Legislature(1995 - 1996)
02/27/1995 01:05 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE February 27, 1995 1:05 p.m. MEMBERS PRESENT Representative Brian Porter, Chairman Representative Joe Green, Vice Chairman Representative Con Bunde Representative Bettye Davis Representative Al Vezey Representative Cynthia Toohey Representative David Finkelstein MEMBERS ABSENT None COMMITTEE CALENDAR * HB 188: "An Act creating the crime of indecent viewing and photography." HEARD AND HELD HB 21: "An Act relating to revocation of a driver's license for illegal possession or use of a controlled substance or illegal possession or consumption of alcohol by a person at least 13 but not yet 21 years of age; and providing for an effective date." PASSED OUT OF COMMITTEE HB 23: "An Act relating to referrals involving dental services." PASSED OUT OF COMMITTEE * HB 158: "An Act relating to civil actions; amending Alaska Rules of Civil Procedure 49, 68, and 95; amending Alaska Rule of Evidence 702; and providing for an effective date." HEARD AND HELD HB 25: "An Act revising Rule 16, Alaska Rules of Criminal Procedure, relating to discovery and inspection in criminal proceedings, to adopt the comparable federal rule." BILL POSTPONED (* First public hearing) WITNESS REGISTER REPRESENTATIVE JERRY MACKIE Alaska State Legislature State Capitol, Room 404 Juneau, AK 99801-1182 Telephone: (907) 465-4925 POSITION STATEMENT: Sponsor of HB 188 MORRIS VERVERS, Superintendent Klawock School District P.O. Box 9 Klawock, AK 99925 Telephone: (907) 755-2917 POSITION STATEMENT: Testified in favor of HB 188 MARGOT KNUTH, Assistant Attorney General Department of Law P.O. Box 110300 Juneau, AK 99811-0300 Telephone: (907) 465-4037 POSITION STATEMENT: Provided information on CSHB 21 REPRESENTATIVE GARY DAVIS Alaska State Legislature State Capitol, Room 420 Juneau, AK 99801-1182 Telephone: (907) 465-2693 POSITION STATEMENT: Sponsor of HB 23 DR. JULIE ROBINSON Alaska Dental Society 3400 Spenard Road Anchorage, AK 99501 Telephone: (907) 243-2156 POSITION STATEMENT: Testified in favor of HB 23 BARBARA GABIER, Program Coordinator Division of Occupational Licensing Department of Commerce and Economic Development P.O. Box 110806 Juneau, AK 99811-0806 Telephone: (907) 465-2534 POSITION STATEMENT: Testified in favor of HB 23 ANNE CARPENETI, Committee Aide House Judiciary Committee State Capitol, Room 120 Juneau, AK 99801-1182 Telephone: (907) 465-4990 POSITION STATEMENT: Provided information on HB 158 PREVIOUS ACTION BILL: HB 188 SHORT TITLE: INDECENT PHOTOGRAPHY SPONSOR(S): REPRESENTATIVE(S) MACKIE, Porter, Phillips, Robinson, Navarre, Green, James, Kubina, Elton JRN-DATE JRN-PG ACTION 02/20/95 419 (H) READ THE FIRST TIME - REFERRAL(S) 02/20/95 419 (H) JUDICIARY, FINANCE 02/22/95 456 (H) COSPONSOR(S): KUBINA 02/23/95 469 (H) COSPONSOR(S): ELTON 02/27/95 (H) JUD AT 01:00 PM CAPITOL 120 BILL: HB 21 SHORT TITLE: DRIVER'S LIC REVOCATION;ALCOHOL/DRUGS SPONSOR(S): REPRESENTATIVE(S) PORTER, TOOHEY JRN-DATE JRN-PG ACTION 01/06/95 26 (H) PREFILE RELEASED 01/16/95 26 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/95 26 (H) TRA, JUD, FIN 02/08/95 (H) TRA AT 01:00 PM CAPITOL 17 02/08/95 (H) MINUTE(TRA) 02/10/95 294 (H) TRA RPT CS(TRA) 4DP 3NR 02/10/95 294 (H) DP: JAMES, MACLEAN, WILLIAMS, G.DAVIS 02/10/95 294 (H) NR: MASEK, BRICE, SANDERS 02/10/95 295 (H) 3 ZERO FN (DPS, LAW, DHSS) 2/10/95 02/27/95 (H) JUD AT 01:00 PM CAPITOL 120 BILL: HB 23 SHORT TITLE: REFERRALS INVOLVING DENTAL SERVICES SPONSOR(S): REPRESENTATIVE(S) G.DAVIS BY REQUEST JRN-DATE JRN-PG ACTION 01/06/95 26 (H) PREFILE RELEASED 01/16/95 26 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/95 26 (H) HES, JUD 02/07/95 (H) HES AT 03:00 PM CAPITOL 106 02/07/95 (H) MINUTE(HES) 02/08/95 266 (H) HES RPT 6DP 02/08/95 266 (H) DP: ROKEBERG, G.DAVIS, BUNDE, TOOHEY 02/08/95 266 (H) DP: ROBINSON, BRICE 02/08/95 266 (H) ZERO FISCAL NOTE (DCED) 2/8/95 02/27/95 (H) JUD AT 01:00 PM CAPITOL 120 BILL: HB 158 SHORT TITLE: CIVIL LIABILITY SPONSOR(S): REPRESENTATIVE(S) PORTER, Toohey, Mulder JRN-DATE JRN-PG ACTION 02/06/95 253 (H) READ THE FIRST TIME - REFERRAL(S) 02/06/95 253 (H) JUDICIARY, FINANCE 02/17/95 (H) JUD AT 01:00 PM CAPITOL 120 02/20/95 (H) JUD AT 01:00 PM CAPITOL 120 02/20/95 (H) MINUTE(JUD) 02/27/95 (H) JUD AT 01:00 PM CAPITOL 120 BILL: HB 25 SHORT TITLE: CRIMINAL DISCOVERY RULES SPONSOR(S): REPRESENTATIVE(S) PARNELL,Porter,Green,Bunde JRN-DATE JRN-PG ACTION 01/06/95 27 (H) PREFILE RELEASED 01/16/95 27 (H) READ THE FIRST TIME - REFERRAL(S) 01/16/95 27 (H) JUDICIARY, FINANCE 01/18/95 75 (H) COSPONSOR(S): GREEN 01/19/95 89 (H) COSPONSOR(S): BUNDE 01/27/95 (H) JUD AT 01:00 PM CAPITOL 120 01/27/95 (H) MINUTE(JUD) 01/30/95 (H) JUD AT 01:00 PM CAPITOL 120 01/30/95 (H) MINUTE(JUD) 02/01/95 (H) FIN AT 01:30 PM HOUSE FINANCE 519 02/06/95 (H) JUD AT 01:00 PM CAPITOL 120 02/06/95 (H) MINUTE(JUD) 02/08/95 (H) JUD AT 01:00 PM CAPITOL 120 02/08/95 (H) MINUTE(JUD) 02/13/95 (H) JUD AT 01:00 PM CAPITOL 120 02/13/95 (H) MINUTE(JUD) 02/15/95 (H) JUD AT 01:00 