Legislature(2003 - 2004)

03/05/2004 08:04 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
             HOUSE STATE AFFAIRS STANDING COMMITTEE                                                                           
                         March 5, 2004                                                                                          
                           8:04 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bruce Weyhrauch, Chair                                                                                           
Representative Jim Holm, Vice Chair                                                                                             
Representative John Coghill                                                                                                     
Representative Bob Lynn                                                                                                         
Representative Paul Seaton                                                                                                      
Representative Max Gruenberg                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Ethan Berkowitz                                                                                                  
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 516                                                                                                              
"An Act relating to a charge for a bad check."                                                                                  
                                                                                                                                
     - MOVED CSHB 516(STA) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 423                                                                                                              
"An Act relating  to accidents involving the vehicle  of a person                                                               
under the influence  of an alcoholic beverage;  and providing for                                                               
an effective date."                                                                                                             
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE BILL NO. 422                                                                                                              
"An  Act  repealing the  special  subaccount  established in  the                                                               
constitutional  budget reserve  fund; relating  to the  powers of                                                               
the Department  of Revenue for  the investment of amounts  in the                                                               
constitutional  budget   reserve  fund;  and  providing   for  an                                                               
effective date."                                                                                                                
                                                                                                                                
     - MOVED CSHB 422(STA) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 412                                                                                                              
"An  Act relating  to the  continuation  of pay  and benefits  to                                                               
employees  of  public corporations  called  to  active duty;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
     - BILL HEARING CANCELED                                                                                                    
                                                                                                                                
HOUSE BILL NO. 520                                                                                                              
"An Act  relating to the  expenses of investigation,  hearing, or                                                               
public advocacy  before the Regulatory  Commission of  Alaska, to                                                               
calculation of  the regulatory cost  charge for  public utilities                                                               
and pipeline  carriers to include  the Department of  Law's costs                                                               
of its public  advocacy function, to inspection  of certain books                                                               
and  records by  the  attorney general  when  participating as  a                                                               
party in  a matter  before the  Regulatory Commission  of Alaska;                                                               
and providing for an effective date."                                                                                           
                                                                                                                                
     - BILL HEARING POSTPONED TO 3/8/04                                                                                         
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 516                                                                                                                  
SHORT TITLE: BAD CHECK CHARGE                                                                                                   
SPONSOR(S): FINANCE                                                                                                             
                                                                                                                                
02/19/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/19/04       (H)       STA, JUD                                                                                               
03/04/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
03/04/04       (H)       <Bill Hearing Postponed to 3/5/04>                                                                     
03/05/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
                                                                                                                                
BILL: HB 423                                                                                                                  
SHORT TITLE: TAXICAB DRIVER LIABILITY                                                                                           
SPONSOR(S): REPRESENTATIVE(S) ANDERSON                                                                                          
                                                                                                                                
02/02/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/02/04       (H)       JUD                                                                                                    
02/02/04       (H)       STA REFERRAL ADDED AFTER JUD                                                                           
02/09/04       (H)       REFERRAL ORDER CHANGED                                                                                 
02/09/04       (H)       STA, JUD                                                                                               
02/10/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
02/10/04       (H)       <Bill Hearing Postponed>                                                                               
03/02/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
03/02/04       (H)       Heard & Held                                                                                           
03/02/04       (H)       MINUTE(STA)                                                                                            
03/05/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
                                                                                                                                
BILL: HB 422                                                                                                                  
SHORT TITLE: BUDGET RESERVE FUND INVESTMENT                                                                                     
SPONSOR(S): FINANCE                                                                                                             
                                                                                                                                
02/02/04       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/02/04       (H)       STA, FIN                                                                                               
02/10/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
02/10/04       (H)       Scheduled But Not Heard                                                                                
02/26/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
02/26/04       (H)       Heard & Held                                                                                           
02/26/04       (H)       MINUTE(STA)                                                                                            
03/02/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
03/02/04       (H)       Heard & Held                                                                                           
03/02/04       (H)       MINUTE(STA)                                                                                            
03/04/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
03/04/04       (H)       Heard & Held                                                                                           
03/04/04       (H)       MINUTE(STA)                                                                                            
03/05/04       (H)       STA AT 8:00 AM CAPITOL 102                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
TOM WRIGHT, Staff                                                                                                               
to Representative John Harris                                                                                                   
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented HB 516 on behalf of                                                                              
Representative Harris, sponsor.                                                                                                 
                                                                                                                                
SCOTT KING                                                                                                                      
Cornerstone Credit Services, L.L.C.                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 516.                                                                            
                                                                                                                                
PEGGY GRADY, Accountant                                                                                                         
Girl Scouts, Susitna Council                                                                                                    
Address not provided                                                                                                            
POSITION STATEMENT:  Stated support for HB 516.                                                                                 
                                                                                                                                
JENNIFER YORK, Accounting Manager                                                                                               
Kaladi Brothers Coffee Company                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Stated support for HB 516.                                                                                 
                                                                                                                                
JILL JAECKEL, Legal Assistant                                                                                                   
Spenard Builders Supply                                                                                                         
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Stated support for HB 516.                                                                                 
                                                                                                                                
JIM SHINE, Staff                                                                                                                
to Representative Tom Anderson                                                                                                  
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    On  behalf  of  Representative  Anderson,                                                               
sponsor of HB  423, summarized the changes made in  Version D and                                                               
answered questions.                                                                                                             
                                                                                                                                
JOHN PATTEE                                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 423.                                                                            
                                                                                                                                
FRANK DAHL                                                                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 423.                                                                            
                                                                                                                                
BRENT FRASER, Transportation Inspector                                                                                          
Municipality of Anchorage                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified and  answered questions during the                                                               
hearing on HB 423.                                                                                                              
                                                                                                                                
MICHAEL LESSMEIER, Attorney at Law                                                                                              
Lessmeier & Winters                                                                                                             
Lobbyist for State Farm Insurance Company                                                                                       
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Testified  in   support  of  HB  423  and                                                               
addressed committee concerns.                                                                                                   
                                                                                                                                
TOMAS H. BOUTIN, Deputy Commissioner                                                                                            
Office of the Commissioner                                                                                                      
Department of Revenue                                                                                                           
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Answered   questions  on  behalf  of  the                                                               
department during the hearing on HB 422.                                                                                        
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 04-29, SIDE A                                                                                                            
Number 0001                                                                                                                     
                                                                                                                                
CHAIR  BRUCE WEYHRAUCH  called the  House State  Affairs Standing                                                             
Committee meeting  to order at  8:04 a.m.   Representatives Holm,                                                               
Coghill, Lynn, and  Weyhrauch were present at the  call to order.                                                               
Representatives Seaton  and Gruenberg arrived as  the meeting was                                                               
in progress.                                                                                                                    
                                                                                                                                
Number 0040                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH informed members  that Mr. O'Tierney had traveled                                                               
to Juneau to  testify on HB 520.   He noted that  the hearing for                                                               
HB 520  had been postponed  to 3/8/04, but invited  Mr. O'Tierney                                                               
to  give   a  brief,  informal  introduction.     [Mr.  O'Tierney                                                               
testified by teleconference on 3/8/04.]                                                                                         
                                                                                                                                
Number 0100                                                                                                                     
                                                                                                                                
DANIEL  PATRICK  O'TIERNEY,  Senior Assistant  Attorney  General,                                                               
Commercial/Fair  Business  Section, Civil  Division  (Anchorage),                                                               
Department Of  Law, indicated that  he came to his  position last                                                               
May.  He disclosed that "in a prior  life" he was a member of the                                                               
then   Alaska  Public   Utilities  Commission,   which  was   the                                                               
predecessor to the  [Regulatory Commission of Alaska  (RCA)].  He                                                               
stated that HB  520 concerns the public advocacy  function of the                                                               
attorney general,  "on behalf  of Ray  Pears, before  the [RCA]."                                                               
In  response to  a question  from Chair  Weyhrauch, he  confirmed                                                               
that he had had the chance to speak with [other legislators].                                                                   
                                                                                                                                
The committee took a brief at-ease at 8:07 a.m.                                                                                 
                                                                                                                                
HB 516-BAD CHECK CHARGE                                                                                                       
                                                                                                                                
Number 0285                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  announced that the  first order of  business was                                                               
HOUSE  BILL NO.  516, "An  Act  relating to  a charge  for a  bad                                                               
check."                                                                                                                         
                                                                                                                                
