2004 Business

Banking/insurance issues

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January 15, 2004
January 19, 2004
January 21, 2004
January 27, 2004
January 29, 2004

February 3, 2004
February 5, 2004
February 9, 2004
February 11, 2004
February 13, 2004
February 17, 2004
February 19, 2004
February 23, 2004
February 25, 2004
February 25, 2004 – Subcommittee

March 1, 2004
March 3, 2004
March 3, 2004 – Subcommittee
March 9, 2004
March 11, 2004
March 15, 2004
March 17, 2004
Final Report (pdf format)

DATE: January 15, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg,
Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

Rep. Deal
The meeting was called to order at 1:40 p.m. by Chairman Black, who
welcomed the committee members back to this session of the Legislature.
Chairman Black also introduced a new member of the Business Committee,
Rep. Clifford Bayer. Rep. Bayer told the committee that he is a medical
research scientist working at the Veterans’ Administration Hospital in Boise,
and that he has been active in local government issues. Chairman Black
also introduced the committee page, Heather Callen. Ms. Callen is a senior
from Twin Falls, and plans to attend college and then attend medical school
to become a physician.

Chairman Black explained that it is his intention to deal with agency
administrative rules next week, and to have the agency people present their
rules as well as any RS’s that they have before the committee. He hopes
this will expedite the process so the committee can move through the
pending rules and the 24 agency RS’s in an efficient and rapid manner.
Rep. Gagner will be chairing Monday’s meeting in the absence of Chairman
Black, who will be meeting with other members of the Pacific NorthWest
Economic Region.

Rep. Meyer asked Chairman Black whether the mad cow situation was
negatively affecting relations between the United States and Canada.
Chairman Black said that, as far as he could discern, relations are not
strained, although some Canadians are concerned about the finger pointing
from the U.S., attempting to affix blame on Canada for the mad cow
problems in this country. However, PNWER does not involve itself in issues
such as mad cow or soft lumber, which is another contentious issue between
the two countries.

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

 

DATE: January 19, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg,
Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

Chairman Black
GUESTS: David Curtis, Roger Hales, Maggie Mahoney, Mary McGown, Rayola
Jacobsen, Dawn Justice, Woody Richards, Jim Trent
The meeting was called to order at 1:40 p.m. by Vice Chairman Gagner, who
explained the rules process and noted that it was the committee’s intention
to hear agency rules and RS’s this week, and to wrap up all the Rules and
agency RS’s this week. No approval will be given to the proposed rules at
this time, in order to give committee members time to further study the rules
and receive clarification or further information if necessary.
Docket No.

10-0101-0301

Dave Curtis, Executive Director of the Board of Professional Engineers and
Professional Land Surveyors, presented Docket No. 10-0101-0301, which
deals with the Board’s rules of procedure. This docket corrects terminology
and clarifies educational requirements for licensure as a professional
engineer. It also provides for proctoring of exams for other jurisdictions.
Docket No.

10-0102-0301

Mr. Curtis also presented Docket No. 10-0102-0301, which responds to
some concerns expressed by the Legislative Counsel. This rule is being
adopted in order to require registrants to communicate with clients and to be
“candid” in these communications.

Mr. Curtis noted that the Board had advertised the opportunity for hearings
on these two rules changes and had received no requests for a hearing. In
addition, license holders were notified of the pending changes, and the
Board has received no negative comments.

RS 13456C1 Mr. Curtis then presented RS 13456C1, which is intended to clear up some
ambiguities in the law that relates to the filing of a “Record of Survey.”
MOTION Rep. Cannon made a motion to print RS 13456C1; motion carried on voice
vote.
RS 13457C1 Mr. Curtis presented RS 13457C1, which clarifies certain licensing
requirements for professional engineers and professional land surveyors.
It also authorizes the board to charge applicants for the cost of having an
outside party administer examinations. It also clarifies that only the State of
Idaho may issue licenses, and prohibits local jurisdictions from requiring
licenses or fees to engage in the professions of engineering or land
surveying. Mr. Curtis said that the board has received no objections to this
proposed legislation.
MOTION Rep. Meyer made a motion to print RS 13457C1; motion carried on voice
vote.
Rayola Jacobsen, Bureau Chief of the Occupational Licensing Bureau,
appeared before the committee to discuss proposed rules changes.
Docket No.

24-0101-0301

Ms. Jacobsen presented Docket No. 24-0101-0301, which adds a
continuing education requirement for architect licensees. She stated that,
as a result of the 9-11-2001 events, the National Association of Architects
has promulgated language to ensure uniformity in architectural licensing; this
rule change incorporates that uniform language. She noted that continuing
ed requirements can be satisfied through readily available online courses,
as well as at events such as national meetings.
Docket No.

24-0401-0301

Ms. Jacobsen also presented Docket No. 24-0401-0301, which removes
some obsolete requirements for the nail technology exam. Candidates are
now routinely using mannequin hands for the exam, and this rule change
recognizes this and allows artificial nails. There have been no negative
comments regarding this rule change.
Docket No.

24-0701-0301

Ms. Jacobsen presented Docket No. 24-0701-0301, which contains rules
dealing with landscape architects. These are the result of legislation passed
in 2003; the rules will mirror the language of the bill. Ms. Jacobsen said that
the Bureau has received no written or verbal communication in opposition to
these rules.
Docket No.

24-0801-0301

Ms. Jacobsen introduced Roger Hales, legal counsel for the bureau, who
presented Docket No. 24-0801-0301. This rule defines qualifications for
crematories and funeral directors, and includes revisions to bring the rules
into compliance with Idaho Code.
Docket No.

24-0802-0301

Mr. Hales also presented Docket No. 24-0802-0301, which eliminates rules
for crematories and then incorporates them into the rules for morticians.
RS 13453 Ms. Jacobsen then presented RS 13453, which eliminates a requirement of
work experience for instructor licenses, since the six months of student
teaching is deemed sufficient to qualify a license holder to become an
instructor.
MOTION Rep. Meyer made a motion to print RS 13453; motion carried on voice vote.
RS 13466 Ms. Jacobsen also presented RS 13466, which will allow transportation
department personnel to estimate the value of surplus property if the value
is $10,000 or less.
MOTION Rep. Meyer made a motion to print RS 13466; motion carried on voice vote.
RS 13628 Ms. Jacobsen presented RS 13628. She explained that the bureau
oversees licensing for 17 different professions, but that it is not authorized
to demand records from all of them. This legislation will allow the bureau to
request additional records in investigation, and also allows for an appeals
process to the District Court. The legislation was drawn up by the Attorney
General’s office.
MOTION Rep. Cannon made a motion to print RS 13628.
SUBSTITUTE

MOTION

Rep. Henbest made a substitute motion to not print RS 13628 until the
committee has a chance to further clarify the issue of opting out of providing
records.
Rep. Cannon argued against the substitute motion, pointing out that printing
the RS will allow for public scrutiny and discussion. Rep. Henbest argued
in support of the substitute motion, saying that any problems in the
legislation could more easily and cheaply be fixed as an RS rather than after
printing as a bill. Although she is in agreement with the intent of this RS, she
would support printing a new RS rather than amending a bill later.
VOTE ON

SUBSTITUTE

MOTION

Chairman Gagner called for a voice vote on the substitute motion to not print
the RS. Since the voice vote was inconclusive, a roll call vote was taken.
Voting in the affirmative on the substitute motion: Reps. Eberle,
Henbest, Smith, Douglas. Voting in the negative: Reps. Gagner, Kellogg,
Meyer, Collins, Block, Rydalch, Cannon, Snodgrass, Bayer. Substitute
motion failed on a vote of 4 Aye, 9 Nay.
VOTE ON
ORIGINAL
MOTION
Chairman Gagner then called for a voice vote on the original motion, to print
RS 13628. Motion carried on voice vote.
Docket No.

18-0115-0301

Shad Priest, Idaho Department of Insurance, presented Docket No. 18-0115-0301, which eliminates the requirement of fingerprinting for nonresident
insurance agents doing business in the State of Idaho. Because
fingerprinting was required for nonresident producers, Idaho was not
considered a reciprocal state under the Gramm-Leach-Bliley Act of 1999.
This change will bring Idaho into reciprocity by eliminating the requirement
of fingerprints for nonresident producers. Mr. Priest said that there have
been no negative comments received by the department.
Docket No.

18-0119-0201

Mr. Priest presented Docket No. 18-0119-0201, which makes permanent a
temporary rule stating that an insurance company cannot use credit scoring
as a primary basis for denying coverage or setting premiums. Idaho has one
of the most restrictive rules in the nation on this matter.
Docket No.

18-0138-0301

Mr. Priest presented Docket No. 18-0138-0301, which deals with insurance
on vehicles used in car pools. This docket repeals rules which are no longer
necessary, since they refer to sections of Idaho Code which are no longer
in existence.
Docket No.

18-0144-0301

Mr. Priest presented Docket No. 18-0144-0301, which reduces the fee for
insurance agent licensing to $60 for a two-year period if the license
application is filed electronically. In response to a committee question, Mr.
Priest stated that, although this will result in loss of revenue, that loss will be
offset by the cost savings realized through electronic filing.
Docket No.

18-0153-0301

Mr. Priest presented Docket No. 18-0153-0301, which reduces the
continuing education requirement for insurance producers from 40 hours
every two years, to 24 hours every two years. The continuing education will
also now require a minimum of three hours of either ethics or insurance law.
The rule change will also eliminate the carryover of credits. Mr. Priest said
that the department has received some inquiries about the changes, but that
any concerns are satisfied once the parties receive an explanation of the
changes.
Docket No.

18-0159-0301

Mr. Priest presented Docket No. 18-0153-0301, which adopts standard
mortality tables which are in agreement with national standards. There has
been no public inquiry and no negative comments regarding this change.
RS 13496 Mr. Priest then presented RS 13496, which deletes a requirement that
insurers file reports regarding material acquisitions with the National
Association of Insurance Commissioners. The Association no longer
requires such reports and does not want to receive them.
MOTION Rep. Meyer made a motion to print RS 13496; motion carried on voice vote.
RS 13499 Mr. Priest presented RS 13499, which specifies that the Idaho State
Insurance Fund will be examined every five years, rather than the current
three-year period. Mr. Priest explained that other states operate on a five-year interval. He also said that the department will still have authority to
examine the Fund fore frequently if it deems it necessary.
MOTION Rep. Meyer made a motion to print RS 13499; motion carried on voice vote.
RS 13501 Mr. Priest presented RS 13501, which will increase the limits on deductibles
when determining whether self-funded employer health plans are required
to register with the Department of Insurance. The limits have not been
raised since 1974, and this legislation will raise those limits to better reflect
the effect of inflation and the increased use of high deductible policies.
MOTION Rep. Collins made a motion to print RS 13501; motion carried on voice vote.
RS 13502 Mr. Priest presented RS 13502, which will require insurance companies to
file amendments to their bylaws with the Department of Insurance.
MOTION Rep. Rydalch made a motion to print RS 13502; motion carried on voice
vote.
RS 13504 Mr. Priest presented RS 13504, which will require surplus lines carriers to
provide timely notice to the department of changes to their name, address,
or state of domicile.
MOTION Rep. Meyer made a motion to print RS 13504; motion carried on voice vote.
RS 13505 Mr. Priest presented RS 13505, which will allow the Director of the
Department of Insurance, at his discretion, to grant an extension of the
suspension of the certificate of authority for an insurer that is not in
compliance with Idaho’s laws.
MOTION Rep. Snodgrass made a motion to print RS 13505; motion carried on voice
vote.
RS 13506 Mr. Priest presented RS 13506, which changes the number of copies of
certain documents that are required to be submitted by an insurer applying
for an Idaho certificate of authority.
MOTION Rep. Snodgrass made a motion to print RS 13506; motion carried on voice
vote.
RS 13507 Mr. Priest presented RS 13507, which will clarify the deposit requirements
that insurers must meet in order to do business in Idaho. It amends Idaho
Code to require that the deposit be maintained either in the insurer’s state
of domicile or in Idaho.
MOTION Rep. Snodgrass made a motion to print RS 13507; motion carried on voice
vote.
RS 13508 Mr. Priest explained that RS 13508 will prohibit an insurer from using a name
deceptively similar to another insurer. This will include any insurer allowed
to do business in Idaho, rather than only those who are “authorized” to do
business in the state.
MOTION Rep. Smith made a motion to print RS 13508; motion carried on voice vote.
RS 13509 Mr. Priest presented RS 13509, which allows the Director of the department
to designate that certain electronic filings made by insurers with the National
Association of Insurance Commissioners will satisfy the requirement that the
filings be made with the department in Idaho.
MOTION Rep. Block made a motion to print RS 13509; motion carried on voice vote.
RS 13516 Mr. Priest presented RS 13516, which adopts model language relating to
nonforfeiture rates for individual deferred annuities. The legislation deletes
last year’s temporary fix and allows for a phase-in period.
MOTION Rep. Cannon made a motion to print RS 13516; motion carried on voice
vote.
RS 13521 Mr. Priest presented RS 13521, which will specify which edition of the
accounting practices and procedures manual is used by insurers to complete
financial reports to the Department of Insurance. It also allows the director
to adopt subsequent revisions to the manual by rule, order or bulletin.
MOTION Rep. Collins made a motion to print RS 13521; motion carried on voice vote.
ADJOURN: There being no further business to come before the committee, the meeting
was adjourned at 3:50 p.m.

 

DATE: January 21, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg,
Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

None
GUESTS: Mary Hughes, Michael Larsen, Donna Jones, Tim Randall, Kimberly
Coster, Gary Malmen, Lee Rice, Bob Corbell, Mike Kelly, Michelle
McMullen, Jim Bledsoe
The meeting was called to order at 1:40 p.m. by Chairman Black. Rep.
Collins
made a motion to approve the minutes of January 19; motion carried
on voice vote. Chairman Black said that there will not be a vote on any
administrative rules today. The deadline for committee action on rules is
February 3.
Docket No.

33-0101-0301

Donna Jones, Executive Director of the Idaho Real Estate Commission,
presented Docket No. 33-0101-0301. This docket will change the rules to
allow real estate licensees to self-certify their continuing education (CE)
requirements when renewing or re-activating a license. Previously, a
licensee was required to submit proof of attendance at approved CE classes.
The Commission does audit the continuing education classes submitted, at
a rate of 25% on a monthly basis. Licensees are required to keep
documentation of their own CE credits, in case they are audited and need to
provide it to the Commission.
Docket No.

01-0101-0301

Barbara Porter, Idaho State Board of Accountancy, presented Docket No.
01-0101-0301
,which implements technical corrections contained in 2003 in
HB 31. This bill was a cleanup bill to the 2002 complete rewrite of the Idaho
Accountancy Act. Ms. Porter stated that the Board had received no
comments on the pending rules changes.
Docket No.

01-0101-0302

Ms. Porter then presented Docket No. 01-0101-0302, which relates to the
CPA exam. The Uniform CPA Examination is converting from a paper-and-pencil exam to a computerized exam in April 2004. This docket sets fees for
the exam and includes new definitions, instructions, and other information
about the computerized version. Ms. Porter also explained that candidates
for the new computerized CPA exam can take the exam in Boise, or they can
travel to other sites which have testing facilities, such as Spokane or Salt
Lake City, if they are closer to those sites.
Docket No.

01-0101-0401

Ms. Porter presented Docket No. 01-0101-0401, which updates the
accountancy rules to be current as of January 1, 2004.
RS 13479 Michael Larsen, Consumer Finance Bureau Chief of the Department of
Finance, presented RS 13479, which provides updates of the Idaho Credit
Code to the most current (January 1, 2004) definitions.
MOTION Rep. Deal made a motion to print RS 13479; motion carried on voice vote.
RS 13482 Mr. Larsen presented RS 13482, which deals with the Idaho Residential
Mortgage Practices Act, updating it to January 1, 2004.
MOTION Rep. Kellogg made a motion to print RS 13482; motion carried on voice
vote.
RS 13498 Mary Hughes, Financial Institutions Bureau Chief of the Department of
Finance, presented RS 13498, which will eliminate the limits on construction
and real estate loans. Ms. Hughes stated that the current limits on such
loans are outdated, and the department has not been able to find any other
states that limit these loan amounts. With this legislation, the amounts of
real estate and construction loans will become a business decision for
banks. The current limit for loans to individuals will also increase. Ms.
Hughes stated that the legislation was originally crafted by the Department
of Finance and then presented to the Idaho Bankers Association and the
Idaho Commercial Bankers Association, with no opposition being voiced.
MOTION Rep. Kellogg made a motion to print RS 13498; motion carried on voice
vote.
Docket No.

07-0201-0301

Dave Munroe, Administrator of the Division of Building Safety, introduced
Ted Hogander, Plumbing Division Bureau Chief. Mr. Hogander presented
Docket No. 07-0201-0301, which removes rules that are now obsolete and
therefore have no force or effect.
Docket No.

07-0207-0301

Mr. Hogander also presented Docket No. 07-0207-0301, which also
removes a chapter in the rules referring to a section of Idaho Code that is no
longer in effect.
Docket No.

07-0206-0301

Mr. Hogander presented Docket No. 07-0206-0301, which contains changes
made necessary by amendments to the adoption of the 2003 Plumbing
Code.
Docket No.

07-0303-0301

Mr. Munroe introduced Jack Rayne, Building Division Bureau Chief, who
presented Docket No. 07-0303-0301. This docket eliminates reference to
provisions for replacing lost insignia for modular buildings, and deletes fees
for out-of-state inspection charges. This language is obsolete and is no
longer necessary.
Docket No.

07-0308-0301

Mr. Rayne also presented Docket No. 07-0308-0301, which is similar to the
previous docket, except it deals with insignia on commercial coaches.
Again, the language treating the replacement of lost insignia is obsolete.
Docket No.

07-0312-0301

Mr. Rayne presented Docket No. 07-0312-0301, which deals with
manufactured and mobile home installations. This change removes the
previous standards for such installations and replaces them with the new
January 1, 2004 standards. The standards have been reformatted and
rearranged to be more user-friendly. There are also three minor changes,
the effect of which is to clarify that the rules also apply to persons who
perform “tear-downs” of manufactured homes in preparation for transport,
and to add provisions concerning the need for gas and oil appliances to be
derated when installed at elevations over 2000 feet.
Docket No.

07-0501-0301

Dave Munroe presented Docket No. 07-0501-0301, which deal with rules
of the Public Works Contractors License Board. These rule changes will
implement legislation adopted in 1999 and 2001, which moved the license
board from a separate entity to the Division of Building Safety. They will
update office information, add definitions, clarify application and hearing
processes, and delete unnecessary language.
Docket No.

07-0601-0301

Mr. Munroe presented Docket No. 07-0601-0301, concerning uniform school
building safety. These rule changes are necessary to bring the rules into
conformity with Idaho Code.
Docket No.

07-0701-0301

Mr. Munroe explained that Docket No. 07-0701-0301 contains startup rules
for the new HVAC bureau created during last year’s legislative session. The
rules were patterned after the existing plumbing bureau, and include
requirements for grandfathering, certification, permitting, inspections and
education. They also include fee schedules for permits and inspections. Mr.
Munroe stated that hearings were held around the state in conjunction with
HVAC meetings, and in general, north Idaho seems to like the fee schedule,
while eastern Idaho has expressed more concern with the fees.

Mr. Munroe also noted that some problems have arisen with the startup of
this bureau, and that the proposed effective startup date of July 2004 now
seems to be unrealistic. No one has yet been hired for the HVAC board, and
Mr. Munroe said that a six-month delay may be necessary. Although he
thinks the bureau can start licensing HVAC contractors by July, the
permitting process will not be in place by that date. Committee members
noted that legislation will be necessary to effect the six-month delay that Mr.
Munroe is requesting.

RS 13511C1 Mr. Munroe introduced Gary Malmen, Electrical Bureau Chief of the Division
of Building Safety. Mr. Malmen presented RS 13511C1, which deals with
qualifications for electrical inspectors. Mr. Malmen testified that the
requirements for state and municipal inspectors need to be consistent; these
include education and experience requirements, as well as the assurance
that there is no conflict of interest. Mr. Malmen stated that the bureau has
held board meetings throughout the state explaining this proposed
legislation, and also sent announcements to municipalities inviting them to
come to these meetings. According to Mr. Malmen, there has been no
voiced concern or opposition.
RS 13540 Mr. Malmen then presented RS 13540, which will increase the experience
requirement for a “master electrician” to four years. Mr. Malmen testified that
most states within Idaho’s 11-state reciprocity area have a four-year
requirement, and that this change will promote Idaho’s reciprocity with these
other states.

In response to committee questions, Mr. Malmen verified that it would take
a total of eight years for a person to become a master electrician, including
four years as an apprentice and four years as a journeyman. He
acknowledged that those journeymen who are currently approaching the
two-year experience level may have to earn two more years in order to
qualify under the new requirements. Mr. Malmen also stated that the
legislation has been endorsed by the International Brotherhood of Electrical
Workers, the National Electrical Contractors Association, and the
Independent Electrical Contractors Association. Mr. Malmen was asked who
is sponsoring this legislation, and he replied that the legislation arose from
the industry, the bureau, and the electrical board.

Chairman Black noted that the electrical bureau may want to examine the
possibility of reciprocity with Canada, since upcoming major construction
projects in Canada will make work available to many northwest contractors.

RS 13518 Mr. Malmen presented RS 13518, which will establish a program for the
timely resolution of disputes between manufacturers, retailers and installers
regarding responsibility for correction and repair of defects in manufactured
homes. This legislation comes as a result of HUD’s Manufactured Housing
Improvement Act of 2000. The bureau has been formulating this legislation
for the past two years. The dispute resolution process will apply only to new
homes.

