Legislature(1995 - 1996)
03/19/1996 01:33 PM Senate TRA
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
SENATE TRANSPORTATION
March 19, 1996
1:33 p.m.
MEMBERS PRESENT
Senator Steve Rieger, Chairman
Senator Robin Taylor, Vice Chair
Senator Lyda Green
Senator Al Adams
MEMBERS ABSENT
Senator Georgianna Lincoln
COMMITTEE CALENDAR
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."
PREVIOUS SENATE ACTION
HB 210 - No previous action to record.
WITNESS REGISTER
Representative Al Vezey
State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Prime sponsor of HB 210.
Joe Ryan, Staff
Representative Al Vezey
State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Answered questions.
Steve Findsen, Vice-President
Knightwatch Security Services
PO Box 33246
Juneau, Alaska
POSITION STATEMENT: Supported HB 210.
Juanita Hensley, Chief
Driver Services
Division of Motor Vehicles
Department of Public Safety
PO Box 20020
Juneau, Alaska 99811-0020
POSITION STATEMENT: Discussed HB 210.
Anne Carpeneti, Assistant Attorney General
Criminal Division
Department of Law
PO Box 110300
Juneau, Alaska 99811-0300
POSITION STATEMENT: Answered questions.
ACTION NARRATIVE
TAPE 96-6, SIDE A
HB 210 PRIVATE MOTOR VEHICLE LICENSING/TESTING
CHAIRMAN RIEGER called the Senate Transportation meeting to order
at 1:33 p.m. and introduced HB 210 as the only order of business.
Number 014
REPRESENTATIVE VEZEY, Prime Sponsor, explained that HB 210 would
provide a mechanism to allow and encourage Alaska to place a
government service, currently performed in house, in the private
sector. Currently, there are some private entities in Alaska who
issue motor vehicle tags and registrations. HB 210 merely provides
a structure to allow services to be contracted. The bill
establishes the rights and obligations of Alaska and the
contracting party with regards to the expectations of each and the
grounds for termination of the contract. Representative Vezey
pointed out that an earlier version of HB 210 contained more
grounds for contract termination than the version before the
committee today; some of the discretionary areas were taken out
because the Division of Motor Vehicles (DMV) did not want that
authority. HB 210 would not cost Alaska anything, the cost of the
privatization program is born by the contractor. The contractor
also pays 100 percent of the mandated fees to the state.
Representative Vezey said that the contractor will determine the
charge to the customer.
Number 059
SENATOR GREEN asked if it was assumed that there would be savings
to the state at some point. REPRESENTATIVE VEZEY replied no. HB
210 does not address the DMV budget. Representative Vezey believed
that any savings the state received would be a result of the
receipts from the fee structure without any state labor involved.
In response to Senator Green, REPRESENTATIVE VEZEY hesitated to say
that a revenue increase could be projected in five or six years
because HB 210 does not mandate this.
SENATOR TAYLOR asked why the entire contract was placed in the
bill. REPRESENTATIVE VEZEY explained that there has been poor
success in achieving privatization in Alaska. If this does not
work, then the administration would be forced to return to the
legislature to explain why this did not work. The information
learned from this would hopefully be utilized in other areas.
SENATOR ADAMS inquired as to why a three year contract was chosen.
REPRESENTATIVE VEZEY believed that three years was drawn from other
privatization programs in other states. The DMV is comfortable
with three years as well as the potential users.
Number 110
SENATOR ADAMS did not see a definition for "in a professional
manner" in the bill; is there one? REPRESENTATIVE VEZEY did not
believe that there is a statutory definition. Representative Vezey
said that the bill attempts to provide the department the ability
to require that the contractors exercise professional standards.
If the department feels the need to go through the appeals process
over professional standards, then the department should be able to
do so.
CHAIRMAN RIEGER asked if HB 210 is primarily oriented toward
licensing heavy equipment and commercial vehicles or private
passenger cars. REPRESENTATIVE VEZEY believed that commercial
users would be the first to take advantage of HB 210. HB 210 is
set up with the following different types of contracts: the
issuing of driver's licenses, the issuing of tags, registration and
license plates or any combination of those three.
