House Public Health, Welfare and Labor Committee Part 2
Video
Transcript
Bills discussed (3)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
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HB1915
· 5 mentions in transcript, chapter
Matched: “We are going to discuss House Bill 1915, House Bill 1915. Madam Chair, Tyler. Madam Chair, you may…”
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Pre-2017 bill | ||
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HB1991
· 1 mention in chapter
Matched: “HB1991”
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Pre-2017 bill | ||
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SB955
· 1 mention in chapter
Matched: “SB955”
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Pre-2017 bill |
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Representative Allen, since I don't have a vice chair and I'm getting ready to run a bill, would you mind coming up and running
Speaker 6
0:20
the meeting until Representative Woods gets back? No problem.
Speaker 8
0:28
All right. There he is. There he is. All right. Okay,
members, we are going to start back on the calendar.
We are going to discuss House Bill 1915, House Bill 1915. Madam Chair, Tyler. Madam Chair, you may present your bill when you're ready. That is correct. 1915. Thank you, Mr. Chair. If I may have my
guest introduce herself for the record. My name is Amy Sanders. You're going to need
Amy Sanders
Unverified
1:09
to get real close. My name is Amy Sanders. All right. Thank you.
Members, every once in a while you get something that comes to you through the work you do in your district, and when your constituents bring you an issue. And oftentimes, I don't know about you all, but sometimes those turn out to be the most heartfelt and
the ones that are more personal to us. House Bill 1915 does mandate coverage for a gastric pacemaker to alleviate the symptoms of gastric paresis.
Now, I'm not very, personally, I'm not very crazy about mandates either, but sometimes that's the way we have to go. We have, in this session, if you recall, we mandated coverage for the coverage of autism. This is a little bit different, though. Gastric paresis, and Amy will tell you a little more about it when she gets to her testimony, is not a disease that has anything to do with obesity.
The gastric pacemaker allows a person who has that disease to have a
normal life by stimulating the intestines and the bowels in order to have them work normally. I'm recognizing we have lunch in front of us, so I'm working a little hard to be a little careful with
that. But so today we have a couple of insurance companies in the state who provide coverage for gastric pacemakers.
I've talked with one of the manufacturers of this device, and it is estimated that there would be about 10 to 15 persons per year in the state of Arkansas, in the whole state, who would need this device. You will have heard, I'm sure, that it is experimental therapy. Unfortunately, our doctor who was going to testify for us today is still in surgery,
but he would tell you that while it is rare, and that's Dr. Brizolera who does surgery here in the state of Arkansas, while it is rare, the surgery is rare, it is not experimental. The FDA approved this device in the year 2000.
You will probably have also heard that there are some insurance companies in the state who exclude this coverage and who believe it's experimental.
Well, one of those insurance companies, as I understand it, is United Insurance Company, and we understand that the
United Board has a national policy and their board took a
positive stance on this therapy in January 2011. So there's been recent movement within even the insurance companies to date.
But I think the most important thing for you to hear is Amy's story And Amy will tell you how she contracted this disease,
what this device has meant to her, and then I'll close with a few comments, and then we'll take questions. My name
Amy Sanders
Unverified
5:00
is Amy Sanders, and I first want to thank the Public Health, Welfare, and Labor Committee for allowing me to come before you this morning or this afternoon to ask for your support of House Bill 1915.
That would require all insurances in Arkansas. Speak into
the mic just a little bit closer and maybe turn the volume up just here. Okay. Okay.
Amy Sanders
Unverified
5:25
Okay. Thank you. My name is Amy Sanders, and I first want to thank the Public Health, Welfare, and Labor Committee for allowing me to come before you this afternoon to ask for your support of House Bill 1915. that would require all health insurances in Arkansas to cover treatment for gastroparesis,
specifically for the gastric pacemaker or stimulator. Gastroparesis is a debilitating neuromuscular stomach disorder where food empties from the stomach more slowly than normal, causing severe nausea and vomiting. Gastroparesis patients can experience a variety of upper gastrointestinal symptoms that prevent them from eating normally, which can lead to severe dehydration, weight loss, and eventually life-threatening electrolyte imbalance and malnutrition.
Other symptoms include nausea and vomiting occurring several times a day, repeated hospitalizations and supplemental nutrition needed due to the nausea and vomiting, weight loss or excessive weight gain over the past years due to improper nutrition, abdominal bloating and or pain, early satiety or fullness, heartburn, changes in blood sugar levels, and lack of appetite. Gastroparesis is usually caused by two origins,
an idiopathic and unknown origin or a diabetic origin. I have had gastroparesis for the past 15 years. While I was on a church mission trip to Honduras in 1996, I contracted Duny fever, which is a form of jungle fever. This fever triggered a gene which turned into gastroparesis. After many hospitalizations and testing, I was near death and was relying on feeding tubes to keep me alive. I was finally diagnosed with gastroparesis, which there is currently no known cure.
I was referred to a specialist in 1996 in Memphis, Tennessee, Dr. Thomas Abel. He was able to implant a gastric stimulator pacemaker in September of 1998. This pacemaker helps control the symptoms of my nausea and vomiting along with pain control. This pacemaker is currently implanted in a pocket made under the skin on my lower right abdominal region that has leads that attach to the intestines which receives electrical impulses to help stimulate the nerves
the nerves to move the food along through my digestive tract. After receiving the gastric electric stimulator pacemaker, I have been able to sufficiently recover my health and graduate from college with a master's degree in occupational therapy where I currently work with adults with developmental disabilities at Pathfinder Incorporated in Jacksonville. At the time of my initial implant in 1998, this treatment was considered experimental by the FDA, and my insurance refused coverage on this basis.
However, this procedure has been approved by the FDA since the year 2000, and my insurance has still refused to cover this condition. Some insurances in Arkansas cover this procedure, but my insurance does not cover this procedure, even though my insurance company does cover this procedure in other states. Doctors with whom I have visited will estimate that there's approximately 10 to 15 people in Arkansas that would require gastric pacemaker or stimulator in a given year.
