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HB 488: "An Act relating to actionable claims against state employees; relating to the state's defense and indemnification of its employees and former employees with respect to claims arising out of conduct that is within the scope of employment; amending the Public Employment Relations Act regarding claims against the state or state employees; and providing for an effective date."

00                             HOUSE BILL NO. 488                                                                          
01 "An Act relating to actionable claims against state employees; relating to the state's                                  
02 defense and indemnification of its employees and former employees with respect to                                       
03 claims arising out of conduct that is within the scope of employment; amending the                                      
04 Public Employment Relations Act regarding claims against the state or state employees;                                  
05 and providing for an effective date."                                                                                   
06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
07    * Section 1.  AS 09.50 is amended by adding new sections to read:                                                  
08            Sec. 09.50.253.  Actionable claims against state employees.  (a)  Except as                                
09       provided in (f) of this section, the remedy against the state provided by AS 09.50.250                            
10       for injury or loss of property, or personal injury or death arising or resulting from the                         
11       act or omission of an employee of the state while acting within the scope of the                                  
12       employee's office or employment is exclusive of any other civil action or proceeding                              
13       for money damages by reason of the same subject matter against the employee whose                                 
01       act or omission gave rise to the claim or against the estate of the employee.  Any other                          
02       civil action or proceeding for money damages arising out of or relating to the same                               
03       subject matter against the employee or the employee's estate is precluded without                                 
04       regard to when the act or omission occurred.                                                                      
05            (b)  A state employee against whom such a civil action or proceeding is                                      
06       brought shall deliver, within the time after date of service or knowledge of service                              
07       determined by the attorney general, all pleadings and process served upon the                                     
08       employee, or a copy of the papers served, to the person designated by the head of the                             
09       employee's agency to receive such papers.  The state employee also shall give notice                              
10       of the civil action or proceeding by promptly furnishing to the attorney general and to                           
11       the head of the employee's state agency copies of the pleadings and process delivered                             
12       under this subsection.  The giving of notice under this subsection to the attorney                                
13       general constitutes an agreement by the employee to cooperate with the attorney                                   
14       general in the state employee's defense of the action or proceeding, and a consent that                           
15       the attorney general conduct the defense as the attorney general deems advisable and                              
16       in the best interests of the employee, including settlement in the attorney general's                             
17       discretion.                                                                                                       
18            (c)  Upon certification by the attorney general that the state employee was                                  
19       acting within the scope of the employee's office or employment at the time of the                                 
20       incident out of which the claim arose, any civil action or proceeding commenced upon                              
21       the claim in a state court is deemed an action or proceeding against the state under the                          
22       provisions of this title and the state is substituted as the party defendant.  The civil                          
23       action or proceeding certified under this subsection is subject to the same limitations                           
24       and defenses applicable to an action or proceeding against the state.  The attorney                               
25       general or the attorney general's designee shall defend the civil action or proceeding in                         
26       which the state was substituted as the party defendant under this subsection.                                     
27            (d)  If the attorney general refuses to certify under (c) of this section, the state                         
28       employee may at any time before trial petition the superior court to find and certify                             
29       that the employee was acting within the scope of the employee's office or employment                              
30       at the time of the incident out of which the claim arose.  Upon such a certification by                           
31       the court, the civil action is deemed to be a civil action or proceeding brought against                          
01       the state under the provisions of this title and the state is substituted as the party                            
02       defendant.  A copy of the petition under this subsection shall be served upon the state                           
03       in accordance with the provisions of Rule 4(d)(7) of the Alaska Rules of Civil                                    
04       Procedure.  The petition to the superior court is the exclusive remedy to challenge the                           
05       noncertification decision by the attorney general of a state employee under this                                  
06       section.                                                                                                          
07            (e)  A claim or suit for damages may not be filed against the state or the                                   
08       attorney general arising out of the process for certification under this section.                                 
09            (f)  This section does not extend or apply to a civil action or proceeding against                           
10       an employee of the state that is brought for a violation of the Constitution of the                               
11       United States, or that is brought for a violation of a statute of the State of Alaska under                       
12       which such an action or proceeding against an employee is expressly authorized.                                   