CHAIRMAN RIEGER asked if the examiner function would be for private
passenger cars or commercial vehicles. REPRESENTATIVE VEZEY said
that HB 210 does not contain an authorization for CDLs.
In response to Senator Taylor, REPRESENTATIVE VEZEY explained that
the authorization for CDLs was not included in HB 210 because that
created a technical question with regard to federal regulations
governing CDLs. Representative Vezey did believe CDLs should be
addressed.
Number 157
SENATOR TAYLOR expressed concern with the civil immunity for
liability provision on page 18. REPRESENTATIVE VEZEY said that
HB 210 establishes a gross negligence standard of liability. This
would create a level playing field between the liability that a
state employee would have and a private sector employee. The state
is not liable for anything that a DMV employee does.
CHAIRMAN RIEGER was worried that an agent, registrar or examiner
could set their own fee. Perhaps, someone having difficulty in
obtaining a license might go to a "license shark" who has a high
fee. He asked if there had been debate in other committees
regarding the possibility of the department or the division being
allowed to approve the fees. REPRESENTATIVE VEZEY indicated that
was the most debated aspect of HB 210. The philosophy behind
allowing the private contractor to establish his/her own fee is
that the customer does not have to go this route. Furthermore, a
high degree of accuracy and accountability is required from the
agents, examiners, and registrars. Representative Vezey believed
it best to allow the market determine the fee structure.
Number 199
JOE RYAN, Staff to Representative Vezey, explained that the Federal
Aviation Act of 1958 designated pilot examiners who give tests from
private pilots to 747 pilots and these examiners establish a fee.
The agency as in HB 210 would reserve the right to retest someone.
CHAIRMAN RIEGER inquired as to where that was located in the bill.
JOE RYAN explained that since the agency gives the authority to
test by inference the agency has the authority to test or review
the private contractors. If there is suspicion of a "license
shark" contractor, the agency could check that. Also the number of
people being handled by an examiner could indicate the need to
review an examiner.
REPRESENTATIVE VEZEY informed the committee that HB 210 was
modelled after California's privatization statute and the Federal
Aviation Association's regulations regarding licensing and
registration of aircraft pilots.
SENATOR ADAMS inquired as to how agents could be prevented from
misusing their powers. For example, registering and relicensing
stolen vehicles. REPRESENTATIVE VEZEY pointed out that HB 210
requires a high standard of accuracy and the ultimate penalty is
the revocation of the license. Any criminal activity would be a
separate offense.
Number 242
STEVE FINDSEN, Vice-President of Knightwatch Security Services,
believed HB 210 would be an opportunity for the private sector to
provide a valuable service while saving the state money. Mr.
Findsen envisioned that the private contractors could have more
convenient hours; he did not however, envision price gouging.
Furthermore, this should be a money making opportunity for the
private sector. He noted that the fee for the service would depend
upon the volume of people served, the type of service provided, and
the expertise and professionalism with which the public was met.
Mr. Findsen said that the private sector would be involved to make
a profit and therefore, would be as efficient as possible. While,
state workers do not have the incentive to work as fast. Mr.
Findsen pointed out that HB 210 requires 95 percent accuracy and
the private contractor could be subject to audits at any time. He
felt those stipulations were appropriate and necessary. Perhaps,
the insurance language should be stronger. He suggested that the
private contractor should be required to put up an honesty bond.
Mr. Findsen supported HB 210.
SENATOR ADAMS commented that he did not see any savings from
HB 210, no employees are eliminated from the DMV. STEVE FINDSEN
said that he did not know that HB 210 would save Alaska money, but
the bill will provide a service to the public that is not currently
provided. The burden on the local DMV would be decreased.
Number 325
JUANITA HENSLEY, Drivers Services with the Division of Motor
Vehicles, requested that Anne Carpeneti from the Department of Law
also come to the table in order to answer any legal questions. Ms.
Hensley informed the committee that contracting, using commissioned
agents, and vendors is not new to the DMV. Commissioned agents
were utilized before statehood. In 1975, when the DMV was
developed as it currently exists, the DMV was fairly exclusive to
contract and commissioned agents. Currently, 13 commissioned
agents who are paid a fee are being used. These vendors are paid
15 percent of the motor vehicle documents they process and 50
percent of any of the drivers license work they process. Ms.
