the state would depend upon
growth and facility development that will occur naturally as the state grows.
The Olympics requires a minimum of 22,000 hotel rooms; Idaho is currently
able to provide about 9,000, or 42% of the necessary number. Mr. Wilgus
envisions Olympic events spread over a wide area of southern Idaho, with
opening and closing ceremonies at Bronco Stadium, which will probably
have a 65,000 seat capacity in 35 years. He also stated that, for example,
downhill events could be in Sun Valley, free style at Bogus Basin, slalom
events in Valley County, and skating events in Canyon County. Thus, the
economic impact would be spread throughout a large portion of the state.

VOTE ON

MOTION

Chairman Black thanked Mr. Wilgus for his presentation, and called for a
vote on the motion to send HJM 3 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Black will sponsor
the bill on the floor.



Chairman Black also announced that the Business Committee will meet on
Friday afternoon, although he does not anticipate a lengthy meeting because
there are only two bills on the agenda, H 144 and H 206.

ADJOURN: There being no further business to come before the committee, the meeting
was adjourned at 1:55 p.m.






DATE: February 25, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

Rep. Kellogg
GUESTS: Ron & Marietta Dennis, Breck Barton, Jim Harris, Rick Dredge, Andrew
Chasan, Phil Barber, Ric Peterson, Jim Trent, Paul Jackson, Rayola
Jacobsen, Woody Richards, Allyn Dingel
Meeting was called to order at 2:05 p.m. by Chairman Black. Rep. Deal
made a motion to approve the minutes of February 21; motion carried on
voice vote.
H 8 Rayola Jacobsen, Bureau of Occupational Licensing, appeared before the
committee and asked that H 8 be HELD IN COMMITTEE. Ms. Jacobsen
reported that the landscape architects, the engineers, and other interested
in the issue of licensing for landscape architects are still meeting to develop
language that will be acceptable to all parties. It may be possible that new
legislation will be decided upon in time to introduce a bill this session;
otherwise, work will continue and a new bill will be introduced next year.



Chairman Black thanked the subcommittee for its work on this issue, and
commended Rep. Cannon for chairing the committee in a fair and efficient
manner.

MOTION Rep. Meyer made a motion to HOLD H 8 in committee. Motion carried on
voice vote.
H 180

Phil Barber, representing the American Insurance Association, a group of
property and casualty insurers, presented H 180. Mr. Barber explained that
Idaho Code 41-1839 was written before the advent of uninsured and
underinsured motorist coverage. This code section provides an incentive for
an insurance company to settle with its insured party by requiring that once
proof of claim is provided, the insurance company must pay within 30 days.
If payment is not made in that time frame, and if the matter is settled in a
court proceeding, the insured has a right to payment for attorney’s fees. In
the past, 41-1839 did not affect uninsured/underinsured (UM/UIM) claims
because most of them were settled, and if they did go to arbitration, the
arbitration was not included under the provisions of this statute. However,
Mr. Barber noted that last year the Idaho Supreme Court ruled that 41-1839
could be applied to UM/UIM cases.



Mr. Barber explained that in UM/UIM cases, the insurance company agrees
to pay the amount that would have been paid if insurance was in place.
Once sufficient information is provided about an accident, a fair amount can
be determined for payment. However, Mr. Barber said that the current
statute’s allowance of 30 days for payment does not allow sufficient time for
reception and evaluation of all the information needed to arrive at a payment
amount. H 180 states that, when the required information is presented, an
insurer will have 60 days to evaluate it and make an offer of payment. If the
insurance company fails to make an offer, or makes an offer substantially
less than that arrived at through arbitration, the insurance company will be
required to pay reasonable attorney’s fees and reasonable arbitration fees.
Mr. Barber testified that the aim of H 180 is to get the insurance companies
to pay claims in a timely manner.



In response to questions from committee members, Mr. Barber said that the
term “all information” on line 15 refers to all the information required by the
insurance policy, which is interpreted as “sufficient” information for the
company to evaluate and make an offer. Mr. Barber also stated that it is
hoped that H 180 will reduce attorney fees because it will encourage swift
settlement. The 20% figure is an attempt to quantify what “substantially”
means.



Ric Peterson, Farm Bureau Mutual Insurance Company, testified in favor
of H 180.
In Mr. Peterson’s view, the most important part of H 180 is the
extension of time to 60 days, and the provision that the 60-day time period
does not begin until the company gets enough information to make an
informed decision as to a settlement amount. Mr. Peterson also stated that
unless legislation is passed, there will be a sharp increase in the number of
UM/UIM claims going to court.



Mr. Peterson responded to questions from committee members, explaining
that, in the case of a pregnant woman who may be injured in an accident, the
woman would not be limited to 60 days to report damages but could wait
long enough to determine whether there is harm done that is not initially
detected. In cases of medical costs, most policies have medical or health
coverage that will pay those kinds of expenses.



Jim Harris, an attorney, testified in opposition to H 180. Mr. Harris
disagreed with Mr. Barber’s statement that 41-1839 predates UM/UIM
coverage, and said that Idaho law was no different before the Martin case of
December 2002, which was cited as the reason for this proposed legislation.
Mr. Harris noted some major problems with H 180: First, this bill will mean
that every arbitration case will go to court because only a court can award
attorney fees. The result of this will be an increase in the District Court
workload. Second, the increase in time from 30 days to 60 days will allow
insurance companies to further delay settlement of claims. Mr. Harris also
pointed out that the legislation requires that “all” information must be
supplied before the clause regarding attorney fees is applicable, and this will
give insurance companies an additional defense to not pay claims. Finally,
this legislation contradicts the Unfair Claims Settlement Practices Act. The
bill will allow insurance companies to make an offer, no matter how ridiculous
the amount may be, in order to force the matter into court. Mr. Harris thinks
that H 180 does not avoid litigation; rather, it forces litigation.



Responding to committee questions, Mr. Harris said that H 180 will require
litigation in every arbitration case because of the fact that only courts can
award attorney fees; this language is found in line 20 of the bill, “the court
shall award …” Mr. Harris also stated that he does not think the Legislature
has the responsibility to determine what is reasonable; rather, the
Legislature sets policy. It is up to judges to decide cases, since they are
trained to determine what is reasonable.



Rick Dredge, an attorney in private practice and a member of the Idaho Trial
Lawyers Association, testified in opposition to H 180, stating that is
represents a substantial change in Idaho law. Mr. Dredge stated that Idaho
Code Section 41-1839 is working well; however, under the proposed new
legislation, an insurance company does not have to actually tender payment,
but is required only to make a settlement offer. Mr. Dredge gave some
examples of actual cases in which this would have worked a hardship on
insured parties. He also testified that H 180 will remove the incentive for
insurance companies to make swift settlement.



Mr. Dredge responded to questions from the committee, explaining how
arbitration fees and legal fees are currently paid. He stated that the district
court has the sole authority to award attorney fees, and that after the judge
enters a judgment in the case, he then makes a judgment on fees and
awards them.



Andrew Chasen, an attorney, testified in opposition to H 180. Mr. Chasen
first stated that he can accept the extension of time from 30 days to 60 days,
and that he also has no problem with the term “all information” on line 15.
He does have a concern, however, that the bill will require the insured to be
exposed to the risk of attorney fees for just trying to get a fair settlement
amount. Mr. Chasen stated that the bill provides a built-in intimidation factor
for the insured.



In response to questions from the committee, Mr. Chasen outlined the major
changes that H 180 would effect. First, the time limit to settle claims is
extended from 30 days to 60 days. Second, it muddies the water in the
matter of what information is required to be submitted to an insurance
company, whereas currently the requirement is that “proof of loss” must be
submitted. Finally, it will make a person who has paid premiums on a policy,
sometimes for many years, pay attorney fees to his own company. Asked
whether an insured must pay both attorneys, Mr. Chasen responded that,
although this may not be the current practice, this legislation will, in fact,
require that.



Ron Dennis testified in opposition to H 180. Mr. Dennis introduced his
wife, Marietta Dennis, who was seriously injured in an automobile collision
in April of 1996, incurring over $78,000 in medical bills. Mr. Dennis stated
that, because the other driver, who was at fault, had only $25,000 in
insurance coverage, he had to retain an attorney on a contingent fee basis
in order to try and settle his claim. The insurance company kept asking for
more and more information, and finally the matter went to arbitration.
Although the arbitrator found all points in favor of Mrs. Dennis, the settlement
offer was just $8,000. Mr. Dennis stated that his insurance company finally
did offer the remaining $275,000 of coverage that he carried on his policy,
but that he had to sign off on any future claims. There is still dispute about
interest owed. Mr. Dennis said that H 180 seems to leave a lot of “wiggle
room” for insurance companies to avoid payment of claims. He also stated
that their medical bills were paid.



Breck Barton, an attorney and a neighbor of Mr. and Mrs. Dennis, testified
in opposition to H 180, stating that it will encourage parties to go to court
in order to settle claims, and that it provides a disincentive to insurance
companies to settle small claims. Mr. Barton pointed out several problematic
aspects, including the requirement to “offer” a settlement rather than to
“tender” payment. He also thinks that the term “all information” may lead to
great mischief by insurance companies, who can change policy language to
demand unreasonable information before they settle claims.



Mr. Barton responded to committee questions, noting that he has no problem
with the extension of time from 30 days to 60 days. However, he thinks that
H 180 adds language to statute without deleting the existing statute, and this
may provide conflicting language, which will have to be settled by the
Supreme Court. Although he was hired on a contingency basis, the Martins
are still waiting for a final settlement and there is still debate about attorney
fees and costs in this matter.



Woody Richards, representing the National Association of Independent
Insurers, testified in favor of H 180. Mr. Richards responded to arguments
made by those opposing H 180. He stated that this bill will not increase the
workload of the district courts, since the courts have always had the
responsibility of making awards. Mr. Richards said that this bill will reduce
the current game playing with regard to accident claims and their settlement.
He pointed out that there seems to be no objection to the extension of time
provisions; in addition, the bill defines what information has to be provided
to the insurance company. Mr. Richards testified that it is also in the best
interest of insurance companies to settle claims promptly so that they do not
alienate their customers and lose business. He also stated that the specified
20% amount was an attempt to make the definition of “substantial” more
certain. Mr. Richards also disputed the problem with the term “offer” in H
180, versus the term “tender” in the existing code, noting that if an offer is
accepted, the company has an obligation to pay the amount offered. Mr.
Richards said that if an insurance company were to make demands for
unreasonable information, the courts would throw out those demands.
Finally, he testified that the bill will not require the insured to pay attorney
fees, and there is no way it could be interpreted to mean that.



Allyn Dingel, an attorney, testified in favor of H 180. Mr. Dingel discussed
the Martin case of December 2002, noting that it was not the insurance
company’s fault that a two-year delay had taken place; rather, among other
delays, the plaintiff changed attorneys. Because the Martin case found that
the legislature hadn’t addressed the area of arbitration, Mr. Dingel pointed
out that the legislature needed to fix this, and H 180 is an attempt to do so.
He also noted that an “offer” of settlement is considered to be as good as a
payment.

MOTION Rep. Gagner made a motion to send H 180 to the floor with a DO PASS
recommendation. Rep. Deal stated his support of the motion, noting that it
is the intent of the bill to extend the time limit to 60 days, which is a desirable
purpose. He also stated that some of the examples of hardship that were
proffered as evidence by opponents of the bill do not, in fact, reflect what
really happens with insurance claim settlements. Rep. Gagner also noted
that H 180 should cause more reasonable settlements to be made. Motion
carried on voice vote.
Rep. Gagner will sponsor the bill on the floor.
H 248 Teri Ottens, Executive Director of the Idaho Association of Mortgage
Brokers, presented H 248. Ms. Ottens explained that currently there are
three groups which deal with mortgage brokering but are exempt from
licensing; these are accountants, attorneys, and realtors. Both accountants
and attorneys are regulated by their respective licensing authorities, but
realtors are not. H 248 will require realtors who want to be involved in
brokering mortgages to obtain the same license as that which is required of
mortgage brokers. Ms. Ottens stated that the realtors association has
remained neutral on this legislation.



Responding to questions from committee members, Ms. Ottens said that it
is not common to see real estate agents brokering mortgages, but there are
some who do so. This legislation is intended to protect consumers from
predatory lending practices as well as other practices sometimes engaged
in by unscrupulous individuals. However, the bill will not require a license for
a realtor who simply wants to suggest a bank or other lender to his clients,
since this does not constitute “brokering” a mortgage.

MOTION Rep. Meyer made a motion to send H 248 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Meyer will sponsor the
bill on the floor.
ADJOURN There being no further business to come before the committee, the meeting
was adjourned at 4:25 p.m.






DATE: February 27, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

Rep. Deal, Rep. Kellogg, Rep. Meyer, Rep. Snodgrass
GUESTS: Donna Jones, Kim Coster, Jennifer Humphreys, Jim Laski, Marlene Lowry,
Susan McBryant, John Wells, Dick Miller, Mark Dunham
Meeting was called to order at 2:05 p.m. by Chairman Black. Rep. Collins
made a motion to approve the minutes of the February 25 meeting as
written; motion carried on voice vote.
H 242 Rep. Wendy Jaquet appeared before the committee to introduce H 242,
which is legislation designed to grant homeowners’ associations more
authority to enforce the covenants and restrictions of the association in a
particular subdivision.