PM CAPITOL 120 02/15/95 (H) MINUTE(JUD) 02/17/95 (H) JUD AT 01:00 PM CAPITOL 120 02/17/95 (H) MINUTE(JUD) 02/22/95 (H) JUD AT 01:00 PM CAPITOL 120 02/22/95 (H) MINUTE(JUD) 02/27/95 (H) JUD AT 01:00 PM CAPITOL 120 ACTION NARRATIVE TAPE 95-17, SIDE A Number 000 The House Judiciary Standing Committee was called to order at 1:05 p.m. on Monday, February 27, 1995. A quorum was present. CHAIRMAN BRIAN PORTER stated the following bills would be heard: HB 188, CSHB 21, HB 23, and then a work session on HB 158. He called Representative Jerry Mackie to come forward and introduce HB 188. HJUD - 02/27/95 HB 188 - INDECENT PHOTOGRAPHY REPRESENTATIVE JERRY MACKIE, Sponsor of HB 188 read the following sponsor statement: "HB 188 establishes the crime of indecent viewing and photography for anyone viewing, making a picture or video taping an individual's nakedness without their knowledge or consent. I introduced the bill in response to an incident that occurred recently in one of my schools which revealed a major loophole in the state's invasion of privacy laws. The incident was the inadvertent discovery by students of a hidden video surveillance system in the girls' locker room. "Following the discovery, the initial reaction of dismay rapidly changed to strong feelings of anger, betrayal, and embarrassment throughout the community. In all small communities, the school gymnasium and shower facilities are used by practically everyone in town. They are also used by many visitors from neighboring communities that come to participate in local events. So the hidden recording system had potential implications for a whole lot of people in the region, both students and adults. "Equally distressing was the revelation that neither the state's invasion of privacy laws nor the child pornography laws applied to the situation. Unauthorized, hidden photographic surveillance by itself is not prohibited, even if the unsuspecting person is naked. There is no foundation then to the public's expectation and trust that privacy exists and is protected especially in places like lavatories, bathrooms, and dressing rooms. "I introduced HB 188 to close this loophole in our privacy laws so that there is a deterrent to the commission of indecent viewing and photographing in the future." Number 105 REPRESENTATIVE AL VEZEY had questions about security surveillance. It is addressed on page 2, subsection (d). He asked if you were doing a security surveillance, and you went back to look at the video tapes to find out who the person is, how are you going to know what sex the person is, if you do not know who the person is? REPRESENTATIVE MACKIE explained there are instances where there are security surveillance systems that protect buildings. If they are properly posted, and it is within the realm of security surveillance, if an individual went up and bared themself in front of a security surveillance camera, whoever is viewing that camera cannot be charged with an offense. It is actually protecting those that have legitimate security systems in their homes or public facilities. It is an affirmative defense for the owners of those security systems so they cannot be charged under this law. That is the reason that needed to be in there. Number 145 REPRESENTATIVE VEZEY said the biggest thing that concerns him is that it exempts persons in security surveillance only if they are the same sex as the person being viewed. That appears to be quite a burden to place on the person with the security system, and their employees. In respect for property owners' rights, why should we require that a legitimate enterprise post that they are doing security surveillance? If something happened to the posted notice, would the people doing the surveillance be convicted of a felony? Signs get ripped down and vandalized. Number 175 REPRESENTATIVE MACKIE said people just need to make reasonable attempts to make sure the signs are posted. For example, if a school decides to have security surveillance cameras in a locker room because the locker rooms keep being vandalized, as long as it is a member of the same sex who is just viewing the room, that should be allowed for security reasons. Number 200 REPRESENTATIVE VEZEY thought they should put a period right after the word "system" and not worry about the "ifs," "ands" or "buts." REPRESENTATIVE MACKIE did not want to disallow the affirmative defense. The whole purpose of this bill is to say that if you have a reasonable expectation to the right to privacy, then you should be afforded that right. If it is posted that there is security surveillance, it is probably not going to be somewhere where you are taking a shower and certainly not being monitored by a person of the opposite sex. CHAIRMAN PORTER said they would hold the bill, while a committee substitute was drafted with a little different language incorporating these concerns. Number 300 MORRIS VERVERS, Superintendent, Klawock School District, testified via teleconference. He described the events that happened in their