Legislature(1995 - 1996)

03/28/1996 01:36 PM TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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              
 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           
 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                 
 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                
 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                
 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              
 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             
 CHAIRMAN RIEGER said that HB 210 would be before the committee                
 again either as a CS or with prepared amendments.                             

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