House Labor & Commerce, 5/15/26, 3:15pm

Good afternoon. Uh, the meeting of the House Labor and Commerce Committee will come to order. The time is 3:27 PM. AM on Friday, May 15th. Members present are Representative Carrick, Representative Colon, Representative Freer, Representative Sadler, Representative Nelson, Co-Chair Fields, myself, Co-Chair Hall.

We have a quorum. Please ensure your cell phones are silent. We're asking that staff and members of the audience not approach the table. If you need to pass a note to a committee member, please get the attention of our committee aide Joan Wilkerson. I'd like to thank Andrew Magnuson, the Labor and Commerce Committee Secretary, and Renzo Moises from the Juneau LAO for tech and teleconferencing support.

On the agenda today, we have two bills before us: SB 83, Telehealth Coverage Reimbursement Rates by Senator Clayman and SB 35 Transportation and Delivery Network Companies by Senator Bjorkman. The first bill is SB 83 Telehealth Coverage Reimbursement Rates. We last heard this bill in April. This is its second hearing before the committee. And would Senator Clayman and your staff, Serena Hackenmiller, please approach the table, introduce yourself for the record, and please remind us what the bill is about.

Thank you for being here.

Thank you, Madam Chair. For the record, Senator Matt Clayman from District H in West Anchorage, and my staff Serena Hackenmiller. This bill provides in the most broad basis, it's pay parity between telehealth rates and in-person rates. Great. Do members of the committee have any questions for the senator?

Senator— Representative Sadler. Thank you. Just, Senator Cleeman, we've had telehealth in the country, in Alaska, for a while. Is anyone developing studies about the efficacy in all branches of medicine provided by telehealth? I've asked that question before and I got one answer.

Just wanted to offer you the opportunity to make the case that telehealth is indeed efficacious as in-person. Through the chair, Representative Sadler, I— I don't have any knowledge of specific studies, but I have talked with providers in other parts of the country as well as analysts who all say that those studies are in the process, but I don't know anything more than that. Okay. Thanks. Okay.

Not seeing further committee discussion or questions, we set an amendment deadline of May 14th at 5:00 p.m. We received two amendments by Co-Chair Fields. Co-Chair Fields, do you have a motion? I will move Amendment W.2. I'll object for purposes of discussion. And this is changing the date 2030 to 2040, and I was hoping that my staff, Evan Anderson, could explain why we're proposing to make that change.

Uh, for the record, Evan Anderson, staff to, uh, Co-Chair Fields. Uh, Amendment W.2 to SB 83, uh, actually deletes the repeal of the Medicaid telehealth statutes that was proposed in the bill. I believe they're in current statute, there's a 2030 repealer of the Medicaid telehealth statutes. And so rather than repealing the repealer, this amendment proposes pushing that repeal date out to 2040. In conversations with Department of Health, they identified that having this repealer on the books gives them more flexibility to promulgate regulations when it comes to telehealth.

And they've expressed interest in maintaining that flexibility rather than a date rather than just letting the statutes be repealed or expire. Okay. Senator— or maybe Senator Clayman, do you have thoughts on Amendment W.2? We have no objection to W.2. Senator Clayman, Representative Sadler?

Thank you. Through to Evan Lastham— to the mayor who just spoke. I'm sorry, I'm not quite understanding why having some repealer to this gives regulatory flexibility. Can you flesh that out? How would it do so?

Because regulations are forever, statutes are forever, unless there's a repealer. Yeah, I think that might be a question that's best for— through the Chair, Evan Anderson, for the record, that might be best for the Department to answer themselves. But my understanding is having a repealer on the books just gives them a little bit more flexibility to kind of continue to set regulations, whereas if this were to be fully repealed, that they're kind of locked in forever at that time. So this just allows them to continue to reassess on an annual or less frequent basis, but a repealer kind of locks them in at a moment of time forever. I'm not quite sure how it would do that, but— and I don't know if we have anybody from the department to answer that question, but okay.

We do not have anybody online. I just hear it's flexible, but I'm not sure why it means flexibility, but I'll defer to anybody else's questions. Senator Clemon. I would just note on this, Madam Chair, is that I think of it not as a repealer, but as a sunset, so the provisions regarding 2030 are Currently there is pay parity in Medicare— Medicaid for telehealth and in-person. And as drafted, it would sunset in 2030.

This extends the sunset to 2040. So at that point in time, you would no longer have the mandatory pay parity that is current law. And so that would continue, and it essentially means at that point the legislature would need to look at it again about whether or not we wanted to maintain pay parity. Which I view— I at least view differently than repeal. Representative Sadler.

Thank you. And Senator, is the assumption that by 2040 we'll all be doing only telehealth and in-person will be obsolete?

Representative Sadler, I certainly hope that when they're trying to listen to your lungs and listen to your heart and taking blood samples that they're not doing that by telehealth. If we get good broadband, maybe not. Good day. Thank you. Further questions from the committee on Amendment W.2?