school. A student spotted a hidden camera in the girls locker room which led to a series of video equipment systems in the attic, including the capacity for videotaping and viewing from several different angles in the girls locker room. The police and state troopers investigated the situation. This was psychologically traumatic to the students and staff, who were offered counseling. At that time they were not aware this incident was not a violation of law. Had they known at the time this deed was not in violation of the law, the trauma would have been much greater. The only thing this individual can be charged with is misuse of equipment and possible damage to the locker room, but nothing regarding invasion of privacy. He wanted to see a bill passed that would protect students from this kind of thing happening. He agreed the language on posting a notice was a bit complicated, and was in support of cleaning that up a little. Number 370 REPRESENTATIVE VEZEY asked if anyone had looked into what civil recourse was available. MR. VERVERS replied there had been no stone unturned in the Attorney General's Office, including the possibility of someone suing the school for violation of privacy. REPRESENTATIVE VEZEY asked if any individuals involved had looked into recourse in the civil courts for personal violations of their civil rights. MR. VERVERS thought some groups have looked into it, but he was not aware of any of them pursuing it to the point where it could be determined whether they have a legitimate case. REPRESENTATIVE MACKIE made it known to the committee the individual has been charged with criminal mischief for drilling holes in the ceiling of the school, and misusing some of the school's video equipment. That was the most they could do. He urged the committee to further look into this matter, and form the language to close up this loophole. CHAIRMAN PORTER noted it has been suggested on page 2, line 11, the definition of "picture" include, after the word "electronic" on line 12, "magnetic" so as to include video taping in this category. He wanted to delete everything in the section on page 2, line 14, after the word "that", and add "Private exposure means that a person is exposed in a place or under circumstances that the person would reasonably believe they were not being viewed and would not be produced in a picture. He suggested they put these three considerations into a committee substitute. He then closed the discussion on HB 188. HJUD - 02/27/95 CSHB 21 - DRIVER'S LIC. REVOCATION;ALCOHOL/DRUGS Number 585 REPRESENTATIVE CYNTHIA TOOHEY, bill sponsor, explained the bill. House Bill 21 closes a small, but important loophole in House Bill 299 which passed last year. The administrative license revocation can only occur when there has been a violation of the pertinent state law. That law should be amended to include municipal ordinance as well as state law. House Bill 21 does this. There are zero fiscal notes from the Department of Public Safety, the Department of Health and Social Services, and the Department of Law. The simple fix will cost the state nothing, but will increase the effectiveness of the law. She proposed an amendment, on page 2, line 23; it was pointed out that one would assume that a municipal ordinance would pertain to drug or alcohol violations; qualification would leave no doubt. Number 615 MARGOT KNUTH, Assistant Attorney General, Department of Law, Criminal Division, testified in support of this legislation. She asked the committee to consider another technical change that would address the existing problem with the "use it - lose it" law. We are requiring both probable cause and personal observation by the officer. For the underlying offenses, probable cause is sufficient for a case to be made, and for there to be a conviction. So we have an anomalous situation where the child can be convicted, but is not subject to the "use it - lose it" provision, when it is appropriate that there be consistency. One place this occurs is on page 1, line 7. With this change it would read, "if a peace officer has probable cause to believe that a person is at least 14 years of age". The same change could be made on page 2, line 17 and 18, replacing "and based on personal observations" with "to believe". Then it would read, "...one, that the officer had probable cause to believe that the person was at least 14 years of age and under 21 years of age." This would create harmony in the law with what we are doing with the violations and with citing these juveniles. MS. KNUTH stated the second issue that has come up with the "use it - lose it" since the law was enacted, is whether military police qualify as peace officers, allowing them to enforce this law. They would like to, but are not certain whether they are included or not. CHAIRMAN PORTER noted that a military police officer is not a peace officer by federal law. You cannot be a police officer and serve in the military at the same time. Number 790 REPRESENTATIVE VEZEY thought they