Legislature(2003 - 2004)

03/05/2004 08:04 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                                                               
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                                                               
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                                                               
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                                                               
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                                                               
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                                                               
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                                                               
REPRESENTATIVE GRUENBERG  said, "I  think he's talking  about the                                                               
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                                                               
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                                                               
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                                                               
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                                                               
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                                                               
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                                                               
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].                                                                     

Document Name Date/Time Subjects