02/08/2007 01:30 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB59 | |
| SB68 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 68 | TELECONFERENCED | |
| += | SB 59 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE LABOR AND COMMERCE STANDING COMMITTEE
February 8, 2007
1:30 p.m.
MEMBERS PRESENT
Senator Johnny Ellis, Chair
Senator Gary Stevens, Vice Chair
Senator Bettye Davis
Senator Lyman Hoffman
Senator Con Bunde
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 59
"An Act relating to the use of broadcasting to promote
charitable raffles and lotteries."
MOVED SB 59 OUT OF COMMITTEE
SENATE BILL NO. 68
"An Act requiring motor vehicle insurers to provide to the
commissioner of administration a database listing vehicle
insurance policy information that will allow the commissioner to
verify whether mandatory motor vehicle insurance has been
obtained, limiting access to the database, establishing methods
for proving that mandatory motor vehicle insurance is in place,
allowing the additional penalties of suspending registration and
vehicle impoundment and forfeiture for failure to have mandatory
motor vehicle insurance, and authorizing hearings after
suspension of registration for failure to have mandatory motor
vehicle insurance."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 59
SHORT TITLE: BROADCASTING PROMOTING CHARITABLE GAMING
SPONSOR(s): SENATOR(s) STEVENS
01/19/07 (S) READ THE FIRST TIME - REFERRALS
01/19/07 (S) L&C
02/06/07 (S) L&C AT 1:30 PM BELTZ 211
02/06/07 (S) Heard & Held
02/06/07 (S) MINUTE(L&C)
02/08/07 (S) L&C AT 1:30 PM BELTZ 211
BILL: SB 68
SHORT TITLE: MOTOR VEHICLE INSURANCE
SPONSOR(s): SENATOR(s) FRENCH
01/26/07 (S) READ THE FIRST TIME - REFERRALS
01/26/07 (S) L&C, TRA, FIN
02/08/07 (S) L&C AT 1:30 PM BELTZ 211
WITNESS REGISTER
STUART WHITE
KFMJ Radio
Ketchikan AK
POSITION STATEMENT: Supported SB 59.
BOB KERN, President
TLP Communications
Ketchikan AK
POSITION STATEMENT: Supported SB 59.
JULIE SLANAKER
Rainy Day Quilter Guild and Ketchikan Little League Baseball
Ketchikan AK
POSITION STATEMENT: Supported SB 59.
SENATOR HOLLIS FRENCH
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of SB 68.
DUANE BANNOCK, Director
Division of Motor Vehicles
Department of Administration
PO Box 110200
Juneau, AK 99811-0200
POSITION STATEMENT: Supported SB 68.
KENTON BRINE
Property Casualty Insurers Association of American (PCI)
Olympia WA
POSITION STATEMENT: Opposed section 5 of SB 68.
STEVE FLASHER
Insurance Agent
Anchorage AK
POSITION STATEMENT: Opposed SB 68.
ACTION NARRATIVE
CHAIR JOHNNY ELLIS called the Senate Labor and Commerce Standing
Committee meeting to order at 1:30:23 PM. Present at the call to
order were Senators Davis, Bunde, Stevens and Ellis.
SB 59-BROADCASTING PROMOTING CHARITABLE GAMING
CHAIR ELLIS announced SB 59 to be up for consideration.
STUART WHITE, KFMJ Radio, Ketchikan, supported SB 59 and said it
will not allow more gambling in Alaska. It fixes problems with
AS 05.15.640(a) that should have been fixed long ago by enabling
over-the-air broadcasters to advertise activities that are
already legal. Newspapers are not banned from this activity, but
it may deny broadcasters equal protection under federal and
state constitutions as well as just being confusing to the
potential advertisers who are not aware of this discrepancy.
1:34:55 PM
SENATOR HOFFMAN joined the committee.
1:36:30 PM
SENATOR BUNDE stated that Mr. White said this bill would not
expand gambling, but he also said advertising on the radio would
increase the number of customers who know about a lottery by
three or four times. Therefore, he reasoned, it may not increase
new kinds of gambling, but it would encourage more people to be
involved in gambling.
