Legislature(1995 - 1996)

03/28/1996 01:36 PM TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                     SENATE TRANSPORTATION                                     
                         March 28, 1996                                        
                           1:36 p.m.                                           
  MEMBERS PRESENT                                                              
                                                                               
 Senator Steve Rieger, Chairman                                                
 Senator Robin Taylor, Vice Chair                                              
 Senator Lyda Green                                                            
 Senator Georgianna Lincoln                                                    
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
 Senator Al Adams                                                              
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 SENATE BILL NO. 315                                                           
 "An Act relating to procurement by the Alaska Railroad                        
 Corporation."                                                                 
                                                                               
 CS FOR HOUSE BILL NO. 210(STA) am                                             
 "An Act relating to issuance of motor vehicle registrations and               
 titles, and to licenses and permits to operate a motor vehicle."              
                                                                               
 HOUSE BILL NO. 411                                                            
 "An Act naming Mountain View Road in Gustavus."                               
                                                                               
  PREVIOUS SENATE ACTION                                                       
                                                                               
 SB 315 - No previous action to record.                                        
                                                                               
 HB 210 - See Senate Transportation minutes dated 3/19/96.                     
                                                                               
 HB 411 - No previous action to record.                                        
                                                                               
  WITNESS REGISTER                                                             
                                                                               
 Henry Springer, Executive Director                                            
 Associated General Contractors of Alaska                                      
 4041 B Street                                                                 
 Anchorage, Alaska 99503                                                       
 POSITION STATEMENT:  Emphasized the competitive bidding process.              
                                                                               
 John Eng                                                                      
 Cornerstone Construction                                                      
 4141 B Street #201                                                            
 Anchorage, Alaska 99503                                                       
 POSITION STATEMENT:  Emphasized the competitive bidding process.              
                                                                               
 Bob Hatfield, President & CEO                                                 
 Alaska Railroad Corporation                                                   
 327 Ship Creek Avenue                                                         
 Anchorage, Alaska 99501                                                       
 POSITION STATEMENT:  Discussed how right of way construction                  
                      currently happens.                                       
                                                                               
 Sam Kito III, Legislative Liaison/Special Assistant                           
 Department of Transportation & Public Facilities                              
 3132 Channel Drive                                                            
 Juneau, Alaska 99801-7898                                                     
 POSITION STATEMENT:  Answered questions.                                      
                                                                               
 Rick Leggett, General Road Manager                                            
 327 Ship Creek Avenue                                                         
 Anchorage, Alaska                                                             
 POSITION STATEMENT:  Discussed layoff possibilities.                          
                                                                               
 Representative Mackie                                                         
 State Capitol                                                                 
 Juneau, Alaska 99801-1182                                                     
 POSITION STATEMENT:  Prime Sponsor of HB 411.                                 
                                                                               
 Juanita Hensley, Chief                                                        
 Driver Services                                                               
 Division of Motor Vehicles                                                    
 Department of Public Safety                                                   
 PO Box 20020                                                                  
 Juneau, Alaska 99811-0020                                                     
 POSITION STATEMENT:  Suggested changes to HB 210.                             
                                                                               
 Anne Carpeneti, Assistant Attorney General                                    
 Criminal Division                                                             
 Department of Law                                                             
 PO Box 110300                                                                 
 Juneau, Alaska 99811-0300                                                     
 POSITION STATEMENT:  Discussed concerns with HB 210.                          
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
 TAPE 96-9, SIDE A                                                             
                                                                               
                                                                               
               SB 315 ALASKA RAILROAD PROCUREMENT                             
                                                                              
 Number 001                                                                    
                                                                               
 CHAIRMAN RIEGER called the Senate Transportation meeting to order             
 at 1:36 p.m. and noted that testimony would be taken until a quorum           
 arrived.  He introduced  SB 315  as the first order of business.              
                                                                               
 HENRY SPRINGER, Executive Director of the Associated General                  
 Contractors of Alaska, emphasized the association's platform of               
 open competitive bidding processes.  He said that there have been             
 attempts to erode that process in the past few years.  Mr. Springer           
 mentioned that he worked with the Department of Transportation                
 (DOT) in 1962 and is somewhat familiar with the construction or               
 changes within the right of way of the Alaska Railroad.  He did not           
 understand why that work could not be done under a competitive                
 bidding process.  The Alaska Railroad would continue to outline the           
 specifications and the operational demands.  Mr. Springer said that           
 it could be done as a specialty contract where the railroad does              
 the construction and integrates the construction with their                   
 maintenance and other operations or it can be done through DOT.               
 Regardless of how the work is done, Mr. Springer believed that the            
 work could be done as the rest of the state work is done, which is            
 in compliance with the State Procurement Code.  He offered to                 
 answer any questions.                                                         
                                                                               
 A quorum was established.                                                     
                                                                               