My doctor, who is now located at the University of Mississippi Medical Center in Jackson, Mississippi, estimates that he treats approximately 100 to 250 patients a year from Arkansas, but not every one of these patients would require the gastric stimulator. I am not asking for help from you just for myself, but for others in Arkansas that may have experienced these same insurance issues as I have. However, if an accident or if maintenance is required on the device, such as a battery
change or a lead replacement, my insurance company will not cover me. Please, I ask for your support of this bill, and again I want to thank you for allowing me to bring this issue before you and I'll be happy to answer any questions that
you may have any questions from the committee at this time represent Wagner you recognize of
Representative Mark Perry
Unverified
10:01
a question thank you I believe this may have been told to
me but would you repeat how much those devices cost and the gastric pacemaker
Amy Sanders
Unverified
10:11
itself if the battery has to be changed it's about twenty thousand dollars if the leads have to be replaced in the battery changed it's about twenty five thousand dollars and and the initial when unit is that
Representative Mark Perry
Unverified
10:25
when you initially get the device it cost that much or just how for the maintenance of the device
Representative Charolette Wagner
Unverified
10:31
that's for the maintenance and how much is the initial cost and it was twenty five
Speaker 19
10:38
thousand when I got it back in 1998 and I think the cost now is somewhere between
Amy Sanders
Unverified
10:43
between 35 and 40,000 for the initial device. And there
Representative Mark Perry
Unverified
10:47
are somewhere between 10 and 20 per year needed in Arkansas, is that correct? Between 10 and 15, is what we
Speaker 38
10:55
were told. Thank you. Thank you, Mr. Chair. Thank you, Representative Wagner.
Representative Mayberry, you were recognized with a question. Thank you, Mr. Chair.
Representative Andy Mayberry
Unverified
11:09
I appreciate your being here and your very heartfelt comments and the situation that you've been in. You talked about your insurance company saying that it was experimental, but that the FDA since then has approved that. I guess one of the outstanding questions is in my mind, and this is actually probably a question more directed toward Representative Tyler. In the bill itself, on page 2, lines 16 and 17, in the actual language of the bill, it
says that the effectiveness of the Entera therapy for this use has not been demonstrated. And I just wondered
if you can address that for us in some way. What
we're trying to make sure that is clear here is that there have been no studies in in
terms of the enterotherapy, we want to be clear with that, there have been no studies to that, but part of that is because
it is such a rare occurrence, I mean 10 to 15 people
a year in Arkansas who need the device, it is such a rare occurrence, so what we're attempting to do here is to
let you know that while the FDA has approved it, there have been no studies to substantiate the effectiveness of it, what we have is patients, we have Amy here and And I know I've heard from three or four other patients since this
bill has been introduced who have testified to the effectiveness of the treatment. Thank you.
Representative Mayberry. Representative Wilkins, you're recognized. Motion at
Representative Andy Mayberry
Unverified
12:52
the proper time, Mr. Chair. Okay. Your
motion is noted. Representative Ward, you're recognized with a question. Thank you, Mr. Chair. Did
Representative Ward
Unverified
13:00
I understand you to say – excuse me. Did I understand you to say that your insurance company, the same carrier, pay for this type of surgery in other states, but not in the state of Arkansas? And
the reason? Representative Ward, excuse me, I have a list here of the insurance companies that do cover
it, and there are a number of insurance companies like Amy's in other states who do provide coverage for it. We also have two insurance companies here in the state of Arkansas who provide coverage, and that would be Benefit Management of Arkansas and the Arkansas Pipe and Trades organization. They cover it. And as I mentioned earlier, UnitedHealthcare, on their national policy, has taken a positive stance on this therapy as recent as 2011.
So it is covered by a number of insurance companies, but just not Amy's and not everyone in the state. You also will have testimony here today, if we need to, from the Employee Benefits Division of the state, looking at our employee benefits, and they will, I believe, testify that it will have negligible impact on state benefits because it's just such a small number. Representative
Lee, you're recognized with a question.
Speaker 57
14:32
Thank you, Mr. Chairman. Thank you for being here today. Representative Mayberry asked one of my questions. I understand that the Mayo Clinic still considers this experimental. Representative Lee, I don't know the answer to that. Okay. 18 and 19 on page 2. What medical centers in Arkansas have approved this device already? I don't believe
it's approved in any medical center in Arkansas except for the maintenance
of it. Amy may speak to where she gets
Amy Sanders
Unverified
15:12
her care. There was a doctor at UAMS that was putting them in. There's a doctor in Harrison currently that puts the devices in. I still go to the University of Mississippi Medical Center in Jackson to get my treatment if a device needs to
Speaker 57
15:30
be changed. Okay, so no medical – you're saying maybe one medical center in Arkansas? I think
she said two, and obviously I didn't have all the information, but she indicated
UAMS in a medical center in Harrison.
Speaker 57
15:47
And you said the cost for the premium is going to be negligible?
me what negligible is? Pennies per month to the participants in any
Speaker 57
16:08
particular medical plan. And I appreciate that you brought up the autism mandate that we passed earlier, and as you
know, I supported that. And one of the reasons after listening to the testimony was that what we were asking for had been proven. There were proven results. It was not experimental. And one of my concerns here is that I'm not
seeing that with this. Representative Lee, I just submit to you that it is a rare condition. Therefore, we have a limited number of people where controlled tests could be done. It is an FDA-approved device.
There's been about 10 to 15 per year who have been able to have that device in Arkansas, and I think we see a very good evidence of it worked with Ms. Sanders here today. She has completed her education. working she's
being a contributor to our state you know if she didn't have this device sometimes to me insurance sometimes is illogical because if she didn't have this device and it didn't work and she was on a feeding tube in a
hospital not able to care for herself which is what can happen with this disease then her insurance would cover it so it seems illogical to me but I do believe we have proof that it does work. We have proof sitting right here. And her doctor, Dr. Brizalera, who unfortunately couldn't get out of surgery to get here, would have testified that it does work with some of his patients. Thank
you. Thank you, Representative Lee. Representative Perry, you recognize the question.
Speaker 72
17:57
Thank you, Mr. Chairman. Representative Tyler, you mentioned there's two other carriers in the state that provide the benefit do you have
Representative Mark Perry
Unverified
18:05
any claims data as far as the amount of claims they've paid no sir I don't okay
Speaker 76
18:14
I'm just kind of interested to know how many people actually did that but we don't have any data
on that the data we have is 10 to 15 in the state that covers you know all all of the residents
the state of Arkansas all right thank you thank you mr. chairman thank you Representative
Representative Mark Perry
Unverified
18:37
Perry, Representative Wagner, are you recognized with the question? Thank you, Mr. Chair. I just want to be sure I'm understanding if this is passed, would this mandate that the insurance cover both the initial
Representative Charolette Wagner
Unverified
18:51
implant of the device and also the repair? Yes, ma'am. Okay. Thank you.