Hensley informed the committee that Alaska paid the 13 commissioned
agents a total of $174,516 last year. There are also 20 I/M
vendors who are contracted to process vehicle registration; the I/M
vendors are working well. Over a years time, 13 percent of the
renewal registrations were done at the I/M stations which decreases
the stress on the DMV. Ms. Hensley reiterated that contracting is
not new to the DMV. She was then available for questions.
SENATOR ADAMS asked if a contract agent's price would be more or
less. JUANITA HENSLEY clarified that contract agents are only
utilized when the agent would cost less than opening a facility in
an area. Currently, the contract agents charge the fee established
in statute and then the agent is paid 50 percent of the fee that is
collected for driver's license work and 15 percent of the fee for
registration work. Of the 13 commissioned agents, only the
Petersburg agent processes only registration work and receives 15
percent of the funds collected for the DMV. The 20 I/M vendors did
not cost the state any additional funds, except for personnel to
audit the vendors' programs and work.
SENATOR ADAMS reiterated that he has yet to see any savings as
noted in the fiscal note. There would not be a need for state
employees in areas where contract agents would be utilized; will
that be considered and produce another fiscal note. JUANITA
HENSLEY viewed HB 210 as allowing an expansion of the services
provided, not an eliminate state employees. HB 210 would alleviate
some of the DMV's workload by utilizing these contract agents or
vendors.
Number 397
SENATOR ADAMS asked Ms. Carpeneti if she agreed with the three year
provision in the bill.
ANNE CARPENETI, Assistant Attorney General for the Department of
Law, informed the committee that she had not done a lot of civil
work and was unfamiliar with contracts. However, she believed it
very unusual to place contract provisions in statute. A contract
is a negotiation between two parties and has unique features. If
there was a point at which the provisions in statute did not work,
then the question would have to come before the legislature to be
revised rather than through negotiations between the parties. Ms.
Carpeneti said that she had concerns about placing contract
provisions in statutory form. Certainly, guidelines to be covered
by a contract could be established. Ms. Carpeneti did not believe
the particulars including the three year provision to be practical.
Ms. Carpeneti referred to page 15, line 26 when stating that she
had questions about the termination provisions. The contract
provides for termination by giving written notice of 60 days while
no time period is stated in the provision before the contract.
What about an emergency? Furthermore, the immunity provision
requires that the people entering into these contracts have
insurance while those injured by their negligent acts could not
bring action to recover.
CHAIRMAN RIEGER commented that contracts are placed in statute at
times when a document is relied upon against liability. ANNE
CARPENETI said that there are good reasons for limiting liability
and subsection (b) of the bill does limit the state's liability for
acts or admissions of the third party agent. This is a policy
question for the legislature. Ms. Carpeneti did not believe that
it was consistent to require that the contract agent carry
insurance, but not make them liable for bad or negligent actions.
Number 438
SENATOR GREEN asked if the complex network of forms would be
replicated in each local agency and who would bear the cost?
JUANITA HENSLEY said that the contract agent would be required to
bear the cost of all the necessary equipment and employee process
to be on the department's system.
CHAIRMAN RIEGER directed everyone to page 2, line 10 and asked if
that was standard language. Would there be times when a
corporation would be the registrar and any employee could do the
work? ANNE CARPENETI did not know.
SENATOR ADAMS interjected that an individual can be a corporation.
He pointed out that this had been discussed on the floor with
regards to private airports.
SENATOR TAYLOR believed that the language seemed to be reaching
towards an individual person, a human being. The language may not
be wise if privatization is the goal.
CHAIRMAN RIEGER said that he would check with the sponsor on that
question. He directed everyone to page 2, line 31 when asking if
the word "shall" should be "may." Would the language "shall"
create an undue burden on the department? JUANITA HENSLEY said
that "shall" could be changed to "may." Ms. Hensley clarified that
HB 210 is Representative Vezey's bill and the department is neutral
on this bill.
