Legislature(1997 - 1998)

02/26/1997 01:10 PM House TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
            HOUSE TRANSPORTATION STANDING COMMITTEE                            
                       February 26, 1997                                       
                           1:10 p.m.¶                                          
 MEMBERS PRESENT                                                               
 Representative Bill Williams, Chairman                                        
 Representative Beverly Masek, Vice Chairman                                   
 Representative John Cowdery                                                   
 Representative Bill Hudson                                                    
 Representative Jerry Sanders                                                  
 Representative Kim Elton                                                      
 Representative Al Kookesh                                                     
 MEMBERS ABSENT                                                                
 All members present                                                           
 COMMITTEE CALENDAR                                                            
 HOUSE BILL NO. 63                                                             
 "An Act extending the motor fuel tax exemption for fuel sold for              
 use in jet propulsion aircraft to fuel used in those aircraft for             
 flights that continue from a foreign country; and providing for an            
 effective date."                                                              
      - MOVED CSHB 63(TRA) OUT OF COMMITTEE                                    
 HOUSE BILL NO. 95                                                             
 "An Act relating to motor vehicle registration, licensing, and                
 insurance; and providing for an effective date."                              
      - MOVED CSHB 95(TRA) OUT OF COMMITTEE                                    
 (* First public hearing)                                                      
 PREVIOUS ACTION                                                               
 BILL:  HB 63                                                                
 SHORT TITLE: AVIATION FUEL TAX EXEMPTION                                      
 SPONSOR(S): REPRESENTATIVE(S) THERRIAULT, Davies, Kelly, Brice                
 JRN-DATE      JRN-PG             ACTION                                       
 01/13/97        48    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/13/97        48    (H)   TRANSPORTATION, FINANCE                           
 01/22/97       126    (H)   COSPONSOR(S): DAVIES                              
 02/12/97              (H)   TRA AT 1:00 PM CAPITOL 17                         
 02/12/97              (H)   MINUTE(TRA)                                       
 02/12/97       325    (H)   COSPONSOR(S): KELLY                               
 02/17/97              (H)   TRA AT 1:00 PM CAPITOL 17                         
 02/18/97       388    (H)   COSPONSOR(S): BRICE                               
 02/24/97              (H)   TRA AT 1:00 PM CAPITOL 17                         
 02/24/97              (H)   MINUTE(TRA)                                       
 BILL:  HB 95                                                                
 SPONSOR(S): REPRESENTATIVE(S) GREEN, Bunde, Rokeberg, Cowdery                 
 JRN-DATE      JRN-PG             ACTION                                       
 01/29/97       168    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/29/97       168    (H)   TRANSPORTATION, JUDICIARY                         
 02/05/97       252    (H)   COSPONSOR(S): BUNDE                               
 02/10/97       297    (H)   COSPONSOR(S): ROKEBERG                            
 02/19/97              (H)   TRA AT 1:00 PM CAPITOL 17                         
 02/19/97              (H)   MINUTE(TRA)                                       
 02/21/97       429    (H)   COSPONSOR(S): COWDERY                             
 WITNESS REGISTER                                                              
 REPRESENTATIVE GENE THERRIAULT                                                
 Alaska State Legislature                                                      
 Capitol Building, Room 511                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-4797                                                    
 POSITION STATEMENT:  Presented HB 63.                                         
 MARK NECESSARY, Senior Vice President                                         
 P.O. Box 3369                                                                 
 Kenai, Alaska  99611                                                          
 Telephone:  (907) 776-8191                                                    
 POSITION STATEMENT:  Testified in support of HB 63.                           
 BOB BARTHOLOMEW, Deputy Director                                              
 Income and Excise Audit Division                                              
 Department of Revenue                                                         
 P.O. Box 110420                                                               
 Juneau, Alaska  99811                                                         
 Telephone:  (907) 465-2320                                                    
 POSITION STATEMENT:  Testified on HB 63.                                      
 JUANITA HENSLEY, Chief Driver Services                                        
 Office of the Commissioner                                                    
 Department of Public Safety                                                   
 P.O. Box 20020                                                                
 Juneau, Alaska  99501                                                         
 Telephone:  (907) 465-4361                                                    
 POSITION STATEMENT:  Testified on CSHB 95.                                    
 MICHAEL LESSMEIER, Attorney                                                   
 State Farm Insurance                                                          
 One Sealaska Plaza, Suite 303                                                 
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 586-5912                                                    
 POSITION STATEMENT:  Testified on CSHB 95.                                    