Thank you, Representative Wagner. Representative Malone, you're recognized with the question.
Representative Stephanie Malone
Unverified
19:05
Thank you, Mr. Chairman. And I apologize. You may have said this earlier. What's the reason behind when the insurance declines the claim? What's the reason they give? They just say it's
Amy Sanders
Unverified
19:15
excluded in my policy. They don't give a medical reason. They just say it's because it's not included in my
Representative Stephanie Malone
Unverified
19:21
policy. But they do cover it in other states? Is that my understanding? So did you have your surgery in another state?
Amy Sanders
Unverified
19:28
I did, but I didn't have insurance.
Which state did you have it in? Mississippi. In Mississippi. Yeah, that's where you had the initials. Well, I've had it in Tennessee. My doctor was in Memphis. That's
Speaker 28
19:40
where I initially got it. And then he moved to Mississippi. So
I've had it both in Tennessee and Mississippi. Okay. Okay. Thank you. Mr. Chair, if I
may, I'll just give you some Blue Cross of Alabama, Blue Cross of Alaska. All of these are Blue Cross. California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, Missouri, Nevada,
New Hampshire, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Texas, Utah, Vermont, Virginia, Washington, and Wisconsin covers it. Aetna, Anthem, Cigna, Health Plan of Nevada, Health Net, Humana, Independence, Blue Cross, Medica, Medical Mutual of Omaha, Tricare, UnitedHealthcare, WellPoint, and WellCare. Those are the ones that have a positive medical policy that cover it. There are a number of other plans that have it on a case-by-case basis.
So it is certainly well established that it is covered care in many, many other states.
Representative Mayberry, you were recognized for
Representative Andy Mayberry
Unverified
20:48
a question. Is there a possibility that studies will, either are being conducted or will be done that can verifiably demonstrate the effectiveness of it? Is that something that's going on that you're
aware of? Mr. Mayberry, not that I'm aware of, other than, again, it's a rare procedure.
The numbers are not there. Amy may be
able to offer some information on that. I'm
Amy Sanders
Unverified
21:15
not sure, but. My doctor in Mississippi has a bunch of studies that he's done about the effectiveness and stuff like that. We could probably
Representative Andy Mayberry
Unverified
21:29
get the information from him. I'm sorry, I appreciate that. I guess I just still have this kind of angst in
my stomach here over if there are studies and if those studies exist,
and I'm not questioning that they do, but why it is written into the bill that it has not been demonstrated to be effective. I guess just in my effort to be honest with the
committee. Okay. Well, I appreciate that. I probably should have
Representative Andy Mayberry
Unverified
21:55
left that language out. No, I appreciate
that. In retrospect, I would have. I do want to just offer, though, that obviously with all the insurance companies that I read off that do cover it, it is respected therapy with those companies.
Thank you, Representative Mayberry. Representative Penarts, you're recognized with
Representative Tracy Pennartz
Unverified
22:25
a question. Representative Tyler, do you have any – in your communications on working on this bill, and I was interested in that list that you read off because certainly there are some of those insurance companies in the state of Arkansas. Was there any rationale that was provided to you how it was that those plans or that
could be covered in other states by those national companies and not covered in Arkansas by those national companies that offered the same or similar insurance plans here?
I'm having trouble with understanding why what the possible rationale could be for denial of that same benefits they may offer in another state. I don't understand
that. Representative Penartz, I have the same issue.
I, again, I said earlier sometimes insurance isn't logical to me, but it was explained to me that they, Amy's insurance did consider it to be experimental. But when I said, but there are other insurance companies, many, many, many other insurance companies who do not consider it experimental, the answer I got was that those companies are independent of the company here in Arkansas.
They each develop their own policies. So it may be that we should ask them
some questions on that. Well, I can
Representative Tracy Pennartz
Unverified
24:04
certainly understand my fellow colleagues on the committee having concerns about mandating something that is considered. Is it considered to be experimental by FDA or, I mean, who is it considered to be experimental by the Centers for Disease Control? I mean, who's saying that it is experimental?
If the FDA approved this device for use, then who's the final say that's saying it's still experimental? I'm sorry. I don't know. Because, I mean, obviously all these insurance plans are covering it in other parts of the United States. Yes, ma'am. I mean, I can understand the studies that must be done, but I'm having a little bit trouble trying to justify why they cover it in other states and not here.
So if they did, then we wouldn't be sitting here asking this for it to be mandated.
That's correct. I guess I'm not – I mean, I'll just have to wonder about that, I guess. I'm sorry. I can't answer that
question. Thank you, Representative Tyler. Thank you, Representative Penards. Representative Malone, you were
Representative Stephanie Malone
Unverified
25:15
recognized with a question. Thank you, Mr. Chair. those same lines it says received humanitarian device exemption do you know what type of it what type of exemption is humanitarian I'm not sure I
know Amy do you know the
Speaker 31
25:32
answer to that question when there's nothing left that's the last
Speaker 32
25:36
resort that's what so it's okay and just one
Representative Stephanie Malone
Unverified
25:39
quick follow-up but did you take some of the medications that they can prescribe for that and it didn't
it It didn't work? Mm-mm. Okay. Thank you. Thank you, Representative
Malone. Representative Allen, you're recognized with the question.
Thank you, Mr. Chairman. I just want to make a comment. Back about three years ago when I had to go to Henry Ford Hospital, in the state of Arkansas,
we were not doing a lot of robotic surgeries. And if you go back seven years ago, Henry Ford Hospital became the original pioneers. None of the other hospitals wanted to take the risk, none of the other hospitals wanted to do the clinical studies, none of the other hospitals wanted to participate, then all of a sudden they were sending all of their patients to Henry Ford Hospital. And as a result of that, Henry Ford Hospital ended up doing like 10,000 or 12,000 versus
states like Arkansas that just got started, probably doing a couple of hundred a year. So what happened was, these hospitals decided that, hey, we need to do this ourself. So after Henry Ford had taken the risk, after Henry Ford had decided that they were going to do this, then other hospitals came on board. So I think this is the same situation with this young lady here. Once there's a proven track record, but the problem is that you don't have a lot of patients
out there. So you can't do clinical trials and you cannot do clinical studies if you don't have the patients. And then a lot of patients probably walking around with this disease and they don't know they have it. So that's why you don't have a lot of data out
there. Thank you. Thank you, Representative Allen. Are there any other comments or questions from the committee at this time? Representative Lampkin, you are recognized.