MR. WHITE countered that non-profit organizations already have
the legal right to present these games and, "The fact that they
would either survive or go away is kind of the important crux of
it there."
He told them that increased ticket sales for groups that
contribute to the community would be a positive result and that
new types of gambling, like riverboats and Bali's, wouldn't
happen here.
1:39:21 PM
BOB KERN, President, TLP Communications, Ketchikan, said TLP
owns and operates KFMJ Radio and publishes the local newspaper.
He supported Mr. White's comments and expanded specifically on
the huge confusion among broadcasters between what the state and
federal governments allow. He thought this legislation would
prevent station owners from being fined or having their licenses
threatened by the actions of employees or others who are
misunderstanding the conflicting regulations they have to deal
with. What is legal to broadcast in 48 of the United States is
not legal in Alaska.
Another issue he clarified is that gaming spots could be allowed
to be broadcast as free public service announcements (PSAs). In
fact, though, most of the day air-time is sold out and any free
PSAs get relegated to the midnight to 5 a.m. time period, which
would do the non-profits very little good. Newspapers don't give
away their space and he didn't think radio stations should have
to either.
MR. KERN also added that passing this legislation would clarify
how to advertise self-conducted lotteries and that the
definition of "broadcasting" should include the Internet. He
said that just putting up a web page that anyone can click on is
broadcasting and that audio is now getting streamed regularly.
He suggested deleting the broadcasting definition section in SB
68 because he didn't know of anybody in television or radio who
transmitted by 2,500 megahertz. He also didn't know of anybody
who broadcasts on microwave video since it is a point to point
communication system; and slow-scan television has not been used
for years by anyone except maybe amateur operators. He
suggested deleting "programming by way of satellite, cable
teletype", which nobody uses anymore, and "or facsimile
transmission and distribution methods". He suggested inserting
"digital distribution methods", since so many stations are
transmitting in the digital mode now, which is not exactly in
the traditional definition of broadcasting.
He also suggested that the state and federal regulations should
be more aligned with each other. As an example, he related that
a Ketchikan station was reported to the FCC for broadcasting
lottery information and promoting it quite heavily last year.
The FCC ruled:
Although 18 USC 13.04 prohibits the broadcast of
information concerning a lottery, 18 USC
13.07(a)(2)(a) states that the provision of 18 USC
13.04 shall not apply to an advertisement concerning a
lottery that is authorized or otherwise not prohibited
by the state in which it is conducted and which is
conducted by a not-for-profit organization. The
information before us indicates [the American Diabetes
Association (ADA)] is a not-for-profit organization
that has conducted the event and raffle as fund
raisers and that the State of Alaska had given the ADA
a charitable gaming permit for the period covered by
the event. Thus, [the FCC says] it appears that the
stations did not violate 18 USC 13.04 or the related
commission rule in as much as their provisions
specifically are not applicable to advertisements
about events which are conducted by the American
Diabetes Association. Therefore, we close this matter.
1:49:16 PM
JULIE SLANAKER, Rainy Day Quilter Guild and Ketchikan Little
League Baseball, said she has been a fund-raising officer for
both of these non-profit organizations for the last three years
and she has noticed it's more difficult than ever to raise funds
for both groups' expenses. The Quilt Guild that has two raffles
every year would do significantly better if she were able to
advertise on the radio.
She said that one thing parents and kids can still participate
in is selling raffle tickets. In Ketchikan, every charitable
organization has raffle tickets at different times of the year
and the more people who know about a raffle, the more tickets
can be sold. It costs a lot to advertise in the paper - a single
ad for one day runs about $80 with a nonprofit rate. For that
same $80 she could advertise with KFMJ and receive a week's
worth of advertising that would promote one of her raffles in a
much more efficient manner.
1:53:58 PM
CHAIR ELLIS thanked her for her comments and closed the public
hearing. He set SB 59 aside, but said he would take it up later
in the meeting.