Number 0296                                                                                                                     
                                                                                                                                
TOM  WRIGHT, Staff  to Representative  John Harris,  Alaska State                                                               
Legislature,  presented  HB  516   on  behalf  of  Representative                                                               
Harris, sponsor.   He stated that the bill  simply would increase                                                               
the amount  for a bad  check to  $30.  He  noted that there  is a                                                               
companion bill  that just passed  the other body and  "we're just                                                               
trying to help move the process along a little bit."                                                                            
                                                                                                                                
Number 0338                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  stated his understanding that  "this was related                                                               
somehow to the requirement ...  to document costs associated with                                                               
checks,"  and  would  eliminate   the  language  regarding  costs                                                               
incurred, replacing it with a flat fee.                                                                                         
                                                                                                                                
MR.  WRIGHT answered  that's  correct.   He  explained that  this                                                               
would allow  businesses to recoup  costs related to a  bad check,                                                               
without going through a lot of bookwork.                                                                                        
                                                                                                                                
CHAIR  WEYHRAUCH related  having  unintentionally written  checks                                                               
when  there  wasn't enough  money  in  his  account and  that  he                                                               
received fees for NSF [nonsufficient  funds] and subsequently put                                                               
money in his  account and paid "the check."   He said, "So, let's                                                               
see, I get hit by the bank, and  then I get hit by the merchant -                                                               
sometimes -  although ...  sometimes if they  know you  they say,                                                               
'Just pay it.'"   He observed, "You still get  an NSF, it doesn't                                                               
deal  with that.   And  merchants still  then sometimes  have the                                                               
discretion to  charge you a $30  fee anyway; but this  just gives                                                               
them the legal authority to do that without question?"                                                                          
                                                                                                                                
MR. WRIGHT  answered that that's  his understanding.  He  said he                                                               
should  defer further  comment  to Scott  King,  but offered  his                                                               
understanding that there are 22  other states that have adopted a                                                               
$30 fee.                                                                                                                        
                                                                                                                                
Number 0451                                                                                                                     
                                                                                                                                
SCOTT  KING, Cornerstone  Credit Services,  L.L.C., testified  in                                                               
support of  HB 516.  He  said that historically, in  Alaska, "we"                                                               
have assumed  a $25 fee  on NSF  checks or checks  that returned.                                                               
The interpretation  of the law has  been, up to this  point, that                                                               
if a business can justify [charging]  the $25, as an operating or                                                               
business  practice, then  that has  been allowed.   He  indicated                                                               
that  that justification  is easily  done.   He  revealed that  a                                                               
recent  court ruling  in  Fairbanks has  "said  that it's  actual                                                               
cost," which  would require a merchant  to keep a ledger  of each                                                               
cost involved  in [getting  the money for]  the check,  and [that                                                               
merchant] would not be allowed to  collect that cost until it was                                                               
incurred.  Mr. King reviewed that  the bill would make two simple                                                               
changes  to  statute:    First,  it  would  remove  the  language                                                               
regarding the  actual costs  incurred.   Second, it  would change                                                               
the amount from $25 to $30.                                                                                                     
                                                                                                                                
MR.  KING  revealed  that  Cornerstone  Credit  Services,  L.L.C.                                                               
represents  approximately  2,000   merchants  throughout  Alaska.                                                               
Many of the businesses rely on  taking checks in order to conduct                                                               
business.  He offered to answer questions from the committee.                                                                   
                                                                                                                                
Number 0562                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH declared a conflict.   He explained that he has a                                                               
problem with  Cornerstone Credit  Services, L.L.C.,  because that                                                               
office has been  repeatedly calling him regarding a  bill that it                                                               
says is unpaid, but which Chair  Weyhrauch said has been paid for                                                               
a  long   time.     He  added,  "I've   been  quite   irate  with                                                               
Cornerstone."  He provided details.                                                                                             
                                                                                                                                
REPRESENTATIVE  GRUENBERG  said, "I'll  object,  so  you have  to                                                               
vote.  So moved."                                                                                                               
                                                                                                                                
CHAIR  WEYHRAUCH said  he was  going to  ask to  be excused  from                                                               
voting,  but Representative  Gruenberg  had objected.   He  said,                                                               
"That's not going to get in the  way of dealing with this bill; I                                                               
just wanted you to know that."                                                                                                  
                                                                                                                                
MR.  KING offered  to discuss  the  issue in  private with  Chair                                                               
Weyhrauch.                                                                                                                      
                                                                                                                                
Number 0660                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM asked  if the changes made to  the bill would                                                               
theoretically  take  away  the  legal  problem  with  "having  to                                                               
support that you deserve the money."                                                                                            
                                                                                                                                
MR. KING  answered yes.   In  response to  a question  from Chair                                                               
Weyhrauch,  he  said the  aforementioned  case  in Fairbanks  was                                                               
resolved.  He said, "We'd end  up having to settle it through our                                                               
E&O [errors  and omissions] insurance  carrier.  I think  it's in                                                               
the process of being settled."                                                                                                  
                                                                                                                                
Number 0697                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG said  he  supports HB  516, because  it                                                               
would stop "all kinds of  ancillary litigation."  Notwithstanding                                                               
that,  he mentioned  a  problem and  the title  of  the bill  and                                                               
continued as follows:                                                                                                           
                                                                                                                                
     Lawyers, because of the unusual  canons of ethics, if a                                                                    
     client doesn't pay a bill,  they are not allowed to, in                                                                    
     any  manner, have  that fact,  through  an agency  like                                                                    
     Cornerstone  ...,  reflected  on  the  person's  credit                                                                    
     rating.   And  this, as  you know,  Mr. Chairman,  is a                                                                    
     very effective  way of getting a  legitimate bill paid.                                                                    
     And what  it does is  it requires lawyers to  sue their                                                                    
     clients,  or arbitrate,  rather  than  just going  very                                                                    
     informally, low key, to get the  bill paid.  And I went                                                                    
     to the bar  association to try to get  the ethical rule                                                                    
     changed.  And a number  of states have gone and changed                                                                    
     their ethical  rule -  some have not.   And  the ethics                                                                    
     committee wouldn't do  it, as I recall.  I  have a file                                                                    
     and  I'm  going  to  talk over  the  interim  with  the                                                                    
     industry.  But I would be  inclined to try to see if we                                                                    
     can  change   that,  because  ...  it   makes  it  very                                                                    
     difficult  for  lawyers  to   collect  bills  that  are                                                                    
     legitimately (indisc. - voice faded out).                                                                                  
                                                                                                                                
Number 0839                                                                                                                     
                                                                                                                                
PEGGY   GRADY,   Accountant,   Girl   Scouts,   Susitna   Council                                                               
("Council"), stated support  for HB 516.  She  told the committee                                                               
that  current  arrangements with  the  Council's  bank allow  NSF                                                               
[checks]  to go  directly to  the  collection agency.   When  the                                                               
check writer pays  the collection agency, the Council  is able to                                                               
recover 100  percent of the  cost of each  check.  Prior  to that                                                               
agreement,  she noted,  NSF checks  were either  written off,  or                                                               
attempts to  collect the debts were  made by staff members.   She                                                               
said  she thinks  it's  fair  to assume  that  if the  collection                                                               
agencies  with trained  professionals are  not able  to charge  a                                                               
flat fee  for their services on  behalf of the Council,  the cost                                                               
to collect the  debts would increase for the  Council, [which is]                                                               
a  not-for-profit  agency, or  worse,  the  burden of  collecting                                                               
these debts would fall back on "our agency."                                                                                    
                                                                                                                                
Number 0920                                                                                                                     
                                                                                                                                
JENNIFER  YORK,   Accounting  Manager,  Kaladi   Brothers  Coffee                                                               
Company, stated  support for  HB 516.   She  said the  bill would                                                               
help streamline the collection process.   She noted that, as with                                                               
the  previous testimony  [from Ms.  Grady],  the company's  [NSF]                                                               
checks  automatically  go to  the  bank  and are  forwarded  from                                                               
there.   She said the  company is able  to recoup 100  percent of                                                               
its NSF checks.  She continued as follows:                                                                                      
                                                                                                                                
