Legislature(2001 - 2002)
03/28/2001 03:25 PM House L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 67-MOTOR VEHICLE REGISTRATION/INSURANCE [Contains references to HB 68 and HB 39.] TAPE 01-41, SIDE B Number 2428 CHAIR MURKOWSKI announced that the committee would hear HOUSE BILL NO. 67, "An Act requiring proof of motor vehicle insurance in order to register a motor vehicle; and relating to motor vehicle liability insurance for taxicabs." REPRESENTATIVE ROKEBERG, speaking as the sponsor of HB 67, stated that the bill has a companion bill, HB 68, which is a "no civil liability for taxis transporting drunks or the tipsy-taxi bill." He said it allows a taxi company to provide two drivers to drive a patron and his or her car home. Many people don't want to take a cab home, he said, because leaving a car at the establishment would [put it in jeopardy] of being vandalized. REPRESENTATIVE ROKEBERG explained that during exploration of that issue, the discovery was made that there is no requirement for taxi cab companies to have any liability insurance in [Alaska], which would be considered a necessity if one is going to be transporting anyone. Therefore, this separate bill was introduced. And he said he'd had the idea of requiring further proof of insurance at the point of registration, similar to HB 39, which is in the bill and has caused there to be a large fiscal note. Number 2348 JANET SEITZ, Staff to Representative Norman Rokeberg, Alaska State Legislature, explained that HB 67 includes the statement, "The ... Division of Motor Vehicles shall refuse to register a vehicle if [the] applicant fails to provide evidence satisfactory that the applicant has motor vehicle insurance." There are a lot of drivers out there who don't have motor vehicle insurance. She said she served on the driving-under- the-influence (DUI) taskforce in Anchorage, and the taskforce discussed proof of insurance for cars registered in Alaska. This [bill] is an attempt to move in that direction, she explained. MS. SEITZ commented that the rest of the bill deals with taxicab liabilities. There are some local governments and municipalities that have minimums for taxicab policies, which she included in the committee's packet. There is nothing contained in the bill that would interfere with the ability of a local government/municipality to set a higher standard for operators. Number 2287 REPRESENTATIVE ROKEBERG added that this was done because of the "single-subject rule," so there had to be two different bills. MS. SEITZ concurred and said the drafters advised against having the taxicab insurance requirements and the civil liability coverage exemption in the same bill. CHAIR MURKOWSKI referred to the sponsor statement. There is mention of developing an electronic notification system in the event that the insured goes out and gets registration for the vehicle, and then cancels it after-the-fact. She asked if this was included as a part of the fiscal note and how that system would work. MS. SEITZ deferred the question to Mary Marshburn of the Division of Motor Vehicles (DMV), but said it was the intention that with the [available] technology, a notice could be sent out from an insurance company when a person canceled coverage. CHAIR MURKOWSKI asked if it would be required that the state be notified when insurance is canceled. MS. SEITZ remarked that this was the hope. She said the bill just says that a person has to provide proof that he or she has insurance to register the automobile. Number 2225 REPRESENTATIVE HALCRO referred to page 2 of the fiscal note from the DMV. He said the only effective way to implement this would be by having constant communication with the insurance companies, which would cost $2 per vehicle, equating to $1.4 million per year. This, he said, is obviously not covered in the fiscal note. REPRESENTATIVE HALCRO said he has had discussions with Mary Marshburn regarding this same thing. He said constituents had contacted him complaining about uninsured motorist insurance. He and Ms. Marshburn had similar discussions about the automatic notification [system], and Ms. Marshburn relayed the same cost to him. Number 2173 CHAIR MURKOWSKI referred to Section 1 of the bill, the requirement to register the vehicle. Is there a rural exemption available for registration of the vehicle, she asked, as opposed to insurance? MARY MARSHBURN, Director, Division of Motor Vehicles, Department of Administration, via teleconference, clarified that there is an exemption for rural areas not connected to a highway system, or those areas with an average vehicular traffic count of less than 499 for registration of a vehicle. A vehicle is only covered by mandatory insurance if it is subject to registration. When asked how [Section 1] might affect that, she said it wouldn't because if the