Legislature(1995 - 1996)
03/28/1996 01:36 PM TRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 210 PRIVATE MOTOR VEHICLE LICENSING/TESTING Number 522 CHAIRMAN RIEGER introduced HB 210 as the next order of business before the committee. He pointed out that the committee packets contained a marked up version of a proposed CS which addresses many of the concerns previously raised. However, the CS does not delete the contract nor does it address the concern surrounding the administrative hearing. The prime sponsor had serious objections to those changes, so Chairman Rieger wanted to bring them before the committee. SENATOR GREEN moved that the CS be adopted in lieu of the original bill. Without objection, it was so adopted. JUANITA HENSLEY, Driver Services in the Division of Motor Vehicles, informed the committee that the issues she would be discussing were brought before the House last year as the bill moved through the process. She directed the committee to page 5, line 23 when explaining that she wanted an immediate report of a criminal complaint of child molestation or sexual abuse; Ms. Hensley did not want to wait 10 days in these cases. There should also be an immediate report of embezzlement. Ms. Hensley was also concerned that the department does not have an arbitration process. A process would have to be developed. In statute, there is a provision allowing the department to conduct administrative hearings with oversight from the Superior Court. Ms. Hensley proposed that page 6, lines 19-24 be deleted and replaced with "administrative hearings conducted under AS 28.05.141." That would be easier for the department. Ms. Hensley felt that the contracts on pages 7-17 are very cumbersome. It is not necessary to place the contracts in statute because the bill establishes what would be agreed upon. Ms. Hensley referred to page 17, line 8 when suggesting that "preapproval" should be deleted. She expressed concern with the amount of insurance required on page 18, but did not know what amount would be appropriate. TAPE 96-9, SIDE B Number 587 Ms. Hensley said that the department has some concerns with subsection (a) on page 19, lines 10-14 regarding civil liabilities. She noted that the Department of Law also had some concerns with that section and Anne Carpeneti would speak to those concerns. Ms. Hensley thanked the committee and the staff for working with the department on the bill. SENATOR LINCOLN asked Ms. Hensley to repeat her comments regarding performing audits on page 17 of the bill. JUANITA HENSLEY suggested that the word "preapproval" on line 8 be deleted. SENATOR LINCOLN clarified that she was referring to line 15. JUANITA HENSLEY recommended deleting the words "with or". SENATOR LINCOLN inquired as to why Ms. Hensley would suggest that deletion. JUANITA HENSLEY reiterated that she would recommend deleting "preapproval" on line 8 which would provide an option of whether or not to give the person notice of an audit. ANNE CARPENETI, Assistant Attorney General for the Department of Law, reiterated her apologies for not being very familiar with civil law, but she noted that she had talked with the civil division regarding the civil liabilities section on page 19. Ms. Carpeneti recalled that the sponsor said that the purpose of subsection (a) was to create a level playing field, but the state continues to be liable for negligence acts of its agents. HB 210 would give these private agents, third parties, protection against liability for negligence which the state does not have. Ms. Carpeneti recommended that subsection (a) be deleted. CHAIRMAN RIEGER asked if a state employee performing this function would be indemnified from negligence. If someone were damaged from the actions of a state employee would the state be held liable. ANNE CARPENETI believed that was correct. CHAIRMAN RIEGER asked if this clause placed the agent in the same position as an employee would have been in. SENATOR TAYLOR stated that the employee is individually responsible as well as the employee's superior. There is an agreement in which the state indemnifies. He noted that there has always been discussion regarding whether or not those indemnification agreements should be extended to third party contractors. CHAIRMAN RIEGER was under the impression that state employees were not personally liable. Number 542 SENATOR TAYLOR said that under HB 210 no one would be held liable, the bill provides a blanket civil immunity. There has to be proof of gross negligence before there can be any recourse. CHAIRMAN RIEGER asked if subsection (b), lines 15-17 were the lines that do not allow the action against the state. ANNE CARPENETI clarified that he was referring to subsection (a), lines 10-14. SENATOR TAYLOR explained that lines 10-14 provide immunity for the contracted agent. Subsection (b) provides a complete blanket of liability immunity for the state and all of the agents of the state. ANNE CARPENETI pointed out that the immunity is provided for the third party agents not the employees of the state. SENATOR TAYLOR pointed out that if subsection (a) were deleted, then the state would receive the blanket of immunity from the person which the state licensed and placed in the field. ANNE CARPENETI said that the state is responsible for the employees that work for them. However, the purpose of subsection (b) is to protect the state against actions of third