13            Sec. 09.50.254.  Defense and indemnification of state employees.  (a)                                      
14       Except as otherwise provided in AS 09.50.254 - 09.50.257, the  state shall provide                                
15       legal defense of civil claims against, and pay settlements and judgments including                                
16       attorney fees and costs entered against, a state employee if the claims, settlements, or                          
17       judgments are based on acts or omissions that occurred during the course and within                               
18       the scope of the employee's employment with a state agency and are not covered by                                 
19       AS 09.50.253.                                                                                                     
20            (b)  The state does not have an obligation to defend or indemnify if the                                     
21                 (1)  acts or omissions at issue were a result of gross negligence or                                    
22       intentional or wilful misconduct on the part of the employee; however, the state may                              
23       not, based solely on an allegation of gross negligence or intentional or wilful                                   
24       misconduct made by a party other than the state agency employing the state employee,                              
25       withhold legal defense in a civil action;                                                                         
26                 (2)  acts or omissions at issue were not within the scope of the                                        
27       employee's employment with a state agency;                                                                        
28                 (3)  acts or omissions at issue are covered by AS 09.50.253;                                            
29                 (4)  claim or action involves a disciplinary, administrative, or criminal                               
30       matter brought against the employee or is an appeal from a disciplinary,                                          
31       administrative, or criminal action;                                                                               
01                 (5)  civil claim or action is based on conduct for which the employee                                   
02       has been convicted of a criminal offense or was terminated from employment by the                                 
03       state agency employing the state employee; or                                                                     
04                 (6)  state employee settled or compromised the claim or action before                                   
05       requesting the state to provide legal defense or indemnification or while a request for                           
06       defense was pending.                                                                                              
07            (c)  The state does not have an obligation to pay an award for punitive damages                              
08       against an employee.                                                                                              
09            (d)  Defense or indemnification provided to a state employee under this section                              
10       does not constitute a waiver, limitation, or expansion of sovereign immunity or of                                
11       other immunity.                                                                                                   
12            (e)  If a legal defense is required under this section, the attorney general shall                           
13       provide legal services to the employee under the procedures set out in AS 09.50.253.                              
14            (f)  This section applies to a former state employee to the same extent as a                                 
15       current state employee.                                                                                           
16            Sec. 09.50.255.  Employee's duties when requesting defense and                                             
17       indemnification.  (a)  The state's obligation to defend and indemnify a state employee                          
18       under AS 09.50.254 - 09.50.257 arises only if the employee                                                        
19                 (1)  complies with the notice process set out in AS 09.50.253(b); and                                   
20                 (2)  cooperates in the defense and resolution of the claim or action.                                   
21            (b)  A state employee for whom the state has provided legal defense under                                    
22       AS 09.50.254 - 09.50.257 or who has a request for the provision of legal defense                                  
23       pending may not settle the claim brought against the employee unless the attorney                                 
24       general approves the settlement.                                                                                  
25            (c)  If the state has provided legal defense and indemnification under                                       
26       AS 09.50.254 - 09.50.257, the attorney general may settle a claim or action without                               
27       the consent of the employee so long as the settlement resolves all the outstanding                                
28       claims against the employee.                                                                                      
29            (d)  This section applies to a former state employee to the same extent as a                                 
30       current state employee.                                                                                           
31            Sec. 09.50.256.  Employee's rights if the state declines to provide legal                                  
01       defense.  (a)  If the state declines to provide a legal defense for a state employee under                      
02       AS 09.50.254 - 09.50.257, the attorney general shall provide the employee with                                    
03       written notice of that decision within 60 days after receiving a request for legal                                
04       defense from the employee, or after service of the summons and complaint on the                                   
05       employee, whichever is later.                                                                                     
06            (b)  A state employee whose legal defense is declined under AS 09.50.254 -                                   
07       09.50.257 may file a petition for legal defense in the superior court.  The employee                              
08       must file the petition within 30 days after the employee received the written notice of                           
09       refusal to defend from the attorney general.  A copy of the petition under this                                   
10       subsection shall be served upon the state in accordance with Rule 4(d)(7) of the                                  
11       Alaska Rules of Civil Procedure.                                                                                  
12            (c)  If a state employee who has been denied legal defense settles the claim or                              
13       action without filing a petition under (b) of this section, the employee waives any right                         
14       to defense or indemnification.                                                                                    
15            (d)  If the court grants a petition under this section, the attorney general shall                           
16       undertake the defense of the employee.                                                                            
17            (e)  This section is the exclusive means for resolving a dispute about                                       
18       representation under AS 09.50.254 - 09.50.257.                                                                    
19            (f)  This section applies to a former state employee to the same extent as a                                 
20       current state employee.                                                                                           
21            Sec. 09.50.257.  Defense with reservation of rights; denial of                                             
22       indemnification; employee liability for expenses.  (a)  The state may undertake the                             
23       defense of a state employee under AS 09.50.254 - 09.50.257 while contesting the                                   
24       obligation to indemnify the employee, either partially or fully.  If the state offers a                           
25       defense with a reservation of rights to an employee, the attorney general may provide                             
26       a legal defense and place limitations on the agreement to indemnify an employee                                   
27       pending the outcome of the case.                                                                                  
28            (b)  If the state denies indemnification or offers a defense with a reservation of                           
29       rights to an employee, the attorney general shall provide written notice to the                                   
30       employee.  The notice must include the reason for the denial or reservation of rights.                            