     And  it  also  acts  as   a  deterrent  for  those  who                                                                    
     knowingly write  [bad] checks.   If they know  that the                                                                    
     fee can be  arbitrarily waived or $5 here,  $10 there -                                                                    
     they play the system.   And it's just a straightforward                                                                    
     fact:  it's simple,  it's straightforward, it cuts down                                                                    
     on  the  time.    That's  one of  the  reasons  why  we                                                                    
     outsource  our collection,  is we  spend  so much  time                                                                    
     trying to  document how  many phone  calls we  did, how                                                                    
     many  minutes  worked  doing   it,  going  through  the                                                                    
     telephone book  and going  through the  telephone bills                                                                    
     and itemizing  how many minutes  we spend  calling this                                                                    
     person or that  person.  And by the time  that we wrote                                                                    
     all of  our times  down, more than  often we  had spent                                                                    
     more  than $25  in trying  to collect  ... a  $5 check.                                                                    
     And  for  those  people who  accidentally,  erroneously                                                                    
     [bounce a  check] ...  a lot of  times I  even override                                                                    
     the decision and [say], "Okay,  well, I'll go ahead and                                                                    
     waive  the  30 dollars  -  just  come  in and  pay  the                                                                    
     check."  So,  we still have that option  of waiving the                                                                    
     fee.   It's  just  [that]  I use  [the  NSF  fee] as  a                                                                    
     deterrent to  stop the people from  writing bad checks.                                                                    
     ...  I myself,  ten years  ago, wrote  a bad  check for                                                                    
     $1.20 and it ended up costing  me $45.  I now make sure                                                                    
     that  I  balance my  checkbook  and  whatnot.   It's  a                                                                    
     learning experience.                                                                                                       
                                                                                                                                
Number 1032                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM noted  that Ohio has a $30 fee  or 10 percent                                                               
of the amount of the check, whichever is greater.                                                                               
                                                                                                                                
MS.  YORK responded  that the  same  amount of  work is  involved                                                               
collecting the  amount of  a $1  check or a  $5,000 check,  "if a                                                               
person does not want to pay the bill."                                                                                          
                                                                                                                                
REPRESENTATIVE  HOLM observed  that a  check of  a larger  amount                                                               
indicates  that  a  larger  purchase  was  made;  therefore,  the                                                               
merchant  has lost  the  ability  to resell  a  larger amount  of                                                               
inventory.  In many cases, he added, that's a huge expense.                                                                     
                                                                                                                                
MS. YORK  said, "The $25  isn't really to cover  the merchandise,                                                               
or whatever,  it's to  cover the  time and  effort it  [takes] to                                                               
collect on  these checks  that people  don't want  to pay."   She                                                               
noted that while  one person who has written a  bad check may pay                                                               
immediately,  another may  persistently  postpone  payment.   She                                                               
indicated the law  of averages and said that the  $25 flat fee is                                                               
to  cover  the  cost  for,   basically,  everyone.    She  added,                                                               
"Everyone knows  what the fee is;  you don't have to  worry about                                                               
anything else, and they know what it is."                                                                                       
                                                                                                                                
REPRESENTATIVE  HOLM suggested  that a  person who  knows that  a                                                               
$5,000  bad check  will cost  him/her $500  will probably  not do                                                               
that too many times.                                                                                                            
                                                                                                                                
Number 1200                                                                                                                     
                                                                                                                                
JILL JAECKEL,  Legal Assistant,  Spenard Builders  Supply, stated                                                               
that "we"  handle the  collections for  all the  branch locations                                                               
throughout  the state.    She stated  support for  HB  516.   She                                                               
stated her  belief that a  $5 increase in the  fee is not  in any                                                               
way outrageous and  barely covers the cost  that businesses incur                                                               
from  habitual [bad]  check  writing.   She  said  that the  bank                                                               
charges  a fee  when the  checks come  back and  the $30  doesn't                                                               
begin  to  cover  the  loss   of  profit  that  occurs  in  those                                                               
instances, whether it  be a large or small check.   She suggested                                                               
that clearing up the language would be beneficial for everyone.                                                                 
                                                                                                                                
CHAIR  WEYHRAUCH said  he  endorses what  Ms.  Jaeckel is  saying                                                               
regarding the problem of dealing with these checks.                                                                             
                                                                                                                                
Number 1306                                                                                                                     
                                                                                                                                
REPRESENTATIVE   HOLM  asked   Ms.  Jaeckel   the  aforementioned                                                               
question regarding  [the $30 fee or  10 percent of the  amount of                                                               
the check].                                                                                                                     
                                                                                                                                
MS. JAECKEL answered as follows:                                                                                                
                                                                                                                                
     As far  as the fees go,  when we have large  checks, we                                                                    
     tend to  file suit  with the  civil penalties  that are                                                                    
     allowed through  the Alaska Statute, and  that is three                                                                    
     times the amount  of the check or  $1,000, whichever is                                                                    
     greater.  And  when you sue an  individual with several                                                                    
     civil  penalties, you  waive your  NSF fee  altogether.                                                                    
     So, ... as far as a  fee that would be posted for those                                                                    
     people [who] accidentally write  a [bad] check, I don't                                                                    
     think that there would be  very many vendors that would                                                                    
     actually go  out of their  way to charge 10  percent of                                                                    
     the check  over the $30  ....   It would cover  more of                                                                    
     the  cost,  but  it  would alienate  a  huge  group  of                                                                    
     customers that  accidentally write a bad  check.  Those                                                                    
     would be the ones that you  would be able to collect it                                                                    
     from, I think.                                                                                                             
                                                                                                                                
Number 1385                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH  said  he  wants  to  know  that  it's  not  the                                                               
intention of  the bill that a  merchant who receives a  bad check                                                               
would be bound to charge a fee.                                                                                                 
                                                                                                                                
Number 1402                                                                                                                     
                                                                                                                                
MR.  WRIGHT  stated  his  understanding   [that  that's  not  the                                                               
intention].                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH  directed  the   committee's  attention  to  the                                                               
language on page 2, lines 10-11, which read as follows:                                                                         
                                                                                                                                
               (2) the defendant fails to tender, before                                                                        
     the action  begins, an amount  equal to [AT  LEAST] the                                                                    
     amount  of the  check plus  $30 [COST  INCURRED BY  THE                                                                
     PLAINTIFF UP TO A MAXIMUM OF $25].                                                                                         
                                                                                                                                
CHAIR WEYHRAUCH suggested that it  could be interpreted that that                                                               
fee has  to be charged.   He asked if  that is the intent  of the                                                               
bill.                                                                                                                           
                                                                                                                                
Number 1455                                                                                                                     
                                                                                                                                
MR.  KING  explained  that  the  current  language  in  the  bill                                                               
explains  what  can  be  charged,   but  is  not  required.    He                                                               
clarified, "The  statute taken as  a whole is something  that can                                                               
be enforced  but is  not required  to be  enforced."   He related                                                               
that he  knows of many cases  where merchants waive NSF  fees for                                                               
those who just write one bad check.                                                                                             
                                                                                                                                
MR.  KING, in  response  to examples  posed  by Chair  Weyhrauch,                                                               
reiterated that the statute does not  require [the NSF fee] to be                                                               
charged;  it is  an  option.   He  added,  "If we  go  back to  a                                                               
language that would  talk about incurred cost or talk  to 'up to'                                                               
a maximum, then  we would be back  in the same boat,  and we'd be                                                               
arguing again with  attorneys and judges about what  does it mean                                                               
by 'up to.'  And that's why  we removed that part of the language                                                               
to remove any arguments that we would face in the future."                                                                      
                                                                                                                                
CHAIR  WEYHRAUCH  reiterated  that  he just  doesn't  want  well-                                                               
meaning  people  who want  to  get  along  to  say that  the  law                                                               
requires that they  [have to charge the NSF fee].   He added that                                                               
he may  just want to  clarify that when the  bill ends up  on the                                                               
House floor.                                                                                                                    
                                                                                                                                
Number 1572                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG stated  that he  could see  that that's                                                               
not the intent of the statute.   Notwithstanding that, he said he                                                               
could see  that that's how  the statute could  be misinterpreted.                                                               
He  suggested  a   sentence  could  be  added   for  purposes  of                                                               
clarification.                                                                                                                  
                                                                                                                                
CHAIR WEYHRAUCH said he may offer  that when the bill is heard in                                                               
the House Judiciary Standing Committee.                                                                                         
                                                                                                                                
REPRESENTATIVE GRUENBERG  asked Mr.  Wright if he  has a  list of                                                               
states that charge less than $30.                                                                                               
                                                                                                                                
