Legislature(1999 - 2000)
02/28/2000 01:25 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE
February 28, 2000
1:25 p.m.
MEMBERS PRESENT
Representative Pete Kott, Chairman
Representative Joe Green
Representative Norman Rokeberg
Representative Jeannette James
Representative Lisa Murkowski
Representative Eric Croft
MEMBERS ABSENT
Representative Beth Kerttula
COMMITTEE CALENDAR
HOUSE BILL NO. 318
"An Act relating to property disposal by law enforcement agencies."
- MOVED CSHB 318(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 385
"An Act relating to search warrants."
- HEARD AND HELD
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 42
"An Act relating to civil liability for certain false or improper
allegations in a civil pleading or for certain improper acts
relating to a civil action; amending Rule 82(b), Alaska Rules of
Civil Procedure; and providing for an effective date."
- HEARD AND HELD
HOUSE JOINT RESOLUTION NO. 52
Proposing an amendment to the Constitution of the State of Alaska
relating to certain public corporations.
- HEARD AND HELD
PREVIOUS ACTION
BILL: HB 318
SHORT TITLE: RETURN FOUND PROPERTY TO FINDER
Jrn-Date Jrn-Page Action
1/26/00 2006 (H) READ THE FIRST TIME - REFERRALS
1/26/00 2007 (H) JUD, FIN
1/31/00 2049 (H) COSPONSOR(S): DYSON
2/09/00 (H) JUD AT 1:00 PM CAPITOL 120
2/09/00 (H) Heard & Held
2/09/00 (H) MINUTE(JUD)
2/11/00 2189 (H) COSPONSOR(S): CROFT
2/28/00 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 385
SHORT TITLE: ISSUANCE OF SEARCH WARRANTS
Jrn-Date Jrn-Page Action
2/16/00 2215 (H) READ THE FIRST TIME - REFERRALS
2/16/00 2215 (H) JUD
2/28/00 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HB 42
SHORT TITLE: CIVIL LIABILITY FOR IMPROPER LITIGATION
Jrn-Date Jrn-Page Action
1/19/99 29 (H) PREFILE RELEASED 1/15/99
1/19/99 29 (H) READ THE FIRST TIME - REFERRAL(S)
1/19/99 29 (H) JUD, FIN
2/16/00 2206 (H) SPONSOR SUBSTITUTE INTRODUCED
2/16/00 2206 (H) READ THE FIRST TIME - REFERRALS
2/16/00 2206 (H) JUD, FIN
2/16/00 2206 (H) REFERRED TO JUDICIARY
2/28/00 (H) JUD AT 1:00 PM CAPITOL 120
BILL: HJR 52
SHORT TITLE: CONFIRM PUBLIC CORP BD MANAGING ASSETS
Jrn-Date Jrn-Page Action
2/02/00 2059 (H) READ THE FIRST TIME - REFERRALS
2/02/00 2060 (H) STA, JUD, FIN
2/17/00 (H) STA AT 8:00 AM CAPITOL 102
2/17/00 (H) Moved Out of Committee
2/17/00 (H) MINUTE(STA)
2/18/00 2234 (H) STA RPT 3DP 3NR
2/18/00 2234 (H) DP: JAMES, WHITAKER, OGAN;
2/18/00 2234 (H) NR: SMALLEY, KERTTULA, GREEN
2/18/00 2234 (H) FISCAL NOTE (GOV)
2/28/00 (H) JUD AT 1:00 PM CAPITOL 120
WITNESS REGISTER
JONATHAN LACK, Staff
to Representative Andrew Halcro
Alaska State Legislature
Capitol Building, Room 418
Juneau, Alaska 99801
POSITION STATEMENT: Presented HB 385 on behalf of sponsor.
REPRESENTATIVE ELDON MULDER
Alaska State Legislature
Capitol Building, Room 507
Juneau, Alaska 99801
POSITION STATEMENT: Sponsor of SSHB 42.
ROBERT A. MINTZ, Attorney at Law
550 West 7th Avenue, Suite 1540
Anchorage, Alaska 99501
POSITION STATEMENT: Testified in strong support of SSHB 42.
PAMELA LaBOLLE, President
Alaska State Chamber of Commerce
217 Second Street, Suite 201
Juneau, Alaska 99801
POSITION STATEMENT: Testified in support of SSHB 42.
MICHAEL LESSMEIER, Attorney at Law
Lessmeier & Winters, and Lobbyist
for State Farm Insurance Company
431 North Franklin Street, Number 400
Juneau, Alaska 99801
POSITION STATEMENT: On behalf of State Farm Insurance Company,
encouraged passage of SSHB 42.
JAMES BALDWIN, Assistant Attorney General
Civil Division (Juneau)
Department of Law
P.O. Box 110300
Juneau, Alaska 99811-0300
POSITION STATEMENT: Testified on HJR 52.
ACTION NARRATIVE
TAPE 00-22, SIDE A
Number 0001
CHAIRMAN PETE KOTT called the House Judiciary Standing Committee
meeting to order at 1:25 p.m. Members present at the call to order
were Representatives Kott, Green, Rokeberg and Croft.
Representatives Murkowski and James arrived as the meeting was in
progress.
HB 318 - RETURN FOUND PROPERTY TO FINDER
CHAIRMAN KOTT announced that the first order of business would be
HOUSE BILL NO. 318, "An Act relating to property disposal by law
enforcement agencies." Chairman Kott reminded members that the
bill had been heard previously. He noted that a new proposed
committee substitute (CS) [work draft 1-LS1294\G, Luckhaupt,
2/18/00] had been prepared. However, there was also a memorandum
from Gerald Luckhaupt of Legislative Legal Services; Chairman Kott
said as he reads that and compares it with the original bill, he
recommends against adopting the new proposed CS. He suggested
returning to the original bill, saying he believes that
requirements already in law will allow the various things to occur
without more language being added.
Number 0143
REPRESENTATIVE ROKEBERG pointed out that Version D still exists
[adopted as a work draft on 2/9/00].
CHAIRMAN KOTT affirmed that. He announced that Version D was
before the committee. He called an at-ease from 1:27 p.m., and
called the meeting back to order at 1:30 p.m.
Number 0220
REPRESENTATIVE CROFT made a motion that the proposed CS for HB 318,
Version D [1-LS1294\D, Luckhaupt, 2/8/00] be advanced from the
committee with individual recommendations and the attached zero
fiscal note. There being no objection, CSHB 318(JUD) was moved
from the House Judiciary Standing Committee.
HB 385 - ISSUANCE OF SEARCH WARRANTS
CHAIRMAN KOTT announced that the next order of business would be
HOUSE BILL NO. 385, "An Act relating to search warrants." He
advised listeners that there were no testifiers other than the
sponsor's representative that day, but that the bill would be taken
up again on Wednesday, March 1.