There was some question from committee members about why the
consumer or purchaser of a manufactured home is not included in the list of
those who are involved in the dispute resolution. Mr. Malmen noted that the
consumer is involved because the initial complaint comes from the buyer of
the home, and this legislation will provide a mechanism to settle disputes
among the three entities who may be responsible for settling with the
consumer.

At the request of the chairman, Vice Chairman Gagner assumed the chair
and conducted the remainder of the meeting.
RS 13520 Ted Hogander, Plumbing Bureau Chief, presented RS 13520, which gives
the board authority to adopt rules concerning civil penalties, and appeals
from those penalties, for rules violations, and to fix the amounts of such
penalties. Mr. Hogander said that this matter has been discussed for the
past two years around the state, and that there have been no objections
voiced.
RS 13522 Mr. Hogander also presented RS 13522, which extends the licensing period
from one year to three years. It will also institute a staggered schedule for
the license renewal process, which will eliminate the necessity of hiring extra
personnel to help process license renewals.
ADJOURN There being no further business to come before the committee, the meeting
was adjourned at 3:30 p.m.

 

DATE: January 27, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg,
Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

None
GUESTS: Mike Brassey, Bob Corbell, Dave Whaley, Woody Richards, Tom
Limbaugh, John Eaton, Pam Eaton, Jerry Peterson, Trent Torres, Aaron
White, Russell Firkins, Lee Rize
The meeting was called to order at 1:35 by Chairman Black. Rep. Douglas
made a motion to approve the minutes of January 21, 2004, as written;
motion carried on voice vote. Chairman Black reminded the committee that
they would be voting on agency rules at Thursday’s meeting, and that
agency representatives would be present to answer any questions.
RS 13656 Bob Corbell, representing the Building Owners and Managers Association,
appeared before the committee to present RS 13656. Mr. Corbell first
introduced Tom Limbaugh, Idaho Industrial Commission, to explain parts
of the legislation. Mr. Limbaugh gave a short history of the Industrial
Commission, previously called the Industrial Accident Board. He explained
that now the Occupational Safety and Health Administration covers all
private sector safety matters except elevators and boilers. There are no
elevator safety rules in Idaho statute, and administrative rules for elevators
do not contain any enforcement authority. Mr. Limbaugh explained that
currently the Division of Building Safety acts as an agent for the Industrial
Commission for elevator inspections. The Industrial Commission is funded
by a 2.5% premium tax on worker compensation premiums paid by Idaho
employers. Worker compensation premiums have been steadily declining
in recent years; consequently, the administrative fund is being depleted. Mr.
Limbaugh stated that if the Industrial Commission were to continue
performing elevator inspections, a raise in premium tax will be necessary.

Mr. Corbell provided further testimony on RS 13656, pointing out that no new
hiring would take place to administer this inspection program, since the QEI
inspectors are already working at the Division of Building Safety. He also
noted that the proposed legislation was developed in cooperation with
retailers, the Associated General Contractors, the Idaho Association of
Commerce & Industry, and the Building Owners & Managers Association.
The legislation would also cover wheelchair and material lifts, as well as
dumb waiters.

MOTION Rep. Deal made a motion to print RS 13656; motion carried on voice vote.
RS 13695 Mike Brassey, representing Primerica Financial Services Home Mortgages,
presented RS 13695 to the committee. He explained that, in 2003, the
Legislature passed H 28, which provided that licensees are responsible on
their bond for the actions of both their employees and their agents. Since
that time, questions have arisen concerning the application of the licensing
provisions to people who work under contract, acting as independent agents.
This legislation makes it clear that an agent serving a single employer is
exempt to the same extent as if he or she were an employee.
MOTION Rep. Gagner made a motion to print RS 13695; motion carried on voice
vote.
RS 13594C1 Jack Lyman, representing the Idaho Manufactured Housing Association,
presented RS 13594C1. This legislation will delete the obsolete
classification for brokers and add a classification for installers; it will also
raise the caps for licensing fees. The fee caps need to be raised because
the previous cap was set in 1989, and the fees were set immediately at the
cap level at that time.
MOTION Rep. Cannon made a motion to print RS 13594C1; motion carried on voice
vote.
RS 13721C1 Mr. Lyman then presented RS 13721C1. This proposed legislation will
exempt modular buildings manufactured in Idaho and exported to another
state from certain building, electrical and plumbing codes and requirements.
Currently, modular homes built in Idaho have to meet Idaho codes as well
as the codes of the state to which they are being shipped, and the use of
Idaho-licensed plumbers and electricians is mandated. This change will
facilitate the shipping of modular homes to other states by providing
exemptions from Idaho code.

Mr. Lyman also pointed out that on page 5, line 20, the word “are” was
inadvertently omitted after the word “state,” and he asked that the RS be
printed with that correction.

MOTION Rep. Gagner made a motion to print RS 13721C1, noting that the current
requirements add an estimated $5,000 to the cost of modular buildings that
are being shipped out of state, and therefore this legislation will save
thousands on the cost of such buildings. Motion carried on voice vote.
ADJOURN There being no further business to come before the committee, the meeting
was adjourned at 2:12 p.m.

 

DATE: January 29, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg,
Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

Rep. Cannon, Rep. Eberle
GUESTS: Dave Munroe, Donna Jones, Jill Randall, Barbara Porter, David Curtis,
Trent Torres, Rayola Jacobsen, Woody Richards, Jerry Peterson, Russell
Firkins, Dave Whaley,
The meeting was called to order at 1:38 p.m. by Chairman Black. Rep
Meyer moved to approve the minutes of the January 27 meeting; motion
carried on voice vote.
RS13721C2 Jack Lyman, representing the Idaho Manufactured Housing Association,
presented RS 13721C2. Mr. Lyman explained that RS 13721C1 was before
the committee at its last meeting, and one change was approved. However,
in the process of revising it, a number of other language problems were
noticed. RS 13721C2 incorporates all the necessary changes. The
legislation deletes an obsolete classification for brokers and adds a
classification for installers, as well as raising the cap for licensing fees.
MOTION Rep. Meyer moved to print RS 13721C2; motion carried on voice vote.
Docket No:

10-0102-0301

Dave Curtis, Executive Director of the Board of Professional Engineers and
Professional Land Surveyors, appeared before the committee and requested
that they reject Docket No. 10-0102-0301, stating that the board had been
contacted by a number of licensees who were concerned about subjective
language in the rule, including the terms “reasonable” and “candid.” Mr.
Curtis further stated that it is his intention to work with concerned licensees
during the interim to develop acceptable language.
MOTION Rep. Snodgrass moved that the committee reject Docket No. 10-0102-0301, as requested by the board. Motion carried on voice vote.
Docket No.

10-0101-0301

Mr. Curtis then requested that the committee approve Docket No. 10-0101-0301.
MOTION Rep. Deal moved that the committee approve Docket No. 10-0101-0301.
Motion carried on voice vote.

Docket No:

07-0701-0301

Dave Munroe, Administrator of the Division of Building Safety, requested
that the committee reject certain portions of Docket No. 07-0701-0301.
These sections deal with HVAC apprentice requirements, as well as HVAC
installation permit and inspection fees.
MOTION Rep. Gagner moved that Section 24, Section 61, and Section 62 in
Docket No. 07-0701-0301 be rejected by the committee. Motion carried on
voice vote.
Mr. Munroe then requested that the committee approve the remaining rules
changes brought by the Division of Building Safety, namely, Docket Nos.
07-0201-0301, 07-0206-0301, 07-0207-0301, 07-0303-0301, 07-0308-0301,
07-0312-0301, 07-0501-0301, and 07-0601-0301
, as well as the remaining
portion of Docket No. 07-0701-0301 which was not rejected in the previous
motion. A question arose about Docket No. 07-0701-0301 being considered
as a fee rule, since the portions that were rejected contained the fees.
Without the rejected portions, the docket no longer contains any fees.
Chairman Black recognized Dennis Stevenson, Administrative Rules
Coordinator, to clarify the matter. Mr. Stevenson stated that, since this
docket originated as a fee rule, it would still be contained in the omnibus
resolution that will approve fee rules.
MOTION Rep. Kellogg moved to approve Docket Nos. 07-0201-0301, 07-0206-0301,
07-0207-0301, 07-0303-0301, 07-0308-0301, 07-0312-0301, 07-0501-0301,
and 07-0601-0301
, as well as the remaining portion of Docket No. 07-0701-0301. Motion carried on voice vote.
MOTION Rep. Deal moved to approve Docket No. 33-0101-0301, Rules of the Idaho
Real Estate Commission. Motion carried on voice vote.
MOTION Rep. Kellogg moved to approve Docket Nos. 01-0101-0301, 01-0101-0302,
and 01-0101-0401
, Rules of the Board of Accountancy. Motion carried on
voice vote.
MOTION Rep. Collins moved to approve Docket Nos. 18-0115-0301, 18-0119-0201,
18-0138-0301, 18-0144-0301, 18-0153-0301, and 18-0159-0301
, Rules of
the Department of Insurance. Motion carried on voice vote. Rep. Gagner
voted against the motion.
MOTION Rep. Kellogg moved to approve Docket Nos. 24-0101-0401, 24-0401-0301,
24-0701-0303, 24-0801-0301, 24-0802-0301, and 24-1801-0301
, Rules of
the Board of Occupational Licensing. Motion carried on voice vote.
There being no further business to come before the committee, the meeting
was adjourned at 2:02 p.m.

 

DATE: February 3, 2004
TIME: 1:30 p.m.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg, Meyer,
Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer, Henbest, Smith(30),
Douglas
ABSENT/

EXCUSED:

Chairman Black
GUESTS: David L. Curtis, David Couch, Gavin Gee, Michael Larsen, Mary Hughes, Dawn
Justice, Woody Richards
Meeting was called to order by Vice Chairman Gagner at 1:33 p.m. Rep. Meyer
moved that the minutes of the previous meeting, January 29, 2004, be accepted
as written; motion carried on voice vote.
H 484 Dave Curtis, Executive Director of the Board of Professional Engineers and
Professional Land Surveyors, presented H 484, which deals with records of
survey, documents prepared by professional land surveyors that make a
permanent record of the information necessary to locate the boundaries of a
parcel of land. The bill adds a definition of “basis of bearing,” clarifies what is
required to be shown on a record of survey, clarifies requirements for monument
locations, and makes other clarifications with regard to records of survey.

In response to committee questions, Mr. Curtis noted that these new regulations
will not affect existing surveys, but only surveys made after July 1, 2004. He also
explained that the change from the word “or” to the word “and” on page 2, line 8,
was being made because under the previous wording a surveyor could meet only
one of the requirements and still satisfy the code. The language change will
correctly reflect the intent of the law, which is to require that a surveyor meet all
requirements.

MOTION Rep. Block moved to send H 484 to the floor with a DO PASS recommendation;
motion carried on voice vote. Rep. Block will sponsor the bill on the floor.
H 485 Mr. Curtis then presented H 485, which will keep engineering and surveying
statutes current with requirements of the professions. It clarifies education and
experience requirements for the licensing exam, and clarifies that the Board can
include the cost of administering exams in the application fee. It also clarifies that
the issuance of licenses is a state function and that local jurisdictions cannot
require additional licenses or fees.

A question arose from the committee regarding land surveyors being able to gain
experience before graduation. Mr. Curtis explained that, after meeting with the
board of governors of the surveyors society, the engineers and land surveyors
board amended this legislation to allow surveyors to gain qualifying experience
before graduation.

In response to another question, Mr. Curtis explained that, until 1978, engineers
licensed to practice in the state of Idaho were also licensed to practice land
surveying, although one could be licensed only as a land surveyor. Because of
the historical connection between these two professions and their licensing
procedures, both engineering and land surveying were administered by one
board. Although land surveying is now a separate profession from engineering,
the two professions remain under one board for administrative purposes.

MOTION Rep. Douglas moved to send H 485 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Douglas will sponsor
the bill on the floor.
H 522 Gavin Gee, Director of the Department of Finance, appeared before the
committee to present H 522. Mr. Gee also introduced Mike Larsen and Mary
Hughes, suggesting that technical questions about the legislation should be
addressed to them. Mr. Gee stated that H 522 is an annual update to the Idaho
Credit Code. It is necessary each year to adopt federal changes and updates in
order to bring Idaho’s laws into conformity with federal statutes. Idaho lenders
are supportive of this legislation, since it provides them with one set of unified
regulations and procedures to follow.
MOTION Rep. Snodgrass moved to send H 522 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Eberle will sponsor the
bill on the floor.
H 523 Mr. Gee then presented H 523, which is similar to the previous bill in that it
provides updates to the Residential Mortgage Practices Act to reflect current
federal law. Again, there is no opposition from the Idaho banking community.
MOTION Rep. Snodgrass moved to send H 523 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Snodgrass will sponsor
the bill on the floor.
H 524 Mr. Gee explained that H 524 represents technical changes to the Idaho Banking
Act. The bill updates lending limit restrictions and makes the banking act current
with federal regulations. Both the Idaho Bankers Association and the Idaho
Community Bankers Association are in support of the bill, which will allow banks
to increase their individual lending limits.
MOTION Rep. Meyer moved to send H 524 to the floor with a DO PASS recommendation.
Responding to committee questions, Mr. Gee explained that giving banks
discretion to set their individual lending limits does not exempt them from
adequate regulation, both by the Department of Finance and by the Federal
Deposit Insurance Corporation. Banks in Idaho are required to be audited every
18 months, and this audit is frequently conducted jointly by the department and
the FDIC. Mr. Gee also noted that, although18 months is the maximum time
allowed between audits, Idaho banks are audited, on average, every 12 to 15
months.
VOTE ON
MOTION
Vice Chairman Gagner called for a vote on the motion. Motion carried on voice
vote. Rep. Meyer
will sponsor H 524 on the floor.
There being no further business to come before the committee, the meeting
was adjourned at 2:10 p.m.

 

DATE: February 5, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg,
Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer, Henbest,
Smith(30), Douglas
ABSENT/

EXCUSED:

Rep. Henbest
GUESTS: Jim Trent, Roger Hales, Denise Brennan, Woody Richards, John Mackey,
Phil Barber, Rayola Jacobsen, Suzanne Schaefer, Leonard Hill
Meeting was called to order at 1:35 p.m. by Chairman Black. Rep. Rydalch
moved to approve the minutes of the February 3 meeting as written; motion
carried on voice vote.
RS 13747 Woody Richards, representing the Workers’ Compensation Exchange,
presented RS 13747. The Workers’ Comp Exchange is a small group of six
subscribers in northern Idaho, including Potlatch and five other sawmills.
The Workers’ Compensation Exchange has fully assessable policies, so they
do not maintain large capital and surplus; rather, when they need more
funding, they go to their members and ask for more money. The exchange
has been filing annual reports, but the assessment formula they are required
to use does not take into account their small size or other factors. This
legislation will allow the Exchange to not file these reports. Mr. Richards
said that the Department of Insurance agrees with this change and he is not
aware of any opposition.
MOTION Rep. Deal moved to introduce RS 13747 to print; motion carried on voice
vote.
RS 13771 Rep. Deal presented RS 13771, which removes sunset provisions on rate
banding for small employer and individual health care plans. Rep. Deal
explained that a number of years ago the Legislature created an index rate,
with a rate band of plus or minus 25%; this was later changed to plus or
minus 50% of the index rate. At that time, a sunset clause was included,
providing an opportunity to revisit the issue and determine whether it was
working well. At the present time, both Blue Cross and Blue Shield, major
providers in the state, agree that the 50% is working well and are asking that
the rate band be left at that level.
MOTION Rep. Meyer moved to introduce RS 13771 to print; motion carried on voice
vote.
RS 13814 John Mackey, United Heritage Financial Group, presented RS 13814. Mr.
Mackey explained that, under current law, employees cannot buy group life
insurance unless their employer participates in the payment of a portion of
the premiums. This legislation will allow employers to offer their employees
group life insurance, without requiring the employers to pay part of the
premiums for employee policies.
MOTION Rep. Snodgrass moved to introduce RS 13814 to print; motion carried on
voice vote.
RS 13824 Phil Barber, representing the Idaho Council of American Insurance
Associates as well as a number of casualty insurers in the state, presented
RS 13824, dealing with rental cars and liability insurance. Idaho law
specifies that the car owner’s insurance is primary for coverage (although not
for liability), and the driver’s insurance is secondary. Under this law,
automobile dealers had a unique problem, since they loan out vehicles for
demonstration purposes as well as temporary replacement vehicles while a
car owner’s vehicle is in their facility for repairs. Therefore, an exception was
made for dealers. This proposed legislation attempts to clarify the intent of
the original statute.
MOTION Rep. Deal moved to introduce RS 13824 to print, noting that the clarifications
included in this legislation are definitely needed at this time. Motion carried
by voice vote
.
RS 13868 Rep. Meyer presented RS 13868, which deals with the Idaho Petroleum
Clean Water Trust Fund. Last year, a new board was created for the Trust
Fund. In the intervening months, several problems have been discovered
in the statute governing this board. This legislation is intended to clarify the
majority needed to make decisions as well as what constitutes a conflict of
interest; these clarifications will allow the board to function more smoothly.
MOTION Rep. Gagner moved to introduce RS 13868 to print; motion carried on
voice vote.
H 483 Rayola Jacobsen, Bureau Chief of the Bureau of Occupational Licenses,
presented H 483, which deletes the one-year experience requirement for
instructors of cosmetology. The experience requirement is reduced to six
months, which is adequate.
MOTION Rep. Snodgrass moved to send H 483 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Snodgrass will
sponsor the bill.
H 486 Ms. Jacobsen presented H 486, which was developed in cooperation with
the Idaho Department of Transportation as well as the Board of Real Estate
Appraisers. This bill will save time and money by allowing Department of
Transportation personnel to estimate the value of surplus property owned by
the department, or property subject to eminent domain when the value would
be $10,000 or less. Ms. Jacobsen said that an example of this type of
property would be small slivers of land in public rights of way.
MOTION Rep. Gagner moved to send H 486 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Gagner will sponsor
the bill on the floor.
H 498 Ms. Jacobsen also presented H 498, which is a response to the Bureau’s
need for more investigative authority. Ms. Jacobsen explained that the
Bureau oversees 19 different licensing entities for 19 separate professions,
and only half of these have subpoena power. This bill provides subpoena
power to all occupational licensing bureaus, allowing them to get records in
order to more effectively investigate complaints. The legislation was drafted
with assistance from the Attorney General’s office.

In response to committee questions, Michael McPeek, deputy attorney
general, said that the power to subpoena records is in effect only after a
complaint goes to the hearing stage. The securing of documents is an
important part of a full investigation and hearing process. He also explained
that H 498’s omnibus provision is a smoother way to handle adding the
subpoena power to all 19 bureaus, rather than drafting 19 separate bills.

MOTION Rep. Collins moved to send H 498 to the floor with a DO PASS
recommendation. Motion carried on voice vote; Rep. Smith (30) is
recorded as voting against the motion. Rep. Gagner will sponsor the bill.
ADJOURN There being no further business to come before the committee, the meeting
was adjourned at 2:35 p.m.

 

DATE: February 9, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg, Meyer,
Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer, Henbest, Smith(30),
Douglas
ABSENT/

EXCUSED:

Rep. Block
GUESTS: Shad Priest, Jim Henderson, Ken McClure
Meeting was called to order at 1:30 p.m. by Chairman Black. Rep. Collins
moved to approve the minutes of the February 5 meeting as written; motion
carried on voice vote.
H 487 Shad Priest, Idaho Department of Insurance, presented H487, which is a simple
housekeeping bill that clears up points of law concerning reports filed with the
department by insurers who acquire other insurance companies. This bill
specifies that such reports will still be filed with the department, but will no longer
be required to be filed with the National Association of Insurance
Commissioners, since the NAIC does not want to receive them.
MOTION Rep. Cannon moved to send H487 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Bayer will sponsor the
bill on the floor.
H 488 Mr. Priest presented H488, which specifies that the Department of Insurance
will be required to examine the State Insurance Fund at least every five years,
rather than every three years. This brings the examination schedule into
alignment with the schedule for all other domestic Idaho insurers. The
department retains the right to examine the fund more frequently if it wishes to
do so. Mr. Priest explained that the examination referred to is an in-depth
examination of the companies, but that the department constantly monitors all
companies by means of their detailed quarterly reports.
MOTION Rep. Collins moved to send H488 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Snodgrass will sponsor
the bill.
H 489 Mr. Priest then presented H489, which will raise the amount of allowable
deductible for self-funded employer health plans. The limits have not been
adjusted since 1974. The change reflects the effects of inflation as well as the
growing use of high deductible policies by employers looking for affordable
health coverage for their employees.
MOTION Rep. Gagner moved to send H489 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Gagner will sponsor the
bill.
H 490 Mr. Priest explained that H490 deals with surplus lines carriers, which are
insurance carriers allowed to provide insurance in Idaho if no Idaho licensed
insurer is willing to provide coverage. The Department of Insurance is required
to keep a list of eligible surplus lines insurers, and in order to do so, the
department needs to receive current information about these companies,
including changes in names or addresses. There is currently no requirement for
the surplus lines carriers to provide this information; this bill will require that
notification is provided to the department on a timely basis.