parties. HB 210 does require that the third party be insured against negligence, gross negligence, and other acts. CHAIRMAN RIEGER believed that the state must use agents to perform state functions in other cases. In such a case, is the person performing the function indemnified? ANNE CARPENETI said that she would have to research such a scenario. SENATOR TAYLOR believed that there is an indemnification agreement that does exist between the State Troopers and Alaska. The troopers are indemnified by the state. ANNE CARPENETI referred to page 5, lines 16-18 when saying that the Department of Public Safety would recommend zero tolerance. This bill would allow people with .03 BAC to be able to give driving tests. CHAIRMAN RIEGER did not have a problem with zero tolerance, but understood that testimony indicated that federal CDL language included this language. ANNE CARPENETI said that was correct for the CDLs, but some states say that .02 is zero tolerance. SENATOR TAYLOR inquired as to why the states would use .02 to mean zero tolerance. Number 493 ANNE CARPENETI believed the reason for that was to not make criminal an act of driving after drinking a glass of wine with dinner. The bill currently going through the legislature discusses zero tolerance for juveniles driving and drinking. Ms. Carpeneti noted that the Department of Law was taking that position as well. CHAIRMAN RIEGER understood the concern. SENATOR TAYLOR discussed how blood alcohol level is determined by lots of factors such as size, weight, tolerance, age, etc. which all vary individually. SENATOR GREEN interjected that what should be addressed was someone going out for lunch and having two or three drinks and returning to administer a driving test. SENATOR TAYLOR discussed the studies on blood alcohol levels. CHAIRMAN RIEGER asked if anyone else was present to testify on HB 210. Chairman Rieger said that he wanted to determine if the committee was interested in changing any of the points that have been raised. Is there interest in lowering the standard on page 5, lines 16-18? SENATOR LINCOLN replied yes. SENATOR GREEN inquired as to how that would be phrased. CHAIRMAN RIEGER believed it would be legal to say that a person could not be visibly under the influence. There must be some way in which to address that issue. SENATOR TAYLOR pointed out that negotiated contracts would address that issue. CHAIRMAN RIEGER asked if there was interest in tightening that language. There seemed to be interest in tightening that language. Chairman Rieger asked if there was interest in adding the language "within the next business day" or "immediately" upon a criminal complaint. That language is on page 5, line 22-23. He informed the committee that the drafter had to choose because the earlier draft had both. SENATOR GREEN asked how the immediate language would be used. CHAIRMAN RIEGER believed that it would be best to specify a time limit. Number 431 SENATOR TAYLOR pointed out that paragraph (3) on page 6 which says, "before the end of the next business day after the agent or examiner is charged." CHAIRMAN RIEGER clarified that language was removed by the drafter because it conflicted with the "10 days of" language. Chairman Rieger explained that line 23 would have to be deleted and criminal complaints would have to be dealt with in a separate section. SENATOR TAYLOR mentioned that currently civil and criminal law was being mixed. CHAIRMAN RIEGER asked if there was interest in placing the criminal language in its own section. There was interest. He asked if the committee was interested in removing the arbitration requirement on page 6, lines 20-24. SENATOR TAYLOR agreed. He said that he liked arbitration as a resolution, but it is not necessary to create a big fiscal note on the bill. CHAIRMAN RIEGER referred to page 7, line 19-page 17, line 5 regarding whether the committee wanted to leave the contract in the bill. SENATOR TAYLOR indicated that he would like for the contract to be deleted. If the department or the contractors wanted to change the contract, they would have to come before the legislature in order to do so. CHAIRMAN RIEGER asked if the committee wanted to delete "preapproval" on page 17, line 8. SENATOR TAYLOR suggested deleting the language "with or" as well on line 15 of page 17. CHAIRMAN RIEGER informed the committee that he took silence to mean consent or interest in changing these issues. He referred to page 18 regarding liability. SENATOR TAYLOR recalled previous testimony that the liability established in the bill was reasonable and could possibly be a little higher. CHAIRMAN RIEGER believed that the department had requested the increase in liability insurance. What should the exact amount be for the liability insurance requirement? A discussion ensued regarding the amount of insurance that should be required. ANNE CARPENETI offered to find out what the norm is from the industry and provide that information to the committee. CHAIRMAN RIEGER was interested in the premiums of an air taxi operator. Number 387 SENATOR TAYLOR recommended deleting lines 10-17 on page 19. SENATOR LINCOLN summarized that the bill would then contain no references to civil liability. SENATOR TAYLOR commented that it would be the same as today; no one's rights are being taken away. CHAIRMAN RIEGER asked if it was correct that an individual would be liable unless there is a statute