Okay, seeing none, I will remove my objection. Is there further objection? Okay, seeing and hearing none, Amendment W.2 has been adopted by the committee. Co-chair Fields, do you have another motion? I move Amendment W.3.

Okay, I'll object for purposes of discussion. Thank you. I'm just going to read what the amendment does because it's short. This amendment inserts a healthcare insurer may use a geographic pay differential to reimburse out-of-state healthcare providers. So this amendment addresses really my only concern with the bill, which is that we might unwittingly incentivize companies to locate healthcare providers in states where they can pay less and provide the same services and be compensated the same rate.

So I think with this amendment in place, I would no longer have concerns because a multi-state employer would no longer be incentivized to to move employees, healthcare providers to a lower-48 state where they could pay lower wages. So this is simply intended to avoid creating an incentive to move healthcare providers, the, the actual humans, to the lower-48. Senator Clemon. Thank you, Madam Chair. We have no objection to the amendment.

Okay. Representative Sadler. Thank you. And, uh, Representative Fields, is the thought that we hear frequently that Alaska is a high place for high cost for healthcare and the lower 40 has— I'm going to pick Mississippi or Alabama, someplace might have low cost. Is the idea to make sure that companies don't lowball by having everyone operating in that area?

Is it to protect against high— is the anticipation this would lead to higher cost differential costs in Alaska or prevent lower outside, I guess? What are your thoughts on that? Through the chair, I don't think this would change the cost of paying wages, providing healthcare in the state of Alaska. I think what it would avoid is, you know, let's say you have a multi-state healthcare provider network where you have facilities and employees in the Deep South and a facility employees in Alaska. And just because of the cost of living, frankly, not even anything to do with healthcare per se, but just wages are different in different regions.

And, you know, in the absence of this geographic pay differential, the bill would mandate that we pay at Alaska rates for a human who lives in, say, Alabama. Well, you don't have to pay a human in Alabama as much. So my argument would be, without this language, we are creating an incentive for employers to move humans or provide services from a human in a lower wage state. And that's just not the incentive that we're trying to create. The incentive that we're trying to create in the bill is just to have good healthcare, whether it's through telehealth or in person.

So I support the intent of the bill. I don't want to unwittingly create an incentive to pay people who don't live in the state of Alaska, and I think the amendment just avoids an unintended consequence. That's all it does. Okay, Representative Colon followed by Representative Carrick. Um, so to the sponsor of the amendment, so I guess I got confused.

So Healthcare insurer may use a geographic pay differential to reimburse. So how does how much someone gets paid affect how they get reimbursed? Yeah, let's say you have a— let's say it's Providence and they have a healthcare provider who earns $140,000 in Alaska and the same healthcare provider earning the same service earns $120,000 in Oregon. Okay. This just says that the insurer could basically take that differential into account when reimbursing for the service.

So if an Alaskan sees a human in Alaska, the reimbursement would be raised based on the $140,000 rate. And so far as the salary affects the cost of care. Mm-hmm. But if that care is provided by the same provider type in Oregon at $120,000, the reimbursement rate would be correspondingly lower. Okay.

That's it. Thank you. Representative Carrick. Thank you, Madam Co-Chair. I just wanted to say I really support this amendment.

I think this amendment makes me support the bill, and I was a little on the fence before because I, I do think costs for in-person care are constantly rising, and I didn't want to create an incentive for a provider who has the option to do telehealth from anywhere in the country have an incentive to do that over having an in-person facility, because I think that, as was mentioned earlier with Representative Sadler's comments, you know, there are, there are a lot of services that can be provided through telehealth. There are also a lot of services that definitely cannot be, or that can be provided even better in person. So I just want all the options to exist, and pay parity is great, but only in so much as we we still have providers in Alaska providing in-person care and telehealth care. So just want to register my strong support for the amendment. Thank you, Representative Carrick.

Representative Sadler. Thank you. And to Representative Fields again, just kind of help flesh out your thinking there. I understand the point of your amendment, W-3. Did you consider— you decided on geographic pay differential.

Did you consider other mechanisms like cost of living or cost of doing business, that kind of thing? Because, again, pay might be divorced from the cost of operating. Yeah, I think through the chair it's essentially the same thing, but a geographic pay differential is a way of— it's an umbrella way of considering those things. And a geographic pay differential is the way that an employer would look at it or would treat a workforce spread across many states and regions. Follow-up?

Yeah. Offer some pay differential. It's not an uncommon thing to do, but I didn't know if anybody had developed a different measure. CPI is not it, but just there's a business cost. So just—.

Yeah. There may be other models that are out there. I know geographic is kind of an easy one.

Thank you. Senator Clayman. Just in response— through the Chair, in response to Representative Sadler's question, I think in the practical dynamic, say somebody's Lives in Alaska and has a Premera plan here in Alaska, and they went to Denver to see somebody in Denver for whatever, and maybe even that became telehealth that they were talking to the person in Denver. What Premera effectively does is instead of trying to run that through.