 KRISTY TIBBLES, Legislative Secretary                                         
    to Representative Joe Green                                                
 Alaska State Legislature                                                      
 Capitol Building, Room 118                                                    
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 465-4931                                                    
 POSITION STATEMENT:  Testified on CSHB 95.                                    
 ACTION NARRATIVE                                                              
 TAPE 97-12, SIDE A                                                            
 Number 001                                                                    
 CHAIRMAN BILL WILLIAMS called the House Transportation Standing               
 Committee to order at 1:10 p.m.  Members present at the call to               
 order were Representatives Williams, Masek, Cowdery, Hudson,                  
 Sanders, Elton and Kookesh.                                                   
 HB 63 -  AVIATION FUEL TAX EXEMPTION                                        
 Number 061                                                                    
 CHAIRMAN WILLIAMS announced the first order of business to be HB
 63, "An Act extending the motor fuel tax exemption for fuel sold              
 for use in jet propulsion aircraft to fuel used in those aircraft             
 for flights that continue from a foreign country; and providing for           
 an effective date."                                                           
 Number 153                                                                    
 REPRESENTATIVE GENE THERRIAULT stated that he would defer to the              
 committees wishes on whether they want to take action on the                  
 original bill or the committee substitute with the marine bunker              
 fuel.  He stated that although a number of years ago the                      
 legislature tried to put an incentive into statute to increase the            
 amount of marine bunker fuel that was sold in the state of Alaska,            
 the Department of Revenue has provided information that the actual            
 amount sold in the state has dropped off significantly.  He stated            
 that in 1996, 99,553 gallons of bunker fuel was sold which derived            
 $5,177 of tax to the state.  He stated that adding marine bunker              
 fuel will not impact the fiscal note very much, but hopefully it              
 will lure sales back into the state of Alaska.  There are a number            
 of cruise ships that come into the state but they are buying their            
 product out of state where they have a tax advantage.                         
 Number 304                                                                    
 REPRESENTATIVE JOHN COWDERY stated that it was his understanding              
 that the bunker fuel or residual oil is also used to make coke in             
 coal.  He asked if there was anything that could be done to enhance           
 the Beluga Coal Fields.                                                       
 Number 407                                                                    
 REPRESENTATIVE THERRIAULT stated that this is the first time he had           
 heard of this and if the committee is uneasy about adding the                 
 bunker fuel onto the bill and would prefer not to,1 that would be             
 Number 453                                                                    
 REPRESENTATIVE KIM ELTON asked why is it limited just to passenger            
 Number 469                                                                    
 REPRESENTATIVE THERRIAULT replied that it is where the potential              
 sales or utilization of this type of fuel is anticipated to come              
 Number 493                                                                    
 REPRESENTATIVE BILL HUDSON asked if we were going to take up the              
 original bill or the committee substitute bill.                               
 Number 507                                                                    
 CHAIRMAN WILLIAMS responded that before the committee is the                  
 original bill and it would be up to the committee members if they             
 want to take up the committee substitute.                                     
