Legislature(1997 - 1998)
04/07/1997 01:06 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 95 - MOTOR VEHICLE INSURANCE & LICENSING Number 097 CHAIRMAN GREEN advised members the first order of business would be HB 95, "An Act relating to motor vehicle registration, licensing, and insurance; and providing for an effective date." It had been discussed the previous week. KRISTY TIBBLES, Legislative Secretary to Representative Joe Green, explained the changes that had occurred as a result of the amendments adopted at the previous hearing. Ms. Tibbles advised members that because of Executive Order 98, which moved the Division of Motor Vehicles to the Department of Administration, that all references to the Department of Public Safety had been changed to the Department of Administration. MS. TIBBLES advised members that the reporting requirements had been changed to a monthly requirement, rather than after cancellations, which was done at the request of the Department of Public Safety. MS. TIBBLES pointed out that the other change in Section 1 would not require insurance companies to report commercial vehicle insurance. MS. TIBBLES advised members that the fee had been increased from $1 to $2 in Section 6. Number 232 REPRESENTATIVE ERIC CROFT asked for an explanation as to why commercial vehicles would not be subject to reporting requirements. Number 257 JUANITA HENSLEY, Chief, Driver Services, Division of Motor Vehicles, Department of Public Safety, advised members there was a separate section in statute that required a separate limit of liability for commercial vehicles, and the enforcement of that fell under the Alaska State Troopers and also Weights and Measures, and was moved to the Department of Transportation through Executive Order 98. She noted that they were required, either interstate and intrastate, to submit proof of insurance to that agency, not the Division of Motor Vehicles. REPRESENTATIVE CROFT asked if commercial vehicles typically maintained their insurance because it was a business, as well as being more regulated. MS. HENSLEY responded that that would be the case, that if stopped by an enforcement officer they would be required to show proof of insurance, and they would also be required to show proof of insurance when stopping at a weigh station. She also pointed out that in order to receive an AK number, which was a US DOT number, they would need to show proof of insurance when applying for that number. Number 362 REPRESENTATIVE BRIAN PORTER moved to adopt CSHB 95(JUD), Version "K", dated 3/22/97. CHAIRMAN GREEN expressed that members adopted that version at the previous hearing. Ms. Tibbles agreed, Version "K", CSHB 95 (JUD) was adopted at the previous hearing, 3/24/97. MS. TIBBLES reiterated that under Section 6, the fee had been increased from $1 to $2, to reflect the estimated cost of the database which was $1 per vehicle per year. The fee was increased to $2 because vehicles are registered every other year. MS. TIBBLES advised members that Section 15 had been amended by inserting language to allow peace officers to electronically verify that a person had the required motor vehicle liability insurance when stopped for a moving violation, in addition to when an accident had occurred. Ms. Tibbles noted that that had been added at the request of State Farm Insurance Company. Number 468 MS. TIBBLES advised members section 16 had been amended to allow the Department of Administration to request an audit on the third party vendor. MS. TIBBLES expressed that the last change provided for a sunset provision, which had also been requested by State Farm Insurance Company. She explained that by July 1, 2000, if the program proved to be effective, legislative action would be necessary to remove the sunset provision. Number 533 MS. HENSLEY pointed out that the Division of Motor Vehicles felt they needed a longer sunset period. She stated that the year 2000 was not sufficient to have comparative data available to see if the program was working, and they would request at least three full years of program operation prior to having to report back to the legislature. It was her suggested that the sunset provision be moved up to the year 2002, or 2005. Ms. Hensley explained that the division would have to go through the procurement process and request for bids, and to go through that process would take some time. MS. TIBBLES pointed out that she did have a proposed amendment that would address that concern. Number 604 REPRESENTATIVE PORTER referred to the provision which would allow law enforcement to ask someone to show proof of liability coverage, and asked if that was an enforceable provision. MS. HENSLEY advised members that it was, and currently it was a Class B misdemeanor and would continue as such if someone failed to have insurance, which could be found under AS 28.22.011. REPRESENTATIVE PORTER asked why it had not been enforceable before, or why it had not been done in the past. MS. HENSLEY stated that even though officers had the authority to ask an individual if they were insured, there was no citing provision, and that was included in draft committee substitute of HB 95. REPRESENTATIVE PORTER noted that testimony had been heard at previous hearings that one of the problems was that people were being asked once a year whether they had liability insurance, and if it was found that the person had cancelled immediately, or falsely signed the renewal registration form, that there was no penalty