SB 68-MOTOR VEHICLE INSURANCE
CHAIR ELLIS announced SB 68 to be up for consideration.
SENATOR HOLLIS FRENCH, sponsor of SB 68, said the purpose of the
bill is to help people who have auto insurance and are affected
by those who do not.
1:55:20 PM
SENATOR FRENCH said the Insurance Research Council, a national
group, estimated that those who don't have insurance make up
about 14-15 percent of drivers on Alaska's roads; but of 18,000
accidents that happened here in 2006, 28 percent of the drivers
involved didn't carry insurance. So, a riskier and less
responsible population is causing harm far out of proportion to
what people might expect. What all of us pay each month to cover
the risk of being injured by an uninsured motorist is about 6
percent of a full coverage policy or 14 percent of just bare-
bones liability policy. That translates into $75 - $80 per year
that each Alaskan has to pay to cover the risk of being injured
by an uninsured motorist.
He said that currently, there is no real method for enforcing
the uninsured motorist laws and the genesis of SB 68 is to take
advantage of modern data-base capabilities and allow the
insurance industry database to communicate with the Division of
Motor Vehicles (DMV) about the number of uninsured motorists
each month.
SENATOR FRENCH explained that the DMV could make a list each
month of all known registered vehicles and compare that to a
list of all known insurance policies. The lack of insurance
could be communicated to the uninsured motorists with a warning
about losing their car registration if they didn't get insurance
within the next 30 days.
1:58:48 PM
DUANE BANNOCK, Director, Division of Motor Vehicles, supported
Senator French's comments and said they share the goal of
reducing uninsured vehicles. He said he would be happy to answer
questions.
2:00:00 PM
SENATOR BUNDE agreed that he wanted fewer uninsured drivers on
the road and asked what the violation rate was of people who
drive with a suspended license. He asked if that information
could somehow be interfaced with an uninsured driver's data
base.
MR. BANNOCK responded that he would attempt to get that
information for him.
2:02:27 PM
SENATOR BUNDE said that safe highways have a cost and using the
user cost/user pay philosophy, he asked Mr. Bannock if he
planned to increase drivers license fees to pay for this program
or to make a request from the general fund.
MR. BANNOCK replied that the department is not proposing to
increase the cost of a driver's license. He added that even with
the DMV's hefty fiscal note for SB 68, it still contributes
nearly five times as much to the general fund as it takes for
operating expenses.
SENATOR BUNDE responded that in the next year or so, that
contribution might become even more significant and he did not
look forward to a decrease in their contribution.
2:03:36 PM
KENTON BRINE, Property Casualty Insurers Association of American
(PCI), said that PCI's members represent about 40 percent of the
auto insurance market across the country. While he shares
drivers' and policy makers' frustration about the percentage of
drivers who drive without insurance coverage, he said that
insurers typically are not in favor of mandatory auto liability
insurance laws even though nearly every state has one. They
don't have a great deal of effectiveness in deterring people who
are determined to drive without insurance, he stated. When
states attempt to enforce laws, there is a spike in compliance
for a period of time and then members gradually drift back out
to where they were previous to that.
MR. BRINE said he had also looked at the same Insurance Research
Council's numbers as Senator French and had no quarrel with
those, but what insurers have seen is that programs,
particularly the electronic database programs, have not proven
themselves to be highly effective ways of either tracking or
changing compliance levels with uninsured motorists. The reason
varies from state to state. In some cases, it's not known if
they aren't effective because of the questionable methods used
in determining their effectiveness. Utah, as an example, changed
the reporting requirements on insurers from once a month to
twice a month. The vendor that was hired by Utah to administer
the database matching program, called Insure Write, found its
uninsured motorist rate dropped to 5 percent thanks to the
efforts of this program. But the Insurance Research Council,
which uses a comparison of uninsured motorists claim frequency
to bodily injury claim frequency numbers to determine an
estimate of uninsured motorists pegged the rate of uninsured
drivers in Utah to be about 10 percent - about double of what
Insure Write claims was their success rate.
