Legislature(2003 - 2004)

03/19/2003 03:16 PM House L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                                                              
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                                                              
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.                                                                                

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