Legislature(1993 - 1994)

03/12/1993 01:00 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
  HB 79 DAMAGE TO PROPERTY BY MINORS                                           
  Number 713                                                                   
  JAY FRANK, representing STATE FARM AND ALLSTATE INSURANCE                    
  COMPANIES, said that HB 79 made a major change in parental                   
  "strict liability" for malicious acts committed by minors.                   
  He said that the law currently allowed a person to recover                   
  up to $2,000 from parents for any type of vandalism                          
  committed by their children.  He noted that HB 79 would                      
  raise that dollar amount to $50,000.                                         
  MR. FRANK said that the insurance industry's concern about                   
  HB 79 was two-fold.  He stated that parents were already                     
  held strictly liable, meaning that although parents might                    
  not cause the damage, they were liable for the acts of their                 
  children.  He called the current law a rather drastic form                   
  of remedy, and said HB 79 would make that remedy                             
  exponentially more drastic.                                                  
  MR. FRANK stated that he felt that the intent behind HB 79                   
  was to penalize parents so that they would exercise some                     
  supervision over their children.  He said that the insurance                 
  industry was concerned that the provisions of HB 79 would                    
  become an item covered by a homeowner's insurance policy,                    
  increasing the cost to the policy-holders.                                   
  MR. FRANK commented that he would like to see the bill                       
  amended so as to exempt the types of damages addressed by                    
  HB 79 from being covered under liability insurance policies.                 
  Then, he said, the effect of HB 79 would be to penalize                      
  parents and not penalize all insurance policy-holders                        
  through premium cost increases.                                              
  Number 752                                                                   
  REP. JAMES asked Mr. Frank, If people could not get                          
  insurance to cover damages done by their children, what                      
  guarantee did victims have of compensation?                                  
  Number 761                                                                   
  MR. FRANK said that Rep. James had asked a good question.                    
  He noted that it was difficult for a person to buy liability                 
  insurance that would cover intentional acts.  He commented                   
  that the irony in HB 79 was that an intentional act                          
  committed by a child was not covered because of its                          
  intentionality.  However, he said, because parents were                      
  being held strictly liable, damages from the minor's                         
  intentional act became insurable.                                            
  MR. FRANK said that there were many things that people did                   
  that caused other parties to suffer losses, which one could                  
  not buy insurance to cover.  Whether or not a person had the                 
  financial resources to compensate a victim for damages did                   
  not concern insurance companies, he said.                                    
  Number 775                                                                   
  REP. JAMES asked how the situation addressed in HB 79 was                    
  different from someone tripping on her sidewalk and breaking                 
  his or her leg.                                                              
  Number 781                                                                   
  MR. FRANK responded that the difference lay in that Rep.                     
  James, in her example, had not done anything intentional to                  
  cause the act.                                                               
  REP. JAMES asked Mr. Frank if he were insinuating that the                   
  parents were intentionally allowing their children to commit                 
  MR. FRANK replied that the act committed by the child was an                 
  intentional act of vandalism, not covered under any                          
  insurance policy.  But, he said, the liability was being                     
  strictly imposed upon the parents.                                           
  Number 788                                                                   
  REP. PHILLIPS asked Mr. Frank if he were saying that no                      
  insurance company would write a policy to cover a child who                  
  engaged in mischievous behavior.                                             
  Number 792                                                                   
  MR. FRANK responded that he was not suggesting that.  He                     
  noted that it was questionable whether an Allstate policy                    
  would cover children's acts of vandalism.  State Farm, he                    
  added, had always had a policy of covering those types of                    
  Number 798                                                                   
  REP. PHILLIPS asked Mr. Frank how the provisions of HB 79                    
  would be technically incorporated into a policy.                             
  Number 799                                                                   
  MR. FRANK said that if children's acts of vandalism were to                  
  be excluded from coverage, a policy could specifically                       
  contain an exclusion which said that the policy would not                    
  cover liability imposed on parents for intentional acts                      
  committed by their children.                                                 
  Number 802                                                                   
  CHAIRMAN PORTER commented that parents' strict liability for                 
  intentional acts committed by their children was already in                  
  place, and HB 79 was merely increasing the dollar amount of                  
  Number 809                                                                   
  MR. FRANK noted that at the current $2,000 level, State Farm                 
  did not have a problem paying for those losses.  However, he                 
  said that when the amount increased to $50,000, State Farm's                 
  view would probably be drastically different.                                