Representative Sheilla E. Lampkin
Unverified
27:37
Thank you, Mr. Chairman. I'd just like to ask one question for my own knowledge, really. You said that we talked about how much this costs every time you have to have it replaced or fixed. How often does that happen? I mean, it's not a two or three times a
Amy Sanders
Unverified
27:52
year deal, is it? No, ma'am. Each person is different. It depends on what the settings are for your device. For mine, it's about every three to five years,
Representative Sheilla E. Lampkin
Unverified
28:01
just depending. Okay. That's what I wonder. like sort of with a heart monitor. It varies person to person, but it's not an ongoing, it's a rare thing.
Yes, ma'am. Yeah, okay. Thank you. Thank you, Representative Lampkin. Are there any other questions or comments from the committee at this time? Is there anyone here in the audience that would like to speak for the bill? Is there anyone here in the audience that would like
to speak against the bill? Representative Tyler, would you like to close for your bill? Thank you, committee. I just would like for you to think about this. Amy's sitting here with a master's degree working for pathfinders in a field that we all feel is important to us.
She is a contributing member of our society as a result of this treatment. She's tried many other treatments. She's tried lots of different medications. She's even tried medication that you have to buy from Canada that hasn't been approved in the United States. She has to buy it in Canada to do it. And that didn't work for her. And I believe many other patients will go through the same kind of protocol. But this is a device that will allow her to lead a normal
life and to be a contributing member of our society.
And I would appreciate a good vote. Thank you, Madam Chair. Representative Wilkins, you're recognized with a motion? A motion do pass. If a motion do pass, all in favor say aye. Aye. Those who oppose. It sounds like the ayes have it. Congratulations,
Representative Tyler. Your bill is passed. Mr. Chair, could I take lessons from Representative Hall and run Senate Bill 955 for Senator Johnny Key?
Sure. What is that? Okay, Senate Bill 955, Senate Bill 955.
I have a member close to me that's saying only if Representative Cozart can go next. But anyway, Madam Chair, you may
present your bill when you're ready.
Teresa Marks
Unverified
30:20
Thank you. My name is Teresa Marks. I'm the Director of
the Arkansas Department of Environmental Quality. Thank you. Senator, excuse me, Senate Bill 955 by Senator Johnny Key is an agreed upon bill by the Department of Environmental Quality and the Arkansas Oil Marketers Association. There are two things that need to be addressed. There needs to be clarification in the statute that details when eligibility for the trust fund can be transferred from the entity owning the site when a release occurs to the entity
who is purchasing the site and agrees to take responsibility for the cleanup. There are requirements in the bill to make sure that the person purchasing the property has legal and financial capacity to complete the cleanup. And then the second section deals with the ownership of large pieces of expensive equipment that are used in cleaning up a site contaminated with gasoline and diesel. The language in the bill will allow the Department and the industry to formulate regulations to
deal with this problem. Currently there is a question of who actually owns the equipment and who has the insurable interest in the equipment. We'll be glad to take any questions that you might have. Thank
you, Madam Chair. Are there any questions from the committee at this time? Representative
Representative Tracy Pennartz
Unverified
31:50
Penarts, you recognize? I just want to be clear under this bill. This is something I've been concerned with because we have some problems at Fort Smith
where we had a company that left and never cleaned up the site, never made any attempt to, was not concerned as a corporate citizen about the cleanup of the site, and then we he had an explosion.
And does this bill in any way clarify the liability, even if a sale of the property is made, whose liability, I'm trying to determine from the couple of paragraphs that you've
added here, who is, are the subsequent owner and the prior owner equally responsible for the cleanup, or does the purchase of the property by the subsequent owner transfer any and all liability to the subsequent owner?
Teresa Marks
Unverified
32:53
The original owner maintains liability, even though what you're actually transferring is the ability to be eligible under the trust fund.
So if you're selling your property, you have eligibility, you've paid your fees, you've done everything you're supposed to under the trust fund, then you will still – that new owner will still be able to use that trust fund eligibility to have the site cleaned up. But the old owner is still going to be liable. If we should have to go back, if the amount of cleanup exceeds the $1.5 million that is generally – or $1 million or $1.5 million that's third party, if it exceeds that,
Speaker 126
33:31
the original owner will still be liable.
Representative Tracy Pennartz
Unverified
33:34
Because I certainly can see how an owner might pass on his or her liability. I just want to make sure that whether it's the prior owner or the subsequent owner, that someone's responsible other than the state being on the hook for the damage that's done. Can you tell me that this does that? Yes,
Teresa Marks
Unverified
34:02
ma'am. There is still the responsible party.
Now, if an owner wants to contractually pass on his liability and the other person agrees to take it, then that's between them, but the state will be looking back to the person who
Representative Tracy Pennartz
Unverified
34:16
is legally responsible. MS. Okay. Yeah. I mean, that's between them and private contracting, but someone is going to be on the hook other than the state for the cleanup caused by the business that went on in that location. MS.
Yes, ma'am. MS. Okay. Thank you. Thank you, Representative Penards. committee.
Is there anyone here in the audience to speak for the bill, against the bill? Madam
Chair, would you like to close for your bill? We're closed. Okay. What is the will of the committee? We have a motion. Representative Wilkins. Do pass. Motion do pass. All in favor say aye. Those who oppose, ayes have it. Congratulations, Madam Chair. Your bill is pass
let's see here we have the next bill what is that representative
Speaker 131
35:15
Oh Everybody everybody Sorry committee just one moment, please. Thank you
And present your bill, House Bill 1991, 1991. And there's an amendment being passed out, so I'm going to wait a minute here and let the members look at that. So we're just going to hold off for a minute.
I kind of like when an amendment gets passed around for everybody to have a few moments to at least review it before we vote on it. So Representative Kosar, thank you for coming in today and running your bill. And is there any discussion on the amendment at this time?