 Number 558                                                                    
 MARK NECESSARY, Senior Vice President, Tesoro, stated that Tesoro             
 supports HB 63.  He stated that HB 63 will help Alaskan refiners              
 remain competitive and at this time jet fuel produced outside the             
 state is entitled to the tax exemption.  It will encourage jobs and           
 investment in the state of Alaska.  He stated that recently Tesoro            
 announced the capital budget for 1997 to be $50 million, of which             
 $16 million is allocated to expand the hydrocracker unit at the               
 Kenai refinery which produces jet fuel.  He stated that it is                 
 ironic that Tesoro purchases Alaska crude oil at a premium price              
 then pays tax on a fuel that sells for considerably less than what            
 is paid for the raw material.  He stated that bunker fuel is a                
 residual from the crude oil after the light ends are extracted in             
 the refining process.  He stated that the only market for residual            
 fuel oil in Alaska are asphalt, bunker fuel, fuel for tankers and             
 cruise ships, and re-injection into the Trans-Alaskan Pipeline.  He           
 stated that the intent from Tesoro's prospective is for the bunker            
 fuel amendment to include all tankers.  He stated that the product            
 is currently subject to state fuel marine tax.  He stated that the            
 tax for bunker fuel is 5 cents per gallon.  This tax represents the           
 disproportional amount of cost for the bunker fuel.  He stated that           
 as a result of the current rate of taxation on this product, Alaska           
 bunker fuel oil is overpriced and Alaska producers can't compete              
 with suppliers from outside the state.  He stated that even though            
 many tankers and cruise ships call on Alaskan ports, minimal                  
 quantities of this extremely tax sensitive fuel oil are purchased             
 in Alaska.  He stated that Alaska bunkers contain less sulfur than            
 the average bunker used in Alaska waters.  The Alaska refiner                 
 transports the residual fuel oil to the west coast where it is                
 combined with an inferior bunker fuel that contains a much higher             
 level of sulfur, which is sold to the same vessels calling on                 
 Alaska ports.  He stated that this tax should be eliminated to                
 increase the marketability of a quality, value added Alaska                   
 petroleum product in a very competitive market.  He stated that               
 Tesoro would like to have the opportunity to develop the market for           
 this product.                                                                 
 Number 821                                                                    
 REPRESENTATIVE HUDSON asked what Tesoro's average annual tax on the           
 bunker fuel is and what percentage of the bunker fuel does Tesoro             
 burn to manufacture other products.                                           
 Number 841                                                                    
 MR. NECESSARY stated that Representative Therriault reference to              
 $5,000 being collected in 1996 probably pertains strictly to cruise           
 ships.  The Tesoro Kenai refinery used 130,000 barrels, this past             
 Number 880                                                                    
 REPRESENTATIVE HUDSON asked if you paid $600,000 in taxes, one-               
 third of that would be taxes that are being paid on a product that            
 you are expending yourself.                                                   
 Number 906                                                                    
 REPRESENTATIVE COWDERY referred to his comments earlier regarding             
 residual fuel being used for coking operations in developing coal             
 fields and asked if the residual could be used for those purposes.            
 Number 936                                                                    
 MR. NECESSARY replied that several years ago Tesoro had looked into           
 that and if the market were to develop, that would be a useful                
 market for that material.                                                     
 Number 956                                                                    
 REPRESENTATIVE COWDERY stated that the committee substitute should            
 be addressed.                                                                 
 Number 985                                                                    
 REPRESENTATIVE JERRY SANDERS asked what period of time would $50              
 million be spent on the expansion.                                            
 Number 1005                                                                   
 MR. NECESSARY stated that it would be between now and December 31,            
 Number 1013                                                                   
 REPRESENTATIVE SANDERS asked how many construction jobs this would            
 bring to Alaska and if workers would be brought in from outside               
 Number 1025                                                                   
 MR. NECESSARY replied that the total estimate is about 250                    
 construction jobs, 160 will be allocated to the expansion of the              
 refinery and from that group it is expected to have 98 percent                
 Alaskan hire.                                                                 
 Number 1052                                                                   
 REPRESENTATIVE SANDERS asked if it would primarily increase the jet           
 fuel or would it increase the bunker fuel as well.                            
 Number 1066                                                                   
 MR. NECESSARY stated that it will increase the amount of jet fuel             
 by 1,700 barrels per day.                                                     
 Number 1074                                                                   
 REPRESENTATIVE SANDERS asked that wouldn't it increase the bunker             
 fuel as well, since it is a by-product.                                       
 Number 1081                                                                   
 MR. NECESSARY responded that it will not increase the amount of the           
 heavy material coming through the refinery.  He stated that the               
 unit it would be processed through would be a hydrocracker unit,              
 which cracks the molecule into smaller molecules, which produces              
 jet fuel.                                                                     
 Number 1097                                                                   
 REPRESENTATIVE SANDERS asked who the bunker fuel is sold to.                  
 Number 1107                                                                   
 MR. NECESSARY replied that it is sold to the Liquid and Natural Gas           
 (LNG) Tankers that run between Nikiski and Japan and the rest is              
 for their own tankers.                                                        
 Number 1133                                                                   
 REPRESENTATIVE SANDERS asked that in other words, you are selling             
 this to yourself and paying a tax on it.  He asked if the reason it           
 is bought here is because they can't buy it in Japan.                         
 MR. NECESSARY replied that he could not answer that, but he would             
 presume that is the reason.                                                   
 Number 1148                                                                   
 REPRESENTATIVE SANDERS stated that he would think with their                  
 operations on Sahlalin island it would just be a short period of              
 time until they would be selling it to themselves in Japan and that           
 Tesoro would lose that market too and asked if Tesoro would be the            
 only one in Alaska that is paying the tax.                                    
