Legislature(1993 - 1994)
03/08/1994 08:00 AM House STA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE STATE AFFAIRS STANDING COMMITTEE
March 8, 1994
8:00 a.m.
MEMBERS PRESENT
Representative Al Vezey, Chairman
Representative Pete Kott, Vice Chairman
Representative Bettye Davis
Representative Gary Davis
Representative Harley Olberg
Representative Jerry Sanders
MEMBERS ABSENT
Representative Fran Ulmer
COMMITTEE CALENDAR
HB 328: "An Act relating to motor vehicle
registration and registration fees; to fees
for drivers' licenses and permits; and
providing for an effective date."
PASSED OUT OF COMMITTEE
SB 186: "An Act relating to state agency
publications."
PASSED OUT OF COMMITTEE
*HJR 60: Relating to an amendment to the Constitution
of the United States prohibiting federal
courts from ordering a state or a political
subdivision of a state to increase or impose
taxes.
PASSED OUT OF COMMITTEE
*HB 402: "An Act requiring that an owner's motor
vehicle liability insurance policy used as
proof of financial responsibility designate
by description or appropriate reference the
motor vehicles it covers; and providing for
an effective date."
PASSED OUT OF COMMITTEE
HB 403: "An Act requiring that automobile liability
insurance include coverage for uninsured or
underinsured motor vehicles and an offer of
policy limits for that coverage equal to
coverage voluntarily purchased for bodily
injury or death; and providing for an
effective date."
PASSED OUT OF COMMITTEE
HB 345: "An Act relating to the preservation of
public facilities and to appropriations for
annual maintenance and repair, periodic
renewal and replacement, and construction of
public facilities."
HELD OVER
HB 405: "An Act establishing and relating to the
Alaska Information Network Corporation;
relating to the Telecommunications
Information Council; and
relating to the state's information industry;
and providing for an effective date."
NOT HEARD
*HB 347: An Act relating to long-term plans of certain
state agencies."
NOT HEARD
WITNESS REGISTER
REPRESENTATIVE STEVE FRANK
Alaska State Legislature
Alaska State Capitol, Room 518
Juneau, AK 99811-0460
Phone: 465-3709
POSITION STATEMENT: Prime sponsor of SB 186
REPRESENTATIVE BILL HUDSON
Chairman Labor & Commerce Committee
Alaska State Legislature
Alaska State Capitol, Room 108
Juneau, AK 99811-0460
Phone: 465-3744
POSITION STATEMENT: Sponsor of HB 402 and HB 403
DENNIS BROWN
Alaska Independent Insurance Agents & Brokers
1311 Summit Dr.
Fairbanks, AK 99712
Phone: 457-3268
POSITION STATEMENT: Testified on HB 402 and HB 403
HOWARD JAEGER
Shattuck & Grummett Insurance
Member, Independent Insurance Agents & Brokers of Alaska
9110 Mendenhall Mall Rd.
Juneau, AK 99801
Phone: 789-3005
POSITION STATEMENT: Supported HB 402 and HB 403
JOHN GEORGE
National Association of Independent Insurers
9515 Moraine Way
Juneau, AK 99801
Phone: 789-0172
POSITION STATEMENT: Supported HB 402 and HB 403
JEANNETTE JAMES
Alaska State Legislature
Alaska State Capitol, Room 501
Juneau, AK 99811-0460
Phone: 465-3743
POSITION STATEMENT: Prime sponsor of HB 345
PREVIOUS ACTION
BILL: HB 328
SHORT TITLE: BIENNIAL VEHICLE REGISTRATION
SPONSOR(S): REPRESENTATIVE(S) MARTIN,BARNES,Phillips,B.Davis
JRN-DATE JRN-PG ACTION
01/03/94 2013 (H) PREFILE RELEASED
01/10/94 2013 (H) READ THE FIRST TIME/REFERRAL(S)
01/10/94 2013 (H) STATE AFFAIRS, FINANCE
01/13/94 2054 (H) COSPONSOR(S): B. DAVIS
01/22/94 (H) STA AT 08:00 AM CAPITOL 102
01/22/94 (H) MINUTE(STA)
01/29/94 (H) MINUTE(STA)
02/08/94 (H) STA AT 08:00 AM CAPITOL 102
02/08/94 (H) MINUTE(STA)
03/01/94 (H) STA AT 08:00 AM CAPITOL 102
03/01/94 (H) MINUTE(STA)
03/05/94 (H) MINUTE(STA)
03/08/94 (H) STA AT 08:00 AM CAPITOL 102
BILL: SB 186
SHORT TITLE: STATE AGENCY PUBLICATIONS
SPONSOR(S): SENATOR(S) FRANK
JRN-DATE JRN-PG ACTION
04/07/93 1221 (S) READ THE FIRST TIME/REFERRAL(S)
04/07/93 1221 (S) STATE AFFAIRS
04/14/93 1354 (S) STA RPT 3DP
04/14/93 1354 (S) ZERO FISCAL NOTE (ADM)
04/14/93 (S) STA AT 9:00 AM BUTROVICH RM 205
04/14/93 (S) MINUTE(STA)
04/14/93 (S) MINUTE(RLS)
04/26/93 1761 (S) RULES 4 CALENDAR 4/26/93
04/26/93 1762 (S) READ THE SECOND TIME
04/26/93 1762 (S) AM NO 1 ADOPTED UNAN CONSENT
04/26/93 1763 (S) AM NO 2 ADOPTED UNAN CONSENT
04/26/93 1764 (S) AM NO 3 FAILED Y10 N10
04/26/93 1764 (S) ADVANCE TO THIRD READING FAILED
Y11 N9
04/26/93 1764 (S) THIRD READING 4/27 CALENDAR
04/27/93 1842 (S) READ THE THIRD TIME SB 186 AM
