Legislature(1995 - 1996)

04/21/1995 01:15 PM TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
            HOUSE TRANSPORTATION STANDING COMMITTEE                            
                         April 21, 1995                                        
                           1:15 p.m.                                           
 MEMBERS PRESENT                                                               
 Representative Gary Davis, Chairman                                           
 Representative Beverly Masek, Vice Chair                                      
 Representative Jeannette James                                                
 Representative Bill Williams                                                  
 Representative Jerry Sanders                                                  
 Representative Eileen MacLean                                                 
 Representative Tom Brice                                                      
 MEMBERS ABSENT                                                                
 COMMITTEE CALENDAR                                                            
 * HJR 42: Relating to regulation of water carriers serving Alaska.            
           PASSED OUT OF COMMITTEE                                             
 HB 161:   "An Act relating to civil liability for guest                       
           passengers on an aircraft or watercraft: and                        
           providing for an effective date."                                   
           PASSED OUT OF COMMITTEE                                             
 HB 210:   "An Act relating to issuance of motor vehicle                       
           registrations and titles, and to licenses and permits to            
           operate a motor vehicle."                                           
           PASSED OUT OF COMMITTEE                                             
 (* First public hearing)                                                      
 WITNESS REGISTER                                                              
 GORDON EVANS, Lobbyist                                                        
 Totem Ocean Trailer Express                                                   
 318 4th Street                                                                
 Juneau,  Alaska  99801                                                        
 Telephone: (907) 586-3210                                                     
 POSITION STATEMENT: Supports HJR 42                                           
 FRANK DILLION, Executive Director                                             
 Alaska Trucking Association                                                   
 3443 Minnesota Drive                                                          
 Anchorage, Alaska  99503                                                      
 Telephone: (907) 276-1149                                                     
 POSITION STATEMENT: Supports HJR 42                                           
 PATTY SWENSON, Legislative Assistant                                          
 Representative Con Bunde                                                      
 Alaska State Legislature                                                      
 State Capitol, Room 108                                                       
 Juneau, Alaska  99801-1182                                                    
 Telephone: (907) 465-4843                                                     
 POSITION STATEMENT: Provided sponsor statement for HB 161                     
 RAY BROWN, Attorney                                                           
 Alaska's Academy of Trial Lawyers                                             
 510 L Street, Suite 603                                                       
 Anchorage, Alaska  99501                                                      
 Telephone: (907) 277-5400                                                     
 POSITION STATEMENT: Opposed CSHB 161                                          
 REPRESENTATIVE AL VEZEY                                                       
 Alaska State Legislature                                                      
 State Capitol, Room 216                                                       
 Juneau, Alaska  99801-1182                                                    
 Telephone: (907) 465-3719                                                     
 POSITION STATEMENT: Prime sponsor for HB 210                                  
 JUANITA HENSLEY, Chief of Driver Services                                     
 Division of Motor Vehicles                                                    
 Department of Public Safety                                                   
 P.O. Box 111200                                                               
 Juneau, Alaska  99802                                                         
 Telephone: (907) 465-2650                                                     
 POSITION STATEMENT: Provided technical information on HB 210                  
 PREVIOUS ACTION                                                               
 BILL:  HJR 42                                                                
 SHORT TITLE: WATER CARRIERS SERVING ALASKA                                    
 SPONSOR(S): TRANSPORTATION                                                    
 JRN-DATE     JRN-PG               ACTION                                      
 04/07/95      1173    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 04/07/95      1173    (H)   TRANSPORTATION                                    
 04/19/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
 04/21/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
 BILL:  HB 161                                                                
 SPONSOR(S): REPRESENTATIVE(S) BUNDE,Toohey                                    
 JRN-DATE     JRN-PG               ACTION                                      
 02/08/95       271    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/08/95       272    (H)   TRA, JUD                                          
 03/06/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
 03/08/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
 03/08/95              (H)   MINUTE(TRA)                                       
 03/13/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
 03/15/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
 03/15/95              (H)   MINUTE(TRA)                                       
 04/21/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
 BILL:  HB 210                                                                
 SPONSOR(S): REPRESENTATIVE(S) VEZEY                                           
 JRN-DATE     JRN-PG               ACTION                                      
 03/01/95       529    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/01/95       529    (H)   TRANSPORTATION, STATE AFFAIRS                     
 03/17/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
 03/20/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
 03/20/95              (H)   MINUTE(TRA)                                       
 04/19/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
 04/21/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
 ACTION NARRATIVE                                                              
 Tape 95-16, SIDE A                                                            
 Number 000                                                                    
 The House Transportation Committee was called to order by Chairman            
 Gary Davis at 1:15 p.m.  Members present at the call to order were            
 Representatives Davis, James, Masek, Williams, Sanders, MacLean and           
 CHAIRMAN GARY DAVIS announced the agenda was to hear testimony on             
 House Joint Resolution (HJR) 42, and review HB 161 and HB 210 in              
 that order.  He indicated the meeting is on teleconference with               
 HJR 42- WATER CARRIERS SERVING ALASKA                                       
 Number 014                                                                    
 GORDON EVANS, Lobbyist, Totem Ocean Trailer Express (TOTE)                    
 explained TOTE provides services from the port of Anchorage, Alaska           
 to the port of Tacoma, Washington.  Between TOTE and Sea-Land, they           
 bring in the majority of the products that are used in Alaska,                
 particularly the Interior of Alaska.  TOTE supports HJR 42.  Mr.              
 Evans stated it was his belief that HJR 42 was self-explanatory.              
 He felt it would be a serious mistake for Congress to repeal all              
 regulations of the Alaska water trade.  He referred to a bill                 
 currently under consideration in Congress which would repeal                  
 regulations, not only the Alaska water trade, but in Hawaii and               
 Puerto Rico, as well.  These are the only three areas that are                
 currently regulated.  He explained that the legislative bodies of             
 these areas are being asked to ensure that an amendment is added to           
 the bill in Congress allowing the people in the Interstate Commerce           
 Commission (ICC) who are currently responsible for the regulating,            
 that they and their duties would be transferred to the Department             
 of Transportation (DOT).  He explained it was to companies, such as           
 TOTE and Sea-Land's, advantage to be regulated.  One reason is the            
 potential problems with anti-trust issues, or if an oligopoly,                
 where there are several carriers serving a particular trade, the              
 carriers could get together and raise rates and there would be no             
 one to oversee them.  TOTE feels as long as there is someone                  
 regulating the traffic, there is no potential of someone to                   
 institute new or higher tariffs and gouge the shippers involved.              
 Mr. Evans said they have discussed this with Alaska's Congressional           
 Delegation.  They have indicated they would support this amendment            
 in Congress, if they could show there was sufficient support in the           
 state for it.                                                                 
 MR. EVANS indicated the committee members should have in their bill           
 packets, numerous letters of support from various companies, the              
 municipality of Anchorage, the Alaska Railroad Corporation,                   
 Anchorage Chamber of Commerce and others.  Mr. Evans indicated that           
 Congressman Don Young was in Anchorage recently and met with the              
 representatives of TOTE and the Alaska Truckers Association.                  