could put into the statute that this particular situation includes military officers. He mentioned this bill does not make the peace officer have to see the juvenile in the act of drinking. CHAIRMAN PORTER added the minor who is, visually, obviously intoxicated, cannot right now, be arrested. The juvenile can only be cited, given a ticket, and sent on his way. That is what we are trying to change. We want to be able to take this individual into custody because he is in a position of potential danger. A juvenile could not have his license suspended under the "use it - lose it," as it stands now. REPRESENTATIVE JOE GREEN made a motion to adopt Version G of the committee substitute as their working draft. Number 800 REPRESENTATIVE TOOHEY made a motion to move the amendment offered by Margot Knuth, as described above. Seeing no objection, the amendment passed. She then made a motion to move Amendment Number 2, which would delete from page 2, line 23, "a violation of AS 11.71, [OR] AS 04.16.050, or a municipal ordinance;" and insert: "(A) a violation of AS 11.71 or AS 04.16.050; or (B) possession or use of a controlled substance or alcohol in violation of a municipal ordinance." There was no objection to the amendment so it was adopted. REPRESENTATIVE CON BUNDE made a motion to move CSHB 21, as amended, with individual recommendations and zero fiscal notes, out of committee. Seeing no objection, it was so ordered. HJUD - 02/27/95 HB 23 - REFERRALS INVOLVING DENTAL SERVICES Number 848 REPRESENTATIVE GARY DAVIS, sponsor of the bill, read his sponsor statement: "House Bill 23 would prohibit the receipt of compensation by a dentist for referring a person to another dentist or dental practice. The American Dental Association Code of Ethics prevents dentists from profiting from referrals. This legislation codifies the ethical concern relating to referrals. "In Section 2, the receipt of compensation by a person or advertisement referring a dental service is prohibited unless the compensation for referral is disclosed at the time of referral. This legislation will help ensure that patients are being referred to a dentist or dental practice as a result of their quality service. "The Alaska Dental Society has had several breeches of their ethics code and their board has requested this legislation. I feel this is an appropriate legislative function of the Board of Dental Examiners under AS 08.36.315." TAPE 95-17, SIDE B Number 000 REPRESENTATIVE DAVIS continued to explain the two main reasons for this bill. One is the public's protection, the other is to comply with the National Dentistry Code of Ethics. REPRESENTATIVE GREEN thought the dental society could handle their ethics problems without involving the government. REPRESENTATIVE DAVIS answered that is a legal question he cannot answer, because it is not specifically stated in statute, under their duties and functions, whether a board or the state has jurisdiction. Number 165 DR. JULIE ROBINSON, past President, American Dental Society, testified via teleconference from Anchorage. She described this bill to be a consumer protection measure. It is in accord with the American Dental Association Code of Ethics which forbids fee splitting, and other means of compensation for referrals. The Dental Society believes if an agency advertises a referral service for which a participating dentist is paying a fee, then they should disclose that information to the consumer. In the past, the consumer has been led to believe the participating dentists are recommended by the American Dental Association, when in fact, they are paying for this referral service. The quality of the dental service is not considered or verified. The American Dental Society hopes this legislation will protect the consumer from misleading advertisement. Number 200 REPRESENTATIVE BUNDE asked if the Code of Ethics does not apply to all dentists; in that you can be a licensed dentist, but not a member of the Dental Society. DR. ROBINSON answered that was correct. REPRESENTATIVE VEZEY said if a dentist does not belong to the Dental Society, are still subject to the Dental Board, which cannot pose its ethical standards at this time. DR. ROBINSON said she thought that was correct. The power of the board is limited. They have only one dentist on their list of referral. She believed this needed to be in place in order for the board to do something about it. Number 245 REPRESENTATIVE VEZEY said he did not care what the Dental Society does. That is a private association. We are talking about the Alaska Dental Board. Number 290 BARBARA GABIER, Program Coordinator, Division of Occupational Licensing, Department of Commerce and Economic Development, responded to the questions regarding the Code of Ethics. Those licensing boards who have adopted a code of ethics have been required to do so either through statute or regulation. When they have authority to adopt such regulations, they do have to adopt them by reference of a specific date of code of ethics. At this