Number 0428
JONATHAN LACK, Staff to Representative Andrew Halcro, Alaska State
Legislature, came forward to explain the bill on behalf of the
sponsor. He informed members that Representative Halcro had
introduced HB 385 because of a decision by a Juneau magistrate in
early January that dismissed a search warrant for a violation. Mr.
Lack pointed out that AS 12.35.020, which grants authority for
judges and judicial officers to issue search warrants, says search
warrants can only be issued for crimes; although that section of
the code does not distinguish between "crimes" and "violations,"
that distinction is made elsewhere in the code. The Juneau
magistrate had grabbed onto that distinction and found that search
warrants could not be issued for violations. To Mr. Lack's
understanding, the state is appealing that decision. However, the
statute leads to the ability to make that distinction. Therefore,
HB 385 is offered to clarify legislative intent by providing that
search warrants can be issued for violations.
MR. LACK told members two people had planned to be online to
testify: Duane Udland, Chief of Police for the Anchorage Police
Department and President of the Alaska Association of Chiefs of
Police, who had submitted a letter in support of this legislation;
and Lieutenant Howard Starbard, Division of Fish and Wildlife
Protection, Department of Public Safety (DPS). Mr. Lack stated his
belief that those two individuals support HB 385 for two reasons.
First, a couple of years ago the legislature reduced the penalty
for alcohol consumption by a minor so that it is no longer a crime,
thereby removing the possibility of jail time; in effect, because
of the magistrate's ruling, search warrants can no longer be issued
for minor consumption.
MR. LACK said second, there are a number of violations of state law
in the fisheries, wildlife and hunting categories; for instance,
there are fairly severe financial penalties - up to $100,000 for
the first offense - for intercepting salmon on the high seas, but
no jail time is associated with that. In talking to him that
morning, Mr. Lack said Lieutenant Starbard had indicated the need
for an ability to seize or inspect a vessel that is doing high-seas
fishing; he had also indicated that if this doesn't pass, there is
a possibility that the DPS will have to investigate all violations
as crimes, which will push up the penalties. The DPS would still
be able to get search warrants for some of these things because the
requirements of the violation and the crime are similar; however,
now they will have to prosecute and investigate those as crimes,
not violations, because they need the search warrant ability. Mr.
Lack noted that Paulette Simpson, who also had been prepared to
testify, had submitted written testimony to committee members.
CHAIRMAN KOTT acknowledged receipt of Duane Udland's letter and
Paulette Simpson's written testimony, both in support of the bill,
which would become part of the permanent record.
Number 0750
REPRESENTATIVE GREEN inquired whether going from a crime to an
offense opens a Pandora's box. He pointed out that a myriad of
things fall under the "offense" category, including speeding and
parking violations, for which a search warrant would be an invasion
of privacy if issued on that basis.
MR. LACK replied, "Absolutely." He referred to AS 12.35.020 and
said the search warrant only can be issued to seize property. For
a speeding violation, as with many violations, no search warrant
would ever be issued. Before a search warrant can be issued, both
federal and Alaskan constitutional law require that probable cause
must be established. A police officer, for example, must go before
the court and state why he or she believes a search warrant needs
to be issued; that includes why the officer believes a crime has
been committed and that the property which he or she is looking to
seize or search will be evidence of that crime. There are
procedural safeguards. Police throughout Alaska have been
obtaining search warrants to investigate and prosecute violations
at least since statehood. This doesn't expand the law or the
ability of the police. Rather, this one [magistrate's] decision
has created a situation where law enforcement officers can no
longer do what they were doing.
Number 0901
REPRESENTATIVE MURKOWSKI, acknowledging that a newspaper shouldn't
be a source of legal information, mentioned an article in the
Juneau Empire that referenced the arguments presented before the
Juneau magistrate. She said apparently the Department of Law had
argued, in its petition, that the court has upheld the use of
arrest warrants for traffic infractions. Like Representative
Green, she is wondering whether this opens a Pandora's box.
MR. LACK specified that the only applicable traffic offense,
because there is a property situation, is where a driver does a
hit-and-run, for example, then proceeds directly home and shuts the
garage door; the police officer would still have to go before the
magistrate or judge to get a search warrant to search the house and
to seize that vehicle. Mr. Lack commented that the article talks
about the state's petition, which he had read. The issue of
traffic violations decided by the Alaska Supreme Court deals with
arrest warrants, which are similar to search warrants, but the
issue of search warrants hasn't been taken to that court yet. In
State v. Clayton, the Alaska Supreme Court established the concept
of a quasi-criminal act, something punishable by only a fine and
not jail time. He said that would be traffic violations.
Number 1034
REPRESENTATIVE CROFT asked whether there is no crime so small that
the state shouldn't authorize the search of a home to find evidence
of that crime. He asked if there is any theoretical limit to this.
MR. LACK answered that theoretically there is not, but the question
becomes whether there is property involved and whether there will
be physical evidence of that crime. Under this bill, a police
officer could conceivably obtain a search warrant to search a house
for a packet of chewing gum that had been shoplifted. However, Mr.
Lack had spoken with a municipal prosecutor that morning, who said
the fine is $300 and it would cost $1,000 to get a search warrant;
therefore, they probably won't do it for a pack of gum or even for
minor traffic violations.
MR. LACK said the focus is minor consumption - a serious problem in
Alaska, especially in rural communities where alcohol use is
rampant among youngsters - and fishing and hunting violations. He
emphasized the need to be able to enforce the laws of the state.
The bottom-line question isn't whether the laws themselves are good
but whether Alaska's police, state troopers and other law
enforcement officials are able to enforce the laws that exist.
Number 1135
REPRESENTATIVE CROFT asked under what section of AS 12.35.020 the
search warrant is authorized.
MR. LACK answered that subsections (1) through (4) all talk about
searching for a specific piece of property that either was used in
the crime or is evidence of the crime.
REPRESENTATIVE CROFT stated his understanding that "property" is
not a house but beer, for example. The search warrant, then,
describes the places to be searched.
MR. LACK affirmed that. He pointed out that committee members had
been given copies of Criminal Rules 4 and 37 of the Alaska Rules of
Court. Criminal Rule 37 provides when a search warrant can be
issued; the specifics of what must be in the warrant are on page
370, the second page of the handout.
Number 1224
REPRESENTATIVE ROKEBERG expressed concern about deleting the word
"crime." He asked whether this is a "greater included definition."
MR. LACK explained that "offense" has been defined in AS 11.81.900,
and it includes a crime and a violation. Therefore, "crime" has
been replaced with "offense" in the bill, so it is all-inclusive.
Number 1262
REPRESENTATIVE GREEN asked whether it would be better, if concerned
as a society about minor consuming and fish and game violations, to
modify it so search warrants are allowed for those, rather than
opening a Pandora's box.
MR. LACK noted that the legislature, either two or four years ago,
had decided to take away the possibility of jail for minor
consumption; he believes the intent was to reduce the stigma
associated with minor consumption and to give people an ability to
move forward without one mistake ruining their ability to get into
college or to get jobs. For example, a person who has done jail
time may not be able to become an Alaska State Trooper or a foster
parent.