Premier Alaska rates, they send it to their affiliate in Denver, and the Denver— in Colorado, they figure out what are the rates for that provider in Colorado, which are going to take into account essentially the in-service— the in-network rates in Colorado for that provider in Colorado, which hopefully will take into account not only the cost of fuel, but the cost of housing and the cost of having medical offices. And so if those rates are lower in Colorado, then the provider in Colorado will essentially be tied to the Colorado rates, which will then be what Premier pays to the provider in Colorado, and that's how the geographic differential, I think, as a practical matter, works once you're in a health insurance network. Appreciate the discussion. Thank you. Okay.

Great. Seeing no further committee questions or discussion, I will remove my objection. Is there further objection to the amendment? Okay. Seeing none, Amendment W.3 has been adopted.

We will now turn to public testimony. Public testimony is now open. Is there anybody in the room who would like to provide public testimony? Seeing none, and seeing none online, I will close public testimony.

Okay, with that, uh, Senator Clayman, did you have any closing comments for the committee before we take action on the bill? Okay, thank you. Um, Mr. Co-chair, do I have a motion? I move to report Senate Bill 83, Work Order 34-LS0413/W, out of committee as amended with individual recommendations and accompanying fiscal notes. Okay, seeing and hearing no objection, SB 83, Work Order 34-LS0413/W, is reported out of committee as amended with individual recommendations and accompanying fiscal notes.

With that, we will take a brief iteas to sign the committee paperwork.

Okay, we are back on record. Next, we're going to hear SB 35, Transportation and Delivery Network Companies, by Senator Bjorkman. Senator Bjorkman and Xavier Bieber, would you If you would like to join us at the table, please put yourself on the record and give us a recap of what SB 35 does. Thank you for being here again.

Thank you, Co-Chair Hall and Co-Chair Fields. It's my esteemed pleasure to be back before the House Labor and Commerce Committee today. For the record, My name is Senator Jesse Bjorkman, and I represent the northern and central portions of the Kenai Peninsula. Senate Bill 35 provides for drivers of delivery network companies to be classified as independent contractors and also provides for insurance guidelines for those delivery network company drivers when they are logged onto the digital network, engaged in prearranged rides, as well as after they complete the prearranged ride. The bill also provides for occupational and accident insurance and other insurance coverages when they are doing their job.

Thank you. Okay, do committee members have questions for Senator Bjorkman? Okay, seeing and hearing none, we will turn to amendments, of which we have 8. Co-chair Fields has 4 amendments. Co-chair Fields, do you have a motion?

I move Amendment S.6. I'll object for purposes of discussion. Thank you. This is the first of 2 amendments that clarify the work of a courier. I appreciate my staff and I think stakeholders identifying that this clarifying language is necessary so we're not unwittingly requiring that couriers who are walking or riding a bicycle need to carry automobile insurance.

So when you see the motor vehicle reference, um, in S.6 and S.8, that's what it's clarifying. Thank you. Senator Bjorkman, would you like to share comments on Amendment S.6? Thank you, Co-Chair Hall. Uh, we support the amendment.

Okay. Representative Kollum, um, where do e-bikes land? Uh, don't need automobile insurance for an e-bike. Okay, so, but would there be any dispute that that's a kind of a motor vehicle? Um, it— so, uh, well, Representative Carrick carried the bill.

E-bikes are not motor vehicles under state law, and I think, again, this amendment just clarifies they're still not a motor vehicle. And it's a good question because there are e-bike riders who are couriers, and it is not our intent to make them go buy an automobile insurance policy for their e-bike. Right. Well, yeah, because we've had kind of a couple of famous accidents lately down in the Lower 48 where people got hurt or killed by an e-bike. So I'm sure I—.

Yeah, I think if we were going to do that, it would— through the chair, it would require tackling the underlying state law on bike— on e-bikes being vehicles. Yeah. And I don't know if the bill sponsor has talked about this or if that would be a whole nother rabbit hole to go down. We like rabbit holes. No, we don't.

Senator Bjorkman, any comments?

There are classifications of e-bikes that I would consider motorcycles, but that is a conversation for a different day.

Agree. Representative Sadler. Hey, Mitch, just a technical thing. We have 8 amendments. The S-dot numbers are a little out of sequence.

They've been numbered Amendment 1, 2, 3, 4. And I appreciate the difficulties in following these amendments. I don't know. I'll say both. Say both.

That's what I'm going to ask. Thanks. So amendment— so before the committee is Amendment Number 1, also known as S.6. Okay, additional questions from the committee? Seeing none, I will remove my objection.

Is there further objection? Seeing and hearing none, we have adopted Amendment Number 1, also known as S.6. Co-chair Fields. I move Amendment 4, also known as S.9. I'll object.

This is essentially conforming language, again indicating that a courier who is walking or bicycling is not required to carry automobile coverage. This language addresses a different section of the bill, same issue. Senator Bjorkman.

Thank you, Co-Chair Hall. We support the amendment.