Number 483
CHAIRMAN RIEGER referred to page 3, lines 19-21 when asking if this
would be a constitutional problem. Can one be required to provide
information regarding a criminal complaint against the person?
ANNE CARPENETI believed that criminal charges that are filed in
criminal cases are public information. CHAIRMAN RIEGER assumed
that as an agent, the agent would have to bear witness against
him/herself if the state has filed a criminal charge. Chairman
Rieger clarified that he was questioning the wording. ANNE
CARPENETI agreed that this language should be rewritten.
CHAIRMAN RIEGER noted that one would be considered under the
influence commercially at .04 while non commercially it would be
.10. He inquired as to which definition of "under the influence"
on page 5, line 8, would be used. ANNE CARPENETI said that the
standard should be specified.
JUANITA HENSLEY explained that HB 210 would allow the DMV to
contract with a trucking firm to do CDL testing, but the federal
guidelines would be followed. The bill requires that an examiner
be licensed in the class of vehicle for which he/she gives tests.
Therefore, a commercial examiner with a Class A CDL would be
subject to the .04 driving under the influence law. A passenger
car examiner would be subject to .10 BAC level. Ms. Hensley
clarified that a CDL is a commercial driver's license. In response
to Chairman Rieger, Ms. Hensley said that a taxi driver is not a
CDL licensee. The vehicle must be registered as a commercial
vehicle, but a taxi driver is not required to have a CDL. Ms.
Hensley informed the committee that a vehicle weighing 26,000
pounds or more, a vehicle carrying hazardous materials or
passengers require a CDL. A CDL is also required when there are 15
or more passengers.
Number 520
ANNE CARPENETI said that she and Ms. Hensley agreed that a blood
alcohol level should be stated in the bill. CHAIRMAN RIEGER
agreed. SENATOR TAYLOR pointed out that this would be a violation
of law anyway; it is not necessary to restate current law.
SENATOR TAYLOR asked why under HB 210 only fleet operators are
allowed to conduct CDLs other than the department. JUANITA HENSLEY
explained that HB 210 would allow the department to contract with
individual persons who meet the requirements to administer CDL
testing. The CDL federal requirements only allow someone to
administer the skills test if the department did the third party
testing for CDLs. The examiner or third party tester must be an
employee of the company for which he/she is administering the test.
That examiner can only administer tests to employees of the company
for which he/she works. According to federal law, an individual
person cannot be a third party tester to test other CDL operators.
SENATOR TAYLOR asked how an individual would change status merely
because they are employed by a trucking company. JUANITA HENSLEY
specified that the company is the third party tester. SENATOR
TAYLOR surmised then that a company can do the examination of its
own employees for CDL purposes, but that company cannot administer
an exam or give CDLs to other persons not in the company. JUANITA
HENSLEY said that was a correct assessment.
SENATOR TAYLOR asked if there was a manner in which HB 210 could
allow these third party agents to administer CDLs. JUANITA HENSLEY
said that would violate federal law. Any violation of the
Commercial Driver's License Safety Act, would result in a loss of
5-10 percent of the highway funds.
SENATOR ADAMS seemed to think that only applied to CDLs on roads,
not off road testing. JUANITA HENSLEY explained that anyone
operating a commercial vehicle on a roadway is required to have a
CDL. The FHWA granted Alaska a waiver to issue CDLs with an off
systems restriction; such persons are only allowed to drive in
specific areas and not on the state maintained roadway.
SENATOR TAYLOR could not believe that federal law would allow a
trucking company to license all of its drivers, but not allow the
state to authorize a third party contract for administering the
same exams.
Number 578
CHAIRMAN RIEGER asked if this issue had been explored; can it only
be done in house and not for anyone else? JUANITA HENSLEY said
that the federal law is that explicit. The state can contract with
a third party tester who can only administer the test for his/her
employees.
SENATOR TAYLOR asked if that is why all the CDL personnel must be
employees of the department. JUANITA HENSLEY replied yes, unless
when using a commissioned agent.
CHAIRMAN RIEGER asked if a commissioned agent meant that the agent
could not charge the customer an additional amount. JUANITA
HENSLEY explained that a commissioned agent would receive 50
percent of everything.
