Legislature(1993 - 1994)
03/02/1993 03:00 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 160: CERTAIN CIVIL ACTIONS REP. JOE GREEN, PRIME SPONSOR of HB 160, testified that HB 160 proposes a "Statute of Repose" for legal action against design and construction companies. The statute of repose is similar to the statute of limitation in other lawsuits. The sponsor believes that without a time limit to file legal actions, design professionals and others in the construction trade are subject to an indefinite and unfair period of liability. Rep. Green further stated that poor maintenance, improper operation, or alteration of a building can adversely affect an original structure. He stated the bill would not grant immunity, at any time, from injury or damage as the result of gross negligence. (See attachment 1) REP. HUDSON asked for questions from the committee. There were no questions from the committee. REP. HUDSON called for testimony from Richard Ritter. Number 108 RICHARD RITTER, CHAIRMAN OF LEGISLATIVE AFFAIRS FOR THE ALASKA CHAPTER OF THE AMERICAN INSTITUTE OF ARCHITECTS, supported the statements made by Rep. Green and commented that of the 45 states with a statute of repose, 32 of them have been adjudged constitutional. He further elaborated on the costly burden on a firm when a claim is filed against them, and provided specific examples. Number 120 REP. HUDSON asked for examples of states that do not have a "statute of repose." Number 125 MR. RITTER responded they were Alaska, Alabama, Wisconsin, Kentucky and New York. He also reiterated that 32 of the 45 states with a statute of repose have been tested in court and were found constitutional. Number 172 RICHARD CATTANAGH, VICE PRESIDENT, ALASKA GENERAL CONTRACTORS, testified in favor of HB 160, stating that under current law, contractors have unlimited liability for any construction project that a company may undertake. He said he believes the law is unfair, pointing out that the statute of limitations for crimes such as vandalism and murder have shorter statute of limitations. MR. CATTANAGH further pointed out that there are many professionals involved in a construction project and he feels that it is unreasonable to leave the contractor solely responsible if a claim is filed. He recommended that a ten year statute of repose is too long. Number 218 REP. HUDSON asked if Mr. Cattanagh participated in the rewriting of this issue last year. Number 220 MR. CATTANAGH responded no, the contractors had been excluded from the bill. As a result, the contractors dealt with the designing engineers and did not participate in rewriting or redrafting the bill. Number 233 DOUG GREEN testified via teleconference from Anchorage in support of HB 160. He pointed out that a building itself is a process which architects and contractors bring to completion. At that time, the owner cares for, maintains, improves or neglects that building, and at that point the responsibility is transferred from contractor to owner. Number 240 MR. GREEN also stated that HB 160 would not protect those who are negligent or fraudulent within that process. In addition, he said, passage of this bill would potentially, over time, lower insurance rates. Number 305 REP. PORTER asked Mr. Green if 10 years was too extreme. Number 310 MR. GREEN said that some studies show that a lesser length of time may be justified and would be interested if that were proposed. Number 319 REP. HUDSON asked what would be a lesser time and what is the standard in other states. Number 323 MR. GREEN said that the standard in most states is five to eight years. In previous legislation in the Senate, the Alaska Professional Design Council supported the seven year "statute of repose." Number 327 REP. GREEN explained that he was concerned that the shorter length of time would increase the likelihood of court intervention and/or if the amount of time was changed in the bill, it may hinder its passage. His priority was to pass the bill from committee and amend it at a later date if that was deemed a reasonable length of time. MR. GREEN agreed. Number 341 LEE HOLMES testified from Anchorage on behalf of the ALASKA PROFESSIONAL DESIGN COUNCIL in support of HB 160. He reiterated comments made by Mr. Green. He also pointed out that most claims are filed within 10 years. If the length of time is longer than that, it poses a greater financial and operational burden to the company because of the cost in locating and maintaining documents. Number 403 GENE REHFIELD testified on behalf of the ALASKA SECTION OF THE AMERICAN SOCIETY OF CIVIL ENGINEERS in support of HB 160. Number 430 REP. HUDSON asked MIKE FORD from LEGAL SERVICES in the DEPARTMENT OF LAW to come forward. He asked about the question of the constitutionality of HB 160 and if this issue had been before the Labor and Commerce Committee last year. He also asked if there was a substantive change in this bill. Number 438 MR. FORD stated there were two changes: HB 160 expands the group of people protected, and also increases the period of time that a lawsuit can be brought against a company or contractor. REP. HUDSON asked if the time limit was seven years in last year's bill. MR. FORD said there were various versions, seven being the most popular. He went on to say, if the committee adopts the ten year provision, 3 percent of potential litigants would be excluded. This is significant in terms of equal protection analysis and who is being prohibited from bringing lawsuit. Number 456 REP. PORTER asked Mr. Ford if there was an equal protection concern regarding who it was protecting by this legislation. Number 460 MR. FORD said yes, and in addition, contractors had been added to the list of those protected and felt that was significant. He continued to say that there is significance in the fact that liability laws have changed since the Scales case and may give the court a different view on this statute of repose. Number 475 REP. PORTER moved that HB 160 pass out of committee with individual recommendations and a zero fiscal note. REP. HUDSON asked for objections. There were none, so HB 160 passed from the House Labor and Commerce Committee. Number 478 CHAIRMAN HUDSON turned the meeting over to VICE CHAIR GREEN. REP. GREEN announced that HB 112 would be heard next.
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