Responding to questions from the committee, Mr. Priest said that the list of
surplus lines carriers is posted on the internet and is thus available to anyone.
Although the department does not have any regulatory authority over these
companies, and thus cannot enforce the reporting requirements, it will be in the
best interest of the companies to comply, since they will be removed from the list
of eligible insurers if they do not cooperate by providing current information. Mr.
Priest also said that a 60-day period was chosen because it seemed to be a
reasonable period of time within which to receive updated information from the
surplus lines carriers.

MOTION Rep. Meyer moved to send H490 to the floor with a DO PASS recommendation;
motion carried on voice vote. Rep. Bayer will sponsor the bill on the floor.
H 491 Mr. Priest presented H491, which deals with suspension of an insurance
company’s license to do business in Idaho. Most of these suspensions are
temporary in nature and arise because of financial problems. Sometimes it
takes more than one year for a company to resolve its problems, and the current
statute does not provide for extension of a one-year suspension. This legislation
will give the director of the department discretion to issue another order of
suspension if the company has not come into compliance within the initial one-year suspension.
MOTION Rep. Deal moved to send H491 to the floor with a DO PASS recommendation;
motion carried on voice vote. Rep. Deal will sponsor the bill on the floor.
H 492 Mr. Priest presented H492, which changes the number of copies of articles of
incorporation and bylaws that are required to be filed with the Department of
Insurance. For domestic insurance companies, three copies of these documents
will be required: one for the Secretary of State, one for the department, and one
to be returned to the insurance company. For foreign insurers, one copy of the
documents will be required, since the company has already filed in its home
state and the documentation sent to Idaho is providing proof of that filing
elsewhere. Other portions of the bill delete references to repealed code sections
and also delete requirements of information that the department no longer
needs.
MOTION Rep. Collins moved to send H492 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Collins will sponsor the
bill on the floor.
H 493 Mr. Priest also presented H493, which amends the statutory deposit
requirements that insurers must maintain in order to obtain a certificate of
authority to sell insurance in Idaho. Currently a company is required to have $1
million in deposits. In the past, some companies have attempted to meet the
deposit requirement by relying on deposits in other states. This bill would
require that the $1 million deposit must be maintained either in Idaho or in the
insurance company’s state of domicile. Companies will not be allowed to reach
the $1 million requirement by aggregating smaller amounts in various states.
The bill also repeals a requirement that workers compensation insurers maintain
a special $25,000 deposit with the state treasurer. Since the Industrial
Commission also imposes a $25,000 deposit requirement on these insurers, the
department will accept that as adequate and will repeal its own requirement for
a separate $25,000 deposit.
MOTION Rep. Deal moved to send H493 to the floor with a DO PASS recommendation;
motion carried on voice vote. Rep. Henbest will sponsor the bill on the floor.
H 494 Mr. Priest explained that H494 will prohibit an insurer from using a name
deceptively similar to another insurer doing business in the state. Previously,
this prohibition covered only those companies authorized to do business in the
state. This bill extends the prohibition to any insurer allowed to do business in
Idaho, since some companies are allowed to do business but are not
“authorized” to do so.

Answering questions from the committee, Mr. Priest said that the judgment
about whether or not a name is “deceptively similar” is a subjective decision, and
is based on an evaluation of whether the similarity in names is so great that it
would tend to confuse consumers.

MOTION Rep. Snodgrass moved to send H494 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Snodgrass will sponsor
the bill.
H 495 Mr. Priest then presented H495, which authorizes the Director of the
Department of Insurance to direct the manner and place of filing for any
document required to be filed with the department. This allows the director to
designate that certain filings made by insurers electronically with the National
Association of Insurance Commissioners will satisfy the department’s filing
requirements, if they are electronically accessible. This will provide a cost
savings to insurers, and is in line with other states who are making the same
change. Mr. Priest also noted that the bill does not implement the change but
simply authorizes the director to do so.

A member of the committee asked whether electronic filings could be potentially
problematic since they could be lost due to a computer malfunction or problem.
Mr. Priest explained that the NAIC maintains these reports and backs them up
for safety, and that the insurance companies filing the reports are also required
to maintain hard copies of the reports.

MOTION Rep. Eberle moved to send H495 to the floor with a DO PASS recommendation;
motion carried on voice vote. Rep. Eberle
will sponsor the bill on the floor.
H 496 Mr. Priest presented H496, which deals with nonforfeiture rates for individual
deferred annuities. Last year, when the minimum nonforfeiture interest rate was
3%, companies were having trouble meeting this rate of interest in the low
interest environment that existed at that time. Last year’s legislature passed a
temporary measure that reduced the minimum to 1.5%; the legislation contained
a sunset clause with a date of July 2005, based on the expectation that the NAIC
would approve model language to address the problem. That model language
has been approved by the NAIC, and this bill incorporates the model language
from the NAIC for determining minimum nonforfeiture rates, and allows for a
phase-in period. Mr. Priest also noted that the index used for setting the
minimum interest rates is the Treasury bill rate, which fluctuates.
MOTION Rep. Cannon moved to send H496 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Gagner will sponsor the
bill on the floor.
H 497 Mr. Priest then presented H497 to the committee. This bill specifies that
insurers must use updated NAIC manuals when completing financial reports to
the Department of Insurance. It will also allow the director to adopt subsequent
revisions to the manual by rule, order or bulletin, rather than by legislation.
MOTION Rep. Meyer moved to send H497 to the floor with a DO PASS recommendation;
motion carried on voice vote. Rep. Meyer will sponsor the bill on the floor.
H 499 Mr. Priest presented H499, which will require insurance companies to file
amendments to their bylaws with the Department of Insurance. Currently, there
is no requirement to do so. Filing of amended bylaws allows the department to
track changes in a company’s structure and management.

Mr. Priest also presented an amendment to H499. The amendment clarifies
that the prior approval requirement applies to changes in a company’s articles
of incorporation but not to changes in bylaws. The amended bylaws are still
required to be filed with the department, but they do not require prior approval
from the department.

MOTION Rep. Deal moved to send H499 to General Orders with the amendment
attached; Rep. Kellogg seconded the motion. Motion carried on voice vote.
Rep. Deal will sponsor the bill on the floor.
Chairman Black informed the committee that there are four House bills and six
RS’s on Wednesday’s agenda, and that the committee is still receiving additional
RS’s. Therefore, it is his intention to meet on Friday afternoon, upon
adjournment of the session, to deal with the remaining RS’s before the
committee.
ADJOURN There being no further business to come before the committee, the meeting was
adjourned at 2:30 p.m.

 

DATE: February 11, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg, Meyer,
Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer, Henbest, Smith(30),
Douglas
ABSENT/

EXCUSED:

None
GUESTS: Aaron White, Woody Richards, Paul Street, Dave Munroe, Marc Bernsen, Bob
Corbell, Jerry Peterson, Dave Whaley, Trent Torres, Russell Firkins, Teresa
Molitor, John Bauman, Jeff Cates, Gary Malmen, Larry Reinhart, Lyn Darrington,
Jack Rayne, Art Berry, Dennis Butterfield
Meeting was called to order at 1:30 p.m. by Chairman Black. Rep. Smith (30)
moved to approve the minutes of the February 9 meeting as written; motion
carried on voice vote.
RS13977 Chairman Black explained that RS13977 is a House Concurrent Resolution
rejecting one of the rules brought by the Board of Professional Engineers and
Professional Land Surveyors. The rule is being rejected at the request of the
Board.
MOTION Rep. Meyer moved to print RS13977, and to send the resolution directly to the
second reading calendar. Motion carried on voice vote. Rep. Black will
sponsor the resolution on the floor.
RS13948 Woody Richards, representing Blue Cross of Idaho, presented RS13948, which
deals with managed care plans. Mr. Richards explained that the Department of
Insurance has had problems deciding which chapter of the code is applicable to
certain health care plans, since the definition of managed care plans is very
broad. This legislation will add a new section to the code which will clarify
whether health care plans are managed care plans for purposes of Title 41,
Chapter 39, and will set forth requirements for insurers offering health care plans
that do not meet the definition of managed care plans. Mr. Richards said that
there has been no opposition to this, but he thinks it does need to have fuller
circulation.
MOTION Rep. Deal moved to send RS13948 to print; motion carried on voice vote.
RS13802 Woody Richards, representing BMC West, then presented RS13802. Mr.
Richards noted that Rep. Smylie is sponsoring this legislation, and that Mr. Paul
Street, Senior Vice President of BMC West, is also supporting it. This RS
represents a rewrite of the Idaho Corporate Code, which was undertaken to
bring Idaho’s law into conformity with the most recent model act. Mr. Richards
said that Montana, Oregon, Utah, and Wyoming had already passed similar
legislation to align their corporate codes with the most recent model act. Mr.
Richards also mentioned that, when this legislation appears before the
committee in bill form, Professor James McDonald will be present and available
to answer questions and provide expertise. Because of the considerable size
and complexity of the bill, Rep. Deal requested that Mr. Richards and the other
parties provide a synopsis of it to committee members so they could more easily
understand its contents. Mr. Richards agreed to do so.
MOTION Rep. Deal moved to send RS13802 to print; motion carried on voice vote.
RS13871 Bob Corbell, representing the Independent Electrical Contractors, presented
RS13871, which is supported by the electrical industry, by the state electrical
board, and by the National Electrical Contractors Association and the
Independent Electrical Contractors Association. Mr. Corbell explained that
RS13871 is an update to the National Electrical Code. The bill identifies current
electrical applications covered by the National Electrical Code and provides
exemptions for maintenance electricians. Mr. Corbell pointed out that the new
code now includes communications installations, an area that was not previously
regulated. He said that this issue could become contentious with
communications installers.

Responding to committee questions, Mr. Corbell said that a person running
telephone lines in a house or a person installing burglar or smoke alarms would
fall under this legislation because those installations are now covered under the
national electrical code.

Gary Malmen, Bureau Chief of the State Electrical Bureau, was recognized to
address this matter. Mr. Malmen said that the bureau’s administrative rules
currently exempt installations of smoke and fire alarms in one- or two-family
dwellings, and that the board could look at exempting certain telephone
installations as well.

The committee also expressed concerns about a lack of knowledge about what
constituted a communications installer. If the bill is printed, the committee will
need to have a fuller discussion on who needs to be licensed.

MOTION Rep. Cannon moved to send RS13871 to print; motion carried on voice vote.
RS13931 Teresa Molitor, Vice President of Human Resources for the Idaho Association
of Commerce & Industry, appeared before the committee to introduce Jon
Bauman
, Chairman of the IACI Workers’ Compensation subcommittee. Mr.
Bauman explained that RS13931 deals with workers’ compensation claims. This
bill will restore the intent of legislation passed in 1991. That legislation did not
contain a statute of limitations on medical benefits in workers’ compensation
claims that have been denied; this was an unintentional omission which will be
remedied by the proposed legislation.

Responding to committee questions, Mr. Bauman stated that there has not been
a governor’s work comp advisory committee since Governor Batt left office,
since Governor Kempthorne has chosen not to continue that committee. Mr.
Bauman said that the Industrial Commission does have an advisory committee,
and that he appeared before them on January 13 to explain this legislation.
Although he did not have enough copies at that time to distribute to the advisory
committee, he did tell them that copies would be readily available at the IACI
offices. Mr. Bauman also stated that Senator Andreason is a member of the
advisory committee at the Industrial Commission. He stated again that the
Industrial Commission now has a workers’ compensation advisory committee
because Governor Kempthorne chose not to continue the governor’s advisory
committee after Governor Batt left office.

MOTION Rep. Gagner moved to send RS13931 to print; motion carried on voice vote.
Rep. Smith (30) and Rep. Douglas voted against the motion.
RS13932 Mr. Bauman then presented RS13932, which clarifies that evaluations of
permanent physical impairment are to be prepared only by qualified physicians.
He noted that the term “qualified physicians” is already defined by statute, and
that this legislation will serve to protect workers as well as employers. The bill
does not preclude the Industrial Commission from weighing impairment ratings
prepared by qualified physicians.

In response to committee questions, Mr. Bauman said that the term “qualified
physicians” is not limited to medical doctors, but in fact can include chiropractors
or other professionals. It is up to the Industrial Commission or the Supreme
Court to decide who is most qualified to provide evaluations in particular cases.

MOTION Rep. Deal moved to send RS13932 to print; motion carried on voice vote;
Rep. Smith (30) voted against the motion.
H 569 Bob Corbell, representing the Building Owners and Managers Association,
presented H569. This bill establishes a program of required inspections for
elevators in the state of Idaho. Mr. Corbell explained that, since there are
already three qualified elevator inspectors (QEI’s) within the Division of Building
Safety, there will not be any new people hired. The bill will require annual
registration of elevators, with fees ranging from $125 to $225 per year; these
fees will fund the cost of the inspections. Mr. Corbell stated that, according to
their research, there are 1,700 elevators in the state and that the fees from this
number of elevators will be approximately $212,000 per year. The inspection
requirement will also include platform and wheelchair lifts as well as escalators.
If passed, the law will go into effect immediately.

Dave Munroe, Director of the Division of Building Safety, testified that this will
result in a $205,000 savings to the Industrial Commission. These costs are
currently being passed through to the commission from the division. Mr. Munroe
also explained that about $96,700 of this expense is for time and travel, as well
as for re-inspections. The current safety advisors will be attending QEI training
so they can perform elevator inspections. Since at least one will be located in
each region of the state, this will save on time and travel expenses.

Mr. Corbell answered further questions from the committee. He said that,
although he had not had any feedback from owners of equipment such as dumb
waiters, this equipment is included in the federal law and thus will also be
covered by Idaho’s inspection requirements. Mr. Corbell also said that there are
five major installers of elevators in the state of Idaho, and that they support this
legislation.

MOTION Rep. Gagner moved to send H569 to the floor with a DO PASS
recommendation.
Further discussion took place regarding possible duplication of inspectors.
Members wondered whether electrical inspectors or fire marshals could be
trained as elevator inspectors and could perform elevator inspections
concurrently with other inspections, thus saving time and money. Mr. Corbell
noted that there is a plan to train building inspectors in Coeur d’Alene to serve
as QEI inspectors as well. Mr. Munroe repeated that the seven safety advisors
located throughout the state will also become qualified elevator inspectors, and
thus will be able to perform inspections in different regions of the state.
VOTE ON
MOTION
Chairman Black called for a vote on the motion. Motion carried on voice
vote
. Rep. Gagner will sponsor the bill on the floor.
H 526 Jack Rayne, Building Bureau Chief at the Division of Building Safety, presented
H526, which provides a method for dispute resolution for manufactured homes
that have significant defects within the first year of their construction. Although
cases in which a formal hearing are necessary occur only about once a year in
Idaho, Mr. Rayne explained that HUD requires all states to set up a formal
dispute resolution process.

Responding to committee questions, Mr. Rayne explained that enforcement
would be achieved by means of fines up to $10,000, as well as possible
suspension or revocation of state licenses. A question was raised about whether
the subcontractor who lays a foundation for a manufactured home is considered
an “installer.” Mr. Rayne responded that the only person exempted from the
dispute resolution process is the one who pours concrete. However, the dealer
who subcontracts with the concrete person can be held responsible for his work.

MOTION Rep. Meyer moved to send H526 to the floor with a DO PASS recommendation;
motion carried on voice vote. Rep. Meyer will sponsor the bill on the floor.
H 568 Jack Lyman, representing the Idaho Manufactured Housing Association,
presented H568. This bill modifies the licensing section of the code to eliminate
the term “broker” and adds the term “installer.” It also raises the current caps for
licensing fees, which have been in place since 1989. The bill will not actually
raise the licensing fees; that process is done by administrative rule. Mr. Lyman
testified that he knows of no opposition to the legislation, either from inside or
from outside the industry.
MOTION Rep. Snodgrass moved to send H568 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Snodgrass will sponsor
the bill on the floor.
H 585 Mr. Lyman then presented H585 to the committee. He explained that the
manufactured housing industry is not producing as many HUD code homes as
it previously had, and as a result the industry has tried to identify other markets
for their product. They have begun to market modular buildings, but have found
an obstacle in the code that impedes their ability to sell these buildings out of
state. Idaho Code requires that any building constructed in the state must meet
Idaho building codes and use licensed contractors in its construction. H585 will
exempt modular buildings, manufactured in Idaho and exported from the state,
from various building, electrical and plumbing codes and requirements. The bill
also prevents buildings from coming back to Idaho unless they meet Idaho Code
requirements. The bill will not allow exempted buildings from being installed in
Idaho, nor will it allow substandard buildings to be exported.

Responding to questions from the committee, Mr. Lyman stated that the use of
licensed electricians and plumbers does not guarantee a better product. He
explained that manufacturing plants that produce modular buildings did not exist
back in 1947 when the legislature made it a policy to use licensed electricians,
or in 1957 when they extended this requirement to plumbers.

The proposed legislation will require that modular buildings exported to other
states will have to meet the building codes of the state of destination. Mr. Lyman
explained that the destination of a particular building is already specified as the
building moves through production, and that it can be inspected at any point
along the line to make sure that it meets the destination state’s code. Mr. Lyman
reiterated his belief that it is incorrect to assume that a worker is unskilled or
inferior just because he is unlicensed. Businesses engaged in producing these
buildings will want to pass necessary inspections, because they will not want to
face a potential liability from an inferior product. He also pointed out that
modular buildings produced in Colorado, for instance, are coming into Idaho for
installation here, and no one is checking to see whether Colorado is requiring or
using licensed electricians in their production.

Mr. Lyman responded to further questions by stating that the five production
facilities in Idaho are in Caldwell, Boise (2), Nampa, and Weiser. A question
arose as to whether manufacturers are willing to face lawsuits if their products
result in problems with fire or other hazards because of the use of unlicensed
contractors. Mr. Lyman said that if a manufacturer meets the code in the state
of destination, that will insulate it from some liability for such problems, since the
state’s code has been met.

Art Berry, co-owner of Kit Manufacturing in Caldwell, appeared before the
committee in support of H585. Mr. Berry explained the slowdown he has
experienced in his business, noting that he had recently purchased Kit
Manufacturing, a 50-year-old company that was on the verge of bankruptcy. His
choice was to either shut down, creating the loss of 200 jobs, or to build better
houses. He noted that the HUD building code is no longer the standard used;
rather, the Uniform Building Code is the code that lenders depend upon in
making lending decisions. Mr. Berry explained that he and other Idaho
companies cannot compete with those in states who allow the use of non-licensed contractors. He said that the price differential can be as high as $6,000
to $8,000 per unit. Mr. Berry asked the committee to consider changing the
current law, since it is a fairness issue rather than a safety or quality issue.

Mr. Berry answered committee questions, saying that he employs about 150
people in his work force; these employees are not required to be licensed. The
homes they build which are intended for export are inspected according to the
rules of the destination state. Some of these states send their own inspectors
to Idaho to inspect the buildings during construction; others contract out to
inspectors who do the inspections. If the buildings are built for installation in
Idaho, they are inspected just like stick homes are inspected. Mr. Berry also said
that the differential in labor costs between licensed and unlicensed workers is
as much as $40 per hour.

Jerry Peterson, representing the Idaho Building Trades, a group of 2,500
tradesmen in the valley and western Idaho, testified in opposition to H585. Mr.
Peterson said that the actual pay for journeymen electricians is $24.26, for sheet
metal workers it is $21.70, and for plumbers, the pay is in the same range. He
also stated that there is no evidence that decreased production costs would
actually save money. He said that as wages fall, so does the level of
productivity. He also thinks that changes should not come at the expense of
licensed workers who are already here.
Larry Reinhart, a builder from Idaho Falls, testified in favor of H585. Mr.
Reinhart has a large building project in Star Valley, Wyoming, south of Jackson.
He is buying HUD products from Idaho manufacturers, but lenders on these
homes require a 20-30% down payment, whereas lenders are willing to finance
100% of the purchase price of UBC homes. Mr. Reinhart has been quoted as
much as $8,000 more for homes built in Idaho over the price of homes built in
Colorado. If no relief is forthcoming on this price differential, Mr. Reinhart said
he will have to go elsewhere to buy his homes.
Dave Whaley, Idaho State AFL-CIO, testified in opposition to H585. Mr.
Whaley said that this legislation is not a union versus non-union matter, but
rather a licensing versus non-licensing matter. Mr. Whaley pointed out that,
since these homes are moved to the installation site after they are built, there is
always a chance of jarring or disturbing pieces of the home, and this could result
in greater possibility of fire or flood damage. The liability in these cases would
come back to the manufacturer. With regard to the modular buildings being
brought back into Idaho, Mr. Whaley said that these buildings are moved all the
time, and that someone may purchase a home and move it back to Idaho, only
to find out that it cannot be installed here because it did not meet Idaho code.

In response to questions from committee members, Mr. Whaley said that,
although the buildings are inspected, there are still things missed by inspectors
that may make the buildings unsafe unless licensed workers are used in their
construction. Mr. Whaley also stated that he thinks that lowering standards, as
this legislation does, is the wrong way to go in an effort to lower the costs.

Dennis Butterfield, a plumbing contractor and a member of the TVMPA
legislative committee, testified in opposition to H585. Mr. Butterfield said that
the legislation will produce an unfair playing field, with some workers being
licensed and some not being licensed. He also is concerned that this will
eventually unravel the licensing system, which ensures high quality in buildings.
Mr. Butterfield said that doing away with inspections is a step backwards.

Responding to a question, Mr. Butterfield said that, in talking about “doing away
with inspections,” he was referring to Idaho inspections being eliminated. Mr.
Butterfield also apologized to committee members for implying that they were
not knowledgeable enough in the technical aspects of plumbing and electrical
work to make an informed decision about the legislation.