Number 1639                                                                                                                     
                                                                                                                                
MR.  WRIGHT answered  that  there  are a  number  of states  that                                                               
charge less than  $30, which is shown on a  list in the committee                                                               
packet.   In  regard to  the aforementioned  discussion regarding                                                               
how  the statute  may be  interpreted,  he pointed  out that  the                                                               
language  uses  the word  "may",  not  "shall".   Notwithstanding                                                               
that, he  said he  thinks the  sponsor would  not have  a problem                                                               
with adding a sentence to clarify that.                                                                                         
                                                                                                                                
Number 1660                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG  stated  his  support of  the  bill  as                                                               
written, but said  he sees it doing two things:   First, it would                                                               
eliminate  the requirement  for a  proof of  cost, which  he said                                                               
would  be  "administratively tough  to  do."   Second,  it  would                                                               
increase [the  NSF fee] from $25  to $30.  He  mentioned the cost                                                               
of living and  said he thinks it's been awhile  since the statute                                                               
was enacted.                                                                                                                    
                                                                                                                                
MR. WRIGHT answered that is his understanding.                                                                                  
                                                                                                                                
Number 1684                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  noted that Representative  Holm owns  a business                                                               
that deals with lots of checks.   He asked Representative Holm if                                                               
he would consider the $30 a fee or a surcharge.                                                                                 
                                                                                                                                
Number 1700                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HOLM  said it  is  a  fee.    On that  point,  he                                                               
referred to  previous consideration  of "10 percent  or whichever                                                               
is greater."  He indicated  that might be an additional deterrent                                                               
and said it piqued his interest  that there may be something that                                                               
"might make it have a little more  teeth to it."  He related that                                                               
sometimes people will  write a bad check and then  bring back the                                                               
merchandise, which  is in worse  condition than when it  left the                                                               
store.                                                                                                                          
                                                                                                                                
Number 1775                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  suggested a  possible [Amendment  1] to  page 1,                                                               
line 11,  which would change the  language to read:   "plus a $30                                                           
fee,  but  the   defendant  in  its  discretion   may  waive  the                                                               
collection of that fee."                                                                                                        
                                                                                                                                
REPRESENTATIVE GRUENBERG  said he  hopes that amendment  would be                                                               
offered in  this committee  [rather than waiting  to offer  it in                                                               
the House Judiciary Standing Committee].                                                                                        
                                                                                                                                
Number 1794                                                                                                                     
                                                                                                                                
MR.  KING  responded that  he  believes  that amendment  "further                                                               
states the  already stated intent  of the statute."   In response                                                               
to a previous insinuation that  the statute is not challenged, he                                                               
noted that it  is actually challenged all the time;  a lot of law                                                               
suits  are   regularly  filed  and  the   court  system  "battles                                                               
regarding this  statute."  He  added, "That's why  this Fairbanks                                                               
statute came  out; there's a  lot of very creative  attorneys out                                                               
there who are very smart and  have a great way of interpreting or                                                               
- in my  opinion - misinterpreting what the intents  are of these                                                               
different  statutes."    He opined  that  simplification  of  the                                                               
statute is imperative.                                                                                                          
                                                                                                                                
CHAIR WEYHRAUCH explained  he thinks the intent  of the committee                                                               
is to "take this and just make it  sure that - boom:  you write a                                                               
bad check; you're  paying a $30 fee; we're  waiving the necessity                                                               
of requiring that you prove what  costs are in collection of that                                                               
fee;  and, by  golly, if  you want  to waive  it, that's  in your                                                               
discretion.  We're  giving that discretion to  the defendant ...;                                                               
this is  not up to the  plaintiff to decide whether  they want to                                                               
waive the justifications of cost or not."                                                                                       
                                                                                                                                
Number 1845                                                                                                                     
                                                                                                                                
MR. KING responded that he doesn't  want to end up in a situation                                                               
where a debate ensues over  why one defendant was discretionarily                                                               
excused  [from  paying  the  fee], while  another  was  not,  and                                                               
whether  or not  a merchant  is  being fair  in his/her  business                                                               
practice.                                                                                                                       
                                                                                                                                
CHAIR WEYHRAUCH offered to broaden the language.                                                                                
                                                                                                                                
MR.  KING  stated,  "I  think  as  soon  as  we  allow  the  word                                                               
discretion, we open up for discrimination."                                                                                     
                                                                                                                                
Number 1860                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH recrafted [Amendment 1] to read as follows:                                                                     
                                                                                                                                
     Page 1, line 11                                                                                                            
                                                                                                                                
     Between "plus" and "$30"                                                                                               
     Insert "a"                                                                                                                 
                                                                                                                                
     After "$30"                                                                                                            
     Insert the following:                                                                                                      
                                                                                                                                
     "fee,  but the  plaintiff may  waive the  collection of                                                                    
     any fee."                                                                                                                  
                                                                                                                                
CHAIR WEYHRAUCH  reiterated that  he doesn't  want anyone  to say                                                               
he/she has to charge [the fee].                                                                                                 
                                                                                                                                
REPRESENTATIVE HOLM suggested  [Mr. King] made a  good point that                                                               
"you  then would  lay yourself  open for  discrimination, because                                                               
you may or may not."                                                                                                            
                                                                                                                                
Number 1942                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG, on that  point, indicated that a person                                                               
can always  find fault with a  merchant, and he said,  "You can't                                                               
guard against that."                                                                                                            
                                                                                                                                
MR. KING added the following:                                                                                                   
                                                                                                                                
     We  have  gone  to  great  lengths  to  determine  what                                                                    
     language  changes ...  we would  make or  how we  would                                                                    
     perceive  this  through  our experience  in  the  court                                                                    
     systems.    And  the  words that  are  in  the  statute                                                                    
     currently do  read, "the plaintiff may  recover".  That                                                                    
     specific statement  right there  ensures that  there is                                                                    
     no requirement  to recover those costs  and, therefore,                                                                    
     no language change would be necessary.                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH noted that it  doesn't say that the plaintiff may                                                               
"waive it too."                                                                                                                 
                                                                                                                                
MR. KING  noted that by simply  saying that "it may  not recover,                                                               
it may not recover."  He  urged that the committee not change the                                                               
language.                                                                                                                       
                                                                                                                                
Number 1982                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON  indicated  that   he  agreed  with  Chair                                                               
Weyhrauch.  He  said he would like to see  clarification that the                                                               
merchant has the ability to waive  the fee, which would be better                                                               
than  trying to  interpret  "where the  'may' is  in  this."   He                                                               
offered examples.                                                                                                               
                                                                                                                                
Number 2055                                                                                                                     
                                                                                                                                
MR.  WRIGHT  directed  the committee's  attention  to  [paragraph                                                               
(1)], beginning on page 1, line 8, which read as follows:                                                                       
                                                                                                                                
          (1) the plaintiff makes a written demand for                                                                          
     payment of the check at least 15 days before beginning                                                                     
     the action; and                                                                                                            
                                                                                                                                
MR. WRIGHT  said that  if a  plaintiff decides  not to  send that                                                               
letter, then in actuality the  plaintiff is saying that he/she is                                                               
waiving the fee.                                                                                                                
                                                                                                                                
REPRESENTATIVE SEATON said he interprets  it to mean that "you're                                                               
waiving recovery  of the money -  of the amount of  the check, as                                                               
well."   He indicated  that his  problem is that  the use  of the                                                               
word "may"  is "covering both  sections and not  clearly allowing                                                               
the merchants to waive the fee."                                                                                                
                                                                                                                                
Number 2087                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG  brought attention  to [page 1,  line 4]                                                               
and the language, "a check that  is dishonored".  He noted that a                                                               
person could  conceivably have a check  that's dishonored through                                                               
a fault of the bank, rather than a fault of the customer.                                                                       
                                                                                                                                
MR. KING  confirmed that that  happens, but the bank  absorbs the                                                               
fee in many instances because  it wants the consumer [to continue                                                               
banking there].                                                                                                                 
                                                                                                                                
[Discussion of Amendment 1 was momentarily set aside.]                                                                          
                                                                                                                                
REPRESENTATIVE GRUENBERG turned attention  to page 1, lines 9-10,                                                               
where it  reads "beginning the  action" and "action begins".   He                                                               
said  "beginning"  an action  could  be  subject to  a  different                                                               
interpretation.                                                                                                                 
                                                                                                                                
Number 2150                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG  offered  [Conceptual Amendment  2]  as                                                               
follows:                                                                                                                        
                                                                                                                                