Jim Laski, an attorney representing Sun Valley Elkhorn Association and
other homeowners’ associations, testified in support of H 242. Mr. Laski
said that the intent of the legislation is to grant the associations the power to
levy monetary penalties or fines for noncompliance with association rules.
Currently, homeowners’ associations have no statutory authority relating
specifically to them, unlike condominium associations. When a
homeowners’ association attempts to impose fines, the matter usually ends
up in court because it is not clear whether the association actually has
statutory authority to do so. Mr. Laski said that H 242 is consistent with laws
in several other states, and pointed out that it requires a two-thirds majority
vote of the association members in order to approve association rules.



In response to questions from the committee, Mr. Laski stated that this bill
would ratchet up pressure on nonconforming homeowners, but
acknowledged that if an offending party still refuses to comply with rules, the
matter would have to be decided by a judge. He also testified that the
reason this legislation is proposed under the code section on nonprofit
corporations is that homeowners’ associations are typically set up as
nonprofits, and there is no section of code dealing specifically with
homeowners’ associations. Rather than bring a bill that would set up a
separate section on homeowners’ associations, Mr. Laski said that they
thought this was a simpler approach. Committee members also expressed
concern about passing legislation that would affect all nonprofit corporations,
instead of just homeowners’ associations.






Susan McBryant, who operates a small property management company in
the Sun Valley area, testified in favor of H 242. She explained that the rules
of homeowners’ associations are designed to uphold property values and to
maintain a certain lifestyle within subdivisions. Ms. McBryant stated that, in
dealing with nonconforming residents, associations have detailed provisions
for notification, hearings, fines and penalties. However, the associations are
not able to actually enforce the rules, which makes for tremendous
neighborhood disharmony and can allow property values to decline when
rules are ignored.



Responding to committee members’ questions, Ms. McBryant stated that
homeowners’ associations have no enforcement powers, so when cases of
nonconforming homeowners are taken to court, the courts find no enabling
language that allows the association to enforce their rules. She also stated
that H 242 would enable all homeowners’ associations to go to their
members to vote on rules and would give them enforcement powers. Again,
committee members noted that the legislation does not specifically address
homeowners’ associations, but instead adds to the code applying to
nonprofit corporations.



Dick Miller, representing Association Management, Inc., a small company
that manages homeowners’ associations, testified in favor of H 242. He
said that, under the current situation, associations have only two options
when enforcing rules: either friendly persuasion, or a lawsuit.

MOTION Rep. Cannon made a motion to HOLD H 242 in committee.



In support of the motion, Rep. Gagner stated that he thought the legislation
was unnecessarily broad, covering all nonprofit corporations, and he
suggested that it should be reworked and refined to include only
homeowners’ associations. Rep. Cannon said, in explanation of his motion,
that he thought the Legislature should stop passing laws to correct problems
that individual groups should be taking care of on their own. He said that if
a homeowners’ association imposes rules on its members, it ought to
enforce its own rules.

VOTE ON

MOTION

Chairman Black called for a vote on Rep. Cannon’s motion to HOLD H 242
in committee. Motion carried on voice vote.
S 1047 Donna Jones, Director of the Idaho Real Estate Commission, presented

S 1047, which includes a number of housekeeping matters made necessary
by the 1999 recodification of the real estate law. The first change adds back
into law a section that was inadvertently dropped during the recodification,
which requires that brokers who deal with mobile homes, motor homes or
floating homes must comply with the same licensing requirements as other
real estate agents. H 242 also will allow self-certification of compliance with
errors & omissions insurance, and will allow online renewals. It also clarifies
the deadline for license applications and renewals, clarifies that a licensee
is not entitled to a refund if he terminates his license, and clarifies that a
licensee will not receive CE credit for taking the same core course more than
once. Additional changes include a requirement that a licensee, when he is
buying or selling property, must run the business through his own broker,
and an allowance for a licensee to pay personal assistants or other sales
associates directly, rather than having his broker pay them.

MOTION Rep. Eberle made a motion to send S 1047 to the floor with a DO PASS
recommendation, with a slight correction on the Statement of Purpose.
Motion carried on voice vote. Rep. Snodgrass will sponsor the bill on the
floor.
S 1048 Donna Jones then presented S 1048, which will authorize the Real Estate
Commission to review license applications of convicted felons. Current real
estate license law provides a five-year “waiting period” before a convicted
felon can apply for licensure. However, once the five years is past, the
Commission has no authority to deny licensing based upon the felony
conviction, regardless of the type of felony offense or the circumstances
surrounding it. S 1048 provides the authority to review applications, sets
standards that the applicant must meet, and lists criteria that will be
considered by the Commission.



In response to questions from committee members, Rep. Jones said that
some other states also require a waiting period for convicted felons, but she
is not aware of any states that have a complete ban on the licensing of
felons, although such a ban could be implemented in the future. She also
responded that there is no provision for making a notation on the licensee’s
license that he or she is a felon.

MOTION Rep. Smith made a motion to send S 1048 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Cannon will sponsor
S 1048 on the floor.
Chairman Black announced that the Business Committee will not meet on
Monday, March 3; thus, the next scheduled meeting is set for Wednesday,
March 5, 2003
ADJOURN There being no further business to come before the committee, the meeting
was adjourned at 3:25 p.m.






DATE: March 5, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

Rep. Kellogg
GUESTS: Bart Harwood, Diane Hakes, Mark Mering, Bill Foxcroft, Karl Watts, Dick
Schultz, Erik Johnson, Hyatt Erstad, Leslyn Phelps, Mary MacConnell
Meeting was called to order at 1:50 p.m. by Chairman Black. Rep. Tilman
made a motion to approve the minutes of the February 27 meeting as
written; motion carried on voice vote.
H 281 Bill Foxcroft, Idaho Primary Care Association, appeared before the
committee to introduce H 281. Mr. Foxcroft distributed a packet of
information to committee members, containing information about numbers
of uninsured people in Idaho, the availability of health care for those people,
and the benefits of having a strong primary and preventative care network
in place. He explained that H 281 would create a grant program that could
award grants to clinics who provide care to the indigent. Although no
funding is currently available from state funds at the current time, this bill
would put a mechanism in place so that, when funds become available, the
program could become operative.
Diane Hakes, Program and Policy Director for the Primary Care Association,
testified in favor of H 281. Ms. Hakes presented a rationale for putting this
mechanism in place now, since the numbers of uninsured Idahoans is rising,
as is the cost of health insurance. Ms. Hakes explained how primary and
preventative care provides a net savings to the state: It allows people to get
medical care in a clinic setting rather than visiting emergency rooms for
routine medical needs. Preventative care can also help avoid more
expensive care in the future by treating medical conditions before they
become major medical crises. Ms. Hakes noted that the state could realize
a savings of $251 for each new Medicaid patient who would have access to
primary care services through Community Health Centers.
Leslyn Phelps, administrator of the Glenns Ferry Health Clinic as well as
clinics in Mountain Home and Grandview, testified in favor of H 281. Ms.
Phelps detailed the increases in her clinic’s budget and number of
employees in the past 20 years, and stated that they operate on grant dollars
as well as patient fees derived from a sliding scale payment schedule.
Patient users have increased from 1,271 to 4,728 and patient visits have
increased from approximately 5,000 in 1982 to 17,000 in the most recent
year. Ms. Phelps stated that her clinics bill to over 145 different insurance
companies, some of which are managed care plans, and that they also
receive payments from patients as well as other federal grant money.



In response to a committee question, Erwin Teuber, director of Terry Reilly
Health Centers, stated that 39% of all revenues in such clinics comes from
patient fees.

Dr. Karl Watts, a family physician for 15 years and director of the Garden
City Community Clinic, testified in favor of H 281. Dr. Watts stated that his
clinic, which has been open since December 2002, treats patients only on
Thursday evenings, but hopes to move to a five-day-a-week schedule by the
end of 2003 and intends to offer dental care by June 2003. His clinic in
Garden City operates without grants, and depends upon the generosity of
donors at this point. Dr. Watts stated that H 281 will help expand and
improve health care availability for the indigent population of Idaho.
Dr. Mark Mering, medical director for Terry Reilly Health Services, testified
in favor of H 281. Dr. Mering explained that Terry Reilly Health Services
operates a number of medical clinics as well as two dental clinics, and offers
behavioral services. Their full service pharmacy provides approximately
$1.8 million in free pharmaceutical services. The clinics operate with eight
physicians and nine nurse practitioners, and they are currently overloaded.
Last year, the clinic doctors delivered 507 babies, which represents 2-3% of
all babies born in Idaho.
Eric Johnson, Chairman of the Board of Terry Reilly Health Services
(TRHS), testified in favor of H 281. Mr. Johnson noted that TRHS provides
health services to Spanish-speaking people and to migrant workers, with
clinics in a number of rural towns such as Marsing, Melba, Homedale, and
Nampa. There is a need to expand services at existing sites, so that TRHS
can provide a medical “home” to those who are indigent or uninsured.
Dick Schultz, Department of Health and Welfare, appeared before the
committee to express some concerns of the department. Mr. Schultz stated
that he does recognize the need for expanded health care for the indigent,
and that the Primary and Preventative Care Grant Program is a viable
option. However, the department does have two major concerns. First, the
funding for such a program is not in the Governor’s budget. Second, if H 281
is passed, the department may be expected to create a board and draft rules
for the administration of such a program, without having adequate funding
to pay for such administration.



Rep. Deal expressed disappointment that the Department of Health and
Welfare had not brought these concerns to the attention of those who
worked on this legislation; there was no discussion of these points before the
legislation reached this stage of being considered by the Business
Committee. Mr. Schultz responded that the department had chosen to take
no position on H 281 because it doesn’t fit within the Governor’s budget.
Rep. Deal said it was his understanding that the department agreed that the
program should be created and then wait for funding to become available.



Bill Foxcroft was recognized to respond to a question from the committee.
Mr. Foxcroft stated that, according to the best estimates that he can obtain,
between two-thirds and three-fourths of those who utilize health care clinics
for the indigent actually cannot afford to purchase health insurance.



Rep. Tilman asked why this bill was before the Business Committee, rather
than the Health & Welfare Committee. He noted that the bill does not deal
with health insurance issues per se, but rather deals with pure grant
programs. Furthermore, Rep. Tilman stated that he did not think the
Business Committee could decide policy issues without an overall
appreciation of the Department of Health & Welfare, and this is outside the
scope of the committee’s expertise.

MOTION: Rep. Cannon made a motion to HOLD H 281 in committee. In support of
the motion, Rep. Cannon stated that, although this is a worthy cause, the bill
will probably be killed on the floor because the funding is not available at the
present time. He thought that the best course of action would be to put the
bill in the committee’s “pocket” and allow it to resurface at a more
appropriate time in the future.
SUBSTITUTE

MOTION:

Rep. Deal made a substitute motion to send H 281 to the floor with a DO
PASS
recommendation. In support of the substitute motion, Rep. Deal
noted that this matter had been under discussion for at least two years, and
that H 281 is the result of a lot of hard work on the part of many parties. He
stated that the purpose of the bill is to create a fund and to set up a process
for grants, contributions, and gifts to be received. If and when the funds are
available, then the program will be in place to administer those funds.



Rep. Gagner expressed some serious concerns about H 281. There is no
probability of funding this program this year, and he does not want this idea
to compete with Health and Welfare funding. Rep. Gagner also noted that,
if the bill is sent out without any funding, it will not come back through the
committee again for further consideration. Although he is totally supportive
of the idea, he has some reservations about passing H 281.

ROLL CALL
VOTE:
Chairman Black called for a vote on the substitute motion to send H 281 to
the floor with a DO PASS recommendation; roll call vote was requested.
Voting AYE: Chairman Black, Rep. Deal, Rep. Collins, Rep. Block, Rep.
Rydalch, Rep. Snodgrass, Rep. Henbest, Rep. Smith (30), Rep. Douglas.
Voting NAY: Rep. Gagner, Rep. Tilman, Rep. Cannon. Absent: Rep.
Kellogg, Rep. Meyer, Rep. Eberle. Substitute motion passed: 9-3-3. Rep.
Deal and Rep. Black will sponsor the bill on the floor.
H 306 Bart Harwood, representing the Small Employer Health Reinsurance
Program and the High Risk Reinsurance Pool, presented H 306. This bill
clarifies that all entities providing health insurance in Idaho are subject to the
reporting requirements relating to annual assessments levied by the Small
Employer Reinsurance Program and the Individual High Rise Reinsurance
Pool. Mr. Harwood noted that Section 2 of the bill cleans up all references
to “carriers,” thus clearing up inconsistencies. On page 5 of the bill,
language that refers to “board” discretion is changed to “broad” discretion,
since this is thought to be a typographical error in the code. Finally,
language is added on page 10 of the bill to make it clear that reinsurance is
mandatory, not optional.



MOTION:


Rep. Deal made a motion to send H 306 to the floor with a DO PASS
recommendation. Motion carried on voice vote.
ADJOURN: There being no further business to come before the committee, the meeting
was adjourned at 3:15 p.m.






DATE: March 7, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

Rep. Kellogg
GUESTS: Bradley Dugdale, Rep. Jim Clark
Meeting was called to order at 1:33 p.m. by Chairman Black. Rep. Deal
made a motion to approve the minutes of the March 5 meeting as written.
Motion carried on voice vote.
H 144 Rep. Jim Clark presented H 144 to the committee. Rep. Clark explained
that this legislation represents a minor change to the Uniform Gifts to Minors
Act (UGMA). Under current law, the assets in an account established under
UGMA must be turned over to the beneficiary when he or she turns 21 years
of age. This bill will increase the age from 21 to 25. Rep. Clark also brought
amendments to H 144 for the committee’s consideration.
Brad Dugdale, D.A. Davidson & Company, appeared before the committee
to further explain H 144. Mr. Dugdale explained that, since minors cannot
legally enter into contracts, custodians are appointed to manage assets in
an account for their benefit. These accounts are usually established when
a parent or grandparent wishes to gift money to the minor child; in those
cases, the parent or grandparent is usually named as custodian for the
account. Under the provisions of H 144, the custodian will be given the
authority to assess the maturity of the child and could, if so desired, delay
the transfer of the funds to the child’s age of 25. Mr. Dugdale explained that
this proposed law is similar to a recently-passed Alaska law, except that
there is more flexibility in the Idaho bill. Alaska’s law requires the custodian
to choose the age of transfer at the time the UGMA account is set up;
Idaho’s will allow that decision to be made at a later time, when the
custodian can more fairly assess the maturity of the child.