 Number 082                                                                    
                                                                               
 JOHN ENG, Cornerstone Construction, explained that Cornerstone                
 Construction is a general contractor that does commercial and                 
 industrial work as well as railroad maintenance and construction.             
 Mr. Eng believed that tax dollars should be awarded through a                 
 competitive bidding process.  He agreed with Mr. Springer that the            
 owner of the adjacent property whether it be the railroad or                  
 someone else, could establish some technical requirements that                
 would have to be followed for everyone's benefit.  Mr. Eng said               
 that he was promoting this legislation primarily for the economic             
 benefit to the state as well as a competitive bid operation and               
 business opportunity for Cornerstone Construction.                            
                                                                               
 BOB HATFIELD, President and CEO of the Alaska Railroad, said that             
 the railroad owns the right of way on which the work would be done            
 and the railroad should do the work it is capable of doing on its             
 own right of way.  As a standard condition to consent to a DOT                
 grade crossing project, the railroad asks that its employees do               
 that work which involves changing or moving track.  Mr. Hatfield              
 emphasized that the railroad asks that its employees do such work             
 due to the liability issues which the railroad accepts through its            
 normal operations.  Therefore, the railroad wants to know exactly             
 how work has been done.  Mr. Hatfield recognized that the work                
 could be accomplished by contractors, but the railroad's liability            
 creates the need to know exactly what is done.  Also the train and            
 construction operations have to be coordinated; the railroad can do           
 this more efficiently.  Mr. Hatfield pointed out that the railroad            
 is reimbursed for doing a project in accordance with the Federal              
 Highway Administration guidelines.  He explained that cost                    
 estimates are submitted to DOT who analyzes the estimates for                 
 reasonableness.  Once the project is complete, DOT routinely audits           
 the payments in order to ensure that the railroad does not receive            
 payment for work that was not done or not done in the manner                  
 specified.  He offered to answer any questions.                               
 Number 145                                                                    
                                                                               
 SENATOR LINCOLN inquired as to why the railroad could not specify             
 within the contract that the contractor would bear the                        
 responsibility.  With regards to the reimbursement by the federal             
 government, could the contractors or subcontractors submit cost               
 estimates and DOT could audit them just as the department audits              
 the railroad?  BOB HATFIELD agreed that the audits could be done              
 for the subcontractor.  Mr. Hatfield reiterated that the railroad             
 can not only do work comparable to that of a contractor, but also             
 can coordinate the work better.  This discussion only refers to               
 track and signal work.  Mr. Hatfield pointed out that the railroad            
 routinely contracts out other work in the right of way that does              
 not directly involve the track or the signal.                                 
                                                                               
 SENATOR LINCOLN noted that Mr. Eng's letter said that he was                  
 looking at railroad crossings and overpasses when asking how track            
 and signal work would be involved in overpasses.  BOB HATFIELD                
 explained that often a track must be relocated when there is work             
 done on an overpass.                                                          
                                                                               
 SENATOR LINCOLN asked if Mr. Hatfield believed there to be a cost             
 savings to Alaska by keeping the contract solely with the railroad.           
 BOB HATFIELD believed there to be a cost savings.  The railroad has           
 the equipment, people, and the expertise to do this work on demand.           
 Mr. Hatfield noted that the railroad seems to have the same                   
 situation with highway construction as the utility companies do.              
                                                                               
 SENATOR LINCOLN asked how much the savings would be in one fiscal             
 year.  BOB HATFIELD did not know.  There are many factors involved            
 in such an estimate.                                                          
                                                                               
 Number 203                                                                    
                                                                               
 SENATOR GREEN asked if this same dilemma applied to any other                 
 governmental entity besides the railroad.  Senator Green believed             
 that a conflict had been created in this public-private entity                
 which separates the railroad from a normal utility.                           
                                                                               
 SAM KITO III, Department of Transportation & Public Facilities, did           
 not believe there was another private entity to which this would              
 apply.  Typically, the department does force account work with                
 villages through Public Health Services or the Department of                  
 Environmental Conservation.                                                   
                                                                               
 SENATOR TAYLOR said that the substance of SB 315 is to allow the              
 railroad to defer to DOT.  He asked if the railroad would have to             
 defer to DOT.                                                                 
                                                                               
 CHAIRMAN RIEGER explained that SB 315 would require that the                  
 railroad use the same processes that DOT would have used had DOT              
 done the work themselves.  In response to Senator Taylor, Chairman            
 Rieger said that the railroad is not doing that.                              
                                                                               
 BOB HATFIELD interjected that the railroad is behaving in the same            
 manner in which DOT would.  DOT can choose to do the work itself of           
 the work can be contracted out.                                               
                                                                               