 MR. NECESSARY replied that is correct.                                        
 Number 1169                                                                   
 REPRESENTATIVE SANDERS stated that he thought the committee                   
 substitute should be addressed.                                               
 Number 1180                                                                   
 REPRESENTATIVE HUDSON asked if someone from revenue could address             
 the dollar amounts, so we would know not just from the industry but           
 also from the agencies.                                                       
 Number 1203                                                                   
 BOB BARTHOLOMEW, Deputy Director, Income and Excise Audit Division,           
 Department of Revenue, stated that the history of bunker fuel sales           
 in 1994 and 1995 equaled $200,000 in revenue.  In 1996 what has               
 been reported as sale of bunker fuel has dropped off considerably.            
 He stated it could be because consumption has dropped off or                  
 because it was netted with other kinds of fuel upon reporting.  He            
 stated that an option that the state took and the department                  
 supported was in 1994, a proposed alternative to the complete                 
 repeal of the tax.  A special act was passed that stated a certain            
 threshold on bunker fuel, which was 4 million gallons and as soon             
 as this was sold the tax was dropped from 5 cents a gallon to 1               
 cent a gallon.  This provided an incentive to sell bunker fuel and            
 the state still received some of the revenue.  He stated that an              
 option would be to extend this option that expires in 1998.  He               
 stated that the 400 million gallons equates to $200,000 dollars in            
 Number 1365                                                                   
 REPRESENTATIVE HUDSON made a motion to adopt CSHB 63, B draft,                
 before the committee.                                                         
 Number 1380                                                                   
 CHAIRMAN WILLIAMS asked if there were any objections.                         
 Number 1386                                                                   
 REPRESENTATIVE ELTON stated that he would object for clarification            
 purposes.  He stated that the draft before us now would only apply            
 to bunker fuel that is sold to passenger watercraft.  He asked if             
 he was correct in sensing that there is some wish to expand that              
 beyond passenger watercraft.                                                  
 Number 1439                                                                   
 REPRESENTATIVE COWDERY stated that it was his intentions to extend            
 it so it would allow development of the Beluga Coal Field, because            
 it is a low yield field and it is one of the largest fields on tide           
 water in the nation, but in order to make it competitive there                
 needs to be a residual of oil.                                                
 Number 1480                                                                   
 REPRESENTATIVE HUDSON stated that he believed the committee                   
 substitute needs to be adopted before it could be amended.                    
 Number 1497                                                                   
 REPRESENTATIVE ELTON stated that he would maintain his objection.             
 Number 1515                                                                   
 CHAIRMAN WILLIAMS called for a roll call vote.  Representatives               
 Cowdery, Kookesh, Hudson, Sanders, Masek and Williams voted in                
 favor of the motion.  Representative Elton voted against motion.              
 Committee Substitute HB 63 was adopted before the committee.                  
 Number 1525                                                                   
 REPRESENTATIVE COWDERY asked the Department of Revenue where it               
 would be appropriate to put the amendment in the bill.                        
 Number 1556                                                                   
 MR. BARTHOLOMEW stated that the department has not been involved in           
 the drafting of the amendment so he would hesitate to comment until           
 he has the intent in writing.                                                 
 REPRESENTATIVE COWDERY stated that maybe the language could be                
 added in the next committee of referral.                                      