04/27/93 1842 (S) PASSED Y20 N-
04/27/93 1842 (S) DONLEY NOTICE OF
RECONSIDERATION
04/28/93 1891 (S) RECONSIDERATION NOT TAKEN UP
04/28/93 1893 (S) TRANSMITTED TO (H)
05/06/93 1661 (H) READ THE FIRST TIME/REFERRAL(S)
05/06/93 1661 (H) L&C, STATE AFFAIRS, JUDICIARY,
FINANCE
02/17/94 (H) L&C AT 03:00 PM CAPITOL 17
02/17/94 (H) MINUTE(L&C)
02/18/94 2455 (H) L&C RPT 5DP
02/18/94 2455 (H) DP:PORTER,SITTON,MULDER,GREEN,
HUDSON
02/18/94 2455 (H) -ZERO FISCAL NOTE (ADM) 2/18/94
03/05/94 (H) STA AT 08:00 AM CAPITOL 102
03/05/94 (H) MINUTE(STA)
BILL: HJR 60
SHORT TITLE: AMEND US CONSTIT. TO LIMIT FED. COURTS
SPONSOR(S): STATE AFFAIRS
JRN-DATE JRN-PG ACTION
02/28/94 2550 (H) READ THE FIRST TIME/REFERRAL(S)
02/28/94 2550 (H) STATE AFFAIRS, JUDICIARY
03/08/94 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 402
SHORT TITLE: PROOF OF MOTOR VEHICLE INSURANCE
SPONSOR(S): LABOR & COMMERCE
JRN-DATE JRN-PG ACTION
01/26/94 2155 (H) READ THE FIRST TIME/REFERRAL(S)
01/26/94 2155 (H) STATE AFFAIRS
03/08/94 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 403
SHORT TITLE: AUTOMOTIVE LIABILITY INSURANCE COVERAGE
SPONSOR(S): LABOR & COMMERCE
JRN-DATE JRN-PG ACTION
01/26/94 2155 (H) READ THE FIRST TIME/REFERRAL(S)
01/26/94 2155 (H) LABOR & COMMERCE, STATE AFFAIRS
02/03/94 (H) L&C AT 03:00 PM CAPITOL 17
02/03/94 (H) MINUTE(L&C)
02/22/94 (H) L&C AT 03:00 PM CAPITOL 17
02/22/94 (H) MINUTE(L&C)
02/23/94 2494 (H) L&C RPT 4DP 2NR
02/23/94 2494 (H) DP: PORTER, SITTON, MULDER,
HUDSON
02/23/94 2494 (H) NR: WILLIAMS, GREEN
02/23/94 2494 (H) -ZERO FISCAL NOTE (DCED) 2/23/94
03/08/94 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 345
SHORT TITLE: PRESERVATION OF PUBLIC FACILITIES
SPONSOR(S): REPRESENTATIVE(S) JAMES
JRN-DATE JRN-PG ACTION
01/07/94 2018 (H) PREFILE RELEASED
01/10/94 2018 (H) READ THE FIRST TIME/REFERRAL(S)
01/10/94 2018 (H) STATE AFFAIRS, FINANCE
01/25/94 (H) STA AT 08:00 AM CAPITOL 102
01/25/94 (H) MINUTE(STA)
02/08/94 (H) STA AT 08:00 AM CAPITOL 102
02/08/94 (H) MINUTE(STA)
03/08/94 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 405
SHORT TITLE: CREATE ALASKA INFORMATION NETWORK CORP
SPONSOR(S): REPRESENTATIVE(S) KOTT,Hudson,Brown,
Hoffman,Davies,Williams
JRN-DATE JRN-PG ACTION
01/26/94 2155 (H) READ THE FIRST TIME/REFERRAL(S)
01/26/94 2156 (H) STATE AFFAIRS, JUDICIARY
02/22/94 2485 (H) COSPONSOR DELETED: GREEN
03/01/94 (H) STA AT 08:00 AM CAPITOL 102
03/02/94 2588 (H) COSPONSOR(S): WILLIAMS
03/08/94 (H) STA AT 08:00 AM CAPITOL 102
BILL: HB 347
SHORT TITLE: STATE LONG-TERM PLANNING
SPONSOR(S):REPRESENTATIVE(S) PARNELL,Hanley,Therriault,
B.Davis,James
JRN-DATE JRN-PG ACTION
01/07/94 2018 (H) PREFILE RELEASED
01/10/94 2018 (H) READ THE FIRST TIME/REFERRAL(S)
01/10/94 2019 (H) STATE AFFAIRS, FINANCE
01/12/94 2043 (H) COSPONSOR(S): THERRIAULT
01/13/94 2056 (H) COSPONSOR(S): B. DAVIS
01/14/94 2084 (H) COSPONSOR(S): JAMES
03/08/94 (H) STA AT 08:00 AM CAPITOL 102
ACTION NARRATIVE
TAPE 94-24, SIDE A
Number 000
CHAIRMAN VEZEY called the meeting to order and 8:00 a.m.
Members present were REPRESENTATIVES KOTT, SANDERS, and
OLBERG.
Number 016
HB 328 - BIENNIAL VEHICLE REGISTRATION
CHAIRMAN VEZEY opened discussion on HB 328 under bills
previously heard.
REPRESENTATIVE PETE KOTT moved that previous action on HB
328 be rescinded, and be taken up for immediate
consideration.
Hearing no objection, CHAIRMAN VEZEY rescinded the previous
action on HB 328. He announced the committee had before
them CSHB 328, version R, which the committee had already
adopted. The committee amended version R on page 6, line
22, and on page 10, line 24, to read "biennial", instead of
"annual."
CSHB 328: "An Act relating to motor vehicle registration
and registration fees, and to the optional municipal motor
vehicle registration tax; to fees for drivers' licenses and
permits; to fees related to inspection and control of motor
vehicle emissions; and providing for an effective date."
REPRESENTATIVE KOTT felt CSHB 328, version R, was a good
bill and it should not be held up by the State Affairs
Committee. The financial ramifications would be taken up by
the Finance Committee.
REPRESENTATIVE KOTT moved CSHB 328, version R, be passed
from committee with individual recommendations.
Number 053
CHAIRMAN VEZEY asked the committee secretary to call the
roll and CSHB 328, version R, passed from the House State
Affairs Committee with individual recommendations.
