Legislature(2003 - 2004)
03/05/2004 08:04 AM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 423-TAXICAB DRIVER LIABILITY Number 2340 CHAIR WEYHRAUCH announced that the next order of business was HOUSE BILL NO. 423, "An Act relating to accidents involving the vehicle of a person under the influence of an alcoholic beverage; and providing for an effective date." Number 2356 JIM SHINE, Staff to Representative Tom Anderson, Alaska State Legislature, on behalf of Representative Anderson, sponsor of HB 423, offered a summary of the introduction to the bill he read to the committee at the previous hearing on March 2, 2004. He stated that HB 423 is a Good Samaritan bill for taxicab operators who transport an intoxicated person by driving that person's vehicle to his/her home or other directed location. The proposed legislation would be a deterrent to those who would otherwise drive impaired if unable to find an alternative method of transportation. The bill would grant taxicab companies legal immunity in the event that an accident occurs, except in the case of recklessness, gross negligence or intentional misconduct. TAPE 04-29, SIDE B Number 2348 REPRESENTATIVE HOLM moved to adopt the committee substitute (CS) for HB 423, Version 23-LS1600\D, Luckhaupt, 3/3/04, as a work draft. There being no objection, Version D was before the committee. Number 2315 MR. SHINE highlighted the changes made to HB 423 [in Version D], as noted in a handout to the committee [available in the committee packet]. The first change was on page 1, line 11, where the phrase, "in the course and scope of employment" was inserted after the phrase, "a person employed". He explained that this language was added to clarify that the driver must be currently working for the taxicab company at the time of the accident. The second change occurred on page 2, [lines 1-2], where the phrase, "inhalant, or controlled substance" was inserted after "alcoholic beverage,". Mr. Shine note that this change conforms to the definition given in AS 28.35.030. The third change made on page 2, [lines 3-4] was to add the phrase, "or designated residential location" after the phrase "owner's residence". He said this clarification was made so that people would not abuse the service by having taxicab drivers take them to another bar. Number 2270 REPRESENTATIVE HOLM asked why the word "dwelling" was not used instead. MR. SHINE explained that the words chosen were discussed in a meeting with Representative Gruenberg and staff. Notwithstanding that, he indicated there would be no objection to [using the word "dwelling"]. REPRESENTATIVE HOLM indicated that the word dwelling had been used during discussion of another bill dealing with carbon monoxide. Number 2245 REPRESENTATIVE GRUENBERG remarked that usually the word "residence" would be used, because it is more of a location, while "dwelling" refers to the building itself. He noted that "designated residential location" would include an adjacent street and is a "reasonable drafting choice." Number 2200 MR. SHINE turned to [Amendment 1], recommended by Legislative Legal and Research Services: On page 2, line 4, after the words "vehicle owner" insert the words "or operator". He explained that the intent of that is so the person [making the request] doesn't have to be the owner of the vehicle. Number 2183 REPRESENTATIVE GRUENBERG moved to adopt Amendment 1. REPRESENTATIVE HOLM suggested that the word "or" is not necessary. REPRESENTATIVE GRUENBERG said he would leave the word "or" in, because conceptually, a person would not say "motor vehicle operator". He asked that Amendment 1 be a conceptual amendment. CHAIR WEYHRAUCH noted that the phrase "motor vehicle owner or operator" is used on page 2, lines 6-7. Number 2110 CHAIR WEYHRAUCH asked if there were any further objections to Conceptual Amendment 1. Number 2099 REPRESENTATIVE SEATON said he is not opposing the idea, but he thinks that there may be ramifications having to do with insurance. He indicated there could be some question regarding whether a person driving someone else's vehicle is covered under insurance. Number 2089 REPRESENTATIVE HOLM asked if Representative Seaton was referring to "uninsured motorists." He indicated that with his own State Farm insurance coverage, he is insured in any vehicle. For example, if he rents a car in California, he doesn't have to pay the extra insurance coverage, because he is insured under his policy. He said he doesn't know what other folks do with other policies. REPRESENTATIVE GRUENBERG said, "I think he's talking about the opposite." Number 2058 REPRESENTATIVE SEATON stated that his concern is in regard to remembering that the intent of "this" is just to protect somebody's property. He said he worries about "the liability incurring." Number 2018 CHAIR WEYHRAUCH noted that he has an amendment that he "was going to offer," having to do with offering some kind of immunity so that "somehow, if somebody's harmed, ... there's some way you get coverage of this." Number 2000 