 Congressman Young indicated he was pleased with the letters and               
 planned to push the amendment in Congress.  Mr. Evans said the                
 current problem is in timing and the mark-up in Congress is                   
 scheduled for around May 6, 1995; the first initial adjournment               
 date for this year's Alaska Legislative session.  He asked if there           
 were any questions.                                                           
 Number 105                                                                    
 CHAIRMAN DAVIS stated for the record that Representative Eileen               
 MacLean arrived at 1:17 p.m.                                                  
 REPRESENTATIVE BEVERLY MASEK said she was in support of getting the           
 federal government out of the state's affairs and supported HJR 42.           
 CHAIRMAN DAVIS said he would take testimony via teleconference from           
 Mr. Frank Dillion in Anchorage.                                               
 Number 107                                                                    
 FRANK DILLION, Executive Director of Alaska Trucking Association,             
 stated they were large customers of the steamship industry.  They             
 handle the deliveries of the majority of freight that travels                 
 through the railbelt of Alaska.  The Alaska trucking industry                 
 supports HJR 42 and requests that it be promptly moved forward to             
 the floor.  Mr. Dillion attended a meeting with Congressman Young             
 and a TOTE representative and Congressman Young indicated that he             
 has already drafted a letter to Chairman Shuster who has                      
 jurisdiction in Congress on this particular issue.  This letter               
 supported the continued oversight at the DOT of the Alaska water              
 trade steamship (indisc.).  He explained the oversight provides               
 stability in the market place.  This is an extremely important                
 issue for the businesses in Alaska to understand what the shipping            
 costs will be.  He emphasized the importance of having stable and             
 dependable services.  He added there was no question regarding the            
 dependability of TOTE and Sea-Land services.                                  
 MR. DILLION continued to explain even in difficult situations, well           
 beyond their control such as labor difficulties, they have                    
 maintained ships in operation and freight moving to Alaska.  He               
 indicated the stability should be maintained, and there should be             
 a mechanism to prevent a situation where they may be treated                  
 unjustly and they have someone who can arbitrate or at least                  
 enforce TOTE and Sea-Land to justify the rates they are proposing.            
 He did not feel that "unbridled" competition in this particular               
 type of market would be in the best interest of anyone in Alaska.             
 He expressed concern that not only would prices go too high, but              
 conversely, of prices going too low.  He said a good example of               
 what happens to a transportation entity when it does not price                
 itself compensatorily is the Mark Air situation.  Simply by having            
 market share and giving the customers and the shipping public a               
 break, does not necessarily make for a good transportation system.            
 He stated they would be afraid to see other steamship lines move              
 into the market for a short term benefit, using a ship that might             
 not be allowed elsewhere and hauling freight at a cut rate deal,              
 establishing that pattern for awhile and then disappearing.  He               
 reiterated his eagerness on passing HJR 42.  He asked if there were           
 any questions.                                                                
 Number 160                                                                    
 CHAIRMAN DAVIS said a number of these resolutions have been                   
 scrutinized closely when reaching the floor, and he wanted to                 
 review some of the details in this particular resolution.  Chairman           
 Davis referred to line 9, page 1, stating "Whereas the citizens of            
 the State of Alaska have expressed their desire to preserve tariff            
 filing and the other essential elements..." and expressed concern             
 regarding the letters of support that were drafted by groups and              
 companies.  He inquired as to the ways to defend the argument that            
 where have the citizens of the state of Alaska expressed their                
 Number 172                                                                    
 MR. DILLION interjected and reminded the committee of the fact that           
 there are thousands of employees who work for those organizations,            
 and they are all citizens.  At times, we defer to the judgment that           
 people who we work for or elect make the decisions that, hopefully,           
 are in the best interest of the majority of people.  He did not               
 feel this was the type of issue that you are going to see the rank            
 and file person off the street take much interest in.  People are             
 interested in the prices they pay and the dependability of service.           
 He felt this serves well the interests of all the citizens of                 
 Alaska that have continued oversight on this particular area of               
 Number 184                                                                    
 MR. EVANS referred to the letters of support which included such              
 entities as the municipality of Anchorage, the Alaska Railroad                
 Corporation, Anchorage Chamber of Commerce, the General Teamsters             
 Local Union, and the Anchorage Independent Longshoreman's                     
 Association and stated they were all consumers as well as groups.             
 He indicated it will come out of their pockets in the end of what             
 they pay at the local stores.  He referred to Alaska Matanuska Maid           
 Dairy, Alaska Fish and Farm products and others.  He agreed with              
 Mr. Dillon's comments.                                                        
 MR. DILLION added due to the fact that TOTE and Sea-Land are                  
 intensely competitive, they want someone watching over them so                
 someone does not make an error in judgment that would impose costs            
 to the state or hurt themselves.  He indicated the reason that TOTE           
 and Sea-Land want someone to continue to look over their shoulder             
 is to make sure someone is looking over the other guy's shoulder.             
 He felt this might explain some of the motivation for the support             
 behind this particular issue.                                                 
 REPRESENTATIVE JEANNETTE JAMES asked Chairman Davis if he was                 
 interested in a motion to move HJR 42 out of committee.                       
 CHAIRMAN DAVIS said yes.                                                      
 REPRESENTATIVE JAMES moved to pass HJR 42 out of the House                    
 Transportation Committee.                                                     
 CHAIRMAN DAVIS asked if there was objection.  Hearing none, HJR 42            
 was passed out of the House Transportation Committee.                         
 HB 161 - AIRCRAFT/WATERCRAFT GUEST PASSENGER LAW                            
 Number 218                                                                    
 CHAIRMAN DAVIS announced the next order of business was to hear               
 testimony on CSHB 161 and asked the prime sponsor's legislative               
 assistant, Ms. Patty Swenson to present her testimony on the                  
 committee substitute (CS) for HB 161.                                         
 PATTY SWENSON, Legislative Assistant to Representative Con Bunde,             
 indicated the only change they have made to the committee                     
 substitute before the committee is on page 2, Section (B).  This              
 includes the addition of limiting aircraft or watercraft owners'              
 liability, if they posted notice that they did not have insurance.            
 People would then have some warning before they rode with the pilot           
 of the boat or plane.  This was the only change Representative                
 Bunde made to the bill.                                                       
 CHAIRMAN DAVIS reminded the committee that a second version added             
 the wording "simple negligence" and this was then deleted, because            
 it would have made the whole bill unnecessary.  He said the effect            
 of the new wording...                                                         
 MS. SWENSON interjected that it would just limit the aircraft or              
 watercraft owner's liability, when they posted notice.  She                   
 explained it would then be similar to a person not having insurance           
 and that it would compensate a person being transported, as is                
 described in the first section of the bill under Section (a).  They           
 would have the same lack of liability in cases other than gross               
 negligence acts.                                                              
 Number 234                                                                    
 CHAIRMAN DAVIS asked for confirmation that this was just a notice             
 to the passengers.                                                            
 REPRESENTATIVE JERRY SANDERS asked if the form of notice was verbal           
 or written?                                                                   
 MS. SWENSON said it stated it was to provide notice to the person             
 being transported.  It does not specify the type of notice.                   
 REPRESENTATIVE SANDERS asked if it was a verbal notification and              
 not some kind of label on the door or display on the aircraft,                
 couldn't we get into a situation of "I said, he said, or you didn't           
 tell me" situation.                                                           
 MS. SWENSON explained it was her understanding that if something              
 were to happen and a notice was posted, then something happened to            
 the notice, there would still be the same problems.                           