Representative Sadler. Thank you, Madam Chair. The question came up in my evaluation of the bill as to whether digital proof of insurance is acceptable anymore. I know that I got a bill through for fishing licenses and I'd heard anecdotally that it's legal to have your automobile insurance carried on your cell phone. I have the Division of Insurance representative here, but I'd ask that question.

Through the Chair, I think if you know, a police officer were to stop and ask you, I think any demonstration of insurance would be sufficient. Director Carpenter, do you have some thoughts? I will share that for my car insurance, I have my current proof of car insurance on my app on my phone. Director Carpenter, for the record, Heather Carpenter, Director of the Division of Insurance. Um, I do not think I can speak to that because that would be a Title 28 provision which falls to to DMV and DPS to enforce.

But I believe there was either a change recently to allow that. I just can't speak with certainty. I think it would be okay. And I do know it's usually a fix-it sort of ticket that if you just forget to have your proof of insurance on you, but you, you know, get pulled over and have to show it, you can take that to Public Safety later and resolve that situation. Follow-up?

And no follow-up. Just the reason I ask, because we're getting, you know, we're digital application-based transportation services and proof of insurance. I just thought it might be good to make sure and cross the T to make sure people know whether or not— whether they can or cannot carry their insurance proof on their phone. So hold that in abeyance until later, but thank you. Okay, thanks.

Um, Representative Colon. Thank you, Chair. Can you kind of just— I'm trying to read it real quick, but can you tell me what the last part of your amendment is where you insert while the driver or courier is logged into What's that? That's not— that doesn't really—. Actually, I'm— yes, through the chair, I'm going to ask Evan Anderson to explain that part of the amendment, please.

Welcome back to the table, Mix Anderson.

Thanks, co-chair Hall. For the record, Evan Anderson, staff to Rep Fields. So that section, um, I actually— I think it might be helpful for me to take a look at the page of the bill. So thanks, editor.

Right, so, um, this, this is, uh, amending Section 14 of the bill, which requires, uh, proof of coverage for the driver or courier, um, while they are logged into the app. Um, so this is kind of just a cleanup of the language, um, The previous language was, uh, in connection with, and we wanted to clarify, in connection with the use of the app or something like— we wanted to be clear and say that, um, the driver needs to be logged into the app for that insurance requirement to be in place. Just try and be more specific. Exactly. Okay, thanks.

I think through—. Chair Fields—. Through the chair, the logged on is kind of the clear industry demarcation point. It's measurable, it's consistent. Is there further committee discussion?

Representative Carrick. Thank you, Madam Co-Chair. I'm so sorry if I'm asking the co-chair to just repeat what he just said, but I just walked in from another call. Does this amendment effectively delete this—. The—.

I'm going to call it a disparity, that's probably not the right word— between when TNC coverage starts and ends and DNC coverage starts and ends? Or is this completely a different section? I'm going to let Evan Anderson answer that. Okay. Sorry.

I opened a can of worms. For the record, Evan Anderson, staff director at Fields.

I am not sure if I know the answer to that question. I might defer to— Ms. Heather Carpenter.

Welcome back, Director Carpenter.

For the record, Heather Carpenter, Director of the Division of Insurance.

Through the Chair, Representative Carrick, I don't think this changes really current statute in that intention for right now, as it just reads, a driver to be on the app. This is more precise language, and I would say we have the benefit of 10 years of knowledge of how this actually works. And with adding then couriers into this current statute, this just requires a little— makes it more precise. And as the CS contemplates right now, even for a transportation network company, that insurance requirement for the company doesn't start until a driver is logged on to the app. So I think this just makes it all pretty clear when that starts and ends.

Okay. I think that helps. Thank you.

Additional questions or comments from the committee? Seeing and hearing none, I remove my objection. Is there further objection? Seeing none, Amendment Number 4, also known as S.9, has been adopted. Chair Fields, do you have another amendment?

I move S.8. I'll object. Okay, um, so S.8 recognizes the difference between a person and a burrito as the occupant of a vehicle, and this shows that DNCs can waive the UM/UIM coverage when they're carrying a burrito, but when they're carrying a person— when a TNC is carrying a person, they do need that uninsured motorist coverage. And for the record, that Amendment 3. Questions from the committee?

Representative Carrick? What if an autonomous vehicle is carrying a burrito? What kind of burrito? That is a rhetorical question. Thank you.

Okay. Representative Sadler. Thank you. But seriously, folks, I'm concerned about the intermittency. I understand the desire to parse narrowly where the obligation to carry insurance lies, but I'm going to oppose this amendment because I think the risk of uninsured and underinsured motorists is there for the drivers.

Burritos can fend for themselves. But just for consistency and uniformity, I think I'd like to not parse that out too detailed. So I'm going to oppose S. 8, Amendment 3. If I might jump in. Co-chair Fields, but yes, but the burrito comment threw me.