stating otherwise? SENATOR TAYLOR said that negligence has to be proved. ANNE CARPENETI explained that most of the contracts that allow the state to contract with third party agents include hold harmless provisions for the state. If lines 15-17 on page 19 are deleted, the hold harmless provision would be deleted. The Department of Law would oppose that deletion, but the department would support the deletion of subsection (a). SENATOR TAYLOR said that no one would be granted a contract without a policy of insurance that shows the state as the primary insurer on the policy. Requiring the contractor to have insurance means that the contractor would serve as the first line of defense on liability for the state. Then the state would say that the state should be held harmless for any possible liability the state had. Number 363 ANNE CARPENETI clarified that this only holds the state harmless for damages resulting from the act or omission of the agent or registrar. SENATOR TAYLOR believed it to say that the state would not be liable if the state does a poor job of inspecting an agent and continues to allow the agent to operate. What is the state's motivation to ensure that a bad agent is not allowed to operate? CHAIRMAN RIEGER read this to mean that the state was being held harmless from the act of the third party, but not from an omission of the state in how the state has contracted or qualified that agent. SENATOR TAYLOR said that was dependent upon the definition of "performing duties." Senator Taylor surmised that the state could not be sued by any injured third party because of an action of an agent. This individual would be an agent of the state. SENATOR LINCOLN agreed with Senator Taylor. In the interest of the state, it would be good to leave the language in the bill because the state would not be sued. However, the state should also be held accountable if the state utilizes an agent on its behalf. ANNE CARPENETI pointed out that these agents are not like state employees, they are independent agents. Ms. Carpeneti agreed with Senator Lincoln that the agent is described as an agent of the state as this is drafted, but Ms. Carpeneti did not envision these individuals as agents of the state. SENATOR TAYLOR emphasized that these individuals would be agents of the state for carrying out certain functions of state government that is being authorized to contract with them. CHAIRMAN RIEGER posed the following situation: an employee stationed in a remote location drives their truck into a store. In that case, the state would be liable. Taking this out would not be inconsistent with the level of liability that the state has with an unsupervised employee. ANNE CARPENETI said that the problem is the level of control the state has over these independent agents. Number 312 SENATOR TAYLOR said that in order to cover this provision that is not in law, the state requires that the agent contractor hold the state harmless and a specific amount of insurance is also required. He pointed out that the same is done with day care centers. This insurance basically insures the state. Senator Taylor believed this to be backwards. ANNE CARPENETI suggested that Ms. Hensley could give the committee an example of the type of agent relationships. Ms. Carpeneti understood that garages that repair cars would be able to issue renewed registration for automobiles. CHAIRMAN RIEGER said that already occurs. SENATOR TAYLOR noted that I/Ms are also done in this way. JUANITA HENSLEY explained that emissions testing stations in Fairbanks and Anchorage were already allowed to renew registrations. HB 210 would allow the department to contract with groups such as Budget Rent a Car. The department does not have control over those employees, the department only has control over the type of work they do. Ms. Hensley pointed out that anyone who performs this work and has access to the computer systems must pass the same background investigations that the department's employees have to pass. She informed the committee that the department is in the process of forming an agreement with third party testing for commercial vehicles. That third party may be an individual or a business such as Princess Tours/Greyline who would not necessarily have to pass the background investigations, but would have to pass the standards established in the contract. The department has no control over those employees other than what is specified in the contracts. SENATOR TAYLOR said that there is a middle ground. These employees could have a hold harmless agreement with the person authorized to perform the work. That individual could be individually responsible and hold the state harmless from liability. HB 210 creates a blanket immunity for the state. SENATOR LINCOLN recalled a question relating to the meaning of "professional manner" on page 5, line 5. JUANITA HENSLEY explained that HB 210 has a section requiring that employees meet all the certifications, training, workshops, seminars, and other instructive meetings. SENATOR GREEN asked if that was on page 4, line 7. JUANITA HENSLEY pointed out that there is a professional code of ethics of the American Association of Motor Vehicle Administrators Certified Driver Examiner Program. This code of ethics would be adopted in regulation. CHAIRMAN RIEGER said that HB 210 would be before the committee again either as a CS or with prepared amendments.