Legislature(2003 - 2004)
03/19/2003 03:16 PM House L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 120-SERVICE CONTRACT SALES ARE NOT INSURANCE Number 1613 CHAIR ANDERSON announced that the final order of business would be HOUSE BILL NO. 120, "An Act excluding service contracts from regulation as insurance; and providing for an effective date." Number 1598 REPRESENTATIVE ROKEBERG moved that the committee adopt the proposed committee substitute (CS) to HB 120, Version 23- LS0537\I, Ford, 3/19/03, as the working document. There being no objection, Version I was before the committee. REPRESENTATIVE ROKEBERG related that [Version I addresses] all the committee's questions. Furthermore, the legislation has a zero fiscal note that was prepared by the committee. REPRESENTATIVE LYNN related his understanding that this legislation protects any licensed realtor providing a home warranty in the state. REPRESENTATIVE JOHN COGHILL, Alaska State Legislature, as the sponsor of HB 120, deferred to officials from the administration. REPRESENTATIVE ROKEBERG pointed out that [Version I] clearly does what Representative Lynn understood, which is why [the language on page 2, lines 23-25] is included. Furthermore, underwriters would still pay the premium tax under Section 1 language. Number 1484 RYNNIEVA MOSS, Staff to Representative John Coghill, Alaska State Legislature, said she concurred with Representative Lynn's understanding that a realtor could sell a home warranty and not have to have a license to sell insurance. REPRESENTATIVE COGHILL pointed out that Section 2, [paragraph (h)(2), page 2, lines 23-25] attempts to clarify that. REPRESENTATIVE ROKEBERG said, "My understanding is on home warranty underwriting, that [subparagraph (e)(1)(C) in Section 1, page 2, lines 5-8] is controlling, ... notwithstanding [subparagraph (e)(2)(E)] below, 'where a home warranty, except as described in (1)(C) of this subsection,' is excluded as found in (1)(C) above." REPRESENTATIVE COGHILL deferred to the representative of the administration. He noted the need on page 2, line 13 to delete "or" because it isn't necessary. REPRESENTATIVE ROKEBERG pointed out that home warranties are not excluded [from oversight by the Division of Insurance] per the language on page 2, line 17. Therefore, [companies that underwrite] home warranties still pay the premium tax, except if the [home warranty] is a component part of a home under [subparagraph (e)(1)(C) in Section 1]. Representative Rokeberg clarified that the home warranty is not excluded from payment of premium tax because it is an underwritten item. But [paragraph (h)(2)] of Section 2 excludes the [seller of the warranty] from being licensed in order to sell [the home warranty]. He said for the record that he wanted to show that some service contracts could cover component parts without intending to be home warranties. So, a [company underwriting] a home warranty would still pay a premium tax, but a [company offering a service contract] on a washer and dryer component part would not [pay a premium tax]. CHAIR ANDERSON noted that the sponsor seems to concur with Representative Rokeberg's comments. Number 1316 REPRESENTATIVE GUTTENBERG inquired as to why Chair Anderson had written the fiscal note. REPRESENTATIVE ROKEBERG explained that statute specifies that if the department doesn't provide a fiscal note, then a committee of referral can do so. Number 1291 REPRESENTATIVE ROKEBERG moved to report CSHB 120 out of committee with individual recommendations and the accompanying fiscal notes. REPRESENTATIVE ROKEBERG withdrew the aforementioned motion and moved that the committee adopt Conceptual Amendment 1 as follows: page 2, line 13, after "serviced;" delete "or". There being no objection, Conceptual Amendment 1 was adopted. Number 1247 REPRESENTATIVE ROKEBERG moved to report the CS for HB 120, Version 23-LS0537\I, Ford, 3/19/03, as amended, out of committee with individual recommendations and the accompanying zero fiscal note. There being no objection, CSHB 120(L&C) was reported from the House Labor and Commerce Standing Committee.