 SENATOR TAYLOR asked if the railroad was using competitive sealed             
 bidding.  BOB HATFIELD said that the railroad was being asked to do           
 the work and the railroad is.  SENATOR TAYLOR said that if the work           
 is being done in-house, competitively sealed proposals would not be           
 required; this law would not effect that, would it?  BOB HATFIELD             
 said that it seems that any work DOT may undertake on the                     
 railroad's property which involved track work would have to be put            
 out to bid, even routine work.                                                
                                                                               
 SENATOR TAYLOR asked if the routine work was being done by DOT, not           
 the railroad and its employees.                                               
                                                                               
 Number 256                                                                    
                                                                               
 BOB HATFIELD explained that DOT may be relocating a road or                   
 building a highway overpass which would require taking apart tracks           
 or moving tracks.  That work is done by the railroad at the request           
 of DOT.  SB 315 would require that work done by the railroad for              
 the railroad to be competitively bid upon.                                    
                                                                               
 HENRY SPRINGER pointed out that under the State Procurement Code,             
 any money appropriated to DOT under the Capital Program (CIP) or              
 any projects must have a competitive bidding process.  The                    
 department can choose how to proceed with operating and maintenance           
 funds that are general fund appropriations.  Mr. Springer clarified           
 that he was asking that the railroad, in cases of capital money               
 coming through DOT to the railroad, have a competitive bid process.           
                                                                               
 SENATOR LINCOLN understood from previous testimony that this                  
 legislation would cost the state more money.  She noted that there            
 is no fiscal note.  Senator Lincoln inquired as to the position of            
 DOT regarding SB 315 and if SB 315 will cost more money.                      
                                                                               
 CHAIRMAN RIEGER pointed out that there are fiscal notes from the              
 Alaska Railroad and DOT.  SENATOR LINCOLN said those fiscal notes             
 are zero.                                                                     
                                                                               
 SAM KITO III said that DOT does not believe there to be a fiscal              
 impact with SB 315.  The department cannot project what the fiscal            
 impact may be for the Alaska Railroad Corporation if the method of            
 operation is changed.  Mr. Kito said that DOT supports the Alaska             
 Railroad Corporation's position on SB 315.                                    
                                                                               
 Number 300                                                                    
                                                                               
 CHAIRMAN RIEGER asked if the Alaska Railroad were a private                   
 corporation and there were no special statutes governing the                  
 railroad, would DOT be able to transfer the ability to do the work            
 on the railroad's right of way to that private railroad.  If the              
 department could transfer that ability to a private railroad, would           
 it be subject to State Procurement Code laws?                                 
                                                                               
 SAM KITO III believed that if the Alaska Railroad Corporation were            
 an independent or private entity, DOT would have no say in how the            
 project was constructed.  With regards to the private entity                  
 receiving funds from the department,  Mr. Kito did not know if that           
 would be possible.                                                            
                                                                               
 CHAIRMAN RIEGER asked if that was done in any other instance or               
 does the department always own the right of way included in a                 
 project.  Perhaps, utilities would be an example.  SAM KITO III               
 informed the chairman that DOT does have lease agreements for                 
 utilities within the road right of way where a utility will have an           
 easement within the road right of way to place its utility.  With             
 a DOT project or highway project, the department will own the right           
 of way or have a significant interest.  With some airports, the               
 department leases the land from a corporation or is proposing to              
 lease the land from a corporation.                                            
                                                                               
 CHAIRMAN RIEGER asked if the department did the work in such                  
 situations.  SAM KITO III replied yes, the department does the work           
 directly; it is a public project.  The department would have a                
 lease for the property and the department would have significant              
 interest in the property in order to operate a public project.                
                                                                               
 Number 330                                                                    
                                                                               
 CHAIRMAN RIEGER asked if money would be transferred to Alyeska                
 where the road crosses the pipeline right of way or would the                 
 department do the work.  SAM KITO III said that he was unfamiliar             
 with the statutes and the regulations.  Statute specifically                  
 addresses utility relocation in state right of way.                           
                                                                               
 CHAIRMAN RIEGER said that he was still unclear as to what would               
 transpire if the railroad was private.                                        
                                                                               
 SENATOR TAYLOR acknowledged that there may be some specialty or               
 advantage to doing the work in-house.  He asked if this work should           
 be open to competitive bidding when the railroad is ultimately                
 liable for the trains running over that work.                                 
                                                                               
 SENATOR LINCOLN wanted to know if there would be a significant                
 difference in the cost of going through a competitive bidding                 
 process.  She pointed out that more employment would be created, if           
 there was not a significant difference in the cost.  With regards             
 to the liability, Senator Lincoln suggested that the construction             
 of buildings, highways and bridges is no different than building              
 railroad ties.  The liability could be written into the contract.             
 Is there going to be an additional cost to Alaska and if so, how              
 much?  Would this carry forward if the railroad was sold?                     
                                                                               