 REPRESENTATIVE SANDERS said this situation would occur more                   
 frequently if the notice was not posted.  He said he supported the            
 amendment to this bill and encouraged it from the beginning, but it           
 did not seem to be definitive enough.                                         
 Number 269                                                                    
 REPRESENTATIVE JAMES responded to Representative Sanders' comment             
 that she has experienced similar situations.  She presented an                
 example of entering a mining area, where the people in charge                 
 require their guests to sign a piece of paper stating that the                
 guest understands any risks that might be involved.  She thought              
 that people will want to insure themselves, so they will put it in            
 writing that they are not responsible.                                        
 CHAIRMAN DAVIS presented a scenario where a pilot took someone for            
 a ride in their airplane, they crashed, and the passenger was                 
 killed.  Previous to the flight, the passenger was notified that              
 the pilot did not have insurance.  Chairman Davis indicated "he               
 can't give his word, I told him" so this type of situation seemed             
 to be a problem.                                                              
 REPRESENTATIVE SANDERS concurred with Chairman Davis and stated if            
 it was incorporated in this bill that there had to be in writing,             
 the terms of liability, he would then feel more comfortable with              
 it.  However, at this time it does not state this and he has no               
 reason to assume this would be carried out by the pilots.                     
 CHAIRMAN DAVIS indicated he would take testimony from Mr. Ray Brown           
 via teleconference from Anchorage.                                            
 Number 293                                                                    
 RAY BROWN, Attorney, Alaska's Academy of Trial Lawyers indicated he           
 did not hear the first part of the presentation and didn't know who           
 the speaker was who was talking about the amendments to the bill.             
 He said he didn't know if they added back language, but he knew               
 from the last time he testified on this bill, Mr. Bunde included              
 under Section B, the wording "negligent conduct."  He asked if that           
 had been taken out.                                                           
 CHAIRMAN DAVIS said yes.                                                      
 MR. BROWN continued to explain that HB 161 is creating a litigation           
 nightmare.  He referred to the issue of a notice requirement as               
 being problematic in and of itself.  He inquired as to who will               
 make the determination of whether or not notice was given as well             
 as determining whether or not someone was negligent, grossly                  
 negligent or reckless or intentional, after an aircraft has                   
 crashed.  He remarked this type of bill seems to carve out a                  
 special class of people that are being immunized from exposure,               
 based upon their conduct.  He said he was not aware of any other              
 class, other than attempting to do this in the medical field, where           
 there is an elite group of people, basically immunizing them from             
 negligent conduct.  He explained HB 161 when read in its entirety,            
 and without some sort of clarification, would probably immunize               
 people to some extent from reckless or grossly negligent conduct.             
 It potentially leaves the care of victims, their families and their           
 children, who if in the event both parents were killed without an             
 income provider, the state of Alaska and the federal government               
 could be responsible for covering the negligent acts of the pilots.           
 If a person is catastrophically injured, it leaves their health               
 care to the state and federal government because of the negligent             
 or reckless conduct of another person.  He said not only from an              
 attorney's standpoint, but from a citizen's standpoint, and in a              
 state where we have the highest per capita number of pilot error-             
 type crashes, he was amazed that a bill such as this would be                 
 passed, to immunize those persons.  He referred to Representative             
 Bunde's explanation that this bill was designed to protect pilots             
 from acts of God.  Mr. Brown stated if this was really the purpose            
 of the bill, there would be no need to pass it because under the              
 torte liability law, if there is no negligence and it is an act of            
 God, then there is no breach in the duty of care and no resulting             
 liability to begin with.  He indicated this is not the intent of              
 this bill, particularly with the deletion of the negligence wording           
 and it is not for the acts of God, but actually to protect                    
 negligent people for their conduct.  He referred to Section 2(b)              
 and said it was difficult for him to figure out from the bill                 
 itself, whether or not the language in subsection 2 (a) also                  
 applies to subsection 1(a).  If it does, then there are some                  
 obvious problems.  He mentioned it would encourage the property               
 owner to purchase the minimum of coverage.                                    
 MR. BROWN presented an example where someone with $3 million or $4            
 million in assets could engage in grossly negligent or reckless or            
 intentional misconduct and only be liable for the minimum amount of           
 coverage.  He stated he would assume that people would elect to               
 purchase the minimal amount of coverage, because for any amount               
 over that they would be immunized for regardless of their conduct.            
 He concluded it has the potential to work a great injustice on                
 innocent victims.  He felt that based on the wording of the                   
 statute, a person would be better off to be involved in an accident           
 with people who would be grossly negligent or intentional with no             
 insurance, so long as they had sufficient assets to cover an injury           
 or death.  He felt the statute discouraged adequate insurance and             
 is a boondoggle for a select few people who are pilots and aircraft           
 owners.  He added it will work a great injustice on innocent                  
 victims who happen to ride in an aircraft.                                    
 Number 363                                                                    
 REPRESENTATIVE BILL WILLIAMS asked Mr. Brown if he is an attorney.            
 MR. BROWN responded, yes.                                                     
 REPRESENTATIVE WILLIAMS said he was under the impression that this            
 bill catered to private parties who wanted to take their friends              
 along for a ride.  The way he viewed it and from what the attorney            
 said, is that we would be providing for an open season in the court           
 system.  That may be true if the operator of the boat or plane was            
 not going to take his friend for a ride.  He presented an example             
 where a friend of his goes for a ride with him in his boat and he             
 tells the passenger that he does not have insurance and he can ride           
 at his own risk.  The passenger has the choice to stay or go.  He             
 felt that was the intent of this bill.                                        
 MS. SWENSON stated Representative Williams is correct.  The purpose           
 of the bill was to be able to take friends and acquaintances on a             
 boat or plane...                                                              
 REPRESENTATIVE WILLIAMS interjected and stated the pilots are not             
 looking to make money...                                                      
 MS. SWENSON interjected that was specifically excluded, if it's a             
 nonpaying passenger, common carriers are excluded as well.                    
 Currently the majority of aircraft owners do not have passenger               
 insurance because of the high costs.  The friends that ride with              
 the pilots are traveling at their own risk.                                   
 REPRESENTATIVE WILLIAMS said he had a friend who occasionally would           
 take him for a ride in his airplane, and he was under the                     
 impression the pilot had insurance.  Representative Williams said             
 this would bring to his attention, the concern that the pilot could           
 say I do not have any insurance and it is the passenger's choice to           
 ride along and the pilot would be covered.  He reiterated his                 
 comments on the fact the passenger has the choice to go or stay.              
 MS. SWENSON said this was correct.                                            
 Number 409                                                                    
 REPRESENTATIVE SANDERS stated there was more to this than just the            
 friends going along for rides.  He presented a scenario where                 
 Representative Williams was a pilot and took him flying.                      
 Representative Williams told Representative Sanders that he did not           
 have insurance.  He said he understood this and agreed not to sue             
 him in the event of a crash.  They then go flying, the plane                  
 crashes and Representative Sanders is killed, and his wife is left            
 without an income.  She would look to sue someone and deserves to.            
 REPRESENTATIVE JAMES disagreed with Representative Sanders'                   
 statement.  If a person was paying for a ride, that person would              
 expect that the beneficiary would receive compensation for the                
 incident.  She felt if it was a commercial flight, the company                
 would be required to cover all passengers.  This bill addresses the           
 issue of people going for rides for the fun of it and do not pay              
 for the rides.  She felt that the pilots would get someone to sign.           