(REPRESENTATIVE G. DAVIS joined the meeting at 8:03 a.m.)
SB 186 - STATE AGENCY PUBLICATIONS
CHAIRMAN VEZEY opened SB 186 for discussion under bills
previously heard.
Number 070
SENATOR STEVE FRANK, PRIME SPONSOR OF SB 186, addressed the
bill. He stated a few years ago there was a bill which
would have required agencies to put the cost of their
publications on the publications. This procedure was
intended to discourage those agencies from printing
expensive high gloss publications, and return them to the
use of a copier. He stated the amended bill, however,
returned to the Senate from the House stating there should
be a preference for printing materials in state operated
facilities. He stated this provision upset the private
sector because the University and the state would now be
providing services that should be provided by the private
sector. The language found in SB 186 is from former
REPRESENTATIVE DAVE CHOQUETTE's bill which did not make it
through the system. He felt SB 186 would correct the wrong
doing by the past amended bill.
(REPRESENTATIVE B. DAVIS joined the meeting at 8:05 a.m.)
Number 111
CHAIRMAN VEZEY announced the arrival of REPRESENTATIVES G.
DAVIS and B. DAVIS, and asked if they would like to sign the
committee report on CSHB 328.
CHAIRMAN VEZEY stated he had requested a House committee
substitute to SB 186 which he had discussed with SENATOR
FRANK. From the original SB 186, all of the language on
line 11, page 1, would be deleted. The House committee
substitute would read on page 1, beginning on line 10, "The
standards shall also be designed to promote the maximum use
of private sector printing facilities located in the state."
Number 158
REPRESENTATIVE HARLEY OLBERG asked the letter designation of
the House Committee Substitute.
CHAIRMAN VEZEY clarified the House CS for SB 186 was version
J. He pointed out another change to page 1, line 5 to SB
186. After the word "practicable", the clause,"or if at
least three businesses in the state are capable of producing
the publication," was added. This addition helps delineate
the definition of "practicable."
Number 180
SENATOR FRANK commented he did not have a problem with this
amendment when first mentioned; however, he did now believe
there were printing facilities in the state, with unique
capabilities, with only one or two competitors. He felt the
requirement of three may be too much.
CHAIRMAN VEZEY stated three would not be a minimum, but if
there were three facilities it would be determined
practicable to contract the printing out.
SENATOR FRANK explained that for the high quality work,
there may be only one or two facilities in the state capable
of producing it.
Number 193
CHAIRMAN VEZEY emphasized the wording states, "when
practicable, OR if at least three businesses in the state
are capable..." He interpreted the House CS to mean if
there are three facilities capable of doing the work, it
will be de facto, determined to be practicable.
Number 202
SENATOR FRANK wanted to make sure the language was clear.
Number 207
REPRESENTATIVE JERRY SANDERS felt if there were three bids
the state would get a fair price, and if there is only one,
the contract needs to be bid outside the state.
Number 214
SENATOR FRANK felt he and the committee had the same intent;
however, the language must be correct.
Number 220
CHAIRMAN VEZEY commented SB 186 could be brought back up
later if SENATOR FRANK would like more time.
Number 221
SENATOR FRANK felt the House CS was fine, as long as the
approach would be the maximum use of the private sector.
CHAIRMAN VEZEY responded it was not the intent of the House
CS to distort the intent of the original SB 186.
SENATOR FRANK wanted to be careful the House CS did not end
up being confusing.
Number 277
CHAIRMAN VEZEY believed SB 186 had a Judiciary Committee
referral and REPRESENTATIVE KOTT would be on that committee
to follow the bill and correct any mistakes if found.
CHAIRMAN VEZEY asked if there was a motion to adopt the
House committee substitute for SB 186.
REPRESENTATIVE SANDERS so moved.
Number 283
Hearing no objection, CHAIRMAN VEZEY announced the House
committee substitute to SB 186 was adopted.
Number 285
REPRESENTATIVE GARY DAVIS moved to pass House Committee
Substitute for SB 186 from committee with individual
recommendations.
CHAIRMAN VEZEY recognized the motion and asked the committee
secretary to call the roll. Hearing no objection, HCSSB 186
passed from the House State Affairs Committee.
HJR 60 - AMEND U.S. CONSTITUTION TO LIMIT FEDERAL COURTS
CHAIRMAN VEZEY opened HJR 60, sponsored by the State Affairs
Committee, for discussion. REPRESENTATIVE SKAGGS, HOUSE OF
REPRESENTATIVES in MISSOURI, requested HJR 60.
CHAIRMAN VEZEY addressed HJR 60 as a resolution asking the
Congress of the Unites States to prepare and present to the
legislature of all the states, an amendment to the
Constitution of the United States. This amendment would
prohibit a federal court from ordering a state or political
subdivision of a state, to increase or impose taxes. He
noted HJR 60 would not have the power of law; it is simply a
resolution.
Number 334
REPRESENTATIVE KOTT felt HJR 60 was a good resolution. The
resolution addressed mandates and the resolve clauses are
verbatim, per REPRESENTATIVE SKAGGS' suggestions.
CHAIRMAN VEZEY commented 26 states have already issued
resolutions similar to HJR 60.
REPRESENTATIVE G. DAVIS did not have a problem with the
concept, but would like an example of the concern. He said
it appeared that the federal courts were looking at ordering
the imposition or increase of taxes, but when questioned the
judges turned them away.
CHAIRMAN VEZEY replied there are Supreme Court decisions
specifically stating they have the right to impose or
increase the taxes.
Number 353
REPRESENTATIVE OLBERG looked to the second page of
REPRESENTATIVE SKAGGS letter which states, "the Federal
District Court, with the blessing of the United States
Supreme Court, continues to order property tax increases..."
for a specific purpose.
Number 365
REPRESENTATIVE KOTT moved to pass HJR 60 from committee with
individual recommendations, asking unanimous consent.
CHAIRMAN VEZEY asked the committee secretary to call the
roll, and HJR 60 passed unanimously from the House State
Affairs Committee with individual recommendations.