In response to committee questions, Mr. Dugdale explained that UGMA
accounts are set up because a child cannot enter into a contract with an
investment company or bank. Generally the giver of a financial gift to the
child self-appoints as custodian and establishes the account under the
child’s social security number. The custodianship can be transferred to
another person if desired. H 144 does not require the custodian to hold the
funds to age 25; rather, the transfer can be made at any time between the
age of majority, 18, and the age of 25, subject to the discretion of the
custodian. No person may act as custodian of an UGMA account unless he
or she has reached the age of majority. Mr. Dugdale also explained that a
“custodian” of an UGMA account is different from a “conservator” because
a conservator is one who manages assets left to a minor following a death.



Rep. Clark explained the amendments to H 144, pointing out that the
amendment simply deletes the changes to code section 68-801 which were
originally proposed in H 144. Instead, it was decided that the changes
should be made to code section 68-820 only, which is what the amendments
to H 144 will do.

MOTION: Rep. Douglas made a motion to send H 144 to General Orders with
amendments attached.
SUBSTITUTE
MOTION:
Rep. Eberle made a substitute motion to HOLD H 144 in committee. In
support of the substitute motion, Rep. Eberle noted that he did not think the
bill was necessary, since the voting age is 18 and the driving age in Idaho
is 16, with some exceptions made for younger ages.
Rep. Smith noted that a substitute motion was not in order at this time, since
no second was voiced for the original motion, and a second is required for
amendments to bills. Rep. Smith then seconded the motion to send

H 144 to General Orders with amendments attached.

ROLL CALL
VOTE:
A roll call vote was requested for the substitute motion to HOLD H 144 in
committee. Voting AYE: Rep. Eberle, Rep. Snodgrass. Voting NAY:
Chairman Black, Rep. Gagner, Rep. Tilman, Rep. Meyer, Rep. Collins, Rep.
Block, Rep. Rydalch, Rep. Cannon, Rep. Henbest Rep. Smith, Rep.
Douglas; substitute motion failed, 2-11-2.
VOTE ON
MOTION
Rep. Black called for a vote on the original motion, to send H 144 to General
Orders
with amendments attached. Motion carried on voice vote.
ADJOURN: There being no further business to come before the committee, the meeting
was adjourned at 2:05 p.m.






DATE: March 11, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

None.
GUESTS: Rayola Jacobsen, Mary G. McGown, Woody Richards, Molly Creswell
Meeting was called to order at 2:30 p.m. by Chairman Black. Rep. Meyer
made a motion to approve the minutes of the March 7 meeting as written;
motion carried by voice vote.
S 1085 Woody Richards, representing Old Standard Life Insurance Company,
presented S 1085. Mr. Richards testified that Old Standard had worked
extensively with the Department of Insurance in framing this legislation, and
the Department has no objection to the bill. Mr. Richards then briefly
summarized the changes included in S 1085, which is designed to
modernize parts of the Insurance Code. First, the bill will authorize
participation interests for insurance companies. Second, it will limit an
insurance company’s investments in mortgages, real estate, and securities
to 65% of their assets. Also, currently insurance companies are restricted
to one common class of stock; this bill will allow other classes of stock.
Finally, the bill will remove the requirement that directors of a company must
own at least one share of the company’s stock. Mr. Richards stated that he
is not aware of any opposition to the bill.
In response to committee questions, Mr. Richards said that real estate
investments are generally not considered liquid, but that securities and
mortgages can be considered as relatively liquid assets. He also said that
it seemed advantageous to make these changes to better match the
requirements in other states. Mr. Richards explained that the insurance
companies will keep track of their investments to make sure they do not
exceed the 65% cap; in addition, the Department of Insurance reviews
assets of companies at least every five years in a market conduct survey.
MOTION Rep. Gagner made a motion to send S 1085 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Collins will sponsor
the bill on the floor.
H 331 Rayola Jacobsen, Bureau of Occupational Licensing, presented H 331,
which represents a compromise between the landscape architects, the
consulting engineers, and the building contractors. She pointed out that, on
page 2, line 4, the bill retains the exemption for land use planners.
Roger Hales, an attorney representing the Bureau of Occupational
Licensing and the Landscape Architect Board, appeared before the
committee to further explain H 331. This legislation will allow an applicant
to apply for licensure as a landscape architect even if he does not have a
degree in that field, as long as he has a minimum of eight years’ experience.
This is a change from the previous requirement of four years of experience.
The bill also adds some clarifying definitions, and expands the Board’s
powers in disciplinary proceedings. H 331 makes some changes to the
renewal process and updates the seal requirements. It also adds language
to the section on disciplinary actions, stating that the Board has the power
to refuse a license for various reasons such as fraud. Mr. Hales stated that
neither the consulting engineers nor the building contractors are opposed to
this bill.
Molly Creswell, representing the Consulting Engineers of Idaho, testified in
favor of H 331.
Ms. Creswell thanked Rayola Jacobsen, Roger Hales, and
the Board for working to meet the concerns of the consulting engineers with
this new legislation.
Mary McGown, a member of the Board of Landscape Architects, testified
that she has no objection to this bill. Ms. McGown stated that there is still
some work to be done to resolve issues, but that she does support this bill
and appreciates the work done to reach this compromise.
Roger Hales resumed the podium to answer a question about what kind of
recourse a homeowner might have if a nurseryman does shoddy work on a
landscaping job. Mr. Hales stated that nurserymen are exempt from
licensing, and that the homeowner would have to undertake civil action.
MOTION\ Rep. Cannon made a motion to send H 331 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Cannon will sponsor
the bill on the floor.
ADJOURN There being no further business to come before the committee, the meeting
was adjourned at 3:00 p.m.






DATE: March 13, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

None.
GUESTS: William A. Jones, Mike Brassey, Douglas Dirks, Ann Nelson, Ed Lodge,
Andrea Mihm, Terry Stewart, Brad Street, Dan Stephens, Deanna Hewitt,
Elvira Sigmond, Pamela McCrae, Dick Riley, Ed Galtney, Ryan Moore, Matt
Lewis, Tim Black, Cindy Copple, Rick Roberson, Verlene Wise, Darlene
Coopersmith, Judy Bigelow, Judy Salskov, Ron Hezeltine, Jennifer Ultis,
Linsey Kelley, Jenny Cahill, Loretta Barraco, Donna Bishop, Jarrad Penner,
Jeanine Butler, Rita Armor, Mike Dulski, Angie Lowber, Lisa Souter, Dallas
Crandall, Craig A. Moore, Tim Baugh, Lyn Darrington, Steve Tobiason,
Chuck Lempesis, Julie Taylor, Scott Sigmon, Jeff A. Buel, Troy Benavidez,
Kent Day, Bill Roiden, Wendy Jaquet, Brad Hoaglun, Ben Ysursa, Steve
Ball, Scott Rasor
Meeting was called to order at 3:25 p.m. by Chairman Black. Rep. Gagner
made a motion to approve the minutes of the March 11 meeting. Motion
carried on voice vote.
S 1051 Ed Lodge, representing the Idaho Ski Areas Association, presented S 1051.
Mr. Lodge reviewed the 1996 Health Insurance Portability and Accountability
Act (HIPAA) and noted that it specifically prohibited employers or health
insurance providers from excluding members of a group health plan based
on a worker’s participation in recreational activities. However, soon after
enactment, the Administration, through the rulemaking process, promulgated
a rule that allowed group health plans to deny medical benefits to those
injured while participating in such activities. Although no insurance
companies in Idaho have denied benefits or coverage based solely on
participation in certain recreational activities, Mr. Lodge stated that it would
be acceptable for them to do so. S 1051 will establish that such denial of
coverage or benefits is contrary to public policy in the state of Idaho.



Mr. Lodge also presented an amendment to S 1051, which was the result of
working with the insurance industry. There was some concern expressed
over the language of the original bill, which defined the denial of coverage
or benefits to be “unfair methods of competition and unfair or deceptive acts
or practices.” The amendment removes that language and instead specifies
activities which may not be used as the basis for denying coverage or
benefits. The amended bill will also have a new Statement of Purpose which
will reflect the new language.

In response to committee questions, Mr. Lodge stated that insurance
companies can charge higher premiums for those engaged in risky activities,
but cannot deny coverage. Although the insurance industry did work with
Mr. Lodge in crafting the amendments, they are not supporting the
amendments at the present time. Mr. Lodge did state, however, that he has
no problem with the amendments being passed, since they will remove
language that is thought to be detrimental to the insurance companies.
William A. Jones, president of the Idaho ATV Association and past
president of the Idaho Trails Council, testified in favor of S 1051. Mr. Jones
stated that his organization represents approximately 700,000 riders,
including all-terrain vehicles, bikes, horses, skateboards, and others. In
response to a question from the committee, Mr. Jones stated that he would
be willing to pay higher premiums in order to obtain health insurance, if his
recreational activities resulted in a higher premium charge.
Lyn Darrington, representing Blue Shield of Idaho, testified in opposition
to S 1051.
Ms. Darrington explained that insurance companies can up-rate
based on only four criteria: geography, age, gender, and smoking status.
She also said that when a claim is paid, Blue Shield does not know whether
the injury has been caused by a high-risk recreational activity. Blue Shield
does have a third party provision that allows them to seek reimbursement
from a third party if the accident was caused by someone else. Ms.
Darrington stated that no Idaho insurance carriers have excluded anyone
from coverage because of their participation in recreational activities.
In response to questions from the committee, Ms. Darrington said that,
although the 1996 HIPAA regulations say that insurance companies can’t
make exclusions, the federal government put in place a rule in 2001 that
contradicts the HIPAA law. There is current federal legislation (S 423) that
will remove this rule.
Steve Tobiason, representing the Idaho Association of Health Plans,
testified in opposition to S 1051, saying that his organization does not see
a need for the legislation, since no carriers are currently denying coverage
or benefits based on recreational activities. He also thinks that S 1051
represents a mandate to insurance companies. Mr. Tobiason stated that he
does think the proposed amendment is an improvement to the bill, because
the language is better. However, he does not think that this matter should
be in Chapter 18, which is the contract section of the Idaho Insurance Code.
In response to questions from the committee, Mr. Tobiason said that in
cases of injuries suffered from auto accidents, the medical pay provision of
automobile insurance pays for a certain amount of medical expenses, after
which the person’s health care coverage becomes effective. This is actually
an advantage to the injured party because the automobile coverage pays
100% of the costs, while the health insurance covers only a portion. This bill
may be interpreted to mean that the health insurance company always has
to be in first position rather than in second position, as it currently is in cases
of injuries from automobile accidents.
Julie Taylor, Blue Cross of Idaho, was recognized to respond to a question.
Ms. Taylor explained that in addition to the four criteria allowed for up-rating
on premiums, companies are also allowed to raise a premium based on
claims experience. Thus, if a person submits a number of claims within a
certain period of time, his premium may be raised to a higher level than that
of a person who does not have any claims during the same period of time.
Responding to further questions from the committee, Mr. Tobiason said that
he testified against S 1051 in the Senate, and that he was not involved in the
work on the proposed amendments. He also stated that his position is that
subsection (1) is unnecessary, and subsection (2) is a mandate.
Chuck Lempesis, representing the Health Insurance Association of America
and the Independent Insurance Providers, testified in opposition to S 1051.
Mr. Lempesis said that although the legislation is well intended, it is
unnecessary because every Idaho insurance company is currently providing
coverage regardless of people’s participation in activities. S 1051 is also a
mandate, and will be the first mandate on insurance carriers since 1985. Mr.
Lempesis expressed concern about the language of the bill. For instance,
“similar activities” is overly broad and could bar companies from denying
coverage for any activity. He also questioned the meaning of the word
“casual.”
Julie Taylor, representing Blue Cross of Idaho, testified in opposition to

S 1051. Ms. Taylor reported that Blue Cross had worked closely with Mr.
Lodge in drafting amendments to the bill, out of a concern over the severe
wording on trade practices. After reaching agreement on the amendments,
Ms. Taylor said that Blue Cross management decided they still could not
support the legislation because they perceive it as a mandate.

In response to committee questions, Ms. Taylor said that Blue Cross cannot
deny coverage to anyone based solely on participation in a sport. They
could, but currently do not, raise the premium if the person has an excessive
number of claims. She stated that, if the bill passes, it will not change the
way Blue Cross rates. Under HIPAA guidelines, companies cannon deny
coverage, but guidelines are silent on the exclusion of benefits.
Brad Hoaglun, representing the Idaho Association of Chiropractic
Physicians, testified in favor of S 1051. He noted that, under the current
regulations, companies could exclude people from coverage for certain
activities, and most people do not read their policies closely or understand
their coverage. Mr. Hoaglun stated that he was not aware, for example, that
activities such as trampolines could be excluded on his homeowners’
insurance until he began researching a new policy.
MOTION Rep. Meyer made a motion to send S 1051 to General Orders with
committee amendments attached. The motion was seconded by Rep.
Snodgrass.
After committee discussion on the motion, Rep. Deal called for
division. Motion carried, 8-6-1.
S 1066 Patrick Collins, representing the Idaho Bankers Association, presented

S 1066, which clarifies the procedures followed in cases of garnishment.
This bill provides for designation of a particular office to accept all
garnishments on the bank by notice to the Department of Finance, which will
publish a list of all such designated offices on its website. Mr. Collins stated
that he is not aware of any opposition to this bill.