 BOB HATFIELD indicated that he would be speculating at this point             
 with regards to the savings or expense of SB 315.  However, Mr.               
 Hatfield assumed that there would be no savings from the labor cost           
 component.  Furthermore, the railroad has parts and materials that            
 are bought in bulk which presumes a better price than a contractor            
 would be able to obtain.  Even if a contractor did the work, the              
 railroad would require that a flagman and track inspector be in               
 place monitoring the work.  Therefore, three more employees would             
 be present than would if the railroad were doing the project.                 
                                                                               
 SENATOR LINCOLN asked if anyone would have to be laid off if the              
 bidding process were utilized.  BOB HATFIELD said that it could be            
 possible.  With the Bird Creek to Girdwood Project, employees would           
 have been laid off.                                                           
                                                                               
 Number 399                                                                    
                                                                               
 RICK LEGGETT, General Road Manager, that the Bird to Gird Project             
 had about 30 track people on that project and two separate crews.             
 If that project had been allowed to go through the bidding process,           
 those railroad employees would have been laid off.                            
                                                                               
 SENATOR GREEN asked if the railroad determines the size of its                
 staffing based on the assumption that those employees will do those           
 projects in-house.                                                            
                                                                               
 JOHN ENG posed the following question:  would the work be better on           
 a competitive bid basis or a cost plus force account basis?                   
                                                                               
 BOB HATFIELD pointed out that the railroad's estimates are reviewed           
 for reasonableness before the work is done and are further audited            
 after the work is completed in order to ensure that the railroad              
 did not do anything out of line.                                              
                                                                               
 JOHN ENG said that SB 315 does not prevent the railroad from also             
 bidding on the work.  With a competitive bid process, the railroad            
 would be able to demonstrate if there would or would not be savings           
 if the railroad did the work.                                                 
                                                                               
 SENATOR TAYLOR does not like the current procurement code.  It is             
 burdensome.  If the railroad has used private contractors in the              
 past and this is a policy shift, Senator Taylor did not object to             
 the legislation.                                                              
                                                                               
 CHAIRMAN RIEGER pointed out that the additional language in SB 315            
 refers to "when procuring" and that there would be a competitive              
 process "when procuring".  Chairman Rieger clarified that the                 
 complaint was in regards to the force account.  Does the railroad             
 interpret SB 315 as preventing any in-house work?  BOB HATFIELD               
 replied yes.  The railroad believes that SB 315 would require the             
 railroad to competitively bid a project no matter how small or                
 large.  Mr. Hatfield mentioned the administrative burden which                
 would be created for the railroad.                                            
                                                                               
 CHAIRMAN RIEGER asked if Mr. Eng interpreted the bill in that                 
 manner.  JOHN ENG said no.  Mr. Eng understood the bill to mean               
 that public bidding would only be required when the project is                
 funded by tax payers' dollars.                                                
                                                                               
 BOB HATFIELD agreed with Mr. Eng, but some of DOT's projects paid             
 for by tax payers are relatively insignificant with regards to                
 cost.                                                                         
                                                                               
 HENRY SPRINGER pointed out that is done under AS 36.30.100 -                  
 36.30.270 which does not preclude the work being done in-house or             
 by force account; the statute lays out a mechanism.  It basically             
 says that, under the procurement code, anything over $100,000 would           
 be required to go through a competitive bidding process.  If there            
 are extenuating circumstances, then the competitive bidding process           
 does not have to be used; it is not a blanket requirement.                    
                                                                               
 CHAIRMAN RIEGER asked if there were other questions from the                  
 committee.  Hearing none, Chairman Rieger asked for the pleasure of           
 the committee.                                                                
                                                                               
 Number 465                                                                    
                                                                               
 SENATOR TAYLOR moved that SB 315 be moved out of committee with               
 individual recommendations.                                                   
                                                                               
 CHAIRMAN RIEGER noted that SB 315 has a referral to Senate Finance.           
                                                                               
 SENATOR LINCOLN objected for discussion purposes.  She had no                 
 objection to moving the bill to Senate Finance, but the bill could            
 be waived from that committee because of the zero fiscal notes.               
 Senator Lincoln said that she would not object to moving the bill             
 out of committee if she was assured that it would be heard in                 
 Senate Finance.                                                               
                                                                               
 SENATOR TAYLOR shared Senator Lincoln's concerns regarding the                
 fiscal impacts of SB 315.  He hoped the bill would not be waived              
 from Senate Finance.                                                          
                                                                               
 SAM KITO III explained that AS 36.30.100 - 36.30.270 does not have            
 any guidelines for what would constitute a project that should be             
 eligible for competitive sealed bid or competitive sealed proposal.           
 Those portions of the procurement code only address the procedures            
 by which a competitive sealed bid or a competitive sealed proposal            
 would be implemented.                                                         
                                                                               