     Page 1, line 9                                                                                                             
                                                                                                                                
     Delete "beginning"                                                                                                         
     Insert "commencing"                                                                                                        
                                                                                                                                
     Page 1, line 10                                                                                                            
                                                                                                                                
     Delete "begins"                                                                                                            
     Insert "commences"                                                                                                         
                                                                                                                                
REPRESENTATIVE   GRUENBERG    clarified   that    this   language                                                               
specifically speaks  to the filing  of the lawsuit.   In response                                                               
to a  request for further  clarification, he said he  would leave                                                               
it to  the drafters whether  to say on  line 10 that  "the action                                                               
commences" or "the action is commenced".                                                                                        
                                                                                                                                
Number 2210                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH   announced  that  there  being   no  objection,                                                               
[Conceptual Amendment 2] was adopted.                                                                                           
                                                                                                                                
Number 2234                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH  moved  to  adopt  Amendment  1  [text  provided                                                               
previously].  He  asked if there was any objection.   He told Mr.                                                               
King, "By  the time  this gets to  [the House  Judiciary Standing                                                               
Committee], if you have an issue,  pick that up there with them -                                                               
they can 'lawyer it'."                                                                                                          
                                                                                                                                
[The committee treated Amendment 1 as adopted.]                                                                                 
                                                                                                                                
Number 2252                                                                                                                     
                                                                                                                                
REPRESENTATIVE  LYNN  returned  to   the  previous  comment  that                                                               
sometimes banks make the error and  some banks absorb [the fee in                                                               
that case].   He said,  "This is a  case where neither  the check                                                               
payor or  the merchant is at  fault, but it's a  burden on both."                                                               
He asked  if there is anything  that can be done  to mandate that                                                               
the bank would absorb this charge.                                                                                              
                                                                                                                                
CHAIR WEYHRAUCH  responded that  he is  not certain  whether that                                                               
would  fall under  the banking  statutes, or  where [it  would be                                                               
addressed].  He suggested that it  may be beyond the scope of [HB                                                               
516] to get into that issue.                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  indicated that  he would not  oppose an                                                               
amendment addressing  the issue [of  ensuring that the  bank pays                                                               
the fee when it is at fault].   He commented that the bill has "a                                                               
ways to go."                                                                                                                    
                                                                                                                                
CHAIR WEYHRAUCH asked  that the committee "not deal  with that in                                                               
this bill."                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG  indicated  that he  would  pursue  the                                                               
issue [in the House Judiciary Standing Committee].                                                                              
                                                                                                                                
Number 2313                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM  moved to report  HB 516, as amended,  out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
zero fiscal  note.  There  being no objection, CSHB  516(STA) was                                                               
reported out of the House State Affairs Standing Committee.                                                                     
                                                                                                                                
HB 423-TAXICAB DRIVER LIABILITY                                                                                               
                                                                                                                                
Number 2340                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  announced that  the next  order of  business was                                                               
HOUSE BILL NO.  423, "An Act relating to  accidents involving the                                                               
vehicle  of  a  person  under   the  influence  of  an  alcoholic                                                               
beverage; and providing for an effective date."                                                                                 
                                                                                                                                
Number 2356                                                                                                                     
                                                                                                                                
JIM  SHINE, Staff  to Representative  Tom Anderson,  Alaska State                                                               
Legislature, on behalf of Representative  Anderson, sponsor of HB                                                               
423, offered  a summary of the  introduction to the bill  he read                                                               
to the  committee at the previous  hearing on March 2,  2004.  He                                                               
stated  that  HB  423  is  a  Good  Samaritan  bill  for  taxicab                                                               
operators  who transport  an intoxicated  person by  driving that                                                               
person's  vehicle to  his/her home  or  other directed  location.                                                               
The proposed legislation would be  a deterrent to those who would                                                               
otherwise drive impaired if unable  to find an alternative method                                                               
of transportation.  The bill  would grant taxicab companies legal                                                               
immunity  in the  event that  an accident  occurs, except  in the                                                               
case   of   recklessness,   gross   negligence   or   intentional                                                               
misconduct.                                                                                                                     
                                                                                                                                
TAPE 04-29, SIDE B                                                                                                            
Number 2348                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM moved to adopt  the committee substitute (CS)                                                               
for HB  423, Version  23-LS1600\D, Luckhaupt,  3/3/04, as  a work                                                               
draft.   There  being  no  objection, Version  D  was before  the                                                               
committee.                                                                                                                      
                                                                                                                                
Number 2315                                                                                                                     
                                                                                                                                
MR. SHINE highlighted the changes made  to HB 423 [in Version D],                                                               
as  noted  in  a  handout  to the  committee  [available  in  the                                                               
committee packet].   The  first change  was on  page 1,  line 11,                                                               
where the  phrase, "in  the course and  scope of  employment" was                                                               
inserted after  the phrase,  "a person  employed".   He explained                                                               
that this language  was added to clarify that the  driver must be                                                               
currently  working for  the taxicab  company at  the time  of the                                                               
accident.   The second  change occurred on  page 2,  [lines 1-2],                                                               
where  the  phrase,  "inhalant,   or  controlled  substance"  was                                                               
inserted after "alcoholic  beverage,".  Mr. Shine  note that this                                                               
change conforms  to the  definition given in  AS 28.35.030.   The                                                               
third change made  on page 2, [lines 3-4] was  to add the phrase,                                                               
"or designated  residential location"  after the  phrase "owner's                                                               
residence".  He  said this clarification was made  so that people                                                               
would not abuse  the service by having taxicab  drivers take them                                                               
to another bar.                                                                                                                 
                                                                                                                                
Number 2270                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM  asked why the  word "dwelling" was  not used                                                               
instead.                                                                                                                        
                                                                                                                                
MR. SHINE  explained that  the words chosen  were discussed  in a                                                               
meeting    with     Representative    Gruenberg     and    staff.                                                               
Notwithstanding that,  he indicated  there would be  no objection                                                               
to [using the word "dwelling"].                                                                                                 
                                                                                                                                
REPRESENTATIVE  HOLM indicated  that the  word dwelling  had been                                                               
used  during  discussion  of another  bill  dealing  with  carbon                                                               
monoxide.                                                                                                                       
                                                                                                                                
Number 2245                                                                                                                     
                                                                                                                                
REPRESENTATIVE   GRUENBERG  remarked   that   usually  the   word                                                               
"residence"  would be  used, because  it is  more of  a location,                                                               
while "dwelling"  refers to the  building itself.  He  noted that                                                               
"designated  residential  location"  would  include  an  adjacent                                                               
street and is a "reasonable drafting choice."                                                                                   
                                                                                                                                
Number 2200                                                                                                                     
                                                                                                                                
MR.  SHINE turned  to [Amendment  1], recommended  by Legislative                                                               
Legal and Research Services:  On  page 2, line 4, after the words                                                               
"vehicle owner"  insert the  words "or  operator".   He explained                                                               
that the  intent of that  is so  the person [making  the request]                                                               
doesn't have to be the owner of the vehicle.                                                                                    
                                                                                                                                
Number 2183                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG moved to adopt Amendment 1.                                                                            
                                                                                                                                
REPRESENTATIVE  HOLM   suggested  that  the  word   "or"  is  not                                                               
necessary.                                                                                                                      
                                                                                                                                
REPRESENTATIVE GRUENBERG  said he would  leave the word  "or" in,                                                               
because  conceptually,  a person  would  not  say "motor  vehicle                                                               
operator".  He asked that Amendment 1 be a conceptual amendment.                                                                
                                                                                                                                
CHAIR WEYHRAUCH  noted that  the phrase  "motor vehicle  owner or                                                               
operator" is used on page 2, lines 6-7.                                                                                         
                                                                                                                                
Number 2110                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  asked if  there were  any further  objections to                                                               
Conceptual Amendment 1.                                                                                                         
                                                                                                                                
Number 2099                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  said he is  not opposing the idea,  but he                                                               
thinks  that  there  may  be  ramifications  having  to  do  with                                                               
insurance.  He  indicated there could be  some question regarding                                                               
whether a person driving someone  else's vehicle is covered under                                                               
insurance.                                                                                                                      
                                                                                                                                
Number 2089                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM asked if  Representative Seaton was referring                                                               
to "uninsured motorists."   He indicated that with  his own State                                                               
Farm  insurance coverage,  he is  insured  in any  vehicle.   For                                                               
example, if he rents a car  in California, he doesn't have to pay                                                               
the extra  insurance coverage,  because he  is insured  under his                                                               
policy.  He  said he doesn't know what other  folks do with other                                                               
policies.                                                                                                                       
                                                                                                                                