vehicle isn't required to be registered, it would have no effect on those vehicles. Number 2121 REPRESENTATIVE HALCRO asked the sponsor if he'd spoken to the Alaskan Automobile Dealers Association or to financial institutions that register vehicles about the [possible] impact on business. He also asked if there had been discussion with any outside groups that provide the service that allows people to forgo a trip to the DMV when a car is purchased. MS. SEITZ replied in the negative; however, she noted that when she recently purchased a car, she had to provide her financial institution with a binder showing coverage or that coverage was being sought through an insurance company and that [the insurance company] would notify [the car dealer] if coverage was canceled. REPRESENTATIVE HALCRO said he, too, went through the process recently. He went to the credit union and filled out the forms, the car was registered, then a month later the credit union sent him a letter saying a copy of his insurance binder hadn't been received yet, although he already had a copy of the registration at his home. He said if there is no lien holder when a person goes to a dealer, and if the car is registered there, a person might fall through the cracks if the onus isn't put on the seller of the car. Number 2032 REPRESENTATIVE ROKEBERG said the notice should be on the person registering. He said he appreciates [hearing about that] because this does occur. The DMV's lack of proper computer systems is causing a huge dislocation and is a matter of public safety in the state, and he added that it is almost reaching critical proportions. There is a public outcry, he remarked. CHAIR MURKOWSKI referred to [requiring] mandatory insurance for taxicabs, and asked if the [taxi drivers] are having any problems with what is being proposed. MS. SEITZ commented that [Representative Rokeberg's office sent out notices], but hadn't heard anything back. Number 1984 REPRESENTATIVE MEYER said anytime the Anchorage Assembly brought up anything to do with taxicabs, [the taxi drivers] came out in "hordes." He said he is surprised that the committee isn't hearing anything; however, maybe the [cab drivers] in Anchorage already have the insurance and are all right with it. On the local level they watch ordinances closely, he remarked. MS. SEITZ pointed out that the minimums established in the bill don't interfere with local ordinances, and are, for the most part, less than what most [communities] have anyway. In Anchorage, for example, [a taxicab diver] would be required to carry insurance under the local ordinance that is higher than what is required in the proposed bill. Number 1930 CHAIR MURKOWSKI mentioned that the sponsor had provided the committee with the ordinances from Anchorage, Fairbanks, and Juneau. She asked if [ordinances] were available for other communities such as Kenai or Ketchikan. MS. SEITZ stated that Kenai's [ordinances] are online; however, there was no reference to insurance provisions for taxicab operators. REPRESENTATIVE ROKEBERG said the committee could separate that [portion] and delete the first section [of the bill]; it could be taken up as a committee bill, he said, because it is a huge issue that deserves consideration by this committee. REPRESENTATIVE MEYER mentioned requiring that everyone have insurance, which is currently the law, and then requiring that the state patrol or local police ask for proof every time they pull someone over. If a person didn't have insurance, he said, then he or she would get a "fix-it" ticket and would have five days to get insurance; if the person didn't comply, then there would be a $200 or $300 fine. REPRESENTATIVE ROKEBERG said he is more concerned about [drivers] having insurance when in an automobile accident and harming innocent citizens, because it raises the underinsured or uninsured motorist premiums on all policies. He said this is going to cost millions of dollars to really do anything about it; the fiscal note is $1.7 million, which doesn't include having the troopers out busting people for failure to have insurance. REPRESENTATIVE ROKEBERG said [the legislature] is losing credibility in the public's eye by not being able to make this enforceable. He asked Ms. Marshburn about the car registration process and proof of insurance. Number 1761 MS. MARSHBURN replied that the state requires that the individual registering a vehicle affirm that the necessary policy is in place and will continue as long as the vehicle is registered and used. This allows the electronic venues to be used for registration, and doesn't impose a burden on the [emission inspection] (IM) stations and car dealerships that also register vehicles. The majority of people are law-abiding, she said. The national average for uninsured motorists is about 15 