point, she was not aware if the Board of Dental Examiners had adopted a code of ethics. She added, the Board of Dental Examiners did receive a copy of this bill at their last board meeting and did not make any comments one way or the other. REPRESENTATIVE BUNDE thought the problem was more widespread than what he is hearing. If this only affects one or two dental offices throughout the state, it sounds like the problem might self correct, and these people will go away. He could not imagine a referral service could keep going with only one or two clients. REPRESENTATIVE TOOHEY said this is a very widespread problem among the states, and we are just becoming a part of the problem. CHAIRMAN PORTER thought this would provide an ounce of prevention. REPRESENTATIVE TOOHEY moved to pass HB 23 out of committee with individual recommendations and zero fiscal notes. Hearing no objection, it was so ordered. HJUD - 02/27/95 HB 158 - CIVIL LIABILITY Number 360 CHAIRMAN PORTER, sponsor of the bill, stated he would explain it, section by section. He explained that a tort is a private or civil wrong. It occurs as a result of an act or omission for which a civil suit can be brought. It involves almost everything, except crimes. He informed the committee members they were free to stop him to ask questions. He described what is in the Sectional Summary, beginning with Section 2: "GENERAL STATUTE OF REPOSE: A law that prevents suits from being brought after a certain period of time, regardless of whether or not the statute of limitations has expired. Statutes of repose begin running when a product is sold or a procedure is performed, instead of at the time an injury is discovered. "The purpose of this section is to make it clear that legal actions involving personal injury, death, or property damage must be brought within a fair and reasonable time. All crimes have a statute of limitations in our legal code. The same standard of fairness should also apply to civil lawsuits. "This section is considered a statute of repose, prescribing an eight year period within which any civil action involving injury, death, or property damage must be filed with the courts. The time period is measured from the date the construction was completed or the last act that allegedly caused the harm. "The eight year period would not apply if the injury, death, property damage was caused by an intentional act or if there was intentional concealment of facts that resulted in a delay of over eight years before the basis for legal action was known. This section does apply if a shorter period of time for bringing a particular legal action imposed under another provision of law applies. The terms for completed construction are defined and clarified so as not to be misinterpreted by litigants or courts." Number 550 REPRESENTATIVE TOOHEY asked about DES, a fertility drug given to mothers in the 1950s. CHAIRMAN PORTER said the statute of repose previously addressed product liability. There is some specific language that was in the bill last year regarding product liability which we have taken out. There was also, under Section 2, "The last act alleged to have caused the personal injury, death, or property damage..." could allude to a general statement on product liability, and that is not our intent. The amendment he would offer later on will take that out. This applies to construction and medical cases, but not to product liability. Number 575 REPRESENTATIVE FINKELSTEIN asked about a situation under Section 2, where, perhaps a building is constructed over four years, and the act alleged to have caused personal injury is the faulty pouring of the concrete. It sounds like Section 1 applies to a building, does Section 2 apply as well? In this case, it would not be eight years from completion of the building, it would be only five years from completion of the building. CHAIRMAN PORTER answered that the substantial completion of the construction would be the specific qualification for the time that would start any construction claim; not when the subcontractor has done things prior to the substantial completion. CHAIRMAN PORTER continued, "Section 3, LIMITATION ON ACTIONS AGAINST HEALTH CARE PROVIDERS: A law that requires lawsuits to begin within a specified time period from when the plaintiffs knew they were injured. When the statute of limitations has expired, the lawsuit can no longer be brought. "Under current law, in medical malpractice claims, one may file a claim within two years upon discovering the injury. This section states that the two-year limitation does not apply to minors under the age of six. Minors must bring legal actions within two years or before their eighth birthday - whichever is longer. Tolling of the time limitation provides additional protection for minors. The clock stops, if fraud by a parent, guardian, insurer, or health provider, is the reason action was not taken. Time is also extended for minors if there was an intentional concealment of facts, or the undiscovered presence