REPRESENTATIVE SEATON said he would remove his objection. He explained that adding the word ["or"] "raises a larger point than just adding the word operator in there." He said he just wanted to make that point. [Amendment 1 was treated as adopted.] Number 1951 REPRESENTATIVE GRUENBERG stated that this is an interesting situation because multiple parties are involved: the person who is drunk, the cab company, the cab driver, the owner of the vehicle, and the injured person. The situation can be examined from various points of view. He noted that two different vehicles would be involved. Representative Gruenberg said, "You have to look at Frank Dahl's letter to really understand it." He continued as follows: We have a situation where the drunk is being separated from the vehicle, and the rescuer comes in a cab as a cab driver, and there's a passenger in the cab ..., and it's another cab driver who drives the vehicle home. We're not talking about the situation where the drunk is in the back of the cab. That person is clearly covered, and it's not within this bill. We're talking about the second trip. And the reason we're talking about the second trip, as I understand it, is ... cabbie number two - her insurance doesn't cover her unless she's driving the cab. That's the purpose of the bill. It's ... a potentially uninsured situation, where the second cabbie is driving the drunk's vehicle only - and this is the Seaton situation. The vehicle may not belong to the drunk; it may belong to the drunk's parents, or cousin, or buddy. However, back to the hierarchy here, we've got the innocent pedestrian here who's wiped out by the ... car belonging to the wife or the cousin, driven by another cabbie who's not covered by insurance. And that is where we are in this factual scenario. Am I not right? Number 1879 MR. SHINE answered that's correct. Number 1870 REPRESENTATIVE GRUENBERG stated that this is a situation where the whole program - which is a good one - can fail because of "the nail in the horseshoe." If cabbie number two isn't covered, he said, the cab companies won't participate in the program. If they don't participate by giving the bars a reasonable break on the price, he continued, the bars won't participate and the drunk gets behind the wheel. In response to a remark by Representative Seaton, he added that another party involved would be the bar owner. Number 1836 REPRESENTATIVE SEATON asked if it has been fully established that the cab insurance does not cover the cab driver. Number 1831 MR. SHINE noted that there are 162 taxicabs operating in "the Anchorage bowl." He explained that they are independent operators. The cab companies are dispatchers that "contract out" to the independent cab drivers who own their own vehicles and take out their own liability insurance. He said the insurance only covers the drivers under "that one vehicle." He mentioned he has copies available of the municipal code. Number 1799 REPRESENTATIVE HOLM asked what the situation is in other parts of the state. Number 1783 REPRESENTATIVE SEATON noted that Representative Holm, for example, had previously stated that his insurance policy covers him in whatever vehicle he drives. He indicated that this [kind of coverage] may be a cheap way to get around "this uninsured and this policy," so that the person who is participating just has to have the rider on his/her insurance. He said, "Maybe it's going to have to be another two dollars or something on there to compensate for that insurance." He clarified that he would be much more comfortable with a solution that builds in protections for the potential victim." Number 1734 MR. SHINE commented that Mr. Lessmeier represents the insurance industry and had indicated that he would be able to testify regarding some of the liability issues. He also noted that both Mr. Dahl and Mr. Pattee are available to answer questions. Number 1700 JOHN PATTEE told the committee that as a board member of Anchorage CHARR [Cabaret Hotel Restaurant & Retailers Association], the Downtown Community Council, Anchorage, and the Anchorage Downtown Partnership, he could speak for all three organizations. He noted that he has owned a couple of nightclubs in downtown Anchorage for over 20 years. He stated his support of [HB 423]. Referring to the previous discussion regarding [all the people who would need to be covered by insurance], he noted that the administrator of the program would have to be covered also. Turning to the program itself, he said it is a great one. He noted that one of the simple, if not justifiable reasons that people drink and drive is that they need their cars. A person may need his/her vehicle the next morning to get to work, or may worry that it will be towed or vandalized. He indicated that a "no-brainer" program like this, which would be free to the customer, would make a significant mark in reducing the number of occurrences of people driving under the influence (DUI). He said he understands that there [are concerns regarding] liability; however, he