  Number 810                                                                   
  CHAIRMAN PORTER said that Mr. Frank's statement about the                    
  intent of HB 79 might not have been entirely inclusive.  He                  
  commented that from his perspective, the intent of the bill                  
  was to more adequately provide coverage for victims.                         
  Number 813                                                                   
  REP. GREEN echoed the Chairman's concern.  He asked Mr.                      
  Frank if it was his belief that if a child could cause                       
  $50,000 worth of damage, the victim should bear the loss for                 
  $48,000 in damages.                                                          
  Number 820                                                                   
  MR. FRANK commented that the insurance industry could not be                 
  all things to all people.  He added that if a person were                    
  caused harm by a judgment-proof individual, the person would                 
  simply have to bear the cost of the damage.  He said that                    
  the irony with HB 79 was that insurance companies could turn                 
  around and exclude intentional acts committed by children                    
  from coverage.  He said that he did not want to see people                   
  not "made whole."  However, he noted the social cost                         
  resulting from HB 79's losses being borne by insurers.  He                   
  said that the bill could eventually drive up premium rates.                  
  TAPE 93-32, SIDE B                                                           
  Number 005                                                                   
  REP. GREEN asked Mr. Frank if insurance rates would go up                    
  across the board or just for parents of minors.                              
  Number 008                                                                   
  MR. FRANK replied that insurance premiums were calculated                    
  based on an insurance company's losses, and that HB 79 would                 
  therefore result in increased insurance rates for everyone.                  
  He noted that a person could obtain first-party property                     
  insurance coverage to cover acts of vandalism to one's own                   
  Number 033                                                                   
  REP. DAVIDSON asked Mr. Frank what happened now in the event                 
  that a child committed $15,000 worth of damage to a                          
  neighbor's property.                                                         
  Number 049                                                                   
  MR. FRANK said that under current law, if the damaged person                 
  wanted to recover costs from the parents of the child who                    
  committed the act of vandalism, that person could file a                     
  civil suit.  Under current law, he added, a person could                     
  recover up to $2,000 from the parents.                                       
  Number 059                                                                   
  REP. DAVIDSON asked Mr. Frank if a damaged person could also                 
  turn to her or his own insurance company for repayment of                    
  the cost of the damage.                                                      
  Number 062                                                                   
  MR. FRANK noted that a damaged person could always turn to                   
  her or his own insurance company if the person had a "first-                 
  party policy."  He said if a person submitted a claim to her                 
  or his own insurance company, the company would turn around                  
  and sue the parents of the child who committed the act of                    
  Number 074                                                                   
  REP. DAVIDSON commented that some parents were at their                      
  wit's end in trying to deal with uncontrollable children.                    
  He said that it was not just the parents' fault that                         
  children were becoming more wayward.                                         
  Number 100                                                                   
  CHAIRMAN PORTER noted that HB 79 might assist the insurance                  
  companies, in that when they sued parents to recover                         
  damages, HB 79 would allow them to recover up to $50,000                     
  instead of the current limit of $2,000.                                      
  Number 114                                                                   
  MR. FRANK responded that the Chairman was correct in that                    
  HB 79 would allow insurance companies to recover more money.                 
  However, he noted that HB 79 would still increase the amount                 
  of money that the parents' insurance company paid out,                       
  therefore increasing losses and premiums.                                    
  Number 122                                                                   
  REP. CON BUNDE, PRIME SPONSOR of HB 79, called his bill                      
  "victims' rights legislation."  He commented that going to                   
  court to recover $2,000 would result in a moral victory, but                 
  certainly not a financial one, due to resultant legal costs.                 
  He said HB 79 contained three steps:  (1) proving that an                    
  individual committed a crime; (2) proving that the child was                 
  a dependent of the parent; and (3) proving actual damages.                   
  REP. BUNDE noted that HB 79 provided that a person could                     
  only seek recovery of actual damages caused, with an upper                   
  limit of $50,000.  He said that knowing that they could be                   
  liable for $50,000 if their children committed crimes,                       
  parents would be more likely to make sure that they knew                     
  where their children were and what they were doing.                          
