05/02/2004 03:50 PM Senate JUD
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= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE JUDICIARY STANDING COMMITTEE
May 2, 2004
3:50 p.m.
TAPE(S) 04-58
MEMBERS PRESENT
Senator Ralph Seekins, Chair
Senator Scott Ogan, Vice Chair
Senator Gene Therriault
MEMBERS ABSENT
Senator Johnny Ellis
Senator Hollis French
COMMITTEE CALENDAR
CS FOR HOUSE BILL NO. 539(L&C)
"An Act exempting a person who allows a student of the
University of Alaska to gain practical work experience with the
person while participating in a practicum from vicarious
liability as an employer, and exempting the student
participating in a practicum from the Alaska Wage and Hour Act;
and providing for an effective date."
MOVED CSHB 539(L&C) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 339(JUD)
"An Act relating to opt-out marketing plans for sales, to free
trial periods for goods or services, and to acts that are
unlawful as unfair trade practices."
MOVED SCS CSHB 339(JUD) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 336(JUD) am
"An Act relating to motor vehicle insurance; limiting recovery
of civil damages by an uninsured driver; and providing for an
effective date."
MOVED SCS CSHB 336(JUD) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 423(JUD) am
"An Act relating to accidents involving the vehicle of a person
under the influence of an alcoholic beverage."
MOVED CSHB 423(JUD) am OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 438(JUD) am
"An Act relating to motorists moving over or slowing down for
emergency vehicles."
MOVED SCS CSHB 438(STA) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 539
SHORT TITLE: UNIV. STUDENT PRACTICUM LIABILITY/WAGES
SPONSOR(s): JUDICIARY
03/18/04 (H) READ THE FIRST TIME - REFERRALS
03/18/04 (H) L&C, JUD
04/16/04 (H) L&C AT 3:15 PM CAPITOL 17
04/16/04 (H) Moved CSHB 539(L&C) Out of Committee
04/16/04 (H) MINUTE(L&C)
04/19/04 (H) L&C RPT CS(L&C) NT 7AM
04/19/04 (H) AM: CRAWFORD, LYNN, GATTO, ROKEBERG,
04/19/04 (H) DAHLSTROM, GUTTENBERG, ANDERSON
04/19/04 (H) JUD AT 1:00 PM CAPITOL 120
04/19/04 (H) -- Meeting Canceled --
04/21/04 (H) JUD AT 1:00 PM CAPITOL 120
04/21/04 (H) Moved CSHB 539(L&C) Out of Committee
04/21/04 (H) MINUTE(JUD)
04/22/04 (H) JUD RPT CS(L&C) NT 2DP 4NR
04/22/04 (H) DP: OGG, MCGUIRE; NR: GARA, HOLM,
04/22/04 (H) SAMUELS, GRUENBERG
04/28/04 (H) MOVED TO BOTTOM OF CALENDAR
04/28/04 (H) NOT TAKEN UP 4/28 - ON 4/29 CALENDAR
04/29/04 (H) TRANSMITTED TO (S)
04/29/04 (H) VERSION: CSHB 539(L&C)
05/01/04 (S) READ THE FIRST TIME - REFERRALS
05/01/04 (S) JUD
05/02/04 (S) JUD AT 3:30 PM BUTROVICH 205
BILL: HB 339
SHORT TITLE: TRADE PRACTICES: FREE TRIAL/OPT-OUT PLANS
SPONSOR(s): REPRESENTATIVE(s) MEYER
01/12/04 (H) PREFILE RELEASED (1/2/04)
01/12/04 (H) READ THE FIRST TIME - REFERRALS
01/12/04 (H) L&C, JUD
02/02/04 (H) L&C AT 3:15 PM CAPITOL 17
02/02/04 (H) Moved CSHB 339(L&C) Out of Committee
