Legislature(1993 - 1994)

03/30/1994 09:07 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 CHAIRMAN LEMAN brings up SB 365 (GOVERNOR'S OMNIBUS BILL) as the              
 next order of business before the Senate State Affairs Committee.             
 The chairman calls the first witness.                                         
 Number 576                                                                    
 NANCY SLAGLE, Director, Division of Budget Review, Office of                  
 Management & Budget (OMB) states SB 365 would increase fees and               
 reduce expenses wherever practicable in state government.  A                  
 sectional analysis which briefly explains each of the sections was            
 provided to the committee...                                                  
 TAPE 94-21, SIDE B                                                            
 MS SLAGLE says she can either walk the committee through the                  
 sectional analysis or answer specific questions.                              
 Number 581                                                                    
 SENATOR TAYLOR wants to know why non-mutual collateral estoppel               
 against the state is abolished, but is ok against all other                   
 CHAIRMAN LEMAN asks that collateral estoppel be defined.                      
 MS. SLAGLE responds it has to do with a decision that has been made           
 in one district, and whether that decision would apply to a similar           
 case in another district.  Ms. Slagle states it is her                        
 understanding that the Department of Law believes disallowing non-            
 mutual collateral estoppel against the state could be an extensive            
 cost-saving measure.                                                          
 CHAIRMAN LEMAN asks if there is anyone from the Department of Law             
 present who could speak to the question.                                      
 Number 557                                                                    
 MARGOT KNUTH, Assistant Attorney General, Criminal Division,                  
 Department of Law states the Civil Division in the Department of              
 Law is involved in this issue as well, and it would probably be               
 good for the committee to hear from someone in that division as               
 MS. KNUTH replies, in answer to Senator Taylor's question, the                
 state is probably the one party involved in the greatest number of            
 lawsuits throughout the State of Alaska.  The state loses a number            
 of cases, and the way the state decides whether or not to appeal a            
 case is if it can live with the decision in that particular case.             
 There are all sorts of adverse decisions against the state which              
 the state does not feel it is important to appeal.  It may be a               
 small case, or perhaps the state even feels that the right result             
 for that individual was reached in that decision.  Probably under             
 appeal, it would be concluded that the legal analysis by the court            
 was unsound.  But if the state needs to appeal every adverse                  
 decision, even in the smallest case, because the state would not be           
 able to live with that decision being applied to a different,                 
 perhaps multi-million dollar case, would cause the state's                    
 litigation to skyrocket.  The state would need a lot more                     
 attorneys, both in the civil side and the criminal side.  The State           
 of Alaska is uniquely situated; there is no other party in the                
 State of Alaska sued as often as the state.                                   
 Number 538                                                                    
 CHAIRMAN LEMAN asks Ms. Knuth about the language in SB 365                    
 overriding the decision of the court in the State v. UCIDA (United            
 Cook Inlet Drift Association) and what would be the effect of that.           
 MS. KNUTH responds she is vaguely familiar with that case.  It was            
 a supreme court decision that said the court was now going to start           
 applying collateral estoppel against the State of Alaska.  She does           
 not recall the specifics of the case, but could have someone from             
 the Civil Division available for the committee.                               
 Number 532                                                                    
 SENATOR TAYLOR states collateral estoppel is not a new doctrine,              
 but merely a new application by the supreme court of collateral               
 estoppel.  He states there must be a lot of commonality between two           
 cases for collateral estoppel to be applied to the present case.              
 Number 519                                                                    
 MS. KNUTH replies that is exactly the problem that was created by             
 Number 512                                                                    
 CHAIRMAN LEMAN asks what section 14, extending temporary vehicle              
 permits from 30 days to 60 days, would accomplish.                            
 Number 505                                                                    
 JUANITA HENSLEY, Chief, Driver Services, Division of Motor                    
 Vehicles, Department of Public Safety says section 14 would allow             
 the department to issue 60 day temporary vehicle licenses.  The               
 reason for this is many times people aren't able to get title to              
 the car within 30 days.  This keeps that person from having to come           
 back in to get a second 30 day permit when the first expires.                 
 Number 490                                                                    
 SENATOR TAYLOR asks about the section that would repeal the statute           
 relating to proof of motor vehicle liability insurance in the case            
 of an accident; why would we want to repeal that statute.                     
 Number 484                                                                    
 SENATOR DONLEY notes that sections 18 through 26 deal with motor              
 vehicle liability insurance.                                                  
 Number 480                                                                    
 MS. HENSLEY responds section 18 increases the amount of damage from           
 500$ to 1500$.  The information the department has received from              
 the insurance industry and the Division of Insurance indicates the            
 average claim is about 1600$.  Police departments are not able to             
 investigate minor property damage accidents due to budgetary                  
 constraints.  Section 18 would simply increase the dollar amount              
 required to be reported.                                                      
 Number 465                                                                    
 SENATOR TAYLOR comments what this section would do is raise the               
 ceiling of when an accident would have to be reported.                        
 Number 458                                                                    
 MS. HENSLEY states people driving without insurance would have                
 their driver's licenses suspended if they were in an accident with            
 a damage total of over 1500$, instead of a limit of 500$.                     