HB 402 - PROOF OF MOTOR VEHICLE INSURANCE
CHAIRMAN VEZEY opened discussion on HB 402. The sponsor of
HB 402 is the House Labor & Commerce Committee.
Number 383
REPRESENTATIVE BILL HUDSON, CHAIRMAN, HOUSE LABOR & COMMERCE
COMMITTEE, addressed HB 402. He stated HB 402 deals with
proof of financial responsibility filings for SR-22 drivers.
SR-22 filings are, in many instances, needed for those who
have been convicted of driving while intoxicated or reckless
driving. He thought HB 402 would provide insurance
companies the necessary information that would ultimately
lead to lowered premiums. All drivers would begin to be
treated with some equity. He noted HB 402 essentially
provides that insurance companies be informed as to what
vehicles they are insuring. Presently, drivers can get
insurance for inexpensive cars, drive and wreck expensive
cars, and the insurance companies are being asked to pay the
cost for the higher cost vehicle. HB 402 would provide a
clear definition for the insurance companies as to what they
are insuring.
CHAIRMAN VEZEY moved to the Fairbanks teleconference site.
Number 431
DENNIS BROWN, ALASKA INDEPENDENT INSURANCE AGENTS & BROKERS,
testified in favor of HB 402. Presently, an offender of a
crime such as driving while intoxicated must provide, to
continue driving, verification of coverage by the means of
an SR-22. The insurance carrier affirms that the liability
coverage has been in place, and if the policy is cancelled
for any reason, the Department of Financial Responsibility
will be so notified. A standard family auto policy has to
list their private passenger automobiles by make, year,
value, etc... This policy is very specific and it does
include an allowance for driving other vehicles, which meet
specific requirements.
MR. BROWN felt an underwriter needs to list specific
vehicles on policies to give them some idea of the uses,
age, and potentiality of loss. An underwriter for SR-22
relating to private passenger automobiles comes into
problems when an SR-22 driver is found driving commercial
heavy equipment or heavy trucks, substantially raising the
rate of coverage required. The SR-22 filing requirement
does not provide specific interpretation of what the driver
can drive, therefore, a driver could drive a Ford Taurus or
an International tractor or trailer.
MR. BROWN stated HB 402 amends SR-22 statutes only to cover
those autos listed in the policy, that meet the definition
of a private passenger automobile. He emphasized the
policies that fit these automobiles should be listed.
Carriers have been getting reluctant to write SR-22 coverage
in Alaska.
CHAIRMAN VEZEY asked MR. BROWN to explain what an SR-22 is.
MR. BROWN explained an SR-22 is a verification of coverage.
For example, if an indicted driving while intoxicated
offender wanted to regain his/her license, an insurance
policy must be secured that the insurance carrier is willing
to submit an SR-22 to the Department of Financial
Responsibility that verifies the insurance is in effect.
CHAIRMAN VEZEY asked if commercial vehicles had to be listed
individually under current laws.
MR. BROWN said yes, and most commercial auto policies
require there be a listing of commercial vehicles.
Number 509
CHAIRMAN VEZEY introduced HOWARD JAEGER as the next
individual to testify in Juneau.
Number 514
HOWARD JAEGER, SHATTUCK & GRUMMETT INSURANCE, MEMBER
INDEPENDENT INSURANCE AGENTS & BROKERS OF ALASKA, testified
in favor of HB 402. He pointed out, presently in the
preferred auto program, the preferred driver has to specify
which vehicles they want insured. If they buy another
vehicle they have 30 days to notify the insurance carrier in
order for coverage to apply to it. After 30 days, coverage
would not apply to that car. The 1989 bill addressing SR-22
filings was broadened to include all motor vehicles owned by
that person, not specifying the 30 day notice period. With
HB 402, coverage would apply to all vehicles which the
insured has notified the insurance company that they own.
Number 534
REPRESENTATIVE SANDERS asked if HB 402 would affect the
premiums an individual would pay for an SR-22 policy.
Number 537
MR. JAEGER said yes. Currently, only one car has to be
notified and insured with an agency, but the person could
then drive other vehicles, without notifying the carrier.
If the person then wrecked, the carrier would have to pay
the claim even if they have not collected a premium for the
other vehicles.
Number 546
REPRESENTATIVE SANDERS inquired if all of the cars insured
under the one driver would be at the higher SR-22 rate.
Number 548
MR. JAEGER said no, only the first car would be higher. The
additional cars would have to be added to the SR-22 policy
though. He stated if a person had a speeding ticket and an
accident the agency would only charge the surcharge on the
one car.
Number 555
REPRESENTATIVE SANDERS commented with the new .08 alcohol
limit there will be a lot of very responsible Alaskans
paying SR-22 insurance. He stated if HB 402 would make
these people pay extra premiums on all their other vehicles
then he would not be in favor of it.
Number 562
MR. JAEGER explained individuals with SR-22 would not be
able to stay in a preferred market; therefore, they would
have to pay the extra premiums. SR-22 individuals would go
into a substandard market, which is automatically a
surcharge market on all of their cars. In terms of their
driving record, the agency would charge the surcharge on
their first vehicle for the DWI and the others would act as
second cars on which there would not be surcharge.
CHAIRMAN VEZEY clarified HB 402 would also lower the cost of
an SR-22 policy for a one vehicle owner, because as it is
now, multiple vehicle owners were being lumped together with
single vehicle owners.
Number 573
MR. JAEGER said yes, multiple vehicle owners could be mixed
together with single vehicle owners without the companies
knowing it.
Number 575
CHAIRMAN VEZEY said the company's exposure is currently very
high and they are not very willing to write SR-22 policies.
He felt the competition may not be very stiff.
Number 578
MR. JAEGER replied the competition is not very stiff now,
but HB 402 may help encourage other companies to come into
the state and offer SR-22 insurance.
Number 580
REPRESENTATIVE OLBERG wondered why the old language of June
6, 1989, was not used in HB 402 which states, "applicable to
all owned vehicles insured by the consignatary." He asked
why the language in HB 402 is more preferable.