REPRESENTATIVE GREEN indicated he recalled that legislation.
However, he is concerned that it may be better, under subsection
(2), to have it say "a crime and the offenses of," listing the
offenses included. That way, one could get a search warrant for
minor consumption or for fish and game violations, even though
those aren't crimes subject to jail time.
MR. LACK indicated he would make two points. First, prior to the
Juneau magistrate's decision it wasn't a question of the ability to
get a search warrant for all violations. Alaskan prosecutors and
police officers had that ability until the end of January, and in
many cases, they may still be doing it because the decision only
affects the one case. Mr. Lack indicated HB 385 is an attempt to
prevent it from affecting all cases. Second, from his personal
experience with legislation and drafting, every year somebody will
have a new violation to add to the list; the statute itself will
become unworkable. Mr. Lack cited an example of legislation with
more than 30 exceptions listed. He restated that the statute, both
now and with HB 385, deals with seizing specific property, and most
violations aren't covered anyway because there is no property
involved. He believes that distinction is sufficient.
Number 1442
REPRESENTATIVE MURKOWSKI asked whether perhaps this legislation is
a bit premature because the courts could decide to not uphold the
magistrate's ruling.
MR. LACK agreed HB 385 is possibly premature in a judicial sense.
However, because it was a magistrate's decision, it is currently
being appealed to the superior court. State resources will be used
to plead this case, and the young gentleman involved will have to
plead his case as well. Then it can be appealed to the Court of
Appeals, and then to the Alaska Supreme Court. For perhaps four to
six years, law enforcement personnel will be out on the streets
without knowing what the law is, a situation the legislature
shouldn't allow. In that sense, it isn't premature.
Number 1538
REPRESENTATIVE MURKOWSKI asked what Anchorage is doing now. For
example, are they issuing search warrants for underage drinking
parties?
MR. LACK replied that he can't say about Anchorage, but he has
spoken to a prosecutor from another jurisdiction, where they are
just "upping" what they are looking for, making it not only minor
consuming, for example, but also contributing to the delinquency of
a minor or trespass issues. If HB 385 isn't passed, the response
will be "upping" the penalties for juveniles.
Number 1593
REPRESENTATIVE JAMES referred back to Representative Green's
suggestion. She indicated she doesn't see any problem with having
a list including minor consuming and fish and game violations, plus
others, because [lists] occur throughout the statutes. Oftentimes
the legislature cannot write a "blank check" and must list
exceptions. To her, this bill particularly begs for some
exceptions. She requested a response.
MR. LACK reiterated that law enforcement officers have had the
ability to obtain search warrants for violations "forever" anyway,
without any problem that he is aware of. Also, the statute itself
talks about obtaining a search warrant to seize property; however,
there is no property involved with most violations, so those are
already excluded by the wording of the statute, and there is no
need to list them. Furthermore, this weekend he came up with an
eight-page list of violations in the statutes before his computer
went down and he lost the list.
Number 1692
REPRESENTATIVE GREEN expressed confusion as to why, if most
violations don't apply, Mr. Lack objects to listing the two to
which it does apply.
MR. LACK explained that there are more than two. They would need
to list perhaps 8 or 10 tobacco violations, minor consuming, and
probably 15 statutes on fish and wildlife, for example. He
acknowledged that it is the committee's decision to list them or
not, but said HB 385, as written, would be simpler.
REPRESENTATIVE GREEN asked how much of a problem it would be to let
the committee know what would be included on that list now for
search warrants.
MR. LACK said he could put it together. He'd spent 14 hours on it
over the weekend to get to eight pages, and he wasn't finished
then. Alphabetically, he was at "F."
REPRESENTATIVE GREEN said he believes that justifies the concern
even more.
MR. LACK reiterated that for most of those, because there is no
property involved, this doesn't really apply.
REPRESENTATIVE GREEN said it would be nice to know what does apply.
Number 1764
REPRESENTATIVE JAMES expressed concern about someone getting a
search warrant because of a tobacco infringement. Although Mr.
Lack had said it has been working fine and the police haven't been
over-reactive or creating problem, she said that doesn't comfort
her much. If presumably the legislature adds intent language, she
has a sneaky feeling it provides law enforcement more authority.
She concluded that she has a real problem with coming into
somebody's home if there isn't something serious going on there.
MR. LACK expressed his understanding - with which he said
Representative Halcro would agree - that the situation with tobacco
is not so much minor possession of tobacco but wanting a search
warrant if a store sells it out of the back room to minors, for
example. Right now, the answer is "no" under the magistrate's
decision. Mr. Lack noted that a number of people had telephoned
with concerns that the bill allows warrantless searches, which it
does not. However, no concern has been heard about whether there
is an abuse of the search warrant process. Because one must
establish probable cause, one must establish, before a magistrate
or a judge, that there is evidence that a crime is either going on
or is going to be committed, and that property used in that crime
needs to be seized. This does not give carte blanche to search
somebody's home. Also, if a search warrant has been issued without
probable cause, anything discovered under that search warrant is
thrown out anyway as "fruits of the poisonous tree." Protections
are built into the constitution and the statute already.
Number 1913
REPRESENTATIVE JAMES surmised that law enforcement must do a lot of
searching, however, before finding that particular property. She
expressed concern about privacy.
MR. LACK said he understands Representative James' concern.
Alaska, which has a specific privacy clause [in the constitution],
guarantees a lot more protections than otherwise would be
guaranteed. For instance, a Federal Bureau of Investigation (FBI)
agent who wanted a search warrant would have to look for the
specific item. And there are size requirements. For example,
someone looking for a double-barrel shotgun cannot look in a
briefcase because it doesn't fit there. The Alaska Supreme Court
has outlined "closed-container rules" on searches. In Alaska, the
privacy clause has already been used to protect Alaskans against
even the broad use of search warrants that is granted under the
federal constitution.
Number 1978
REPRESENTATIVE CROFT compared the Fourth Amendment [to the U.S.
constitution] and [Article I,] Section 14 of Alaska's constitution.
The former read:
Searches and seizures. The right of the people to be
secure in their persons, houses, papers, and effects,
against unreasonable searches and seizures, shall not be
violated, and no warrants shall issue, but upon probable
cause, supported by oath or affirmation, and particularly
describing the place to be searched, and the persons or
things to be seized.
Article I, Section 14 of Alaska's constitution read:
SEARCHES AND SEIZURES. The right of the people to be
secure in their persons, houses and other property,
papers, and effects, against unreasonable searches and
seizures, shall not be violated. No warrants shall
issue, but upon probable cause, supported by oath or
affirmation, and particularly describing the place to be
searched, and the persons or things to be seized.
REPRESENTATIVE CROFT commented that it seems to imply that even a
search with a warrant that is unreasonable can be constitutionally
prescribed.
MR. LACK agreed.