02/02/04 (H) MINUTE(L&C)
02/05/04 (H) L&C RPT CS(L&C) NT 4DP 2NR 1AM
02/05/04 (H) DP: CRAWFORD, LYNN, DAHLSTROM,
02/05/04 (H) ANDERSON; NR: GATTO, ROKEBERG;
02/05/04 (H) AM: GUTTENBERG
03/05/04 (H) JUD AT 1:00 PM CAPITOL 120
03/05/04 (H) -- Meeting Postponed to 3/16/04 --
03/16/04 (H) JUD AT 1:00 PM CAPITOL 120
03/16/04 (H) Heard & Held
03/16/04 (H) MINUTE(JUD)
03/29/04 (H) JUD AT 1:00 PM CAPITOL 120
03/29/04 (H) Bill Postponed To 3/30/04
03/30/04 (H) JUD AT 1:00 PM CAPITOL 120
03/30/04 (H) Scheduled But Not Heard
03/31/04 (H) JUD AT 1:00 PM CAPITOL 120
03/31/04 (H) Moved CSHB 339(JUD) Out of Committee
03/31/04 (H) MINUTE(JUD)
04/01/04 (H) JUD RPT CS(JUD) NT 5DP
04/01/04 (H) DP: HOLM, GARA, GRUENBERG, OGG, MCGUIRE
04/07/04 (H) TRANSMITTED TO (S)
04/07/04 (H) VERSION: CSHB 339(JUD)
04/08/04 (S) READ THE FIRST TIME - REFERRALS
04/08/04 (S) L&C, JUD
04/22/04 (S) L&C AT 1:30 PM BELTZ 211
04/22/04 (S) EXTEND BOARD OF REAL ESTATE APPRAISERS
04/27/04 (S) L&C AT 1:30 PM BELTZ 211
04/27/04 (S) Moved CSHB 339(JUD) Out of Committee
04/27/04 (S) MINUTE(L&C)
04/28/04 (S) L&C RPT 4DP
04/28/04 (S) DP: BUNDE, FRENCH, SEEKINS, STEVENS G
05/02/04 (S) JUD AT 3:30 PM BUTROVICH 205
BILL: HB 336
SHORT TITLE: MOTOR VEHICLE INS./ UNINSURED DRIVERS
SPONSOR(s): REPRESENTATIVE(s) MEYER
01/12/04 (H) PREFILE RELEASED (1/2/04)
01/12/04 (H) READ THE FIRST TIME - REFERRALS
01/12/04 (H) JUD
03/31/04 (H) JUD AT 1:00 PM CAPITOL 120
03/31/04 (H) <Bill Hearing Postponed>
04/06/04 (H) JUD AT 1:00 PM CAPITOL 120
04/06/04 (H) Heard & Held
04/06/04 (H) MINUTE(JUD)
04/07/04 (H) JUD AT 1:00 PM CAPITOL 120
04/07/04 (H) Failed To Move Out Of Committee
04/07/04 (H) MINUTE(JUD)
04/14/04 (H) JUD AT 1:00 PM CAPITOL 120
04/14/04 (H) Moved CSHB 336(JUD) Out of Committee
04/14/04 (H) MINUTE(JUD)
04/15/04 (H) JUD RPT CS(JUD) NT 1DP 3DNP 2NR
04/15/04 (H) DP: ANDERSON; DNP: HOLM, GARA, OGG;
04/15/04 (H) NR: SAMUELS, MCGUIRE
04/29/04 (H) TRANSMITTED TO (S)
04/29/04 (H) VERSION: CSHB 336(JUD) AM
05/01/04 (S) READ THE FIRST TIME - REFERRALS
05/01/04 (S) JUD, FIN
05/02/04 (S) JUD AT 3:30 PM BUTROVICH 205
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
03/05/04 (H) Heard & Held
03/05/04 (H) MINUTE(STA)
03/09/04 (H) STA AT 8:00 AM CAPITOL 102
03/09/04 (H) Moved CSHB 423(STA) Out of Committee
03/09/04 (H) MINUTE(STA)
03/12/04 (H) STA RPT CS(STA) NT 3DP 3NR 1AM
03/12/04 (H) DP: SEATON, HOLM, LYNN; NR: COGHILL,
03/12/04 (H) BERKOWITZ, WEYHRAUCH; AM: GRUENBERG
03/19/04 (H) JUD AT 1:00 PM CAPITOL 120
03/19/04 (H) Heard & Held
03/19/04 (H) MINUTE(JUD)
03/26/04 (H) JUD AT 1:00 PM CAPITOL 120
03/26/04 (H) Moved CSHB 423(JUD) Out of Committee
03/26/04 (H) MINUTE(JUD)
03/29/04 (H) JUD RPT CS(JUD) NT 6DP
03/29/04 (H) DP: HOLM, SAMUELS, GRUENBERG, OGG,
03/29/04 (H) ANDERSON, MCGUIRE
04/19/04 (H) TRANSMITTED TO (S)
04/19/04 (H) VERSION: CSHB 423(JUD) AM
04/20/04 (S) READ THE FIRST TIME - REFERRALS
04/20/04 (S) L&C, JUD