Further he has found through studies across the board that at
best people are not sure that these programs work and at worst
they are fairly sure they don't work. And the costs for
instituting them are borne by consumers and insurers. Frequent
small mistakes are made, as well, in things like the recording
of a vehicle identification number (VIN) or something else in
the reporting to the state.
Looking at the broader issue of uninsured motorists, Mr. Brine
said it might be useful to consider what things can be done in
the insurance marketplace to make insurance more attractive for
people to buy. He admitted that the reason some people just
won't buy liability insurance coverage is because some might
feel they don't have adequate assets to protect.
MR. BRINE said that some states have considered creating a
policy with lower limits; litigation costs could be examined and
the rate quote process could be speeded up by allowing access to
a web database of driver records for insurance companies. Alaska
is currently one of four states in the country that doesn't
allow insurers to look at driver records in an online real time
web based format.
He also mentioned that in California, which has a very high rate
of uninsured drivers, the voters passed an initiative saying
that uninsured motorists involved in an accident that wasn't
their fault can't collect noneconomic damages. He concluded
saying that he would be pleased to work with the committee about
experiences across the country with these programs, but today he
was opposed to section 5 of SB 68.
2:12:15 PM
SENATOR BUNDE asked if Alaska's underinsured and uninsured
coverage would protect his assets if were in an accident with an
uninsured person.
MR. BRINE replied yes.
SENATOR BUNDE asked if uninsured people who are involved in a
disproportionate number of accidents belong in a higher risk
pool. What would it do to his rates, for instance?
MR. BRINE replied that the idea behind insurance is to pool
people with people of similar risks and not pooling higher risk
people in with the lowest risk people in order to balance out
the cost.
2:15:43 PM
SENATOR BUNDE said Utah went to twice a month reporting and
asked what impact that would have on rates.
MR. BRINE said he didn't have the chance to investigate what the
costs are because the law was passed so fast, but he has heard
that it is costly because it is computer based and a lot of
reformatting has to be done. The initiation is costly as well.
However, he agreed with Senator Bunde that "gaming the system"
is very real and no matter what, people who are determined to do
so, will be able to get some proof of insurance that isn't real
or purchase insurance, hold it long enough to have the reporting
go through and cancel it. He added that the effectiveness of
electronic database programs is also questionable and it's not
known how accurate the database would be from month to month.
2:18:13 PM
STEVE FLASHER, Anchorage Insurance Agent, said on the surface SB
68 sounds great, but he has some concerns - like would the
vendor be able to sell the information to other insurance
companies or what if a name is misspelled on the insurance
policy or the VIN number, which is 17 numbers, is wrong. He
deals with credit unions and banks on correcting those all the
time. Another issue is timeliness of reporting. Ultimately, he
said, all the costs will be passed on to the insurance companies
that will raise the rates of their current carriers. He didn't
think this program would be very successful and said he thought
the reason there is such a high number of uninsured drivers is
basically because the cost of insurance is so high and all this
does is add to that cost.
Lastly, he said SB 68 just adds another layer of bureaucracy
when it already takes his office two or three days to obtain a
customer's motor vehicle report (MVR) information. That slows
the whole process of being able to accurately quote and put
policies into force.
2:23:08 PM
SENATOR FRENCH commented that he continues to work with industry
and the division to bring costs down and make the program more
effective.
CHAIR ELLIS said the bill will be brought up again and set it
aside.
SB 59-BROADCASTING PROMOTING CHARITABLE GAMING
CHAIR ELLIS announced SB 59 to be back before the committee and
asked if there was any committee discussion. There was none.
2:24:32 PM
SENATOR STEVENS moved to pass SB 59 with the attached fiscal and
individual recommendations. There were no objections and SB 59
moved out of committee.
There being no further business to come before the committee,
Chair Ellis adjourned the meeting at 2:27:36 PM.
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