REPRESENTATIVE CROFT asked whether there are any reported cases of
crossing a constitutional line by getting so "small" that it is
unreasonable, constitutionally.
MR. LACK explained that the concept of "reasonable" has been
applied strictly to whether probable cause exists, not to the crime
itself or the level of the crime. Alaska's constitution is even
more specific, as interpreted by the supreme court, because it also
has the privacy clause adopted in 1973.
Number 2054
CHAIRMAN KOTT thanked Mr. Lack. Noting that others may want to
testify at the next hearing, he announced that HB 385 would be held
over until Wednesday, March 1.
HB 42 - CIVIL LIABILITY FOR IMPROPER LITIGATION
CHAIRMAN KOTT announced that the next order of business would be
SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 42, "An Act relating to civil
liability for certain false or improper allegations in a civil
pleading or for certain improper acts relating to a civil action;
amending Rule 82(b), Alaska Rules of Civil Procedure; and providing
for an effective date."
Number 2096
REPRESENTATIVE ELDON MULDER, Alaska State Legislature, sponsor,
acknowledged that he had been before the committee four or five
times with similar legislation. He suggested that members read the
sponsor statement but said he would talk about his reasons for
continuing to bring this bill forward. He believes that there is
a crisis of confidence among Alaskans regarding the ability to
defend oneself in court, and that people are frustrated with the
inability to make themselves whole in this process. There is not
much opportunity to recover the expense of defending oneself in
court, he said, even though the claims being made are incorrect.
Most times, these issues are settled out of court for the costs,
the deductible, or the limits of the insurance policy, because of
the ease of doing so and the savings in time and money.
REPRESENTATIVE MULDER told members he is troubled because he
believes that lying is an acceptable tool to be utilized in the
court system today; he cited a movie about a lying attorney as an
example. He restated the desire to have people be able to defend
themselves against a factually inaccurate claim and to make
themselves whole, which he doesn't believe is possible currently.
Therefore, the bill allows two new actions to occur. A person can
file for recovery against an attorney who has knowingly put forward
a case based upon factual inaccuracies, or if the case has been
brought forward without due diligence to research the information
to ensure that it is factual. Currently under Rule 11 that ability
exists, but it can only be utilized by the judge.
REPRESENTATIVE MULDER specified that he isn't trying to pick a
fight with the judicial system or judges, then pointed out that
judges are attorneys who have come through the legal system; they
are forced to sit and make judgments against their own. From a
practical standpoint, Representative Mulder said he doesn't believe
that Rule 11 can practically be utilized, and hence it isn't
properly utilized to its fullest extent. This bill expands the
ability of the trier of the case - the judge or jury - to allow
that trier to apply those same standards against an attorney or the
plaintiff in the case.
REPRESENTATIVE MULDER told members that he believes there are
precautions built into the bill. If the defendant believes there
are inaccuracies in the case, this bill requires that the defendant
has to put forward a counterclaim that states the defendant's
belief that the case is based upon false information, what the
inaccuracies are, and the reasons for the belief; after those are
put forward, there are 21 days to respond. A plaintiff who knows
the information to be correct would continue forward with the case;
however, if the attorney didn't know all the facts, this gives that
attorney the opportunity to take appropriate corrective action.
REPRESENTATIVE MULDER said this bill doesn't totally tip the
balance of the scales toward the defendant, and he believes this
counter-step is both reasonable and appropriate. People who tell
the truth have nothing to fear from this bill, which is aimed at
those who base a case on inaccuracies or the failure to properly
pursue the action necessary to discover what the truth is. He
noted that Bob Mintz was on teleconference and Michael Lessmeier
was available to answer technical questions. Acknowledging that he
himself isn't an attorney, he indicated his belief that it would be
difficult for an attorney to present the bill because of possible
repercussions.
Number 2454
REPRESENTATIVE JAMES recalled that she had once believed the
judicial system is perfect and attorneys are wonderful. However,
as a plaintiff in a case, she had listened to a deposition in which
an absolutely false statement was made about a meeting that
supposedly occurred.
TAPE 00-22, SIDE B
Number 0001
REPRESENTATIVE JAMES noted that in the instance discussed above,
she had asked her attorney what she could do about it, and the
attorney had said she could do an affidavit about it; that would
have been one person's word against the other's. She asked whether
this [bill] does anything for circumstances such as that.
REPRESENTATIVE MULDER replied that he believes it would allow her
to try to substantiate that claim. Certainly, there would be an
ability to get statements or testimony from others at the meeting,
for example, to support her statement that she hadn't attended that
meeting, and to support her claim that the statement was factually
inaccurate; if that were the basis of the claim, Representative
James could then countersue.
Number 0057
REPRESENTATIVE MURKOWSKI commented that the discovery process is
about finding out things that perhaps the client didn't tell the
attorney or about which the client didn't tell the whole story. In
discovery, there is a requirement to go ahead and correct the
responses to any interrogatories that have come in because of the
new information available. If the trial were going on, however,
what would happen to the trial? Would it be somewhat derailed by
an allegation that a few counts of the claim were perhaps
inaccurate and were false representations? She asked whether this
would slow the process down because of having a "mini-trial" within
a trial.
REPRESENTATIVE MULDER suggested either Mr. Lessmeier or Mr. Mintz,
who are attorneys, could answer better.
Number 0153
ROBERT A. MINTZ, Attorney at Law, testified via teleconference from
Anchorage. He responded to Representative Murkowski's question by
referring to subsection (a), which requires signed civil pleadings;
he said it wouldn't pertain to testimony given at trial. Under
subsection (c), he said, there is a codification and liberalization
of the "malicious prosecution common law"; he said he thinks that
would be an applicable provision and that Mr. Lessmeier would
address the applicability of subsection (b).
MR. MINTZ continued with "malicious prosecution." He said that
someone who takes an active part in a continuation for an improper
purpose after learning that there is no probable cause for the
civil proceeding would become liable under the Act as if that
person had initiated the proceeding. This raises the bar. One
expects an ethical person who learns that the basis for an action
or defense no longer exists would act on that; in reality, however,
that occasionally doesn't happen. This bill, therefore, creates
consequences that don't exist today for failure to do the right
thing. Mr. Mintz asked Representative Murkowski whether that helps
with her question.
Number 0248
REPRESENTATIVE MURKOWSKI replied that it does and it doesn't. In
a limited procedural sense, she asked, does the case get
sidetracked from the main issues of the trial if there is, for
instance, one count that has been misrepresented?
MR. MINTZ answered no. In the strict procedural sense, it doesn't
sidetrack the underlying trial, because the claims under this bill
cannot be brought until after final judgment is entered. However,
it does create tension in the heart of the person who is
prosecuting the claim that the person now knows is not justifiable.
In that sense, it may disrupt the procedure because it creates an
incentive to come forward.