 Number 1604                                                                   
 REPRESENTATIVE SANDERS stated that maybe the committee could agree            
 on an conceptual amendment.                                                   
 CHAIRMAN WILLIAMS stated that a memo will be sent along with the              
 Number 1623                                                                   
 REPRESENTATIVE HUDSON stated that if we are going modify or amend             
 the bill then we would have to ask for an amended fiscal note to              
 carry along with it.  He suggested that the committee pass out the            
 bill and attach a letter of intent to the next committee of                   
 Number 1653                                                                   
 REPRESENTATIVE SANDERS stated that if page 2, line 21 had the word            
 passenger eliminated from it would eliminate the need for lines 24            
 through 26.                                                                   
 Number 1684                                                                   
 REPRESENTATIVE ELTON stated that it would not address                         
 Representative Cowdery's concern of the use of this kind of fuel to           
 create a coal slurry.  He stated that the reason he objected to the           
 bill was because he had a sense that the committee would want to go           
 on further.  He would prefer it if it just addressed the problem              
 that was originally presented, this is a last minute change that              
 will lead to further change.  He stated that the committee is                 
 taking a bill that addresses a discreet problem and is trying to              
 fix other things by reducing the revenue that comes to the state at           
 a time when more programs are being taken out.  He stated that it             
 is a problem that Tesoro pays a tax on fuel that they are selling             
 to themselves but beyond that causes problems.  He stated that the            
 committee is making a substantive change that is going to make him            
 rethink his position on the bill.                                             
 Number 1808                                                                   
 CHAIRMAN WILLIAMS stated that this was talked about when the bill             
 was first brought to the committee and the language of the title of           
 the bill was tightened up.  He stated that this should take care of           
 Representative Elton's concern.                                               
 Number 1837                                                                   
 REPRESENTATIVE ELTON stated, "that it does help a lot.  I guess the           
 growth that I see in this bill is I can swallow this bill when it             
 says passenger watercraft.  I might even be able to swallow this              
 bill if it says passenger watercraft and let's not tax somebody               
 selling bunker fuel to themselves.  Going beyond that would be                
 allowed under the title."  He stated that the coking idea for coal            
 may be a great idea and he understands that there could be a                  
 potential problem competing with refineries, that in the future may           
 be placed overseas at which he would then revisit the bill.  He               
 stated he is not comfortable with extending this, in light of a               
 potential problem down the road when it means that we are taking              
 $200,000 out of the general fund.                                             
 Number 1882                                                                   
 REPRESENTATIVE COWDERY stated that he would have no problem moving            
 the bill and working with the sponsor in the next committee of                
 Number 1911                                                                   
 REPRESENTATIVE BEVERLY MASEK made a motion to move CSHB 63(TRA), 0-           
 LS0262\B, Chenoweth, 2/26/97 with the following fiscal notes and              
 individual recommendations.                                                   
 Number 1930                                                                   
 CHAIRMAN WILLIAMS asked if there was an objection.  Hearing none,             
 CSHB 63(TRA) was moved out of the House Transportation Standing               
 HB 95 - MOTOR VEHICLE INSURANCE & LICENSING                                 
 Number 1992                                                                   
 CHAIRMAN WILLIAMS stated that the next order of business is HB 95,            
 "An Act relating to motor vehicle registration, licensing, and                
 insurance; and providing for an effective date."   He stated that             
 the bill was amended at the last meeting.                                     
 REPRESENTATIVE MASEK asked which version of the bill the committee            
 was working from.                                                             
 Number 2019                                                                   
 JUANITA HENSLEY, Chief Driver Services, Office of the Commissioner,           
 Department of Public Safety, stated that the committee was working            
 from the original draft of the bill, Version E, with two amendments           
 1 and 2.  Amendment 1 failed and Amendment 2 was adopted.                     
 Number 2035                                                                   
 REPRESENTATIVE AL KOOKESH asked if under the exemption for                    
 insurance, other than being a self insurer, is the exemption on               
 page 3, off road system.                                                      
 Number 2050                                                                   
 MS. HENSLEY replied, "Yes, that it is anyone that is determined by            
 the Department of Transportation and Public Facilities studies that           
 have fewer then 499 daily traffic."  She stated that there are                
 those that have the off systems drivers license that are exempt               
 from this.                                                                    
 Number 2068                                                                   
 REPRESENTATIVE MASEK stated that page 2, Section D, line 5 through            
 8, if an insurance company did not put forth the required paperwork           
 could they be suspended or lose their license.                                
 Number 2140                                                                   
 MS. HENSLEY stated that this is placed through the Division of                
 Insurance Statutes and it would be the reporting requirements and             
 the Division of Insurance Requirements.  She stated if the division           
 found that a person was not following the intent of the law by                
 providing the information to the Department of Public Safety, then            
 the provisions of existing law would step in.                                 
 Number 2194                                                                   
 REPRESENTATIVE MASEK asked that it seems that statute already                 
 requires drivers to carry insurance in the state.                             