MOTION Rep. Deal made a motion to send S 1066 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Tilman will sponsor
the bill on the floor.
H 289 Rep. Wendy Jaquet appeared before the committee to present H 289. The
purpose of this bill is to make data available to the general public on
pharmaceutical marketing and promotional spending in Idaho. Rep. Jaquet
stated that at least 15 states are looking at this type of legislation. The bill
will require pharmaceutical companies to disclose, in an annual report to the
Secretary of State’s office, the amount of gifts given to physicians;
exemptions would include free samples, association scholarships, and free
samples.



Rep. Jaquet gave an overview of the reasons why she thinks this legislation
is necessary. She stated that prescription drugs are the fastest growing
segment of overall national health expenditures, and that drug utilization
increases as a result of pharmaceutical advertising. The majority of
promotional efforts continues to be focused on the physician; spending on
drug promotion directly to physicians increased by nearly $5 billion from
1996 to 2000. The pharmaceutical industry has instituted a voluntary code
of conduct to control marketing practices, effective July 1, 2002. Rep.
Jaquet stated that, while this is a start, it still does not require any reporting.
H 289 will require the pharmaceutical industry to report gifts, which will allow
closer monitoring of how those gifts may be influencing physicians to use
certain drugs.

In response to questions from the committee, Rep. Jaquet said that detailing
to physicians increases the utilization of so-called “designer drugs” over the
less expensive generic drugs, and that there were 34% more prescriptions
written for advertised drugs between 1998 and 1999, while the increase in
prescriptions written for non-advertised drugs in the same time period was
only 5%. The intent of the legislation is to reduce both the usage and the
cost of drugs.



Committee members expressed some concern with the disclosure and
reporting requirements, citing increased bookkeeping costs which will
ultimately be passed along to patients. They also had questions about
disclosure of trade secrets. Rep. Jaquet pointed out that the increased costs
will be borne by the drug companies, not by physicians; the trade secret
information is protected under Title 9 of existing code.

Jim Baugh, representing Comprehensive Advocacy, Inc., testified in favor
of H 289.
Mr. Baugh said that he advocates for persons with disabilities,
many of whom are dependent upon prescription drugs. Mr. Baugh cited
problems in Massachusetts, where detailers are trained to ask doctors to
prescribe drugs for off-label uses, and to give benefits to doctors who do so.
The doctors are often invited to speak at seminars, with free travel and
lodging plus a stipend. This provides an incentive to utilize more expensive
drugs. Mr. Baugh also stated that H 289 does not prohibit any marketing
practice; rather, it just requires reporting of those practices.
Committee members asked how the disclosure of the “value, nature, and
purpose” of drugs given to physicians would affect the way a doctor
prescribes a particular drug. They also questioned whether this legislation
would actually result in a reduction in the cost of prescription drugs. Mr.
Baugh responded that disclosure of the types and amounts of gifts to a
prescriber will tell whether there is a financial incentive to the doctor, and
may expose an overall pattern of prescribing a drug for all patients
regardless of their need, in exchange for financial incentives from the drug
companies. Mr. Baugh also stated that if H 289 helps to prevent abuses in
the over-prescription and improper prescription of drugs, that would
eventually result in cost reductions.
Ben Ysursa, Idaho Secretary of State, testified in opposition to H 289. Mr.
Ysursa stated that his office is charged with monitoring elections and that
this matter of prescription drugs is not germane to the office of the Secretary
of State. Additionally, he is opposed to H 289 because the fiscal impact is
unclear, and his office will be experiencing budget constraints and can ill
afford to take on the monitoring activities required by this bill. His office is
opposed to the bill not on its merits, but rather because of the fiscal impact.
Bill Roden, representing the Pharmaceutical Research and Manufacturing
Association of America, testified in opposition to H 289. Mr. Roden stated
that this bill is not about prescription practices; in fact, it does not prevent
gifts or trips, even if they are given in conjunction with getting a doctor to
prescribe a certain product. Mr. Roden noted that there are not massive
abuses and there is no evidence of a problem with either pharmaceutical
companies or physicians in the state of Idaho. He also pointed out that,
without the expensive research and development undertaken by major drug
companies, there would be no generic equivalents in existence. Drug
companies provided free prescription medication to 35,000 people in Idaho
in the last year. Mr. Roden also stated that, in his view, this is a problem that
needs to be solved at the national level, not on a state-by-state basis. In
fact, House Resolution 757 is currently in Congress, and deals directly with
the problem, making it illegal to give certain gifts.
Rep. Jaquet thanked the committee for its consideration of H 289. Noting
that the states are incubators for good ideas, Rep. Jaquet encouraged
passage of H 289, since there has been no federal solution yet to this
problem.
MOTION Rep. Kellogg made a motion to HOLD H 289 in committee. In support of
the motion, she stated that H 289 would create an unreasonable burden on
the Secretary of State. Rep. Henbest expressed opposition to the motion,
noting that drug costs are a huge problem which is not being addressed by
the federal government. She stated that there is a multi-billion dollar cost
involved in the detailing of medications, instruments, and equipment, and
that this cost inevitably trickles down to drive up the cost of medical care.
Rep. Gagner argued in favor of the motion, pointing out that increased
medical costs and increased drug usage are not solely the result of one
factor; in some cases, guidelines for usage have changed. He said that
perhaps the solution to this problem is to make gifts from pharmaceutical
companies to physicians illegal.
VOTE ON
MOTION
Rep. Black requested a vote on the motion to HOLD H 289 in committee;
motion carried on voice vote. Rep. Henbest voted in opposition to the
motion.
RECESS Chairman Black called for a ten-minute recess at 6:00 p.m.
RECONVENE The committee reconvened at 6:15. Chairman Black announced that there
were four people who would testify in favor of the next bill, H 334, and that
six people would testify in opposition to the bill. Rep. Deal stated that, in
accordance with House Rule 38, he was disclosing that he is an insurance
agent and also is Chairman of the Board of the State Insurance Fund. Rep.
Meyer
stated that he is the vice-chairman of the State Insurance Fund,
although he is not an insurance agent.
H 334 Mike Brassey, representing the Alliance of American Insurers, presented

H 334 to the committee. Mr. Brassey said that this bill includes two
amendments to Section 41-309 of the Insurance Code. The first, on lines 25-31, creates the presumption that for purposes of this section, an insurer with
tax exempt status, or an affiliate of such an insurer, is a government agency.
The second amendment is in lines 16-17 and line 30, which will apply the
statute to an insurer’s affiliates.



Mr. Brassey stated that in most states, a State Insurance Fund is created
because worker’s compensation insurance is mandatory for employers, so
the state fund can offer work comp policies to those who cannot otherwise
get insurance. In Idaho, the State Insurance Fund offers a basic, standard
worker’s compensation policy, and the fund is barred from doing business
out of the state of Idaho. Recently, the Worker’s Compensation Fund (WCF)
of Utah acquired ownership of a for-profit subsidiary, Advantage, who
currently does business in Idaho. Because the Utah parent company acts
as the state insurance fund for that state, it enjoys a tax-exempt status. A
ruling by Judge McKee found that the Utah company is, in fact, a
government company operating in Idaho, which is a violation of Idaho’s
code. Because of their tax exemption, the Utah company enjoys the same
advantage as the Idaho state fund. Private companies who offer worker’s
compensation policies do not enjoy the same competitive advantage and
therefore fear that they will not be able to stay in this market. As the market
contracts, there will be fewer companies offering coverage and less
variability in policies.



In response to questions from committee members, Mr. Brassey said it is
generally agreed that Advantage is a shell corporation which enjoys a federal
tax exemption. The current situation illustrates the kind of problem that
exists when more than one state fund operates in this state; the result will be
that private companies will dry up. He stated that Advantage has a broader
range of products which may be more like private company policies; the
Idaho state fund, on the other hand, offers only one basic policy.

Douglas Dirks, president and CEO of Employers Insurance Company of
Nevada, testified in favor of H 334. Employers Insurance Company is the
former State Fund for the state of Nevada which was privatized in May of
1999 and became a private mutual insurance company. In July 2002,
Employers Insurance acquired the book of business of Fremont Insurance
Company, which wants to operate in Idaho. Mr. Dirks stated that he simply
wants a level playing field in the area of work comp policies. He said that,
under current Idaho law, government controlled insurance companies are not
permitted to do business in Idaho, with the exception of the State Insurance
Fund. All other companies are privately controlled. If a company is entitled
to a tax exemption, it is presumed to be controlled by a government entity.
Therefore, Idaho has two government controlled companies offering work
comp products.
Responding to questions and concerns from committee members, Mr. Dirks
said that Advantage can underprice the market since they have a tax-exempt
status. This creates an unlevel playing field, which discourages competition
in private insurance companies.
Dick Riley, representing Advantage Workers Compensation and Workcare
Northwest, testified in opposition to H 334. His opposition to the bill falls
into three categories: it is bad law, brought by the wrong people, for the
wrong reasons. Mr. Riley thinks H 334 is bad law because it violates the
commerce clause of the U.S. Constitution. He thinks it is brought by the
wrong people, an organization of insurance companies who want to exclude
competition with the State Insurance Fund. He thinks it is brought for the
wrong reasons because, rather than safeguarding competition as stated in
the Statement of Purpose, the bill will have an anti-competitive effect.



Mr. Riley stated that WCF of Utah is not a state agency, and that it issues
policies, maintains sufficient capital, is subject to the rules of the Idaho
Department of Insurance, and has its rates regulated by that department.
The preliminary decision of an administrative proceeding conducted by
Judge McKee stated that WCF is controlled by the State of Utah because the
governor of the state appoints the board of directors. Mr. Riley disagrees
with this finding.



Mr. Riley explained that the State Insurance Fund of Idaho has over half of
the market for work comp policies; the second largest company is Liberty
Northwest, and Everest National is third. Basically, there are two private
carriers in the Idaho marketplace: Liberty Northwest and Advantage. Mr.
Riley said that the question of the tax advantage is moot because pricing is
set by the Department of Insurance, so Advantage is not able to undercut the
competition. Mr. Riley also said that the state cannot set up barriers to
prevent businesses from coming into Idaho; if they do so, this is a violation
of the commerce clause of the Constitution. Mr. Riley suggested that there
are a number of ways to prevent unfair practices without barring companies
from coming into the state. He stated that H 334 and probably the entire
code section are an interference with interstate commerce. Rep. Deal noted
that it is not a bad thing that the state insurance fund is a major supplier of
work comp policies in the state; in fact, the same situation exists in Utah.



In response to committee questions, Mr. Riley supplied figures on market
share for Liberty Northwest (11.49% in 2001) and Advantage (5% in 2001).
The rest of the market is covered by about 200 smaller carriers whose total
share is about 25-30% of the market. The State Insurance Fund has over
50% of the market. He also said that, unlike the State Fund, Advantage
does not pay dividends back to its policyholders. Mr. Riley also said that
Advantage was owned by another company in Indiana, but in 1998 the WCF
of Utah bought the company’s stock. He noted that it may be easier for
Advantage to get reinsurance because of its affiliation with WCF.



Dennis Lloyd, General Counsel to WCF in Salt Lake City, was recognized
to answer a question. Mr. Lloyd said that Advantage has its own board of
directors and is regulated by the Indiana Insurance Department. He also
stated that Advantage cedes 80% of its premiums to WCF.

Ed Galtney, cofounder of Workcare Northwest, testified in opposition to

H 334. He testified that his company works with over 1,000 Idaho
businesses in the area of work comp. Workcare employs over 20 people,
and this bill will cause the termination of many of them; additionally, it will
affect the jobs of claims adjusters, loss prevention specialists, continuing
education instructors, and others. Mr. Galtney stated that he has chosen to
postpone construction of a new headquarters building in Meridian because
of H 334. If this legislation passes, Advantage will be forced to cease
underwriting in Idaho, which will negatively affect independent agents who
rely on Advantage for worker’s compensation products.



Responding to committee questions, Mr. Galtney said that Workcare does
not have a tax advantage; Workcare is not an insurance company, but rather
is a service company that provides services for Advantage on a contractual
basis. Workcare provides loss prevention and safety services which help to
mitigate losses before they occur.

Ryan Moore, cofounder, co-owner and co-president of Workcare Northwest,
testified in opposition to H 334. He stated that both Workcare and
Advantage pay taxes. He explained that it is not unusual for a company to
have a federal tax exemption, and gave examples of companies who enjoy
this status, noting that the largest are companies not domiciled in the United
Sates. He also stated that the findings of Judge McKee included a finding
that Advantage does not compete unfairly and that there was no public policy
reason to revoke their authority to do business. Mr. Moore stated that Judge
McKee also found that the reason for section 41-309 of the code no longer
exists, and the hearing officer encouraged legislative changes.



Rep. Deal asked Mr. Moore if he could read the final conclusion of Judge
McKee’s ruling; Mr. Moore responded that he did not have that with him.
Upon further questions from the committee, Mr. Moore stated that there is
a Senate bill currently in the Idaho Senate, S 1148, which addresses the
issue of the definition of “voting control.” Committee members expressed the
point that Advantage is ceding 80% of premiums to the WCF of Utah, while
the State Insurance Fund of Idaho sends its profits back to Idaho consumers
in the form of dividends.