 She proposed the situation where a waiver was signed, but both                
 family members were killed in a plane crash and everyone dies and             
 other people are not a party to that.  She felt that if someone did           
 sign the waiver, this would be seen as evidence of the fact the               
 passenger was informed.  She said the issue is taking passengers              
 for a free ride and of the passenger's will.  She explained the               
 insurance was expensive and it is a toy in many cases.  She                   
 indicated she did not have a problem with people having toys even             
 though they kill themselves with toys.  She commented anytime                 
 someone is negligent, they should be held responsible.                        
 Number 434                                                                    
 MR. BROWN stated the problem, as he understood it, was that we are            
 immunizing people for negligence.  He stated when he gets into an             
 airplane, car or boat, he hopes that the operator will not act in             
 a negligent manner.  He understands that he has no control over the           
 operator of the boat, plane or car.  He questioned why we would               
 want to isolate one pocket of society.  Whether it is called a toy            
 or not, he did not understand why someone would want to protect a             
 person from negligent conduct?  He remarked this is exactly what              
 this bill would be doing just by the mere recitation of a person              
 stating they do not have insurance.  He questioned who would be               
 responsible for the negligent conduct of an uninsured pilot even if           
 they gave notice, and added more than likely it would be the state            
 of Alaska.  He said fortunately we are in a state that does not               
 have a large tax base, but someone will pay for the negligent acts.           
 He commented on Representative Sanders' astute observations that              
 there will be family members that will suffer because of this                 
 conduct.  He reiterated his concerns for people wanting to immunize           
 a person that caused the negligent act at the expense of everyone             
 else.  He added he did not understand what the problem was with               
 requiring people to carry insurance to operate these toys.                    
 REPRESENTATIVE WILLIAMS stated the way he saw it, people can                  
 protect themselves to the hilt.  He said the subject of torte                 
 reform had come up and said this sounds similar.  He made the                 
 analogy of pedestrians crossing the street and assuming everyone in           
 a car has liability insurance.  He said the pedestrians are not               
 aware of who has insurance and who does not, but if they cross the            
 street, and are hit by a car...maybe this bill should include motor           
 vehicles as well.                                                             
 CHAIRMAN DAVIS said he had neglected to adopt the Committee                   
 Substitute, and asked if he could have a motion to adopt the                  
 Version /F, CSHB 161.                                                         
 REPRESENTATIVE JAMES motioned to adopt CSHB 161, Version /F.                  
 CHAIRMAN DAVIS asked if there was any objection.  Hearing none,               
 CSHB 161, Version /F was adopted.                                             
 REPRESENTATIVE SANDERS commented on the distinction between cars              
 and boats, and said with cars there is no law saying you do not               
 need insurance and the same applies to boats.  Representative                 
 Sanders said he did not see why airplanes should be different.  He            
 felt a person should have insurance.  He was not going to be party            
 to making a law that states that insurance is not needed.                     
 Number 499                                                                    
 REPRESENTATIVE TOM BRICE added to Representative Sanders' comments            
 that this was the intent of HB 161.  It does not imply "my good               
 friend, Jerry, come on my boat with me and we'll have fun," rather            
 HB 161 indicates a person won't buy insurance because, if they do,            
 they will be held liable, but if they don't buy the insurance, then           
 they are off the hook.  This was his concern with the fact it is a            
 negative incentive to obtain insurance to help out in the situation           
 where simple negligence is a factor.  A person is still liable if             
 they commit a grossly negligent act, but a person is not liable if            
 they commit a negligent act.  He suggested the possibility of                 
 lowering the standard to ease some of the concerns among members of           
 the committee.  As the bill is written, it says "don't buy                    
 insurance because it is a waste of time and money.  The people that           
 get hurt will be taken care of by the state."  Representative Brice           
 said that was his concern.                                                    
 REPRESENTATIVE EILEEN MACLEAN stated she had similar concerns, but            
 added this should not be exclusive to air and watercraft guest                
 passengers.  She asked to make it all inclusive of other modes of             
 Number 522                                                                    
 CHAIRMAN DAVIS stated it was his intent to address a motion on the            
 CS for HB 161 to move it out of the House Transportation Committee.           
 REPRESENTATIVE JAMES made a motion to move CSHB 161(TRA) out of               
 CHAIRMAN DAVIS asked if there was objection.                                  
 REPRESENTATIVE MACLEAN objected for discussion on CSHB 161(TRA).              
 REPRESENTATIVE BRICE proposed an amendment on page 1, line 13,                
 delete the word "gross" and negligence or reckless or intentional             
 misconduct are not exempt under this.                                         
 REPRESENTATIVE JAMES objected to Representative Brice's proposed              
 CHAIRMAN DAVIS questioned the legal definition of the wording                 
 "reckless misconduct."  He expressed concern for the legal                    
 interpretation of this.  He would interpret this as being similar             
 to simple negligence, but was not sure.  He then announced there              
 was a motion to delete the word "gross" on page 1, line 13, that              
 had been objected to for the purpose of discussion.                           
 REPRESENTATIVE JAMES explained her objection was with the wording             
 "negligence."  She stated it was not possible for anyone to live              
 without it.  She said we are not perfect and any time someone does            
 something that injures someone else, it can be construed as                   
 negligent.  If someone does do something and nothing happens, it is           
 not negligent.  She explained there has to be some admittance to              
 the fact that there is an inherent risk of living and people cannot           
 be held responsible for everything people do that can be addressed            
 as negligent.  If people could place negligence in terms of degrees           
 of a negligent act that a person did something intentionally....              
 She then presented an example of someone driving into a ditch and             
 saying "I could have avoided that by doing this or this or this"              
 and the person admits that they were negligent.  It is not possible           
 to go through life without having some sort of negligent accidents.           
 She stated she would feel very vulnerable if every negligent action           
 that she has is subject to a lawsuit.  She reiterated her concerns            
 on addressing the issue of an inherent risk of living.  This is why           
 she objected to the term negligent.                                           
 Number 558                                                                    
 REPRESENTATIVE BRICE disagreed and explained that before this would           
 happen there should be testimony from attorneys who understand the            
 term negligence.  He felt the immediate discussions were stretching           
 the term way beyond its intent.  He presented an example where he             
 was just involved in a car accident on March 1, 1995.  The driver             
 crossed the yellow line and ran into him.  As far as he is                    
 concerned, the other driver was negligent.  Unfortunately, the                
 lawyers are blaming the icy roads so she was found not to be                  
 negligent.  He suggested that before every mishap that occurs is              
 deemed a negligent act, there should be an understanding of a                 
 legally recognized and defined term for negligence.  He reiterated            
 his concerns on having someone from Legislative Legal Services                
 confront this issue.  He concluded by saying it would ease the                
 concerns of a lot of people because unlike driving, snow mobiling             
 or unlike any other type of activity, the operation of aircraft and           
 watercraft are probably the two most unforgiving forms of                     
 transportation.  Not only unforgiving in case of accidents, but               
 also unforgiving in terms of various conditions of the outdoor                
 elements.  The potential for serious injuries is much higher than             
 driving or walking.                                                           
 MS. SWENSON asked the maker of the amendment if his intent was to             
 delete the term gross negligence and add negligence?                          
 REPRESENTATIVE BRICE said yes.                                                
 MS. SWENSON asked for confirmation on adding the word negligence to           
 the bill and not holding people liable for gross negligence acts...           
 REPRESENTATIVE BRICE interjected that it would be lowering the                
 standard to "negligence."                                                     
 CHAIRMAN DAVIS said he would speak in favor of the motion and                 
 suggested to move the bill to the Judiciary Committee, where                  
 further legal action could be discussed.                                      