TAPE 96-6, SIDE B
Ms. Hensley said that a contract agent would have to meet the same
requirements, but the contract agent would not be paid for their
services by the department. In response to Chairman Rieger, Ms.
Hensley explained that the commissioned agents were grandfathered
in long ago and that has not been expanded.
SENATOR TAYLOR expressed interest in determining a way around that.
He could not believe that Greyline could administer and issue CDLs
to their employees for free while citizens in Ketchikan have to
raise the money to travel to Juneau to get the same license.
Number 578
JUANITA HENSLEY said that the department would write to the FHWA to
determine if there is an additional waiver that would allow CDL
contracting in certain areas in Alaska.
SENATOR TAYLOR was not sure as to why it is necessary to specify
the type of advertising for these people.
CHAIRMAN RIEGER asked Representative Vezey and Joe Ryan to return
to the table for more questions. Chairman Rieger noted that Legal
Services had said that "individual" did mean a natural person; has
that been discussed in other committees? REPRESENTATIVE VEZEY said
that had been discussed and asked Mr. Ryan to explain.
JOE RYAN explained that the bill wanted to allow non profits to do
this to raise funds. Legislative drafting determined that
"individual" would encompass corporations and people. Mr. Ryan
clarified that the desire was to have a comprehensive term that
allowed companies, non profits, and individuals.
CHAIRMAN RIEGER asked if there would be any objection to changing
"shall" to "may" on page 2, line 30. JOE RYAN pointed out that
line 18 specifies that the department has the discretion to choose
who would be licensed and who would not be licensed.
REPRESENTATIVE VEZEY did not believe that to be a large issue.
CHAIRMAN RIEGER inquired as to what was meant by the language on
page 3, lines 17-18. REPRESENTATIVE VEZEY explained that there are
DMV policies and federal requirements regarding the continuing
education of licensers, examiners, and agents. The bill would
allow the department to require that agents, registrars, and
examiners maintain current professional training requirements.
Representative Vezey noted that there had been much discussion
about that paragraph; the department and he are satisfied with the
language. Representative Vezey pointed out that a lot of
discretion had been given to the department to establish a
professional standard.
Number 519
CHAIRMAN RIEGER reiterated his concern about providing information
regarding a criminal matter. REPRESENTATIVE VEZEY stated that the
purpose was that upon request an applicant would have to provide
information to the department regarding criminal complaints. This
information must be disclosed to the state although the information
may not be valid for criminal or civil prosecution. Representative
Vezey did not have a problem with relaxing the standards.
SENATOR TAYLOR noted that some of the provisions for the screening
for police officers and troopers required waivers for various
constitutional rights. Requiring the criminal information of these
people may violate the Fifth Amendment Rights, but there may be a
policy reason to do so.
CHAIRMAN RIEGER saw the problem being that the person would respond
to a complaint which could merely be from someone who dislikes the
examiner. REPRESENTATIVE VEZEY said that the bill places the state
in a supervisory role.
CHAIRMAN RIEGER asked if Representative Vezey had a specific blood
alcohol level in mind. REPRESENTATIVE VEZEY said that the federal
standard had been adopted for examiners. The BAC for a passenger
vehicle for DWI is .10 and Representative Vezey believed that
everyone would agree that to be too high for a professional
examiner. Someone holding a commercial driver's licenses no matter
the type of vehicle is considered intoxicated at .04 and with a BAC
of .01 he/she become ineligible to operate a vehicle for 24 hours.
HB 210 requires that these professionals should not partake in
intoxicating substances for at least eight hours before work.
Number 471
CHAIRMAN RIEGER asked if Representative Vezey would object by
reference in the bill to the federal CDL standard. REPRESENTATIVE
VEZEY said that the law would remain the same. CHAIRMAN RIEGER was
not sure which standard would apply to a person administering a
test in a private passenger car. REPRESENTATIVE VEZEY clarified
that it would depend upon whether the person held a CDL. A
commercial driver's license is not required in order to be an
examiner in a private vehicle, or one that weighs less than 26,000
gross vehicle weight. Currently, a person holding a CDL is subject
to the .04 standard of intoxication and at .01 the person would not
be allowed to drive for 24 hours. Representative Vezey did not
have a problem with adopting the CDL standard. The intent was to
create a high standard.