04/29/04 (S) L&C AT 2:45 PM BELTZ 211
04/29/04 (S) Moved CSHB 423(JUD)am Out of Committee
04/29/04 (S) MINUTE(L&C)
05/01/04 (S) L&C RPT 1DP 2NR
05/01/04 (S) DP: BUNDE; NR: FRENCH, DAVIS
05/02/04 (S) JUD AT 3:30 PM BUTROVICH 205
BILL: HB 438
SHORT TITLE: MOVE OVER LAW FOR DRIVERS
SPONSOR(s): REPRESENTATIVE(s) HOLM
02/05/04 (H) READ THE FIRST TIME - REFERRALS
02/05/04 (H) TRA, STA, JUD
02/17/04 (H) TRA AT 1:30 PM CAPITOL 17
02/17/04 (H) Scheduled But Not Heard
02/24/04 (H) TRA AT 1:30 PM CAPITOL 17
02/24/04 (H) Moved Out of Committee
02/24/04 (H) MINUTE(TRA)
02/26/04 (H) TRA RPT 3DP 2NR
02/26/04 (H) DP: OGG, STEPOVICH, HOLM; NR: MASEK,
02/26/04 (H) KOHRING
03/09/04 (H) STA AT 8:00 AM CAPITOL 102
03/09/04 (H) Moved CSHB 438(STA) Out of Committee
03/09/04 (H) MINUTE(STA)
03/12/04 (H) STA RPT CS(STA) 1DP 2NR 3AM
03/12/04 (H) DP: LYNN; NR: COGHILL, WEYHRAUCH;
03/12/04 (H) AM: GRUENBERG, SEATON, HOLM
04/02/04 (H) JUD AT 1:00 PM CAPITOL 120
04/02/04 (H) <Bill Hearing Postponed TO 4/5/04>
04/05/04 (H) JUD AT 1:00 PM CAPITOL 120
04/05/04 (H) -- Meeting Postponed to Tues. 4/6/04 --
04/06/04 (H) JUD AT 1:00 PM CAPITOL 120
04/06/04 (H) Moved CSHB 438(JUD) Out of Committee
04/06/04 (H) MINUTE(JUD)
04/07/04 (H) JUD RPT CS(JUD) 5DP
04/07/04 (H) DP: SAMUELS, HOLM, GARA, GRUENBERG,
04/07/04 (H) MCGUIRE
04/15/04 (H) TRANSMITTED TO (S)
04/15/04 (H) VERSION: CSHB 438(JUD) AM
04/16/04 (S) READ THE FIRST TIME - REFERRALS
04/16/04 (S) STA, JUD
04/27/04 (S) STA AT 3:30 PM BELTZ 211
04/27/04 (S) Scheduled But Not Heard
04/29/04 (S) STA AT 3:30 PM BELTZ 211
04/29/04 (S) Moved SCS CSHB 438(STA) Out of
Committee
04/29/04 (S) MINUTE(STA)
05/01/04 (S) STA RPT SCS 3DP 1NR SAME TITLE
05/01/04 (S) DP: STEVENS G, COWDERY, STEDMAN;
05/01/04 (S) NR: GUESS
05/02/04 (S) JUD AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
Mr. Heath Hilyard
Staff to Representative McGuire
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Testified for the sponsor of HB 539.
Mr. Pete Kelly
University of Alaska
Fairbanks, AK
POSITION STATEMENT: Testified that HB 339 is identical to SB
369, which the committee passed out the previous week.
Representative Kevin Meyer
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of HB 339
Ms. Suzanne Cunningham
Staff to Representative Meyer
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Answered questions about HB 339
Mr. Michael Lessmeier
State Farm Insurance
Lessmeier and Lessmeier
Juneau, AK
POSITION STATEMENT: Supports HB 339
Representative Tom Anderson
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of HB 423
Mr. Matthew Rudig
Staff to Representative Holm
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Testified for the sponsor of HB 438
ACTION NARRATIVE
TAPE 04-58, SIDE A
CHAIR RALPH SEEKINS called the Senate Judiciary Standing
Committee meeting to order at 3:50 p.m. Senators Ogan,
Therriault and Chair Seekins were present. The first order of
business was HB 539.