 REPRESENTATIVE JAMES reminded the committee that these passengers             
 are riding for free and for the fun of it.  The passengers in this            
 case should assume some portion of the responsibility.                        
 Number 612                                                                    
 REPRESENTATIVE MACLEAN said she viewed it differently and presented           
 an example of someone needing to be transported out of a village              
 for medical reasons.  The pilot is not being paid to transport the            
 person out of the village.  She asked how would this impact the               
 CHAIRMAN DAVIS said the pilot would be contracted to transport the            
 passenger.  This would be seen as a business transaction through              
 whatever company the pilot is affiliated with.  He questioned                 
 whether a private pilot using his own plane to medivac someone out,           
 would not be covered and the passenger may not be covered.                    
 REPRESENTATIVE MACLEAN stated she was referring to a situation                
 where someone from Hoonah or Petersburg ws going to be transported            
 in an emergency situation and they were not paying, how would this            
 legislation impact this particular situation.                                 
 Number 617                                                                    
 MS. SWENSON explained if there was an accident while transporting             
 this person, the pilot would not be held liable.  Many people would           
 not be able to be transported if a pilot did not have passenger               
 insurance.  Pilots would be afraid that something might happen to             
 them in flight that was beyond their control.  As a result, the               
 pilot may choose not to transport the person that needed to be                
 CHAIRMAN DAVIS asked to vote on the motion.  He reminded the                  
 committee the motion was to move the amendment to delete the word             
 "gross" on page 1, line 13.  He then asked for a roll call on                 
 Representative Brice's amendment.  Representatives Brice, Masek,              
 Davis, Sanders, Williams and MacLean voted in favor of the                    
 amendment. Representative James opposed the amendment.  Chairman              
 Davis asked if there was further discussion.  Hearing none, the               
 amendment passed.                                                             
 REPRESENTATIVE WILLIAMS made a motion to move CSHB 161(TRA) as                
 amended out of the House Transportation Committee with zero fiscal            
 REPRESENTATIVE SANDERS objected.                                              
 CHAIRMAN DAVIS asked for a roll call vote.  Representatives Brice,            
 James, Davis, Masek and Williams voted in favor.  Representatives             
 Sanders and MacLean voted no.  Chairman Davis announced that CSHB
 161(TRA), as amended was moved out of the House Transportation                
 HB 210 - PRIVATE MOTOR VEHICLE LICENSING/TESTING                             
 Number 645                                                                    
 CHAIRMAN DAVIS announced the next item on the agenda was HB 210.              
 CHAIRMAN DAVIS asked for a motion to adopt the CS for HB 210                  
 Version R, as the working document.                                           
 REPRESENTATIVE SANDERS made a motion to adopt the CS for HB 210,              
 Version R, as the working document.                                           
 CHAIRMAN DAVIS asked if there was objection.  Hearing none, the CS            
 Version R, was adopted as the working document.                               
 REPRESENTATIVE AL VEZEY noted there has been previous discussion              
 and a small subcommittee working with the Division of Motor                   
 Vehicles (DMV) on HB 210.   He said a number of changes were made             
 which were reflected in the committee substitute before the                   
 committee members.  He asked if there were any questions.  He then            
 indicated there were proposed amendments before the committee.                
 CHAIRMAN DAVIS said he, too, discussed the amendments with the DMV.           
 He indicated that with the consent of the prime sponsor, the                  
 Administration and the committee, he would like to discuss and vote           
 on each amendment individually.  He suggested that Ms. Juanita                
 Hensley with the Department of Public Safety could present details            
 of previous meetings that she and the prime sponsor had regarding             
 this issue.                                                                   
 TAPE 95-16, SIDE B                                                            
 Number 000                                                                    
 JUANITA HENSLEY, Chief of Driver Services, Division of Motor                  
 Vehicles, Department of Public Safety, asked if Chairman Davis                
 wanted her to speak directly to the amendments.  She stated she               
 worked directly with the sponsor of this bill to come up with the             
 draft that was before the committee.  She indicated that she had              
 reviewed the draft and coordinated information with the Department            
 of Law.  The amendments presented were the concerns that they have.           
 CHAIRMAN DAVIS suggested they make a motion for each particular               
 amendment and have discussion and debate as each amendment was                
 REPRESENTATIVE JAMES made a motion to move Amendment 1.                       
 CHAIRMAN DAVIS asked if there was objection.                                  
 REPRESENTATIVE BRICE objected to Amendment 1.                                 
 MS. HENSLEY explained Amendment 1 on page 4, lines 24-25, Section             
 (F) states "felonious attempt to commit an offense..."  She said it           
 had been the advice of the Department of Law that a felonious                 
 attempt is a felony.  Section (F) would not be needed because                 
 "felony" is already covered in Section (E).                                   
 CHAIRMAN DAVIS asked Representative Vezey if he would care to                 
 comment on this.                                                              
 REPRESENTATIVE VEZEY said he did not have any strong feelings on              
 this particular amendment.  He stated the intent was to try and               
 create a contract relationship between an entity of the state and             
 the private sector.  He indicated a person does not have to break             
 the law to have grounds under normal commercial law to terminate a            
 contract.  Crimes of moral turpitude are usually considered                   
 sufficient reasons to dissolve a contract.  He explained this is              
 what he was attempting to do here.  He said they were trying to               
 give the state more reasons for terminating a contract, but the               
 state is indicating that they do not want more reasons.                       
 CHAIRMAN DAVIS indicated he communicated with the Department of Law           
 in a meeting and said it's true that Section (E) is covered by                
 Section (F).  He then asked if the objection was still maintained             
 on Amendment 1.                                                               
 REPRESENTATIVE BRICE withdrew his objection.                                  
 CHAIRMAN DAVIS asked if there was any other objection to Amendment            
 1.  Hearing none,  Amendment 1 passed.                                        
 REPRESENTATIVE JAMES motioned to move Amendment 2.                            
 CHAIRMAN DAVIS asked if there was objection on Amendment 2.                   
 REPRESENTATIVE BRICE objected to Amendment 2, for the purpose of              
 Number 095                                                                    
 MS. HENSLEY explained the department feels that to take a person to           
 arbitration, the due process must still be carried out.  This would           
 not allow for full due process with superior court oversight as to            
 a decision being made.  Ms. Hensley said the department would                 
 propose changes on lines 18-21, deleting the language "shall submit           
 the issue to arbitration as provided under AS 09.43; the department           
 may not cancel or suspend a certificate or card under this                    
 paragraph unless the cancellation or suspension is supported by the           
 decision of the arbitrator."  Ms. Hensley suggested that language             
 be deleted and insert after examiner, "notice and hearing as                  
 provided under AS 28.05.141."                                                 
 CHAIRMAN DAVIS asked for confirmation that this was the                       
 department's current administrative hearing procedures.                       
 MS. HENSLEY said yes, the administrative procedures that are not              
 covered under the Administrator Procedures Act.  However, the                 
 person still may, if they feel they are aggrieved after the                   
 administrative hearing, file an appeal in superior court based on             
 the record itself and not on (indisc.) hearing.                               
 Number 120                                                                    
 REPRESENTATIVE VEZEY stated the basic difference with this issue is           
 the state is accustomed to operating under a certain set of                   
 statutes and procedures for adjudicating complaints or differences.           