 CHAIRMAN RIEGER said that he would like to move this bill, but he             
 would also like to review those statutes.                                     
                                                                               
 SENATOR TAYLOR withdrew his motion.                                           
                                                                               
 CHAIRMAN RIEGER believed that often public projects are                       
 appropriated in part, with the expectation that work would get out            
 to the private sector.  Chairman Rieger said that he was                      
 sympathetic to that.  He wanted to have a workable procedure in               
 place to ensure that happens.  If there is a question regarding the           
 restrictions with the procurement reference, then it would be                 
 appropriate to hold the bill.  Chairman Rieger asked if anyone else           
 would like to testify on SB 315.  He informed everyone that staff             
 would research those statutes, obtain a legal opinion, and share it           
 with committee members.                                                       
                                                                               
                                                                               
             HB 411 MOUNTAIN VIEW ROAD - GUSTAVUS                            
                                                                               
 CHAIRMAN RIEGER introduced    HB 411  as the next order of business.        
                                                                               
 REPRESENTATIVE MACKIE, Prime Sponsor, explained that Alaska statute           
 requires that highway names be done by legislation.  This is a                
 community project which has been consistently called Mountain View            
 Road   since the 1950s.  Representative Mackie received a petition          
 from Gustavus to officially name the road Mountain View Road.    Thi        
 summer the road is being upgraded and the cost of the signs will be           
 included, there will not be a fiscal impact to the state.                     
 Representative Mackie did not know of any opposition in the                   
 community.                                                                    
                                                                               
 SENATOR TAYLOR moved that HB 411 be moved out of committee with               
 individual recommendations.  Hearing no objections, it was so                 
 ordered.                                                                      
                                                                              
                                                                               
                                                                               
        HB 210 PRIVATE MOTOR VEHICLE LICENSING/TESTING                       
                                                                               
 Number 522                                                                    
                                                                               
 CHAIRMAN RIEGER introduced  HB 210  as the next order of business             
 before the committee.  He pointed out that the committee packets              
 contained a marked up version of a proposed CS which addresses many           
 of the concerns previously raised.  However, the CS does not delete           
 the contract nor does it address the concern surrounding the                  
 administrative hearing.    The prime sponsor had serious objections         
 to those changes, so Chairman Rieger wanted to bring them before              
 the committee.                                                               
  SENATOR GREEN moved that the CS be adopted in lieu of the original          
 bill.  Without objection, it was so adopted.                                  
                                                                               
 JUANITA HENSLEY, Driver Services in the Division of Motor Vehicles,           
 informed the committee that the issues she would be discussing were           
 brought before the House last year as the bill moved through the              
 process.  She directed the committee to page 5, line 23 when                  
 explaining that she wanted an immediate report of a criminal                  
 complaint of child molestation or sexual abuse; Ms. Hensley did not           
 want to wait 10 days in these cases.  There should also be an                 
 immediate report of embezzlement.                                             
                                                                               
 Ms. Hensley was also concerned that the department does not have an           
 arbitration process.  A process would have to be developed.  In               
 statute, there is a provision allowing the department to conduct              
 administrative hearings with oversight from the Superior Court.               
 Ms. Hensley proposed that page 6, lines 19-24 be deleted and                  
 replaced with "administrative hearings conducted under AS                     
 28.05.141."  That would be easier for the department.                         
                                                                               
 Ms. Hensley felt that the contracts on pages 7-17 are very                    
 cumbersome.  It is not necessary to place the contracts in statute            
 because the bill establishes what would be agreed upon.  Ms.                  
 Hensley referred to page 17, line 8 when suggesting that                      
 "preapproval" should be deleted.  She expressed concern with the              
 amount of insurance required on page 18, but did not know what                
 amount would be appropriate.                                                  
                                                                               
 TAPE 96-9, SIDE B                                                             
                                                                               
 Number 587                                                                    
                                                                               
 Ms. Hensley said that the department has some concerns with                   
 subsection (a) on page 19, lines 10-14 regarding civil liabilities.           
 She noted that the Department of Law also had some concerns with              
 that section and Anne Carpeneti would speak to those concerns.  Ms.           
 Hensley thanked the committee and the staff for working with the              
 department on the bill.                                                       
                                                                               
 SENATOR LINCOLN asked Ms. Hensley to repeat her comments regarding            
 performing audits on page 17 of the bill.  JUANITA HENSLEY                    
 suggested that the word "preapproval" on line 8 be deleted.                   
                                                                               
 SENATOR LINCOLN clarified that she was referring to line 15.                  
 JUANITA HENSLEY recommended deleting the words "with or".  SENATOR            
 LINCOLN inquired as to why Ms. Hensley would suggest that deletion.           
 JUANITA HENSLEY reiterated that she would recommend deleting                  
 "preapproval" on line 8 which would provide an option of whether or           
 not to give the person notice of an audit.                                    
                                                                               
