Legislature(1995 - 1996)
05/04/1996 03:00 PM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
CS FOR HOUSE BILL NO. 517(TRA)(title am)
An Act relating to motor vehicle records and hearings
of the Department of Public Safety; increasing the
period under which a person may drive a motor vehicle
under a temporary permit; relating to ownership of
certain abandoned motor vehicles; relating to
suspension or revocation of a motor vehicle
registration or special permit; relating to renewal of
a driver's license by mail; relating to procedures
applicable to administrative revocation of a driver's
license; relating to commercial driver training
schools; increasing the property damage amounts for
proof of financial responsibility and proof of motor
vehicle eligibility in order to lawfully operate a
motor vehicle in the state; amending the definition of
`commercial motor vehicle'; relating to prohibited
operation of a commercial motor vehicle and to
disqualification from driving a commercial motor
vehicle; relating to certain notifications in accidents
involving property damage; relating to motor vehicle
registration procedures; and providing for an effective
date.
Co-chairman Halford directed that CSHB 517 (TRA)(title am)
be brought on for discussion. JULIE TAURIAINEN, aide to
Representative Gary Davis, came before committee. She
explained that the legislation was requested by the Dept. of
Public Safety. It addresses two areas:
1. The first relates to federal mandates required to
gain compliance with federal regulations relating
to federal motor carrier safety act programs,
grant requirements, and the commercial
vehicle safety act. Failure to adopt these
provisions may result in sanctions of 5
percent of federal ISTEA moneys and funding
from the motor carrier safety assistance
grant. The state may cumulatively lose $20
million.
2. Housekeeping measures which will increase
efficiency within Dept. of Public Safety
operations, save costs, and expedite
services to the public.
Senator Donley directed attention to Amendment No. 1 and
explained that it applies to the housekeeping portion of the
bill. He referenced the current financial responsibility
act. He then explained that in accidents incurring over
$500 in damages for which an individual does not have
insurance coverage or fails to pay for damages, the
individual's license is subject to suspension. The proposed
bill would raise the level of damage to $1,500. Senator
Donley suggested that was bad public policy. The amendment
establishes the threshold at $501.
Current law requires that accidents with damages totaling
over $500 must be reported. The bill proposes to raise that
amount to $1,500. That is reasonable. The second portion
of the amendment would increase that threshold to $2,000
simply to reduce the amount of paperwork in instances where
no one was injured and there was no problem surrounding the
accident.
Senator Donley spoke against raising both of the foregoing
thresholds equally. While increase of one merely reduces
paperwork, the other has the substantive effect of allowing
individuals to drive without insurance or avoid paying for
damages in automobile accidents.
END: SFC-96, #109, Side 1
BEGIN: SFC-96, #109, Side 2
Senator Donley noted that the proposed amendment resets the
financial responsibility threshold at $501 rather than the
statutory $500 in order to remain within title language and
avoid need for the resolution and vote accompanying a title
change. He then MOVED for adoption of Amendment No. 1. Co-
chairman Halford OBJECTED.
JUANITA HENSLEY, Chief, Driver Services, Dept. of Public
Safety, came before committee in support of the bill. Mrs.
Hensley pointed to budgetary reductions over a number of
years and explained that the proposed increase of the
financial responsibility threshold from $500 to $1,500 would
be the first since 1977. Prior to that time, the limit of
reportable damage was $200. The increase does not mean that
individuals do not have to carry insurance. Prior to
registering a vehicle, the department requires certification
(on the vehicle registration application) that the vehicle
is covered by insurance for liability limits required by
law. Failure to maintain insurance following application
would result in unsworn falsification for which prosecution
may occur. Mrs. Hensley said she did not have a problem
with the latter portion of Amendment No. 1 (Page 2, lines 8
through 16). She expressed a preference for maintaining the
limitation at which a driver license would be suspended at
$1,500 to provide more efficient operation of the
department. She attested to the fact that $500 in damage
could be merely "a little ding in a door." She then
distributed photos evidencing $2,800 in vehicle damage.
Mrs. Hensley next attested to impact of the present $500
limit on the Dept. of Law, the Court System, and Dept. of
Corrections.
The proposed $1,500 threshold has nothing to do with whether
or not an individual has insurance. The department would
continue to suspend the driver license if an individual
fails to submit proof of insurance at the $1,500 limit. The
affidavit of insurance would also continue to be a
requirement at the time of registration.
Senator Donley suggested that the real issue is, "At what
level or amount of damage do we want somebody to be able to
escape any sanction for, without paying for, and without
having insurance for?" The amount of the accident damage is
irrelevant. The Senator further spoke to enforcement
problems associated with the higher threshold.
Senator Donley mentioned that fiscal notes do not reflect
cost savings from increased thresholds. He reiterated that
the bill would have a detrimental impact on constituents who
are hit by an uninsured driver and sustain $1,400 in damage
for which there is no state enforcement of statutory
violations. Mrs. Hensley again attested to efficiencies to
be gained by the increase. Police departments often do not
respond to an accident unless there is $1,500 to $2,500 in
damage. Many accidents are presently unreported. Senator
Donley acknowledged that reporting is not mandatory. He
reiterated that the proposed amendment would provide the
option of reporting an accident when an individual has
broken the law.