 What we are trying to establish is a contract.  The standard in the           
 state of Alaska and across the country for contract -- commercial             
 law -- is that contract disputes are arbitrated.  People are                  
 voluntarily entering into contracts that stipulate that any dispute           
 on that contract will be solved by arbitration.  Representative               
 Vezey felt there were advantages to the state.  Some of those                 
 advantages are:  Under a contract relationship, any methods of                
 dispute resolution can be used, providing both parties of the                 
 contract agree to it.  It is when an agreement cannot be reached              
 that they have to go to mandatory procedures, such as an                      
 administrative hearing procedure that the state and the DMV is                
 accustomed to using.  However, this is subject to appeal in the               
 trial courts.  He explained the advantage of arbitration is it does           
 not cost the state anything.  Both parties are required to pay for            
 the cost of the arbitration.  They are not using the court system,            
 rather they are using an arbitration system.  The courts have                 
 traditionally refused to review or overturn the findings of an                
 arbitrator, because they respect the arbitration process and the              
 right of parties to agree to arbitration.  In commercial law, it is           
 unusual for a court to take up a case that has been decided by an             
 arbitration tribunal, unless there is some sign of clear abuse.               
 Representative Vezey proposed arbitration will give the state                 
 greater flexibility than what they are currently bound to.  He                
 indicated it was a judgment value and either system achieves                  
 justice.  It is a question of how are we willing to look at going             
 to a new system.                                                              
 Number 174                                                                    
 MS. HENSLEY asked to address Representative Vezey's comments and              
 stated if we had to go through the provision of setting up an                 
 arbitration section or to deal with arbitrators, it would cost the            
 department to contract with an arbitrator and pay the cost of hotel           
 accommodations for that individual, if they had to come in from out           
 of town.  Presently, the department already has administrative                
 hearing officers on staff and the Department of Law already handles           
 their appeals through the superior court.  The mechanism is already           
 set up.  With the arbitrations area, they would have to set up a              
 separate procedure for that, which would be costly to the                     
 department.  Ms. Hensley did not feel the department would be able            
 to absorb the cost, because the DMV does not have the budget in               
 order to establish a program without receiving that cost of that              
 Number 189                                                                    
 CHAIRMAN DAVIS asked if the arbitration was to continue as is,                
 would the department establish a fiscal note for this bill?                   
 MS. HENSLEY said they would have to indicate what the cost of the             
 arbitration would be, because they do not have the necessary                  
 process set up in their department at this time.  In order to do              
 that, they would have to develop whatever costs would be associated           
 with that contract or the arbitrator.  In most cases, when using              
 arbitrators you do pay for all their expenses.  Whereas, currently            
 the department has hearing officers on staff.                                 
 CHAIRMAN DAVIS stated the arbitration language is in statute so               
 there would be no need for the regulations.                                   
 MS. HENSLEY stated there would be no regulations.                             
 Number 196                                                                    
 REPRESENTATIVE JAMES said she visualized an arbitrator to be more             
 neutral and fair than someone who is on staff with the department.            
 She presented an example of arbitrators having to come to Juneau if           
 that is where they had to work out of, or, if there was a                     
 contractor in Fairbanks, they would deal with an arbitrator from              
 Fairbanks.  To attach a fiscal note would be to presume that there            
 are going to be disputes.  She stated if there was any value to               
 this legislation, it should be placed that this would be an                   
 infrequent occurrence where there would be arbitration issues such            
 as this.  Based on that position, she supported the idea of an                
 arbitrator because of the fairness issue of not having someone                
 within the staff of the Department of Public Safety.                          
 REPRESENTATIVE MACLEAN asked Ms. Hensley if snow machines and all             
 terrain vehicles (ATV) were included under the category of motor              
 MS. HENSLEY explained it is a requirement with the DMV that snow              
 machines be registered through Title 5.  This is not the case with            
 ATVs.  The federal government determined years ago that ATVs were             
 unsafe vehicles.                                                              
 Number 238                                                                    
 REPRESENTATIVE VEZEY stated he appreciated the department's                   
 position.  Unless he was mistaken about the Alaskan Uniform                   
 Arbitration law, he thought that both parties have to pay, up-                
 front, the anticipated costs of an arbitration proceeding.                    
 Typically, arbitration panels are not bound by Rule 82 that the               
 court proceedings are.  The prevailing party would be awarded full            
 costs and fees.  He indicated arbitration encourages mediation,               
 where both parties agree to pay the costs of mediation.  There are            
 very few limits placed on how an arbitrator is selected.  There is            
 a proposed panel that is organized and people are given the chance            
 to veto, or agree on an arbitrator or a mediator.  He added that              
 there were other means to settling disputes, but they are trying to           
 create the atmosphere of a commercial relationship between the                
 state and a contractor.                                                       
 CHAIRMAN DAVIS asked if there was still objection to Amendment 2?             
 REPRESENTATIVE BRICE stated he objected to the amendment.                     
 CHAIRMAN DAVIS asked for a role call vote.  Representatives Davis,            
 Brice, Williams and James opposed the Amendment.  Representative              
 MacLean voted in favor of Amendment 2.  Chairman Davis indicated              
 Amendment 2 failed to pass the committee.  He then announced                  
 Amendment 3.                                                                  
 REPRESENTATIVE MACLEAN made a motion to move Amendment 3.                     
 CHAIRMAN DAVIS asked if there was objection.                                  
 REPRESENTATIVE JAMES stated she objected to Amendment 3.                      
 Number 292                                                                    
 CHAIRMAN DAVIS asked Ms. Hensley to address Amendment 3.                      
 MS. HENSLEY explained that the DMV and the Department of Revenue              
 reviewed this amendment and both departments expressed concern for            
 Amendment 3.  She explained in order to have some type of an audit            
 trail on the contractors, the department would propose changes to             
 page 7, lines 8-13, by deleting the existing language and inserting           
 on line 8 after department, "as determined by contract."  She                 
 explained if they have a business which only processes 20                     
 transactions per month, then they might want the option to say, on            
 a monthly basis they can make the deposits.  She added it would               
 give the department more control of a business and the ability to             
 monitor that particular area more closely.  She commented this is             
 a good piece of legislation, but the department is just trying to             
 obtain the maximum out of it.  They are currently developing                  
 private indices; it's like a contract with government, privatizing            
 out.  They are trying to privatize areas such as the IM                       
 (inspection/maintenance) stations in Anchorage which are processing           
 approximately 100 registrations per day.  She noted there are                 
 currently 13 commission agents they are working with.  She said               
 this amendment just gives the department and the Department of                
 Revenue more control over the amount of money being collected and             
 when it is to be deposited, as well as the interest the state                 
 collects off that money.                                                      
 Number 303                                                                    
 REPRESENTATIVE VEZEY said he did not have strong opposition to                
 Amendment 3.  His intent was to provide for a reasonable commercial           
 relationship between an agent and a proprietor (indisc).  He said             
 they modeled this after the Internal Revenue Service (IRS) and                
 their manner of collecting payroll taxes.  Whenever an agent                  
 collects a sum of money that exceeds $5,000, it is due that week,             
 just as the payroll taxes are with the IRS.  If $5,000 is not                 
 collected during the course of the quarter, then they still have to           
 submit quarterly.  He felt it was a reasonable standard.                      
