Legislature(2009 - 2010)BUTROVICH 205

04/08/2010 01:00 PM Senate TRANSPORTATION

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSSB 152(TRA) Out of Committee
Moved CSHB 366(JUD) Out of Committee
Moved HJR 47 Out of Committee
         HB 366-MOTOR CARRIER INDEMNIFICATION AGREEMENTS                                                                    
SENATOR  KOOKESH   announced  consideration  of  HB   366.  [CSHB
366(JUD) was before the committee.]                                                                                             
1:30:54 PM                                                                                                                    
JEANNE  OSTNES, Staff  to Representative  Craig Johnson,  said HB
366 places a  provision in statute to clarify  that both shippers                                                               
and motor  carriers are responsible  for their own  negligence or                                                               
1:32:03 PM                                                                                                                    
AVES  THOMPSON, Executive  Director, Alaska  Trucking Association                                                               
(ATA), stated  support for HB  366. He related that  one priority                                                               
of  ATA this  year  is  to achieve  tort  reform  with regard  to                                                               
indemnification  agreements   in  motor   carrier  transportation                                                               
contracts.  Motor carriers  must  comply with  the federal  motor                                                               
carrier  safety regulations  when transporting  goods as  well as                                                               
common  law or  statutory duties  or responsibilities.  Likewise,                                                               
shippers   and    other   parties    have   legal    duties   and                                                               
responsibilities   to   fulfill    when   providing   goods   for                                                               
transportation. However,  it's becoming more common  for shippers                                                               
to  include language  in motor  carrier  contracts requiring  the                                                               
motor carrier  to indemnify  and hold  harmless the  shipper even                                                               
when   the  shipper   fails  to   meet  its   legal  duties   and                                                               
The  CS  for  HB  366  provides  statutory  language  that  voids                                                               
contractual   provisions  in   a  motor   carrier  transportation                                                               
contract  that  indemnifies  either  the  shipper  or  the  motor                                                               
carrier for their own negligent  or intentional acts or omissions                                                               
that  lead to  claims. This  levels the  playing field  and makes                                                               
everyone responsible  for their own actions  without establishing                                                               
new  duties  or  responsibilities.  The bill  doesn't  limit  the                                                               
freedom to contract  and each party can control  its employees or                                                               
agents to improve unsafe practices.  Industry groups that support                                                               
the  legislation  include   BP,  ConocoPhillips,  Association  of                                                               
General  Contractors,  Alaska  Miners Association,  Alaska  State                                                               
Chamber of Commerce, and the  Ocean Carriers Equipment Management                                                               
Association. He  noted that twelve  states have similar  laws and                                                               
eight states have legislation pending.                                                                                          
1:35:28 PM                                                                                                                    
SENATOR PASKVAN  stated that HB  366 advances good  social policy                                                               
and will  promote safety; each  person should be  responsible for                                                               
his or  her own  conduct. To  allow private  parties to  say that                                                               
someone  else will  pay for  their omissions  or negligence  is a                                                               
troubling concept, he said.                                                                                                     
SENATOR MENARD said she imagines he  has heard the input from the                                                               
Alaska Insurance Company about shifting responsibility.                                                                         
MR. THOMPSON said he isn't aware of that.                                                                                       
MS. OSTNES said Linda Hall,  the division director for insurance,                                                               
looked at the  bill and had no problem with  it. Ms. Ostnes added                                                               
that  the intent  of  the  legislation is  not  to  void a  whole                                                               
contract, just the portion dealing with omissions or neglect.                                                                   
1:37:35 PM                                                                                                                    
DEAN  MCKENZIE,  President,  Alaska West  Express  (AWE),  stated                                                               
support for  HB 366. He noted  that he submitted a  letter to the                                                               
sponsor  citing an  unresolved  issue with  a  company that  does                                                               
drilling  work   in  Alaska,  nationally,   and  internationally.                                                               
Currently  AWE  is working  with  two  more companies  that  have                                                               
similarly lopsided  language in their master  service agreements,                                                               
which takes  a lot of  time. Smaller contractors or  carriers may                                                               
not  have the  ability  to devote  this much  time,  he said.  As                                                               
others  have stated,  we should  all be  responsible for  our own                                                               
actions; we should  not be forced to take  responsibility for the                                                               
actions of others over whom we have no control, he said.                                                                        
1:39:00 PM                                                                                                                    
JAMES C. DOYLE, Vice President,  Weaver Brothers Trucking, stated                                                               
support for HB 366. He cited  an example of a situation that this                                                               
legislation would  prevent. Four  or five  days after  a trucking                                                               
company delivered  fuel to a  gas station, a customer  was burned                                                               
while  filling  a  portable  gas  tank because  of  an  arc.  The                                                               
trucking company had to pay the  claim even though it had nothing                                                               
to  do  with  the  actual  incident  because  it  had  signed  an                                                               
agreement indemnifying the gas station  from any type of loss. HB
366 would correct this type of wrong, he said.                                                                                  
1:40:39 PM                                                                                                                    
SENATOR KOOKESH  closed public  testimony and  asked the  will of                                                               
the committee.                                                                                                                  
SENATOR  PASKVAN moved  to report  CS for  HB 366  from committee                                                               
with  individual  recommendations  and attached  fiscal  note(s).                                                               
There being  no objection,  CSHB 366(JUD)  moved from  the Senate                                                               
Transportation Standing Committee.                                                                                              

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