Legislature(1993 - 1994)

02/02/1994 02:20 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 (FIN) AM as the next order of business before the committee.                  
 REPRESENTATIVE CON BUNDE, representing District 18 and prime                  
 sponsor, reviewed HB 79 and the desire to increase the recovery               
 from $5000 to $10,000.                                                        
 SENATOR SHARP clarified that the district court allows up to                  
 $50,000 in recovery.  He posed an example to clarify how HB 79                
 would actually work.                                                          
 REPRESENTATIVE CON BUNDE stated that existing statute limits                  
 recovery to $2000, HB 79 would raise that limit to $5000.  He                 
 expressed the need to raise the recovery to $10,000.  He noted that           
 a $2000 recovery for a $20,000 car is not much; furthermore, one is           
 often not able to seek recovery from juveniles.  There is runaway             
 legislation to protect parents against financial obligation when              
 the juvenile is delinquent.                                                   
 SENATOR MILLER asked if section 2 of HB 79 addresses the runaway              
 issue.  REPRESENTATIVE BUNDE was concerned that the section may not           
 carry strength of law in court.                                               
 SENATOR SALO asked if section 2 addresses when the runaway has to             
 be reported in order to eliminate the parents financial obligation,           
 while disallowing retrospective claims.  REPRESENTATIVE BUNDE said            
 that investigators would deal with such issues.  CHAIRMAN RIEGER              
 pointed out that line 1 page 2 only eliminates parental obligation            
 for acts of the minor after the runaway is reported.                          
 Number 500                                                                    
 SENATOR SALO requested clarification of the $50,000 liability limit           
 for civil damages regarding HB 79.  REPRESENTATIVE BUNDE noted that           
 a $5000 limit for juveniles was small in comparison to a $50,000              
 limit for adults.                                                             
 SENATOR LEMAN commented that the responsibility for compensation of           
 damages should lay closest to the person doing the damage.  He                
 suggested that $5000 was too little and should be raised.                     
 REPRESENTATIVE CON BUNDE specified that the average in other states           
 is between $10,000 and $15,000.  The question of who should suffer            
 the greater loss was mentioned.                                               
 VINCENT USERA, Assistant Attorney General in the Civil Division of            
 the Department of Law, offered to answer questions.                           
 SENATOR SALO stated that the House HESS testimony referred to                 
 $50,000, but the bill ended up only raising the money to $5000.               
 She reiterated the desire to clarify the $50,000 limit.                       
 VINCENT USERA said that $50,000 was the jurisdictional limit of               
 district court.  He pointed out that district court, a court of               
 minimal jurisdiction, could take cases up to $50,000.  The                    
 comparison is $5000 to $50,000 in terms of the magnitude of the               
 offense.  Without this statute, there would be no way to recover at           
 all from the parent for a child.  He noted that the legislation               
 increases the limit of the common law currently in effect.                    
 SENATOR MILLER asked if the definition of "person" in the first               
 section includes a corporation.  REPRESENTATIVE BUNDE stated that             
 yes the definition includes a corporation.                                    
 SENATOR MILLER asked if a person recovers the $5000 in a civil                
 court action, who would be responsible for the attorney's fee.                
 VINCENT USERA said that attorney's fees are awardable under the               
 discretion of the court, normally 20 percent of the award.  These             
 cases seeking under $5000 would usually be limited to Small Claims            
 Court which would not require an attorney.  The defendant has the             
 opportunity to move the case to district court and be subject to              
 the formal rules.  Mr. Usera agreed with Senator Miller's                     
 speculation that a $2000 recovery is not worth the time and effort            
 to go to court.                                                               
 Number 580                                                                    
 SENATOR LEMAN moved to amend the amount on line 7 of page 1 from              
 $5000 to $25,000.  CHAIRMAN RIEGER objected.                                  
 TAPE 94-4, SIDE B                                                             
 Number 578                                                                    
 SENATOR LEMAN explained that he believed in the principle of                  
 restitution and that raising the limit to $25,000 comes closer to             
 allowing pay back of damages.                                                 
 SENATOR SALO expressed interest in the circumstance of people                 
 unable to pay.  She proposed that one would find a greater pool of            
 people unable to pay at $25,000 than at $5000; in this case what              
 would happen.                                                                 
 REPRESENTATIVE CON BUNDE specified that like any legal situation if           
 the court places a judgement against you it could result in                   
 garnishing wages, permanent fund dividends and assets.                        
 GEORGE BINGHAM, Superintendent of Claims for State Farms for                  
 Southeast, commented that in these type situations an insurance               
 recovery limit of $2000 would probably cover 40-50 percent of the             
 claims, $5000 would cover 80 percent, $10,000 would probably cover            
 95 percent of the claims.  There is always 5 to 10 percent that               
 will not be covered.                                                          
 SENATOR SHARP asked if the 80 to 90 percent that Mr. Bingham spoke            
 of included auto claims whether insured or not.  MR. BINGHAM said             
 that was correct and only 5 percent of the claims by minors are               
 over $10,000.  SENATOR SHARP expressed his dislike with                       
 establishing a maximum limit; why should someone damaged over the             
 maximum amount be penalized he asked.                                         
 SENATOR MILLER pointed out that most of the 5 percent are protected           
 with the $25,000 limit.  Chances are that 95 percent of the claims            
 will not get up to the $25,000 range.                                         
 SENATOR LEMAN asked what percentage $25,000 would cover.  MR.                 
 BINGHAM stated that 97 percent would be covered.                              
 CHAIRMAN RIEGER reminded the committee of the previous motion to              
 amend the amount on page 1 line 7 from $5000 to $25,000.  A hand              
 vote was taken with the following result:  Senators Miller, Sharp,            
 and Leman voted "Yea" and Senators Rieger and Salo voted "Nay".               
 The motion was carried.                                                       
 SENATOR MILLER moved Senate Committee Substitute for CSHB 79 (HES)            
 out of committee with individual recommendations.  Hearing no                 
 objections, it was so ordered.                                                

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