percent, and Alaska was below that last year at 14 percent; she added that it has been as high as 20 percent and is trending downward. MS. MARSHBURN said the most effective way of dealing with the mandatory insurance issue is through electronic verification. Requiring a binder or paper proof of insurance is really no proof at all. A person could obtain a binder and have a card from the insurance company in the car saying that there is coverage for the next year, when, in truth, that person hadn't paid the premium. That is not an effective method of providing proof of coverage, she emphasized. MS. MARSHBURN pointed out that she thought there was merit to considering Representative Meyer's suggestion. She explained that from the standpoint of raising public [awareness], a person needs to carry proof, and to make sure that the insurance is in effect. Requiring that it be carried in a vehicle would be good, with noncompliance resulting in a "fix-it" ticket or a fine. Number 1639 MS. MARSHBURN said short of electronic verification, there really is no good way to significantly reduce [the number of people who don't carry the] mandatory insurance. REPRESENTATIVE HALCRO said he and Ms. Marshburn had discussed the needs of her department overall. He said for a $5 or $6 "bump" in the cost of renewing a driver's license, or $5 for the license and $2 additional for one's vehicle, [Alaska] could implement and pay for the technology necessary to [realize] some of these ideas. MS. MARSHBURN explained that the driver's license is a five-year license that costs $15; either a digital-license-technology fee or an additional fee could be added to help get an electronic verification system for "MI [IM]." Number 1541 REPRESENTATIVE HALCRO said he is concerned about passing legislation that puts an additional burden on the DMV without passing the cost along to the user because [the DMV office] is currently maintaining numerous vacancies. MS. MARSHBURN reported that there are now 21 vacancies held vacant. [Alaska] is just shy of 500,000 drivers, with 742,260 registered vehicles in the state. MS. MARSHBURN, when asked what the cost is for [vehicle] registration, she replied that for a run-of-the-mill passenger vehicle the fee is $68 plus any applicable motor vehicle registration tax if within a municipality where [the DMV] collects the tax - Anchorage or Fairbanks. It is $68 every two years [for a car], and $158 for a commercial vehicle. REPRESENTATIVE HALCRO asked what percentage gets "kicked back" to the community where the car is registered. Number 1460 MS. MARSHBURN responded that the motor-vehicle tax goes back to the community. The division collects about $45 million a year total, including driver's license and registration [fees], and [the DMV] returns about $10 million in taxes to the municipalities in Alaska. REPRESENTATIVE HALCRO asked why the $10 million is rebated. MS. MARSHBURN said the motor vehicle registration tax is a tax that the state collects as the property tax on vehicles. A municipality can elect to have the state collect that tax, and that is done for 14 municipalities. Number 1400 REPRESENTATIVE ROKEBERG asked for clarification that the $45 million includes the ad valorem tax. MS. MARSHBURN responded affirmatively. She said $35 million goes into the general fund, and about $10 million is returned to the municipalities. Responding to a question about how many [staff] work at the DMV with 21 current vacancies, she responded that there are not many. When asked why there are so many vacancies, she responded that it has to do with the boat registration program and supplemental funding, and also the fact that [the DMV] only collected revenue for part of this year, and had a large program startup cost. She said [the DMV] only collects for the boat registration program and had a full year of costs, because the bill passed at the end of the last legislative session and was implemented on January 1 [2001]. So [the DMV] only collected revenue from January 1 onward, she remarked, and people don't really register boats until the water thaws. REPRESENTATIVE KOTT asked Ms. Marshburn how the proof of insurance applies to those private sector vendors who currently issue tags, and asked how it would work with the mail-in system. Number 1335 MS. MARSHBURN replied that there are two ways that it can happen. One way would be to have the dealers and the IM stations that register vehicles either require proof of a binder before completing the sale and registering the vehicle, or have a sign which states that the vehicle can't be registered until the individual can furnish proof of insurance; the dealer would push that responsibility off onto the DMV. The dealer would complete the sale, bundle the paperwork, and send it to DMV and it would be up to the DMV to refuse the sale if