stated that [HB 423] is a Good Samaritan law with good intent. He cautioned nitpicking the bill to death and encouraged the committee to just "do it." Number 1551 REPRESENTATIVE GRUENBERG assured Mr. Pattee that the committee's intent was not to nitpick the bill to death, but to ensure that the bill is properly drafted to avoid causing more litigation later. He asked Mr. Pattee if CHARR or the industry would be hiring an administrator to work on this program. MR. PATTEE said Anchorage CHARR will run the program. In response to a question from Chair Weyhrauch, he opined that if Fairbanks wants to run such a program, it has the ability to do so. Number 1499 REPRESENTATIVE GRUENBERG stated that if an industry group is going to be running this program, then the committee needs to consider the language on page 2, lines 9-11, which immunizes those who are licensed. He pointed out that CHARR and its employees are not licensed. He opined that if [those employees] could be "a target defended in this," then the committee needs to add a provision that immunizes them. MR. PATTEE concurred. He said it doesn't have to be CHARR; any organization could run the program. He said, "When it first started four years ago, it was the Anchorage Downtown Partnership ... that was going to run this program." He said, for example, that Mothers Against Drunk Driving (MADD) could run the program. Whatever language is put in the bill needs to be vague, so that whoever decides to administer the program can do so without being held liable, he concluded. Number 1446 REPRESENTATIVE GRUENBERG said that would require another section of the bill, or an amendment to subsection (b). Number 1425 FRANK DAHL told the committee that he is past-president of Anchorage CHARR and owner of Blues Central at the Chef's Inn. He stated his support of HB 423. He stated that most of what he had to say to the committee had been sent in a letter [included in the committee packet]. He posited that [HB 423] really is an opportunity to do something proactive and positive about an ongoing problem, and it is an idea that stands a good chance of working. He said, "It kind of gets us away from just more and more punishment that has not worked in the past." He stated, "We're there to watch out for our friends and patrons and this gives us the tool to do so." He urged the committee to pass the bill. Number 1376 BRENT FRASER, Transportation Inspector, Municipality of Anchorage, told the committee that he directs the department of the municipality that regulates the taxicabs, the limousines, and the chauffeurs of those vehicles. In response to a question from Representative Gruenberg, he stated his understanding that the municipality will not have any direct participation in the program. He imparted [the municipality's] concern that the legislation does not "put any undue burden upon the chauffeur." He added that he thinks that the organizations that are in place seem to be very capable of effectively administering the program. REPRESENTATIVE GRUENBERG asked if Mr. Fraser thinks the municipality needs to be immunized, too. MR. FRASER answered no, to the best of his knowledge. He reminded the committee that the taxicabs in Anchorage are all privately owned and operated and the municipality simply issues the permits. He surmised that that's not to say that an enterprising attorney couldn't attempt to "get into the municipality's pockets" if there was a lawsuit, but he noted that that has never happened. Number 1254 MICHAEL LESSMEIER, Attorney at Law, Lessmeier & Winters, Lobbyist for State Farm Insurance Company ("State Farm"), told the committee that he has practiced law in the state for 25 years, and most of his work as a practicing lawyer has been doing litigation work. He said State Farm thinks the bill is a great idea. He said there are some solutions to the legitimate concerns raised by Representatives Seaton and Gruenberg. MR. LESSMEIER stated he thinks the concerns that have been heard thus far fall into two categories: The first category has to do with how to "protect an innocent victim who would no longer have a remedy against somebody that's driving a vehicle, because they're immunized by this bill." He offered a recommendation to the committee that the insurance that is on a vehicle [would] "go with the driver of that vehicle as a permissive user." He offered his understanding that Representative Gruenberg has drafted "something to that effect." He said he hasn't talked about this issue with other members of the industry; however, he stated he thinks it's something they would support, because the risk to the industry is a lot less if a sober professional is delivering the vehicle than it would be if an intoxicated or impaired person were to get behind the wheel. He emphasized that State Farm Insurance would certainly support that. MR. LESSMEIER noted the second thing that should be done is to ensure that the vehicle isn't uninsured or underinsured, or "would be treated that way." He gave an example of a vehicle