I do have a motion from a committee member. Representative Allen, you're recognized. Motion to adopt. Okay. We have a motion to adopt the amendment. All in favor say aye. Those are opposed. Ayes have it. The amendment has been adopted. Representative Cozart, if you're ready, you may present your bill. Thank you, Mr. Chair. I would like
Representative Bruce Cozart
Unverified
37:40
to introduce Julie Mills. She's here with me today from the Arkansas Home Builders Association.
thank you madam chair sorry to keep confusing
Representative Bruce Cozart
Unverified
37:55
things here we would like to present our bill this is a an amendment to the Arkansas law concerning the residential building contractors committee to rename the to me in the name of the residential building contractors committee and for other purposes it explain that bill just a little bit basically it's going to require for a remodel or repair contractors, home improvement type contractors to be added
to their listing. It is going to reduce the threshold on them to $2,000. So if they do not do at least $2,000 worth of work,
they will not have to be licensed. But if they do over that in any instance of any part of any contract, they would have to be licensed. Some of the same stuff is going to count, just one house per year, your own residence. This does not affect homeowners, does not affect any home improvement that you do on
your own home, just people that would be
working for you. You can do any of your own work without a license. The subcontractors of these people would be exempt, but if they are a subcontractor that is working for an unlicensed contractor or for a homeowner would still have to be licensed. This clarifies the committee name as Residential Contractors Committee is what this basically does. We do have a grandfathering date in here up through December 31 of this year and after
that you would have to take a test and be licensed. It adds a penalty for working without a license in the state and it's just as before the only The only one that had that was commercial side of that,
so we'll add one in the residential side. The penalty is going to be set at $400 a day due to
covering smaller projects. Our usual fees are up to 3 percent of the project, so 3 percent of a small project would not be very much at all and would not warrant much of a fine, so we took that to $400 a
day. It also does not require a workman's comp for a person if they are doing work under 20,000 unless otherwise specified by law. If they have employees, they would still fall under those rules and regs on that. Basically that's the gist of it.
Speaker 142
40:20
Do you have anything you want to add? Thank you,
Speaker 143
40:26
Madam Chair. I'm Julie Mills with the Arkansas Home Builders Association.
Representative Sheilla E. Lampkin
Unverified
40:30
want to give you a little bit of history behind this bill. This bill was actually requested at the code officials of Arkansas. The code officials throughout the state have been having a problem with, especially after storms, those people who come in and do the work or don't do the work but take the money, the code officials and the contractor's licensing board has no jurisdiction over them and they have to the code officials have to give them a permit and because there's nothing saying the fact that they can't so this
bill is actually really to protect the the homeowner and the consumers out there and we've raised it to two thousand dollars just so that and those little guys who are just doing like little home repairs and stuff especially especially in southern Arkansas, that it will not affect them. This is not a bill that we are trying to put anybody out of business in whatsoever. That's why there's no financial statement. That's why there's no workers' comp required. We have talked to the Subcontractors Association.
We've talked to the Department of Health. And we've talked to the residential side of the Contractors Licensing Board. They all support it. Actually, the Contractors Licensing Board supports this bill. Actually, Greg Crow was the one who wrote this bill. So there is no problem with it being able to be enforced because Greg feels as though his guys can't enforce it. I'll be glad to take any questions.
I do have a question. The Contractors Licensing Board, will they have to add additional staff in order to be able to accomplish this? No. I
Representative Bruce Cozart
Unverified
42:20
used to serve on that board. Actually, I just resigned when elected to this position, and we've already discussed this in the past, and we will not have to add staff at this time. Now, because of, a lot of builders have declined, so we do really need something else to pull that back up to where we were
at the same level we were probably two years ago. But with an increase, if this continues to grow, Yes, at some point,
they may possibly have to add staff,
Representative Butch Wilkins
Unverified
42:54
but at this time, no. Okay. Representative Wilkins, you're recognized. Thank you, Madam Chair. Mr. Cozart, I'm a man who's blessed with a lot of grandsons, and, you know, they're very handy, and is this saying that they'd have to get
a license to work on my house
If it's over $2,000, what about their grandma's house
Speaker 151
43:16
and their aunt and uncle's? No, sir, not on any family member's house. That would fall under family. Does it
Representative Butch Wilkins
Unverified
43:27
just. I think it does say that, yes. I admit to not having read the bill. It snuck up on me. Well, let me see if I
Speaker 154
43:35
can find that real quick. While you're
looking for that, we're going to go on to Representative Smith and recognize
him for a question. Representative Wilkins will come back to you.
Representative Garry L. Smith
Unverified
43:46
Thank you, Madam Chair, and thank you, Representative Kozart. I have a question. Why is your name not on the
Speaker 160
43:57
amendment? I think we had to have Representative
Speaker 162
43:59
Allen. I can answer that question. Okay. Yes, sir, would you? It's a friendly amendment. It's my amendment, but a friendly amendment. Oh,
Representative Garry L. Smith
Unverified
44:05
okay. Okay. Thank you. And you said you could enforce this by how? Is it self-imposed enforcement, or is it just John Doe the consumer calls in a complaint? I know you talked about there might be need for extra staff
later, but right now you don't think so. So how are we going to avoid that for the interim?
Representative Bruce Cozart
Unverified
44:22
Well, as in the residential contracting licensing now, we are pretty well a John Doe calls
in. We do have staff that do drive in certain areas. They cover different sections of the state, and if they see something that's inappropriate,
they investigate that. But most of our calls through the contractor's licensing board is from somebody calling in and saying we do have a problem,
Representative Garry L. Smith
Unverified
44:46
yes. MR. Okay. And so they would file through a civil court for reparations or whatever?
MR. Actually, we do that through the contractor's licensing board. We have a board that sets and hears those hearings. MR. Okay. All right. I think that's all the questions
I have right now. Thank you. Thank
Representative Andy Mayberry
Unverified
45:08
you, Madam Chair. Representative Mayberry, you're recognized. MR. Thank you, Madam Chair. So the history on this is this has basically came about because of, you know, the scam some artists doing the roofing repair after hailstorms and storms and such as that. Under current Arkansas law, them coming in and taking the money and hitting the road,
that's illegal, correct? And wouldn't there already be some sort of civil and possibly criminal penalties against those individuals for doing that? Yes, there is. It's just hard to collect them when they run out
Representative Bruce Cozart
Unverified
45:42
of state. And what we're trying to do is to get those people when they come into state to know that they cannot even bid on a job. And so the insurance companies that are paying them, such as a roofing contractor, if he comes in from out of state and wants to collect on a roofing job, he has to have a permit
or license. He usually has to have a permit, but he needs to have
a license also to get that permit now. Okay. Representative Wilkins, you're recognized.