Number 0310
MR. MINTZ turned attention to how the bill differs from current
law. He first referred members to his letter in support of SSHB
42, contained in packets, and said he didn't want to repeat what he
had written. He then explained that this bill allows people who
are injured by misconduct to seek compensation. Currently, the
rules and the legal system give the court discretion to redress the
wrongs which are addressed by this bill; however, this bill gives
that power to the injured party and doesn't rely on the judicial
system to be self-correcting. The bill also expands the
consequences by allowing punitive damages in those rare cases where
it can be proved that somebody knowingly and intentionally lied.
MR. MINTZ surmised that attorneys won't like this bill because it
will require some of them to do more up-front work before asserting
the claim. Furthermore, it exposes their personal pocketbooks if
it can be shown that the up-front work wasn't done, or if it can be
proven that they acted unreasonably or maliciously. This bill is
a measured step that for the most part uses existing standards of
conduct or creates a claim where there is knowing and intentional
falsification going on. He said he strongly supports it.
Number 0380
REPRESENTATIVE MURKOWSKI referred to Civil Rule 82. She then
referred to subsection (e) of the bill, which says a court shall
award actual reasonable attorney fees and which deviates from the
rule. She asked whether the legislature can get away with just an
indirect court rule amendment or whether there is a need to amend
Civil Rule 82 to provide for "actuals."
MR. MINTZ answered that absent the three-quarters' vote, that
section probably won't become law. He said the intention of the
bill is to try to make people as whole as possible, including the
cost of prosecuting these claims. "Even if we can't go the whole
mile, the rest of the provisions go a long way towards making
people more whole than they can be made today," he added.
Number 0450
PAMELA LaBOLLE, President, Alaska State Chamber of Commerce, came
forward to testify, noting that her organization has been active
over the years in trying to make the judicial system more
responsive to business people who are too often held hostage by
false litigation or a system that just doesn't work without a great
deal of expense. She pointed out that many times an individual has
to decide whether to fight a claim or just settle out of court
based on the expense. Civil litigation has always been a real
problem for business people, especially those in small businesses.
MS. LaBOLLE reminded members that defending against false
allegations is no less costly than defending against the true ones.
This bill says that people who intentionally provide false
information that is material to a case will pay if that is found to
be the fact; it also applies if people use invalid claims or
counterclaims to intentionally cloud a case, which may happen when
one's case isn't that strong; furthermore, it applies when someone
is hoping to force someone else to settle out of court. She said
this isn't about honest errors or ethical people, and she believes
most attorneys are ethical people. This is about people who would
unethically use the system to their own will and benefit, at
significant expense to honest, ethical people. This bill would put
a cost on those who try to use the system to their own benefit
while harming others.
Number 0599
MICHAEL LESSMEIER, Attorney at Law, Lessmeier & Winters, and
Lobbyist for State Farm Insurance Company, came forward to testify
on behalf of State Farm Insurance Company. He stated:
We call this bill "the truth and responsibility bill,"
because those are the principles that it seeks to
recognize. And I think we would hope that while those
principles would be recognized by everyone, and in fact
the importance of those principles in our civil justice
system would be heightened by what's in this bill, our
hope is that the actual tools that this bill places in
the system would be used rarely, because under this bill
there would be definite and certain sanctions for a very
narrow kind of conduct that does occur, and the cost of
that conduct is high. And the purpose of this bill is to
raise the recognition of everyone that there are certain
things that you shouldn't be doing in a court of law, and
we're not going to allow them anymore.
And as an example, Representative Murkowski, you had a
question about what happens ... in the middle of a trial.
For example, do we get sidetracked on an issue of
credibility when we shouldn't be? And that really ... is
the purpose of subsection (b). The purpose of subsection
(b) is, in a case, to require the jury to be instructed
with the principles set forth in subsection (b). In
other words, ... if a party comes to court and knowingly
makes a false statement of material fact, they lose. And
what that should do is that should encourage a very
candid discussion between counsel and their client, at
the very outset of the case, that if you're trying to
take advantage of the judicial system, there will be a
definite and certain sanction.
This doesn't sidetrack the trial. There's no action the
judge has to take. It is simply an instruction that is
submitted to the jury, and you continue with the trial
and the jury makes its finding. It is self-implementing,
and so it won't impose any additional cost on the system.
It won't impose any additional cost on the parties. It
simply is a recognition that if you come to court and you
lie, you're going to lose on that claim.
It is not designed to address situations where people
make a mistake or people discover information after the
fact that they didn't have before, but a knowing false
statement of material fact. And so, that's the purpose
of subsection (b).
The other provisions of this bill are designed to impose
some responsibility on people that participate in the
system. And we think that is a healthy thing. We think
that the goals that this bill seeks to further are really
laudable goal, and we would encourage the passage of this
legislation.
Number 0771
REPRESENTATIVE MURKOWSKI acknowledged that she was perhaps asking
for an explanation on the record. She referred to Civil Rule 11,
the "attorney sanction rule," and requested that Mr. Lessmeier
explain to the committee how Rule 11 would tie in or whether it
would still be significant if this legislation were to pass. She
further asked why Rule 11 isn't adequate to make the parties whole,
as Representative Mulder has indicated.
MR. LESSMEIER answered that he has been practicing law in Alaska
for a little more than 20 years, and he doesn't know that he has
ever seen Rule 11 used. The work he does is civil litigation,
almost exclusively. The judicial system is focused on resolving
cases, not disputes between lawyers under Rule 11. Whether that is
a function of limited judicial resources, he doesn't know. But
Rule 11 hasn't been a practical sanction. Mr. Lessmeier added that
the responsibility provisions of the bill, as he reads them, are a
little broader and are self-implementing; they extend not just to
a lawyer but also to a party or a participant in the process who is
intentionally misusing the process. Mr. Lessmeier said that if
there has been action taken in that kind of situation, he certainly
doesn't recall it.
REPRESENTATIVE MURKOWSKI followed up by asking whether, in Mr.
Lessmeier's opinion, what SSHB 42 does is a far better solution
than beefing up Rule 11 and the sanctions within it.
MR. LESSMEIER affirmed that, adding that he believes that the idea
of beefing up the sanctions in Rule 11 has already been tried once.
Number 1058
REPRESENTATIVE ROKEBERG asked whether the legal profession has a
name for a "conspiracy of silence" where members of the profession
don't want to police themselves regarding incompetency or
dishonesty. He also asked whether Mr. Lessmeier could provide an
example where this would have come into play in his experience.
MR. LESSMEIER elaborated on the example mentioned by Representative
James, saying that if she had been able to corroborate that she had
been elsewhere and to provide evidence to the satisfaction of a
jury, then the person who made the claim would lose that claim and
be subject to damages for the consequences of that act. The damage
award would be in a separate action, Mr. Lessmeier noted, with the
option of pursuing damages assuming the dictates of the bill were
followed, which would include writing a letter giving written
notice that the statement was false and that it hadn't been
corrected. He said the purpose is to prevent this sort of activity
from occurring.