not being insured, but the person injured having uninsured/underinsured motorist coverage, and he indicated that that would be a remedy. He added, "As the bill is written now, I'm not sure that they would have that remedy." He noted that there is a "strong scheme" in the state to make [uninsured/underinsured motorist insurance] available to people. Number 1136 MR. LESSMEIER turned to a third issue, which he said was previously raised by Representative Gruenberg. He stated that, as a practicing lawyer, he thinks it's important that [the legislature] "immunize to the extent of this bill for negligence" anybody who participates in the administration of this program, because he said he thinks the program will save lives and [prevent] injury. Number 1087 REPRESENTATIVE SEATON asked if a rider would have to be added to the insurance that the cab drivers generally have, or if that would "normally be included in their insurance policy." Number 1040 MR. LESSMEIER stated, "The insurance to provide this kind of service is unaffordable for them. And so, we're talking about the insurance that would go with the vehicle." He clarified that he is referring to the insurance that would be on the vehicle of the person who is intoxicated and wants the free ride home. The cab driver would be a permissive user under that vehicle owner's policy. He said he thinks most policies now provide that the insurance applies to a permissive user. He concluded, "So, our suggestion is that we just make these people permissive users." That would avoid the problem of affordability for the taxicab industry, while placing the burden where it should be placed - on the vehicle owner. He stated that it seems to him it's a win-win situation all the way around, because the risk for the intoxicated person is going to be less if they have a sober cab driver delivering that vehicle. REPRESENTATIVE GRUENBERG offered to work on a new CS over the weekend. Number 0935 MR. SHINE told Chair Weyhrauch that he would work with Representative Gruenberg. Number 0928 CHAIR WEYHRAUCH turned to [Conceptual Amendment 2], which would add a new section to read, "The terms of this act shall be repealed on January 1, 2006." Number 0886 MR. SHINE said the issue of whether to have a sunset included in the language of the bill was brought up at "the last meeting." Also discussed was whether to have a "reporting back to legislature to the effectiveness of the program." He turned to a question previously asked by Representative Holm regarding how many cabs are in locations other [than Anchorage]. He explained that this is a pilot program for the Anchorage area, which is why only Anchorage was looked at [in terms of numbers of cab drivers, for example]. CHAIR WEYHRAUCH remarked that he doesn't want to add a "report to legislature," because it's implicit in the sunset that the legislature will have to [decide] whether to extend [the program] or not. Number 0840 REPRESENTATIVE SEATON asked if the January 1, 2006, date would "give them one year." REPRESENTATIVE WEYHRAUCH clarified that it would take effect July 1, 2004, and would be in effect through 2005 [for one and one half years]. He said, "I just arbitrarily picked 2006. It could be 2007. That gives them two years." Number 0827 REPRESENTATIVE GRUENBERG said he wants to know if "they" want to have a sunset on there. However, if there is a sunset, he suggested that it be at the end of the legislative session, so that the legislature would "have that session, then, to extend it." Number 0800 CHAIR WEYHRAUCH amended his Conceptual Amendment 2 to read: "The terms of this act shall be repealed on July 1, 2007." CHAIR WEYHRAUCH, in response to a question by Representative Lynn, stated his understanding that [the program] is predominately being promoted by groups and individuals [in] Anchorage; however, he said anyone statewide would be able to take advantage of "this provision." REPRESENTATIVE LYNN asked, "And use the same language?" CHAIR WEYHRAUCH answered, "Correct." Number 0737 REPRESENTATIVE HOLM reiterated that he thinks it's appropriate to make statewide policy that can easily be incorporated into other municipalities. Number 0719 REPRESENTATIVE GRUENBERG asked Mr. Lessmeier if he is aware of any other places that "do this," and whether the insurance industry participates at all in the setting of rates. Number 0708 MR. LESSMEIER responded that he is not aware of that. Number 0699 CHAIR WEYHRAUCH moved to adopt Conceptual Amendment 2 [as amended], as previously stated. There being no objection, it was so ordered. CHAIR WEYHRAUCH stated his understanding that Representative Gruenberg would not be offering his amendments today, but instead would work on amendments with the sponsor and with the cooperation of CHARR and Mr. Lessmeier. Number 0608 REPRESENTATIVE HOLM noted that Alberta, Canada, has this kind of program, and he is waiting to hear back from Senator Ralph Seekins' daughter who lives in Alberta. Number 0572 CHAIR WEYHRAUCH announced that HB 423 [was heard and held].