Mr. Lyman offered closing comments concerning H585. He stressed that, as
explained on page 2, line 15 of the bill, when a modular building built in Idaho
leaves the state without an Idaho insignia, it cannot come back into the state.
A building permit would not be issued to install such a building in this state.
Also, Mr. Lyman pointed out that a company engaged in building modular
buildings will hire licensed plumbers and electricians when the company decides
it will make them money to do so.
Rep. Gagner noted that, although a number of modular builders were strongly
opposed to this bill, they didn’t show up to testify. He also said that, in his mind,
this is not an “anti-union” bill but rather an “affordable housing” bill. By way of
clarification, Rep. Douglas pointed out that at least three modular building
companies had, in fact, submitted written testimony to committee members in
advance of the meeting, and that their testimony should be considered as if they
were present to give it in person.
MOTION Rep. Gagner moved to send H585 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Smith and Rep.
Douglas
voted in opposition to the motion. Rep. Snodgrass will sponsor the
bill on the floor.
Chairman Black announced that, because of a large number of RS’s still
remaining to be heard, the committee would meet on Friday, February 13,
immediately upon adjournment of the regular session of the House of
Representatives.

There being no further business to come before the committee, the meeting was
adjourned at 4:00 p.m.

 

DATE: February 13, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg, Meyer,
Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer, Henbest, Smith(30),
Douglas
ABSENT/

EXCUSED:

Rep. Kellogg
GUESTS: Rayola Jacobsen, Woody Richards, Ken McClure, Lyn Darrington, Steve
Tobiason, Julie Taylor, Doug Burks, Ed Schlofman, Steve Millard, Bob Corbell,
Roger Seiber
Meeting was called to order at 12:15 p.m. by Chairman Black. The minutes from
the February 11 meeting were not ready for approval.
MOTION Rep. Smith moved to send all nine RS’s on the agenda to print. Rep. Rydalch
and Rep. Gagner objected. Motion failed on voice vote.
Chairman Black announced that the committee page, Heather Callen, was
finishing her five-week tenure at the legislature. He thanked her for her
assistance to the Business Committee and presented her with a gift. Chairman
Black also introduced the new page, Brittany Zabransky, who is from Coeur
d’Alene.
RS 13567 Rep. Henbest presented RS13567, which provides for mental health parity only
in the state employees’ health insurance plan. Rep. Henbest explained that this
is similar to previous legislation on mental health parity in that it limits health
insurance coverage to biologically-based mental illnesses only. Traditionally,
mental health conditions have been excluded from insurance coverage. Rep.
Henbest said that this exclusion is bad for two reasons; first, it is discriminatory,
and second, it results in poorer outcomes in the long run. She said that this bill
will provide a first step to look at the viability of mental health coverage. She
also said that 38 states offer some form of mental health parity, and the average
cost increase to health plans is 1%. In some cases, the cost decreases. Rep.
Henbest said she asked the Department of Administration to provide an estimate
of the cost to the state if this legislation goes into effect, and their estimate was
$3 million.
MOTION Rep. Deal moved to print RS13567; motion carried on voice vote.
RS 13725C1 Rep. Block presented RS13725C1. She explained that this legislation will aid
local, family-owned agriculturally-related businesses. The legislation will update
the buy-back statutes and the protection statutes that deal with farm equipment
dealerships that are cancelled or terminated. Rep. Block also introduced two
Doug Burks of Burks Tractor, and Ed Schlofman of Schlofman Equipment.
MOTION Rep. Collins moved to print RS13725C1; motion carried on voice vote.
RS 13925 Rep. Snodgrass presented RS13925, known as the Consumer Access to
Information Act. This legislation will provide a medium for health care providers
to distribute certain information on the internet through a secure website.
MOTION Rep. Smith moved to print RS13925; motion carried on voice vote.
RS 13944 Steve Tobiason, representing the Idaho Association of Health Plans, presented
RS13944. This proposed legislation addresses the payment relationship
between doctors and insurance carriers and provides for payment within 30
days. It also provides that insurance carriers will not bill patients for the amount
of the deductible or co-insurance until the claim has been paid. Mr. Tobiason
said that prompt pay has been the subject of discussion for three years, and that
there are points of agreement and points of disagreement among the parties
involved in the debate. RS13944 represents the position of insurance carriers;
another prompt pay bill will be presented that represents the position of the
physicians and providers. Mr. Tobiason noted that his legislation requires
electronic submission of claims, a provision that is required by the recent HIPAA
regulations.
MOTION Rep. Meyer moved to print RS13944; motion carried on voice vote.
RS 14030 Rayola Jacobsen, Bureau Chief of the Bureau of Occupational Licenses,
presented RS14030. Ms. Jacobsen said that, in the last five months, the bureau
has seen a great increase in the number of applicants for cosmetology licensing.
Currently, there are only two examiners in each district, with up to 120 applicants
requesting the once-a-month examinations. The proposed legislation will strike
the provision that the Governor appoints cosmetology examiners and will place
that function within the cosmetology board. The cost for additional examiners
will be borne by the dedicated fund of the board of cosmetology.
MOTION Rep. Douglas moved to print RS14030; motion carried on voice vote.
RS 14032 Rep. Henbest presented RS14032, which provides for a discount of up to 20%
on health insurance premiums for individuals who maintain a healthy weight or
those who adhere to an approved schedule of physical examinations, complying
with Centers for Disease Control guidelines. Rep. Henbest explained that
companies currently rate for bad behaviors such as smoking, but can’t reward
for good behaviors.

Responding to questions from committee members, Rep. Henbest
acknowledged that most health insurance premiums are funded by employers
and that, because of this, the legislation may not provide an incentive to
individuals. However, she thinks it will set a tone that will encourage healthy
lifestyles. She also noted that the discount will be “up to” 20%, but may be less
than that amount.

MOTION Rep. Douglas moved to print RS14032; motion carried on voice vote.
RS 14034 Rep. Henbest then presented RS14034, which provides for health insurance
reimbursement for counseling on obesity, and requires insurance companies to
pay for weight reduction services. Rep. Henbest explained that currently there
is no incentive for a provider to offer help for obesity or weight loss programs.

A question was raised about what qualifies as “weight reduction services” that
would require reimbursement. For instance, does this legislation limit that
definition to medical services, or could it include such programs as Weight
Watchers? Rep. Henbest said she thought that was a valid question, and
explained that it was not her intention to reimburse except for health care
providers. This may be a point that will need to be clarified.

MOTION Rep. Smith moved to print RS14034; motion carried on voice vote.
RS 14037C1 Ken McClure, representing the Idaho Medical Association, presented
RS14037C1, which deals with prompt payment of claims. Mr. McClure
explained that the medical association and the insurance industry do not see eye
to eye on this issue, and that both sides would like to reach a compromise and
find a solution to this problem. The proposed legislation would require either
payment of a claim within 30 days, or an outright denial of the claim, or a request
for further information regarding the claim. Once the requested information is
received, payment would be required within 30 days of that date. Mr. McClure
stated that payment delays are generally not a problem with the major health
insurance providers in Idaho; problems do arise, however, with out-of-state
providers. Mr. McClure also pointed out one provision of the legislation, on page
2, lines 34-37, which stipulates that if the health insurance contract specifies a
certain payment time, then the contract supercedes the 30-day requirement in
this legislation.
MOTION Rep. Gagner moved to print RS14037C1; motion carried on voice vote.
RS 14045 Lyn Darrington, representing the Idaho Association of Health Plans, presented
RS14045. Ms. Darrington explained that this legislation addresses a problem
that has become a concern over the past several years. When a patient goes
to a contracting hospital in an emergency situation, some of the medical
personnel who treat him may not be contracted with his health plan. The patient
then can be billed by the non-contracting health care provider for the balance of
the bill that is not covered by his insurance plan. This legislation will protect
patients from an unanticipated large billing from non-contracting health care
providers. Ms. Darrington pointed out that the legislation defines “emergency”
situations on page 1, line 35; states that the insurance carrier is required to pay
on page 1, line 18, and prohibits balance billing on page 1, line 26.
MOTION Rep. Douglas moved to print RS14045; motion carried on voice vote.
There being no further business to come before the committee, the meeting was
adjourned at 12:55 p.m.

 

DATE: February 17, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg
(Nonini), Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

None
GUESTS: David L. Bock, Brad Dixon, Mike Brassey, Suzanne Schaefer, Julie Taylor, Jim
Baugh, Bonnie Haines
Meeting was called to order at 2:20 p.m. by Chairman Black. He introduced Mr.
Robert Nonini, who is substituting for Rep. Hilde Kellogg this week. Rep. Meyer
moved to approve the minutes of the February 11 meeting as written; motion
carried on voice vote
. Rep. Cannon moved to approve the minutes of the
February 13 meeting as written; motion carried on voice vote.
Chairman Black announced that H705 and H709, two bills dealing with prompt
payment of medical insurance claims, would be assigned to a subcommittee for
further study and, hopefully, compromise. Chairman Black appointed Rep. Deal
as chairman of the subcommittee; he also appointed the remaining members,
namely, Rep. Collins, Rep. Kellogg, Rep. Snodgrass, and Rep. Smith.
H 570 Mike Brassey, representing Primerica Financial Services Home Mortgages,
presented H570. Mr. Brassey explained that the legislature passed H28 last
year, which redefined the term “agent” to include independent agents. The
legislation also provided that licensees are responsible on their bond for the
actions of both employees and agents. Since H28 went into effect, questions
have been raised about the application of the licensing provisions to people who
work under contract as independent agents. This legislation amends the statute
to clarify the treatment of employees and agents so that they are treated the
same way for licensing purposes by including both in the classes of people who
are exempt from licensing. Mr. Brassey stated that in today’s environment it is
common for mortgage brokers to work through independent agents, and this
legislation will facilitate that arrangement.
MOTION Rep. Gagner moved to send H570 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Gagner will sponsor the
bill on the floor.
H 618 Brad Dixon, representing the Workers’ Compensation Exchange, presented
H618. Mr. Dixon explained that the Work Comp Exchange is a small insurance
carrier in north Idaho, with six policy holders, that writes only fully assessable
work comp policies. When the company needs additional funding, it makes a
capital call on its policy holders, who then pay into the exchange. Under current
code, insurance companies are required to file risk-based capital (RBC) reports
with the Department of Insurance. These reports are not appropriate for fully
assessable policies, since the assessment formula used does not take into
account their small size or other factors. The reports are, therefore, useless.
Mr. Dixon stated that the Department of Insurance agrees with this legislation,
which will exempt the Work Comp Exchange from filing RBC reports.
MOTION Rep. Gagner moved to send H618 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Gagner will sponsor the
bill on the floor.
H 619 Rep. Deal presented H619, which removes sunset provisions on rate banding
for small employee and individual health care plans. Rep. Deal stated that a few
years agothe Legislature created an index rate with a rate band of plus or minus
25%, which was later changed to plus or minus 50% of the index rate. At that
time a sunset clause was included. Rep. Deal said that it is now the consensus
of the insurance industry that the rate banding should continue at 50%. H619
will remove the sunset clause, and will put into code the plus or minus 50% rate
band. Rep. Deal also stated that H619 will delete language requiring a report
to the Department of Insurance regarding retention of the index rate bands.
Jim Baugh, Executive Director of Comprehensive Advocacy, Inc. (Co-Ad), testified in favor of H619. Mr. Baugh stated that, in addition to his
work with CoAd, Inc., he is also the CEO of a 20-employee business, and
he is concerned with rising health insurance costs for his employees. Mr.
Baugh explained that when a small business hires a new employee, one
of the considerations in the hiring decision is whether or not the employee
will increase group health costs for the business. This places people with
disabilities at a disadvantage when they seek employment, because it
creates a disincentive for employers to hire disabled people. Yet, as a
matter of public policy, employers are encouraged to hire people with
disabilities. Mr. Baugh supports the removal of the sunset provisions and
the retention of a 50% rate band, but he also hopes that consideration will
be given to reducing the rate bands in the future, perhaps to the 25% level
of a few years ago. Mr. Baugh also stated that neighboring states have
considerably lower percentages; for instance, Utah has set its rate band
at around 16%. Rep. Deal expressed sympathy for Mr. Baughs
concerns.
MOTION Rep. Collins moved to send H619 to the floor with a DO PASS
recommendation; motion carries on voice vote. Rep. Deal will sponsor
the bill on the floor.
H 622 Rep. Meyer presented H622 to the committee. He explained that the
Petroleum Clean Water Trust Fund Board was established last year and
has held two meetings. An attorney hired by the board has determined
that some of the current statutes relating to the Idaho Petroleum Clean
Water Trust Fund do not conform to the creation of a board and need to
be changed by H622. The bill changes language on page 1, lines 39-40,
to allow a majority vote of those present at a meeting, rather than a
majority vote of all members, to make decisions and transact business for
the fund. Changes on page 2, lines 36 and 43, include the board in
limitations on personal liability. The bill also adds language, on page 2,
lines 30-33, which will require that conflict of interest issues are resolved
under the provisions of the Idaho Nonprofit Corporation Act.
Suzanne Budge Schaefer was recognized to respond to a committee
question about what the Idaho Nonprofit Corporation Act actually says
about conflicts of interest. Ms. Schaefer stated that the act provides that
a board member of a nonprofit corporation can disclose a conflict of
interest and the board can either waive or not waive the conflict.
MOTION Rep. Smith moved to send H622 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Meyer will
sponsor the bill on the floor.
There being no further business to come before the committee, the meeting was
adjourned at 2:55 p.m.

 

DATE: February 19, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg
(Nonini), Meyer, Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer,
Henbest, Smith(30), Douglas
ABSENT/

EXCUSED:

None
GUESTS: Dave Sessions, Bob Petersen, Preston Wilbourne, Stephen Jones, Brian
Church, Michael Hillman, Rhett W. Fornof, Kim Lewis, John Mackey, Phil Barber,
Ron Tucker, Brad Dixon, Rich Petersen, Rayola Jacobsen
Meeting was called to order by Chairman Black at 1:30 p.m. Rep. Douglas
moved to approve the minutes of the February 17 meeting as written; motion
carried on voice vote. Chairman Black announced that it was his intention to
move H621 to the bottom of the agenda for today’s meeting.
H 620 John Mackey, representing United Heritage Financial Group, presented H620.
Mr. Mackey explained that currently, if employers want to offer group life
insurance to their employees, the employers must pay a portion of the premium.
H620 will allow employers to offer group life insurance policies to their
employees without being required to pay premiums. It is hoped that this will
provide employers with some relief from the rising costs of insurance, while still
allowing them to offer this benefit to employees. Under the provisions of H620,
employers can still choose to participate in group life insurance plans. Mr.
Mackey also pointed out that the bill includes an emergency provision, enabling
it to take effect immediately. Mr. Mackey said he is not aware of any opposition,
and the Department of Insurance is aware of the proposed legislation.
MOTION Rep. Gagner moved to send H620 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Black will sponsor the
bill on the floor.
SJM 106 Rep. Nonini presented SJM106, which is a statement of support for the concept
of maintaining the states as the sole regulators of the business of insurance. It
also expresses support for state efforts to streamline, simplify and modernize
insurance regulation, by means of the increasing use of technology, which is the
key to modernization in the state insurance department’s functioning. Rep.
Nonini stated that the insurance industry is a $900 billion business in the United
States, and that $2 billion of that business is in Idaho. The Idaho Department
of Insurance is the fourth largest contributor to the state’s general fund. If
federal regulation is allowed to extend to states, undermining the states’
authority to regulate insurance, Rep. Nonini said that a large percent of the
premium tax collected will be lost to Idaho.
MOTION Rep. Deal moved to send SJM106 to the floor with a DO PASS
recommendation. In explanation of his motion, Rep. Deal explained that there
are some in Congress who want to impose one standard model for insurance
regulation on the entire country, and that SJM106 will keep insurance regulation
as a function of the state. Motion carried on voice vote. Rep. Nonini will
sponsor the bill on the floor if he is still substituting for Rep. Kellogg when the
memorial comes up for consideration. If Rep. Kellogg is back, Rep. Nonini
requested that she be allowed to sponsor the memorial.
H 621 Phil Barber, representing the Trade Association of Property and Casualty
Insurers, presented H 621. Mr. Barber explained that auto dealers routinely loan
cars to their customers during repair jobs, but that these loaner cars are offered
at no charge to the customer. It is common that the insurance follows the car,
thus making the owner’s insurance primary in case of an accident. Mr. Barber
said that in 2000 the legislature passed a bill which carved out a narrow
exception to this practice, intended to apply only to automobile dealers, which
would place them in second position with regard to claims arising from an
accident. This bill was the result of three years’ work with the auto dealers. At
that time (2000), the automobile rental companies were also discussed, and it
was decided to not include them in this narrow exception, since they are in the
business of renting cars and are compensated for those rentals. In their case,
the cost of insurance coverage would be considered a cost of doing business.
Mr. Barber stated that, despite the narrow provisions of the 2000 bill, there
continued to be confusion about who was primary and who was secondary in
insurance claims arising from rental car accidents. The current bill, H621, tries
to make clear the original intent of the 2000 legislation.
Bob Peterson, owner of a rental car agency for the past 22 years, testified in
opposition to H621
. Mr. Peterson said that the profit margin on car rentals is
quite narrow and the market is very competitive. If H621 passes, Mr. Peterson
thinks that he will be out of business because he will not be able to bear the
additional insurance costs. He testified that a similar law was passed in New
York, and dozens of small rental car companies closed as a result. He also said
that in Idaho, only two of the car rental companies are major corporations; the
others are franchise arrangements owned by small businessmen like him.

Responding to committee questions, Mr. Peterson said that, although the law will
apply to all rental car companies, regardless of size, it is still his contention that
the effect of the law will be felt more seriously by small businesses because they
can’t spread the cost or absorb it as readily as a large corporation can. Mr.
Peterson also said that, if a person with no insurance rents a car and then has
an accident, the rental car company’s insurance would be responsible for the
damage and would pay the costs.

Preston Wilbourne, National Car Rental, testified in opposition to H 621. Mr.
Wilbourne said that the bill is worded in such a way that it will have the effect of
shifting not only the liability coverage to the rental companies but also the
collision coverage. He pointed out on page 3, line 16 that the bill does not
specify liability insurance. Mr. Wilbourne stated that in all other Northwest
states, the rental car companies are allowed a second position for liability. In his
view, H621 will have a negative impact on car rental business in Idaho by raising
the price of rental cars in the state. As a matter of clarification, Rep. Deal
pointed out that the bill does specify liability insurance on page 3, line 9, in the
section immediately preceding the section referred to by Mr. Wilbourne.
Ron Tucker, representing State Farm Insurance, testified in favor of H621. Mr.
Tucker worked closely with automobile dealers in 1998, 1999, and 2000 to
create a solution to the problem of liability with regard to their loaner cars. He
said that the intent of the 2000 legislation was clearly to make the insurance of
rental car companies primary. He also noted that it is important to this
discussion to separate the rental car company from the rental car company’s
insurance. Mr. Tucker explained that if a driver’s insurance policy covers an
accident in a rental car, the driver’s insurance is pro rata or excess. He said
that, without the clarification offered by H621, the claims settlement process is
slowed down considerably because rental car companies are reluctant to
cooperate in settling. Often, the delay is great enough that the driver’s insurance
company ends up taking care of the claim. Mr. Tucker stated that H621 will
clarify who is primary in these cases, and thus will facilitate a more timely
settlement of claims.

In response to committee questions, Mr. Tucker clarified that the bill is, in fact,
dealing with only liability insurance; in fact, the entire code section that is being
amended, 49-1212, covers liability insurance. He also stated that, in his mind,
there would be little incentive for people to “take advantage” of a rental car
company’s insurance coverage if the law is changed, since the driver still bears
responsibility for the accident in terms of any ticket or other ramifications. Mr.
Tucker said that there is no specific law that requires rental car companies to
carry insurance; what is required is financial responsibility, in the way of
adequate bonding or other assets. Asked about how other states handle this
matter, Mr. Tucker said that it is a mixed bag; some states place rental car
companies’ insurance as primary, some as excess, and some do not specify.
This latter situation results in disagreements between rental car companies and
insurance companies, as has happened in Idaho.

Steven Jones, an independent franchisee of Hertz, testified in opposition to
H621.
Mr. Jones said that, to his knowledge, nine states have laws that make
the rental car companies’ coverage primary; most of these states are in the East.
Mr. Jones also stated that if this law passes, the additional cost of insurance will
be spread to all good drivers who rent cars.

Responding to questions, Mr. Jones said that there is a lot of confusion in the
area of which insurance company is primary. Many times, those who rent cars
do have liability and collision coverage for the rental car through their own car
insurance policies, but they are not aware of this coverage.

Brian Church, Enterprise Rent-A-Car, testified in opposition to H621, testified
in opposition to H621, saying that the bill actually serves to protect the accident-prone drivers. He also said that, at a time when the insurance industry is
thriving, this legislation will have a minuscule effect on insurance companies.
The effect on rental car companies, however, will be tremendous. Mr. Church
said that this bill will be a major blow to the industry.
Brad Dixon, representing Property & Casualty Insurers, testified in favor of
H621
. He said that this is not a matter of the insurance industry versus the
rental car industry. Rather, he said, it is more like insurance versus insurance.
Mr. Dixon said that this bill clarifies Idaho law with respect to which insurance is
primary. It does not, however, change the fact that Idaho Code already says the
insurance of rental car companies is in primary position. Therefore, insurance
rates already reflect this reality. Clarifying the matter, as H621 does, will simply
make it easier for adjusters to settle claims. He also testified that he believes 20
states have rental agencies as primary; the nine states previously referred to
have this in statute, and the rest depend on case law.