So Senator Bjorkman, do you have comments on the amendment before we turn to Co-chair Fields? Thank you, Co-Chair Hall. This amendment just clarifies the intent of the CS to allow for UM/UIM coverage to apply to a passenger. And so what that means is— the reason specifically is we do not want the driver making an insurance decision for the passenger. The driver can make that insurance decision for themselves, but we prefer that they not make it for the passenger.

This amendment clarifies that intent. Okay, thank you. Representative Kline? Yeah, I think that's what kind of what I was— I thought that the CS did that already. I thought the DNCs were exempt from the UI, and is— is— so is this new language?

I mean, I don't know, maybe for the bill sponsor. You said it's the intent, so I— and I guess I already thought that was happening in the bill. Senator Bjorkman, through the chair to Representative Klobuchar, yes, I thought so too. This just clarifies and executes that that actually is happening. I think it's an important amendment, and kind of to what Rep. Sadler was saying, this is carrying passenger coverage.

You don't need passenger coverage burrito. This is a body in your car. It doesn't have anything to do necessarily with the driver. So why would we force DNCs to pay for insurance coverage of food and products? So I support the amendment.

Representative Sadler. Thank you. Appreciate the debate. Um, not every delivery is a burrito. It could be a very, very expensive guitar or piece of electrical equipment, which would have much more value than a burrito in the person entrusting that to the DNC service might carry some value on it and not want to lose it.

They can always buy another burrito, can't always buy a new Les Paul.

Representative Kahlum? Yeah, so from what I've gathered from the bill sponsor and from many discussions, this— the genesis of this coverage, which used to be $1 million, now it's $500,000, someone got hurt and they didn't have enough coverage. It wasn't that they crashed a nice piece of art and had to try to recover it. So I think it's important. I think it's an important distinction.

It's important if it's some— a person getting hurt, but object getting hurt, or you lose your burritos. I mean, and I've been pretty clear, I'm pretty sensitive to racking up the cost to the TNC and the DNC because I know that falls on riders. So I like, I like it being different. But I support it. Thank you, Representative Kollum.

Senator Bjorkman, did you have additional comments? It may be helpful to hear from the Division of Insurance Director Heather Carpenter on this amendment so that she can confirm what this amendment executes. Brilliant idea, Senator Bjorkman. Thank you. Director Carpenter.

For the record, Heather Carpenter, Director of the Division of Insurance. And just to be clear, the division takes.

No position on the amendment. There were conversations about the current read of Committee Substitute S and the intent, as the sponsor said, to not subject DNCs to UM/UIM insurance, so they could waive it. However, these sections that this amendment has could be interpreted to mean that it was required, and we had a bit of a conversation with Ian Walsh, the alleged drafter, who said there are two interpretations of this. It could mean it's required. It could mean it's not required.

And my— you know, the division's advice was if the intent is to not have it, get rid of any confusion that could lead to litigation and higher cost. But again, the division takes no position on the amendment. Thank you, Director Carpenter. Additional questions or comments from the committee? Seeing and hearing none, I remove my objection.

Object. Uh, object. Uh, would you like to speak to your objection, Representative Sadler? Uh, no, no, no objections. Okay, will the clerk please call the roll?

Representative Nelson. Pass. Representative Sadler. No. Representative Freer.

Yes. Representative Carrick? Yes. Representative Colon? Yes.

Representative Nelson? Yes. Co-chair Fields? Yes. Co-chair Hall?

Yes.

6 Yeas, 1 nay. With a vote of 6 yeas and 1 nay, Amendment Number 3, also known as S.8, has been adopted by the committee. Co-chair Fields, do you have a motion? Uh, that, that's all the amendments that I was going to offer. Okay, next, Representative Freer.

Uh, thank you, uh, Co-Chair Hall. I move amendment number 5, S.2. Object. Thank you. Um, so, uh, Co-Chair Hall and Fields, uh, I offer amendment number 5.

This amendment deletes Section 7 of the bill with the intent of not requiring all vehicle operators to carry uninsured and Underinsured motorist coverage requirements under this legislation. This is what we— sorry, okay, we, we kind of had a small conversation about this during the last hearing. There are smaller locally owned operations across both rural and urban Alaska that are not considered DNCs or TNCs. This includes but is not limited to privately owned taxi and shuttle companies or Or the intent is to protect, like, folks that are picking up goods and delivering them to the airport to deliver to rural Alaska. This amendment, I believe, helps ensure that new insurance requirements do not unintentionally impede the operations of these small businesses.

It's clear that D&Cs and T&Cs will likely pass increased insurance costs onto their passengers. But in many smaller communities, residents may not be able to absorb those additional costs, and smaller vehicle operators may struggle to do so as well. And I just— I wanted to get that on record. I have heard feedback on Amendment Number 5, so I will be withdrawing Amendment Number 5. Okay, Amendment Number 5, also known as S.2, has been withdrawn.

Representative Colon, do you have a motion? Yeah, just gonna get my— I'll make sure I'm in order here. Do you need a little spreadsheet? Yes. 6.3.

I got it. I move Amendment 6, uh, or S.3. Okay, object? Representative Klobuchar. So this amendment, um, so on the meat of it is page 12.

