Legislature(2009 - 2010)BUTROVICH 205
04/08/2010 01:00 PM TRANSPORTATION
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* first hearing in first committee of referral
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HB 366-MOTOR CARRIER INDEMNIFICATION AGREEMENTS SENATOR KOOKESH announced consideration of HB 366. [CSHB 366(JUD) was before the committee.] 1:30:54 PM JEANNE OSTNES, Staff to Representative Craig Johnson, said HB 366 places a provision in statute to clarify that both shippers and motor carriers are responsible for their own negligence or omissions. 1:32:03 PM AVES THOMPSON, Executive Director, Alaska Trucking Association (ATA), stated support for HB 366. He related that one priority of ATA this year is to achieve tort reform with regard to indemnification agreements in motor carrier transportation contracts. Motor carriers must comply with the federal motor carrier safety regulations when transporting goods as well as common law or statutory duties or responsibilities. Likewise, shippers and other parties have legal duties and responsibilities to fulfill when providing goods for transportation. However, it's becoming more common for shippers to include language in motor carrier contracts requiring the motor carrier to indemnify and hold harmless the shipper even when the shipper fails to meet its legal duties and responsibilities. The CS for HB 366 provides statutory language that voids contractual provisions in a motor carrier transportation contract that indemnifies either the shipper or the motor carrier for their own negligent or intentional acts or omissions that lead to claims. This levels the playing field and makes everyone responsible for their own actions without establishing new duties or responsibilities. The bill doesn't limit the freedom to contract and each party can control its employees or agents to improve unsafe practices. Industry groups that support the legislation include BP, ConocoPhillips, Association of General Contractors, Alaska Miners Association, Alaska State Chamber of Commerce, and the Ocean Carriers Equipment Management Association. He noted that twelve states have similar laws and eight states have legislation pending. 1:35:28 PM SENATOR PASKVAN stated that HB 366 advances good social policy and will promote safety; each person should be responsible for his or her own conduct. To allow private parties to say that someone else will pay for their omissions or negligence is a troubling concept, he said. SENATOR MENARD said she imagines he has heard the input from the Alaska Insurance Company about shifting responsibility. MR. THOMPSON said he isn't aware of that. MS. OSTNES said Linda Hall, the division director for insurance, looked at the bill and had no problem with it. Ms. Ostnes added that the intent of the legislation is not to void a whole contract, just the portion dealing with omissions or neglect. 1:37:35 PM DEAN MCKENZIE, President, Alaska West Express (AWE), stated support for HB 366. He noted that he submitted a letter to the sponsor citing an unresolved issue with a company that does drilling work in Alaska, nationally, and internationally. Currently AWE is working with two more companies that have similarly lopsided language in their master service agreements, which takes a lot of time. Smaller contractors or carriers may not have the ability to devote this much time, he said. As others have stated, we should all be responsible for our own actions; we should not be forced to take responsibility for the actions of others over whom we have no control, he said. 1:39:00 PM JAMES C. DOYLE, Vice President, Weaver Brothers Trucking, stated support for HB 366. He cited an example of a situation that this legislation would prevent. Four or five days after a trucking company delivered fuel to a gas station, a customer was burned while filling a portable gas tank because of an arc. The trucking company had to pay the claim even though it had nothing to do with the actual incident because it had signed an agreement indemnifying the gas station from any type of loss. HB 366 would correct this type of wrong, he said. 1:40:39 PM SENATOR KOOKESH closed public testimony and asked the will of the committee. SENATOR PASKVAN moved to report CS for HB 366 from committee with individual recommendations and attached fiscal note(s). There being no objection, CSHB 366(JUD) moved from the Senate Transportation Standing Committee.