Answering questions from committee members, Mr. Dixon agreed that this
legislation will result in smoother claims settlement because it will avoid litigation
in some cases. He said, however, that since insurance rates are based on
multiple factors, he cannot say with any certainty whether this legislation will
result in lower insurance premiums. Mr. Dixon also said that surrounding states
are not consistent; for instance, Washington state does not have the rental car
insurance as primary, but Montana does place primary responsibility with the
rental company.

MOTION Rep. Gagner moved to HOLD H621 in committee.
By way of explanation, Rep. Gagner said that he is concerned about what this
legislation will do to consumers. He believes that it will result in higher
premiums, and he also believes that it does, in fact, penalize good drivers. Rep.
Douglas
also argued in favor of the motion, saying that policies in the east
cannot be compared to Idaho law, since many people in the east do not own
cars and therefore do not have automobile insurance coverage.
VOTE ON
MOTION
Roll call vote was requested on the motion. On a roll call vote, the motion
passed, 11-1-3
. Voting in favor of the motion: Reps. Gagner, Nonini, Collins,
Block, Rydalch, Cannon, Eberle, Snodgrass, Henbest, Smith, and Douglas.
Voting in opposition to the motion: Rep. Black. Absent and excused: Reps.
Deal, Meyer, and Bayer. The bill will be HELD in committee.
H 706 Rayola Jacobsen, Bureau Chief of the Bureau of Occupational Licenses,
presented RS14030. Ms. Jacobsen said that the number of applicants for
cosmetology licensing has doubled. The board has only two examiners in each
district, with up to 120 applicants requesting the once-a-month examinations.
Currently, the governor makes appointments of cosmetology examiners. The
proposed legislation will strike the provision that the Governor appoints
cosmetology examiners and will place that function within the cosmetology
board. Ms. Jacobsen said that the governor’s office is aware of the proposed
legislation and has no objection. She also noted that the cosmetology board is
the only board which relies on the governor for appointments such as these.

Responding to committee questions, Ms. Jacobsen said that, in order to be
considered for appointment as an examiner, a person must be a licensed
cosmetologist actively working in the field, and must have received training as
an examiner. She also stated that licensure is not required prior to admission
to a cosmetology school and, as far as she knows, no schools require such prior
licensure.

MOTION Rep. Snodgrass moved to send H706 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Meyer will sponsor the
bill on the floor.

There being no further business to come before the committee, the meeting was
adjourned at 2:55 p.m.

 

DATE: February 23, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg, Meyer,
Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer, Henbest, Smith(30),
Douglas
ABSENT/

EXCUSED:

None
GUESTS: Steve Keys, Teri Ottens, Dave Munroe, Tom K. Brown, Russell Firkins, Ted
Hogander, Gary Malmen, Jack Dillard, Paul Street, James MacDonald, Woody
Richards, Chuck Goodenough, Al Frieze, Mike DeLacy, Warren McQueary, Jeff
Fitzlof, Benny Antunes, Aaron White, Jerry Peterson, Bob Corbell, Justin Ruen,
John Eaton
Meeting was called to order at 3:00 p.m. by Chairman Black. Rep. Cannon
moved to approve the minutes of the February 19 meeting as written; motion
carried on voice vote.
H 671 Woody Richards, representing BMC West, appeared before the committee to
introduce H671, a revision of the Business Corporation Act. Mr. Richards
introduced Paul Street, co-chairman of the committee that supervised the rewrite;
James Mac Donald, law professor at the University of Idaho, and Chuck
Goodenough
from the Secretary of State’s office.
Paul Street explained that H671 is the result of a review of Idaho’s Business
Corporate Code, which was rewritten about five years ago to bring it into
compliance with the model act. In reviewing the model act and Idaho’s current
code, the need for further revision was determined, and H671 contains those
revisions. Mr. Street also noted that a broad cross-section of attorneys was
involved in working on this bill.
James MacDonald, professor of law at the University of Idaho, testified that the
objective of H671 is to bring Idaho law up to date with the most current model act
provisions. Professor MacDonald explained that this corporate code regulates
the internal workings of corporations in the state and that federal corporate law
covers a wider scope. Professor MacDonald said that the Idaho Business
Corporation Act contains 190 sections and that H671 amends about 70 of those
sections. The large majority of these changes are housekeeping or updating
matters.

Professor MacDonald presented the highlights of H 671, as follows: 1) It allows
corporations to use new electronic technologies for certain functions such as the
use of e-mail for proxy voting. 2) It addresses corporate fraud, amending some
sections dealing with corporate officer behavior. 3) It allows out-of-state
corporations to move to Idaho and become Idaho corporations, doing away with
the necessity of dissolving the corporation and establishing a new Idaho
corporation. 4) It adopts uniform voting rules for shareholder approval of
corporation decisions. According to Professor MacDonald, H671 contains many
technical amendments and definitions, but its main thrust is to bring Idaho into
compliance with the Model Business Corporation Act.

A question arose as to whether this bill actually covers many different topics and
therefore should be separated into different bills. Chairman Black noted that if all
the topics covered by this bill were treated in separate bills, the committee would
have about 200 bills to consider. Mr. Goodenough explained that the bill really
does have only one topic, revision of the Model Business Corporation Act, which
was adopted as one piece. Professor MacDonald also added that legislative
services had no problem treating the revisions in one bill.
In response to further questions from committee members, Professor MacDonald
stated that the bill is limited to business corporations and does not apply to
subchapter S corporations. Similarly, the bill does not apply to or affect
businesses set up under trusts. He said that the legislation provides more
specificity on director liability in the internal affairs of corporations. It also
provides legislative guidance for what was previously a completely judicial
function. Mr. Street noted that the term “reasonable person” refers to a
reasonable person on the committee, as opposed to a reasonable person on the
street.
MOTION Rep. Deal moved to HOLD H671 for two days, until the committee has had a
chance to review the four-page summary of the bill. Professor MacDonald
assured the committee that he would be available to answer any questions that
committee members may have, and he provided his phone number (885-7947)
and his e-mail address (jimmymac@uidaho.edu) in case committee members
wished to contact him. Mr. Richards announced that he, too, would be available
to provide additional information, and that Mr. Street and Mr. Goodenough were
willing to help committee members if needed. Motion carried on voice vote.
H671 will be reconsidered at the February 25 meeting.
H 525 Steve Keys, Chairman of the State Electrical Board, presented H525, which
deals with qualifications and restrictions on electrical inspectors. Mr. Keys said
that the purpose of the bill is to require city inspectors to meet the same
qualification standards as state inspectors. Mr. Keys also said that the present
language is unclear and thus he is presenting an amendment to H525.

In response to committee questions, Mr. Keys said that small communities who
cannot afford to hire a full-time inspector could band together and hire a joint
inspector to service several communities. He said that many communities use
journeymen electricians to conduct inspections, and that this gives rise to
possible conflicts of interest if an electrician is inspecting the work of one of his
competitors. Mr. Keys acknowledged that the bill does not change the
qualifications or the number of years of experience needed to become an
electrical inspector.

MOTION Rep. Smith moved to HOLD H525 in committee.
Teri Ottens, a staff member at the Idaho Association of Building Officials,
appeared on behalf of Dennis Davis, who was not able to be present to testify.
Ms. Ottens testified in opposition to H525, saying that the division of building
safety told her that they have no evidence of actual conflicts of interest, but only
the “potential” for a conflict. She also stated that this legislation will be a hardship
on small communities who have only one inspector, since that single inspector’s
absence for a lengthy period of time would mean that no inspections would take
place during that time. She is also opposed to the bill because it specifies that
all deputy inspectors shall be appointed by the division, even for municipalities.
This represents a restriction on local jurisdictions.
Bob Corbell, representing the Independent Electrical Contractors, testified in
favor of H525
. Mr. Corbell said that cities and counties are hiring non-journeyman electricians to do inspections, and some of these have only 8-10
hours of classroom training to become inspectors, rather than the four years of
education and 8,000 hours of experience required to become a journeyman
electrician. Mr. Corbell stated that there has never been a requirement that the
administrator of the division hire inspectors for local municipalities. He said that
the bill’s real purpose is to get rid of the conflict of interest problems. He also said
that the bill’s only opposition is from the cities and counties, and that lots of other
people are supportive of the legislation.

Responding to committee questions, Mr. Corbell explained that municipalities can
set up their own inspection programs, but that the majority of counties in Idaho
utilize the state inspectors. Mr. Corbell stated that there is a move among local
municipalities to move toward a “certification” process for inspectors rather than
to continue to require four years of experience and training.

Some confusion arose concerning the amendment presented by Mr. Keys. After
committee discussion, it was determined that the “amendment” was actually an
entirely new bill that rearranges and restates the contents of the original H525.
SUBSTITUTE
MOTION
Rep. Rydalch presented a substitute motion to recommend that a new bill be
developed
and presented to the committee.
Rep. Gagner argued in support of the original motion to HOLD H525 in
committee, saying that he is concerned with the local control issue. He noted that
both cities and counties oppose the bill.
Rep. Smith also argued in support of the original motion. She stated that her
constituents in Pocatello oppose H525 because of the loss of local control that
will take place if the bill passes.
Rep. Rydalch stated that she would be willing to withdraw her motion to develop
new legislation, except that the proposed “amendment” or new bill as presented
by Mr. Keys still does not address the problem of loss of local control in
appointing electrical inspectors. Chairman Black said that the same end can be
accomplished, that is, to allow the sponsors to frame a new bill that will maintain
local control, by withdrawing Rep. Rydalch’s substitute motion. Rep. Rydalch
withdrew the substitute motion.
VOTE ON
ORIGINAL
MOTION
Chairman Black then called for a vote on the original motion, to HOLD H525
in committee. Motion carried on a voice vote.

H 527
Ted Hogander, Bureau Chief of the State Plumbing Bureau, presented H527,
which will add civil penalties, developed by rulemaking, for violations of the rules
or the Code. Mr. Hogander explained that the division of building safety rules aim
primarily at public safety, and that H527 will result in better compliance with the
rules that are designed to protect public safety. He also noted that the state
electrical bureau instituted similar civil penalties three years ago, so this bill will
bring the plumbing bureau into conformity with the electrical bureau. Mr.
Hogander stated that if the new legislation is passed, it will give the plumbing
bureau more enforcement authority. The legislation has been discussed for the
past two years, and Mr. Hogander said that, to his knowledge, there is no
objection to it by plumbing contractors.
MOTION Rep. Gagner moved to send H527 to the floor with a DO PASS recommendation,
noting that the legislation is sorely needed. A question arose as to why the bill
included an emergency clause. Mr. Hogander responded that the new law needs
to go into effect immediately in order to allow the bureau to formulate
administrative rules that will be ready for the approval of next year’s legislature.
Motion carried on voice vote. Rep. Gagner will sponsor the bill on the floor.
H 528 Mr. Hogander then presented H528, which authorizes three-year renewals of
plumbing certificates and amends the fee schedule pertaining to those
certificates. Mr. Hogander said that the bureau has experienced a 20% increase
in the number of requests for permits and inspections, and that the increase has
been handled by existing personnel plus some temporary help. The renewals will
now be placed on a staggered schedule, with renewals coming due monthly
instead of once a year. This will allow the bureau to eliminate the need for part-time help at the end of the year.
MOTION Rep. Cannon moved to send H528 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Eberle will sponsor the
bill on the floor.
Steve Keys presented H529, which increases the work experience requirement
for master electricians from two years to four years. Mr. Keys said that Idaho
currently has about 100 master electricians, but that this classification is of little
value since it does not enjoy reciprocity with other states. Since Idaho’s
experience requirement is only two years, electricians who come into Idaho from
other states can qualify for a master electrician license here before they would be
able to do so in their former states.

In response to committee questions, Mr. Keys stated that there is no
grandfathering provision in the bill which would protect electricians who are
currently near the two-year experience level. Unless they attain a master
electrician’s license before this bill goes into effect, they will have to meet the
higher standard of four years’ experience.

MOTION Rep. Smith moved to send H529 to the floor with a DO PASS recommendation.
Mr. Keys continued to respond to committee questions. He explained that an
apprentice electrician must have four years’ experience and 8,000 hours of
schooling to qualify for a journeyman license. Then, if this legislation passes, an
additional four years of experience must be gained to qualify for master electrician
status. Mr. Keys said that there is no education or experience requirement for a
person to become an apprentice. He also stated that there is no requirement for
a master’s license before an electrician can open a shop. Responding to further
questions, Mr. Keys said that the number of people applying for the master
electrician test is increasing, but there is no requirement for a master’s license
before one can get a contractor’s license. Mr. Keys said that he does not have
any figures on the number of electricians who are nearing the two-year
experience level which is the current requirement for a master’s license. He
stated that the only negative feedback his department has received is from those
who feared that a master electrician status would be required for a contractor
license, which is not the case.
VOTE ON
MOTION
Following committee questions and discussion, Rep. Black called for a vote on
the motion to send H529 to the floor with a DO PASS recommendation; motion
carried on voice vote. Rep. Douglas
will sponsor the bill on the floor.
There being no further business to come before the committee, the meeting was
adjourned at 4:55 p.m.

 

DATE: February 25, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg, Meyer,
Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer, Henbest, Smith(30),
Douglas
ABSENT/

EXCUSED:

Rep. Eberle
GUESTS: Dale Higer, Mike Brassey, Marilyn Chastain, JoAn Condie, Dawn Justice
Meeting was called to order at 2:55 p.m. by Chairman Black. Rep. Bayer moved
to approve the minutes of the February 23 meeting as written; motion carried on
voice vote.
S 1227 Dale Higer, Chairman of the Idaho Commission on Uniform State Law, presented
S1227, a revision of Article 7 of the Uniform Commercial Code, which deals with
warehouse bills of lading and other documents of title. The last revision took
place in 1951. This bill provides a framework for the further development of
electronic documents of title, and also updates the law to reflect state, federal and
international developments and practice. Mr. Higer stated that there is no
opposition to this bill.
MOTION Rep. Kellogg moved to send S1227 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Kellogg will sponsor the
bill on the floor.
S 1228 Mr. Higer then presented S1228, a revision of Article 1 of the Uniform
Commercial Code. This bill updates definitions and makes Article 1 consistent
with other revised articles of the Uniform Commercial Code. Mr. Higer pointed
out two areas where the code will differ from the uniform act: 1) there is no
change to the definition of “good faith”; and 2) there is no change in the “choice
of law” provisions.
MOTION Rep. Cannon moved to send S1228 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Gagner will sponsor the
bill on the floor.
S 1277 Mr. Higer also presented S1277, which is a Department of Finance bill dealing
with the Uniform Securities Act. The last revision of this act took place in1985.
This bill substantially revises and modernizes the laws governing the regulation
of the offer and sale of securities. It will bring Idaho law into alignment with the
recently adopted Uniform Securities Act. Mr. Higer said that the bill has the
support of a number of groups, including the American Bar Association and the
New York Stock Exchange.
MOTION Rep. Kellogg moved to send S1277 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Snodgrass will sponsor
the bill on the floor.
H 671 Woody Richards, representing BMC West, presented H671, revision of the
Idaho Corporate Code, which was previously before the committee on Monday,
February 23. Mr. Richards suggested that Paul Street could give a general
summary of the revisions, or could stand for committee questions instead.

Responding to committee questions, Mr. Street said that the bill removes the term
“prudent person” and uses “business judgment rule” because it is the standard
that is currently used. Mr. Street said that the Model Act further defines what a
“reasonable person” is. He pointed out the term “person in like position” on page
21, line 41, and explained that this means a person on a board rather than any
ordinary person on the street. He also noted the standards of liability for directors
of corporations on page 22. Mr. Street said that the bill is carefully drafted and
is written in such a way that it is not incomprehensible to a layman. Mr. Street
also responded to a question concerning director liability, saying that the bill does
offer some protection for directors who consult with experts when they are dealing
with a matter which they don’t fully understand.

Mr. Street then offered a brief summary of H671. In addition to the new
provisions on responsibilities of board members, the bill lists required offices of
a corporation and establishes standards of conduct for officers. It also deals with
domestication of corporations, providing that if a corporation moves to Idaho, it
can become an Idaho corporation without dissolving. Mr. Street stated that this
is becoming a common trend in corporation law, and that it considerably speeds
up the process. The bill defines when shareholder approval is needed for
disposition of assets, and sets up a procedural process that allows shareholders
to get a fair price for their stock. Finally, Mr. Street said that the bill specifies that
the dissolution of a corporation can occur without leaving future liabilities to the
board of directors, by having the corporation buy insurance to cover contingent
liabilities.

In response to further committee questions, Mr. Street said that the legislation
closely follows the Model Business Corporation Act of 2002. He also said that the
legislation anticipates the need for greater care in corporate dealings, in light of
the corporate scandals of the past few years. He pointed out in particular the
sections that deal with officer behavior on page 24 of the bill. Mr. Street also
noted that the bill removes the requirement of having nine directors before board
terms can be staggered, and said that the central issue is not really staggered
terms but rather the independence of the persons named to a board. The bill does
not change the standards for directors or officers.

MOTION Rep. Gagner moved to send H671 to the floor with a DO PASS recommendation;
motion carried on voice vote. Rep. Smylie will sponsor the bill on the floor.
There being no further business to come before the committee, the meeting was
adjourned at 4:55 p.m.

 

DATE: February 25, 2004
TIME: Upon Adjournment of Business Committee
PLACE: Room 408
MEMBERS: Chairman Deal, Rep. Kellogg, Rep. Collins, Rep. Snodgrass, Rep. Smith (30)
ABSENT/

EXCUSED:

None
GUESTS: Elwood Kleaver, Steve Tobiason, chuck Lempesis, Lyn Darrington, Mike Brassey, Julie
Taylor, Woody Richards, Pam Eaton, Jim Scheel, Victoria Paulson, Ken McClure, Tim
S. Olson, Skip Smyser, Steve Millard, JoAn Condie, Bob Seehusen, Jeremy Pisca
Meeting was called to order by Chairman Deal at 3:50 p.m. Rep. Deal explained that
the subcommittee was formed to study three House bills dealing with prompt payment
of medical claims, namely, H705, H709, and H743. He said that it is the hope of the
subcommittee that the three parties bringing these bills can reach agreement and can
craft a consensus bill to present to the Business Committee. Rep. Deal also said it was
his understanding that the parties had been working toward that goal, although a
consensus will probably not be reached at this meeting. He asked whether any
subcommittee members needed an explanation of the key points of any of the three
bills. Since H743 did not have a print hearing in the Business Committee,
representatives asked for a brief discussion of that bill.
H 743 Chuck Lempesis, representing the American Association of Health Plans, presented
H743. He said that this legislation was intended to further the discussion of the prompt
pay issue, and that he thinks the parties involved should come to an agreement. H743
includes a 30-day time frame for payment of claims, requires electronic submission of
claims, and also requires that claims be submitted within 30 days. He believes that any
bill should include bilateral responsibilities on both health care providers and insurers.
Mr. Lempesis also explained that his bill does not include any penalties, since he thinks
these may prove to be stumbling blocks. His view is that the prompt pay measure
should be crafted without any penalties and then be allowed to work on that basis. If
it does not work, there is always time to impose penalties. Responding to a committee
question, Mr. Lempesis said that he thinks the 30-day time frame is adequate if it
represents a bilateral requirement; this figure could be raised to 45 days.
H 705

H 709

H 743

Ken McClure, representing the Idaho Medical Association, distributed copies of a chart
he had drawn up to illustrate the similarities and differences of the three bills (see
attached chart). He explained that he placed H705 and H743 in the same column for
comparison purposes, since those two bills have similar features. The chart includes
information on who is affected by the legislation, how claims must be submitted, what
time restrictions are included, what restrictions are placed on health care providers, and
what the penalties are for noncompliance. Mr. McClure commented on some of these
points: First, he said that the physician has a contract with his patient only, and should
be able to bill for his services to that patient. Second, he said that H709, unlike the
other two bills, includes an incentive to encourage compliance with the law. He said
that if there is no penalty for noncompliance, the new law will not have much effect.
H 705 Steve Tobiason, representing the Idaho Association of Health Plans, discussed H705.
He noted that H705 applies only to physicians because that is the only group that his
members negotiate with. He would not have any objection, however, to expanding the
definition of “provider.” Mr. Tobiason distributed copies of a letter he had sent to Mr.
McClure detailing areas of agreement and possible compromise. (See attached letter.)
Mr. Tobiason stated that it is not a problem to draft a new bill, rather than amending one
of the current bills. He also said that 48 states now have prompt pay provisions. In
order for prompt pay arrangements to work, however, Mr. Tobiason said that the claims
must be electronically filed for quick turnaround time. Electronic filing also assures
completeness of the claim at the time it is submitted, thus eliminating the need to spend
additional time acquiring further information. He stated that there may be a need to go
to a dual time frame, 30 days for electronically submitted claims and 45 days for paper
claims. Mr. Tobiason agreed that the penalties should be eliminated, since the
requirements may be unreasonable given the number of claims processed by the major
providers in the state. He said that Blue Cross and Blue Shield process 10,000 claims
each per day, totaling 2.5 million claims each in a year’s time.
Julie Taylor, representing Blue Cross of Idaho, told the subcommittee that she had
been in discussion with representatives of the Idaho Medical Association and that she
has a meeting scheduled on Thursday, February 26, with senior management at Blue
Cross to discuss the issues surrounding these bills. Responding to questions from
committee members, Ms. Taylor said that the 30 days is measured from the time the
claim is received, not from the date of service.