CSHB(L&C) 539-UNIV. STUDENT PRACTICUM LIABILITY/WAGES
MR. HEATH HILYARD, staff to Representative Lesil McGuire,
sponsor of HB 539, quoted Herman Melville, "A whale ship is my
Yale college and my Harvard" and said to a certain extent, that
is what CSHB 539(L&C) addresses: practical learning experiences,
or university practicum. HB 539 does two things. First, it
limits vicarious liability by the student participating in a
practicum, the practicum provider and the University of Alaska
(UA). Second, it clarifies that practicum students are not
employees for the purpose of wage and hour laws, in particular
the minimum wage requirements. HB 539 is very important to UA
for its practicum programs because providers are concerned about
the amount of liability they are exposed to when participating,
particularly in the health and construction fields. He pointed
out that last year, the UA had a great deal of difficulty
securing enough practicum opportunities for graduating students.
CHAIR SEEKINS asked how CSHB 539(L&C) differs from SB 369, which
the committee heard and took action on the prior week.
MR. HILYARD said it is his understanding that the two pieces of
legislation are identical.
MR. PETE KELLY, University of Alaska, verified that SB 369 was
modeled verbatim after CSHB 539(L&C) so the two bills are the
same.
SENATOR OGAN moved CSHB 539(L&C) from committee with individual
recommendations and attached fiscal notes.
The motion carried with Senators Ogan, Therriault and Seekins in
favor.
CSHB 339(JUD-TRADE PRACTICES: FREE TRIAL/OPT-OUT PLANS
REPRESENTATIVE KEVIN MEYER, sponsor of HB 339, informed members
that he would be commenting on a proposed committee substitute
(CS) distributed to committee members. He worked with the
Department of Law (DOL) and other businesses on this legislation
to address concerns and believes the changes made in the CS make
the bill better.
CHAIR SEEKINS moved the proposed committee substitute, labeled
version B, as the working document before the committee. With no
objection, the motion carried.
REPRESENTATIVE MEYER said CSHB 339(JUD) is a consumer protection
bill that deals with two business practices: the pretrial period
and the opt-out marketing program. No one has opposed this
legislation during its evolution and it has picked up many co-
sponsors. A pretrial period is used by, for example, magazine
companies, and is a time period for which a potential consumer
receives magazines at no charge and then is eventually charged
for a subscription. This legislation clearly discloses all of
the terms and conditions of that pretrial period, as well as any
participating consumers' obligations. It basically shifts the
burden to the business to prove that all disclosures were made
to the consumer in the case of a dispute.
The opt-out provision addresses situations in which consumers
are given a service, for example call waiting on a telephone,
without requesting it and are charged for it. Those people are
required to take specific actions to opt-out of that service.
Businesses use the opt-out method because it is profitable as it
is often time consuming or difficult to cancel. The bill
clarifies the responsibilities of the consumer and shifts the
burden to the business to prove that all disclosures were made
to the consumer before he or she accepted the product or
service.
REPRESENTATIVE MEYER indicated that he worked with the
Department of Law, as well as East Coast businesses that use
these practices, to level out the playing field for consumers.
CHAIR SEEKINS said he would outlaw opt-out plans as he believes
they are meant to deceive because they depend on lack of
communication or people forgetting for their success. He noted
that this legislature has addressed two bills that deal with
telephone sales and more people are asking legislatures
nationwide to protect them from these kinds of marketing plans.
REPRESENTATIVE MEYER agreed.
There being no further questions or testimony, SENATOR OGAN
moved SCS CSHB 339(JUD) from committee with individual
recommendations and attached fiscal note(s).
The motion carried with Senators Therriault, Ogan, and Seekins
in favor.
CSHB 336(JUD)am-MOTOR VEHICLE INS./ UNINSURED DRIVERS
REPRESENTATIVE KEVIN MEYER, sponsor of HB 336, introduced staff
member Suzanne Cunningham, and told members that this
legislation states that if a person knowingly breaks the law by
driving without mandated vehicle insurance, that person cannot
sue for the same amount in damages as a person with the required
insurance. He pointed out the key word is "knowingly." If an
accident occurred, the uninsured driver could sue for non-
economic and compensatory damages but not for pain and
suffering. He noted that damages for pain and suffering are most
costly to the 82 percent of people who do have insurance
coverage. This issue was brought to his attention by a
constituent who said she pays $1500 per year in insurance and
must listen to a neighbor brag that he has no insurance, yet
both would collect the same damage award if either were in an
accident. The California Legislature enacted similar legislation
because 35 percent of drivers there had no insurance. He said
although he carries insurance coverage in case an uninsured
motorist hits his vehicle, if that happened, his rates would
increase.