Number 586
MR. JAEGER responded the drafters were trying to say the
same thing in different language by stating, "designated by
description or appropriate reference, the motor vehicle that
it covers." The old law stated, "applicable to all owned
vehicles insured by the insurance company." He felt HB 402
could read as it used to.
Number 593
REPRESENTATIVE KOTT believed the language in HB 402 was
legally the correct language of today. He asked how many
SR-22's were in the state.
MR. JAEGER did not know.
REPRESENTATIVE SANDERS wanted to clarify the answer to his
previous question. He asked if a person, who owns three
cars, were to receive a DWI he/she would only have to pay
that higher premium on one car, not all three.
MR. JAEGER confirmed REPRESENTATIVE SANDERS.
Number 607
CHAIRMAN VEZEY introduced JOHN GEORGE as the next individual
to testify.
JOHN GEORGE, NATIONAL ASSOCIATION OF INDEPENDENT INSURERS
(NAII), testified in favor HB 402. The reason people have
to have an SR-22 filing is because they have run afoul of
the law; caught driving without insurance, driving while
intoxicated, or involved in a serious accident. The state
wants to ensure, with an SR-22, that these people are now in
compliance and have automobile insurance. MR. GEORGE
pointed out SR-22 is a requirement of the state. Current
laws require insurance companies to verify, if an individual
is driving a car, that he/she is insured. Therefore, if an
individual owns ten cars and only has insured one of them
with the company, but gets in a wreck in one of the other
cars, the insurance company still has to pay the client's
claim. He clarified HB 402 would allow the insurance
companies to pay claims on any car they insure, and only the
cars described on the form.
Number 641
REPRESENTATIVE OLBERG asked why cars were insured, instead
of drivers.
Number 642
MR. GEORGE responded drivers can be insured, but not many
companies offer that type of owner's policy. A problem
arises when an insured driver lends his/her uninsured car to
another individual. The car would only then be insured if
the other driver had liability insurance.
CHAIRMAN VEZEY asked the pleasure of the committee.
Number 655
REPRESENTATIVE BETTYE DAVIS moved to pass HB 402 from
committee with individual recommendations.
Number 662
CHAIRMAN VEZEY asked the committee secretary to call the
roll, and HB 402 passed unanimously from the House State
Affairs Committee with individual recommendations.
HB 403 - AUTOMOTIVE LIABILITY INSURANCE COVERAGE
CHAIRMAN VEZEY opened HB 403 for discussion. The House
Labor & Commerce Committee sponsored HB 403.
Number 677
REPRESENTATIVE BILL HUDSON, CHAIRMAN HOUSE LABOR & COMMERCE,
addressed HB 403. Legislation passed in 1992 requires
insurance companies to offer uninsured and underinsured
motorist coverage in excess of voluntarily purchased
coverage by the insurer. He explained on current insurance
forms there is a signed statement on the back which states
one has turned down the higher limits required by law to be
offered to you. He stated HB 403 was introduced to remove
the mandatory offer of higher insurance limits. Alaska is
the only state in the Nation which requires uninsured and
underinsured motorist coverage of up to $2 million. AS
21.89.020 would be amended to require coverage that includes
policy limits equal to the limit voluntarily purchased. He
felt, with the passage of HB 403, there would be greater
competition because companies which could not offer those
higher limits would be enticed to join the market.
TAPE 94-24, SIDE B
Number 000
CHAIRMAN VEZEY asked any future witness to answer if there
was any advantage to an individual purchasing insurance
limits that exceed their net assets.
CHAIRMAN VEZEY asked DENNIS BROWN if he would again like to
testify on HB 403.
Number 042
DENNIS BROWN, ALASKA INDEPENDENT INSURANCE AGENTS & BROKERS,
testified in favor of HB 403. They would like a healthy
competitive insurance market in the state to provide better
prices and coverage for the consumers. HB 403 would make
only minimum requirements, and the actually extension of
coverage is a decision made by purchaser of insurance. He
stated HB 403 would not remove the provisions for uninsured
and underinsured motorists, but rather change the limits of
coverage. If a purchaser decides to purchase $500,000 of
insurance for third party liability, injuries or damages to
others, the same limits should be available as under the
underinsured and uninsured motorists. He felt the coverage
should not be in excess of what the purchaser bought for
liability. MR. BROWN emphasized automotive liability
coverage is mandated in the state of Alaska, and as such it
should be affordable and attainable. He pointed out the low
population and high cost of doing business in Alaska creates
a limited and secluded market for those in insurance.
Alaska does not develop the large premium dollars to attract
underwriters. He said Alaska is usually the last state a
company enters and the first state to leave if things get
bad.
Number 123
REPRESENTATIVE KOTT asked if MR. BROWN could confirm that
Alaska is the only state requiring coverage up to the $2
million limit.
MR. BROWN replied, to the best of his knowledge, Alaska is
the only state.
CHAIRMAN VEZEY inquired if there was any valid reason a
person would carry liability insurance that exceeds their
net personal worth.
Number 137
MR. BROWN responded net worth is probably the best
"barometer" to use when purchasing liability insurance. He
noted what is affordable to buy in the market place also
weighs heavily in the decision making process.
Number 157
CHAIRMAN VEZEY said, for example, his net worth was
$250,000. He asked the minimum policy rate.
MR. BROWN answered minimum policies are $1,500, $2,500, or
$125,000 single limit as the state requires.
Number 167
CHAIRMAN VEZEY questioned if there would be a valid reason
for carrying liability insurance which exceed a person's net
personal worth.
Number 169
MR. BROWN said yes, it is what an individual may feel they
would be accountable to others in the operation of that
vehicle. Even if a limit exists, and the accident exceeds
the limit, one would still have the potentiality of personal
liabilities.
CHAIRMAN VEZEY asked HOWARD JAEGER if he would join the
table to testify on HB 403.