It's a section that is re— um Dealing with the driver compensation. So originally this didn't have it in the bill. It got merged with another bill. And I do appreciate the— like, we started at 90% of the rate, the ride, and then we did 180% of minimum wage, brought it down to 120%. I just don't— I, first of all, I don't think that's really the purpose of the bill.

The purpose of the bill is to deal with insurance and to get some clarifying language around contract independent contractors. So again, when we do stuff like this, these costs get passed down to the customer. And maybe you agree with that, maybe not, maybe not. But the insurance requirements in the bill are already going to crank up the rate. And the other thing, when you— so when you base it on minimum wage, that ballot initiative that passed last year, the minimum wage is going to continue to go up for a couple of years.

So it's a pretty hefty financial impact. I want people paid well. But I think it's— I don't agree with putting in a statute and telling TNCs or DNCs how to pay their people. It also has the per-mile compensation, the CPI, tying it to CPI.

You can't count a gratuity. And really, I guess my purpose is I want the TNCs to stay here and the DNCs to stay here. If the cost of doing business is so prohibitive, it will either do one of two things. One, the rate will go so high that they don't get that many riders and these people aren't going to make that much money anyway, or they just leave the state. So I don't— I mean, I like the intention of I want people to be well paid, but when we do stuff like that, I think there's unintended consequences.

So the amendment just removes that section, Section 20, out of the bill. Senator Bjorkman, do you have thoughts on the amendment? Thank you, Co-Chair Hall. Um, this amendment does exactly what Representative Colon says it will do. Um, Co-Chair Fields has expressed, uh, strong support for this amendment and moving the bill out of committee with this policy in the bill.

So, um, that's how I feel about the amendment. I support the bill moving from committee. Coach Airfields, did you have any comments? Yeah, so I was, um, talking to the last Lyft driver who took me to the airport, and he was explaining that the ride cost $11, which I thought was very cheap for my house. Um, pretty hard to earn a living wage if a ride costs $11 and you got to drive to pick me up and then you drive to the airport and then God knows where else you get your next ride.

So, um, he actually got 90% of the fare on that ride. He got $10 out of $11. Um, he also explained that if you pre-order a ride, typically it costs $25 from my house. Lyft gets all of that, all that margin. So they have a model, and Uber is different but similar in some ways, where they take the entire difference.

I think just what it shows is these companies are going to pay the bare minimum to have workers available. And there's a very serious discrepancy between their claim of paying $38 per hour on average and what I hear from drivers. I talked to the driver about it. He was like, oh yeah, they don't— we don't earn— we don't earn that much. Um, and he said there's serious issues with Uber claiming to pay drivers and drivers not getting paid.

Um, so I have serious concerns about, um, a growing class of so-called independent contractors, which actually just represents an underclass of workers who don't have unemployment insurance, they don't have workers' comp, they aren't covered by minimum wage, so they have no wage protections, no protection if they're injured on the job. So I think if we are going to expand the pool of independent contractors, which is a worthy thing to consider because some people want to work in that way, and that's fine, but if we're going to do that, we got to have some protections in place. It doesn't have to be the same as our system of minimum wage, UI, and workers' comp, but there has to be some corresponding floor for wages and workplace safety protection. So that's why I support the wage floor and, yeah, don't support moving the bill from committee if we are not doing something to ensure that people at least have a fighting chance of surviving on what are pretty low wages. And, you know, these are giant international companies that are totally non-transparent and frankly don't care about their workers.

So I think we're the only people who can stand up for the workers. I don't think you can tell them— I'm not going to accept that they don't care about their workers. You don't know that.

That's based on hearing from the workers. Yeah, we can disagree. Anecdotal stories. I have Representative Sadler in the queue. Join us, actually.

Yeah, and the committee has decorum as well. Representative Sadler. Absolutely. And keep with that decorum. Yeah, I'm concerned with the expression of the conflation of living wage and minimum wage.

There is no obligation that every job be enough to support a 2-bedroom apartment and a mom and pop and 2 kids. Minimum wage exists for a reason. But this— I won't get into the philosophical debate. I appreciate the last speaker's concern for workers. But this is a job that's available to a lot of people.

It's not a career, I don't think. And I think having a state-set wage is a bit of an overreach. And to the point that they deserve— or there's no protection for the job, I was under the impression that there is— there are provisions in this bill to provide occupational accident insurance. So there are indeed going to be some protections for these at some level. And again, to Representative Kolum's point, the larger we make the cost, we make it less likely people use that.

So it's kind of you're chasing your tail if you try to raise wages by reducing the amount of business that goes to the.

Sector. So I'm going to support number 6. Co-chair Fields. Yeah, I just also wanted to reference for committee members— so I mean, anecdotes from drivers are one thing, and I think they're important, but there are extensive studies about what drivers earn, including from the Economic Policy Institute, and they find that drivers consistently earn less than minimum wage when you take into account cost of vehicle maintenance, fuel, and so on. So there are— there's very robust data on the subject.