Matt Lewis, representing American Staffing, testified in opposition to

H 334. Mr. Lewis stated that staffing services such as his do not have many
options in purchasing work comp insurance; basically, they must choose
between the State Insurance Fund or the Reinsurance Fund. Worker’s
compensation insurance represents the single biggest variable in the cost
of doing business. Mr. Lewis’ company has been offered little or no risk
control services in the past, but when he went to Workcare, he was offered
participation in their aggressive loss control program, which resulted in a
$100,000 savings the first year. Passage of H 334 will force his business
back into the risk pool and limit his options for risk management.

Tim Black, McDonald Insurance, testified in opposition to H 334. As an
insurance agent, he is faced with no companies who are willing to write
some risks. Businesses who have employees across the country present a
problem because there are not many companies who can write business
across the U.S. Mr. Black will have no other market to go to if Workcare
ceases doing business in Idaho. He can go to the State Insurance Fund, but
only for workers within the state; thus, he is forced to deal with state funds
in all states where the companies have workers. This represents a huge
administrative problem for him.
Cindy Copple, vice president of Workcare Northwest, testified in
opposition to H 334
. She stated that Advantage has brought tremendous
benefit to the state, and has employees who have paid hundreds of
thousands of dollars in state income taxes to Idaho. Her concern is that
employees of her company and of Pinnacle Risk Services, which pays their
claims, will lose their jobs.
MOTION Rep. Deal made a motion to send H 334 to the floor with a DO PASS
recommendation. Rep. Deal stated that the final conclusion of the hearing
officer, Judge McKee, was that Advantage was not complying with the
requirements of Idaho Code 41-3009. Rep. Deal also read from a letter he
received from Max McClintock, a Workcare employee. In his letter, Mr.
McClintock urged Rep. Deal to kill the bill, saying that the State Insurance
Fund has given back large dividends and has held rates artificially low. He
also stated that the state fund reserves are dangerously low, which puts the
fund in jeopardy of becoming insolvent. Rep. Deal reported that, in fact, the
state fund’s reserves as of December 2002 were $213,429,000, and that the
fund had a $68,000,000 surplus. Rep. Deal concluded by saying that this is
a public policy issue and that the basic question is whether or not the
legislature wants to allow additional state insurance funds to operate in
Idaho.
SUBSTITUTE

MOTION

Rep. Rydalch made a substitute motion to HOLD H 334 in committee. In
support of her motion, Rep. Rydalch expressed her concern that this bill
violates the commerce clause of the Constitution. She also noted that the
Senate bill is working its way through the Senate and the committee should
wait to see its outcome.
Committee members expressing support for the substitute motion stated that
they did not hear evidence of the need for this legislation, and that they felt
the state fund needed the competition of other companies. They also noted
that H 334 will not preserve competition. They asked for more time to
consider the issue, and expressed concern for deciding what is actually best
for the consumers, the people of Idaho.
Arguing in favor of the original motion, Rep. Snodgrass stated that it seems
obvious that Advantage would enjoy a competitive advantage because of the
tax-exempt status of its parent company, the WCF of Utah. He also supplied
statistics on the growth of Advantage, saying that their income in 1998 was
zero, in 1999 it was $78,000; in 2000 it was $1,274,000; in 2001 it rose to
$14,575,000; and in 2002 it was $33,332,596. Rep. Snodgrass said that this
kind of phenomenal growth in the business does not seem possible without
some factor such as a significant cost advantage.
ROLL CALL
VOTE ON
SUBSTITUTE
MOTION
Roll call vote was requested on the substitute motion to HOLD H 334 in
committee. Voting aye: Rep. Gagner, Rep. Tilman, Rep. Rydalch, Rep.
Cannon, Rep. Eberle, Rep. Henbest, Rep. Douglas. Voting nay: Rep.
Black, Rep. Deal, Rep. Kellogg, Rep. Meyer, Rep. Collins, Rep. Block, Rep.
Snodgrass, Rep. Smith. Substitute motion failed, 7-8.
ROLL CALL
VOTE ON
ORIGINAL
MOTION
Roll call vote was requested on the original motion to send H 334 to the floor
with a DO PASS recommendation. Voting aye: Chairman Black, Rep. Deal,
Rep. Kellogg, Rep. Meyer, Rep. Collins, Rep. Block, Rep. Snodgrass, Rep.
Smith. Voting nay: Rep. Gagner, Rep. Tilman, Rep. Rydalch, Rep. Cannon,
Rep. Eberle, Rep. Henbest, Rep. Douglas. Motion passed, 8-7. Rep. Deal
will sponsor the bill on the floor.
ADJOURN There being no further business to come before the committee, the meeting
was adjourned at 8:25 p.m.






DATE: March 17, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

None.
GUESTS: Kirby Vickers, Bill Roden, Ted Judd, Walt Thode, Chuck Devlin, Syd Abrams,
Bob Corbell, Jerry Deckard, Rep. Mitchell
Meeting was called to order at 3:20 p.m. by Chairman Black. Rep. Collins
made a motion to approve the minutes of March 13 as written. Motion carried
on voice vote.
H 178 Rep. Mike Mitchell appeared before the committee to testify in favor of

H 178. Rep. Mitchell briefly recounted his 30 years’ experience as a beer
and wine wholesaler. He stated that, in his view, it is the wholesaler who
establishes the necessary rapport with retailers and earns the shelf space
for the wines. In response to a committee question, Rep. Mitchell stated that
he did not have contracts with vineyards and that he was not sure that such
contracts were available or necessary at the time.

Bill Roden, representing the Idaho Beer & Wine Distributors Association,
presented H 178 to the committee. Mr. Roden pointed out, first of all, that
although it is being portrayed as the same bill brought to the committee as
in previous years, H 178 is, in fact, a different piece of legislation. He said
that previous bills proposed adding a whole new section of Code, while this
bill simply clarifies existing code. Mr. Roden read from a District Court
decision of Judge McKee, in which the judge noted that the existing code is
“not a model of clarity” and is “ambiguous.” Mr. Roden discussed the
language on page 2, lines 6-19, explaining that this language intends to
clarify what is meant by “good cause” in the termination of a distributor
contract. In explaining subsection (2) on page 2 of the bill, Mr. Roden said
that the “customer” of a winery is actually the distributor. He also noted that
wineries can act as their own distributors if they so choose.



Mr. Roden stated again that H 178 is a clarification of existing law, and does
not change Idaho Code. He said that there has been some talk about similar
legislation in Washington and Illinois; both dealt with franchise laws in
general. The Illinois case dealt with out-of-state entities differently than in-state entities, which is viewed as a violation of interstate commerce. Mr.
Roden noted that the Washington law has been stricken on the same basis,
because it also dealt with out-of-state entities differently. Mr. Roden stated
that, if Idaho’s law is not clarified, there are a lot of small businesses in Idaho
which will be hurt because they have built up their businesses over a number
of years and have little or no protection under the current law.

In response to committee questions, Mr. Roden stated that H 178 will apply
only to distributor relationships in the future; the current law, enacted in
1979, will still control existing agreements. This reflects the judgment issued
by Judge McKee, who stated that the Legislature cannot impact contracts
already entered into in the past. Responding to concerns expressed by
some committee members regarding “essential and reasonable
requirements” and “good faith efforts,” Mr. Roden stated that he is prepared
to present amendments that will strike some of the troublesome terms. He
also noted that most agreements between vintners and distributors are not
written, and technically may not be franchise agreements.
Kirby Vickers, of Vickers Vineyards, testified in opposition to H 178. Mr.
Vickers stated that some clauses in the bill make interpretation of its
meaning difficult. Mr. Vickers recognized that distributors provide a good
and valuable service, keeping the retailers’ shelves stocked with product.
However, he urged the committee to allow the distributors and the wineries
work out their relationships without undue interference.



Responding to the committee’s questions, Mr. Vickers stated that he does
have agreements with his distributor. He chooses not to distribute his own
products because the distributor does a better job of dealing with small
retailers and restaurants who may order small amounts of his product at any
one time.

Chuck Devlin, winemaker at Ste. Chapelle Winery, testified in opposition
to H 178
. Mr. Devlin stated that Ste. Chapelle purchases 90% of the grapes
grown in Idaho, and that it is the best selling brand in the region. He said
that all the area wineries oppose this bill, noting that wineries spend a lot of
time and effort building their relationship with a distributor, as well as
creating market awareness of their products. It is not solely the distributor
who earns shelf space and recognition of the product.
Syd Abrams, representing the Wine Institute, testified in opposition to

H 178. Mr. Abrams pointed out that there are now fewer distributors but
more wineries in existence. He stated that a winery is lucky if it can get a
distributor to represent it. In any case, Mr. Abrams think that it is best to let
the open marketplace determine the relationships between vintners and
distributors.

Bob Corbell, executive director of the Idaho Grape Growers & Wine
Producers, and also representing the Idaho Vintners Association, testified
in opposition to H 178. Mr. Corbell stated that he represents 14 wineries,
and that none of them support this legislation. Mr. Corbell pointed out that,
under the provisions of this bill, no notice has to be given by a distributor
before he can cancel an agreement with a winery; this does not represent
equal rights between the distributors and the wineries.
Jerry Deckard, of Capitol West Public Policy Group, representing the Wine
Institute, testified in opposition to H 178. Mr. Deckard referred committee
members to a letter submitted by Capitol West which outlines the major
problems with this legislation. Mr. Deckard stated that the changes
proposed in H 178 constitute a significant change to the contract rights in
existing law. He also pointed out ambiguous terminology such as “good
cause,” “good faith,” and “substantial efforts,” and predicted that these terms
will encourage litigation in the future. Mr. Deckard said that the new law
forces obligations on suppliers that will obliterate their contract rights. He
said that the existing system is working well, and there is no need to try and
fix it with new legislation.
Mr. Roden was recognized to close his arguments in favor of H 178. He
pointed out that none of those who testified in opposition to this bill said that
it would change the existing law. In fact, this bill will remove the ambiguity
that currently exists. Mr. Roden passed out copies of his proposed
amendments and stated that he is willing to make further changes, if
necessary, to make the new legislation more acceptable. The amendments
will remove “substantially” and “essential” from the language of the bill. Mr.
Roden stated again that H 178 does not seek to change existing law but
instead seeks to clarify it. Basically, the bill is saying that a distributor just
has to have “good cause” to terminate an agreement, but does not define
good cause. It is not forging new ground, but is clarifying existing law. Mr.
Roden also restated his willingness to remove additional language that may
be causing some concern.



In response to a committee question, Mr. Roden stated that the term “good
cause” was dealt with by a court decision, but that it was a District Court
decision, not a Supreme Court decision. Although judges may look to a
precedent set by a District Court decision, they may not even know about the
existence of such a decision because District Court decisions are not
published. In any case, those decisions made at the district level are not
binding in future cases; only Supreme Court decisions are binding on future
cases.

MOTION Rep. Deal made a motion to HOLD H 178 in committee. In support of his
motion, Rep. Deal recounted findings he had made in an internet search of
this issue. He said that, in other states, this kind of law creates a monopoly
sometimes resulting in price increases, and results in a situation that is
harmful to consumers. The “good cause” language awards distributors a
virtual lifetime contract. Mr. Deal stated that a similar law in Illinois was
repealed by that legislature in June 2002, that Arizona had repealed a
distributor monopoly law, and that then-Governor Bush in Texas had vetoed
that state’s bill.
SUBSTITUTE

MOTION:

Rep. Tilman made a substitute motion to send H 178 to the floor with a DO
PASS
recommendation. Rep. Tilman said that he had not heard sufficient
reasons to convince him not to support H 178, and that no case had been
made with regard to creating a monopoly. He stated that the bill is simply
trying to clarify what the existing relationship is between distributors and
wineries, and that the judge was involved in this matter precisely because
the existing language is not clear.
Mr. Roden was recognized to respond to a question from the committee. He
stated that, under existing law, a winery may not be able to cancel a current
distributor relationship and become their own distributor. However, H 178
will apply to any future contracts entered into, so that the winery could do so.
ROLL CALL
VOTE ON
SUBSTITUTE
MOTION:
Roll call vote was requested on the substitute motion, to send H 178 to the
floor with a DO PASS recommendation. Voting yea: Rep. Tilman, Rep.
Kellogg, Rep. Meyer, Rep. Snodgrass, Rep. Smith (30), Rep. Douglas.
Voting nay: Chairman Black, Rep. Gagner, Rep. Deal, Rep. Collins, Rep.
Block, Rep. Rydalch, Rep. Cannon, Rep. Eberle. Rep. Henbest was absent.
Substitute motion failed: 6-8-1.
ROLL CALL
VOTE ON
ORIGINAL
MOTION:
Roll call vote was requested on the original motion, to HOLD H 178 in
committee
. Voting yea: Chairman Black, Rep. Gagner, Rep. Deal, Rep.
Collins, Rep. Block, Rep. Rydalch, Rep. Cannon, Rep. Eberle. Voting nay:
Rey Tilman, Rep. Kellogg, Rep. Meyer, Rep. Snodgrass, Rep. Smith (30),
Rep. Douglas. Rep. Henbest was absent. Motion carried, 8-6-1.
ADJOURN: There being no further business to come before the committee, the meeting
was adjourned at 4:40 p.m.