 CHAIRMAN DAVIS supported the amendment.  He stated it was hard to             
 imagine what the outcome of this might be.  He referred to the 13             
 contract agents and stated there are communities where there may be           
 five transactions per day, yet another contractor could do much               
 more, so different contracts are going to have different needs.  If           
 there is the flexibility such as what the department is requesting            
 in the amendment, it would be beneficial because no one method is             
 going to fit each contract.  He asked if there were further                   
 discussions on Amendment 3, and was the objection still maintained?           
 Hearing none, Amendment 3 passed.  He then offered Amendment 4.               
 REPRESENTATIVE JAMES made a motion to move Amendment 4.                       
 CHAIRMAN DAVIS asked if there was any objection.                              
 REPRESENTATIVE MACLEAN objected for purposes of discussion.  She              
 expressed concern for the section on the commercial drivers                   
 licenses CDL) program.                                                        
 MS. HENSLEY explained that 49 CFR (Code of Federal Regulations) of            
 the Commercial Driver License Act allowed an individual to be                 
 grandfathered in until April 1, 1992.  She explained that this                
 stated if an employer certified that the person met the                       
 qualifications up until April 1, 1992, then the employer could                
 certify that individual had met those requirements and they had               
 been employed, and the individual would not be required to take a             
 skills test - a driving test.  After April 1, 1992, federal law               
 requires a skills test to be administered to an individual applying           
 for a commercial drivers license.  This section would place the DMV           
 out of compliance with the Commercial Driver License Safety Act of            
 1986, and it is subject to a 10 percent loss of federal highway               
 funds, if they are found in noncompliance of that program.  She               
 mentioned that a couple of years ago, 10 percent of the federal               
 highway fund equalled approximately $25 million.                              
 Number 359                                                                    
 REPRESENTATIVE BRICE referenced the loss of funding and asked if              
 the funds are diverted, or does the state not get it.                         
 MS. HENSLEY explained it was part of the Intermodal System                    
 Transportation Efficiency Act (ISTEA) funds and would not be                  
 diverted, as the "helmet money" was diverted; it would be totally             
 sanctioned against the state.                                                 
 REPRESENTATIVE VEZEY disagreed with the DMV on this particular                
 issue because the Code of Federal Regulations (CFR) provide for               
 that particular type of certification through private channels.               
 The intent here was to allow for the program to be up by the state.           
 He noted they were not mentioning anything regarding grandfathering           
 people in after April 1, 1992, but they were only saying that a               
 program will be set up.  He mentioned that currently, there is a              
 program in Alaska that is providing professional driver training              
 which has received a number of accolades.  However, they do not               
 have the authority at this time to issue driver licenses.                     
 Representative Vezey indicated it would not take a great deal to              
 bring them into compliance.  He stated he disagreed with the                  
 characterization that this would put the state out of compliance              
 with the federal regulations.                                                 
 Number 375                                                                    
 MS. HENSLEY explained that under this bill, the DMV would have the            
 authority to contract or conduct third party testing, if the                  
 individual met all the requirements.  The third party testing would           
 be comprised of a commercial company, if the DMV chose to do a                
 third party testing.  The federal government requires extensive               
 monitoring of those third party testers, of which the DMV has never           
 had the budget to monitor, so they have never allowed a third party           
 tester to do commercial driver licensing.  However, the safety                
 regulations dealing with the employer responsibility with the                 
 single license requirement, implies that within this requirement it           
 states, "effective April 1, 1992, no person shall operate a                   
 commercial vehicle unless such person has taken and passed written            
 and driving tests which meet the federal standards contained in               
 subparts (f), (g) and (h) of this part, for commercial vehicles               
 that a person operates."  The department feels the remainder of the           
 bill would provide the department with the opportunity, if they               
 chose, to initiate a third party contract.  She stated currently,             
 they have the opportunity to do this, they've never been able to do           
 the monitoring that the federal government requires of third party            
 testers.  She said they were interested in the fact an employer can           
 say that an individual does meet the required standards without the           
 required skills testing which may be completed and maintained by              
 the employer, certifying that the person has passed all the skills            
 Number 440                                                                    
 REPRESENTATIVE VEZEY withdrew his objection to Amendment 4.  He               
 stated it was not his intent to be in conflict with the federal               
 CHAIRMAN DAVIS stated if Amendment 4 had not passed, his intent was           
 to request that a note follow the bill to ensure the legality of it           
 was carried out.  He asked for objection on Amendment 4.  Hearing             
 none, Amendment 4 was passed.                                                 
 REPRESENTATIVE WILLIAMS made a motion to move Amendment 5.                    
 CHAIRMAN DAVIS asked if there was any objection.                              
 REPRESENTATIVE MASEK objected to Amendment 5.                                 
 MS. HENSLEY acknowledged that Amendment 5 may be somewhat                     
 controversial.  Amendment 5 was drafted by the Department of Law,             
 proposing to delete on page 19, lines 18 and 19 in their entirety.            
 She referred to the DMV regulations and stated that they preferred            
 having as much as possible put into statute.  She added she has to            
 write the regulations and does not enjoy doing this, so if it can             
 be placed in statute and have everything spelled out as to the                
 desires of the department, then the department would like to not              
 have to have regulations.  However, the DMV and the Department of             
 Law feels there possibly could be some requirements that they would           
 have to have, particularly when dealing with some of the contract             
 issues, instead of having to come back to the legislature every               
 year and with those contracts in statute.  If the Occupational                
 Safety Hazard Administration (OSHA) requirement change or if the              
 insurance requirements change, then they would have to return every           
 year to the legislature and have all the statutes changed annually.           
 The DMV feels this was an area they wanted to leave open so they              
 would have the leeway.  She said the DMV has always had legislative           
 input on all of their regulations.                                            
 REPRESENTATIVE VEZEY explained the purpose of that particular                 
 section was twofold.  First, they wanted to construct a bill that             
 was thorough and understandable.  The goal of privatization of a              
 service currently provided by the government, is something that has           
 not been met with much success in the state of Alaska.  He has                
 observed numerous attempts over the years, and they have all                  
 failed.  He explained they started out with the goal that the                 
 entire program would have to be placed in statute, so they would              
 know exactly what they were getting into and how it would work.               
 For that reason, he started off with the premise that there would             
 not be any regulations; the statutes would have to be complete and            
 functional.  The other aspect of this section is the realization              
 that this particular program may not work.  It is somewhat of an              
 experiment.  He explained other states are trying it, most notably            
 California.  He felt it was important that the legislature does               
 come back after a year or two of experience with this.  He did not            
 feel that the adoption of Amendment 5 would cause this program not            
 to work, but he did feel it would cause the legislature to take a             
 somewhat laissez faire attitude towards the statute.  He stated it            
 seems there is the tendency to say "well, we will let them work               
 that problem out in regulation, and let it go."  He remarked that             
 it forces us to take what is in the amendment very seriously.                 
 Number 450                                                                    
 REPRESENTATIVE BRICE stated with all due respect to his good                  
 colleague from district 32 and his abilities, he felt it would be             
 impossible to be so thorough to plan every contingency for the                
 possible success of a piece of legislation.  He indicated because             
 of that, by not adopting Amendment 5, we are tying hands on                   
 possibly even insignificant issues that cause such projects to                
 fail.  He added these were his concerns, when that type of language           
 is inserted.                                                                  
 REPRESENTATIVE JAMES disagreed with Representative Brice and stated           
 she supported the idea of coming back and making a legislative                
 decision on anything that does not work.  She inquired as to the              
 three levels of decisions that affect the way state business is               
 run.  There is a statute, which is the underlining law, then there            
 are regulations which also are law, and policies as well.  If any             
 of those things that you mentioned would arise, that you would be             
 able to have a policy until there could be a legislative change.              