Answering a question about the definition of “health care provider,” Mr. McClure
referenced H709, page 1, lines 33-40, and said that it contains a very broad definition
of “health care provider.” Pam Eaton pointed out that the definition of a provider does
not include pharmacies. Mr. McClure said that he would be okay with including
pharmacies in the definition. Mike Brassey noted that the three bills also differ on
which insurers are included.

Mr. Tobiason responded to a question about the fact that the real problem with
nonpayment of claims rests primarily with out-of-state insurance companies or
nonparticipating providers. He explained that in other states, if providers want to take
advantage of the prompt pay provisions of the law, they become contracted providers.
He also said that this legislation would not apply to self-funded health plans or to
ERISA, which is controlled by the Department of Labor, which has its own payment
standards.

Mr. McClure said that he does have some sympathy with the need for a time
differential. He also stated that, where a contract exists and where the contract’s
provisions are different from the prompt pay law, the contract should take precedence.
The prompt pay statute ought to apply in cases where there is no contract in place. Mr.
McClure said that, by including penalties for noncompliance, it is not his intention to
create problems or generate money for the department of insurance. He called the
committee’s attention to page 2, lines 48-52, and said that the purpose of the penalty
is not to penalize someone who is honestly trying to comply with the prompt pay
provisions.

Mr. Lempesis testified that he sees four problem areas, namely: 1) What is a health
care provider? He said there have to be some limitations on this, or even someone like
a barber could be considered a health care provider. 2) The Department of Insurance
cannot act as a collection agency. 3) Any penalties must be bilateral. He drew attention
to code section 41-1329, the Unfair Claims Practices Act, and compared it to carpet
bombing or to execution for a shoplifting offense. 4) It is important to always remember
that an insurance policy is a contract; a physician contracts with an insurer. Therefore,
the philosophical question arises: Is it the government’s role to interfere in a contract,
or to impose obligations where no contract exists?

Rep. Deal asked whether everything had been put on the table with regard to the three
bills. Mr. McClure responded that he is not wed to the Unfair Claims Act, although it
does allow the department of insurance some discretion in enforcement matters. He
also agrees that contracts are important.

Rep. Deal invited questions or comments from subcommittee members. Comment was
made that it seemed doctors would already have an incentive to submit billing in a
timely manner, since they cannot get paid until they bill. Tim Olson, Blue Shield,
explained that doctors sometimes delay a billing until the next calendar year, in order
to shift their taxable income to the next year. Mr. Lempesis also noted that doctors,
like lawyers, are not always good businessmen, and thus may not be efficient in
submitting billings. Mr. Kleaver pointed out that a contracted provider cannot balance
bill a patient. Ms. Taylor said that sometimes a doctor will say he’s submitted the
billing, but if it is a third party billing, the bill may not be received by the insurance
company in a timely fashion.

Rep. Deal summarized the five general topics discussed, and noted that three of the
five are points of possible agreement among parties. These are: 1) the need for a
better definition of “health care provider”; 2) the difference in acceptable time limits for
electronic versus paper billing, that is, 30 days for electronic and 45 days for paper; and
3) a determination of which companies are involved. The remaining two points, 4) how
to treat nonparticipating providers, and 5) penalties and enforcement, are areas that
remain in conflict.

Rep. Deal asked the parties to continue working on these two areas of conflict, and he
announced that he would schedule a subcommittee meeting sometime early next week
to assess progress and further identify areas of agreement.

ADJOURN: There being no further business to come before the committee, the meeting was
adjourned at 4:55 p.m.

 

DATE: March 1, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg, Meyer,
Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer, Henbest, Smith(30),
Douglas
ABSENT/

EXCUSED:

Rep. Block
GUESTS: Jerry Peterson, Trent Towes, Mark Larson, Dennis Brittain, Douglas Brown, Darrald
Bean, Norm Varin, Julie Taylor, Dennis Davis, Ken Sommer, Darrel Cossaart, Ann
Bell, Tim S. Olson, Bob Corbell, Russell Firkins, Edward Draper, Vivian Ransom,
Rourke Yeakley, Barton Hill, Neeraj Soni, Michael C. Ross, Bonnie T. Cams, Dennis
Tanikuni, John Eaton, Jack Lyman, Bruce Allcott, Karl Malott, Doug Strosnider,
Lindsay Redifer, Ken McClure, Jennifer Gilliland, Lyn Darrington, Ben Estes, Steve
Tobiason, Leon Duce, Chuck Lempesis
Meeting was called to order at 2:50 p.m. by Chairman Black. Rep. Meyer moved to
approve the minutes of the February 25 meeting as written; motion carried on voice
vote.
H 710 Lyn Darrington, representing the Idaho Association of Health Plans and Regence
Blue Shield, presented H710 to the committee. Ms. Darrington said that H710 is the
result of work done by four health care providers in the state of Idaho. She explained
that this bill addresses the situation in which a patient goes to a contracting hospital
for emergency room services and is treated by non-contracting physicians or other
providers, without being aware that the providers do not contract with the patient’s
health care plan. Currently, the patient is billed for the balance due, that is, the
amount over and above the contracted amount. In order to avoid these large balances
being passed on to the patient, H710 will require the insurance companies to pay a
non-contracting provider at the contracted rate, and will require the non-contracting
provider to forgo the remainder of the bill. Ms. Darrington pointed out the definitions
in section (5), including the definition of a hospital as a facility that provides 24-hour
care.

Ms. Darrington commented on a number of objections to H710. She noted that this
bill is not an attempt at price fixing, since companies fix their own rates. She also said
that some fear this bill would result in the insurance companies reducing the amount
of payment for emergency services. She said that the bill is not about reimbursement,
but is instead intended to protect consumers from high balance bills submitted by non-contracting providers. Ms. Darrington distributed a sheet listing the top 40 procedure
codes and showing the comparative payment amounts for Regence Blue Shield of
Idaho, Idaho Medicare, and Regence in three other states.

Responding to committee questions, Ms. Darrington said that it is not uncommon for
balance bills to be $500 to $2,000, and occasionally higher. Asked whether the
payment amounts shown on the handout are sufficient to cover costs plus allow for a
profit for providers, Ms. Darrington said that since 92% of physicians contract with
Regence, the payments must be adequate. She also said that the hospitals are not
balance billing, since they are contracting entities, but that the non-contracting health
care providers do submit bills to patients for the balance of their bills. Ms. Darrington
said that she is not familiar with Medicare reimbursement requirements. She also said
that “medically necessary” is defined in subsection (5) of the bill.

Ms. Darrington was asked to provide an illustration of what the cost difference would
be to a patient going to a “preferred” provider as opposed to a “non-preferred”
provider. She responded that a patient going to a non-preferred provider would be
responsible for 30% of the amount of the contractual payment (since Regence pays
non-contracting providers 70% of the approved payment amount), and the patient
would also be responsible for the balance of the bill above the contracted amount. If
a non-contracting provider charges $150 for a procedure, and Regence’s payment
amount for a contracting provider is $100 for that procedure, Regence will pay a non-contracting provider $70 (70%), and the patient is responsible for the remainder of the
bill, which would be $30 plus $50. She said that doctors can write off the balance
even without this legislation, but that they seldom do so. Ms. Darrington reiterated
that the bill is aimed at protecting patients in situations beyond their control, when they
go to an emergency room of a contracting hospital and are treated by non-contracting
medical service providers.

Ken McClure, representing the Idaho Medical Association, testified in opposition to
H710
, although he stated that he does understand the patients’ concerns. Mr.
McClure stated that this bill tells a doctor the amount he is allowed to charge, whether
he has signed on with a particular plan or not. In the case of emergency rooms,
hospitals are required to see and treat emergency patients, and emergency room
doctors have to work in those hospitals. Mr. McClure said that if doctors are required
to accept the lower payment even though they didn’t agree to it, this bill is fixing prices
under market levels. He said that if the reimbursement levels were sufficient, doctors
would be contracting with the insurance companies. In response to a question, Mr.
McClure said that differences in insurance policies occur not just in the various
amounts for co-payment, but also in many other variables.
Steve Tobiason, representing the Idaho Association of Health Plans, testified in
favor of H710
, stating that the bill is designed to provide patient protection from
balance billing. Mr. Tobiason pointed out that H710 will result in the insurance
companies paying out more than they would under current law, since they will pay
100% of the contracted amount to non-contracting physicians. He also noted that
there are a lot of procedures that take place in hospitals that are not covered by this
legislation, which addresses only emergency room situations. Mr. Tobiason stated
that this bill will resolve a problem by minimizing the financial impact to the patient.

Answering committee questions, Mr. Tobiason said that some physicians do not
contract with insurance companies because they may be the only specialist in a
certain geographical area and therefore do not have to contract. Mr. Tobiason sees
no indication that this bill will affect the quality of care in emergency rooms.

Julie Taylor, representing Blue Cross of Idaho, testified in favor of H710. She said
that if the intent is to afford some protection for consumers, then both the medical
profession and the insurance providers need to give a little. Therefore, she believes
that non-contracting providers should be barred from balance billing patients.
Dr. Edward Draper, an emergency medical practitioner for 30 years, testified in
opposition to H710
. Dr. Draper pointed out that he has also been an emergency
room patient and that he has paid emergency room balances of $10,000 to $15,000
in the last two years. Dr. Draper is concerned about protecting the right of emergency
room physicians to contract, or not contract, with insurance companies. He stated
that, although he sympathizes with the intent of this legislation to protect consumers,
he does not think this is good legislation.
Dr. Rourke Yeakley, a board certified emergency room physician who provides
emergency services at two St. Luke’s hospitals in the Boise area, testified in
opposition to H710
. Dr. Yeakley testified that emergency room medicine in Arizona,
California, and New Mexico are now in crisis as a result of similar legislation in those
states. Since the legislation in those states resulted in artificial price fixing for
emergency services, Dr. Yeakley said that the more patients he saw, the more he lost.
He also stated that he saw many emergency room physicians dropping out of
emergency medicine to work in specialties. As a result, it became more difficult to
obtain proper medical treatment for those patients visiting emergency rooms. In this
way, Dr. Yeakley thinks that this bill will definitely affect the quality of care.
Dennis Tanikuni, assistant director of public affairs for the Idaho Farm Bureau
Federation, testified in favor of H710. He recounted a personal experience in which
his wife had to be treated in an emergency room in LaGrande, Oregon, with a resulting
large balance bill.
Chuck Lempesis, representing the American Association of Health Plans and the
Health Insurance Association of America, testified in favor of H710, saying that the
committee had been involved in an important philosophical discussion about the
sanctity of a contract. In general, Mr. Lempesis said, government should not interfere
in any way with a contract; however, Title 41 of Idaho Code is replete with instances
of the state telling insurance companies what they should do. The same practice
seems to be absent with regard to telling doctors what they should do. Mr. Lempesis
pointed out that the bill attempts to balance the interests of both providers and
insurance companies, and that it applies solely to emergency room care. Mr.
Lempesis said that the bill asks doctors to accept whatever the insurance company
pays for certain procedures, which is what lawyers do all the time when they provide
legal services for less than the amount they would normally charge. Mr. Lempesis
said that, if committee members vote against this bill, they should not do so based on
the idea of the sanctity of a contract.
Darrald Bean, Idaho Association of Health Underwriters, testified in favor of H710,
expressing his belief that it is a consumer protection measure.
MOTION Rep. Snodgrass moved to send H710 to the floor with a DO PASS recommendation.
Committee discussion continued with regard to H710. Concern was expressed about
who was going to protect the doctors in these situations. It was also thought that,
although this may not be the best solution in terms of consumer protection, there was
no substitute solution presented. Therefore, the default position should be in favor of
patients, in protecting them from high balance bills.
SUBSTITUTE

MOTION

Rep. Gagner offered a substitute motion to HOLD H710 in committee. Speaking
in favor of the substitute motion, Rep. Gagner expressed concern about the loss of the
right to contract if H710 passes. He said that the bill will, in effect, mandate all
emergency room doctors to be contracted and then the insurance companies may
lower their payment rates, thus driving out more doctors from emergency room
practice. Rep. Deal stated that he had worked on this issue a few years ago and that
the parties were not able to reach consensus at that time. He said that contracting is
an important issue in this debate.

Rep. Snodgrass argued against the substitute motion, saying that emergency room
doctors become contracted only if the hospital in which they are working is contracted.
He also said that current reimbursement rates may move up, rather than down, if the
current rates fail to attract enough contracting physicians. He pointed out that, under
H710, insurance companies will not benefit, but rather will end up paying more.

Rep. Henbest invoked Rule 38, stating that her husband is a physician. She said that
the bill covers only one part of the problem and that there are inherent conflicts in how
the system is set up, since emergency room physicians are a “captive” group of
doctors. She noted that no one had talked about the responsibilities of the hospitals;
if they offer emergency room services, do they have a responsibility to assure that
they have adequate staff? Rep. Henbest said that H710 is just one indication of how
broken the health care delivery system really is.

Rep. Smith argued against the substitute motion, saying that her primary concern is
patient protection. Rep. Rydalch stated that, in her view, H710 is not a consumer
protection bill. Rep. Douglas argued in support of the substitute motion, stating that
she does believe the bill will affect the quality of care. She said that when one group,
such at patients, gets a break, another group ends up paying. She also noted that the
uninsured are not part of this discussion at all.

ROLL CALL
VOTE
A roll call vote was requested on the substitute motion to HOLD H710 in committee.
On a roll call vote, the substitute motion passed, 9-6-1. Voting in favor: Reps.
Gagner, Deal, Kellogg, Collins, Rydalch, Cannon, Eberle, Henbest, and Douglas.
Voting in opposition: Reps. Black, Meyer, Snodgrass, Bayer, and Smith. Absent
and excused
: Rep. Block.
H 773 Jack Lyman, Idaho Manufactured Housing Association, presented H773. Mr. Lyman
explained that Rep. Ringo had introduced a bill earlier in the session which would
increase the time required for notice to be given to tenants of a mobile home park if
the park planned to cease operation. The current notification period is 120 days, and
Rep. Ringo’s bill would have increased that period to 300 days. Since this time period
was unacceptable to members of the Manufactured Housing Association, Mr. Lyman
and Rep. Ringo worked out a compromise of 180 days. H773 contains the 180-day
time period for notification. Mr. Lyman stated that Rep. Ringo supports this bill, and
his association supports it as well.
MOTION Rep. Kellogg moved to send H773 to the floor with a DO PASS recommendation;
motion carried on voice vote. Rep. Ringo will sponsor the bill on the floor.
H 756 Rep. Gagner presented H756, stating that he is a building contractor and therefore
invoked Rule 38 on disclosure. He explained that this bill will accept the 2003
International Building Code and Energy Conservation Code and would also adopt the
2003 International Mechanical & Fuel Gas Codes. Rep. Gagner explained that last
year HVAC was separated from plumbing, becoming a separate entity. One area of
concern is that of sprinkler coverage for fire protection. In the 2000 Code, there were
no requirements for sprinkler installations in buildings smaller than 16 units; this bill
includes sprinklers for those buildings, with exemptions for single-family residences
and two-, three-, and four-plex buildings. For buildings of five to 16 units, the sprinkler
requirement remains. Smaller units were exempted partly because of the prohibitive
cost, which Rep. Gagner said were approximately $2 per square foot for sprinkler
installation. He noted that local governmental units still have the ability to adopt
stricter guidelines, increasing the requirements to include those exempted by this bill.
Rep. Gagner also said that this bill deals with only residential properties.
Dennis Tanikuni, assistant public affairs director for the Idaho Farm Bureau, testified
in opposition to H756, stating that he would ask the legislature to adopt policies that
would limit government infringement on private property rights.
John Eaton, governmental affairs director for the Building Contractors Association of
Southwestern Idaho, testified in support of H756. Mr. Eaton pointed out language
on page 2, lines 12-14 of the bill, which protect local governments. He also stated that
his organization supports the International Building Code and does not support any
of the uniform codes. Mr. Eaton testified that lines 37-39 on page 2 of the bill retain
the language from the 2000 Code.
Bruce Allcott, representing the Idaho Fire Chiefs Association, testified in opposition
to H756
. Mr. Allcott stated that the fire chiefs had not been involved in any
discussions prior to the bill’s drafting, and his main objection is that the process used
to determine code was not satisfactory. He distributed a handout that illustrated a
proper code process. Mr. Allcott also testified that he has figures indicating a cost of
about $1.10 to $1.13 per square foot for sprinkler installation. Mr. Allcott said that he
is not debating the value of sprinkler systems, and that he would support Rep.
Gagner’s bill except for the sprinkler exception. His main point of contention is the
process followed in developing this bill. Mr. Allcott also said that there is a safety
issue involved, since small children and the elderly may not respond to smoke
detectors in case of fire. Sprinkler systems have a 97% effectiveness rate, compared
to 40-50% for smoke alarms. Sprinkler systems also limit a fire’s damage to a smaller
area and keep the fire to a manageable size.

Answering committee questions, Mr. Allcott said that the new Code would require
sprinkler systems in three-plex and four-plex buildings, but that Rep. Gagner had
exempted those two classifications in this bill. He agreed that local governments can
require sprinklers in those smaller units, but that fire districts have no authority to do
so.

Karl Malott, representing the Professional Fire Fighters of Idaho, testified in
opposition to H756.
Mr. Malott said that the committee should adopt the entire Code
as a whole, rather than exempting out certain buildings. He thinks that if the
requirements for sprinklers are removed for three- and four-plexes, then other
requirements may also be removed, such as the requirements on fire walls, doors, and
so forth. He also said that landlords have an obligation to protect tenant safety, and
that this also involves a safety issue for firefighters themselves.
Doug Strosnider, Deputy Fire Chief of the Nampa Fire Department, testified in
opposition to H756.
He used the analogy of buying a new car with a package of
safety features such as safety glass, anti-lock brakes, and air bags. The Code should
be adopted in the same manner, as one integrated whole. He stated that the
legislature had never before exempted certain sections. He also said that the fire
services would be totally supportive of the bill if the exemption is removed.
Jennifer Gilliland, from the Planning and Development Services Department for the
City of Boise, testified in support of H756. She said her department is anxious to
move to the 2003 Code, which contains important clarifications of the 2000 Code.
She stated that tri-plex and four-plex buildings won’t enjoy the same economies of
scale that are enjoyed by bigger buildings when figuring costs for sprinkler
installations.
Dennis Davis, Idaho Association of Building Officials, testified in favor of H756,
stating that he had helped to draft the bill and he supports it as drafted. He gave an
example of one other change in the 2003 code. The 2000 code required handrails on
a stairway with two or more risers; the 2003 code changes the requirement to
stairways with four or more risers. Responding to committee questions, Mr. Davis said
that there are other things a builder can do to make a building safer, such as installing
fire walls at various vertical and horizontal planes, and increasing the number of
smoke detectors and alarms. Mr. Davis also testified that he understands the position
of the fire personnel who are opposing this bill, but that he is supporting it because he
thinks there is more to lose if the bill doesn’t pass.
Darrel Cossaart, representing Ada County, testified in support of H756. Asked
whether he would also support the bill without the exemptions, Mr. Cossaart said that
in general he would.
Ben Estes, retired fire chief of Pocatello and representing the Fire Chiefs of Idaho,
testified in opposition to H756. He said that he has been involved in emergency
services for the past 27 years. He stated that, while local governmental entities can
institute their own more stringent requirements for sprinklers, fire districts do not have
the authority to do so. Mr. Estes also testified that he also has a problem with the
process used to arrive at this legislation, which represents a change from past
procedure. Mr. Estes expressed concern about pulling out specific sections from the
code, noting that if sprinklers are exempted this year, what might be exempted next
year?
Leon Duce, representing the Association of Idaho Cities, testified that he strongly
supports H756.
He also distributed copies of a letter containing testimony of Ken
Baker, who also supports the legislation. Asked whether he would support the bill if
the sprinkler exception was left out, Mr. Duce said that he would support it but that it
would be difficult to pass the legislation.
Rep. Gagner further testified on H756 by first noting that exemptions from code
requirements are granted all the time, such as in the case of agricultural buildings. He
also pointed out that cities and counties will still have the right to amend the
requirements if they wish to do so. Jack Rayne, Division of Building Safety, was
recognized to comment. He said that H756 is necessary to clear up the problems
encountered with the 2000 code and the transition to the 2003 code. Rep. Gagner
said that an emergency clause was included because some municipalities asked that
it be include.
Mark Larson, State Fire Marshal, was recognized to answer a question from the
committee. He said that the fire code is adopted by administrative rule, and that he
will adopt the same language in the administrative rules as that which is adopted in
the building code. He also stated that there is no guarantee that the installation of
sprinklers will save money on construction costs. One result may be, however, that
a sprinklered building can be bigger or will require less space between buildings, thus
saving some costs. Mr. Larson said that although some insurance companies do give
a discount for buildings that have sprinklers in place, other companies do not. Rep.
Gagner
added that some insurance companies actually charge a higher premium
because of the possibility of increased water damage from sprinklers.
In response to a committee question, Jennifer Gilliland stated that the legislation is
supported by Boise’s mayor, and that the City of Boise would oppose the legislation
if the exemption language is removed.
MOTION Rep. Douglas moved to send H756 to General Orders, deleting lines 37 through 39
on page 2, and also deleting “and” in the paragraph immediately preceding.
SUBSTITUTE
MOTION
Rep. Deal offered a substitute motion to send H756 to the floor with a DO PASS
recommendation. In support of his motion, Rep. Deal stated that the differences over
this bill represent a turf war, with the cities supporting the legislation and the fire
departments opposing it. He pointed out that locals can still make changes in the
requirements if they wish.