there were no proof of insurance. MS. MARSHBURN explained that the Web and the interactive voice response (IVR) are completely automated. She said the DMV would have to require the individual to mail in proof of registration and then do a physical match-up in-house on the registration and proof of insurance. She said it is something that she doesn't even want to think about in terms of the volume, trying to do a match-up, and then scanning the proof of insurance or reviewing the person's insurance to make sure that it meets the requirements of the law. MS. MARSHBURN said [the DMV] would probably discontinue the electronic venues at that point and just bring all of those transactions in-house if a "live body" has to be inserted. Number 1234 REPRESENTATIVE HALCRO asked if the fee for a driver's license is set in statute or is set by regulation. MS. MARSHBURN replied that it is set in statute, as are all of the fees from the DMV. Number 1113 REPRESENTATIVE ROKEBERG reiterated that this is a serious issue that needs to be investigated. He said the fix-it ticket might have some value, although he wasn't sure what the cost would be. It is illegal now, he said, so why don't "they" bust people now? REPRESENTATIVE KOTT asked Ms. Marshburn if other states are doing what [Alaska] is contemplating. MS. MARSHBURN replied that some states do require proof of insurance; however, uniformly, the reply from other states has been that it is not effective. Second, the law only requires proof of insurance to be shown if a person is in an accident; right now the law requires that the vehicle be covered, but it doesn't require a person to carry or show that proof of insurance. CHAIR MURKOWSKI asked if a person, when being stopped for having a taillight out, for example, couldn't be asked for proof of insurance at that time. MS. MARSHBURN answered affirmatively. She said [the police/trooper] can ask for it, but there is currently no requirement that it be carried and furnished in law now, so there is no way to cite for it. Number 0994 REPRESENTATIVE KOTT said when a person is in an accident, and it is reported to the state, a form is filled out and the person has to indicate insurance coverage at that time; if a person wasn't insured, he asked, what would be the penalty? MS. MARSHBURN commented that when the officer cites a person, he or she gives the person forms that need to be completed and returned to the division. When the forms come into the division, a person supplies some insurance information such as who the carrier is, what the [policy] number is, and so forth. [The DMV] audits every third one of those via the insurance company to verify that the individual is telling the truth. If a person is in violation of the law, then the license is suspended for failure to have the vehicle covered, and the first suspension is for 90 days. MS. MARSHBURN said the municipalities could decide to require that proof of insurance be carried in the vehicle, and she thought Anchorage was contemplating that. Number 0881 REPRESENTATIVE HALCRO asked when the driver's license fee was last raised. MS. MARSHBURN said probably ten years ago, in 1991. REPRESENTATIVE HALCRO said it appeared there was an amendment effective July 3, 1991. REPRESENTATIVE HAYES explained that in the military, to get on post, a person has to have the insurance information in the car, because proof of insurance is asked for. It wouldn't be much of a stretch for the cities, he remarked, because they are already doing it in the military. REPRESENTATIVE KOTT commented that there is a requirement to show proof of insurance when the vehicle is registered, but the military police in stopping and citing people for traffic violations on the post or base don't ask for proof of insurance; they just want to see the driver's license. Number 0764 CHAIR MURKOWSKI remarked that she wasn't sure that there were any easy fixes. [The committee] could do one of two things: separate this out and send on the taxicab insurance [portion], or work through an active subcommittee to figure out if there is a way to address it. She asked for clarification that the only thing that can work is an electronic format to track things. MS. MARSHBURN answered affirmatively. She reiterated that a person could bring in proof of insurance. However, it could have been canceled that morning; a piece of paper is not proof that the policy is in effect. If [the DMV] has the ability to electronically link [up with] the insurance companies, then the data would be much more accurate. Number 0672 REPRESENTATIVE ROKEBERG said there is a huge fiscal note, and the "poor" DMV has a manpower shortage; Ms. Marshburn notes that it would be an additional two minutes per transaction, which causes four and a half extra state positions. If there is a "fix-it" ticket written