of a foreign body with no therapeutic or diagnostic purpose, provided this specification applies to the legal action being brought. "The third part of this amendment defines terms to ensure that the statute is understood and applied fairly." CHAIRMAN PORTER then went on to explain that the eight years statute of repose would apply to a situation where a foreign body, such as a forceps, is left inside of a person's rib cage during surgery. He continued, "Section 4, CERTAIN STATUTORY LIABILITIES TO BE BROUGHT IN TWO YEARS: This section removes unclear and conflicting language from the statute. The existing two-year limit for actions involving libel, slander, assault, battery, seduction, or false imprisonment remains the same. "Section 5, GENERAL STATUTE OF LIMITATIONS: This section places a two-year limit on actions involving injury, death, or property damage after the date claimants could reasonably believe they had a claim. "It requires that a person commence a civil action for personal injury, death, or property damage within two years of the time the person knows or should have known of the injury, death or damage. It provides that this section does not apply if a shorter period of time is required under another provision of law." Number 675 REPRESENTATIVE FINKELSTEIN asked what the definition for "accrual of action" was. CHAIRMAN PORTER answered "accrual of action" is a common legal term, that is defined in statute. Number 685 ANNE CARPENETI, Committee Aide, said it is defined in Title 9. CHAIRMAN PORTER said "Section 6, NONECONOMIC DAMAGES: Money awarded that does not compensate the injured person for monetary loss, but rather, for example, for pain and suffering. "Economic damages: Money awarded to an injured person to compensate for his or her actual monetary loss. For example, economic damages compensate for medical costs and lost wages. "This section extends the definition for noneconomic losses to include claims for wrongful death as well as personal injury. The definition is clarified by removing "negligence" which is difficult to establish or disprove. The change further defines noneconomic losses to include loss of consortium, (i.e., the right to a husband's or wife's fellowship). "This section provides that damages for noneconomic losses are limited to certain types of injuries, such as pain and suffering; limits damages for noneconomic losses to $300,000, except that damages are limited to $500,000 for certain specified injuries; provides an exception for damages awarded against a person committing or attempting to commit a felony; provides that multiple injuries sustained as a result of a single incident shall be treated as a single injury for the purpose of this section." Number 765 CHAIRMAN PORTER continued, "Section 7, PUNITIVE DAMAGES: Sometimes called exemplary damages, punitive damages are awarded in to punish a defendant for a malicious, intentional act rather than one that is merely negligent. "The current statute allows punitive damages to be awarded when there is `clear and convincing evidence,' but, does not explain evidence in what actions. This section requires that punitive damages may not be awarded unless malice or conscious acts showing deliberate disregard of another person by the person from whom the punitive damages are sought is shown. "Section 8, LIMIT OF PUNITIVE DAMAGE AWARD: Any awards for punitive damages will be at most $300,000 or up to three times the amount of compensatory damages awarded. Further, one-half of the award will be deposited into the general fund of the state. "Section 9, DAMAGE CALCULATION: The term `death' is added so that the statute applies to damages awarded for legal actions involving both personal injury and death. "The added text states that after past and future economic and noneconomic losses have been calculated by the court, the amount of state and federal taxes that would have been paid is subtracted from the award. The amount of tax should be calculated using the state and federal tax rate at the time of the injury or death. "IRS code 104(A)(2) allows income from awards involving personal injury or death to be exempt. Under current statutes, awards are calculated as the gross loss to the claimant. Therefore, the prevailing party is awarded their actual past and projected loss, plus the amount they would have paid in taxes under normal circumstances. Claimants are being compensated as if future earnings were tax exempt. "This section ensures that the prevailing party is fairly compensated for actual after-tax losses. Specifying how the tax rates should be calculated removes the need to speculate how much future taxes will be and prevents future litigation for award adjustments." TAPE 95-18, SIDE A Number 000 CHAIRMAN PORTER said, "Section 10, PERIODIC PAYMENTS: Under a periodic payment system, lawsuit awards are paid to the plaintiff throughout his or her lifetime, for the period of disability or for any other set period, instead of a lump sum. "This section changes the phrase `an injured party' to `a party.' This allows anyone involved in the suit, rather than just the claimant, to request periodic payments for amounts awarded for future damages. "Requires that future economic and noneconomic damages that exceed $100,000 be paid periodically whether or not it is requested by a party. Provides that a portion of a judgment owed to an attorney under a contingent fee agreement, must be reduced to present value and paid in a lump sum." Number 070 REPRESENTATIVE GREEN asked about the possible scenario where there is going to be $100,001 payment over a three year period, and the attorney's fee is one-third. If you discount the second and third year to the present, it is conceivable that the awardee would be out for almost his first year's compensation. Because a third of that is brought forward to the second and third year, according to the way this is written. CHAIRMAN PORTER said the attorney's fee is taken out of the award, reduced to present value, and given to the attorney. Still you are right. If, for example, there were a three-year award of $50,000 each, that would be $150,000 due the plaintiff. If the contingent fee was 50 percent, which is quite high, but if it were, that would reduce it to $75,000, and that is what would be spread out over three years. The $75,000 would be given to the attorney in a lump sum, while the remaining $75,000 would be spread out over a three year period to the plaintiff. Number 175 CHAIRMAN PORTER explained "Section 11, SECURITY FOR PERIODIC PAYMENTS: Requires that the court require security be posted for periodic payments, except when the obligation is recognized by the state or an insurer. Requires that the judgment include increases for future anticipated inflation. Provides to the judgment creditor damages caused by the failure to make periodic payments, including costs and attorney fees. "Section 12, INFLATION ADJUSTMENTS FOR PERIODIC PAYMENTS: The words `for personal injury or death' are added to the statute. This section clarifies what types of damage awards are being regulated by this statute. "Courts must specify the percentage or the method for increases by future periodic payments will increase to cover inflation. "By specifying the amount or method allowed for inflation, the amendment prevents future litigation for an adjustment of the original award. Number 300 "Section 13, COLLATERAL BENEFITS: A trial where the jury is not told that the injured person has received money for their injury from other sources, such as an insurance policy or another defendant. "This prevents unjust enrichment from claimants who collect multiple awards for the same loss. "Prohibits a claimant from recovering damages that duplicate amounts received from collateral sources. Provides exceptions for certain collateral sources that are subrogated to the claimant, and for death benefits and workers' compensation benefits. Allows a person defending a claim to introduce evidence of amounts received from certain collateral sources. Prohibits a person who provides a collateral benefit that is introduced into evidence from recovering that amount from the claimant or being subrogated the rights of the claimant. Number 360 "Section 14, APPORTIONMENT OF FAULT: Provides that the court shall determine each party's equitable share of the obligation to each claimant. Provides that assessment may only be used to measure percentages of fault and not to subject a person to civil liability. "The word `party' creates a loophole that restricts apportionment of fault to those named in the legal action. By considering all persons or entities which contributed to a loss, each is fairly apportioned a degree of fault based on their own actions. "Thus, this section provides that the court shall determine each party's equitable share of the obligation to each claimant. Provides that an assessment may only be used to measure percentages of fault and not to subject a person to civil liability. "Section 15, APPORTIONMENT OF FAULT: Changes the statute number to conform with revised law and clarifies the rules so that all parties that contributed to injury or death are fairly considered when assessing the percentage of fault. "Section 16, EFFECT OF RELEASE: Provides that a release given in good faith does not discharge another person from liability, but does reduce the total amount awarded by the jury or court by the amount stipulated in the release or the consideration paid for it, whichever is greater. Number 450 "Section 17, OFFERS OF JUDGMENT: The existing statute says that prior to 10 days before trial begins, either party can make an offer to settle a claim, plus accrued costs. This must be accepted within 10 days and correctly recorded by the clerk. "If the court's judgment is less favorable to the recipient of the offer, the person who refused the offer must pay the offerer's costs and attorney fees incurred since the date when the higher offer to settle was made." Number 520 REPRESENTATIVE FINKELSTEIN felt this provision