31            (c)  If the state has defended an employee under AS 09.50.254 - 09.50.257, the                               
01       attorney general may bring an action against the employee for expenses incurred in the                            
02       defense if the trier of fact found that the employee's conduct was not within the course                          
03       or scope of employment.  The action for expenses under this subsection must be                                    
04       brought not later than one year after the execution of a written agreement settling the                           
05       underlying claim or action or entry of final judgment in the action.                                              
06            (d)  This section applies to a former state employee to the same extent as a                                 
07       current state employee.                                                                                           
08    * Sec. 2.  AS 09.50.300 is amended to read:                                                                        
09            Sec. 09.50.300.  Compromise by attorney general.  Except as provided in                                
10       AS 09.50.253 - 09.50.257, the [THE] attorney general may, with the approval of the                            
11       court, arbitrate, compromise, or settle any action filed under AS 09.50.250 -                                     
12       09.50.300.                                                                                                      
13    * Sec. 3.  AS 09.50 is amended by adding a new section to article 3 to read:                                       
14            Sec. 09.50.301.  Definitions for AS 09.50.253 - 09.50.257.  In AS 09.50.253 -                              
15       09.50.257,                                                                                                        
16                 (1)  "acting within the scope of the employee's office or employment"                                   
17       means acts or omissions                                                                                           
18                      (A)  that the state employee is employed or authorized to                                          
19            perform;                                                                                                     
20                      (B)  of the state employee that occur substantially within the                                     
21            authorized time and space limit;                                                                             
22                      (C)  that are activated by a purpose to serve the state; and                                       
23                      (D)  that do not constitute acting, or failing to act, with willful,                               
24            reckless, or intentional misconduct, or with gross negligence or malice;                                     
25                 (2)  "settlement" means the execution of a written agreement settling                                   
26       the claim or action that gave rise to the employer's obligation to defend or indemnify                            
27       the state employee;                                                                                               
28                 (3)  "state employee"                                                                                   
29                      (A)  means                                                                                         
30                           (i)  a permanent, probationary, seasonal, temporary,                                          
31                 provisional, or nonpermanent employee in the executive, legislative, or                                 
01                 judicial branch of the state government, whether in the classified,                                     
02                 partially exempt, or exempt service; or                                                                 
03                           (ii)  a person appointed to a board or commission of the                                      
04                 state government;                                                                                       
05                      (B)  does not include an employee of                                                               
06                           (i)  the University of Alaska;                                                                
07                           (ii)  the Alaska Railroad Corporation; or                                                     
08                           (iii)  a political subdivision of the state, including a                                      
09                 regional educational attendance area.                                                                   
10    * Sec. 4.  AS 23.40.075 is amended to read:                                                                        
11            Sec. 23.40.075.  Items not subject to bargaining.  The parties may not                                     
12       negotiate terms contrary to the                                                                                   
13                 (1)  reemployment rights for injured state employees under                                              
14       AS 39.25.158;                                                                                                     
15                 (2)  reemployment rights of the organized militia under AS 26.05.075;                                   
16                 (3)  authority of the Department of Health and Social Services under                                    
17       AS 47.27.035 to assign Alaska temporary assistance program participants to a work                                 
18       activity considered appropriate by the Department of Health and Social Services; [OR]                             
19                 (4)  authority for agencies to create temporary positions under                                         
20       AS 47.27.055(c);                                                                                              
21                 (5)  provisions of AS 09.50.250 - 09.50.300.                                                        
22    * Sec. 5.  The uncodified law of the State of Alaska is amended by adding a new section to                         
23 read:                                                                                                                   
24       TRANSITION.  Nothing in this Act terminates or modifies a collective bargaining                                   
25 agreement in effect on the effective date of this Act; however, for a collective bargaining                             
26 agreement between a state agency and an organization representing state employees that                                  
27 expires before July 1, 2004, the new agreement may not contain provisions contrary to this                              
28 Act.                                                                                                                    
29    * Sec. 6.  The uncodified law of the State of Alaska is amended by adding a new section to                         
30 read:                                                                                                                   
31       APPLICABILITY.  This Act applies to a cause of action that arose on or after the                                  
01 effective date of this Act.                                                                                             
02    * Sec. 7.  The uncodified law of the State of Alaska is amended by adding a new section to                         
03 read:                                                                                                                   
04       REVISOR'S INSTRUCTIONS.  The revisor of statutes is instructed to change the                                      
05 heading of art. 3 of AS 09.50 from "Article 3. Claims Against State" to "Article 3. Claims                              
06 Against the State or State Employees."                                                                                  
07    * Sec. 8.  This Act takes effect immediately under AS 01.10.070(c).