House Business Committee

 

2004 Minutes

 

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.