 Number 450                                                                    
 SENATOR TAYLOR says part of what the state is trying to pick up               
 with mandatory reporting of accidents with damage of 500$ or over             
 is people driving with suspended or revoked driver's licenses.                
 CHAIRMAN LEMAN comments that simply scratching the finish on a car            
 can cost 1500$.                                                               
 MS. HENSLEY says that is very true, and sometimes breaking a tail             
 light on a car can be 1500$.                                                  
 Number 429                                                                    
 SENATOR DONLEY states that at the time mandatory auto insurance               
 legislation was passed, there was a decision made not to require              
 proof of insurance up front.  One of the selling points for that              
 was to raise registration fees to pay for a program where people              
 would have to show proof of insurance if they were in an accident.            
 It was a "check" to make sure people were getting insurance.  If we           
 now weaken the "check" we have, it removes one of the arguments for           
 not having proof up front.                                                    
 Number 417                                                                    
 CHAIRMAN LEMAN asks Ms. Hensley how many more accidents would slip            
 through the system if the state changes from mandatory reporting              
 for accidents from 500$ damage to 1500$ damage.                               
 Number 414                                                                    
 MS. HENSLEY replies she really does not have that information.                
 Number 410                                                                    
 SENATOR TAYLOR says he would like to get back to public safety                
 concerns.  He is concerned with section 43 because it would repeal            
 that portion relating to proof of motor vehicle liability insurance           
 in the case of an accident.                                                   
 Number 405                                                                    
 MS. HENSLEY states that is not correct.  The repealer section in AS           
 28.22.041 would allow a person to come back within a period of time           
 and submit proof that they purchased insurance after the fact.  Ms.           
 Hensley says she would have to read the statute to explain exactly            
 what it would do, but it does not repeal the mandatory insurance              
 law at all.  It just takes out one paragraph which is a loophole.             
 SENATOR DONLEY says he did not understand that explanation at all.            
 SENATOR TAYLOR says he was confused too.                                      
 Number 395                                                                    
 MS. SLAGLE responds that section 23 and 24 of SB 365 deal with the            
 sections concerning proof of motor vehicle liability insurance.               
 Those sections are not repealed from statute.                                 
 SENATOR DONLEY asks why AS 28.10.108 (b) should be deleted.                   
 MS. HENSLEY replies AS 28.10.108 (b) deals with allowing commercial           
 vehicles to have a rotating registration period, as do private                
 CHAIRMAN LEMAN notes that the committee is operating with time                
 constraints today, and asks that members perhaps review their                 
 concerns about SB 365 between today and next Wednesday.                       
 Number 374                                                                    
 SENATOR TAYLOR says that he will just list his concerns for the               
 department and they can then be taken up Wednesday.  He has a                 
 significant concern with section 12, which would change the method            
 of notification for cancellation, suspension, or revocation of                
 driver's licenses from certified mail to first class mail.  He                
 thinks police officers should go out and personally serve the                 
 notices and cut the license plates off the damn car at the same               
 time.  By not sending the letter certified mail, the state cannot             
 even prove in court that the notice was received.                             
 SENATOR TAYLOR's second concern is all the additional fees that the           
 Department of Public Safety is asking for.  He wants to know how              
 the department is currently handling SR22's.  Who is responsible              
 for maintaining those records?                                                
 Number 334                                                                    
 MS. HENSLEY replies the Department of Public Safety is basically              
 not going to change any of the operation of how SR22's are handled,           
 or how suspension of driver's licenses for uninsured motorists are            
 handled.  The only thing changing, is the department will not be              
 issuing suspension notices for those individuals involved in                  
 accidents where the damages are between 500$ and 1,500$.                      
 MS. HENSLEY states the mandatory insurance law has worked.  Before            
 the law, the uninsured motorist rate was about 21%.  In 1985, that            
 rate went down to 7.7%.  It has slowly risen over the years, and is           
 now at about 11.9%.  The department has not been excluded from the            
 budget cuts of the last several years, and has fewer employees                
 today.  One of the things the committee should be aware of is that            
 the house budget caps have cut out the financial responsibility               
 program entirely from the department's budget.  If that budget goes           
 through, the Department of Public Safety will not be suspending any           
 driver's licenses for failure to prove financial responsibility.              
 Number 311                                                                    
 SENATOR TAYLOR asks Ms. Hensley what happened to the revenue stream           
 created in 1985 by the mandatory insurance laws.  That revenue                
 stream was intended to support those positions.                               
 MS. HENSLEY responds the Division of Motor Vehicles brings 29                 
 million dollars per year to the general fund, while at the same               
 time receiving a budget of 7.9 million dollars.  That money goes to           
 the general fund and is not coming back to DMV.                               
 SENATOR TAYLOR asks if Ms. Hensley knows why that money is not                
 coming back to DMV.  He asks, if we add all these new fees, won't             
 they also go into the general fund?  Senator Taylor says he is                
 fascinated to hear that is what is happening to DPS's budget on the           
 house side, and he will do what he can to correct that.                       
 Number 277                                                                    
 CHAIRMAN LEMAN asks personnel from DEC to be prepared to address              
 the committee regarding the section of SB 365 that relates to them            
 at Wednesday's hearing.  The chairman announces that, in the                  
 interest of time, the committee will hold SB 365 until Wednesday's            

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