Representative Butch Wilkins
Unverified
46:16
I mean, they can answer your question now. Thank you, Madam
Representative Sheilla E. Lampkin
Unverified
46:22
Chair. What line on page 7? We're looking at page 7, line 11. A person who acts as a residential builder contractor in the construction of his or own residential unless he builds his home.
Representative Butch Wilkins
Unverified
46:33
Oh, wait a minute. Wait a minute. But
Speaker 171
46:46
I'm referring to – I believe you're referring to like your –
Representative Butch Wilkins
Unverified
46:51
some type of kinfolk's house. Well, I'm referring to page 2, line 4.
Speaker 172
46:57
Means any person, firm, partnership, co-partnership, association. That's any person. Page
Representative Sheilla E. Lampkin
Unverified
47:02
14 – I mean, line 17.
I mean, excuse me, line 14. the owner of a single resident acting as his or her own home improvement contractor on his or her own property. So that's what you would be doing. If your grandsons came in and worked on your home, you would be your own contractor. You would be your own contractor. And
Representative Bruce Cozart
Unverified
47:24
if there's no money exchanging hands on that, I mean, if they're not doing a
Speaker 174
47:28
contract. It don't work that way. I promise you, that don't work that way. Good money, huh? Okay.
Speaker 177
47:36
Yeah, I mean, you know, that just don't work that way.
Representative Butch Wilkins
Unverified
47:40
I still think I have an issue with the home improvement contractor, it means any person. I've got it all. Are
close. Representative Perry, you're recognized. Thank you, Madam Chair. Reading
Representative Mark Perry
Unverified
48:02
this, we're trying to protect the consumer.
Is there any requirement in here for bonding or insurance requirements? There is no
Representative Bruce Cozart
Unverified
48:12
bonding requirement. The only insurance requirement would be if they do work over $20,000 or if
they have employees they would have to carry a workman's comp. We are not requiring general liability or any of that, and we do not. We require that only on home builders now and remodelers that do work over $20,000. So we're not concerned with
Representative Mark Perry
Unverified
48:36
the little jobs under $20,000?
Representative Bruce Cozart
Unverified
48:38
Well, it's hard for a guy that really just makes his
living doing those deals. And this is my business. This is what I do. So I came up doing that, and it would have been hard for me to go out and pay $1,000 to $1,200 a year for workman's comp just to have myself working without an employee when I was starting out. So try not to hurt those people.
Representative Mark Perry
Unverified
49:02
Well, Work Comp addressed that issue with the non-coverage statute. That's your business. Insurance is my business.
And, you know, I have clients all the time that have remodel work done, and they have an issue where there's damage from their contractor, and now they can't find him. So they've got to hire someone else to fix his problem. In fact, I'm currently, I walked into my house yesterday and I couldn't live there because I'm remodeling. So I understand the concern, and my contractor provided me a certificate of insurance along with a certificate of work comp.
But I would be concerned that we're not requiring these contractors to be liable and to protect the consumer on that side. And what insurance
Representative Bruce Cozart
Unverified
49:49
would cover that if he does something
wrong? General liability. General liability does not cover that. If he? Not if that contractor does it wrong. It does not cover that. Believe me,
Representative Mark Perry
Unverified
50:01
I've been there. When you say it doesn't protect the consumer for damages to the house? Yes, sir, if there
Representative Bruce Cozart
Unverified
50:08
is damages. But if he does it wrong, it does not.
Not right now. And then bonding? No, bonding would, yes. Correct. And we looked at the bonding. That was one of the processes we looked at. And
Speaker 151
50:24
bond on the commercial side. But that's the only one that has bonding is commercial side.
Representative Tracy Pennartz
Unverified
50:36
All right. Thank you, Madam Chair. Representative Penartz, you're recognized. I'm sort of confused here, and I'm not a contractor, and
I'm sort of leery of the term contractor since I've been in state agencies and we've had some contracting bills in there, subcontractors.
It's clearly, if you can, yes or no on these representatives or your guests here. And
it's sort of along the same lines, because I've gotten stories from constituents where the amount has been less than $20,000, let's say after we had that ice storm, and they were supposed to come in and they paid $6,000 to have their roof repaired. And then they paid them the $6,000, and then these people were gone, and they didn't do the roof right.
Now, if you're not requiring them to be bonded, how does that constituent of mine who's paid good money that they saved to have their roof repaired, are
they just out of luck because you're exempting a job below $20,000 from being bonded? No, ma'am. That's what
Representative Bruce Cozart
Unverified
51:43
the licensing will do. If they have a problem, they can report them to the licensing bureau or the licensing committee. The licensing committee will bring them in for a hearing, and they will pull their license if they are found
neglect or done it. Unless they are willing to make the restitution, make it right. They have those choices. If they do not, then they will lose their license. Then they cannot pull a permit without that license, so
Representative Tracy Pennartz
Unverified
52:12
they cannot come back and get that until it's made right. If you're in business and you're doing a $20,000 job here and you do five or six jobs that are less than $20,000 and you have gross sales of around $100,000, why would we want to exempt you from the requirement of having to be bonded?
Why would that be a good thing for our
Speaker 151
52:38
constituents to exempt you from being bonded? Ma'am, I am
Representative Bruce Cozart
Unverified
52:41
not bonded on my residential homes now. I'm only bonded on my commercial side. I can build a million-dollar home and not be bonded. Well,
Representative Tracy Pennartz
Unverified
52:49
you wouldn't be building my million-dollar home if you're not bonded. Well, I
Representative Bruce Cozart
Unverified
52:52
have, and I have never had but one person in my whole career ask me to be bonded on one house. Well, you're
Representative Tracy Pennartz
Unverified
52:58
an honest man then. Well, and I hope
Representative Bruce Cozart
Unverified
53:00
that I am. I believe I am. But, I mean, there are people out there, I agree, but that is just not a anybody who's never had that on law.