  REP. BUNDE stated that in the case of good parents whose                     
  children were simply uncontrollable, there was a process by                  
  which the children could be adjudicated as "delinquent."  In                 
  that case, he added, the parents would not be financially                    
  responsible for damages caused by the child.                                 
  REP. BUNDE addressed Mr. Frank's suggested amendment to HB
  79.  The amendment would put into statute a provision that                   
  no insurance company could write a policy in Alaska covering                 
  the type of liability addressed in HB 79.  He said that he                   
  opposed the proposed amendment.                                              
  REP. BUNDE said that increased liability would lead to                       
  increased awareness among parents as to their                                
  responsibilities toward their children.  He noted that his                   
  bill would also allow victims of vandalism a greater                         
  opportunity to recover damages.                                              
  Number 212                                                                   
  REP. PHILLIPS commented that had HB 79 been in place the                     
  year before, it might have saved the life of a Dimond High                   
  School student shot while stealing a furniture store sign in                 
  Number 220                                                                   
  REP. BUNDE noted that most children were not so evil that                    
  they would do something that would cause their parents to                    
  lose huge sums of money.  He said that his bill would cause                  
  children to consider the consequences of their actions.                      
  Number 237                                                                   
  REP. GREEN asked about a situation in which a child caused                   
  damage and the child's parents were financially capable of                   
  covering the cost of the damage but moved out of state.                      
  REP. BUNDE replied that under current law, a person who                      
  moved out of state was still responsible for her or his                      
  debts.  He noted that HB 79 would not change that.                           
  REP. GREEN asked Rep. Bunde if he had considered penalizing                  
  children directly for their acts of vandalism.  He mentioned                 
  revoking their driver's licenses or seizing their permanent                  
  fund dividend checks.                                                        
  Number 255                                                                   
  REP. BUNDE said that what Rep. Green had suggested was one                   
  of the original thrusts of HB 79.  However, he said that                     
  because minors could not enter into contracts, the state                     
  could not personally address those things for which a minor                  
  had to sign.  He said that HB 86, which he had also                          
  sponsored, provided for the seizure of a minor's vehicle if                  
  it was used in the commission of a crime.                                    
  Number 278                                                                   
  REP. DAVIDSON said that it seemed to him that HB 79 would                    
  create another type of victim -- the parents.  He expressed                  
  concern over the manner in which the problem of wayward                      
  youth was being attacked.  He suggested increasing the                       
  amount of liability from the current $2,000, but making it                   
  lower than the $50,000 proposed in HB 79.                                    
  Number 307                                                                   
  REP. BUNDE said that it was not his intention to set a new                   
  limit.  He noted that he just set out the jurisdictional                     
  amount currently allowed in the district court.  He                          
  commented that he shared Rep. Davidson's concerns about                      
  wayward children.  However, he stated that parents needed to                 
  do all they could to be responsible for their children.                      
  Number 323                                                                   
  REP. DAVIDSON asked about society's obligation toward                        
  wayward youth.                                                               
  Number 327                                                                   
  REP. BUNDE indicated that if a parent knew of her or his                     
  substantial financial obligation, he or she would either                     
  rein in the children as best they could or have them                         
  adjudicated as delinquent.                                                   
  Number 334                                                                   
  REP. DAVIDSON asked what tools parents could use to rein in                  
  their children.                                                              
  REP. BUNDE replied that parents could decide what tools to                   
  use.  He commented that the only legal protection parents                    
  had against out-of-control children was to have them                         
  adjudicated as delinquent.                                                   
  Number 342                                                                   
  REP. DAVIDSON noted that the state could do better than to                   
  pass legislation dumping the load back on the parents.  He                   
  reiterated his belief that parents were not the only ones at                 
  fault when it came to wayward children.                                      
  Number 356                                                                   
  CHAIRMAN PORTER commented that he agreed with Rep.                           