Number 190
HOWARD JAEGER, SHATTUCK AND GRUMMETT INSURANCE, testified in
favor of HB 403. He emphasized HB 403 would not preclude
those drivers that want to buy higher uninsured limits from
buying them. Companies who offer an individual $500,000
worth of liability insurance to purchase would have to
provide that amount. HB 403 would provide; however, those
companies which can only offer $50,000 and $100,000 bodily
injury limits to only have to offer $50,000 and $100,000
uninsured motorist limits. Insurance companies can already
offer high liability limits far in excess of state
requirements. Therefore, HB 403 would not limit an
individual's ability to still buy the higher limits after
they are no longer law. MR. JAEGER explained higher limits
of uninsured motorists have generally not been purchased by
the consumer. Many people are buying insurance at their
current liability limits, or even lower. Alaska's mandatory
insurance limits currently are higher than any of the other
49 states in the Nation. Regarding young drivers, because
their costs have increased and the way the law is written,
they can reject uninsured motorist insurance totally. He
believed the Division of Insurance had submitted information
to the committee in support of HB 403.
Number 243
REPRESENTATIVE HUDSON asked if Alaska was the only state
with arbitrarily established top limits on insurance, and
how does Alaska compare on the bottom limits.
Number 249
MR. JAEGER answered Alaska's liability minimums are almost
double the limits in any other state, even triple over some
states. Uninsured motorist insurance, he recollected, is a
mandatory offering by about half of the other states, but
none of them meet the 1-2 million limits in Alaska.
Number 257
REPRESENTATIVE HUDSON pointed out those who have preceded
[us] have some how determined that Alaska's bottom limits
should be twice as high as the next highest in the Nation.
The state also determines arbitrarily that any company
operating in Alaska has to offer 1-2 million limits even
though other states do not. He felt HB 403 would put
insurance limits back down into normal ranges. He
emphasized the bottom limits would be worked on next,
because young individuals are going uninsured due to
Alaska's bottom limits being so high that they cannot afford
it.
Number 281
REPRESENTATIVE G. DAVIS asked if page 1, line 14, referred
to the $125,000 bottom limit when it states,"the policy
limit written may not be less than the policy limit in AS
28.20.440."
Number 289
MR. JAEGER affirmed REPRESENTATIVE G. DAVIS. Liability
insurance is written with "split limits," whereby each
person has $50,000 maximum, $100,000 for each accident, and
$25,000 property damage liability. Liability insurance can
also be written with $125,000 total which includes bodily
injury and property damage.
MR. JAEGER addressed CHAIRMAN VEZEY's question as to why a
person may want to buy higher liability limits. He felt an
individual cannot judge the worth of someone they may
involve in a major accident. Therefore, a judgment could
come against that individual which could far exceed his/her
stated liability limit. The judgment against them would be
precluded by the amount of liability they have and also by
the amount of assets they have.
Number 316
CHAIRMAN VEZEY commented the judgment is against the person
and not the insurance company.
Number 317
MR. JAEGER affirmed CHAIRMAN VEZEY.
Number 318
CHAIRMAN VEZEY continued a person buys insurance to protect
their assets. However, in Alaska insurance is bought
because it is required by law. He asked if a person could
receive a judgment which not only takes their assets, but
also their insurance policy.
Number 328
MR. JAEGER responded if the judgment was for $150,000, and
the liability insurance policy only covered $100,000, the
insurance company would pay the $100,000 and leave the other
$50,000 for the policyholder to come up with.
Number 338
REPRESENTATIVE OLBERG explained he carries a $1 million
liability on his homeowner insurance because he wants a
"willing and enthusiastic partner when [he] gets in
trouble." He said it only costs him $20-25 more than the
minimum every month to have this type of coverage. He said
he understood that if an individual is worth a $100,000 and
gets a judgment against him/her for $500,000, then that
individual will have to spend the rest of his/her life
paying off the debt.
CHAIRMAN VEZEY believed at that point the bankruptcy laws
would take effect.
REPRESENTATIVE OLBERG did not believe declaring bankruptcy
would be the solution.
Number 350
CHAIRMAN VEZEY asked JOHN GEORGE to testify next.
Number 356
JOHN GEORGE, NATIONAL ASSOCIATION OF INDEPENDENT INSURERS,
testified in favor of HB 403. He stated he used to be the
Director of Insurance for the State of Alaska, and while in
that position, the law presently being challenged by HB 403
was adopted. He pointed out the passage of that bill did
lead to the loss of several insurance carriers. The reason
insurance carriers cannot offer the $2 million limit is
because of their reinsurance. Insurance companies lay off
part of the risk to other insurers, and their contracts with
these other insurers contemplates the type of business that
they write. If companies write up to $500,000 worth of
liability, they buy reinsurance that covers them for
$400,000, in excess of the $100,000 they want to retain.
With the $2 million limit, the company would have to buy
$1.9 million in reinsurance to cover themselves, in excess
of the $100,000 they would want to retain on account. He
emphasized the $2 million limit is not economical for Alaska
when there are multiple states writing policies. Reinsurers
even look at Alaska's requirement and question whether or
not they should even reinsure the companies because of the
unusually high amount.
MR. GEORGE addressed REPRESENTATIVE HUDSON'S statement about
reducing the minimum requirements. He felt reducing them
would be attractive, realizing there would always be the
chance of getting into a major accident, the vast majority
of accidents involve only $2,000-$5,000 worth of damages and
some medical bills. These types of accidents could be
covered by fairly minimal insurance limits. He noted if an
accident is the fault of a person with low liability
insurance, and the other party has a higher limit, the lower
limit would cover what it could and the higher insurance of
the other party would cover the difference. He emphasized
people would not be disadvantaged by not being able to
collect, and he agreed lowering the bottom limits would
cover individuals for 99 percent of the accidents they would
be in.
Number 416
REPRESENTATIVE G. DAVIS moved to pass HB 403 from committee
with individual recommendations, and accompanying fiscal
note.
Number 419
CHAIRMAN VEZEY noted the fiscal note for HB 403 was on page
3, and asked the committee secretary to call the roll.
CHAIRMAN VEZEY announced HB 403 passed unanimously from the
House State Affairs committee with individual
recommendations.
CHAIRMAN VEZEY called for a recess at 9:12 a.m. The meeting
reconvened at 9:26 a.m. with REPRESENTATIVES B. DAVIS and
OLBERG present.