REPRESENTATIVE MEYER said this bill is a matter of fairness.
Although there are probably many reasons that 18 percent of
drivers have no insurance in Alaska, one reason may be that they
are unsafe drivers with multiple DUI offenses or reckless
driving offenses so the 82 percent of insured drivers become the
true victims. He said the bottom line is whether the legislature
wants to protect the people who comply with the laws. He noted
that theoretically, reducing the number of pain and suffering
lawsuits should lower rates.
CHAIR SEEKINS questioned how "knowingly" is defined.
REPRESENTATIVE MEYER said the language on page 1, line 10, says
the person must know that he or she was not in compliance.
CHAIR SEEKINS said the only argument he could imagine that would
hold water is that the person might not know his policy was
cancelled or lapsed because of an unanticipated oversight.
REPRESENTATIVE MEYER said it would be the insurance company's
responsibility to prove the driver knew he didn't have
insurance, which is a high hurdle.
SENATOR OGAN asked how that would affect an uninsured driver who
was in an accident in which someone else was at fault.
REPRESENTATIVE MEYER clarified that the driver could sue for all
damages except pain and suffering. The logic is that the driver
broke the law by driving without insurance.
SENATOR OGAN felt that is too limiting because the driver who
caused the accident could be very drunk, eluding police, or
involved in criminal activity and driving dangerously and be let
off the hook.
CHAIR SEEKINS said the uninsured driver should not have been on
the road in the first place. This legislation says if a person
chooses to drive without insurance, that person is assuming the
risk of not being able to recover economic damages, no matter
the cause of the accident.
SENATOR OGAN agreed that driving without insurance is
irresponsible and said he does not condone it but he knows of
seniors who live on very limited fixed incomes who drive without
insurance because of the financial hardship. Those people have
no other options and he does not believe it is right to let
someone with criminal culpability off on a tort claim in such a
case.
REPRESENTATIVE MEYER said Senator Ogan raised a good point but
he believes that many of the 18 percent of drivers without
insurance should not be driving. So, the question becomes, is it
fair for one of those drivers to be on the road and hit an
insured motorist. He noted the uninsured motorist could have
been drunk. He reminded members that driving is a privilege, not
a right, and that part of the responsibility is mandated
insurance coverage. He repeated that rates are increasing
because the 18 percent are not paying into the system.
SENATOR OGAN disagreed that is the only reason rates are
increasing.
SENATOR THERRIAULT asked what would happen if he, as a father,
knowingly let his insurance policy lapse and his teenage son and
friends took the car and got into an accident. He questioned
whether they would be covered because they did not know the car
was uninsured.
REPRESENTATIVE MEYER deferred to a representative from an
insurance company to answer but said he believes the father
would probably be responsible.
MS. SUZANNE CUNNINGHAM, staff to Representative Meyer, said the
bill is written to apply to the person who is operating the
motor vehicle so if the son did not know, it would not apply.
CHAIR SEEKINS thought if the son caused the accident, the friend
and son's only recourse would be against the father. If another
driver caused the accident, a claim for non-economic damages
would be available against that driver by the passengers and
son, who did not know.
SENATOR THERRIAULT asked how that would apply to an uninsured
parked vehicle in which a person was injured.
CHAIR SEEKINS noted the key word is "operating" a motor vehicle.
He then said, in response to Senator Ogan's earlier comment,
people who make the choice to drive without insurance knowingly
are giving up their rights to recover non-economic damages.
MR. MIKE LESSMEIER, a Juneau attorney representing State Farm
Insurance, stated support for CSHB 336(JUD)am. State Farm did
not ask Representative Meyer to introduce Section 1 but it did
ask him to introduce some of the other sections, which he would
explain. Those sections have not been controversial. Sections 2,
4 and 5 deal with what is called the "mirror rule." That rule
says if the liability portion of a policy provides coverage for
punitive damages, then the uninsured and underinsured motorist
coverage must also include coverage for punitive damages.