 Number 2225                                                                   
 MS. HENSLEY stated that it is mandatory that everyone certify their           
 vehicle, at the time they are registering their vehicle, that the             
 vehicle meets the limits of liability under Alaska Statute, Title             
 28, Chapter 22.  She stated that the division does not require                
 proof to be shown, it is a self certification program.  The only              
 time that a person is required to submit proof that the vehicle is            
 insured is after the fact of an accident, resulting in damages                
 greater that $501.  She stated that they have 15 days from the date           
 of the accident to submit proof that the vehicle is insured.  She             
 stated that what they are doing in the bill, is at the time of                
 registration the insurance will be verified though the electronic             
 REPRESENTATIVE MASEK stated that since there is already a law why             
 not go after the offenders.  We need to enforce the laws that are             
 on the books rather than make the insurance companies more                    
 Number 2268                                                                   
 MS. HENSLEY stated that the provision does go after the individuals           
 if they are involved in an accident and do not submit the proof               
 that they are insured, the Division of Motor Vehicles suspends the            
 uninsured driver's license regardless of fault.  She stated that              
 the bill allows the department to electronically verify that the              
 person was insured on the spot, eliminating paperwork.                        
 Number 2278                                                                   
 REPRESENTATIVE MASEK stated that on page 1, Section 1, line 7, of             
 the bill, regarding the monthly reporting, it seems like it is                
 going after the private sector.  She stated maybe it should be                
 reported at the time the insurance is purchased.  She stated it is            
 putting a bigger burden on the industry rather than having the                
 agencies do the job.                                                          
 Number 2353                                                                   
 MS. HENSLEY stated that the division updates changes monthly and              
 the insurance industry already has an electronic medium.  She                 
 stated that all the large insurance companies are on the electronic           
 database.  She stated that the division will have access to the               
 database and will eliminate having to get the information through             
 paper shuffling.  It will benefit the way the division does                   
 business.  She stated that last year, the division eliminated four            
 positions from the budget.                                                    
 TAPE 97-12, SIDE B                                                            
 Number 007                                                                    
 MS. HENSLEY stated that enacting an electronic verification                   
 program, will allow the financial responsibility program to be                
 Number 034                                                                    
 REPRESENTATIVE COWDERY stated that there is very little proof                 
 required at present to show that a driver is insured.                         
 Number 055                                                                    
 MS. HENSLEY stated that is correct.                                           
 Number 077                                                                    
 REPRESENTATIVE COWDERY stated that after an accident the only thing           
 that can be done is to take the license away.  He stated that the             
 bill enforces that existing law to a higher degree.                           
 Number 116                                                                    
 REPRESENTATIVE HUDSON asked if the lists are able to become public.           
 Number 132                                                                    
 MS. HENSLEY replied that page 5, lines 10 through 12 stated that              
 database companies can't disclose information on the file.                    
 Number 156                                                                    
 REPRESENTATIVE HUDSON asked that if there is anything in the bill             
 that addresses out of state insurers being on the line to easily              
 report in every 30 days.                                                      
 Number 179                                                                    
 MS. HENSLEY stated that if they are licensed to do business in the            
 state of Alaska, they have to be approved by the Division of                  
 Insurance and they would be required to report to the database                
 Number 206                                                                    
 REPRESENTATIVE SANDERS asked if Ms. Hensley said that they are                
 going to eliminate four people if this goes through.                          
 Number 220                                                                    
 MS. HENSLEY replied no, the division eliminated four people last              
 year and lost a whole program.  She stated that what they wanted to           
 do is free up people that are doing the paper shuffling to                    
 reinstate the program.                                                        
 Number 263                                                                    
 REPRESENTATIVE HUDSON stated that we are adding an additional cost            
 to the industries.  He stated that the bill appealed to him because           
 of the possibility that the uninsured motorist could be eliminated            
 and decrease the liability that all of the insured motorists have.            
 Number 330                                                                    
 MS. HENSLEY stated that there are those individuals who are never             
 going to have insurance but this will cut the uninsured motorists             
 quite drastically.  She stated that the one state that has this law           
 has cut their uninsured motorists by half.                                    
 Number 367                                                                    
 MICHAEL LESSMEIER, Attorney, State Farm Insurance, stated that                
 everytime the legislature passes a bill that raises the cost of               
 doing business, the cost has to be passed onto the customers.  He             
 stated that the problem that is trying to be solved is one of                 
 uninsured drivers, who usually can't afford insurance to begin with           
 and by making the product more expensive, will not solve the                  
 problem.  He stated that when the company does better than the loss           
 experienced, money is given back.  In 1987 and 1988 State Farm                
 Insurance issued a 20 percent premium refund.  He stated that the             
 issue is enforcement.  If the bill is passed without anymore                  
 enforcement mechanisms in it, it will not affect the number of                
 uninsured drivers.  He stated that proof of insurance at the time             
 of registration would not cost the industry or the policy holders             
 any additional money.  He also suggested that when stopped for a              
 traffic violation proof of insurance should also be checked.                  