HB 345 - PRESERVATION OF PUBLIC FACILITIES
CHAIRMAN VEZEY opened HB 345 for discussion under bills
previously heard.
Number 443
JEANNETTE JAMES, PRIME SPONSOR OF HB 345, addressed the
bill. She commented since the last hearing of HB 345, the
State Association of Facilities Management held a meeting to
discuss HB 345 and decided they would propose a committee
substitute.
Number 451
CHAIRMAN VEZEY asked if the committee had received a revised
fiscal note.
Number 452
REPRESENTATIVE JAMES replied another fiscal note was
received from the University of Alaska Fairbanks (UAF). She
suspected, in looking at the two fiscal notes, that the
reduction of the operating budget meant the university was
not asking for operation dollars. The difference between
the capital request starting in 1995 from $16 million in the
Department of Transportation fiscal note, to the $11 million
in the UAF fiscal note, is to just include that portion that
would relate to UAF.
REPRESENTATIVE JAMES stated the purpose of HB 345 is to put
emphasis on the maintenance of the state's public
facilities. She said the sooner these facilities are taken
care of, the better off the state will be. She would like
to set in statute, a formula for funding maintenance of
public facilities based on a life cost basis. This formula
would be used for allocating revenues that would be required
for each agency. Each agency, including the Governor, would
have to present their number in the budget process. She
would like the legislature to be required to fund these
amounts, before they could authorize the construction of new
facilities. She pointed out the state has continued to fund
new facilities, without any consideration for buildings the
state already has.
REPRESENTATIVE JAMES outlined the fiscal note as the $61
million, indicated in the total operating cost, would be the
amount required in the current year's budget if the
legislature were to formula fund the percentage of
maintenance required for all existing facilities. Of the
$61 million, about $35-36 million is included in the
operating budget that has been presented by the Governor.
She noted the great short fall in the operating budget,
compared to what the budget has requested. The capital line
is the amount that would take over a period of 15 years to
catch up on the deferred maintenance the state has fallen
behind on.
CHAIRMAN VEZEY asked if the legislature were to authorize
$75 million in bonding, how would it impact the proposed
fiscal note.
Number 498
REPRESENTATIVE JAMES suggested the $75 million would not
address the deficit between the $35 million currently in the
budget and the $61 million that would be required just to
keep up. Until the state fully funds maintenance, the state
will continue to fall behind.
Number 509
CHAIRMAN VEZEY questioned what $31 million REPRESENTATIVE
JAMES was referring to in the budget.
Number 510
REPRESENTATIVE JAMES responded $31 million is spread out
through the agencies' budgets.
Number 511
CHAIRMAN VEZEY stated when he brought up the $75 million in
bonding, he was only referring to the university.
Number 512
REPRESENTATIVE JAMES was not aware of the University's
operating budget for 1994. She suspected it did not address
deferred maintenance and it only addresses the past deferred
maintenance by the $75 million. She noted the University
would continue to pick up more deferred maintenance because
it was not in the budget.
Number 516
CHAIRMAN VEZEY clarified the $75 million would cut in half
the accrued deferred maintenance, and it would not impact
the proposed fiscal note at all.
Number 517
REPRESENTATIVE JAMES affirmed CHAIRMAN VEZEY. She was
disappointed there was not more public input and response to
HB 345. She wanted to make the public aware of the
seriousness of the problem.
CHAIRMAN VEZEY asked what she had meant by public.
Number 525
REPRESENTATIVE JAMES answered anyone other than the
legislature.
(REPRESENTATIVE KOTT returned to the meeting at 9:34 a.m.)
REPRESENTATIVE JAMES felt if HB 345 was an important issue
people would not have to be invited, and if the desire
existed they would be present.
Number 536
CHAIRMAN VEZEY did not accept her reasoning because he
believed those involved in maintenance were acutely aware of
the problem. He thought the administrators of the state's
public facilities probably feel like "it's the sword
Democoles hanging over their head." He stated the majority
of the average public is probably not aware that all of the
state's public facilities are broken or deteriorating.
CHAIRMAN VEZEY stated he felt the fiscal notes were
presented in an improper manner. The University fiscal note
estimates $11 million escalating at about 3-4 percent a
year. He stated those capital improvements to existing
facilities represent depreciation and they will accrue,
whether the legislature funds them or not.
Number 551
REPRESENTATIVE JAMES stated CHAIRMAN VEZEY was correct.
Number 552
CHAIRMAN VEZEY looked at the DOT fiscal note and noted it
included the cost of operation for the facilities. He
believed they had good reason because their operating
budgets had been manipulated to go to other than building
maintenance, utilities, etc.
Number 557
REPRESENTATIVE JAMES responded if the requirement for
maintenance and repair was funded on an ongoing basis, the
operating cost would be found in the operating budget, not
in the capital budget. If component replacement and renewal
were considered, they might be a capital expenditure. She
understood general maintenance of public facilities is an
operating expense. She noted only the $35 million is
included in the $61 million because most of the rest of the
money in the operating and maintenance is for lights and
other utilities that have nothing to do with keeping the
building "up to speed."
Number 569
CHAIRMAN VEZEY stated DOT's fiscal note is $61 million just
for operation, plus a capital improvement portion of $16-17
million.
REPRESENTATIVE JAMES clarified the $16 million is to catch
up the deferred maintenance that has not been done in
previous years.
Number 574
CHAIRMAN VEZEY stated the $61 million includes scheduled
maintenance. He had believed the $61 million included
operation of the building, including utilities.
Number 576
REPRESENTATIVE JAMES stated the $61 million did also include
operation of the buildings and utilities. She noted
throughout the agency budgets $35 million has been
distributed of the $61 million. She clarified this depicts
that there is a deficit in the 1994 budget, which is going
to contribute to the capital needs in the future.
Number 584
CHAIRMAN VEZEY felt the committee may have not thoroughly
reviewed their packets on HB 345 yet.
Number 587
REPRESENTATIVE KOTT agreed.