  Davidson's point that the state needed to strike a balance                   
  between accountability and authority capability.  He said he                 
  was looking at ways to allow parents to have the authority                   
  that they needed to maintain discipline and control over                     
  their children.  He stated that in recent years, laws                        
  protecting children from abuse and sexual assault might have                 
  gone overboard to the point that parental authority had been                 
  Number 386                                                                   
  CHAIRMAN PORTER spoke about a case he had once handled in                    
  which a 15-year-old girl had run away from home because her                  
  parents would not allow her to smoke.  Under current law, he                 
  said, the police could not take her home if she did not want                 
  to go.                                                                       
  Number 409                                                                   
  REP. NORDLUND mentioned Rep. Bunde's HB 100, Prosecution of                  
  Juvenile Felons, and the sponsor's comment that children                     
  under the age of 18, in some cases, ought to be tried as                     
  adults.  Yet in HB 79, he said, the sponsor provided that                    
  parents should be responsible for the actions of children                    
  under the age of 18.  He asked Rep. Bunde to explain this                    
  apparent incongruity.                                                        
  Number 425                                                                   
  REP. BUNDE said that Rep. Nordlund's point was well taken.                   
  He said HB 79 relied somewhat on existing law in that it was                 
  difficult to recover damages from a person under the age of                  
  Number 442                                                                   
  REP. NORDLUND commented that the approaches of HB 100 and                    
  HB 79 seemed to be at cross-purposes.                                        
  Number 446                                                                   
  REP. BUNDE stated that he understood Rep. Nordlund's point,                  
  but he did not entirely concur.  He said he did not see his                  
  ideas as mutually contradictory.                                             
  REP. NORDLUND clarified his point by saying that if a child                  
  was able to make adult decisions, then the parents should be                 
  released from responsibility for the child's actions.                        
  Number 459                                                                   
  REP. BUNDE said that parents could be released from                          
  responsibility through legal action.                                         
  Number 464                                                                   
  REP. JAMES stated that she viewed HB 79 and HB 100 as                        
  addressing two entirely different issues.  She said that the                 
  issue of parental responsibility did not necessarily enter                   
  into HB 100.                                                                 
  Number 479                                                                   
  REP. BUNDE expressed his opinion that the two bills                          
  addressed two different issues.                                              
  REP. KOTT asked if HB 79 would result in the state being                     
  obligated to cover damages committed by a minor.  He                         
  mentioned a case on the Kenai Peninsula in which a child in                  
  the custody of the state and living in a foster home had                     
  committed arson.                                                             
  REP. BUNDE said that under current law, a state agency or                    
  its agents would not be liable for the acts of a minor in                    
  their custody.  He said his bill would not change that or                    
  increase the state's liability.                                              
  Number 514                                                                   
  REP. DAVIDSON asked Rep. Bunde if he had children, and if                    
  so, what tools he employed to control the behavior of his                    
  Number 515                                                                   
  REP. BUNDE said that he did have children and used remedies                  
  ranging from a strong voice and spankings to "time out" and                  
  threats of kicking the children out of the house if they did                 
  not behave.  He noted that if he had been responsible for                    
  $50,000 in damages committed by his children, he would have                  
  adjudicated them as delinquent as soon as he felt they might                 
  commit damage in retaliation for being kicked out of the                     
  house.  He said that he subscribed to the theory of "Tough                   
  Love," whereby a child was told that if he or she lived with                 
  parents, he or she would have to abide by rules set by the                   
  Number 531                                                                   
  REP. KOTT asked what happened once a child was adjudicated                   
  as delinquent.                                                               
  Number 535                                                                   
  REP. BUNDE replied that he believed that such children                       
  became wards of the court.                                                   
  Number 543                                                                   
  REP. DAVIDSON commented that a parent could not have a child                 
  adjudicated as delinquent unless the child had committed a                   
  crime, in his understanding.                                                 
  Number 547                                                                   
  REP. BUNDE said that his research indicated that if a child                  
  were out of control, a parent could have him or her                          
  adjudicated as delinquent.  He noted that the process was                    
  not a simple one.                                                            
  Number 554                                                                   
  CHAIRMAN PORTER noted that it was his understanding that a                   
  court had to judge whether or not a child was delinquent.                    
  Number 560                                                                   
  REP. DAVIDSON said that a parent could not necessarily have                  
  an unruly child adjudicated as delinquent.                                   
  CHAIRMAN PORTER replied that Rep. Davidson was correct.                      
  REP. NORDLUND asked about a child who committed an act of                    
  vandalism, was caught, and was charged with a crime by the                   
  police.  At that point, he asked, would the child be                         
  adjudicated as delinquent, and therefore not covered under                   
  the provisions of HB 79?                                                     
  Number 574                                                                   
  REP. BUNDE said that the child would not be considered                       
  delinquent at the point at which the crime was committed.                    