Therefore, in effect, the policyholder is funding his ability to
recover punitive damages. Those damages are designed to punish
the person without coverage but, in effect, the insured driver
is paying for that coverage himself. He said that makes no sense
and has caused that coverage to increase in price. To address
that situation, State Farm proposed an amendment, which was
adopted, that says regardless of what the liability provision of
a driver's policy says, the uninsured/underinsured motorist
provision need not provide coverage for punitive damages.
SENATOR THERRIAULT asked, "...right now the law requires that if
it is in one, it must be in the other, so you're alleging that
you're paying for double?"
MR. LESSMEIER responded that it forces people to pay for
something most would choose not to purchase, if they had the
choice. A person might want that coverage in the liability
portion of a policy because often when a person is sued for
reckless driving, for example, there is an allegation of
punitive damages in that claim. However, when one turns around
and looks at an uninsured/underinsured motorist claim, most
policyholders would not want to pay for damages that are
essentially punitive damages, designed to punish another person.
The policyholder is essentially punishing himself because it
does not affect the uninsured motorist that ran into him as he
is recovering punitive damages under his own policy. HB 336 says
the coverage in the uninsured/underinsured portion of one's
policy does not have to mirror the liability coverage with
respect to punitive damages.
MR. LESSMEIER said the other change is in Section 3. He
explained:
When we ... go all the way back to the history of
uninsured/underinsured motorist coverage in the state,
in 1983 and 1984 we passed a system that mandated
offers of uninsured and underinsured motorists and
that system has evolved. Now what happens, when you
buy an insurance policy, it contains coverage for
uninsured/underinsured motorists unless you decline it
in writing. And then what happens is every six months,
if you're a State Farm insured, you get a written
offer of uninsured/underinsured motorist coverage all
the way up to $1 million. What the Supreme Court said
in a case called [Indisc.] vs. State Farm, is that in
umbrella policies, there has to be these offers as
well and the difficulty with that is if we make these
offers on each vehicle, and people make the selection
on each vehicle and then we're required to make them
in the umbrella policy as well, it leads to
conflicting offers. We don't know what the price - and
as a result of that it's just created a mess in terms
of the umbrella policies and one major carrier in this
state has actually stopped writing because of that
decision.
Our point is that we have a wonderful system for
making this coverage available through these mandated
offers already and that it ought to be on the primary
policy and this would just mean that we don't have to
make those offers on excess or umbrella policies. We'd
still make them on the primary policies and I think
those changes make eminent good sense.
If we go back to the first provision, we look at this
provision really as an issue of fairness. The issue of
fairness is this issue: if a person is unwilling to
provide liability coverage for someone else, provide
protection for someone else, it's not unfair for them
to not expect to receive the same level of benefit.
Now with respect to Senator Ogan's concern, the person
that is the violator, the bad actor that is
intoxicated, that person is subject to all of the
criminal penalties, is subject to an award for
economic damages, and is also subject to an award of
punitive damages. This does not affect the ability of
an injured person to recover punitive damages so they
have a pretty big hammer to get whatever that person
would have in terms of assets. They're not left
unprotected and I think that's important.
We look at this, and one of our judges across the
street, he talks about what he calls the goose/gander
rule, and this is really the goose/gander rule. We
think that people that make this choice - and the way
this bill was changed in the House, it was changed to
be knowing - so we don't - the situation that you were
talking about Senator Therriault, we don't want to
cover anyone with this bill that does not knowingly
violate the law. One of the amendments that had
originally been proposed was with knew or should have
known, and it became knowing. That's a pretty high
standard to meet and we would hope that as a result of
this, what would happen is that we would have less
people that make that choice to drive without
insurance. The less people that sign the registration
certification that says I certify that I have and will
maintain automobile insurance on this car and then
turn around and don't.
We would hope that there would be more financially
responsible drivers on the road so we don't end up
with a situation where what we have now is probably 16
to 18 percent and it truly is a situation where every
person that drives and doesn't buy insurance is being
subsidized by those that do - everyone of us. Ninety-
six percent of our policyholders do buy
uninsured/underinsured motorist coverage and that
coverage has been a coverage that certainly has
changed over the years. It's increased in terms of its
benefit but it's also increased in its price. It's
gotten way away from what it originally was intended
to be and so we think this bill is a good idea and I'd
be willing to answer any questions that anybody might
have of me.