Number 589
REPRESENTATIVE G. DAVIS stated the fiscal note was the
obvious factor which was detracting from the attractiveness
of HB 345. However, he felt a mechanism did need to be found
to deal with the deferred maintenance. He agreed with
REPRESENTATIVE JAMES that if HB 345 would have had more
public notice, every agency would have been present to
indicate the need for the bill. He thought HB 345 was
similar to the Executive Order from the 1993 session, which
dealt with transferring all facilities to DOT so they could
run a program similar to that in HB 345. In reference to
his example, he felt the issue of deferred maintenance was
becoming more up front and open, but solutions are not being
adequately discussed.
Number 615
CHAIRMAN VEZEY felt HB 345 would be more attractive if a
zero fiscal note could be structured. He stated if the
maintenance was not paid for, the existing buildings would
depreciate at a predictable rate and would soon be
uninhabitable.
Number 627
REPRESENTATIVE JAMES agreed with CHAIRMAN VEZEY. She
mentioned maintenance persons would be doing other things
besides just maintenance in several agencies. Therefore,
the state is really paying for labor which could be amassed
into a definite labor position. This labor position could
get maintenance done for the same dollars the state is
already spending. She gave the example of maintenance
people making coffee.
REPRESENTATIVE JAMES felt money could be saved in the long
run and the issue of deferred maintenance needs to be
addressed. She would support putting maintenance in a
special area where it, and the employees, would be properly
utilized so the cost would be less. She believed a positive
fiscal note could even be offered, if HB 345 could be
revised in some way.
Number 646
CHAIRMAN VEZEY believed the legislature would not have a
problem approving a formula for the maintenance of it's
facilities; however, it would have a problem creating
another program. He did not believe the legislature would
ever deny itself the right to build new facilities until
maintenance was brought up to a certain level, noting one
legislature cannot bind another. He felt terms would have
to be defined because utilities may or may not be included,
and major maintenance items would need a cost limit. He
noted some administrators deliberately let maintenance
deteriorate to the extent that it exceeds $25,000, so they
can the have work done under capital improvements, as
opposed to under their maintenance budget.
Number 667
REPRESENTATIVE JAMES pointed out page 6, line 25, after it
states "a legislature shall", Section 9(7), "appropriate
funds for the full cost of annual maintenance and repair and
periodic renewal and replacement of existing public
facilities of a branch of state government...before funding
construction of new public facilities or substantial
addition to existing public facilities." She asked if this
should be reworded to not be so strong.
REPRESENTATIVE JAMES would not want to bind other
legislatures, but she wants them to have to notice its
existence.
CHAIRMAN VEZEY commented the legislature would not pass
bills that attempted to bind other legislatures.
REPRESENTATIVE JAMES felt changing the language to where
they would have to first identify before they go forward in
new construction might be effective and not necessarily
binding.
Number 688
REPRESENTATIVE G. DAVIS commented deferred maintenance will
continue to be a problem and the legislature should continue
to talk about it as is it now. He also felt agencies should
be involved to let them know there are things they can do to
keep the problem on the forefront. New facilities will face
the same fate as existing facilities in the future if they
are not taken care of. He stated even before an agency
offers a new section or service which will cost more money,
they should have to look at where they could spend that
money in deferred maintenance.
TAPE 94-25, SIDE A
Number 015
(REPRESENTATIVE OLBERG left the meeting at 9:46 a.m.)
CHAIRMAN VEZEY stated he was not prepared at the time to
prepare a committee substitute which would address the
short-comings he has found in HB 345.
Number 026
REPRESENTATIVE JAMES referred to the comments by CHAIRMAN
VEZEY about the fiscal note and the attempt by HB 345 to
bind other legislatures, and asked if he would be more
comfortable with moving HB 345 out of committee if these two
concerns were amended.
CHAIRMAN VEZEY did not have a problem moving the HB 345 out
of committee; however, he wanted HB 345 to be more
attractive to the legislature so it would not be buried in
the Finance Committee. He felt a zero fiscal note could be
made if HB 345 was made into an advisory report. HB 345 may
fit into HB 347, which will be heard March 10, 1994, because
it deals with state long-term planning.
Number 055
REPRESENTATIVE JAMES said she would support any plans for
the future because historically, the state has not done it.
She took CHAIRMAN VEZEY's suggestion that HB 345 be made
into an advisory, as opposed to a formula program. She felt
the public needed to be informed that the formula would
actually work. She noted when money is authorized for
construction of new buildings, fiscal notes are attached
which shows the cost of maintenance for that building in the
future. She offered to make the changes to HB 345 and bring
it back before the committee as a sponsor substitute, so the
bill would not get stalled in committee.
Number 099
CHAIRMAN VEZEY thought a zero fiscal note could even be
attached to the sponsor substitute if worded correctly. The
bill may have to carry some cost to perhaps prepare a report
on an annual basis.
Number 114
REPRESENTATIVE JAMES appreciated hearing HB 345 before the
committee because the issue is important and, even if it
becomes an interim project, she will not let the problem go
away.
Number 119
CHAIRMAN VEZEY believed the legislature does not see
information to the extent of regarding deteriorating public
facilities. Life cycle costing has now become an important
issue. HB 345 could be revised and made attractive enough
to gain the support of the legislature.
Number 136
REPRESENTATIVE JAMES asked, if a sponsor substitute was
drafted, would the committee consider rehearing HB 345 and
moving it out of committee.
CHAIRMAN VEZEY replied the committee would consider
rehearing HB 345 if they received a zero fiscal note. HB
345 was held in committee for reconsideration.
ADJOURNMENT
Hearing no more business before the committee, CHAIRMAN
VEZEY adjourned the meeting at 9:55 a.m.
SCHEDULED BUT NOT HEARD
HB 405: "An Act establishing and relating to the Alaska
Information Network Corporation; relating to the
Telecommunications Information Council; and
relating to the state's information industry; and
providing for an effective date."
SCHEDULED BUT NOT HEARD
HB 347: "An Act relating to long-term plans of certain
state agencies."
| Document Name | Date/Time | Subjects |
|---|