Mrs. Hensley noted that the financial responsibility section
(four positions) in driver services was deleted from the
Governor's budget. The budget also indicates that the
division of motor vehicles, driver services section, was
eliminating the financial responsibility section that
suspends the at-fault driver in motor vehicle accidents. It
also states that the division would continue to process
suspensions for failure to have insurance, but that it would
do so at the $1,500 limit.
Discussion followed regarding a determination of damage at
the point of accident.
Senator Donley cautioned that if the bill passes as
presently drafted, "Everybody out there . . . will know that
you don't have to have auto insurance as long as you don't
do more than $1,500 worth of damage." There will be
absolutely no enforcement of insurance requirements.
In response to a question from Senator Randy Phillips, Mrs.
Hensley said that department opposition to Amendment No. 1
is based on the amount of paperwork involved in the license
suspension process when damage is not substantial. The
division of insurance reports the average claim in Alaska,
three years ago, was $1,600.
Senator Donley said that increasing the mandatory reporting
level to $2,000 would save considerable paperwork when there
is no problem. The increase to $1,500 focuses on problem
damages. The issue is compliance with the law which
requires two things:
1. Insurance coverage
2. Payment for damage.
He suggested that an individual who does only $10.00 worth
of damage should not be excused from auto insurance
requirements.
Co-chairman Halford asked if an accident report would have
to be filed if the accident resulted in $2,000 but the
individual at fault paid for repairs. Mrs Hensley responded
affirmatively. She explained that two separate statutes are
involved:
1. The financial responsibility act.
2. Mandatory insurance law.
The financial responsibility act says that an individual who
causes $500 or more in damages in an accident and does not
have insurance will have his or her license suspended by the
department. There is parallel suspension. One suspension
requires the individual to pay for damages. The other
requires everyone to have insurance. A driver can be
suspended for being at fault and causing the damage. He or
she can also be suspended for not having liability
insurance. If the damage is paid, the issue of lack of
insurance remains. The individual will have to deal with
suspension for that violation and will have to "file SR 22
at $500." Senator Donley said the question is, At what
level does enforcement occur?. Under the proposed bill, the
department would, in effect, no longer enforce financial
responsibility. Enforcement of mandatory auto insurance
would continue.
Co-chairman Halford voiced concurrence with the department's
goal of reaching to $1,500, except for cases in which an
individual responsible for the accident does not pay. That
threshold should remain at $500. Senator Donley advised
that Amendment No. 1 would accomplish that goal. It raises
the mandatory report level to $2,000. Mrs. Hensley stressed
that the department would continue to require individuals to
sign the affidavit of insurance at the time of vehicle
registration. Approximately 11 percent of those involved in
motor vehicle crashes in Alaska are uninsured. The
department does not have the budget to implement and suspend
drivers at $501--the threshold set forth in Amendment No. 1.
The department will not be processing any financial
responsibility suspensions. The department will only
suspend drivers for not having required insurance. The only
recourse damaged drivers will have is to file suit in small
claims court for compensation for damages. Senator Donley
noted that the proposed bill would also impact enforcement
of mandatory insurance provisions by increasing the
threshold from the existing $500 to $1,500. The proposed
amendment sets the threshold at $501. Mrs. Hensley
referenced earlier attempts by the department to increase
the threshold to $1,500 and ultimate inclusion of a
negotiated $1,000 limit within an omnibus fees bill.
[Co-chairman Frank and Senator Rieger arrived at this time.]
Further discussion and examples of provisions of current law
versus changes proposed in both the present version of the
bill and Amendment No. 1 followed. Mrs. Hensley referenced
a situation wherein the injured driver had no insurance, and
the driver causing the damage failed to pay and also had no
insurance. She advised that three suspensions would issue.
Two to the driver causing the damage for failure to pay and
lack of insurance, and the third to the uninsured driver
whose vehicle sustained damage. She further advised that
the department receives approximately 20,000 accident
reports per year. Senator Donley said that the proposed
amendment should significantly reduce the number. Reports
that are received will be focused on problem accidents.
In response to a question from Senator Zharoff, Senator
Donley explained that a decrease in reporting would occur
because reporting would be optional up to $2,000. At the
present time, everything over $500 is mandated.
Co-chairman Halford called for a show of hands on Amendment
No. 1. Amendment No. 1 was ADOPTED on a vote of 4 to 3
(Senators Donley, Frank, Rieger, and Sharp were in support).
Senator Donley MOVED that SCS CSHB 517 (Fin) pass from
committee with individual recommendations and accompanying
fiscal notes. No objection having been raised, SCS CSHB 517
(Fin) was REPORTED OUT of committee with zero fiscal notes
from the Dept. of Public Safety and Dept. of Transportation
and Public Facilities. Co-chairman Frank and Senators
Donley, Rieger, and Sharp signed the committee report with a
"do pass" recommendation. Co-chairman Halford and Senators
Phillips and Zharoff signed "no recommendation."
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