SENATOR GREEN felt that this discussion regarding how much alcohol
a person could consume before administering a driver's test was
ridiculous. Senator Green stressed that one should not be allowed
to drink at all and administer a test. REPRESENTATIVE VEZEY
assumed that people would not administer a test while intoxicated.
This bill merely incorporates the federal standard for pilots;
eight hours prior to flight time no alcohol may be consumed.
SENATOR GREEN pointed out that the bill allows an examiner to drink
during work hours up to a BAC of .04. REPRESENTATIVE VEZEY said
no. SENATOR GREEN said that is what the discussion is about.
CHAIRMAN RIEGER agreed. He posed the situation in which an
examiner who was drinking heavily the night before and comes to
work with a BAC of .06, or enough that someone being tested would
notice.
Number 440
JOE RYAN stated that the "8 hours before" and the "under the
influence" language addresses what is being discussed. If a pilot
drinks within eight hours before a flight or is still under the
influence the next morning, he/she cannot fly or drive as is the
case in HB 210. Mr. Ryan noted that one is under the influence
when taking the first drink.
CHAIRMAN RIEGER inquired as to how strongly the sponsor felt about
having the contract in the bill. REPRESENTATIVE VEZEY said that
there are no great examples of privatization in Alaska; this is a
small first step. Representative Vezey hoped that the legislature
would keep a close eye on this. If this does not perform within 12
or 24 months, then the program should be reviewed. Representative
Vezey emphasized that historically, agencies take steps in order to
ensure that privatization does not work which is why the contract
is in statute.
CHAIRMAN RIEGER asked if Representative Vezey held that view in
light of the agency's testimony that a lot of this is already
occurring. REPRESENTATIVE VEZEY said that this is an area in which
other states are moving in this direction. In general,
Representative Vezey's experience has been that state agencies are
very good at structuring their efforts to ensure that privatized
services do not work.
CHAIRMAN RIEGER said that would be reviewed in the mark up of the
bill. He believed that placing the contract in the bill may
dramatically inhibit the success of the privatization.
REPRESENTATIVE VEZEY believed that placing the contract in
regulations would decrease the possibility of success. In
Representative Vezey's opinion, this is an experiment.
Number 407
SENATOR GREEN referred to page 18 , line 26 when asking what that
amended portion meant. Does it mean that a bid process is not
necessary? SENATOR TAYLOR said that it means that the procurement
code would not be used. SENATOR GREEN asked if that was good or
bad.
REPRESENTATIVE VEZEY explained that the contract was not intended
to be limited. He hoped that all qualified comers would be awarded
a contract.
STEVE FINDSEN seemed to be unclear on the training aspect. A
corporation cannot be trained, each individual would have to be
certified. Although the corporation may be a financial backer of
the venture, each employee would need to be trained and certified.
Mr. Findsen did not know how the bond would work.
SENATOR TAYLOR felt that was a good point which should be
clarified. He believed that the drafter had intended to focus on
the fact that an individual would be certified by the department,
but the person holding the agency relationship may have more than
one individual within them. That does not seem to be in the bill
and should be clarified.
SENATOR TAYLOR pointed out that the Division of Motor Vehicles is
one of the single biggest money makers. People are made to stand
in line for hours or penalized for using the services. Senator
Taylor believed this to be a false economy. Making licensing and
registration easy should be the goal. Senator Taylor said that he
had always been opposed to the reductions in that department. This
will help reduce some of the department's work load. In Ketchikan,
the office has been closed for two weeks because both employees are
sick, so no one can registrar a car or obtain a license. There
should be an alternative, especially in the smaller rural
communities.
CHAIRMAN RIEGER informed the committee that there is a bill by
request relating to the procurement of the Alaska Railroad
Corporation. A prospective purchaser will be before the committee
next week. Chairman Rieger held HB 210 for possible amendments.
There being no further business before the committee, the meeting
was adjourned at 2:42 p.m.
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