for failure to provide proof of insurance, how come it isn't necessary to register the vehicle? It shouldn't be a burden to dealers because they require it before releasing a car, or at least require a binder. Number 0611 REPRESENTATIVE HALCRO said if a person goes into a car dealership on Saturday looking for a car and does the transaction, that person may or may not finance through the dealership. All of the loan paperwork would be done there, but there is no way that an insurance agent can be accessed. State law says that a person is covered for 30 days if there is insurance. It is the customer's responsibility or the lien holder's responsibility; if someone comes in and says he or she has insurance, "we" take their word for it if the car has been paid for. And, in the case of the lien holder, "we" already procure a security agreement or some kind of written contract with the financial institution. The credit union gives the person 30 days to let them know when the insurance is received; "they" do the DMV work, and the person gets the title and copy of registration in the mail. If proof of insurance isn't provided within two week, [the company] may be forced to go out and get the person insurance and then bill him or her for it because [the company] wants to protect its collateral. Number 0449 REPRESENTATIVE ROKEBERG said [the legislature] is not going to disrupt commerce by adopting this provision, because it is going to be accommodated for anyway. REPRESENTATIVE HALCRO pointed out that many people sell their cars through the newspaper. After being paid for the car, the person selling the car doesn't care whether the purchaser has insurance. REPRESENTATIVE KOTT said when renting a car, there is no guarantee [that a person has insurance], if he or she is waiving the car-rental insurance. REPRESENTATIVE ROKEBERG said the title could be changed and the car reregistered. The bill says that a person would have to fill out proof of insurance there. The secondary market is not affected at all, he remarked. REPRESENTATIVE KOTT said if [the legislature] is trying to get those uninsured motorists off the roads, in that particular scenario they are going to be driving until they go down and register that vehicle so, "You are not going to get them." He said getting to this problem in its entirety couldn't be done; the only way to get to the problem is if $1.3 million is funded. This is why, he said, after talking to Ms. Marshburn, he opted not to pursue that course of action in the other bill. Number 0340 REPRESENTATIVE KOTT made a motion to amend the bill by removing Section 1. REPRESENTATIVE HALCRO said the problem could be that a person could pay the insurance company for a month, go down to the DMV and register the car, and then fail to pay the bill when it comes in a month, but the person would still have the card that the insurance company sent. He said the only real way to address the problem is by investing in the technology that allows the DMV to be in constant communication with various insurance companies that would give automatic notification if insurance lapses or is canceled. He said if he were an insurance company in the state, that is something that he would want to be onboard with, because the fewer people driving around without insurance, the better off clients are going to be. Number 0248 REPRESENTATIVE ROKEBERG said he didn't objected to the motion to amend the bill. He suggested that the long-term policy committee raise the fees so digital licenses can become a reality. REPRESENTATIVE ROKEBERG said the DMV's [information technology] needs to be [improved] because it doesn't work and is affecting public safety. REPRESENTATIVE HAYES said for a public policy call, he doesn't think that it is a bad bill, even with that section. He suggested that if the House Finance Committee wants to pull a section, that is fine. The reality of the situation, he remarked, is pay now or pay later. Number 0046 REPRESENTATIVE HALCRO asked for verification that the concern from the Division of Legislative Legal and Research Services was that of the single-subject rule, [that the two bill subjects] have to be split up regardless. REPRESENTATIVE ROKEBERG said he is trying to [raise awareness] of the problem. REPRESENTATIVE CRAWFORD commented that it is a good public policy, and he said [the bill] should be moved as it is. REPRESENTATIVE KOTT reaffirmed that he was going to continue to offer his amendment. TAPE 01-42, SIDE A Number 0067 REPRESENTATIVE KOTT said if the bill passes this year, it would take another year for the system to "come onboard" with the technology and so forth. REPRESENTATIVE MEYER stated that Ms. Marshburn had mentioned that 14 percent of the drivers don't have insurance. If [that amount was dropped down to] 4 percent, would that reduce