 ANNE CARPENETI, Assistant Attorney General for the Department of              
 Law, reiterated her apologies for not being very familiar with                
 civil law, but she noted that she had talked with the civil                   
 division regarding the civil liabilities section on page 19.  Ms.             
 Carpeneti recalled that the sponsor said that the purpose of                  
 subsection (a) was to create a level playing field, but the state             
 continues to be liable for negligence acts of its agents.  HB 210             
 would give these private agents, third parties, protection against            
 liability for negligence which the state does not have.  Ms.                  
 Carpeneti recommended that subsection (a) be deleted.                         
                                                                               
 CHAIRMAN RIEGER asked if a state employee performing this function            
 would be indemnified from negligence.  If someone were damaged from           
 the actions of a state employee would the state be held liable.               
 ANNE CARPENETI believed that was correct.  CHAIRMAN RIEGER asked if           
 this clause placed the agent in the same position as an employee              
 would have been in.                                                           
                                                                               
 SENATOR TAYLOR stated that the employee is individually responsible           
 as well as the employee's superior.  There is an agreement in which           
 the state indemnifies.  He noted that there has always been                   
 discussion regarding whether or not those indemnification                     
 agreements should be extended to third party contractors.                     
                                                                               
 CHAIRMAN RIEGER was under the impression that state employees were            
 not personally liable.                                                        
                                                                               
 Number 542                                                                    
                                                                               
 SENATOR TAYLOR said that under HB 210 no one would be held liable,            
 the bill provides a blanket civil immunity.  There has to be proof            
 of gross negligence before there can be any recourse.                         
                                                                               
 CHAIRMAN RIEGER asked if subsection (b), lines 15-17 were the lines           
 that do not allow the action against the state.  ANNE CARPENETI               
 clarified that he was referring to subsection (a), lines 10-14.               
                                                                               
 SENATOR TAYLOR explained that lines 10-14 provide immunity for the            
 contracted agent.  Subsection (b) provides a complete blanket of              
 liability immunity for the state and all of the agents of the                 
 state.  ANNE CARPENETI pointed out that the immunity is provided              
 for the third party agents not the employees of the state.                    
                                                                               
 SENATOR TAYLOR pointed out that if subsection (a) were deleted,               
 then the state would receive the blanket of immunity from the                 
 person which the state licensed and placed in the field.  ANNE                
 CARPENETI said that the state is responsible for the employees that           
 work for them.  However, the purpose of subsection (b) is to                  
 protect the state against actions of third parties.  HB 210 does              
 require that the third party be insured against negligence, gross             
 negligence, and other acts.                                                   
                                                                               
 CHAIRMAN RIEGER believed that the state must use agents to perform            
 state functions in other cases.  In such a case, is the person                
 performing the function indemnified?  ANNE CARPENETI said that she            
 would have to research such a scenario.                                       
                                                                               
 SENATOR TAYLOR believed that there is an indemnification agreement            
 that does exist between the State Troopers and Alaska.  The                   
 troopers are indemnified by the state.                                        
                                                                               
 ANNE CARPENETI referred to page 5, lines 16-18  when saying that              
 the Department of Public Safety would recommend zero tolerance.               
 This bill would allow people with .03 BAC to be able to give                  
 driving tests.                                                                
                                                                               
 CHAIRMAN RIEGER did not have a problem with zero tolerance, but               
 understood that testimony indicated that federal CDL language                 
 included this language.  ANNE CARPENETI said that was correct for             
 the CDLs, but some states say that .02 is zero tolerance.                     
                                                                               
 SENATOR TAYLOR inquired as to why the states would use .02 to mean            
 zero tolerance.                                                               
                                                                               
 Number 493                                                                    
                                                                               
 ANNE CARPENETI believed the reason for that was to not make                   
 criminal an act of driving after drinking a glass of wine with                
 dinner.  The bill currently going through the legislature discusses           
 zero tolerance for juveniles driving and drinking.  Ms. Carpeneti             
 noted that the Department of Law was taking that position as well.            
                                                                               
 CHAIRMAN RIEGER understood the concern.                                       
                                                                               
 SENATOR TAYLOR discussed how blood alcohol level is determined by             
 lots of factors such as size, weight, tolerance, age, etc. which              
 all vary individually.                                                        
                                                                               
 SENATOR GREEN interjected that what should be addressed was someone           
 going out for lunch and having two or three drinks and returning to           
 administer a driving test.                                                    
                                                                               
 SENATOR TAYLOR discussed the studies on blood alcohol levels.                 
                                                                               
 CHAIRMAN RIEGER asked if anyone else was present to testify on                
 HB 210.  Chairman Rieger said that he wanted to determine if the              
 committee was interested in changing any of the points that have              
 been raised.  Is there interest in lowering the standard on page 5,           
 lines 16-18?                                                                  
                                                                               