REPRESENTATIVE GRUENBERG  said, "I  think he's talking  about the                                                               
opposite."                                                                                                                      
                                                                                                                                
Number 2058                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  stated that  his concern  is in  regard to                                                               
remembering  that  the  intent  of  "this"  is  just  to  protect                                                               
somebody's property.   He  said he  worries about  "the liability                                                               
incurring."                                                                                                                     
                                                                                                                                
Number 2018                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH noted  that he  has  an amendment  that he  "was                                                               
going  to  offer,"  having  to  do with  offering  some  kind  of                                                               
immunity  so that  "somehow, if  somebody's  harmed, ...  there's                                                               
some way you get coverage of this."                                                                                             
                                                                                                                                
Number 2000                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  said he  would remove  his objection.   He                                                               
explained  that adding  the word  ["or"] "raises  a larger  point                                                               
than just  adding the word operator  in there."  He  said he just                                                               
wanted to make that point.                                                                                                      
                                                                                                                                
[Amendment 1 was treated as adopted.]                                                                                           
                                                                                                                                
Number 1951                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG  stated  that this  is  an  interesting                                                               
situation because multiple parties are  involved:  the person who                                                               
is  drunk, the  cab company,  the cab  driver, the  owner of  the                                                               
vehicle, and the  injured person.  The situation  can be examined                                                               
from  various  points of  view.    He  noted that  two  different                                                               
vehicles would be involved.   Representative Gruenberg said, "You                                                               
have to  look at  Frank Dahl's letter  to really  understand it."                                                               
He continued as follows:                                                                                                        
                                                                                                                                
     We have a situation where  the drunk is being separated                                                                    
     from the vehicle,  and the rescuer comes in a  cab as a                                                                    
     cab driver,  and there's  a passenger  in the  cab ...,                                                                    
     and  it's another  cab driver  who  drives the  vehicle                                                                    
     home.  We're not talking  about the situation where the                                                                    
     drunk  is in  the  back of  the cab.    That person  is                                                                    
     clearly covered, and it's not  within this bill.  We're                                                                    
     talking about  the second trip.   And the  reason we're                                                                    
     talking about the  second trip, as I  understand it, is                                                                    
     ...  cabbie number  two -  her insurance  doesn't cover                                                                    
     her unless she's driving the cab.                                                                                          
                                                                                                                                
     That's  the   purpose  of  the   bill.    It's   ...  a                                                                    
     potentially  uninsured  situation,   where  the  second                                                                    
     cabbie is driving  the drunk's vehicle only  - and this                                                                    
     is the  Seaton situation.   The vehicle may  not belong                                                                    
     to the drunk; it may  belong to the drunk's parents, or                                                                    
     cousin,  or  buddy.   However,  back  to the  hierarchy                                                                    
     here,  we've got  the  innocent  pedestrian here  who's                                                                    
     wiped out by  the ... car belonging to the  wife or the                                                                    
     cousin, driven by another cabbie who's not covered by                                                                      
      insurance.  And that is where we are in this factual                                                                      
     scenario.  Am I not right?                                                                                                 
                                                                                                                                
Number 1879                                                                                                                     
                                                                                                                                
MR. SHINE answered that's correct.                                                                                              
                                                                                                                                
Number 1870                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG  stated that  this is a  situation where                                                               
the whole  program - which  is a good one  - can fail  because of                                                               
"the  nail  in  the  horseshoe."   If  cabbie  number  two  isn't                                                               
covered,  he said,  the cab  companies won't  participate in  the                                                               
program.    If  they  don't  participate by  giving  the  bars  a                                                               
reasonable  break on  the  price, he  continued,  the bars  won't                                                               
participate and the drunk gets behind  the wheel.  In response to                                                               
a remark  by Representative Seaton,  he added that  another party                                                               
involved would be the bar owner.                                                                                                
                                                                                                                                
Number 1836                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON asked  if  it has  been fully  established                                                               
that the cab insurance does not cover the cab driver.                                                                           
                                                                                                                                
Number 1831                                                                                                                     
                                                                                                                                
MR. SHINE  noted that  there are 162  taxicabs operating  in "the                                                               
Anchorage  bowl."    He  explained   that  they  are  independent                                                               
operators.   The  cab companies  are  dispatchers that  "contract                                                               
out" to  the independent cab  drivers who own their  own vehicles                                                               
and  take  out  their  own  liability insurance.    He  said  the                                                               
insurance only covers  the drivers under "that one  vehicle."  He                                                               
mentioned he has copies available of the municipal code.                                                                        
                                                                                                                                
Number 1799                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM  asked what the  situation is in  other parts                                                               
of the state.                                                                                                                   
                                                                                                                                
Number 1783                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON   noted  that  Representative   Holm,  for                                                               
example, had  previously stated that his  insurance policy covers                                                               
him in whatever vehicle he drives.   He indicated that this [kind                                                               
of coverage]  may be a  cheap way  to get around  "this uninsured                                                               
and this  policy," so that  the person who is  participating just                                                               
has to  have the  rider on  his/her insurance.   He  said, "Maybe                                                               
it's going  to have  to be  another two  dollars or  something on                                                               
there to  compensate for that  insurance."  He clarified  that he                                                               
would be  much more  comfortable with a  solution that  builds in                                                               
protections for the potential victim."                                                                                          
                                                                                                                                
Number 1734                                                                                                                     
                                                                                                                                
MR. SHINE  commented that Mr. Lessmeier  represents the insurance                                                               
industry  and had  indicated that  he  would be  able to  testify                                                               
regarding some of the liability issues.   He also noted that both                                                               
Mr. Dahl and Mr. Pattee are available to answer questions.                                                                      
                                                                                                                                
Number 1700                                                                                                                     
                                                                                                                                
JOHN  PATTEE  told  the  committee  that as  a  board  member  of                                                               
Anchorage   CHARR   [Cabaret   Hotel   Restaurant   &   Retailers                                                               
Association], the Downtown Community  Council, Anchorage, and the                                                               
Anchorage  Downtown Partnership,  he  could speak  for all  three                                                               
organizations.    He  noted  that   he  has  owned  a  couple  of                                                               
nightclubs in  downtown Anchorage for  over 20 years.   He stated                                                               
his support  of [HB 423].   Referring to the  previous discussion                                                               
regarding  [all  the people  who  would  need  to be  covered  by                                                               
insurance], he noted that the  administrator of the program would                                                               
have to be covered also.   Turning to the program itself, he said                                                               
it is  a great  one.   He noted that  one of  the simple,  if not                                                               
justifiable  reasons that  people drink  and drive  is that  they                                                               
need their  cars.   A person  may need  his/her vehicle  the next                                                               
morning to  get to work,  or may worry that  it will be  towed or                                                               
vandalized.  He indicated that  a "no-brainer" program like this,                                                               
which would  be free  to the customer,  would make  a significant                                                               
mark  in reducing  the number  of occurrences  of people  driving                                                               
under the  influence (DUI).   He said  he understands  that there                                                               
[are concerns  regarding] liability; however, he  stated that [HB                                                               
423] is  a Good  Samaritan law  with good  intent.   He cautioned                                                               
nitpicking  the bill  to death  and encouraged  the committee  to                                                               
just "do it."                                                                                                                   
                                                                                                                                
Number 1551                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG assured Mr.  Pattee that the committee's                                                               
intent was not  to nitpick the bill to death,  but to ensure that                                                               
the bill  is properly  drafted to  avoid causing  more litigation                                                               
later.   He asked Mr.  Pattee if CHARR  or the industry  would be                                                               
hiring an administrator to work on this program.                                                                                
                                                                                                                                
MR.  PATTEE  said Anchorage  CHARR  will  run  the program.    In                                                               
response to  a question from  Chair Weyhrauch, he opined  that if                                                               
Fairbanks wants to  run such a program, it has  the ability to do                                                               
so.                                                                                                                             
                                                                                                                                
Number 1499                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG stated  that  if an  industry group  is                                                               
going to  be running  this program, then  the committee  needs to                                                               
consider  the language  on page  2, lines  9-11, which  immunizes                                                               
those  who are  licensed.   He  pointed out  that  CHARR and  its                                                               
employees are not licensed.   He opined that if [those employees]                                                               
could be  "a target defended  in this," then the  committee needs                                                               
to add a provision that immunizes them.                                                                                         
                                                                                                                                