There are some people that require that, but it's not in the law for residential money. It's not in the law? Not on residential. It is on commercial. That is the only bond I have to have
Representative Tracy Pennartz
Unverified
53:17
when I come out. Well, what's my recourse? Where do I get my money back? Lawsuit. That guy's gone. He's gone. Well, I'm out of luck, in other words, because there's nothing to cover. There's no bond to cover the loss. Well,
Representative Bruce Cozart
Unverified
53:32
any person can ask for that bond. They can ask for anyone to be insured in any way, form, or fashion.
I've had people that I have billed for that ask for a million-dollar liability insurance or $2 million. It's just according to what, you know, if you want to bid that job, they have those requirements. But that's really up to
Representative Sheilla E. Lampkin
Unverified
53:53
each person on each instance. This will give the opportunity because everybody who
Speaker 145
53:57
is licensed, even as a residential right now, they are listed on the website. And when, if this bill passes, the remodelers will also be listed on the website. So these guys that will actually either be grandfathered in or actually apply for a license,
these are guys who are going to be honest guys, per se, that will be listed on the website. And this will give the consumer an opportunity to say, are you licensed? If they say yes, then they can go to the website, to the contractor's licensing board website, And pull their name up. If their name is not on there, they can actually call the contractor's licensing board office and ask them, this guy tells me he's licensed, I can't find him on the website.
They can look him up, and they can also ask him, have there been any complaints against him? And if there has, then they will tell them there's a complaint outstanding or no, there's been no complaints. Otherwise, right now, you would be out of luck. But if this law would go into place, then you can ask them, are you licensed?
Representative Tracy Pennartz
Unverified
55:09
But from what my colleague says, and please correct me if I'm wrong, ma'am,
my esteemed colleague says that I could be out of luck even if someone was licensed. Is that not true? Go ahead. That is true. I mean, if they're licensed. In
Speaker 164
55:31
that case, it didn't matter whether they
Representative Tracy Pennartz
Unverified
55:33
were licensed or not. No, but we have
Representative Bruce Cozart
Unverified
55:37
a recourse through the licensing deal. I mean, what the license does is actually keeps people as honest as possible. If they want to continue work in Arkansas, they're going to treat their customers right and do the right thing.
When they don't and they have a complaint against them, They have to come before this board and justify what that complaint was either right or wrong against them. Once they have that hearing, this board is like a judge and jury. We have a hearing judge and a chairman and six board members, and they do the same thing. They vote yes or no, that you were right or wrong. If you basically said you did wrong, then your license could be pulled. It could be fined. It could be done a lot of things to it. That's probably not all in this bill, but that's just the way that works.
Representative Tracy Pennartz
Unverified
56:22
Well, I appreciate that, Representative. And, Madam Chair, I'm going to yield because I don't want to take up any remaining time where it might be used by my colleagues.
Representative Sheilla E. Lampkin
Unverified
56:35
Thank you, Representative Penartz. Representative Lampkin, you're recognized. Thank you, Madam Chair. I just have one quick little question that's really not much about the bill except on page 3, line 19, there's a date, January the 1st, no, excuse me, line 16. There's a date, July the 1st, 2001. Is that 2001?
Is that grandfathering something in, or should that be 2011?
That is the current bill for the residential. Okay. Yeah, that's the
Speaker 145
57:01
residential part. That's when that went into
Representative Barry Hyde
Unverified
57:12
effect. Okay. Thank you. Representative Hyde, you're recognized. Thank you, Madam Chair. Sorry I
walked in a little late, but I was listening to your comments about insurance and specifically work comp, which I think has been kind of a sensitive or a much-discussed issue
amongst residential contractors and licensing over the last couple of years. And I'm just kind of wondering if I heard that wrong, is that there's no requirement to provide any evidence of or for the builder or remodeler to provide any evidence of as long as the project is less than $20,000 and the contractor has zero employees. Is that right? Kind of, but not quite. If it's
Representative Bruce Cozart
Unverified
57:54
a building contractor that he's going to be building homes, he is required to have it.
Yes, that is part of the licensing law on that. As a home improvement contractor, no, he would not if he has zero employees. If he is a family-run deal with just him and
his son working as a family group, You are exempt from workman's comp. Yeah, but
Representative Barry Hyde
Unverified
58:16
we get back stuck in that thing of, you know, oftentimes what happens, especially rurally, is, you know, you have a father-son who are exempt under the law. But they also got a cousin and an uncle and other folks that also are remodelers.
And they get that maybe not a big job, but now they've got several of those $19,999 jobs, and they're behind. And so they've kind of got the whole family in, and now they no longer really qualify for the exemption under work comp. And that's kind of always been the debate. And, you know, I don't think, you know, if there's no work comp in those situations and someone's injured,
does that injured person have a claim against the property? I
Representative Bruce Cozart
Unverified
59:09
could possibly, yes. so in any instance you go into that i mean that we have discussed this in length too i mean the homeowner has to know that that person does not have insurance and they are liable how did they know well they don't i mean they don't have to but i mean they
Representative Barry Hyde
Unverified
59:23
that's going to happen i agree with you they have to know so i'm just i'm just that's between them and their builder there submarine your bill but but the work comps is a big issue and there's a lot more liability to it
And those exemptions are just a plain old bad idea, but it's not anything I'm going to change today. But so I'm just asking how, you know, because what I'm concerned about is the homeowner, is the consumer. So tell me, how does the consumer know that I falsified an ACORN certificate or that I don't really have any insurance because I'm working under a waiver because it's supposed to just be me and my brother, but actually I've got six of my relatives helping me hang sheetrock today or whatever the case is, and we collapse the scaffold.
There's four people injured, you know, and before they can, you know, get the stitches done, there's four attorneys at the hospital, you know, wanting to
line them up, and that is how this works. So how does the homeowner know? Well, they have to ask
Speaker 151
1:00:19
questions. That's how they have to know. But, I mean, they have to be educated, and most of them
Representative Barry Hyde
Unverified
1:00:24
are not. If the licensing board's not providing that consumer protection, what are they doing? Just simply a registration? Well, I mean. Because
we also have a list of exemptions here. I'm not sure if I can find my place again.
I think I'm on the current bill. Isn't there a bunch of folks that are not a bunch of folks? I'm sorry about that. Aren't there some folks that are exempted from examination that's modified in this bill if they have got three permits in the last year, one permit,
Representative Bruce Cozart
Unverified
1:00:53
or is that old language? That's only on the grandfathering clause. That would just keep them from having to take a test before January the 1st
of 2012. They could grandfather. And that's the same thing we did on the licensing of the original. We grandfathered people in before the actual deadline date to take the test.