 She said she was uncomfortable with writing a statute, within the             
 length of time that we write statutes, that would encompass                   
 absolutely everything.  She stated she had mixed feelings about               
 this issue because the regulation process we have currently does              
 not seem to be working.  She noted she was not directing that                 
 comment specifically to the Department of Public Safety, but in               
 general.  She stated in her evaluation, writing regulations are               
 what the Administration does.  This is where most of the time and             
 energy is spent.  She added this is also where most of the laws are           
 being made.                                                                   
 REPRESENTATIVE WILLIAMS noted he had been watching legislation go             
 through the process, which is a very timely process, where a lot of           
 egos get in the way and games are played.  He expressed concern               
 that the public will hurt, if we have to wait a legislative session           
 to get this changed to where it will work, rather than have to call           
 in experts.  He stated he was not always in agreement with the                
 regulations, but will work with them.  He said he would like to see           
 the bill go and have it worked on.  He suggested that the                     
 Administration should construct the regulations.                              
 MS. HENSLEY stated it has always been the department's intent, as             
 well as the DMV's intent, to work with the legislators on                     
 regulations.  The DMV would include legislative input on any                  
 regulations that would be adopted as a result of this legislation             
 Number 529                                                                    
 CHAIRMAN DAVIS indicated his support for the inclusion of Amendment           
 5.  He stated he was is support of eliminating regulations and                
 incorporating things into statute.  He asked Ms. Hensley, "on a               
 scale from 1 to 10, how inclusive is this piece of legislation as             
 far as not needing regulations."                                              
 MS. HENSLEY stated it is just about where we (indisc.) she was not            
 sure if the DMV would even have to adopt a regulation.  Policies              
 may then have to become a regulation, if the department can't get             
 statute change.  If they came back for a statute change to                    
 implement that, then the regulation is a moot point.  However,                
 unless they do that, there may be some problems.  Based on                    
 everything the department has looked at, this piece of legislation            
 is quite intensive, as well as extensive.  From her viewpoint, the            
 department would not have to adopt many, if any, regulations to               
 implement this program.                                                       
 CHAIRMAN DAVIS referred to the contract formats in the bill, and              
 asked if there is any availability in the contract formats to make            
 changes, should the federal government pass down some mandates                
 relating to this.  He questioned whether or not it is within the              
 contract to make changes.                                                     
 MS. HENSLEY said no, there is not.  The contracts are set in                  
 statute and law.  These will be the contracts that they have to               
 abide by.  Any changes that are requested, would require the DMV to           
 return to the legislature and request a change, unless a regulation           
 could be adopted to include that into the contract.                           
 CHAIRMAN DAVIS said, "that would be my major concern, because this            
 division...the business being taken care of in this legislation...            
 has the federal government dealing with it to a certain degree also           
 and we can't control the changes that they make that may require              
 changes on our part."                                                         
 REPRESENTATIVE JAMES stated she did not think if we have those                
 contracts in statute, that they can be changed by regulation.  By             
 deleting this section we have not said that regulations can change            
 the contracts.  She felt the statute will dictate.                            
 MS. HENSLEY stated Representative James was correct.  She commented           
 that the DMV has decided that they would not work on it with this             
 committee, but would take it up in the House State Affairs                    
 Committee, regarding the contracts.  The Department of Law has some           
 problems with the contracts being in statute, due to the changes              
 that are always being made, especially with the DMV and the federal           
 hand that they have over them.  She suggested putting in statute              
 what the legislature would like for the DMV to have in a contract,            
 but the contract, itself, not be in the statute, because of all the           
 changes being made.                                                           
 Number 546                                                                    
 REPRESENTATIVE BRICE referenced the various sections throughout the           
 bill that reflect back to statements such as "as required by the              
 department," "provided for by the department", etc.  He indicated             
 the department has to have the ability to form the more intricate             
 statements.  He suggested this is what happens in regulations.  He            
 felt that type of language might cause the department some                    
 inability to work the various mandates of the bill.                           
 CHAIRMAN DAVIS commented that was a good point.  He asked if there            
 was further debate on Amendment 5.                                            
 REPRESENTATIVE JAMES stated she still objected.                               
 CHAIRMAN DAVIS asked for a roll call vote on Amendment 5.                     
 Representatives MacLean, Williams and Brice were in support.                  
 Representative James and Davis were opposed to Amendment 5.                   
 He announced Amendment 5 passed.  He asked Ms. Hensley to address             
 the issue of why there was no fiscal note with the bill.                      
 Number 595                                                                    
 MS. HENSLEY explained when the DMV first reviewed this bill, it was           
 their understanding they would have a mandate where they would have           
 no option as to whether they could look at an area and determine              
 whether or not it would be cost effective for them to contract with           
 an agent, or whether it would be cost effective for the state to              
 continue with the DMV services that are provided.  She indicated in           
 some areas there may be both.  The first initial fiscal note they             
 prepared was "unbelievable" because of the oversight they would be            
 required to have.  It was not going to be a cost savings to the               
 state to contract with individuals.  She said that is why we have             
 worked with the sponsor in deleting the word "shall" and inserting            
 the word "may" so they would have some leeway and would not be a              
 mandate that this will be done.                                               
 MS. HENSLEY added with this particular draft that was before the              
 committee, the fiscal note would be zero.  However, Ms. Hensley               
 said she did want to go on record and say "that as we develop these           
 contracts with the various agents, and if we see that it is costing           
 for us to have the oversight and have the audit trails that we must           
 have, especially when you're looking at the division bringing in              
 $34 million or $36 million a year, those audit trails and that                
 accounting needs to be there.  There needs to be some training                
 done.  So, if we see and as those contracts increase, and we cannot           
 absorb it within the existing staff that we have, we would like to            
 go on record and say we will be coming back for an increment in the           
 budget to address those issues, but right now the fiscal note would           
 be zero."  She indicated she would provide a fiscal note to the               
 committee the following day.                                                  
 CHAIRMAN DAVIS stated the fiscal note will be accepted as a verbal            
 statement that it would be a zero fiscal note and will look for a             
 written statement in the near future.                                         
 REPRESENTATIVE VEZEY referenced Version R of the bill, which                  
 contains the word "shall."  He thought there was another version              
 that read "may."                                                              
 MS. HENSLEY explained that was one of the recommendations the DMV             
 had made.  She thought it was an oversight when this went to the              
 drafter after their conversation.  She recommended that on page 1,            
 line 7, the word "shall" be deleted and insert the word "may."                
 REPRESENTATIVE JAMES made a motion to move Amendment 6.                       
 CHAIRMAN DAVIS asked if there was objection.  Hearing none,                   
 Amendment 6 passed.  He said he would entertain a motion to move              
 CSHB 210(TRA) as amended out of the House Transportation Committee.           
 REPRESENTATIVE JAMES made a motion to move CSHB 210(TRA), Version             
 R, as amended out of the House Transportation Committee with                  
 individual recommendations and zero fiscal note.                              
 CHAIRMAN DAVIS asked if there was objection.  Hearing none, CSHB
 210 (TRA) as amended was passed out of the House Transportation               
 There being no further business to come before the House                      
 Transportation Committee, Chairman Davis adjourned the meeting at             
 2:15 p.m.                                                                     

Document Name Date/Time Subjects