Representative Nelson. Yeah, hey, uh, I, I appreciate it, uh, Madam Co-chair. Uh, just speaking as someone that that was a driver, uh, and can still do it. Um, you know, I disagree with, uh, Coach Airfield's assessment of it. You know, I do believe that it really is up to the driver to decide.

Uh, if you're deciding just to do shuttles between, uh, downtown Anchorage and the airport, you might earn a little bit less. If you are deciding to do a bar scene, uh, Friday night at midnight, you're gonna earn a lot more because there's a lot less, uh, people out there. So I'm going to support this amendment. Really, I'm also questioning the whole idea, because how this app operates, especially with how easy it is to accept or disengage rides, you could easily be on the south side of Anchorage and accept a ride up in north downtown Anchorage or Eagle River, and it would compensate you for that, uh, or just simply being on the app and quote unquote accepting rides, uh, I'm understanding that that would count for the minimum wage. So what would stop someone from just being on the app and constantly denying, uh, rides and racking up a lot of money?

So that's where my concern is, and I appreciate Representative Colon for putting this amendment forward, just speaking as a driver. Co-chair Fields? Yeah, the way the, uh, just through the chair, you it wouldn't actually work to just sit there and deny rides and get paid, and you would not get any more rides if you, if you use the app that way. Just, just for clarity.

Well, if I can respond to Representative Nelson. Well, um, you know, that is kind of how it goes. If, if I decided, yeah, my score would tank, but I would still be getting ride offers, that's where my concern comes from. And if someone wants to abuse that system under this current, uh, uh piece of legislation, if it is passed, that is ripe for abuse. And then that would be an avenue that companies would not want to deal with any longer, because then, one, you're having customers, uh, take in that cost, and two, um, it's just not going to be fair for the rest of the drivers.

So I appreciate it. Thank you, Representative Nelson. Additional committee questions or comments? Seeing and hearing none, I will maintain my objection. Will the clerk please call the roll?

Representative Nelson. Yes. Representative Carrick. No. Representative Sadler.

Yes. Representative Freer.

Representative Colombe? Yes. Co-chair Hall? No. Co-chair Fields?

No. 3 Yeas, 4 nays. With a vote of 3 yeas to, uh, 4 nays, Amendment Number 6, also known as Amendment S.3, has not been adopted. Representative Colombe, do you have a motion? Yeah, I move Amendment Number 7, S.5.

And, um, so this is just, um, reducing the UI, UIM, um, coverage requirement down to $250,000. I guess, is this the same vein? I'm just trying to get the cost of the rides down. The more we require, the more standards, insurance coverage we require, it's going to bring up the cost of the ride. And so I do appreciate the sponsor coming from $1 million down to $500,000.

I think that's huge, but I thought I'd just give it a shot a little bit lower. Senator Bjorkman.

Thank you, Co-Chair Hall. Through the chair to Representative Kollom, I appreciate the amendment. However, that amount of coverage is not enough to support paying bills that we have, real-life examples that have been incurred by people that have been in accidents. So I can't support the amendment. I think $500,000 is an acceptable level.

Um, as we look at this issue further, I think it's worth exploring what is a continued appropriate level as we are likely to look at some of these same statutes in future years. So thank you for the amendment. Thank you. I can't support it. Thank you, Senator Bjorkman.

Representative Sadler. Thank you. I'm going to support Amendment 7.

My understanding is that even $250,000 uninsured motorist coverage is a lot more than other states require in similar circumstances. And I'm concerned that what is kind of a trend in the building where a good idea gets loaded down with even more good ideas and to the point where all those accumulated good ideas make for a bad idea. So I think if we want this bill to go through, I think this is an appropriate amendment. I like uninsured motorist coverage, but I don't want to overly burden the industry or the driver. I think $250,000 is a good compromise.

Coach Airfields. Yeah, through the chair, I just wanted to share why I won't be supporting it. I did have a constituent who was seriously injured by an uninsured motorist. The hospital bills actually fell between $250,000 and $500,000. Unfortunately, it's not that hard for hospital expenses to rise that high, so that's why I'm going to stick with the bill sponsor on this one.

Representative Sadler. No, I'm fine. Do you want me to repeat? No, I heard it, but just for future. Thank you.

Okay, additional comments or questions from the committee? I just wanted to point out, so since the prior amendment failed and this will fail, I just, I just want to reiterate, this will cost— this, this will increase rates for drivers, period. This is the cost of living, and there's a lot of low-income people that use TNCs, and I I just don't— I don't agree with just raising the cost for the drivers and lowering the, the number of rides that the drivers are going to make. Thank you, Representative Kulum. Okay, with that, I maintain my objection.

Will the clerk please call the roll?

Representative Carrick? No. Representative Freer? No.

Representative Nelson? Yes. Representative Sadler? Yes. Representative Colombe?

Yes. Co-chair Fields? No. Co-chair Hall? No.