MR. LESSMEIER returned to Representative Rokeberg's first question
and said attorneys are advocates for both sides. Although he
believes that the vast majority of attorneys are honest and
ethical, some attorneys and parties misuse the system; they are the
focus of this bill, which is carefully and narrowly drafted to
catch the people who misuse the system. The fact that the stakes
go up is the true benefit of this. This requires a contemplation
and a discussion that is not necessarily required right now in
terms of attorney-client discussions. Furthermore, some clients do
try to take advantage of the system without the knowledge of their
attorneys. The intent of the bill is to prevent that.
Number 1058
REPRESENTATIVE ROKEBERG referred to a consumer protection bill from
a couple of years ago, and he asked whether anything in the
statutes prohibits frivolous or vexatious lawsuits.
MR. LESSMEIER answered:
Nothing to this degree. One of the things that we did
do, in 1987, is we raised the attorneys fees that would
be awarded to a prevailing party if an offer of judgment
is entered. But there is nothing that addresses in this
fashion the issue of not just a frivolous lawsuit but a
frivolous position that is taken by either party, because
this bill swings both ways. ... It applies equally to a
defendant who engages in this kind of conduct as well as
a plaintiff. So it applies to both sides.
REPRESENTATIVE ROKEBERG asked whether there is nothing in law,
then, except for court rules, that prohibits a frivolous or
vexatious lawsuit to occur.
MR. LESSMEIER said that is correct.
REPRESENTATIVE ROKEBERG remarked that it is most extraordinary,
saying they rely entirely on the bar to police itself and its own
court rules, with nothing statutorily protecting the public from a
dishonest counselor.
MR. LESSMEIER restated that the only thing is the offer of judgment
provision.
Number 1153
REPRESENTATIVE ROKEBERG directed Mr. Lessmeier's attention to the
beginning of subsection (c), beginning on page 2, line 9, which
read, "(c) A person may not, on the person's own behalf or as a
representative of a party ...." He asked what happens if an
attorney detrimentally relies on the statements of a client and
then finds himself or herself in a trap. He further asked how one
makes the separation if there is a cause of action against both the
attorney and the party.
MR. LESSMEIER answered that he thinks the attorney has a right,
within a reasonable limit, to rely on what the client tells him or
her, but also has an obligation to investigate it. And when the
attorney receives from the other side the "21-day letter" - the
prerequisite to any cause of action, which says that something
isn't true and the reasons why - at that point, the attorney needs
to do the right thing and not propagate the lie. Ethically, an
attorney cannot do that anyway, Mr. Lessmeier added.
REPRESENTATIVE ROKEBERG asked whether an attorney wouldn't breach
a code of ethics by not representing the client otherwise.
MR. LESSMEIER responded, "He would breach his code of ethics if he
continues to propagate a lie, having known that it is a lie or
having discovered that it is a lie."
REPRESENTATIVE ROKEBERG asked what the code would call for then.
MR. LESSMEIER answered that the code would call for the attorney to
withdraw and to counsel the client to correct the
[misrepresentation].
REPRESENTATIVE ROKEBERG stated his understanding that that is why
the statute has self-enforcement provisions, because it puts people
on notice and gives everybody a chance to own up to it.
MR. LESSMEIER affirmed that.
Number 1284
REPRESENTATIVE MURKOWSKI countered Representative Rokeberg's
assertion that there is a secret code of brotherhood that attorneys
use to take care of their own. She said there is none. In fact,
attorneys and the officers of the court are not afraid to police
themselves, and they do have an ethical code of conduct.
Furthermore, within the bar there is an ethics review panel and a
disciplinary panel. An attorney who goes too far is disbarred and
subject to disciplinary actions through the bar. She said she
didn't want this insidious rumor to be perpetuated that attorneys
won't police themselves; they do, and they do a good job of it.
She said perhaps there is a very, very small number that this bill
is addressing, but she had wanted to stand up for the profession.
REPRESENTATIVE ROKEBERG agreed about the profession in total, but
said he would be curious to know whether the bar has had any
disciplinary actions as a result of vexatious or frivolous
litigation and/or dishonesty in pursuing lawsuits.
REPRESENTATIVE MURKOWSKI indicated the committee could probably get
that information.
REPRESENTATIVE ROKEBERG suggested perhaps the bill sponsor could
look into that. He also asked whether the bar association may be
breaching its own ethics to divulge that information.
REPRESENTATIVE MURKOWSKI indicated that information is published.
REPRESENTATIVE CROFT said there are some [attorneys], who have been
disbarred or otherwise sanctioned.
Number 1420
MR. LESSMEIER added that he believes the intent regards everyone in
the civil justice system, not just lawyers. Returning attention to
the provision regarding actual attorney fees, he said that
addresses a situation where somebody brings an action claiming that
there was a violation of this statutory scheme. A person who
accuses another of filing a false action and loses will have to pay
that other person's actual costs and attorney fees. This is
intended to be something that people do not engage in lightly.
Number 1507
CHAIRMAN KOTT asked whether anyone else wanted to testify, then
specified that the public hearing was still open. He announced
that SSHB 42 would be held over until Wednesday, March 1.
HJR 52 - CONFIRM PUBLIC CORP BD MANAGING ASSETS
CHAIRMAN KOTT announced that the final order of business would be
HOUSE JOINT RESOLUTION NO. 52, proposing an amendment to the
Constitution of the State of Alaska relating to certain public
corporations. He invited Representative James to explain the
resolution.
Number 1580
REPRESENTATIVE JAMES, speaking as the sponsor, advised members that
HJR 52 is similar to a proposed constitutional amendment that she
had introduced previously. At that time, the target was trying to
protect the continuity of the members of the Alaska Permanent Fund
Corporation board, which had been replaced entirely by both
Governor Hickel and Governor Knowles when they came into office.
Representative James offered her continuing personal opinion that
those board members, who manage the biggest pot of money in Alaska,
ought to have some continuity, which is why there is a revolving
board. She believes those members should only be removed for
cause.
REPRESENTATIVE JAMES explained that although similar to the
previous legislation, HJR 52 is a little more expansive. Article
II, Section 26, of the constitution already states that when a
board or commission is at the head of a principal department or
regulatory or quasi-judicial agency, its members shall be appointed
by the governor, subjection to confirmation by the legislature and
may be removed as provided by law. This resolution adds, "or at
the head of a public corporation that manages State assets," and,
"With respect to public corporations, the legislature may by law
exclude the applicability of this section based on the type or
value, or both, of the State assets that are managed by the public
corporation."
REPRESENTATIVE JAMES said she would bet that the constitutional
drafters never envisioned so many public corporations managing so
much wealth in the state. She believes that adding these
provisions will allow removal of board members only for cause.
Public corporations now manage a lot of assets. She believes this
is a good change to the constitution because it takes care of
something that the original constitutional scholars had not
foreseen. She emphasized its importance and urged members'
support.
Number 1796
REPRESENTATIVE MURKOWSKI referred to the language that says the
applicability can possibly be excluded, based on the type or value
of that public corporation. She asked what other public
corporations are out there.