Rep. Cannon expressed support for the substitute motion, saying that this matter
needs to be left to local jurisdictions. Rep. Collins stated support for the substitute
motion, saying that the 2003 code represents better law than the 2000 code. He also
expressed opposition to sending H756 to General Orders.

Rep. Henbest stated support for the original motion, primarily because of safety
considerations. Rep. Rydalch pointed out that presently tri-plex and four-plex
buildings are not covered, and this bill does not change that, but that it adds
extensively to the requirements for buildings above that number.

VOTE ON
SUBSTITUTE
MOTION
Chairman Black called for a vote on the substitute motion, to send H756 to the floor
with a DO PASS recommendation. The substitute motion carried on voice vote.
Reps. Eberle, Douglas, and Henbest asked to be recorded as voting against the
substitute motion.
H 757 Rep. Gagner then presented H757, which requires doctor’s offices to disclose
whether they honor an insurance card presented by a patient. They will be required
to disclose whether they are participating physicians, whether they balance bill, and
whether they charge interest. Rep. Gagner said that the $5,000 fine for failure to
disclose was removed from the bill. If the doctor fails to disclose, he will not be able
to balance bill. The bill also takes out emergency health care provisions and doesn’t
force emergency rooms to disclose. The bill also removes indirect health care
providers since the patient normally does not have face-to-face contact with providers
such as radiologists and anesthesiologists. It will be the responsibility of the health
care providers to maintain a site on the internet and a toll-free number with a current
list of contracting providers. This list will also be required to be included in the
company’s regular mailings. Responding to questions from the committee, Rep.
Gagner said that “first contact” would not include a phone conversation but would
mean the first time a patient visits the office.
Julie Taylor, representing Blue Cross of Idaho, testified in opposition to H757. She
stated that there is one important piece missing from the legislation, and that is
whether or not the provider contracts with a specific network. Questions arose as to
whether most people actually know which network they belong to. Ms. Taylor
acknowledged that a patient’s insurance card may or may not contain that information.
Vivian Ransom, clinic administrator for Idaho Sports Medicine, testified in opposition
to H757
, saying that the intent of the legislation is good but that the same end could
be achieved without legislation but with better education. She stated that, in her
experience, six out of ten people do not know their own insurance network or their
coverage. In her view, the patients do need to assume some responsibility for their
health care, and being informed about their coverage is one area in which they could
become more responsible. Ms. Ransom said that she would be willing to work with
the IMA to develop a method which would take care of this problem without legislation.
In response to committee questions, Ms. Ransom agreed that the whole field of health
insurance and health care is very complex and it is difficult even for her office staff to
understand it adequately. She also noted that many times her office is notified
retroactively about changes in network affiliation, so they cannot always be sure their
information is correct.
Dennis Tanikuni, Farm Bureau, testified in favor of H757, stating that it would be
helpful for consumers.
Ken McClure, representing the Idaho Medical Association, testified on H757, stating
that he had worked with Rep. Gagner on this legislation for over two years. Mr.
McClure distributed copies of a proposed patient notification form which could be used
to inform patients about the doctor’s participation with specific health insurance plans.
This form would be given to the patient to read and sign at the time of an initial visit,
or when the doctor’s status changes. Mr. McClure said that if H757 is sent to the floor
by the committee, he would like some assurance from the committee that the patient
notification form complies with the intent of the bill.

Responding to committee questions, Mr. McClure said that the form is not intended
for use in emergency situations, but would only apply to doctor’s office calls. He said
that it would be virtually impossible to have the form reflect all the specific companies
and plans that are available for contracting, since they are so numerous. For
instance, Primary Health contracts with about 1,300 carriers, so it would be impossible
to list all of them on a form. Mr. McClure said that the patient needs to know about his
coverage and it is hoped that the use of this simple form will be enough to alert a
patient to ask about whether or not his doctor is contracting with his insurance plan.
Asked whether he supported the proposed legislation contained in H757, Mr. McClure
stated that he is “nervously supportive” based on an understanding that his proposed
patient notification form will satisfy the requirements of the bill.

Lyn Darrington, representing Regence Blue Shield, testified in favor of H757, stating
that it will do more good than harm, and that it is a good first step. In response to a
question, Ms. Darrington said that the notification must be given to a patient at a first
visit and also any time a doctor’s status changes.
Steve Tobiason, representing the Idaho Association of Health Plans, testified in
favor of H757.
Rep. Gagner summarized the testimony on H757 by saying that the bill is not perfect
but that it does represent a good compromise and that it will solve problems for many
people.
MOTION Rep. Bayer moved to send H757 to the floor with a DO PASS recommendation.
Rep. Henbest argued that the patient notification form presented by Mr. McClure is
not detailed enough and does not meet the requirements of the bill. Rep. Gagner
responded that he does not know how the form could be refined any further, since it
has already been through six or eight drafts in an effort to comply with the intent of the
full legislation. Rep. Bayer asked that the record show that the committee recognizes
the adequacy of the notification form as meeting the requirements of the bill. Some
members expressed the opinion that accepting the form may be problematic; Rep.
Bayer clarified that the notification form is not part of the bill. Motion carried on voice
vote. Rep. Gagner
will sponsor the bill on the floor.
Chairman Black notified the committee that H675 had been held in the Business
Committee, at the request of its sponsor, Woody Richards. The Chairman said that
the Idaho Medical Association had some problems with the bill, but that a new RS has
been prepared that will address their concerns. He asked that the new proposed
legislation, RS 14240, be given a print hearing before the Business Committee and
then be sent directly to the second reading calendar, in the interest of time. Chairman
Black recognized Mr. Richards, who represents Blue Cross of Idaho. Mr. Richards
asked guidance on how to proceed with the new legislation in order to assure that it
has a hearing before the Business Committee. Some committee members said they
had received considerable correspondence concerning H675, which was thought to
be controversial. Mr. Richards said that all parties, including the Department of
Insurance, the Idaho Medical Association, and Blue Cross will be satisfied with the
wording of the new RS.
Committee discussion followed concerning the proper way to handle the new
proposed legislation. It was decided that the Business Committee would request
recognition as a privileged committee for the purpose of hearing RS14240. The
committee will take testimony on the legislation and, if the RS is sent to print, the
committee will request that the bill be sent directly to the second reading calendar.
There being no further business to come before the committee, the meeting was
adjourned at 7:10 p.m.

 

DATE: March 3, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg, Meyer,
Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer, Henbest, Smith(30),
Douglas
ABSENT/

EXCUSED:

None
GUESTS: Alex LaBeau, Mike Kane, Rick Ferguson, Donna Jones, Kim Coster
Meeting was called to order at 3:25 p.m. by Chairman Black. Rep. Cannon
moved to approve the minutes of the March 1 meeting as written; motion carried
on voice vote.
Report on
ICRMP
Mike Kane appeared before the committee to make general comments about the
Idaho Counties Risk Management Program (ICRMP). Mr. Kane explained that
ICRMP is a government entity made up of and for local governments, to offer
property and casualty insurance. Mr. Kane introduced Rick Ferguson, executive
director of ICRMP, who gave a report on the current status of ICRMP. Mr.
Ferguson thanked the Business Committee for legislation passed in 2000 which
allowed ICRMP to use a higher percentage of real estate holdings to meet the
minimum surplus requirements of the Department of Insurance. Since that time,
ICRMP has been able to increase its surplus from less than $1 million to about
$10 million. They have increased the occupancy rate and the rents for offices in
their building, and have undergone a significant change in personnel. Mr.
Ferguson noted that 43 of Idaho’s 44 counties participate in ICRMP; he also
reported that ICRMP is able to provide training for local governments.

Members of the committee commended Mr. Ferguson and ICRMP for the
progress made in the last few years, saying that their operations and their claims
services have both improved. The committee thanked Mr. Kane and Mr.
Ferguson for their presentation, and expressed the hope that they would be able
to continue their good work for the local governments within the state.

S 1240 Donna Jones, executive director of the Idaho Real Estate Commission,
presented S1240, which will allow a broker to assign one agent to represent the
seller and another broker to represent the buyer when his office is handling both
the listing and the sale of a property. Ms. Jones explained that there are
increasing numbers of larger real estate offices with many agents who may not
even know one another. She stated that the legislation offers an option for a
brokerage to deal with in-house transactions, but it is not mandatory. Offices
using this option must develop a policy to ensure client confidentiality. Ms. Jones
said that the legislation was drafted by the real estate commission and the Idaho
Association of Realtors, and that she is unaware of any objections.
MOTION Rep. Snodgrass moved to send S1240 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Snodgrass will sponsor
the bill on the floor.
S 1241 Ms. Jones then presented S1241, which is a housekeeping bill from the Idaho
Real Estate Commission. This bill clarifies compliance requirements and makes
other necessary changes to the code regarding continuing education credits for
real estate agents. Ms. Jones stated that the changes in this bill have been
publicized on the commission’s website since October of last year, and that the
commission has not received any objections.
MOTION Rep. Snodgrass moved to send S1241 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Snodgrass will sponsor
the bill on the floor.
S 1242 Ms. Jones also presented S1242. This bill meets the concerns raised last year
by JFAC concerning the appropriate dedication and use of civil fines collected by
the real estate commission. S1242 requires that all fine moneys collected as a
result of disciplinary action will be used exclusively for the development and
delivery of real estate education for the benefit of Idaho real estate licensees. Ms.
Jones said that no opposition to this bill has been received by the commission.
MOTION Rep. Gagner moved to send S1242 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Gagner will sponsor the
bill on the floor.
RS 14240 Woody Richards, representing Blue Cross of Idaho, presented RS14240. This
proposed legislation was developed to replace H675, and Mr. Richards asked that
the committee consider sending this RS to print and then directly to the second
reading calendar. Mr. Richards explained that, after learning about objections to
H675 from some parties, he spent considerable time with them to work out the
differences and craft a bill that would be acceptable to all involved; RS14240 is
the resultant consensus bill. The groups involved in the negotiations included the
Department of Insurance, the Idaho Medical Association, representatives of the
Idaho Association of Commerce and Industry and other health care insurance
companies.

Mr. Richards explained that the current definition of “managed care plan” in Idaho
Code is overly broad and could be applied to virtually all health care contracts.
The language in Section 2 of the legislation creates a dividing line between
managed care products and other health care plans. The legislation also
contains important consumer protections, included at the request of the
Department of Insurance. Mr. Richards stated that other provisions were included
as a result of input from the Idaho Medical Association; these requirements are
being transplanted from Chapter 39. Mr. Richards further testified that this
legislation will not eliminate consumer choices in health care plans; managed
care, PPO, and traditional plans will still be offered.

Committee members asked whether some of the initial objectors were present at
today’s meeting and whether they were satisfied with the resulting legislation as
presented by Mr. Richards. Ken McClure, representing the Idaho Medical
Association, was recognized to respond. Mr. McClure stated that the IMA had
shared their concerns about patient protection provisions with Blue Cross, and all
their concerns were accommodated. Mr. McClure also said that he has no
objection to having RS 14240 bypass the normal committee hearing process,
since there are no other points of contention left among the interested parties.
Steve Millard, representing the Idaho Hospital Association, also stated that his
organization is satisfied with the consensus bill.

Some concern was expressed about bypassing the normal procedure of having
the bill returned to the Business Committee for a full hearing. Chairman Black
reminded the committee that the bill will go to the Senate after passage in the
House and that it will receive a full hearing in the germane Senate committee.
Mr. McClure also assured committee members that his organization had studied
all the provisions that would benefit patients, and that those provisions they
requested had moved across into this legislation. Mr. Richards noted that, given
the conflict that has historically existed between insurance providers and the
medical community, the level of cooperation among all parties was particularly
gratifying, and he thanked the Idaho Medical Association and the Idaho Hospital
Association for their interest in this legislation.

MOTION Rep. Cannon moved to send RS14240 to print and then directly to the House
second reading calendar
. Motion carried on voice vote. Rep. Gagner will
sponsor the bill on the floor.
H 703 Chairman Black announced that the next bill on the agenda, H703, had been
returned to the sponsors at their request. The bill had been heavily amended and
the parties involved decided to start with a new RS. Rep. Meyer, one of the
sponsors of H703, stated that the agricultural suppliers and dealers had all
agreed to a new bill, and that the Ways & Means Committee would hold a print
hearing for the new RS tomorrow.
MOTION Rep. Meyer moved to HOLD H703 in committee; motion carried on voice vote.
There being no further business to come before the committee, the meeting was
adjourned at 4:25 p.m.

 

DATE: March 3, 2004
TIME: Upon Adjournment of Business Committee
PLACE: Room 408
MEMBERS: Chairman Deal, Rep. Kellogg, Rep. Collins, Rep. Snodgrass, Rep. Smith (30)
ABSENT/

EXCUSED:

None
GUESTS: Chuck Lempesis, Tim S. Olson, Skip Smyser, Pam Eaton, JoAn Condie, Victoria
Paulson, Julie Taylor, Woody Richards, Lyn Darrington, Steve Tobiason
Meeting was called to order at 4:35 p.m. by Chairman Deal, who summarized the
conclusions reached at the subcommittee’s February 25 meeting. Rep. Deal
recalled that, of the five areas of concern among the parties working on prompt pay
bills, three of them were no longer problematic at that time but two issues were still
troublesome. He also said that he understands there has been some conferring
among parties since the last meeting, and the question of penalties is no longer an
issue. Rep. Deal stated that, at this point, there is no compromise bill and he
wanted it made clear to all present that he personally does not have a bill. He did
ask Mr. McClure to draft legislation incorporating the suggestions or requirements
of all parties, and Mr. McClure has done that, although the legislation is not in RS
form but is just a draft.

Ken McClure, representing the Idaho Medical Association, presented his draft and
distributed copies to all present. Mr. McClure said that he had met with most or all
interested parties and had been able to reach some agreement on some issues.
However, he made it clear that the draft is not consensus legislation. He stated that
he started by looking at all three bills, H705, H709, and H743, and tried to satisfy
various needs in his new draft. He explained that he started with H709, so the
stricken and underlined portions of his draft represent changes from H709. Mr.
McClure said that one change is that the new legislation will not apply to Delta
Dental. Secondly, since some third-party administrators pay claims on behalf of
insurers, these third-party administrators will not be defined as “insurers.” Other
changes include a differential of 30 days or 45 days for payment, depending on
whether the claim is submitted electronically or in paper form; a requirement for
prompt payment if prompt submission of claims takes place (as determined by
postmark); and the inclusion of interest payments. Mr. McClure pointed out other
features of the draft that attempted to accommodate requests from other parties,
including the issue of nonpayment of premiums, the allowance that a company will
not be penalized for late payment if during a calendar year they make timely
payment of at least 95% of their claims, and a provision that the contract between
an insurer and a practitioner or facility will take precedence.

In response to a committee question, Mr. McClure said that the draft legislation
requires prompt payment to whomever the payments are due. The insurance
companies must pay the patients as promptly as they pay the doctors. He also
acknowledged that interested parties had received copies of the draft legislation only
an hour or so previous to the meeting and thus have not had adequate time to fully
study its provisions.

Steve Tobiason, representing the Idaho Association of Health Plans, said that the
biggest point of separation is the contracting versus non-contracting issue. He said
that in a case where the health care provider doesn’t contract with an insurance
company, the provider still contracts with the patient. There is also a contract
between the patient and the insurance company. But there is no contract between
the insurance company and the provider. Mr. Tobiason pointed out that, if there is
a contract between only the provider and the patient, that contract will govern the
timing and method of payment to the patient. He asked why there was a need to
modify the contract, adding that if the patient is not getting paid in a timely fashion,
there would be complaints from patients. He stated that the payment standard is
already in the insurance contract, and this bill would override that contract
relationship. Mr. Tobiason also said that this bill does not impose prompt
submission of claims, but only prompt payment. He stated that he has not had a
chance to fax the bill to his board members to get their input.

Lyn Darrington, representing Regence Blue Shield, stated that she has not had a
chance to thoroughly review the new draft, and that no one talked to her about
working on draft legislation that would be brought to the subcommittee. She stated
that the details of the bill that are still in contention should have been worked out
between the last subcommittee meeting and this one.
Mr. McClure said that he had about three to five conversations with Tim Olson and
Steve Tobiason since the last meeting. He stated that his goal was to reach an
agreement conceptually and that the details of the legislation would follow upon that
agreement. He said it was his thought that discussion of details would be premature
if the parties couldn’t agree on the broad concepts.
Julie Taylor, representing Blue Cross of Idaho, said that she had a long and
productive meeting with the IMA and that they had reached some agreements on
a number of issues. She detailed the areas in which progress was made, including:
1) a provision about nonpayment of premiums; 2) safe harbor provisions; 3) a
differential of 30 to 45 days; 4) provisions for third-party payers. Ms. Taylor said that
Blue Cross does think Delta Dental should be bound by this legislation.

In response to committee questions, Ms. Taylor said that Blue Cross processes
about 2.5 million claims each year, and that they are “scored” on a quarterly basis
on the timeliness and accuracy of their payments. Mr. McClure noted that Blue
Cross’s score is well above the 95% minimum, somewhere in the neighborhood of
99%. Ms. Taylor said that their fourth quarter 2003 score was 99.6%, and that the
lowest score she could recall in the last few years was 97.5%. When asked whether
the 95% figure in the legislation was perhaps set too low, Mr. McClure stated that
the objective is not to get companies in trouble, but rather to give the Department
of Insurance some credible guidelines which will allow them some enforcement
power in this area.

Tim Olson, Regence Blue Shield, stated that his main concern is about the process
being used. He noted that there were three separate bills brought forward, H705,
H709, and H743. He said that it appears most of the discussion on a consensus bill
took place with Blue Cross, and yet Blue Cross was not a part of any of the three
original bills. Mr. Olson said that there had been minimal conversation with his
company, Regence Blue Shield, in trying to reach a consensus. Mr. Olson read
from an IMA newsletter of Monday, March 1, and stated that he had tried to become
a part of the ongoing discussion but was not successful. He also recalled the
debate in the Business Committee on Monday, March 1, over the issue of
emergency services, a major part of which centered around the contracting/non-
contracting issue.
Chuck Lempesis, American Association of Health Plans, stated that the parties at
the meeting are really wasting everyone’s time, since there is, in fact, no problem
with prompt payment in this state. He said that the only reason a prompt pay bill is
being sought is because Idaho is one of the few states that do not have such a
statute. He asked someone to identify which companies are not promptly paying
claims in Idaho. Mr. Lempesis detailed the number of people in the state who would
not be affected by this legislation. In Idaho, there are 550,000 enrolled in Blue
Cross or Blue Shield, 180,000 on Medicaid, 24,000 state employees, and 220,000
uninsured. This total of 974,000, which is a large majority of the population of the
state, will not be helped by a prompt pay statute. Mr. Lempesis said that there is
simply no compelling need in Idaho for a prompt pay statute, and the effort to
institute one is simply government involvement in an area where there is no
problem.
Rep. Deal said that he has heard from groups of doctors in Canyon County who say
they do have a problem with payment. Mr. McClure agreed that either there is a
problem, or the members of the IMA are wrong when they say there is. He said that
the prompt pay issue is one of nationwide proportions, and that most other states
have addressed it by legislation. Mr. McClure said that he is sympathetic to the
sanctity of contracts, but that the Department of Insurance doesn’t have any tools
without this legislation.

Mr. Tobiason responded that Idaho Code section 41-1329 sets forth penalties and
allows administrative fines up to $5,000 and the loss of ability to do business. He
stated that the Department of Insurance could develop an administrative rule
detailing prompt payment requirements, which would preclude the necessity of
legislation. Ms. Taylor stated that the legislation will create a level playing field
because it applies to non-contracting providers. In this case, if the provider knows
that the patient is being paid within 30 days, they can predict when their bill will be
paid by the patient. Mr. McClure said he would entertain any technical changes to
make the legislation work for all parties. He said that the matter boils down to the
question, if there is a reason not to pay a patient as quickly as a doctor is paid, then
what is that reason? Mr. Richards stated that the exclusion of Delta Dental would
not be acceptable to his clients.

Rep. Deal stated that he did not see any necessity of further subcommittee
meetings, and that his recommendation would be to report the work of the
subcommittee to the Business Committee and to suggest that the three bills be held
in committee until another time.
MOTION Rep. Collins moved to recommend to the full Business Committee that H705, H709
and H943 be HELD in committee
. Committee discussion took place on the motion.
It was noted that the issue of contracting versus non-contracting is still a major
sticking point, and that the philosophical questions surrounding the prompt pay
matter may never be resolved. It was also stated that sometimes parties look to the
legislature to solve problems that they themselves should resolve. Motion carried
on voice vote.
Rep. Deal thanked all parties involved in the prompt pay issue for their time and
efforts, and said he would presume they had been working in good faith.
ADJOURN: There being no further business to come before the committee, the meeting was
adjourned at 5:40 p.m.