DATE: March 19, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

None
GUESTS: Robert L. Aldridge, Brad Eidam, Mark Dunham, Jeremy Pisca, T. J.
Angstman
Meeting was called to order at 2:50 p.m. by Chairman Black. Rep. Meyer
made a motion to approve the minutes of March 17 as written. Motion
carried on voice vote.
S 1127 Bob Aldridge, attorney, presented S 1127 to the committee. Idaho Code
Section 15-6-107 refers to how creditors of a deceased person may seek
payment for debts of the decedent from non-probate assets. Since 1961,
Idaho has had provisions exempting certain insurance products from debts,
in Sections 41-1833 through 1836. Although the enactment of Section 15-6-107, and its amendment this session in S 1034, is not believed to affect
those exemptions, this bill will explicitly state the lack of effect in each of the
relevant sections of code, by addition of the sentence, “This section shall not
be affected by the terms of section 15-6-107, Idaho Code.” Mr. Aldridge
stated that this bill clarifies existing law and also eliminates the necessity of
looking in two different sections of code to determine the lack of effect.
MOTION Rep. Collins made a motion to send S 1127 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Douglas will
sponsor the bill on the floor.
Chairman Black announced that the last bill on today’s agenda, H 243, will
not be heard today. Some of the testifiers on this bill were not able to appear
today, due to travel delays in Denver.
S 1097 Mark Dunham, Idaho Association of Realtors, presented S 1097 to the
committee. Mr. Dunham explained that this bill is intended to clear up
ambiguity within the Real Estate Broker’s Act. Senate Bill 1097 will clearly
define the duties of real estate agents and brokers. Mr. Dunham pointed out
the change on page 1, line 32, which strikes the language requiring a real
estate agent or broker to conduct a reasonable investigation of the property
and of the material representations made by the seller. He said that it is
routine practice to encourage a buyer to obtain a professional home
inspection, since real estate agents are not qualified to do so and, in fact, do
not perform inspections. Mr. Dunham also stated that the new language on
page 2, lines 24-30 reflect what actually happens in current real estate
practice. In section 2, subsection (2), language is added to make it clear that
the real estate agent or broker “shall be entitled to rely upon representations
made by a client.” Mr. Dunham also pointed out that S 1097 does not
eliminate duties of the real estate professional, which are still listed in
Section 54-2087, including the duty to disclose all adverse material facts
“actually known or which reasonably should have been known by the
licensee.” He said that the concerns that will be expressed by the Idaho
Trial Lawyers Association are not well founded, because the bill will not
eliminate duties that the trial lawyers say will be eliminated. Mr. Dunham
noted that S 1097 came out of the Senate Commerce Committee with
unanimous approval, and that it passed on the Senate floor with a vote of 29-6.
T. J. Angstman, an attorney and realtor, and a member of the Idaho
Association of Realtors, testified in opposition to S 1097. Mr. Angstman
spoke about the recently implemented Broker’s Representation Act, which
created a system called “buyer’s agency” in which one agent specifically
represents the interests of the buyer of a property, and another agent
represents the seller’s interests. Mr. Angstman said that, under this bill, an
agent will be acting as a negotiator or a facilitator, but not as an agent. Mr.
Angstman suggested that, in order to accomplish the goal of this legislation,
the realtors could leave in the phrase “reasonable investigation” and add that
the agent would have no duty to discover latent defects in the property. He
also stated that, if this bill removes the responsibility of an agent to do an
inspection, it is possible that a later court will interpret that to mean that the
agent has no responsibility or duty to do any investigation of the property.
Responding to committee questions, Mr. Angstman stated that, although the
duties of an agent are included in real estate contract forms, these forms
could be modified to take out the duties that are eliminated by this statute.
Mr. Angstman stated that he received his real estate license in 1990 and
went to law school at the U of I in 1995, paying his way through law school
by selling real estate. Currently, he derives about 15% of his income from
real estate transactions, acting as an agent for buyers; the remainder of his
income, 85%, derives from his work as a real estate attorney. He also stated
that, with S 1097, the listing agent can rely upon the information given to him
by the seller, and in turn the buyer’s agent will rely on the listing agent’s
information. In this scenario, no real estate person is required to verify the
information provided by the seller, and the seller may misrepresent such
things as the presence of underground sprinklers, for instance.
Jeremy Pisca, general corporate counsel to the Idaho Association of
Realtors, testified in favor of S 1097, explaining that he drafted this
legislation. The association’s executive committee negotiated the details of
the bill over a period of six to seven months, and the bill says exactly what
they want it to say. Mr. Pisca gave a brief summary of the genesis of this
bill, a case in which a seller stated that there had been no prior pest
infestation in his house when, in fact, there had been a termite problem.
When the new owner discovered the termite problem, the seller’s realtor was
sued because his client had lied on the disclosure form. This bill will clarify
that the real estate agent can rely on information provided by the seller,
unless the realtor knew or should have known about a defect. The realtor
still has an obligation to perform his duties as listed on the agreement, with
good faith, honesty, and fair dealing.
In response to questions from committee members, Mr. Pisca said that it is
common practice for a real estate agent to recommend that a buyer get a
professional inspection on a property. He pointed out that Idaho Code
section 55-2502, the Idaho Property Condition Disclosure Act, lists all the
information that a seller has to provide about his property, and noted that the
realtors have published their own disclosure form which expands the code
requirements. If a real estate agent cannot rely on the seller’s word, he
remains open to liability for conditions he cannot know about. Since the
seller signs a disclosure statement under oath, the real estate agent should
ben able to rely on that information, unless the agent knows it to be false.
Mr. Pisca was asked what the average price is for a professional home
inspection; he offered as an example his own recent purchase of a $145,000
home, for which he paid $125 for an inspection.



Responding to further questions, Mr. Pisca stated that real estate agents are
trained to market properties, and are not trained as home inspectors.
Therefore, they do not have greater knowledge of the property’s condition
than the people who actually live in the home, and they should not be held
responsible for knowledge they cannot have. He also said that payment for
a home inspection is an item that can be negotiated between buyer and
seller. Mr. Pisca said that, on the disclosure form, the seller is responsible
to list conditions actually known by him as owner of the home; if he is aware
of conditions that existed prior to his ownership, he would be required to
disclose them.

MOTION Rep. Eberle made a motion to send S 1097 to the floor with a DO PASS
recommendation.
Brad Eidam, Idaho Trial Lawyers Association, testified in opposition to

S 1097. Mr. Eidam presented a handout which compared the duties of an
agent dealing with a “customer” and the duties of an agent dealing with a
“client.” Mr. Eidam stated that S 1097 will remove the distinction between
the two, and the public will not know that they are not getting representation
as a “client” until something goes wrong and they find that the agent is not
responsible. He also said that under current law a realtor can fulfill his
obligation by referring the buyer to a professional inspector, and that he
would not have to do the inspection himself.

In response to committee questions, Mr. Eidam said that it seems farfetched
to imagine that a real estate agent would actually tell a client that he used to
be required to do an inspection but that he is now not required to do so. He
stated that S 1097 is an overly-broad solution to the problem that the realtors
are trying to fix.
Mr. Dunham was recognized to conclude his arguments in favor of S 1097.
He noted that it was the realtors who brought the legislation known as the
Broker’s Representation Act in 1996. In response to the concern that people
won’t know what level of representation they are receiving from an agent, Mr.
Dunham pointed out that realtors are required to go through a list of their
responsibilities to their clients. To illustrate this point, he displayed a number
of required documents, including a four-page property disclosure form, a
seller representation agreement, a sales contract that specifically urges the
buyer to get a professional inspection, and a statement of which party is
paying for which portions of the transaction. Mr. Dunham said that the
current code sets up realtors for lawsuits over matters that they cannot know
about a property.
VOTE: Following committee discussion about S 1097, Chairman Black called for a
vote on the motion to send S 1097 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Cannon and Rep.
Douglas voted in opposition to the motion. Rep. Snodgrass and Rep. Tilman
will sponsor the bill on the floor.
H 365 Scott Leavitt, past president of the Idaho Association of Health Underwriters
and a member of the Boise Insurance and Health Underwriters, presented
H 365 to the committee. Mr. Leavitt explained that, when an insurance
policy is replaced with a new policy, the new company has to credit the
amount of deductible for the current year. Therefore, the new company must
obtain this information from the old insurance company. Currently, a number
of out-of-state companies are charging Idaho insurance companies as much
as $300 to $400 to provide this information. This bill adds three words to
existing law to specify that this necessary information will be provided “at no
cost.”
MOTION Rep. Gagner made a motion to send H 365 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Collins will sponsor
the bill on the floor.
ADJOURN Chairman Black announced that there would be no meeting of the Business
Committee on Friday, March 21. There being no further business to come
before the committee, the meeting was adjourned at 4:10 p.m.






DATE: March 25, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED

Rep. Kellogg, Rep. Henbest.
GUESTS Allyn Dingel, Woody Richards, Kris Ormseth, Denise Brennan, Con Paulos,
Dennis Dillon, Dave Hand, Chuck Everett, Kent Just, Alex LaBeau, Jerry
Evans, Ron Kennedy, Julie Taylor, Lyn Darrington, Jim Mowbray, Jim Trent,
Bill Lindsay, Pam Eaton
Meeting was called to order by Chairman Black at 3:20 p.m. Rep. Douglas
asked that an addition be made to the minutes of March 19, mentioning that
S 1031 amends Idaho Code section 15-6-107, and that S 1127 is a further
clarification. Minutes were approved with that addition. It is noted that Rep.
Gail Bray
is substituting for Rep. Henbest for the week of March 24-28.
H 380 Rep. Mike Mitchell presented H 380, noting that this legislation is a different
approach to controlling malpractice awards than that employed in H 92,
passed this year. H 380 will use a rate review approach. Rep. Mitchell
presented statistics suggesting that large awards for medical negligence are
rare in Idaho. He explained that he is not asking for committee action on this
legislation at the present time, but that he wanted to draw attention to this
matter because he intends to bring a bill during the next legislative session.



In response to committee questions, Rep. Mitchell said that this legislation
applies only to casualty insurance, including malpractice; it will not apply to
homeowner’s, auto, or business insurance.

MOTION Rep. Tilman made a motion to HOLD H 380 in committee. Motion carried
on voice vote.
H 243 Rep. Elaine Smith presented H 243 to the committee. She explained that
this bill amends Section 33-1228 of Idaho Code to require health insurance
companies to regularly provide enrollment and cost experience data to
school districts for their covered retirees. School districts in Idaho are
required to maintain retiree and active employees under the same insurance
carrier contract. Rep. Smith said that the information on the school district’s
retirees is necessary for a district that wants to seek a competitive bid on its
insurance contract. The lack of information ties the hands of the districts in
seeking the best coverage for the lowest cost. Rep. Smith also said that the
proposed legislation will apply to all school districts in the state.
Bill Lindsay, a principal with the Denver firm of Benefit Management &
Design, Inc., testified in favor of H 243. Mr. Lindsay said that the bill is a
matter of fairness and disclosure, in that it asks the insurers to provide
information with regard to insured parties. Mr. Lindsay stated that Idaho law
provides retired school district employees with a high degree of protection
regarding the continuation of their health insurance coverage after
retirement. School districts bear the burden of rising insurance costs for
their retired employees, and this bill is trying to make it easier for districts to
seek competitive bids. He also said that the major insurers in the state, Blue
Cross and Blue Shield, will not release data on retirees that they cover, thus
making it virtually impossible for districts to seek bids.
In response to questions from committee members, Mr. Lindsay said that
school districts have information only on their active employees, and that it
would be easy for the carriers to provide the necessary data on retirees to
the districts. Mr. Lindsay was asked about the term “regular basis” on page
1, line 36 of the bill; he said that he did not know how often that would be.
Rep. Smith responded by saying that it was intended to mean once-a-year
reporting. Some committee members expressed concern that if an individual
district has a good claims history and therefore chooses to remove itself from
the pool, that would defeat the pool concept.
Jerry Evans, Idaho School Districts Cooperative Service Council, testified
in opposition to H 243. Mr. Evans explained that the Council is a voluntary
organization of school districts seeking economy and efficiency through
cooperative efforts in purchasing and other areas. The Council includes 94
of Idaho’s districts, plus ten education-related entities including six charter
schools. This pool allows purchase of health insurance at favorable rates,
lower than those otherwise available. Mr. Evans explained that school
districts have three classes of employees: active employees, retirees under
the age of 65, and retirees 65 or older. Those retirees under 65 do not
qualify for Medicare and therefore have the same insurance coverage as
active employees. He also provided some statistical details, saying that 32
of the groups in the Council have five or fewer retirees over 65; 48 have
more than five but less than 25; 21 districts have between 26 and 99; and
three districts have 100 or more post-65 retirees.



Mr. Evans provided members of the committee with a copy of a “Sample
School District” handout which details the utilization and cost figures for an
Idaho school district. This report provides information on each of the cost
drivers affecting insurance coverage; H 243 will not provide this kind of
detailed information. Mr. Evans explained that the retirees from all districts
are pooled and that their premiums are paid from their unused sick leave at
PERSI. Mr. Evans asked why districts would want to have their over-65
retirees reported as part of the district, when districts are not involved
financially and the premiums are not part of the district’s budget. Mr. Evans
said that the Council opposes H 243 because it is not needed, and also
because they think that the eventual result of the required reporting will lead
to those with better reports leaving behind a higher risk pool when they go
to another carrier. H 243 poses a significant danger to the program Mr.
Evans has been running successfully.