MR. PATTEE concurred.   He said it doesn't have  to be CHARR; any                                                               
organization  could run  the program.   He  said, "When  it first                                                               
started   four  years   ago,  it   was  the   Anchorage  Downtown                                                               
Partnership ...  that was going to  run this program."   He said,                                                               
for example, that Mothers Against  Drunk Driving (MADD) could run                                                               
the program.   Whatever language is  put in the bill  needs to be                                                               
vague, so that  whoever decides to administer the  program can do                                                               
so without being held liable, he concluded.                                                                                     
                                                                                                                                
Number 1446                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG said that  would require another section                                                               
of the bill, or an amendment to subsection (b).                                                                                 
                                                                                                                                
Number 1425                                                                                                                     
                                                                                                                                
FRANK  DAHL  told the  committee  that  he is  past-president  of                                                               
Anchorage CHARR  and owner  of Blues Central  at the  Chef's Inn.                                                               
He stated his support of HB 423.   He stated that most of what he                                                               
had to say  to the committee had been sent  in a letter [included                                                               
in the committee packet].  He  posited that [HB 423] really is an                                                               
opportunity  to  do something  proactive  and  positive about  an                                                               
ongoing problem, and  it is an idea that stands  a good chance of                                                               
working.  He  said, "It kind of  gets us away from  just more and                                                               
more punishment  that has not  worked in  the past."   He stated,                                                               
"We're there  to watch out for  our friends and patrons  and this                                                               
gives us the tool to do so."   He urged the committee to pass the                                                               
bill.                                                                                                                           
                                                                                                                                
Number 1376                                                                                                                     
                                                                                                                                
BRENT   FRASER,   Transportation   Inspector,   Municipality   of                                                               
Anchorage, told the  committee that he directs  the department of                                                               
the  municipality that  regulates the  taxicabs, the  limousines,                                                               
and the chauffeurs of those vehicles.   In response to a question                                                               
from Representative  Gruenberg, he stated his  understanding that                                                               
the municipality  will not have  any direct participation  in the                                                               
program.    He imparted  [the  municipality's]  concern that  the                                                               
legislation does not  "put any undue burden  upon the chauffeur."                                                               
He added that he thinks that  the organizations that are in place                                                               
seem  to  be  very  capable   of  effectively  administering  the                                                               
program.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  GRUENBERG   asked  if   Mr.  Fraser   thinks  the                                                               
municipality needs to be immunized, too.                                                                                        
                                                                                                                                
MR.  FRASER answered  no,  to  the best  of  his  knowledge.   He                                                               
reminded the  committee that  the taxicabs  in Anchorage  are all                                                               
privately owned  and operated and the  municipality simply issues                                                               
the  permits.   He  surmised  that  that's  not  to say  that  an                                                               
enterprising  attorney   couldn't  attempt   to  "get   into  the                                                               
municipality's  pockets" if  there was  a lawsuit,  but he  noted                                                               
that that has never happened.                                                                                                   
                                                                                                                                
Number 1254                                                                                                                     
                                                                                                                                
MICHAEL  LESSMEIER,   Attorney  at  Law,  Lessmeier   &  Winters,                                                               
Lobbyist for  State Farm Insurance  Company ("State  Farm"), told                                                               
the  committee that  he has  practiced law  in the  state for  25                                                               
years,  and most  of his  work as  a practicing  lawyer has  been                                                               
doing litigation work.   He said State Farm thinks  the bill is a                                                               
great idea.   He said there are some solutions  to the legitimate                                                               
concerns raised by Representatives Seaton and Gruenberg.                                                                        
                                                                                                                                
MR. LESSMEIER stated he thinks  the concerns that have been heard                                                               
thus far fall into two categories:   The first category has to do                                                               
with how to "protect an innocent  victim who would no longer have                                                               
a  remedy  against somebody  that's  driving  a vehicle,  because                                                               
they're immunized by this bill."   He offered a recommendation to                                                               
the committee  that the  insurance that is  on a  vehicle [would]                                                               
"go with  the driver of that  vehicle as a permissive  user."  He                                                               
offered  his  understanding  that  Representative  Gruenberg  has                                                               
drafted "something  to that  effect."  He  said he  hasn't talked                                                               
about this issue with other  members of the industry; however, he                                                               
stated he thinks  it's something they would  support, because the                                                               
risk to  the industry is  a lot less  if a sober  professional is                                                               
delivering  the vehicle  than it  would be  if an  intoxicated or                                                               
impaired  person were  to get  behind the  wheel.   He emphasized                                                               
that State Farm Insurance would certainly support that.                                                                         
                                                                                                                                
MR. LESSMEIER  noted the second thing  that should be done  is to                                                               
ensure  that  the vehicle  isn't  uninsured  or underinsured,  or                                                               
"would be  treated that way."   He gave  an example of  a vehicle                                                               
not   being    insured,   but    the   person    injured   having                                                               
uninsured/underinsured motorist  coverage, and he  indicated that                                                               
that would be a  remedy.  He added, "As the  bill is written now,                                                               
I'm not  sure that they would  have that remedy."   He noted that                                                               
there   is   a   "strong   scheme"   in   the   state   to   make                                                               
[uninsured/underinsured motorist insurance] available to people.                                                                
                                                                                                                                
Number 1136                                                                                                                     
                                                                                                                                
MR.  LESSMEIER  turned  to  a  third issue,  which  he  said  was                                                               
previously raised  by Representative Gruenberg.   He stated that,                                                               
as  a  practicing lawyer,  he  thinks  it's important  that  [the                                                               
legislature]   "immunize  to   the  extent   of  this   bill  for                                                               
negligence"  anybody who  participates in  the administration  of                                                               
this program,  because he  said he thinks  the program  will save                                                               
lives and [prevent] injury.                                                                                                     
                                                                                                                                
Number 1087                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON asked if a rider  would have to be added to                                                               
the insurance  that the  cab drivers generally  have, or  if that                                                               
would "normally be included in their insurance policy."                                                                         
                                                                                                                                
Number 1040                                                                                                                     
                                                                                                                                
MR.  LESSMEIER stated,  "The insurance  to provide  this kind  of                                                               
service is  unaffordable for them.   And so, we're  talking about                                                               
the  insurance that  would go  with the  vehicle."   He clarified                                                               
that  he is  referring  to the  insurance that  would  be on  the                                                               
vehicle of the person who is  intoxicated and wants the free ride                                                               
home.   The  cab driver  would be  a permissive  user under  that                                                               
vehicle  owner's policy.   He  said he  thinks most  policies now                                                               
provide  that the  insurance applies  to a  permissive user.   He                                                               
concluded, "So, our suggestion is  that we just make these people                                                               
permissive   users."     That   would   avoid   the  problem   of                                                               
affordability for the taxicab industry,  while placing the burden                                                               
where it  should be  placed -  on the vehicle  owner.   He stated                                                               
that  it seems  to  him  it's a  win-win  situation  all the  way                                                               
around, because the  risk for the intoxicated person  is going to                                                               
be less if they have a sober cab driver delivering that vehicle.                                                                
                                                                                                                                
REPRESENTATIVE GRUENBERG  offered to  work on a  new CS  over the                                                               
weekend.                                                                                                                        
                                                                                                                                
Number 0935                                                                                                                     
                                                                                                                                
MR.  SHINE  told   Chair  Weyhrauch  that  he   would  work  with                                                               
Representative Gruenberg.                                                                                                       
                                                                                                                                
Number 0928                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  turned to [Conceptual Amendment  2], which would                                                               
add  a new  section to  read,  "The terms  of this  act shall  be                                                               
repealed on January 1, 2006."                                                                                                   
                                                                                                                                
Number 0886                                                                                                                     
                                                                                                                                
MR. SHINE said the issue of  whether to have a sunset included in                                                               
the language  of the bill was  brought up at "the  last meeting."                                                               
Also  discussed  was  whether  to   have  a  "reporting  back  to                                                               
legislature to the  effectiveness of the program."   He turned to                                                               
a question previously asked by  Representative Holm regarding how                                                               
many cabs are in locations  other [than Anchorage].  He explained                                                               
that this  is a pilot  program for  the Anchorage area,  which is                                                               
why only  Anchorage was  looked at  [in terms  of numbers  of cab                                                               
drivers, for example].                                                                                                          
                                                                                                                                