imposed. He asked if the draft committee substitute addressed that concern. MS. HENSLEY advised members that if a policy were cancelled it would be reflected in the insurance data base, and either the Division of Motor Vehicles, or through a contract with a third party, could require that the third party agent send a notice to the individual and require that proof of insurance be submitted to the division. She noted that if the individual failed to do that, their drivers license would be suspended at that point. Number 892 REPRESENTATIVE PORTER stated that rather than suspending a person's drivers license, had anyone considered going after the plates of the offending vehicle. MS. HENSLEY advised members they would rather use the enforcement mechanism on the drivers license, as opposed to the vehicle, because there could be multiple owners of the vehicle, as well as the possibility of placing a hardship on someone that might not be the responsible party in making sure the vehicle was insured. CHAIRMAN GREEN agreed, and stated that what was intended to be an administrative cure, appeared now to be swaying towards a criminal cure. REPRESENTATIVE PORTER expressed that drivers licenses get suspended or revoked all the time, and it did not preclude those people from driving because there was no visual knowledge that could be obtained by revoking someone's drivers license. He stated that if the license plates were taken off the car it would be noticeable, and it was the responsibility of the owner of the car to maintain liability insurance. Representative Porter stated that in terms of actual enforceability and real results, it would take more effort to remove the plates, but they might have a better response to the law. MS. HENSLEY noted that she did not disagree with what Representative Porter was saying; however, with the fiscal impact the division was faced with, she did not believe it would be possible to endeavor that action. REPRESENTATIVE PORTER asked if there was joint ownership of vehicles so both drivers licenses could be taken. MS. HENSLEY advised members that very few people had joint vehicle ownership in the state, that it was "or" language, rather than "and" on the vehicle title or registration. Number 995 REPRESENTATIVE BERKOWITZ asked if Ms. Hensley had any indication as to how many people drove company cars, if and if there would a problem in the context of company cars. MS. HENSLEY expressed that if it was a company car, it would be considered a commercial vehicle. She explained, though, that the provision of the commercial vehicle insurance referred to earlier would not take place unless a vehicle weighed 10,000 pounds or more, and other vehicles, such as rental cars, would fall under the self insurance packet the company would have on file with the division. REPRESENTATIVE BERKOWITZ pointed out that when anyone rents a car the question was always posed as to whether the individual wanted to include insurance on the rental policy. People with rental cars tended to be a little less cautious than if they were driving their own cars, and asked if it would be problematic in that context, and asked if car rental agencies were required to maintain insurance on their rental vehicles. MS. HENSLEY stated that they would be required to maintain insurance on the vehicle through their self insurance policy, whether they pay out a claim on a specific vehicle or not. Number 1091 REPRESENTATIVE ROKEBERG asked if the committee had adopted amendment 1 relating to a moving violation on page 6. CHAIRMAN GREEN responded that it had not been adopted. CHAIRMAN GREEN advised members he had three proposed amendments of which the first could be found on page 6, line 11, to insert a moving violation or following "involved in". He explained that it would allow the officer citing a moving violation to request a showing of proof of insurance. CHAIRMAN GREEN moved Amendment 1. There being no objection, Amendment 1, draft CSHB 95 (JUD), was adopted. CHAIRMAN GREEN moved Amendment 2, page 7, line 20, delete [three] and insert two, and on line 22, delete [45] and insert 15. REPRESENTATIVE ROKEBERG objected for the purpose of discussion. He asked if it was a doable time frame, and in particular changing 45 days to 15 days. MS. HENSLEY expressed that that would be sufficient time. CHAIRMAN GREEN moved to Amend Amendment 2, to insert after "15" the words working days. REPRESENTATIVE BERKOWITZ offered a friendly amendment to change "15" to "21", because the working days concept was difficult from a tabulation point. CHAIRMAN GREEN had no objection to the friendly amendment to his amendment to Amendment 2. Representative Rokeberg withdrew his objection, so Amendment 2 to draft CSHB 95 (JUD) was adopted as amended. CHAIRMAN GREEN moved to adopt Amendment 3, page 8, line 2, to delete [2000] and insert 2002. REPRESENTATIVE CROFT asked if the Chairman wanted to consider the department's suggestion of extending that date to the year 2005. CHAIRMAN GREEN expressed that the reason for keeping the sunset date at 2002 was a compromise between the department's recommendation and what the insurance companies had requested. There being no objection, Amendment 3, draft CSHB 95(JUD) was adopted. REPRESENTATIVE ROKEBERG moved to report CSHB 95(JUD) out of committee with individual recommendations and attached fiscal note. There being no objection, CSHB 95(JUD) was reported out of committee.
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