Responding to questions, Mr. Evans said that retirees in a district do not
have a choice of whether to stay with their current carrier when a district
moves to a new carrier, because Idaho Code requires that all persons
covered by the district must have the same coverage and benefits; retirees
must be given a Medicare supplement policy with the same benefits as
active employees. Mr. Evans also stated that an experience report for the
over-65 group is available every month; this report is not broken down by
individual, however. He said that the insurance companies are barred from
releasing any information that would lead to the personal identification of an
insured person.
Ron Kennedy, a principal of Western Benefit Solutions, testified in
opposition to H 243
. He said that this bill will defeat the purpose of group
insurance. In a large pool, everyone pays smaller premiums in order to fund
a few large claims. If companies break out claims experience on an
individual basis, the districts with better claims history will break away from
the pool. Then the pool enters into a “death spiral” in which the remaining
districts have to pay higher insurance rates because they will become a
group of individuals with high claims history. Ultimately, rates will be so
expensive that no one will be able to afford the coverage.
Lyn Darrington, representing Regence Blue Shield of Idaho and the Idaho
Association of Health Plans, testified in opposition to H 243. Ms.
Darrington said that the recent Health Insurance Portability and Availability
Act (HIPAA) includes serious penalties for any violation of confidentiality of
personal health information. The release of information required under the
provisions of H 243 would be a clear violation of the HIPAA provisions,
according to Ms. Darrington.
Julie Taylor, representing Blue Cross of Idaho, testified in opposition to

H 243. Ms. Taylor said her biggest concern is that the retiree pool will be
undermined and the sickest retirees will be left in the pool, thus jeopardizing
the viability of the system. She also pointed out troublesome areas of the
bill: There is no definition of cost report, no definition of “regular basis,” and
no determination of whether the reports are on an incurred or on a paid
basis. Finally, Ms. Taylor said that the language in H 243 does not say that
a report needs to be given to an individual school district.

MOTION Rep. Tilman made a motion to HOLD H 243 in committee.
Rep. Smith was recognized to provide closing arguments in favor of H 243.
She read an e-mail from the superintendent of the Lakeland School District,
in which he expressed support for this bill. The superintendent said that he
cannot see any disadvantage, and that any additional information that would
help control insurance costs is positive.



Bill Lindsay was recognized to respond to earlier committee questions. Mr.
Lindsay said that page 1, lines 28-30 contain the requirement that
employees and retirees of a district have to be included in the same health
insurance plan. He also read from HIPAA regulations, Section 164.501, third
paragraph, in which disclosure of specific claim information is permitted for
purposes of comparison. Mr. Lindsay said that it is not the intention of this
bill to hurt retirees or to destroy the pool; rather, it is seeking information so
that districts can get a competitive bid on their insurance coverage.






Rep. Tilman argued in favor of his motion to HOLD H 243 in committee,
saying that it appears that claims information is available to districts, at least
on the basis of the entire pool’s history. He said that there did not seem to
be a problem in this area, since 94 districts are in the pool and none of them
appeared to testify in opposition to the bill.

VOTE ON
MOTION
Chairman Black called for a vote on the motion to HOLD H 243 in
committee. Motion carried on voice vote. Rep. Rydalch, Rep. Douglas,
and Rep. Smith voted nay.
H 383 Rep. Sharon Block presented H 383 to the committee. Rep. Block
explained that this legislation is being brought on behalf of many Idaho small
businessmen who are franchise owners in auto dealerships, real estate
offices, and food establishments. She explained that if a problem arises with
a franchiser outside the state, Idaho courts may be prevented from hearing
the case, because the laws of other states sometimes do not allow Idaho
courts to hear such disputes. Therefore, the small businessman would be
required to travel to the state in which the franchiser is domiciled in order to
settle disputes, and most of them do not have the financial resources to do
so. This creates an unfair disadvantage to these small business franchise
holders. H 383 will specify that a franchise company cannot use the “choice
of law” provision to get around Idaho Code Section 29-110. Rep. Block then
explained details of H 383, and said that the bill seeks to create a level
playing field for franchise owners to settle disputes in Idaho.
Pam Eaton, president of the Idaho Retailers Association, testified in
opposition to H 383
. Calling the committee’s attention to a letter she
submitted to them earlier, Ms. Eaton stated that this bill is an unnecessary
government interference in the freedom to contract, and that it may limit the
franchise system from expanding. She also said that franchise agreements
are already regulated by the Federal Trade Commission and contract law,
and that H 383 may mean that eventually the state of Idaho will be in the
middle of all contracts between parties.



Responding to committee questions, Ms. Eaton said that the franchise
business may be slowed because franchises hesitate to go into some states
which have inconsistent or unfavorable regulations. She said that her
association’s main concern is the government regulation and interference
that this bill represents.

Kris Ormseth, representing Doug Vollmer, owner of Papa Murphy’s
franchises, testified in favor of H 383. Mr. Ormseth said that he does not
see this bill as undue interference in private contract rights, but that it will
level the playing field in franchise arrangements. Mr. Ormseth also stated
that it is common for contracts to specify which state’s laws will apply to any
disputes, but less common to specify the venue in which disputes will be
litigated. H 383 says that if a franchiser does not live up to the franchise
agreement, an Idaho resident who holds that franchise should not have to
incur the expense of going out of state to litigate the matter.
Con Paulos, owner of auto dealerships including General Motors,
Volkswagen of America, and Mazda, as well as a number of Subway
sandwich shops, testified in favor of H 383. Mr. Paulos said that, in his wide
experience with franchises, it is typical of large franchisers to use a standard
contract and not to negotiate terms of the contract. Mr. Paulos told the
committee about his own experience with a franchise business that he had
to close in 1997. This year, six years after the closure of that business, he
has received notification that he has to defend himself in a lawsuit in the
state of Indiana. Mr. Paulos also pointed out that the major franchisers do
not usually present problems that have to be litigated; rather, contract
problems generally arise with small franchises which may not be well
planned or fully disclosed to the franchisees.
Jim Mowbray, owner of the TCBY stores in the Boise area for the past 17
years, testified in favor of H 383. Mr. Mowbray said that the playing field is
not even close to being even, and that franchisees should have the right to
defend any actions in their own state, which H 383 will allow them to do.
David Hand, executive director of the Idaho Lodging and Restaurant
Association, testified in favor of H 383. Mr. Hand stated that one of the first
questions asked of a small business person when he is seeking financing is
about the terms of the franchise agreement. Mr. Hand said that he had
contacted a number of fast food operations, and that these small businesses
agree with and support this legislation.
Chuck Everett, executive director of the Associated Innkeepers of Idaho,
and also Ameritel Inns, testified in favor of H 383. Mr. Everett said that he
has recently entered into franchise agreements with Hilton Garden Inns and
Best Western. Although he doesn’t anticipate litigation with either of these
franchisers, he would like to have the ability to settle any possible conflicts
in Idaho.
Alex LaBeau, representing the Idaho Association of Realtors, testified in
favor of H 383
, saying that his association thinks it is good legislation. He
represents companies such as Century 21, ReMax, ERA, Prudential, and
Keller Williams, and the owners of all of these companies are in support of
the legislation. Mr. LaBeau gave an example of a local company that wanted
to sue Prudential for a franchise contract dispute, but did not do so because
the costs in Prudential’s home state were prohibitive. H 383 will allow such
an action to take place in Idaho in the future.
MOTION Rep. Meyer made a motion to send H 383 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Block will sponsor
the bill on the floor.
ADJOURN There being no further business to come before the committee, the meeting
was adjourned at 5:25 p.m.






DATE: March 27, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman,
Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED

Rep. Henbest
GUESTS Tammy Payne, Terri Meyer, Cheryl Meade, Peggy Peterson, J.L. Byington,
Ron Matthews, Karen McWilliams, Julie Taylor, Lyn Darrington, Nancy
Vannorsdel, Ray Stark, Steve Millard, Bonnie Haines, Dawn Justice, Bill
Foxcroft
Meeting was called to order at 3:48 p.m. by Chairman Black. Rep. Tilman
made a motion to approve the minutes of the March 25 meeting as written.
Motion carried on voice vote.
H 376 Sen. Dean Cameron presented H 376, which is intended to provide a
mechanism to assist families in obtaining health insurance for children and
adults. Sen. Cameron first thanked the Idaho Strategic Planning Committee
and the Boise Metro Chamber of Commerce, as well as Rep. Henbest, Rep.
Black, and Speaker Newcomb, all of whom have worked to develop this
legislation as a way to reduce the uninsured population in Idaho. He
explained that this legislation will allow development of an “access” card
which will operate much like a prepaid phone card, and which can be used
to purchase insurance coverage on an individual or group basis. The dollar
value of the card will be determined based on the individual’s eligibility level.



Sen. Cameron explained the three components of the program and reviewed
the details of H 376, pointing out that it defines poverty, defines the types of
policies to be purchased, and delineates details of the advisory boards that
will be established to oversee the programs. He also explained how the
program will be funded, stating that no general funds will be used for
funding. Rather, one-quarter of all premium taxes collected above $55
million will be dedicated to the Access Fund. Although the $55 million
threshold has not yet been reached, It is anticipated that the amount of
premium taxes will continue to increase in the future so that there will be
funding for this program. Also, Sen. Cameron explained that state funds will
be leveraged by the federal matching grant program, on an 80-20 basis.



Responding to questions from committee members, Sen. Cameron stated
that there is no fixed upper limit on the funds going to this program. As
premiums continue to rise, the amount of premium tax will also rise, although
there has been some discussion of reducing the premium tax rate. In any
case, this program will not be funded until and unless funds become
available through excess premium tax collections. Sen Cameron also stated
that there may be necessity for some co-payment, similar to private plans,
for the adult program. He explained that the three boards report to the Idaho
High Risk Reinsurance Board, which reports to the Legislature; thus, there
will be legislative oversight for this program. Additionally, although there is
no mandate that the boards include a member of the legislature, neither is
there any prohibition against that. Sen. Cameron does not anticipate that the
federal matching funds will become unavailable, since many states, including
Idaho, are not using their full allocation of CHIPS dollars at the present time.

Chairman Black noted that no one had signed up to testify in opposition to
H 376, and he asked whether any of those in favor of the bill needed or
wanted to testify, or if they thought they could add any further clarifying
information. Members of the Idaho Community Action Network (ICAN)
indicated that they wished to testify about concerns they have with the bill.
Peggy Peterson, ICAN member, testified on H 376, thanking Sen. Cameron
for his work on this issue. She stated that ICAN is in favor of expanded
insurance coverage, but that they are concerned that the type of insurance
offered is the most affordable and highest quality coverage, as well as the
best access for families. ICAN also wants definite goals set for the program
and would like to see an evaluation process in place to assess its success.
ICAN supports separate boards to oversee the three parts of this program,
but they want the boards to include a broad spectrum including small
business, insurance providers, and community leaders as well as users.
They are also concerned about out-of-pocket costs that they may have to
bear. Ms. Peterson distributed a handout that included a list of questions
and concerns.
Ron Matthews, ICAN member, testified on H 376, noting that a program
with a high deductible and a high co-pay amount can hurt families who need
this coverage. Mr. Matthews pointed out that there is a need for education
on both underutilization and overutilization of insurance. He thinks that the
existence of a co-payment may discourage people from seeking appropriate
medical care, if they can’t afford the co-pay.
MOTION Rep. Tilman made a motion to send H 376 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Black and Rep.
Gagner will co-sponsor the bill on the floor.
S 1073 Terri Meyer, bureau chief of the Child Support Services for the Department
of Health & Welfare, presented S 1073. Responding to initial questions from
the committee, Ms. Meyer explained what a child support order is and how
her department enforces orders that are issued from a court, generally from
a divorce decree. She also stated that the proposed amendments arose
after consultation and in cooperation with both Blue Cross and Blue Shield.
Ms. Meyer stated that the term “obligated parent” can refer to either the
custodial or the noncustodial parent.



Ms. Meyer then explained the details of S 1073. This legislation is
necessary to allow Idaho to conform to the National Medical Support Notice
(NMSN), which provides a standardized federal information form and a
standardized procedure when obtaining medical support for Idaho’s children.
Ms. Meyer said that all of this already happens at the present time, but that
the procedures are not standardized. H 376 spells out specific definitions,
requirements, exceptions, and other details of this reporting program. She
also stated that the federal mandate requiring states to conform to the
standardized reporting does carry severe penalties for noncompliance, and
that Idaho would suffer those penalties if this bill is not passed.

In response to committee questions, Ms. Meyer said that if parents are not
covered by health insurance from an employer, they are not required to
provide children’s insurance coverage under this bill. Day laborers are also
not required to provide insurance, unless they have coverage through their
employers. She said that if H 376 does not pass, the federal financial
participation in Idaho’s Health & Welfare budget, currently $11.6 million, will
be in jeopardy.



Chairman Black explained that this bill, which was originally sent to the
Health & Welfare Committee, was referred to the Business Committee
because Health & Welfare thought this committee could better deal with the
issues in the bill, which involves insurance policies and insurance
requirements. He also stated that representatives from Blue Cross and Blue
Shield were present and available to answer any questions concerning the
proposed amendments to the bill. Rep. Eberle stated that the Health &
Welfare committee was poised to hold this bill, because of concerns over the
repeated use of the word “shall” in the bill, which obligates employers to
comply with these regulations. He noted that the bill was sent to the
Business Committee rather than holding it in the Health & Welfare
Committee.

MOTION Rep. Cannon made a motion to send S 1073 to General Orders with
committee amendments attached
. Rep. Block seconded the motion.
Motion carried on voice vote. Rep. Cannon will sponsor the bill on the floor.
Chairman Black announced that Rep. Mitchell had provided copies of a new
RS to replace H 380, which he previously presented to the committee at the
March 25 meeting. Rep. Mitchell does not plan to proceed with this
legislation during this session, but wants the issue to be studied and wants
copies of the new RS to be available to Business Committee members.
Chairman Black announced that there are still one or two Senate bills to be
studied by the Business Committee. The committee will not meet Monday,
March 31, but will probably meet on Tuesday, April 1.
ADJOURN There being no further business to come before the committee, the meeting
was adjourned at 4:35 p.m.