  He or she would be adjudicated as such after the crime was                   
  Number 579                                                                   
  CHAIRMAN PORTER commented that one malicious act would not                   
  guarantee that a child would be branded "delinquent."                        
  Number 586                                                                   
  REP. KOTT asked if a parent could petition the court to                      
  adjudicate a child as delinquent if that child ran away from                 
  Number 596                                                                   
  RANDALL HINES, YOUTH CORRECTIONS SPECIALIST with the                         
  DEPARTMENT OF HEALTH AND SOCIAL SERVICES, commented that                     
  children entered the juvenile justice system through a                       
  number of means:  petitions filed by law enforcement                         
  agencies, school district referrals, and parental referrals.                 
  However, he said if a child did not break the law, no                        
  delinquent offense had occurred.  He stated that a child                     
  could not be adjudicated as delinquent just because he or                    
  she had run away from home and was incorrigible.                             
  Number 613                                                                   
  REP. KOTT asked if, under HB 79's provisions, a parent could                 
  be liable for $50,000 worth of damage caused by a teenage                    
  Number 620                                                                   
  MR. HINES noted that parents could not "adjudicate" their                    
  children as delinquent; only the court could do that.                        
  Number 626                                                                   
  REP. KOTT commented that the committee should get a legal                    
  opinion as to whether adjudication was the only mechanism                    
  for alleviating parental responsibility for damage caused by                 
  their children.  He asked Mr. Hines to discuss the                           
  emancipation process.                                                        
  Number 631                                                                   
  MR. HINES said that in order for a child to be legally                       
  emancipated, it had to be demonstrated to the court that the                 
  child was recognized as an adult.                                            
  CHAIRMAN PORTER noted that for a child to be emancipated,                    
  the child often had to demonstrate talents, not liabilities.                 
  Number 639                                                                   
  REP. JAMES expressed her belief that if a parent could not                   
  control a child, he or she could have the child placed in                    
  foster care.                                                                 
  Number 646                                                                   
  MR. HINES replied that emergency foster care could be                        
  provided for such children in some cases.                                    
  Number 654                                                                   
  REP. DAVIDSON asked Mr. Hines if he felt that changing laws                  
  so as to give parents reasons to relinquish control of their                 
  children to the state was a good idea.                                       
  Number 663                                                                   
  MR. HINES said that each family was "a fingerprint," and the                 
  issues surrounding a family's ability to care for a child                    
  were very complex.  He said that strengthening the runaway                   
  law might be a step in the right direction.  He added that                   
  providing additional foster care might also be part of the                   
  solution.  He said that there was not one simple answer to                   
  this complex problem.                                                        
  Number 689                                                                   
  REP. PHILLIPS made a motion to move HB 79 out of committee                   
  with individual recommendations.                                             
  Number 692                                                                   
  REP. DAVIDSON objected.  He asked that the committee hear                    
  testimony from the court system on the issue.                                
  Number 697                                                                   
  CHAIRMAN PORTER commented that the committee had addressed                   
  many important issues.  He said that in his understanding                    
  HB 79 was not intended to solve the whole problem of                         
  delinquent juveniles.  He said that the bill had a                           
  relatively narrow focus in deterring some juveniles from                     
  committing acts of vandalism.                                                
  Number 715                                                                   
  REP. DAVIDSON maintained his objection, as he was not                        
  convinced that HB 79 was a good bill.  He noted that bills                   
  that the committee passed out might well become state law.                   
  He said that the legislature needed to address all the                       
  aspects of the problem of delinquent juveniles.  He said he                  
  appreciated the sponsor's effort, but felt that HB 79 would                  
  result in more pressure on the family unit.  He said that he                 
  would like to hear from more agencies, more parents, and                     
  perhaps some children.                                                       
  CHAIRMAN PORTER called for a roll call vote on the motion to                 
  move the bill from committee.  Reps. Green, Kott, James and                  
  Porter voted "yea."  Reps. Davidson and Nordlund voted                       
  "nay."  And so, HB 79 was moved out of committee with                        
  individual recommendations and a zero fiscal note.                           

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