 SENATOR LINCOLN replied yes.                                                  
                                                                               
 SENATOR GREEN inquired as to how that would be phrased.                       
                                                                               
 CHAIRMAN RIEGER believed it would be legal to say that a person               
 could not be visibly under the influence.  There must be some way             
 in which to address that issue.                                               
                                                                               
 SENATOR TAYLOR pointed out that negotiated contracts would address            
 that issue.                                                                   
                                                                               
 CHAIRMAN RIEGER asked if there was interest in tightening that                
 language.  There seemed to be interest in tightening that language.           
 Chairman Rieger asked if there was interest in adding the language            
 "within the next business day" or "immediately" upon a criminal               
 complaint.  That language is on page 5, line 22-23.  He informed              
 the committee that the drafter had to choose because the earlier              
 draft had both.                                                               
                                                                               
 SENATOR GREEN asked how the immediate language would be used.                 
                                                                               
 CHAIRMAN RIEGER believed that it would be best to specify a time              
 limit.                                                                        
                                                                               
 Number 431                                                                    
                                                                               
 SENATOR TAYLOR pointed out that paragraph (3) on page 6 which says,           
 "before the end of the next business day after the agent or                   
 examiner is charged."                                                         
                                                                               
 CHAIRMAN RIEGER clarified that language was removed by the drafter            
 because it conflicted with the "10 days of" language.  Chairman               
 Rieger explained that line 23 would have to be deleted and criminal           
 complaints would have to be dealt with in a separate section.                 
                                                                               
 SENATOR TAYLOR mentioned that currently civil and criminal law was            
 being mixed.                                                                  
                                                                               
 CHAIRMAN RIEGER asked if there was interest in placing the criminal           
 language in its own section.  There was interest.  He asked if the            
 committee was interested in removing the arbitration requirement on           
 page 6, lines 20-24.                                                          
                                                                               
 SENATOR TAYLOR agreed.  He said that he liked arbitration as a                
 resolution, but it is not necessary to create a big fiscal note on            
 the bill.                                                                     
                                                                               
 CHAIRMAN RIEGER referred to page 7, line 19-page 17, line 5                   
 regarding whether the committee wanted to leave the contract in the           
 bill.                                                                         
                                                                               
 SENATOR TAYLOR indicated that he would like for the contract to be            
 deleted.  If the department or the contractors wanted to change the           
 contract, they would have to come before the legislature in order             
 to do so.                                                                     
                                                                               
 CHAIRMAN RIEGER asked if the committee wanted to delete                       
 "preapproval" on page 17, line 8.                                             
 SENATOR TAYLOR suggested deleting the language "with or" as well on           
 line 15 of page 17.                                                           
                                                                               
 CHAIRMAN RIEGER informed the committee that he took silence to mean           
 consent or interest in changing these issues.  He referred to page            
 18 regarding liability.                                                       
                                                                               
 SENATOR TAYLOR recalled previous testimony that the liability                 
 established in the bill was reasonable and could possibly be a                
 little higher.                                                                
                                                                               
 CHAIRMAN RIEGER believed that the department had requested the                
 increase in liability insurance.  What should the exact amount be             
 for the liability insurance requirement?                                      
                                                                               
 A discussion ensued regarding the amount of insurance that should             
 be required.                                                                  
                                                                               
 ANNE CARPENETI offered to find out what the norm is from the                  
 industry and provide that information to the committee.                       
                                                                               
 CHAIRMAN RIEGER was interested in the premiums of an air taxi                 
 operator.                                                                     
                                                                               
 Number 387                                                                    
                                                                               
 SENATOR TAYLOR recommended deleting lines 10-17 on page 19.                   
                                                                               
 SENATOR LINCOLN summarized that the bill would then contain no                
 references to civil liability.                                                
                                                                               
 SENATOR TAYLOR commented that it would be the same as today; no               
 one's rights are being taken away.                                            
                                                                               
 CHAIRMAN RIEGER asked if it was correct that an individual would be           
 liable unless there is a statute stating otherwise?                           
                                                                               
 SENATOR TAYLOR said that negligence has to be proved.                         
                                                                               
 ANNE CARPENETI explained that most of the contracts that allow the            
 state to contract with third party agents include hold harmless               
 provisions for the state.  If lines 15-17 on page 19 are deleted,             
 the hold harmless provision would be deleted.  The Department of              
 Law would oppose that deletion, but the department would support              
 the deletion of subsection (a).                                               
                                                                               
 SENATOR TAYLOR said that no one would be granted a contract without           
 a policy of insurance that shows the state as the primary insurer             
 on the policy.  Requiring the contractor to have insurance means              
 that the contractor would serve as the first line of defense on               
 liability for the state.  Then the state would say that the state             
 should be held harmless for any possible liability the state had.             
 Number 363                                                                    
                                                                               