DATE: April 1, 2003
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Tilman, Kellogg,
Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Henbest, Smith(30),
Douglas
ABSENT/

EXCUSED:

Rep. Kellogg
GUESTS: Maria Barratt, Pat Minegar, Toby Ashley, Ken Harward, Jim Bledsoe, Ben Kohler,
Jerry Peterson, Ray Coon, Dennis Butterfield, Bob Corbell, John Eaton, Neil
Colwell, Larry Benton
Meeting was called to order at 2:28 p.m. by Vice Chairman Gagner. Rep. Tilman
made a motion to approve the minutes of the March 27 meeting as written.
Motion carried on voice vote.
S 1133 Bob Corbell, representing the Idaho Mechanical Contractors, the Independent
Electrical Contractors of Idaho, and the Northwest HVAC Association, presented
S 1133. Mr. Corbell explained that this legislation started as S 1065 earlier in the
session, but that because of concerns from contractors who install decorative
fireplaces and barbecues, he had considerably amended the bill. The new
legislation, S 1133, has been amended by the Senate, and Mr. Corbell is
presenting the engrossed bill to the committee.



Mr. Corbell explained that HVAC contractors hold specialty licenses issued by the
Division of Building Safety, and that the HVAC contractors want to set up their
own bureau which will specifically address their industry. He stated that the bill
contains an emergency clause in order to ensure enough time for the newly-appointed board to draft rules by August 2003 and submit them to the 2004
legislative session. It is hoped that this new HVAC bureau will be fully operative
by July 2004. The plumbing board will supply startup costs of approximately
$6,500 to cover initial meetings; thereafter, license and inspection fees will
support this bureau.



Mr. Corbell then reviewed the bill, explaining that the new board will include two
members who are HVAC contractors, one active plumbing contractor board
member and one active electrical contractor board member, each of whom will
serve a two-year term initially, one private sector mechanical engineer, and two
municipal officials, one city and one county. The two-year board positions will
eventually be replaced by an HVAC contractor and a specialty contractor, whose
terms will then be three years. Board duties include holding public meetings and
issuing permits, in the same manner as the plumbing and electrical boards
operate.



Mr. Corbell stated that existing contractors will be grandfathered, but that after
July, new businesses will be required to meet the new regulations developed by
the new board. Nothing in this legislation will bar local municipalities from
adopting rules that are more strict than the proposed state board’s rules.

Responding to committee questions, Mr. Corbell explained the relationship
between the new HVAC board and the Division of Building Safety, stating that it
would operate in the same manner as the current electrical board and plumbing
board operate. It is the board that has the authority to promulgate rules. The bill
also requires a “bond” on page 4, line 53, and Mr. Corbell stated that this refers
to a performance bond.
Pat Minegar, co-owner of A-1 Heating and Governmental Affairs coordinator for
the Building Contractors Association of Southwest Idaho, testified in favor of S
1133
, stating that his organization wholeheartedly supports the legislation. Mr.
Minegar said that, since HVAC contractors routinely work with natural gas,
propane piping, and flue venting, some method of checking their competency is
just as important as it is in the area of electrical contractors.
Ken Harward, representing the Association of Idaho Cities, testified in favor of
S 1133, stating that his organization fully supports this bill.
Ben Kohler, president of the Idaho Mechanical Contractors, testified in favor of
S 1133.
His organization supports the legislation for three basic reasons: the
public safety factor, the increased complexity of HVAC installations, and the
potential energy savings from correct installations.
Jerry Peterson, Idaho Building Trades, testified in favor of S 1133. Mr.
Peterson said that the HVAC industry has evolved, and that fire and smoke
controls now fall under the HVAC industry. There is currently no standard to
measure a contractor’s ability, and no training standard for those wishing to
become contractors. Mr. Peterson said that passage of S 1133 is in the best
interest of the industry as well as the public.
Dennis Butterfield, representing the Treasure Valley Master Plumbers
Association, testified on S 1133. He has legitimate concerns about the
legislation, but if it passes, Mr. Butterfield will work with heating contractors to
safeguard against future problems. He cited a trend toward the Idaho
Association of Building Officials squeezing out the Plumbing Board.
John Eaton, representing the Building Contractors Association of Southwest
Idaho and the Idaho Building Contractors Association, testified in favor of S
1133
. Mr. Eaton said that this bill is the result of a long and concerted effort at
consensus building among all interested parties, and that it will help guarantee
a higher degree of competency and safety in the HVAC industry.
Neil Colwell, Avista Corporation, a natural gas and electrical utility company in
northern Idaho, testified in favor of S 1133. Mr. Colwell said that, since some
companies do not require permitting for installations, his company tries to provide
safety inspections after the installations are complete. However, by that point,
most of the work is already covered up by finish construction, and the inspection
is therefore made more difficult and less effective.
Jim Bledsoe, owner of Jim’s Heating & Cooling for the past 28 years and
president of the Boise HVAC Association, testified in favor of S 1133. Mr.
Bledsoe said that, although some parties have stated they did not know about
this legislation until very recently, he has personally spoken with a number of
people from various parts of the state and has received expressions of support
from many people involved in the industry. In response to questions from the
committee, Mr. Bledsoe said that he thinks the result of this legislation will be to
increase opportunities for young people to enter the profession, rather than to
provide a dampening effect on their entry.



Mr. Corbell was recognized to answer further questions. With regard to the
grandfathering of existing contractors, he said that this would probably mean that
some incompetent contractors will initially be allowed to remain in business.
Under the new process, however, the HVAC board will have the means to weed
out those who are incompetent or irresponsible, because they will be able to deny
license renewal if sufficient complaints are filed against such a contractor. The
testing and training requirements will serve to keep out new contractors who do
not measure up to the standards set by the new board. He also explained how
startup funding comes from the plumbing board, saying that HVAC contractors
hold specialty licenses and contribute to the plumbing bureau. As funds build up
in the new HVAC bureau, the plumbing bureau will be reimbursed. Ray Coon,
a member of the Plumbing Board, stated that the board did not hold a formal vote
on whether or not to advance the startup financing to the new HVAC bureau.

In further comments to the committee, Mr. Corbell said that individual cities are
not required to adopted a building code, and not all Idaho cities have building
codes in place. Mr. Eaton was recognized to respond to a question about the
counties that do not have a code in place; he stated that, in those instances, the
state will provide inspections for HVAC work. This allows counties to retain a
greater degree of local control. It was noted that this is the same approach as
that of the current plumbing and electrical bureaus. Mr. Eaton also said that
inspectors will work for the Division of Building Safety, not for the board.
MOTION Rep. Meyer made a motion to send S 1133 to the floor with a DO PASS
recommendation. Motion carried on voice vote. Rep. Gagner will sponsor the
bill on the floor.
ADJOURN Chairman Black announced that any further meetings of the Business Committee
will be at the call of the chair, since no further legislation remains to be
considered at this point. There being no further business to come before the
committee, the meeting was adjourned at 3:50 p.m.






DATE:

April 15, 2003

TIME:

1:30 P.M.

PLACE:

Room 408

MEMBERS:

Chairman Black, Vice Chairman Gagner, Representatives Deal,
Tilman, Kellogg, Meyer, Collins, Block, Rydalch, Cannon, Eberle,
Snodgrass, Henbest, Smith(30), Douglas

ABSENT/
EXCUSED:

None

GUESTS:

Edward Galtney, Richard Riley, Ryan Moore, Cindy Copple,
Jeanine Butler, Dallas Crandall, Jarrad Renner, Lisa Routon,
Mike Duiski, Angie Lowber, Pam McCrory, Loretta Barraco, Jenny
Cahill, Tim Black

Meeting was called to order at 1:10 p.m. by Chairman Black. Rep.
Cannon made a motion to approve the minutes of the April 1
meeting as written. Motion carried on voice vote.

S 1148a

Ed Galtney, co-president of Workcare Northwest, presented S 1148a to the committee. Workcare Northwest is a company
specializing in workers compensation insurance, providing work
comp policies to 800 clients in Idaho. Mr. Galtney told the
committee that he had previously testified before them in
opposition to H 334 earlier in the session. S 1 148a is intended to
clarify the definition of “control” in an effort to fix an obsolete
statute, Section 41-309 of Idaho Code. The bill will also clear
technical defects of the code section. In response to a question
from the committee concerning the Senate amendment to S 1148, Mr. Galtney noted that he would have preferred the sunset
provision to remain at one year, rather than be shortened to 100
days.

Richard Riley, an attorney representing Advantage, testified in
favor of S 1148a. He pointed out that the legislation will serve to
continue the current prohibition of government-controlled
insurance companies operating in Idaho, but will modify the
definition of “control.” Mr. Riley referred to a transcript of a portion
of Judge McKee̓s ruling, in which thejudge stated that Advantage
was not owned by a government agency and that it was not
operated for any government or governmental agency. Judge
Mckee ruled that the State of Utah has voting control of
Advantage because the governor appoints some members of the
board. This was construed by Judge Mckee to constitute “control”
of the board.

Mr. Riley referred to a handout containing the definition of
“control” from Idaho Code Section 41-3801, Subsection 2. Mr.
Riley noted that S 1148a will simply refer the Department of
Insurance to its own definitions in order to determine whether a
company is a government-controlled entity. He said that this bill
will serve to clarify the definition of control and even expand the
definition, since on page 1, line 18, the word “voting” is
eliminated. Mr. Riley also stated that there is some contention
over whether Advantage is operating fairly or unfairly in Idaho,
and he pointed out a section of the colloquy between Judge
McKee and Mr. Donovan at the administrative hearing which
applies to this question.

Finally, Mr. Riley stated that code section 41-309 needs to be
examined more closely, since it may be obsolete and since it also
may be determined to be unconstitutional, violating the free trade
provision of the Constitution.

In response to committee questions, Mr. Riley agreed that Judge
McKee̓s final ruling stated that Advantage should be barred from
doing business in the State of Idaho. He also agreed that Judge
Mckee found section 41-309 to be outdated and unnecessary,and that the judge expressed concerns about whether the section had any meaning. Mr.Riley also responded to a question about whether it was time for the State of Idaho toget out of the workers compensation business, saying that he thinks the StateInsurance Fund fills a definite need by providing coverage for Idaho employers whowould not otherwise be able to obtain workers compensation insurance, which isrequired by law.

MOTION:

Rep. Rydalch made a motion to send S 1148a to the floor with a
DO PASS recommendation.

In discussing the motion with committee members, Mr. Riley said
that he hoped to get the blessing of the Department of Insurance
on some remedial legislation that would address the problem, and
that, although he would have preferred a one-year time period,
the 100 days gives Advantage a chance to work with the
department in developing such legislation. It is his hope that
Advantage can continue doing business in Idaho until the next
legislative session, at which time such legislation can be
presented and acted upon.

Chairman Black asked Rep. Deal to briefly explain the State of
Utah̓s role in solving this problem. Rep. Deal explained that he
was privy to a letter from Governor Leavitt asking for 100 days in
which to privatize the Workers Compensation Fund of Utah. At
present, the Governor of Utah is working on a solution, and it is
Rep. Deal̓s understanding that a special session of the Utah
Legislature will be convened to deal with this issue.

SUBSTITUTE
MOTION:

Rep. Deal stated that the current Statement of Purpose attached
to S 1148a is not reflective of the amended bill. He presented a
new SOP to the committee which more clearly states the intent of
S 1148a, and made a substitute motion to replace the original
SOP attached to S 1148a with his new SOP. In support of the
substitute motion, Rep. Deal cited House Joint Rule 18, which
directs committees to review statements of purpose and allows a
member to challenge the sufficiency of a statement of purpose.

The new statement of purpose proposed by Rep. Deal reads as
follows: “Idaho law does not allow insurers operated for or by
state governments, other than the Idaho State Insurance Fund, to
transact insurance in the State of Idaho. The purpose of this
legislation is to allow states other than Idaho, like the state of
Utah, time to change their laws so that their government owned
or controlled insurance funds, and their wholly owned
subsidiaries, wishing to transact insurance in the State of Idaho
can become private companies authorized to transact insurance
in the State of Idaho. This legislation would allow these states
time to make these necessary changes. This legislation will
temporarily change the definition of “control” for the purposes of
determining whether an insurance company is under government
ownership or control. For the time period from July 1, 2003 to
November 1, 2003, the definition of control for the purposes of
Idaho Code section 4 1-309 would be amended thus allowing
these government owned or controlled companies to continue to
operate in Idaho. After November 1, the existing prohibition
against government owned or controlled insurers, other than the
Idaho State Insurance Fund, operating in Idaho would again
become the law.”

Rep. Tilman suggested that the statement of purpose could be
improved by deleting the first three sentences of Rep. Deal̓s
proposed new SOP, thus beginning the new SOP with the
wording, “This legislation will temporarily change the definition of
‘control̓…“ Rep. Tilman also noted that, in the fifth sentence of
Rep. Deal̓s new SOP, the word “these” be stricken, since it is
superfluous. Rep. Deal agreed to the shortened version of the
new SOP. Other members of the committee who had expressed
reservations about Rep. Deal̓s proposed SOP also agreed that
the shortened version was acceptable to them.

AMENDED
SUBSTITUTE
MOTION:

Therefore, Rep. Tilman made an amended substitute motion
to send S 1148a to the floor with a DO PASS recommendation,
with the new statement of purpose. Motion carried on voice
vote
.

ADJOURN:

There being no further business to come before the committee,
the meeting was adjourned at 1:50 p.m.