everyone's insurance rates in the state, he asked. By spending some money here, he said, will a rebate be given back to constituents through lower insurance rates? REPRESENTATIVE HALCRO remarked that the only way that the rate of [uninsured motorists] is known is from the number of traffic accidents and the number of people involved, and then that is broken out into the percentage of people who don't have insurance. If a person were wondering if that would equate to an across-the-board decrease in uninsured motorist rates, a person would have to be able to make sure that everyone was "lifted" up. It would come down to the insurance companies making more money, thereby lowering rates and giving it back to policyholders. Number 0184 REPRESENTATIVE KOTT asked Ms. Marshburn if that percentage [14 percent for uninsured motorists] includes those rural communities that don't require vehicle registration. MS. MARSHBURN answered affirmatively. She said if [a vehicle] is not required to be registered, [the vehicle owner] is not subject to the mandatory insurance (MI) provision. REPRESENTATIVE HALCRO asked Ms. Marshburn if he is making a correct assertion in saying that 11 or 14 percent of people in accidents don't have insurance, and that percentage doesn't cover those who are driving around without insurance that never get in accidents. MS. MARSHBURN replied affirmatively. She said an assumption can be made that the percentage of uninsured motorists in the state can be somewhat inflated because it is the irresponsible drivers who drive without insurance; however, that is purely subjective, and there is no way to really assess that. If that is the case, then there are more law-abiding drivers. She reiterated that this bill is trying to do something that is truly effective in reducing the MI rate. The division doesn't believe that requiring paper proof of insurance is effective, she reiterated, and the money that the DMV has described as necessary to implement this would be better used on a more effective solution. Number 0352 CHAIR MURKOWSKI suggested that Ms. Marshburn is saying, then that if this [legislation] were to pass with this section in place, with the fiscal note attached, [the legislature] would be throwing good money after bad because an effective policy is not being implemented. She asked whether the recommendation from Ms. Marshburn is that [the legislature] not do it, if it can't be effective. MS. MARSHBURN remarked that this is correct. REPRESENTATIVE KOTT said maybe this is more of an issue for the insurance companies; if [insurers] required drivers to post whatever the requirements are for their policy for a period of two years and wouldn't cancel [a policy] under any circumstances, then a person would have insurance. He said if Representatives Halcro, Rokeberg, and Meyer would like to meet with the division during the interim, he would be happy to sit in on a meeting or two. Number 0480 REPRESENTATIVE HAYES objected to the amendment [deleting Section 1]. A roll call vote was taken. Representatives Halcro, Kott, Crawford, and Murkowski voted in favor of adopting the amendment. Representatives Meyer, Hayes, and Rokeberg voted against it. Therefore, the amendment was adopted by a vote of 4-3. REPRESENTATIVE KOTT made a motion to move HB 67 [as amended] out of committee with individual recommendations and the attached fiscal note. Number 0667 MS. MARSHBURN commented that the fiscal note is $314,000 and that she would rather put that money towards an electronic verification system. She clarified that she hadn't commented about local option, but said it is one way of raising the profile on the need to carry insurance. REPRESENTATIVE HALCRO said he voted for [the amendment] because [the legislature] is going to have to do it sooner or later; however, it was his understanding that because of the single- subject rule, this bill wasn't going to be able to go anywhere. REPRESENTATIVE ROKEBERG stated that he has another bill. And, when asked about having two subjects in the same bill, he responded that both are insurance [issues]. Number 0773 CHAIR MURKOWSKI announced that there had been a motion to move HB 67 as amended from committee with individual recommendations. She added that there would be a new fiscal note. There being no objection, CSHB 67(L&C) moved out of the House Labor and Commerce Standing Committee. CHAIR MURKOWSKI noted that there had been some discussion about what needed to be done, and the need for more money to do it right. She said it is something that this committee should look at during the interim. Number 0806 MS. MARSHBURN, when asked to confirm that without Section 1, the bill now carries a zero fiscal note, responded, "It does indeed." [CSHB 67(L&C) was moved out of the committee.]
| Document Name | Date/Time | Subjects |
|---|