Representative Barry Hyde
Unverified
1:01:10
Well, I'm back to that consumer protection, and I really appreciate what you're trying to work on today. But, you know, I'm not sure how grandfathering those folks, again, protects the public Because isn't that test, in fact, mostly contract law and responsibilities of that contractor? I really can't answer that question. I can. I've taken the test. I think that's what it is. Well, I took
Representative Bruce Cozart
Unverified
1:01:38
the test. Don't get me wrong. Yes, it is.
But, I mean, I'm trying to think exactly the way you were wanting
Representative Barry Hyde
Unverified
1:01:45
me to say that, and I probably didn't say it. Well, I'm not wanting to say anything. I'm just, you know, I'm wanting as tight a requirements as we can have. and my colleagues who are homebuilders might not agree with that because I think by and large most homebuilders as well as commercial or industrial builders are good, honest, hardworking people. But unfortunately our reputation is damaged regularly and often by folks who easily maneuver around these few rules we put out.
Representative Bruce Cozart
Unverified
1:02:12
Well, I agree. What we're trying to do is basically not hurt the little guy because I know if you put too many fees and too many regulations on the small guy, then they can't operate. rate. And I'm not trying to do that with them. We're just trying to try to get them into a scope that we know who they are, and if they are
Representative Barry Hyde
Unverified
1:02:31
doing something wrong, we can definitely take care of that. And I appreciate that. And all I'm trying to do is make sure that we don't shortcut anything out there that's available, specifically with insurance, that protects the consumer. Thank you.
Speaker 204
1:02:42
I appreciate your testimony. Thank you, Mr. Chairman.
Representative Hyde, you're recognized. I mean, excuse me, Representative Allen. Yes, you have been recognized. Representative Allen, you're recognized.
Thank you, Madam Chair. One of the things that the banks are requiring
now in order to protect the consumer, they're requiring that you have a financial statement, show your contractor's license, general liability license, and workman's comp license. Now, would you agree that's a form of protection for the consumer? I believe
Representative Bruce Cozart
Unverified
1:03:16
it is on a new construction, yes.
And they're requiring it on some of the remodeling now. Yes,
Representative Bruce Cozart
Unverified
1:03:22
sir, they are. If they're getting a home improvement loan, yes, sir, they are. They're
asking those questions. And I don't know if it's to protect the consumer or to protect the bank or to protect all parties involved, but there is some protection going on now. All right, ladies and gentlemen, Representative
Penartz. Point of order. We're going in at 1 o'clock today.
Representative Tracy Pennartz
Unverified
1:03:42
Yes, ma'am. I was just getting ready to talk about that. And I'm about to get up and leave. I don't know what the chair wants to do here.
Well, it will be up to the committee. We are going to go in at 1 o'clock today. We have to leave to do that. So we have a couple of options. We can move ahead on this bill now, or we can come back and take this bill up at the top of our agenda the next time we meet. Representative Wilkins, you're recognized. Do you have anyone signed up to speak against it? If not, I'm ready to make
Representative Butch Wilkins
Unverified
1:04:10
a motion. No, sir, we do not. A motion at the proper time? Yes, sir. Representative Hyde.
Representative Barry Hyde
Unverified
1:04:22
Just one simple question, I think, a yes or no, almost a yes or no. Can you tell me, where is the Home Builders Association on this
Speaker 199
1:04:33
bill? The Home Builders Association is for this bill. We know and we understand
Representative Sheilla E. Lampkin
Unverified
1:04:37
that this is just a beginning, and we're having to take baby steps because, as you very well know, what we went through to get the license for the residential, what we went through to get workers' comp for the residential guys. This
Speaker 145
1:04:49
is just a step, and if we can get this one passed, I guarantee you we will come back.
Speaker 220
1:04:55
But the Arkansas Home Builders Association endorses this bill. Absolutely. Thank you, Madam
Chair. Representative Cozart, we do have some other questions apparently lined up on this bill. So, unfortunately, what we're going to do is to set this bill aside, and we'll take it up at our very next meeting and committee before you leave we have a decision to make we can't we will have an opportunity to meet again this afternoon or we can meet again on
thursday and it's up to you all we've worked hard today so you all let me know whether you think we should be meeting again this
Speaker 225
1:05:34
afternoon representative hall i'd like to remind the chairman most of the members of this committee sit on state agencies we have a joint meeting with the senate right
after adjournment of the Senate in the House today. I understand. The meeting, though, that's scheduled for the A committees
is in the middle of the calendar and is not after adjournment. It is in the middle of the calendar.
So, I mean, that's still, that doesn't, it's up to the will of the committee as to
Speaker 217
1:06:11
whether or not we meet this afternoon or not. All right,
I hear a motion that we meet this afternoon when we take a recess in the House to get these bills out. So Representative Cozark, if you will come back immediately, we'll hear your bill.
Agenda
Documents
No documents posted.
Speakers
Representative Linda S. Tyler Chair
Unverified
Speaker 6
Speaker 8
Representative Jon Woods Chair
Unverified
Amy Sanders
Unverified
Representative Mark Perry
Unverified
Representative Charolette Wagner
Unverified
Speaker 19
Speaker 38
Representative Andy Mayberry
Unverified
Representative Ward
Unverified
Speaker 57
Speaker 67
Speaker 72
Speaker 76
Representative Stephanie Malone
Unverified
Speaker 28
Representative Tracy Pennartz
Unverified
Speaker 31
Speaker 32
Representative Fred Allen Chair
Unverified
Representative Sheilla E. Lampkin
Unverified
Teresa Marks
Unverified
Speaker 126
Speaker 131
Representative Bruce Cozart
Unverified
Speaker 142
Speaker 143
Representative Butch Wilkins
Unverified
Speaker 151
Speaker 153
Speaker 154
Representative Garry L. Smith
Unverified
Speaker 160
Speaker 162
Speaker 171
Speaker 172
Speaker 174
Speaker 177
Speaker 178
Speaker 145
Speaker 164
Representative Barry Hyde
Unverified
Speaker 204
Speaker 199
Speaker 220
Speaker 225
Speaker 217