3 Yeas, 4 nays. With a vote of 3 yeas and 4 nays, Amendment Number 7, also known as S.5, has failed to be adopted. Representative Kollom, do you have another motion? I will not be offering amendment 8. Okay, with that we have finished amendments.

Does the committee have any final questions or comments for the bill sponsor?

Representative Sadler. I will reiterate my early comments. I'm concerned when a good idea gets loaded down with other good ideas because you eventually reach a failure, and I fear that we've reached that. Thank you, Representative Sadler. Senator Bjorkman, do you have any closing comments for the committee?

Thank you very much, Co-Chair Hall and members of the Labor and Commerce Committee. I greatly appreciate all the time that the committee has spent on this process. The, the process that we have undertaken here is really digesting what is a delivery network Company Act, very similar to a Transportation Company Act that was passed about 10 years ago or so, and it's no small feat.

As we look at where the bill sits currently, there are some, some things that likely need to be solved with the bill in order for it to become law this year. I think what is at stake is pointed out through many of the constituents who reached out to our offices, where we had drivers who are driving for delivery network companies. Um, my constituent, it was Walmart Spark, and Walmart Spark refused to provide them with insurance while they were logged on to the digital network and they were on their way to Walmart to get things to bring to someone else. And under this scenario, they would be covered. But if the bill doesn't pass, they will not be covered.

Similarly, if a person is in a rideshare vehicle or a commercial taxi and they're hit by someone who does not have insurance, they are offered additional protection by this bill. I think as we look at what a DNC statute looks like, um, this is close. There was another amendment contemplated but not offered that would have ensured.

That drivers for DNCs in period 1, when they're logged on to the digital network, making sure that they are covered. That remains a concern I have. My desire was to cover all the insurance gaps and ensure that they are covered.

The version of this bill right now, I believe, does that. Providing an additional verification would have ensured or provided additional layer of protection. I understand that some apps are not the others, and their business model is not like the others. And if personal lines insurers and APCIA, the American Property Casualty Insurers of America, that insurance association does not want to cover DNC drivers while the app is on, that's a choice. Similarly, if DNC companies and apps do, do not want to cover those drivers while the app is on.

That's a choice. However, then who covers those drivers? Some of them may be able to buy an endorsement to cover them during that period of time. However, that is an extra step in a purchase of a product at a period of life or in a financial state of life where that's probably not the first thing on that person's mind if they're driving for a D&C company for cash. That's a hole in the bill that I think will likely get taken up at a later date.

I have a strong desire to make sure that they're covered. And the end coil model is what it is, 'cause it's kind of predictable and reliable and treats everybody the same. We try to deviate from that to allow some room for DNCs, to save cost. And at the end of the day, additional verification wasn't acceptable, which is fine. Like, that is what it is.

But I remain concerned about that. Overall, the insurance coverage came about in this bill because people were uncovered. And that's a problem, simply because they can lose coverage and have a pretty bad day and a series of bad years through significant financial loss. I did want to point out with occupational and accident insurance, that is a significant benefit and protection for these drivers, both TNCs and DNCs. In some ways, that coverage offers more protection than our workers' comp system.

It says something about our workers' comp and liability limits that exist in that system. I don't think the liability limit has been raised from $400,000 It hasn't been raised since I've been alive, I can tell you that. So that's fascinating. But the AUCAC in this bill provides additional coverage. So yeah, thank you for all your work in this bill.

Thank you for hearing me and spending so much time with me these days of May. Thank you. Thank you, Senator Bjorkman. We have comment, I believe, from Coach Airfield. Yeah, one of the interesting things I learned is that when the legislature passed the TNC bill, there were these insurance gaps that the TNCs themselves tried to address for years.

So one of the things I like about this bill is if we're going to address the independent contractor employee status and DNCs, we avoid insurance gaps going forward. And yeah, we can wrestle with costs, but I think it's better not to have those gaps. And I think we're approaching it maybe in a more holistic way this time. So I appreciate the bill sponsor trying to navigate some pretty complicated policy questions. Seeing no further comments from the committee, Co-Chair Fields, do I have a motion?

I move to report House Bill 35, Work Order 34-LS0330/S, out of committee as amended with individual recommendations and accompanying fiscal notes. Object. There has been an objection. Representative Kellum, do you want to speak to your objection? No.

Okay, will the clerk please call the roll?

Representative Sadler? No. Representative Freer? Yes. Representative Carrick?

Yes. Representative Nelson? No. Representative Kellum? No.

Co-chair Fields? Yes. Co-chair Hall? 4 Yay, 3 nay. With a vote of 4 yay and 3 nay, the bill has passed.

Um, there— where am I? So HB 35, Work Order 34-LS0330/s is reported out of committee as amended with individual recommendations and accompanying fiscal notes. This concludes our bill activity for today. We are unsure if we're going to have additional bill work to do, but stay tuned. Wouldn't be surprised if we do.

At this point, the next committee meeting is scheduled for May 18th. The committee is adjourned at 4:26 PM.