 ANNE CARPENETI clarified that this only holds the state harmless              
 for damages resulting from the act or omission of the agent or                
 registrar.                                                                    
                                                                               
 SENATOR TAYLOR believed it to say that the state would not be                 
 liable if the state does a poor job of inspecting an agent and                
 continues to allow the agent to operate.  What is the state's                 
 motivation to ensure that a bad agent is not allowed to operate?              
                                                                               
 CHAIRMAN RIEGER read this to mean that the state was being held               
 harmless from the act of the third party, but not from an omission            
 of the state in how the state has contracted or qualified that                
 agent.                                                                        
                                                                               
 SENATOR TAYLOR said that was dependent upon the definition of                 
 "performing duties."  Senator Taylor surmised that the state could            
 not be sued by any injured third party because of an action of an             
 agent.  This individual would be an agent of the state.                       
                                                                               
 SENATOR LINCOLN agreed with Senator Taylor.  In the interest of the           
 state, it would be good to leave the language in the bill because             
 the state would not be sued.  However, the state should also be               
 held accountable if the state utilizes an agent on its behalf.                
                                                                               
 ANNE CARPENETI pointed out that these agents are not like state               
 employees, they are independent agents.  Ms. Carpeneti agreed with            
 Senator Lincoln that the agent is described as an agent of the                
 state as this is drafted, but Ms. Carpeneti did not envision these            
 individuals as agents of the state.                                           
                                                                               
 SENATOR TAYLOR emphasized that these individuals would be agents of           
 the state for carrying out certain functions of state government              
 that is being authorized to contract with them.                               
                                                                               
 CHAIRMAN RIEGER posed the following situation:  an employee                   
 stationed in a remote location drives their truck into a store.  In           
 that case, the state would be liable.  Taking this out would not be           
 inconsistent with the level of liability that the state has with an           
 unsupervised employee.                                                        
                                                                               
 ANNE CARPENETI said that the problem is the level of control the              
 state has over these independent agents.                                      
                                                                               
 Number 312                                                                    
                                                                               
 SENATOR TAYLOR said that in order to cover this provision that is             
 not in law, the state requires that the agent contractor hold the             
 state harmless and a specific amount of insurance is also required.           
 He pointed out that the same is done with day care centers.  This             
 insurance basically insures the state.  Senator Taylor believed               
 this to be backwards.                                                         
                                                                               
 ANNE CARPENETI suggested that Ms. Hensley could give the committee            
 an example of the type of agent relationships.  Ms. Carpeneti                 
 understood that garages that repair cars would be able to issue               
 renewed registration for automobiles.                                         
                                                                               
 CHAIRMAN RIEGER said that already occurs.                                     
                                                                               
 SENATOR TAYLOR noted that I/Ms are also done in this way.                     
                                                                               
 JUANITA HENSLEY explained that emissions testing stations in                  
 Fairbanks and Anchorage were already allowed to renew                         
 registrations.  HB 210 would allow the department to contract with            
 groups such as Budget Rent a Car.  The department does not have               
 control over those employees, the department only has control over            
 the type of work they do.  Ms. Hensley pointed out that anyone who            
 performs this work and has access to the computer systems must pass           
 the same background investigations that the department's employees            
 have to pass.  She informed the committee that the department is in           
 the process of forming an agreement with third party testing for              
 commercial vehicles.  That third party may be an individual or a              
 business such as Princess Tours/Greyline who would not necessarily            
 have to pass the background investigations, but would have to pass            
 the standards established in the contract.  The department has no             
 control over those employees other than what is specified in the              
 contracts.                                                                    
                                                                               
 SENATOR TAYLOR said that there is a middle ground.  These employees           
 could have a hold harmless agreement with the person authorized to            
 perform the work.  That individual could be individually                      
 responsible and hold the state harmless from liability.  HB 210               
 creates a blanket immunity for the state.                                     
                                                                               
 SENATOR LINCOLN recalled a question relating to the meaning of                
 "professional manner" on page 5, line 5.  JUANITA HENSLEY explained           
 that HB 210 has a section requiring that employees meet all the               
 certifications, training, workshops, seminars, and other                      
 instructive meetings.                                                         
                                                                               
 SENATOR GREEN asked if that was on page 4, line 7.  JUANITA HENSLEY           
 pointed out that there is a professional code of ethics of the                
 American Association of Motor Vehicle Administrators Certified                
 Driver Examiner Program.  This code of ethics would be adopted in             
 regulation.                                                                   
                                                                               
 CHAIRMAN RIEGER said that HB 210 would be before the committee                
 again either as a CS or with prepared amendments.                             
                                                                               
 There being no further business before the committee, the meeting             
 was adjourned at 2:58 p.m.                                                    
                                                                               
                                                                               

Document Name Date/Time Subjects