REPRESENTATIVE JAMES at first indicated she had a list, then said
she didn't. She said it is AIDEA [Alaska Industrial Development
and Export Authority], the Alaska Housing Finance Corporation
(AHFC), the Alaska Railroad Corporation and, she thinks, the Alaska
Commission on Postsecondary Education (ACPE), for example. There
are a lot of both large and small corporations, but the Alaska
Permanent Fund Corporation is the only one that she knows of which
has had a problem with having a governor wipe out the board and
then start over. She expressed concern about continuity of that
board in particular, noting that revolving boards exist so that
there is always someone experienced on the board. She said it
seems that the permanent fund should be run on more than
philosophy, and she believes protection is needed in this area, as
the permanent fund is Alaska's biggest asset.
REPRESENTATIVE JAMES told members that if there is going to be an
amendment to the constitution, all those corporations should be
covered at once, which HJR 52 does. She alluded to the Alaska
Science and Technology Foundation (ASTF), saying she believes that
is a corporation also, and she isn't sure of all [the corporations]
that are out there. She restated the need to have the option to
ensure that the people put on [the boards] are the ones that the
legislature would approve; she noted that usually appointees are
approved. She again emphasized the need for continuity and respect
for the revolving terms that these members have. In response to a
question of Representative Rokeberg, she indicated that appointees
to the boards in question don't need legislative approval now.
Number 2055
REPRESENTATIVE ROKEBERG surmised that the chief executive officers
would be board members of those corporations.
REPRESENTATIVE JAMES said she doesn't know that that is always the
case.
REPRESENTATIVE ROKEBERG suggested they would at least have to be
approved by the legislature to be in that position, which he said
isn't unreasonable.
REPRESENTATIVE JAMES pointed out that when the legislature does [a
confirmation], there is a public hearing. That never happens in
these cases now.
Number 2235
REPRESENTATIVE CROFT indicated the Alaska Permanent Fund
Corporation seems to be the one for which this makes the most sense
and for which the most danger exists if there are bad appointments.
He said at least having confirmation and a hearing on that board
makes a lot of sense, as there is too much money there anymore to
have that done, even by good people, without any limits. However,
he doesn't know about some other corporations that [HJR 52] would
affect, and he has some questions about the way it is written. He
indicated he would wait until after Mr. Baldwin's testimony.
REPRESENTATIVE JAMES clarified that she has no complaints about any
appointees to the board of the Alaska Permanent Fund Corporation.
REPRESENTATIVE ROKEBERG emphasized that these public corporations
sometimes have literally billions of dollars in assets, and he
believes that Alaskans can be viewed as shareholders in these
corporations.
Number 2409
JAMES BALDWIN, Assistant Attorney General, Civil Division (Juneau),
Department of Law, came forward to testify, noting that a similar
resolution in the Senate had been introduced by Senator Halford and
that a draft committee substitute is pending there.
TAPE 00-23, SIDE A
Number 0001
MR. BALDWIN mentioned the balance between continuity and having
someone be responsible for the decisions made by a the governing
body of a public corporation. He asked: If members of that body
aren't elected by the people but are appointed with overlapping
terms, and if they can only be removed for cause, then who are they
responsible to, ultimately, when they make errors in judgment? He
answered that if all those things are in operation, they aren't
responsible to anyone. With the current system, if the board of
trustees makes an error in judgment or is unethical or incompetent,
the governor can remove them and must stand and be responsible for
that action at an election every four years; that is the system in
place now, and there is something to be said for that, as well.
MR. BALDWIN told members that the system built into the
constitution is to have very few elected officers, who are
responsible for almost everything in the executive branch of state
government, including the permanent fund; if something goes wrong,
then that officer will be held responsible at the upcoming election
to the voters. That is an outgrowth from the territorial days.
Mr. Baldwin explained:
We're very inventive people, and the way we dealt with
the absentee federalism and the absentee congressmen and
absentee governors and boards was to create a bunch of
boards ... that were populated by our own people; and
that worked to undercut federalism, but it also was very
frustrating because there wasn't anybody you could hold
responsible. And then the framers came out with a new
constitution that said, "We want an end to that. We want
responsibility for the people who make important
decisions." So, having said that, that's basically the
underlying reason.
MR. BALDWIN explained that the confirmation power is a shared
executive power in which the legislature shares some of the
governor's power of appointment. Generally, the rule in the
constitution is that the governor has the appointment power within
the executive branch; that power is shared through the exercise of
the right to confirm, which is specifically granted in a number of
places in the constitution. However, under the case known as
Bradner v. Hammond, that power is only shared when expressly
provided for in the constitution; it cannot be implied or assumed.
Mr. Baldwin noted that a lawsuit had involved the legislature's
attempting to make confirmation extend to deputy directors and
lesser officers of that nature; that was found to be invalid.
MR. BALDWIN indicated this resolution can be viewed, by those who
do not favor this approach, as the legislature trying to share in
the appointment of members of the Alaska Permanent Fund
Corporation, if that is the focus. He said that can be advocated
as being either a good thing or a bad thing regarding whether it is
appropriate to have the legislature be involved in those
appointments.
Number 0324
MR. BALDWIN advised members that there are some technical problems
with the resolution's wording. He believes it is apt in its
description of determining a public corporation that manages state
assets because the Alaska Permanent Fund Corporation is basically
an overseer of a bunch of other investment managers; although it
does some in-house investment, it mostly oversees what others do.
The assets given to other public corporations like AHFC and AIDEA,
however, may well not legally be considered state assets; rather,
they may be considered their own assets, as those entities are
political subdivisions of the state. The reason is to insulate the
state treasury from any liability for debt. There is even a
statute in AIDEA's title that says that their property, their
money, is not state money but is their own. Mr. Baldwin pointed
out that AIDEA or AHFC may itself be a state asset; he isn't sure
how those are carried on the state's balance sheet. He said this
is his legal outlook on this, and maybe this language in the
resolution isn't that accurate for reaching AHFC or AIDEA.
Number 0468
REPRESENTATIVE MURKOWSKI commented that it is difficult to accept
that the legislature takes on the responsibility of confirming
appointees to the boards related to opticians and hairdressers, for
example, and yet they aren't involved in the process of something
as significant as the Alaska Permanent Fund Corporation board. She
said she hadn't made that step up as to why the legislature
shouldn't be involved in that confirmation process.
REPRESENTATIVE JAMES said she understands the delineation that Mr.
Baldwin is talking about in a corporation, but to her
understanding, there cannot be a public corporation that isn't
owned by somebody. There are shareholders, the state as a whole.
There has to be a nexus between the [legislature] and state
ownership. She said those are state assets, and the legislature,
to her belief, can dismantle that corporation, by statute, and
therefore can manage those assets, although she doesn't know that
they plan to do that. She agreed it is probably more of a legal
issue than an accounting issue.