4:30 p.m.
SENATOR THERRIAULT asked for the definition of "operating a
motor vehicle."
MR. LESSMEIER said he wished he had a good answer but thinks it
depends on where the vehicle was parked. He thought, for
example, if a person drove to downtown Juneau, stopped and was
waiting to get out of the vehicle and was hit, that would fall
under operating a motor vehicle. However, if a vehicle was off
the roadway, it would not.
SENATOR OGAN asked what percentage of non-economic damage claims
involves clear criminal activity.
MR. LESSMEIER was unable to provide a percentage but said there
are always scenarios in which the application of a law is not
perfect. He suggested that using the remaining tools of the
criminal law and the ability to collect punitive damages in
egregious cases, he suspects there will be very few cases where
every single penny that the bad actor has available is not paid.
He said in looking at this, he keeps coming back to the fact
that people make the choice not to provide protection for others
and, at the same time, to give up some compensation for them.
The consequence of that choice is fair under this bill.
CHAIR SEEKINS announced a 3-minute recess.
CHAIR SEEKINS asked if he chose not to buy insurance on his
family's vehicles without the knowledge of the other family
members, whether those family members would have the right to
recover non-economic damages. He then questioned whether a
person could not recover non-economic damages under this bill
but could recover punitive damages if the act was egregious.
MR. LESSMEIER said that is correct.
CHAIR SEEKINS noted that 50 percent of punitive damages must be
shared with the State of Alaska. He then asked, "So it would
mean if it was truly an egregious act on the part of the non-
insured or the other person, then you still can go after those
punitive damages under the law but not what we would classify as
non-economic - pain and suffering."
MR. LESSMEIER agreed.
CHAIR SEEKINS then expressed concern that an uninsured driver
could hit a pedestrian. He thought this bill might not provide
an incentive for those people without insurance to get it, but
it will limit some of the exposure for the legal drivers.
With no further participation, he closed public testimony.
TAPE 04-58, SIDE B
SENATOR OGAN asked Representative Meyer if he would oppose an
amendment to address a situation where:
...if someone is driving with criminal culpability -
either a reckless driver, a DUI, felony looting - and
run into somebody, I think they should get hammered
with as many tools as the guy that gets hurt
regardless of whether or not they had insurance. I
support what the bill does if it's just a simple
violation but I think - I haven't talked to the MADD
folks about it among others about drunk driving, I
don't know how they'd feel about it, but I mean I
think this goes a little too far in that area....
REPRESENTATIVE MEYER expressed concern about the late date in
the session and noted this bill has a referral to the Senate
Finance Committee.
CHAIR SEEKINS offered to hear the bill again on Wednesday. The
committee then took a brief at-ease.
SENATOR OGAN moved to adopt a conceptual amendment [1], which
read:
The limitation of recovery does not apply, however, if
the driver of the other vehicle (1) is cited for a
violation of the state's operating a motor vehicle
while intoxicated as a result of the accident and is
convicted of the offense, (2) intentionally causes the
accident, (3) flees from the scene of the accident,
(4) at the time of the accident is in furtherance of
an offense that is a felony.
He noted that language is from a Louisiana statute.
CHAIR SEEKINS announced that without objection, Amendment 1 was
adopted.
SENATOR THERRIAULT indicated that he would work with the prime
sponsor on a definition of what constitutes operating a motor
vehicle.
SENATOR THERRIAULT then moved SCS CSHB 336(JUD) from committee
with individual recommendations and its zero fiscal note.
The motion carried with Senators Ogan, Therriault and Seekins in
favor.
4:42 p.m.
CSHB 423(JUD)am-TAXICAB DRIVER LIABILITY
REPRESENTATIVE TOM ANDERSON, sponsor of HB 423, said this bill
applies to taxicab operators who transport motor vehicles owned
by intoxicated individuals to their homes or other directed
residential locations. This bill will lighten the insurance law
a bit by not making the taxicab driver's insurance company
liable for any damages that may occur, unless the taxicab driver
was grossly negligent or reckless. The insurance company of the
intoxicated person would be liable for any damage. He indicated
that in 2002, 87 traffic deaths occurred, of which 35 were
alcohol related. In order to create a successful program, liquor
establishments have committed to implementing some policies,
such as installing direct phone lines to cab companies. They
would agree, in partnership with taxicab companies, to make
public service announcements to help influence patrons to use
the program. They have also agreed to pay a portion of the
agreed upon cab fare costs and will track the program's usage to
determine its effectiveness. The service will be free to
consumers and cab companies will receive $40 per trip from bar
owners. MADD supports this legislation; it passed the House with
unanimous support. He noted this bill was introduced in a
previous legislature but died in the Senate on the last day due
to lack of time.