CHAIR WEYHRAUCH  remarked that he  doesn't want to add  a "report                                                               
to legislature,"  because it's  implicit in  the sunset  that the                                                               
legislature  will  have  to  [decide]   whether  to  extend  [the                                                               
program] or not.                                                                                                                
                                                                                                                                
Number 0840                                                                                                                     
                                                                                                                                
REPRESENTATIVE SEATON  asked if the  January 1, 2006,  date would                                                               
"give them one year."                                                                                                           
                                                                                                                                
REPRESENTATIVE  WEYHRAUCH clarified  that  it  would take  effect                                                               
July 1,  2004, and would be  in effect through 2005  [for one and                                                               
one half years].   He said, "I just arbitrarily  picked 2006.  It                                                               
could be 2007.  That gives them two years."                                                                                     
                                                                                                                                
Number 0827                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG said he wants  to know if "they" want to                                                               
have  a sunset  on there.    However, if  there is  a sunset,  he                                                               
suggested that  it be at the  end of the legislative  session, so                                                               
that the  legislature would "have  that session, then,  to extend                                                               
it."                                                                                                                            
                                                                                                                                
Number 0800                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH  amended his  Conceptual  Amendment  2 to  read:                                                               
"The terms of this act shall be repealed on July 1, 2007."                                                                      
                                                                                                                                
CHAIR  WEYHRAUCH, in  response to  a  question by  Representative                                                               
Lynn,   stated   his   understanding  that   [the   program]   is                                                               
predominately  being  promoted  by groups  and  individuals  [in]                                                               
Anchorage; however,  he said  anyone statewide  would be  able to                                                               
take advantage of "this provision."                                                                                             
                                                                                                                                
REPRESENTATIVE LYNN asked, "And use the same language?"                                                                         
                                                                                                                                
CHAIR WEYHRAUCH answered, "Correct."                                                                                            
                                                                                                                                
Number 0737                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM  reiterated that  he thinks  it's appropriate                                                               
to make  statewide policy  that can  easily be  incorporated into                                                               
other municipalities.                                                                                                           
                                                                                                                                
Number 0719                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG  asked Mr. Lessmeier  if he is  aware of                                                               
any  other  places that  "do  this,"  and whether  the  insurance                                                               
industry participates at all in the setting of rates.                                                                           
                                                                                                                                
Number 0708                                                                                                                     
                                                                                                                                
MR. LESSMEIER responded that he is not aware of that.                                                                           
                                                                                                                                
Number 0699                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH  moved  to  adopt  Conceptual  Amendment  2  [as                                                               
amended], as  previously stated.   There  being no  objection, it                                                               
was so ordered.                                                                                                                 
                                                                                                                                
CHAIR  WEYHRAUCH  stated  his understanding  that  Representative                                                               
Gruenberg  would  not  be  offering  his  amendments  today,  but                                                               
instead would  work on amendments  with the sponsor and  with the                                                               
cooperation of CHARR and Mr. Lessmeier.                                                                                         
                                                                                                                                
Number 0608                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM noted that Alberta,  Canada, has this kind of                                                               
program,  and he  is  waiting  to hear  back  from Senator  Ralph                                                               
Seekins' daughter who lives in Alberta.                                                                                         
                                                                                                                                
Number 0572                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH announced that HB 423 [was heard and held].                                                                     
                                                                                                                                
HB 422-BUDGET RESERVE FUND INVESTMENT                                                                                         
                                                                                                                                
Number 0552                                                                                                                     
                                                                                                                                
CHAIR WEYHRAUCH  announced that  the last  order of  business was                                                               
HOUSE  BILL NO.  422, "An  Act repealing  the special  subaccount                                                               
established in  the constitutional budget reserve  fund; relating                                                               
to the powers of the Department  of Revenue for the investment of                                                               
amounts in the constitutional budget  reserve fund; and providing                                                               
for an effective date."                                                                                                         
                                                                                                                                
Number 0543                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SEATON moved  to adopt  the committee  substitute                                                               
(CS)  for HB  422, Version  23-LS157\Q, Cook,  3/4/04, as  a work                                                               
draft.   [No objection was stated,  and Version Q was  treated as                                                               
adopted.]                                                                                                                       
                                                                                                                                
Number 0450                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG moved Amendment 1 to Version Q.                                                                        
                                                                                                                                
REPRESENTATIVE HOLM objected.                                                                                                   
                                                                                                                                
Number 0398                                                                                                                     
                                                                                                                                
The committee took an at-ease from 9:37 a.m. to 9:38 a.m.                                                                       
                                                                                                                                
TAPE 04-30, SIDE A                                                                                                            
Number 0001                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG  said he wanted  to know if  Amendment 1                                                               
would give the Department of Revenue additional flexibility.                                                                    
                                                                                                                                
Number 0058                                                                                                                     
                                                                                                                                
TOMAS   H.   BOUTIN,   Deputy   Commissioner,   Office   of   the                                                               
Commissioner, Department of Revenue,  responded that while he has                                                               
no  problem  with  Amendment  1,  it  would  not  really  provide                                                               
additional flexibility.   Furthermore, he stated  that Version Q,                                                               
without Amendment 1,  would "do just fine," and  is worded better                                                               
than the original bill.                                                                                                         
                                                                                                                                
Number 0126                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG withdrew Amendment 1.                                                                                  
                                                                                                                                
Number 0156                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HOLM  moved  to  report  CSHB  422,  Version  23-                                                               
LS1527\Q,  Cook,   3/4/04,  out  of  committee   with  individual                                                               
recommendations [and the accompanying fiscal note].                                                                             
                                                                                                                                
REPRESENTATIVE  SEATON  objected  for discussion  purposes.    He                                                               
turned to  the title  of Version  Q.  He  asked, "If  the special                                                               
subaccount established in the  constitutional budget reserve fund                                                               
(CBRF)  is repealed,  does the  money automatically  flow to  the                                                               
CBR, or does it flow to the general fund?"                                                                                      
                                                                                                                                
Number 0200                                                                                                                     
                                                                                                                                
MR. BOUTIN stated he is certain it  would be part of the CBR.  He                                                               
said the  department currently reports  the CBR  balance, without                                                               
even delineating the CBR.   He explained that the only difference                                                               
in the  subaccount is that it  needs to be invested  with a five-                                                               
year minimum time horizon in mind.                                                                                              
                                                                                                                                
REPRESENTATIVE SEATON explained  that he wanted it  on the record                                                               
that "this was not a ... CBR draw that we were offering."                                                                       
                                                                                                                                
Number 0300                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG moved  [Amendment  2 to  Version Q],  a                                                               
technical  amendment that  would remove  the words,  "On July  1,                                                               
2004,"  from page  1, line  7 of  Version Q.   He  explained that                                                               
since the committee had changed  the effective date from "July 1,                                                               
2004" in  the original bill  version to  "effective immediately",                                                               
the July  1, 2004 date in  the "TRANSITION" part of  the bill was                                                               
no longer accurate.                                                                                                             
                                                                                                                                
MR. BOUTIN concurred.                                                                                                           
                                                                                                                                
Number 0339                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM,  at the bequest  of the chair,  withdrew his                                                               
previously  stated motion  [as  a  point of  order,  so that  the                                                               
committee could address Amendment 2].                                                                                           
                                                                                                                                
REPRESENTATIVE  GRUENBERG questioned  whether  the  tense of  the                                                               
word "merge" on page 1, line 8 should be changed.                                                                               
                                                                                                                                
Number 0374                                                                                                                     
                                                                                                                                
CHAIR  WEYHRAUCH  offered his  understanding  that  line 7  would                                                               
therefore begin with the word "The".                                                                                            
                                                                                                                                
REPRESENTATIVE  SEATON asked  for  clarification  on whether  the                                                               
word "TRANSITION" would be deleted.                                                                                             
                                                                                                                                
CHAIR WEYHRAUCH announced that,  without objection, the technical                                                               
[Amendment 2] was so ordered.                                                                                                   
                                                                                                                                
Number 0400                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM moved to report  CSHB 422, as amended, out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
fiscal  note.    There  being no  objection,  CSHB  422(STA)  was                                                               
reported out of the House State Affairs Standing Committee.                                                                     
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
Number 0449                                                                                                                     
                                                                                                                                
There being no  further business before the  committee, the House                                                               
State Affairs  Standing Committee  meeting was adjourned  at 9:46                                                               
a.m.                                                                                                                            

Document Name Date/Time Subjects