 MR. LESSMEIER stated that there ought to be an independent audit of           
 the situation to see if it is working.  He stated that                        
 confidentiality could be a problem.  He urged a need for caution,             
 with the bill.  He stated that insurance companies may be set up              
 electronically but they are not set up to transfer information.               
 Number 683                                                                    
 REPRESENTATIVE ELTON stated that the bill will add efficiencies to            
 the agency operation and may lead to reinstatement of a program               
 that could benefit the insurance industries.                                  
 Number 717                                                                    
 MR. LESSMEIER stated that not all insurance companies are                     
 computerized.  He stated that the Motor Vehicle Safety                        
 Responsibility Act should be separate from the bill, he stated that           
 a new computer system will result in time to make it operational.             
 He stated that the legislature should give the division funding to            
 reinstate the act.                                                            
 Number 790                                                                    
 REPRESENTATIVE MASEK asked if any insurance companies have the                
 database set up.                                                              
 Number 813                                                                    
 MR. LESSMEIER replied that he didn't believe so.                              
 Number 830                                                                    
 REPRESENTATIVE COWDERY made a motion to move CSHB 95(TRA) out of              
 the House Transportation Standing Committee.                                  
 Number 841                                                                    
 REPRESENTATIVE MASEK objected for purpose of discussion.  She                 
 stated that she would like to offer an amendment to page 1, Section           
 1, line 7, to change each calendar month to "an insurer that issues           
 an automobile liability insurance policy in this state shall within           
 fifteen days of the policy inception date or cancellation, report             
 to the Department of Public Safety a record of each motor vehicle             
 insurance policy issued by the insurer."                                      
 Number 888                                                                    
 CHAIRMAN WILLIAMS stated that he will accept that amendment at this           
 time, but from here on out he will not accept an amendment that is            
 brought before the committee at the time there is a meeting.  He              
 stated that he would appreciate getting the amendments a day before           
 as members expect the bill to be before them a day before.                    
 Number 915                                                                    
 CHAIRMAN WILLIAMS objected to the amendment.                                  
 Number 924                                                                    
 REPRESENTATIVE MASEK stated that basically what the amendment would           
 do is instead of having the insurance company comply every month it           
 would give them the opportunity to provide the information within             
 15 days of the policy inception date or cancellation date to the              
 Department of Public Safety.                                                  
 Number 957                                                                    
 KRISTY TIBBLES, Legislative Secretary to Representative Joe Green,            
 stated that Representative Green would prefer not to have the                 
 amendment in the bill, although he is not entirely opposed.  She              
 stated that monthly reporting would be more accurate.                         
 Number 1000                                                                   
 CHAIRMAN WILLIAMS stated that there are two motions on the floor he           
 asked that the motion to move the bill be withdrawn.                          
 REPRESENTATIVE COWDERY withdrew the motion to move CSHB 95(TRA).              
 Number 1012                                                                   
 REPRESENTATIVE ELTON stated that instead of turning over the whole            
 database monthly, the insurer would only be required to provide               
 notice of new policies that are written or provide notice of                  
 policies that were expired and not renewed.  He asked what would be           
 less of a burden on the industry, doing these as they occur within            
 fifteen days or each month.                                                   
 Number 1061                                                                   
 MS. TIBBLES responded that it appears for large insurance companies           
 it would be less of a burden to report monthly, however for smaller           
 companies it is easier to report as they receive the cancellations.           
 Number 1108                                                                   
 CHAIRMAN WILLIAMS asked for a roll call vote on Amendment 3.                  
 Representatives Elton, Sanders, Hudson, Kookesh, Cowdery, Masek               
 voted in favor of Amendment 3.  Chairman Williams voted against               
 Amendment 3.  Amendment 3 passed.                                             
 Number 1120                                                                   
 REPRESENTATIVE COWDERY made a motion to move CSHB 95(TRA) as                  
 amended, with the attached fiscal note and individual                         
 Number 1133                                                                   
 CHAIRMAN WILLIAMS asked if there was any objections.  Hearing none,           
 CSHB 95(TRA) was moved out of the House Transportation Standing               
 Number 1137                                                                   
 CHAIRMAN WILLIAMS stated that the House Transportation Standing               
 Committee is adjourned at 2:35 p.m.                                           

Document Name Date/Time Subjects