SENATOR OGAN asked if a very alcohol-impaired person could give
legal consent to another to drive his car.
REPRESENTATIVE ANDERSON said the principle of the needs of the
many outweighs the needs of the few would apply. The needs of
the many in this case would be those who are cognizant of the
ramifications of driving while impaired. If the person is very
drunk, the bar can sanction that person, who should not be in
the bar. In a worst-case scenario, the staff would help the
person into a taxi and another would drive the car home. If that
person decided to sue, he said he would love to see how a judge
and jury would react. He referred to lines 21-23 of page 2 of
the bill and thought that language might be applicable. He read:
The motor vehicle owner is considered to have given
consent to another person to drive the person's motor
vehicle if the other person is involved in an
accident.
He said in a worst-case scenario, a person who was really drunk
and did not want a cab driver to drive his car home would be out
of luck and probably could not testify in opposition to that.
SENATOR OGAN expressed concern that the legislature is making
that decision for the person.
CHAIR SEEKINS said nothing in the bill says the person has to
originate at a licensed establishment.
REPRESENTATIVE ANDERSON said that is incorrect; the vehicle must
be driven home from a licensed establishment. The partnership
with taxicab companies would not work otherwise as the taxicab
companies would go broke.
CHAIR SEEKINS closed public testimony, as no one else wished to
testify.
SENATOR OGAN moved CSHB 423(JUD)am from committee with
individual recommendations and its attached fiscal notes.
The motion carried with Senators Therriault, Ogan and Seekins in
favor.
HB 438-MOVE OVER LAW FOR DRIVERS
MR. MATTHEW RUDIG, staff to Representative Holm, sponsor of HB
438, told members that moving over and slowing down can save
lives. It is very dangerous for law enforcement officers and
emergency personnel to work alongside a roadway. According to
the National Law Enforcement Officers Memorial Fund report, from
1997 through 2002, 93 law enforcement officers were struck and
killed nationwide along the roadside. Many more have been
injured and many have had close calls. No measure of "move over"
legislation will guarantee officers and emergency personnel
complete safety, however this bill and further public education
efforts will heighten driver awareness of the inherent dangers
of officers and emergency personnel. Establishing such a
requirement in statute will encourage the public to take
precautions when passing emergency vehicles along the roadside
with emergency lights flashing. Thirty other states have enacted
similar legislation. Testimonials given by several Fairbanks
police officers are included in members' packets that expressed
a need for such legislation.
SENATOR THERRIAULT asked if this legislation essentially
requires drivers to slow down to 20 mph and move over to the
lane furthest away if an emergency vehicle is alongside the
road. He pointed out that he was referring to information on the
fiscal note.
MR. RUDIG said that language was in the original version of the
bill but was amended by the House Judiciary and Senate State
Affairs Committees. The new language in those versions reads:
Unless otherwise directed by law enforcement or
emergency personnel, shall slow to a reasonable and
prudent speed considering the traffic roadway and
weather conditions.
CHAIR SEEKINS noted the bill in its present form has no stated
speed limit in these instances.
MR. RUDIG agreed.
SENATOR OGAN said he fully supports the intent of this
legislation but asked if this bill simply clarifies the law and
creates a class A misdemeanor if personal injury results if a
person does not follow the law.
MR. RUDIG said that is correct but that the offense could be
written as a violation as well.
CHAIR SEEKINS noted it would be an infraction if no personal
injury resulted.
SENATOR THERRIAULT said this only applies to stationary
emergency vehicles, not vehicles en route.
MR. RUDIG clarified that is the intent of the sponsor.
SENATOR OGAN moved SCS CSHB 438(STA) from committee with
individual recommendations and attached fiscal notes.
The motion carried with Senators Ogan, Therriault and Seekins in
favor.
With no further business to come before the committee, CHAIR
SEEKINS adjourned the meeting at 5:08 p.m.
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