 

DATE: March 9, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg, Meyer,
Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer, Henbest,
Smith(30), Douglas
ABSENT/

EXCUSED:

None
GUESTS: Marilyn Chastain, Chuck Goodenough, Joan Crosch
Meeting was called to order at 2:45 p.m. by Chairman Black. Rep. Meyer
moved to approve the minutes of the March 3 meeting as written; motion carried
on voice vote.
H 803 Rep. Deal presented H803 to the committee. He recognized Joan Krosch from
the Department of Insurance, who was present to answer questions on this
legislation. Rep. Deal explained that H803 deals with the high risk reinsurance
pool. Individuals who lose their jobs and who purchase insurance coverage are,
in certain circumstances, eligible for a federal tax credit equal to 65 percent of
the premium cost of a state-qualified health insurance plan. However, as Rep.
Deal noted, currently there are no qualified plans in Idaho, so individuals who
would otherwise qualify for the tax credit are unable to take advantage of the
credit. This bill will allow the Idaho Individual High Risk Reinsurance Pool plans
to be designated as a state-qualified health benefit plan for purposes of the
Trade Act of 2002.

Joan Krosch responded to a question about whether this benefit was limited
only to those who lost jobs due to trade agreements. She responded that it
would depend upon whether the job was lost as a result of some trade
adjustment.

MOTION Rep. Collins moved to send H803 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Collins will sponsor the
bill on the floor.
H 812 Rep. Deal also presented H812, which is another bill dealing with the high risk
insurance pool. He explained that two years ago federal funds became
available for qualifying high risk insurance pools, and Idaho’s Department of
Insurance has applied for some of the federal funds. The proposed legislation
amends provisions of Idaho law relating to individual health insurance plans to
incorporate requirements of the federal Health Insurance Portability and
Accountability Act of 1996 (HIPAA). H812 amends the definition of “eligible
individual” and makes necessary changes dealing with preexisting conditions.
These changes will assure that Idaho meets the requirements for receiving the
federal funding for which it has applied.
MOTION Rep. Gagner moved to send H812 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Deal will sponsor the
bill on the floor.
S 1276 Marilyn Chastain, securities bureau chief for the Department of Finance,
presented S1276, which deals with endowment care cemeteries in the state of
Idaho. Ms. Chastain stated that there are 12 of these private cemeteries in the
state and that they are not part of the cemetery maintenance fund. Instead,
10% of the payments made for cemetery plots goes into a trust fund to maintain
the grave sites in perpetuity. S1276 makes three changes to the Endowment
Care Cemetery Act. First, it increases the amount of compensation to which a
fund trustee is entitled from .5% to 1.5% of the principal of the trust fund. This
will better reflect current market compensation rates; no change has been made
in this rate for the past 40 years. Second, it will permit out-of-state CPAs and
Canadian accountants to prepare and submit cemetery annual registration
statements. There are a number of cemeteries that are owned by entities
outside the state, and they would like to be able to use their own accountants
to prepare these statements. Third, the bill will provide explicit authority for the
Department of Finance to examine cemetery records.
MOTION Rep. Cannon moved to send S1276 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Cannon will sponsor
the bill on the floor.
S 1382 Chuck Goodenough, deputy secretary of state, commercial division, presented
S1382. Mr. Goodenough explained that the legislation has several purposes.
It clarifies that forms used for UCC liens on farm product filings are treated
differently than non-farm filings. It inserts a clarifying cross-reference to Idaho
Code to provide a second layer of protection against individuals filing liens
against themselves. Finally, it includes additions to the transition provisions that
were added after the Idaho version of Revised Article Nine of the Uniform
Commercial Code was drafted. These additions ratify the processes in use
since July 2001.
MOTION Rep. Meyer moved to send S1382 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Meyer will sponsor the
bill on the floor.
SUBCOMMITTEE
REPORT
Rep. Deal reported findings of the subcommittee which studied the three bills
dealing with prompt payment of medical claims, H705, H709, and H743. Rep.
Smith
moved to approve the minutes of the March 3 subcommittee meeting as
written; motion carried on voice vote. Rep. Deal then stated that the
subcommittee meeting held on February 25 was very productive in bringing
forth areas of agreement among the parties studying the prompt pay issue. At
the end of that meeting, two issues still remained in conflict. At the
subcommittee meeting on March 3, no consensus could be reached on these
points. Rep. Deal reported the subcommittee’s recommendation that the
Business Committee hold all three bills in committee. He also stated that since
the last subcommittee meeting, considerable work had been done to write a
new bill which will be given a print hearing in the State Affairs committee
tomorrow. He said that those involved in the new bill’s drafting include the
Idaho Medical Association, Blue Cross, Regence Blue Shield, and the
Association of Health Plans. The new bill should be ready for a hearing by the
Business Committee by Thursday, March 11.
MOTION Rep. Deal moved to HOLD H705 in committee; motion carried on voice vote.
MOTION Rep. Deal moved to HOLD H709 in committee; motion carried on voice vote.
MOTION Rep. Deal moved to HOLD H743 in committee; motion carried on voice vote.
There being no further business to come before the committee, the meeting was
adjourned at 3:20 p.m.

 

DATE: March 11, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg, Meyer,
Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer, Henbest,
Smith(30), Douglas
ABSENT/

EXCUSED:

Rep. Henbest
GUESTS: Jean Boyles, Ron Moore, Doug Burks, Ed Schlofman, Dar Olberding, Mark
Duffin, Woody Richards, Steve Tobiason, Lyn Darrington, Tim Olson, Bonnie
Haines
Meeting was called to order at 3:20 p.m. by Chairman Black. Rep. Deal moved
to approve the minutes of the March 9 meeting as written; motion carried on
voice vote.
H 817 Rep. Block presented H817, which is designed to meet the concerns of farm
machinery dealers who may be faced with cancellation of their dealership
agreements with equipment manufacturers. Rep. Block explained that such
cancellations create instability for dealers and hardship for farmers.
Ron Moore, president of the Pacific Northwest Hardware & Implement
Association, testified in favor of H817. Mr. Moore’s organization represents
equipment dealers in Oregon, Washington, and Idaho. Mr. Moore stated that
the Idaho statute regulating dealership agreements was originally put into Code
in 1975, and that H817 brings the Code up to date to better reflect current
business practices. Similar codes have already been updated in Oregon and
Washington, and Mr. Moore said that the dealers are now seeking to achieve
consistency in Idaho’s law. He also noted that the legislation has been
negotiated between dealers and manufacturers and that, although the
manufacturers are not actively supporting the bill, they are also not opposing it.
Mr. Moore reviewed several sections of the bill, pointing out the major
provisions: First, it requires a 90-day notice if a termination is made for good
cause. Second, if a manufacturer is going to establish a new dealership in the
same market area as an existing dealership, the manufacturer is required to
notify the existing dealer. Third, under the warranty portion of the legislation,
the manufacturers are required to reimburse dealers at the dealer’s hourly labor
rate. Mr. Moore also stated that there is no opposition to this bill.

In response to committee questions, Mr. Moore said that the bill will affect both
current and future contracts. He also pointed out that dealership contracts are
not typical contracts, but instead are “contracts of adhesion” which are made on
a “take it or leave it” basis offered by equipment manufacturers.

Doug Burks, owner of Burks Tractor in Twin Falls, testified in favor of H817.
Mr. Burks said that he has seen the dealership contracts change considerably
during the 25 years he has been in business, and that H817 would simply bring
contract legislation up to the current business climate. He said that the
increasing use of computer technology has required dealers to make significant
investments; for example, Mr. Burks was required to purchase $250,000 in
computer equipment and software.
Rep. Meyer testified in favor of H817. He showed the committee pictures
illustrating the difference between “old” equipment and the newer high-tech farm
equipment now used. He also stated that he has always bought parts and
service manuals so he can repair and service his farm equipment, but the
advent of new and increasingly complex technologies used in equipment has
precluded that possibility. Rep. Meyer noted that the dealers have to invest in
expensive equipment to be able to service these high-tech pieces of equipment.
Rep. Roberts testified in favor of H817. He also pointed out the increasingly
complex technological advancements available in farm equipment, telling the
committee that he will soon add a global positioning system that will allow him
to seat grain within a three-inch tolerance. Rep. Roberts said that H817 will
offer important protection to dealers who service these high-tech pieces of
equipment.

Responding to committee questions, Rep. Roberts noted that the farm
equipment business is, in a certain sense, different from other dealerships
because the equipment dealers have to house extensive amounts of equipment
to repair and service the farm equipment they sell. If a dealership agreement
is terminated, this service equipment should be able to be bought back by the
manufacturers. Mr. Moore also commented that these dealership agreements
are not franchise businesses, but are contracts of adhesion. He stated that the
“buy-back” provisions of the bill are not the only important portions, pointing out
that the bill also covers termination and notice requirements which are equally
important.

MOTION Rep. Gagner moved to send H817 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Block will sponsor the
bill on the floor.
H 833

RS 14268

Ken McClure, representing the Idaho Medical Association, appeared before the
committee to inform them that, after some negotiation, all parties had reached
agreement on a prompt pay bill. Mr. McClure said that one small flaw was
identified in the compromise bill, H833, and that therefore a new bill had been
drawn up, RS14268, which fixes the problem in H833.

Chairman Black announced that the Speaker had designated the Business
Committee as a privileged committee for the purpose of holding a print hearing
on RS14268. He said that it was his intention to ask the committee to hold
H833 in committee, and to send RS14268 to print and then directly to the
second reading calendar, as a replacement for H833. The new bill, however,
will receive a different bill number.

Mr. McClure pointed out the problem in H833 and said that the new RS has
language inserted on page 1, line 41, after the word “corporation” which will
more closely define “insurer.” This is the only difference between H833 and the
new RS. Mr. McClure also expressed his gratitude to all involved for their time
and efforts in arriving at RS14268. He further requested that, in the interest of
time, the committee introduce RS14268 and send it directly to the second
reading calendar.

RS14268 requires insurance companies to pay a claim within thirty days
following receipt of a bill if the claim is sent electronically, or within 45 days if
sent by paper. The RS includes exceptions in cases where companies may not
be able to pay within this time restriction, for instance, when they do not have
adequate documentation. The legislation includes some penalty provisions and
it also changes the mechanism for awarding interest, stating that if the amount
of interest is under $4, no interest has to be collected. It also includes a
definition of “electronic claims.”

In response to committee questions, Mr. McClure explained that the legislation
includes a “safe harbor” provision to protect companies who are paying most
claims in a timely manner. He also stated that, if a company finds that it does
not have proper documentation for a claim, the 30-day clock stops, and when
documentation is received, the 30-day time frame starts over.

Jean Boyles, a Boise resident, appeared before the committee and distributed
a chart listing the amount of campaign contributions that members had received
from health care providers in 2001-02, which totaled almost $16,000. Ms.
Boyles asked that committee members not be influenced by contributions from
either side of this debate when they vote on the legislation.
Woody Richards, representing Blue Cross of Idaho, testified in support of
RS14268
, stating that all parties had negotiated in good faith to arrive at this
consensus legislation. Mr. Richards said that the prompt pay issue had been
a matter of discussion and work for the past three years, and he urged the
committee to send the RS to print and then directly to the second reading
calendar.
Steve Tobiason, Idaho Association of Health Plans, testified in favor of
RS14268
. Mr. Tobiason noted one important part of the legislation, which is a
provision that the statute will not overrule existing contracts. He also said that,
although the legislation will not directly benefit insurers, it will provide a benefit
to consumers. Mr. Tobiason said that Idaho was one of three states which do
not have prompt pay provisions in their laws. If RS14268 is passed into law,
that number of states will drop to two. Finally, he reiterated the testimony of
others who stated that the legislation was the result of much hard work and
good faith negotiation among all interested parties, and he acknowledged their
continuing efforts in reaching agreement on the prompt pay issue.
MOTION Rep. Deal moved to HOLD H833 in committee; motion carried on voice vote.
MOTION Rep. Deal moved to introduce RS14268 to print and to send it directly to the
second reading calendar with a DO PASS recommendation; motion carried
on voice vote. Rep. Deal
will sponsor the bill on the floor.
S 1289 Chairman Black informed the committee that S1289, a bill dealing with the
Board of Dentistry, had been mistakenly sent to Business. This bill is a
companion bill to S1288 and the two bills need to be considered together.
Therefore, he recommended that the committee vote to send S1289 to the
Health & Welfare Committee.
MOTION Rep. Cannon moved to send S1289 to the Health & Welfare Committee;
motion carried on voice vote.
There being no further business to come before the committee, the meeting was
adjourned at 4:20 p.m.

 

March 15, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg, Meyer,
Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer, Henbest,
Smith(30), Douglas
ABSENT/

EXCUSED:

Rep. Gagner
GUESTS: Dale Higer, Rep. Leon Smith
Meeting was called to order at 1:05 p.m. by Chairman Black. Rep. Deal moved
to approve the minutes of the March 11 meeting as written; motion carried on
voice vote.
S 1391 Rep. Leon Smith appeared before the committee, at the request of Sen. Noh,
to present S1391. Current Idaho law requires general contractors to provide
certain information to, and gain the approval of, homeowners for work in excess
of $2,000. Failure to do so precludes use of liens to protect the providers of
repairs. Rep. Smith explained that this legislation was written to address the
problem of absent homeowners, which is not uncommon in the Wood River
Valley. The costs of restoring or repairing vital services in an emergency can
easily exceed the $2,000 limit, and it can take considerable time to find and
communicate directly with the absentee homeowners. The bill will exempt
providers from the requirement of notifying and getting permission in instances
where the homeowner or the agent of the homeowner initiates contact with the
general contractor to make emergency repairs to electrical, plumbing, or water
systems.
MOTION Rep. Deal moved to send S1391 to the floor with a DO PASS recommendation;
motion carried on voice vote. Rep. Smith (24) will sponsor the bill on the
floor.
S 1440 Dale Higer, representing the Uniform Law Commission, presented S1440,
which is a trailer bill to S1228 and S1229. Mr. Higer explained that this bill
corrects some drafting inconsistencies between S1227 and S1228. The
inconsistencies were not noticed until after the previous two bills had been
adopted; if they had been noticed earlier, the bills could have been amended on
the floor. Mr. Higer said that, in the current situation, Legislative Services
advised him that it would be simpler to repeal Section 28-1-201, Idaho Code,
and write a new section to replace it. The bill provides a consistent set of
definitions between Article 1 and Article 7 of the Uniform Commercial Code.
MOTION Rep. Meyer moved to send S1440 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Kellogg will sponsor
the bill on the floor.
Chairman Black advised the committee that there would be a meeting on
Wednesday, March 17, for the purpose of hearing two Senate bills that are still
remaining in the Business Committee for consideration.
There being no further business to come before the committee, the meeting was
adjourned at 1:20 p.m.

 

March 17, 2004
TIME: 1:30 P.M.
PLACE: Room 408
MEMBERS: Chairman Black, Vice Chairman Gagner, Representatives Deal, Kellogg, Meyer,
Collins, Block, Rydalch, Cannon, Eberle, Snodgrass, Bayer, Henbest,
Smith(30), Douglas
ABSENT/

EXCUSED:

None
GUESTS: Russell Firkins, Teri Ottens, Chuck Anderson, Jeff Avery, Kathy Smith, Bob
Corbell, Jeremy Manwaring, Brett Manwaring, Josh Manwaring
Meeting was called to order at 2:00 p.m. by Chairman Black. Rep. Rydalch
moved to approve the minutes of the March 15 meeting as written; motion
carried on voice vote.
Chairman Black announced that he will ask the committee to first consider
S1389, the second bill on today’s agenda, since one of the testifiers on that bill
needs to catch a 3:45 airline flight. Without objection, S1389 was moved to the
top of the agenda.
S 1389 Sen. Goedde appeared before the committee to introduce Chuck Anderson,
legislative committee chairman of the Idaho Mortgage Brokers Association. Mr.
Anderson, who is also chairman of the Coeur d’Alene Chamber of Commerce,
presented S1389. The purpose of this legislation is to establish licensing and
educational requirements for all persons who originate residential mortgage
loans and who are not regulated under other laws of the state. Mr. Anderson
said that stock brokers and insurance agents are currently required to be
licensed, and that their average transactions involve much lower sums of money
than the real estate loans handled by loan originators, who are not licensed. He
said that licensing will result in greater consumer protection from unscrupulous,
dishonest, or incompetent loan originators. The bill also defines the relationship
between a mortgage broker or banker and a loan originator, and it defines
continuing education requirements.

Responding to committee questions, Mr. Anderson said that the new licensing
will help eliminate fraud and predatory practices because it will provide a
mechanism for the Department of Finance to revoke licensing for unscrupulous
loan originators. At the present time, a loan originator can be dismissed for
wrongful practice by one broker and still be hired by another broker. Mr.
Anderson also stated that it is preferable to require a bond from each loan
originator because if the originator engages in unethical practices, his bond
would be attached first, and the broker’s bond would not be adversely affected.
He said that the amount of the bond is usually sufficient to cover any damages
to a consumer. In response to a question about whether this bill is an attempt
to keep new people from entering the industry, Mr. Anderson said that it is
aimed at keeping people out of the loan origination business who should not be
in the business because of unscrupulous practices. He also noted that present
loan originators will be “grandfathered” so they will not be required to pass an
examination in order to be licensed; an exam will be required for those who are
entering the field for the first time.

Jeff Avery, Avery Financial, testified in favor of S1389, stating that the bill will
be helpful to consumers. Mr. Avery said that loan originators who work as
independent contractors still have to work under a licensed mortgage broker.
The independent contractor will also have to be licensed and bonded. He also
noted that the primary purpose of S1389 is to require continuing education for
loan originators, some of whom (according to Mr. Avery) do not know what they
are doing.
Kathy Smith, president of the Idaho Association of Mortgage Brokers, testified
in support of S1389. She said that the purchase of a home is usually the
single biggest purchase a consumer will make in his or her lifetime, and that the
bill will provide necessary consumer safeguards by requiring continuing
education for loan originators. She also noted that the legislation will help raise
the credibility of the industry.

Responding to committee questions, Ms. Smith said that she does not think the
fee schedule is unduly high. She pointed out that the annual licensing fee for
loan originators will be $100 and the annual bonding fee will be about $150 to
$200. In addition, continuing education costs should be fairly low; Oregon’s
continuing education program costs $79 per year. Ms. Smith said that there are
1,700 mortgage brokers in Idaho, and that her association’s membership is 250.
The majority of the 250 are mortgage brokers, and the rest (about 20%) are
mortgage lenders. She also said that the legislation was publicized to
interested parties through the association’s newsletter, as well as by the
Department of Finance. She stated that the Department of Finance is neutral
on S1389, but that her organization had worked with the department for a
number of years to develop this legislation.

Josh Manwaring, past president of the Idaho Association of Mortgage Brokers,
testified in support of S1389. Mr. Manwaring said that 70-80% of the delays
in home mortgage closings could be due to lack of experience on the part of
loan officers. He also stated that there are currently no requirements for the
position of “loan officer,” and that a mortgage broker could have a stable of 200
loan originators who operate with no consequences for performing their jobs
poorly. Mr. Manwaring said that he thinks S1389 will be a benefit to the industry
as well as to consumers.

Responding to committee questions, Mr. Manwaring said that, should a loan
originator’s bonding amount be exhausted in settlement of a claim, then the
broker’s bond will pick up the additional amount of the claim. Even though loan
originators will be licensed and bonded under S1389, their brokers will still be
liable for their practices.

Mr. Anderson was recognized to answer further committee questions. He
delineated the requirements for licensing as a loan originator, which include
three years of experience, a $10,000 net worth, and the absence of any
misdemeanors or felonies in the financial services field. Mr. Anderson also

testified that loan originators are not required to maintain errors and omissions
insurance; rather, their liability is covered under the bonding requirement.

MOTION Rep. Meyer moved to send S1389 to the floor with a DO PASS
recommendation; motion carried on voice vote. Rep. Meyer will sponsor the
bill on the floor.
S 1435 Bob Corbell, representing the Idaho HVAC Association, presented S1435. Mr.
Corbell reminded the committee that the HVAC rules pertaining to training and
fees had been rejected earlier in the session. The problem with the proposed
rules was that the HVAC program was modeled after the electrical bureau’s
model, and some elements of the electrical bureau are not workable in HVAC
installations. S1435 provides for definitions of specialty journeymen and
apprentices, provides permit fees for HVAC installations in residential and
commercial facilities, and establishes rulemaking authority for civil penalties
when approved by the legislature. Mr. Corbell stated that the HVAC field
includes many categories of installations, and this legislation will allow an
installer to be qualified in one or a number of these areas, which will be
reflected on his or her card. In order to become a total qualified HVAC
journeyman, the person will have to become competent in all areas of the field
in which they want to work. Mr. Corbell also said that the previously-proposed
fees were too high, and that those fees have now been lowered. Mr. Corbell
noted that, as requested by the Business Committee, there will be dual qualified
inspectors who can perform both plumbing and HVAC inspections, in an effort
to cut down on costs. He said that the bill does include an emergency clause
which will allow HVAC licensing to begin on July 1, 2004.
MOTION Rep. Gagner moved to send S1435 to the floor with a DO PASS
recommendation. In support of his motion, Rep. Gagner complimented the
parties who worked out the details of the HVAC licensing program, noting that
S1435 is now a good piece of legislation. He said that the program makes
sense for the industry, and the dual inspection program will cut costs by about
$350,000. Some questions were raised regarding whether the fees proposed
for inspections were unnecessarily high. Rep. Gagner said that JFAC would be
able to monitor the level of reserves that are allowed to build up in the fund, and
if there is an excess, the fee schedule could be reduced in the future.
Chairman Black called for a vote on the motion; motion carried on voice
vote. Rep. Gagner
will sponsor the bill on the floor.
Chairman Black announced that there is no legislation remaining for the
committee to consider, and that any further meetings will be at the call of the
chairman. There being no further business to come before the committee, the
meeting was adjourned at 3:00 p.m.