would cover unreasonable offers as well as reasonable offers. REPRESENTATIVE VEZEY agreed the wording was vague. CHAIRMAN PORTER continued, "Section 18, PREJUDGMENT INTEREST: The section changes the interest rates on judgments and decrees from a set 10.5 percent a year to a floating rate of 3 percent above the federal discount rate in effect January 2nd of the year of the judgment. This rate is not used if a different rate has previously been agreed to by contract. "Federal discount rates have been as low as 1 percent (1942) and as high as 14 percent (1981). Allowing annual adjustments for prejudgment interest brings charges in line with the current market and prevents unfairly high or low rates. "Provides that the rate of interest on judgments and decrees, including prejudgment interest, is equal to prejudgment interest for certain future damages or punitive damages. "Section 19, PREJUDGMENT INTEREST: The purpose for the prejudgment interest is to allow claimants reimbursement of funds that would normally have been in their possession plus any interest that amount could have earned prior to the trial. This is not the case in damages awarded for future losses and these sums can be invested and interest earned on the funds. "Prejudgment interest is subject to federal income tax and attorney fees commission. "Section 20, UNIFORM ARBITRATION ACT: Amends the section on application of the Uniform Arbitration Act so that it applies to the statutes as listed after adoption of House Bill 158. "Section 21, MEDICAL EXPERT WITNESS QUALIFICATION: This section establishes qualifications for an expert witness to testify on issues relating to appropriate medical standard of care unless the witness is a health care provider. "MEDICAL BOARD OVERSIGHT OF MEDICAL EXPERT WITNESSES: Establishes guidelines for the court as to when to allow a medical expert witness to testify in cross-examination. "Section 22, DEFINITIONS: Provides definitions for professional negligence and professional services. "Section 23, CONTINGENT ATTORNEY FEE AGREEMENTS: Provides that if an attorney collects a contingency fee in connection with an award of punitive damages, the contingent fee due the attorney shall be calculated after that portion of punitive damages due the state has been deducted from the total award of damages. Number 530 "Section 24, CIVIL LIABILITY OF HOSPITALS FOR NON EMPLOYEES: The purpose of this section is to clarify the circumstances in which hospitals are held directly liable for the actions of health care providers not employed by the hospital. Current law permits claimants to sue only the hospital rather than the independent contractor who may have less ability to pay. "Provides that a hospital is not liable for civil damages resulting from an act or omission by a health care provider who is not an employee or actual agent of the hospital. However, the hospital must provide notice that the health care provider is an independent contractor and a notice of limited liability must be posted in all admissions areas and published in area newspapers annually. "The hospitals must also use caution and prudence in granting privileges to independent health care providers, have a review proceeding to monitor independent contractors, and be prepared to revoke or restrict privileges when needed. "Hospitals are liable for civil damages if the hospital or its employees were negligent or acted with intentional misconduct. "The final section defines health care providers and hospitals as the terms are used in this statute. Number 610 "Section 25, DAMAGES RESULTING FROM COMMISSION OF A CRIME: Provides that a person committing, attempting to commit, or fleeing from the commission of a felony whose action substantially contributed to the person's injury or death, is prohibited from recovering damages from personal injury or death. "Section 26, SIGNING OF PLEADINGS, MOTIONS, AND OTHER PAPERS; SANCTIONS: Sanctions for failure to sign a pleading or filing a frivolous lawsuit is a matter in the discretion of the trial court. This section imposes monetary sanctions against any attorney in civil cases from filing frivolous, unnecessary and legally deficient pleadings. "If it is alleged or appears that a pleading, motion, or other paper is signed in violation of this section, the court, upon motion or upon its own initiative, may set the matter for hearing. If the court determines that the motion is in violation, monetary sanctions will be implemented. Number 640 "Section 27, Repealing AS 09.55.548. "Section 28 through 33, Technical sections relating to amending Alaska Rule of Civil Procedure 49.68.702 and 95. "Section 34, Severability. "Section 35, This Act applies to all causes of action accruing on or after the effective date of this Act. "Section 36, This Act takes effect July 1, 1995." Number 650 CHAIRMAN PORTER stated the work session on HB 158 was over, and on Wednesday, March 1, the bill would be open to public testimony. ADJOURNMENT The House Judiciary Committee adjourned at 3:05 p.m.