MR. BALDWIN indicated he isn't disputing that the legislature, in
its lawmaking capacity, has substantial powers over public
corporations. He pointed out that some public corporations are
more closely held than others under Alaska law; therefore, it is
hard to generalize about all of the public corporations because
they cover the spectrum: some are closely held, with three
principal department heads sitting on the actual boards, whereas
some are not at all closely held, such as the Alaska Railroad
Corporation, which has one department head and a lot of verbiage in
the statutes about how independent it is. But most all of them
carry the language that they have a separate and independent legal
existence; that basically is to insulate the state from their debt.
Mr. Baldwin added:
When you go to terminate one of these corporations, ...
we always get into a long debate up in the Finance
Committee about whether the legislature can just dip into
the treasury of AHFC or something of that nature and pull
out dollars and take them directly to the state treasury.
And there's always sort of a process we go through so
that we're not doing that directly; there's always a
process so that it is appearing that the board is
actually voluntarily giving us this money. And that's
the reason that we want to maintain that separateness.
So I think there is a legal issue here about whether
these are, in fact, state assets. ... They are not assets
in a typical sense. ... These corporations can be
dissolved and sold off and liquidated, and that's the
typical way of getting the value out of them. But ...
once we give them, like the Ketchikan shipyard, or we
give them an asset like that, it becomes, really, no
longer a state asset. It becomes an asset of the
corporation. And so that's why I think that this
language here may not be hitting the mark.
Number 0740
REPRESENTATIVE JAMES remarked that, on the other hand, if they
truly are separated and not state assets, one wonders why [the
state] is appointing board members anyway. She repeated that the
legislature could dissolve these entities, by statute, and then
determine where the money would go after selling everything. She
indicated that although there may be some insulation, if there were
a huge error and loss, for example, she doesn't feel comfortable
that that line could not be crossed.
Number 0825
CHAIRMAN KOTT thanked Mr. Baldwin. Noting that no other testifiers
were signed up, he closed public testimony.
REPRESENTATIVE CROFT alluded to the last sentence of Section 1 of
the resolution, which read: "With respect to public corporations,
the legislature may by law exclude the applicability of this
section based on the type of value, or both, of the State assets
that are managed by the public corporation." He asked
Representative James what the intent is.
REPRESENTATIVE JAMES answered that the intent is that the
legislature may list, in law, who this doesn't apply to, such as
small corporations or "the people that do the space thing over in
Kodiak," for example. She said it would be a decision by the
legislature to exempt any; right now, all are included. She cited
the ASTF and the ACPE as further examples, asking whether the
legislature wants to confirm their appointees. She restated the
need to go down the list and see what the legislature wants to do.
CHAIRMAN KOTT suggested it is all-inclusive now, and the
legislature would have to pass a statute that would exclude those
entities. He said he doesn't know how many there are in total, but
he would assume there are 15 or 20.
REPRESENTATIVE CROFT reminded fellow members of the need to be
careful with constitutional language. He read from the proposed
language, in part, "may be law exclude the applicability of this
section based on". He stated:
And so, then, it will be those are the only two things
that you can exclude based on, and if you exclude based
on anything else, it would be unconstitutional. And
exclude based on the type or value of the state assets:
... it seems like if we're giving carte blanche to
exclude, we should say that, rather than saying "based on
specific things." "The legislature may by law exclude
the applicability of this section to public
corporations." ... It would be a weird question if
somebody came back and said, "You excluded this student
loan program but not the other, and there's another
smaller one or something, and I can't find any
distinction between the two based on type of value."
Number 0976
REPRESENTATIVE JAMES said she believes Representative Croft is
correct on that, and that it is pretty hard to define. She added:
I think maybe we should have just a carte blanche
authority ... to exclude them, if we so chose. It's kind
of like the permanent fund issue, where it says that the
permanent fund itself cannot be spent, but the earnings
are up to the legislature to determine by law ... how
they'll be used. So, we have it periodically throughout
the constitution of "the legislature will provide by law"
certain things. But this gives us authority, and then
the legislature could provide exemptions by law, if it
happened to be their choice to do that.
REPRESENTATIVE CROFT suggested it could be given to the drafters as
an idea that the legislature may by law exclude the applicability
of this section to public corporations.
Number 1020
CHAIRMAN KOTT pointed out the other issue brought out by Mr.
Baldwin, which was to ensure that it applies only to those
corporate heads or board members or commission members.
REPRESENTATIVE JAMES said she thinks it is clear, but it might be
easy to put it in there, if there is a need to be more specific.
Number 1054
REPRESENTATIVE CROFT asked whether it should be "opt in" or "opt
out."
REPRESENTATIVE JAMES answered that she personally believes it
should be "opt out," and it should cover everything, because it is
unknown what other kinds of corporations will exist in the future.
REPRESENTATIVE CROFT replied, "Or we could say the legislature has
the power to, by law, require that the governing body of a public
corporation be subject to this section." He commented that if
written correctly, opting in or out would have the same effect.
However, if [the legislature] hadn't excluded something that could
be described as a corporation by statute, for example, somebody
could bring a lawsuit and say that the governing board isn't legal.
With the "opt in" language, the legislature knows that five
specific entities are included, for example. In contrast, with the
"opt out," there is a big group out there not yet defined.
REPRESENTATIVE JAMES responded that she is comfortable including
all public corporations at this point, and then determining which
ones aren't necessary to include, more so than saying it is for
certain ones only and that more could be included. She isn't
certain which ones she would list right now, although she is very
interested in the Alaska Permanent Fund Corporation; she also is
thinking seriously about AIDEA and AHFC because they are huge, and
she believes [the legislature] should have a hearing on those board
members. She mentioned the Alaska Railroad Corporation as well,
asking whether that should be included. She believes those are
things that the legislature should decide about, one at a time.
She suggested "opting them out" would be easier politically than
the reverse.
Number 1225
CHAIRMAN KOTT asked Representative James whether, if she had the
list of public corporations, she would be willing to entertain
legislation that would deal specifically with opting those entities
out at the same time, to establish a nexus between the legislation
and passage of the amendment.
REPRESENTATIVE JAMES said she believes it is less confusing like
this [to voters] than if there were specifics.
CHAIRMAN KOTT clarified that he wasn't suggesting putting the
specifics in the constitutional amendment.
REPRESENTATIVE JAMES said she thinks it is too late in this session
for the legislation, although she believes the legislature will
have to determine whether there are any exceptions if this
resolution passes.
Number 1295
CHAIRMAN KOTT said he would like to see the list. He asked whether
there were additional comments, then announced that HJR 52 would be
held over so that he could work on language to incorporate the two
areas discussed, to clarify that they are talking about the heads
and the board members of the public corporations, and to make it
clear what they are getting at with "public corporation" on page 1,
lines 12-14. [HJR 52 was held over.]
CHAIRMAN KOTT recessed the House Judiciary Standing Committee
meeting at 3:22 p.m.
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