Legislature(1995 - 1996)
03/03/1995 01:13 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE March 3, 1995 1:13 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 All members present COMMITTEE CALENDAR 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." PASSED OUT OF COMMITTEE *HB 150: "An Act relating to receipts for bail forfeited in satisfaction for certain offenses." SCHEDULED BUT NOT HEARD *HB 151: "An Act relating to magistrate jurisdiction in presumptive death proceedings." SCHEDULED BUT NOT HEARD *HB 153: "An Act relating to the surety bond for certain judicial officers." SCHEDULED BUT NOT HEARD (* First Public Hearing) WITNESS REGISTER CONNIE ADAMSON P.O. Box 353 Sutton, AK 99674 Telephone: (907) 745-1816 POSITION STATEMENT: Opposed HB 158 DAN MIDDAUGH, Alaska Health Project 1818 West Northern Lights Boulevard, No. 102 Anchorage, AK 99517 Telephone: (907) 276-2864 POSITION STATEMENT: Opposed HB 158 STEVE CONN, Executive Director Alaska Public Interest Research Group (AKPIRG) P.O. Box 101093 Anchorage, AK 99510 Telephone: (907) 278-3661 POSITION STATEMENT: Opposed HB 158 RHONDA SCOTT 3866 Helvetia Drive Anchorage, AK 99508 Telephone: (907) 561-4959 POSITION STATEMENT: Opposed HB 158 DIXIE ALMS, Public School Speech Pathologist P.O. Box 210272 Auke Bay, AK 99821 Telephone: (907) 790-2286 POSITION STATEMENT: Commented on HB 158 JIM FORBES, Assistant Attorney General Fair Business Practices Section Civil Division Department of Law 1031 West 4th Avenue, No. 200 Anchorage, AK 99501 Telephone: (907) 269-5222 POSITION STATEMENT: Provided information on HB 158 MICHAEL LESSMEIER, Attorney State Farm Insurance Company One Sealaska Plaza, Suite 303 Juneau, AK 99801 Telephone: (907) 586-5912 POSITION STATEMENT: Provided information on HB 158 DANIELLA LOPER, Administrative Assistant to Representative Brian Porter Alaska State Legislature State Capitol, Room 118 Juneau, AK 99801-1182 Telephone: (907) 465-3940 POSITION STATEMENT: Provided information on HB 158 PREVIOUS ACTION BILL: HB 158 SHORT TITLE: CIVIL LIABILITY SPONSOR(S): REPRESENTATIVE(S) PORTER, Toohey 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 02/27/95 (H) MINUTE(JUD) 03/01/95 (H) JUD AT 01:00 PM CAPITOL 120 03/01/95 (H) MINUTE(JUD) 03/03/95 (H) JUD AT 01:00 PM CAPITOL 120 BILL: HB 150 SHORT TITLE: RECEIPTS FOR BAIL FORFEITURES SPONSOR(S): JUDICIARY BY REQUEST JRN-DATE JRN-PG ACTION 02/03/95 236 (H) READ THE FIRST TIME - REFERRAL(S) 02/03/95 236 (H) JUDICIARY 03/03/95 (H) JUD AT 01:00 PM CAPITOL 120 BILL: HB 151 SHORT TITLE: MAGISTRATE PRESUMPTIVE DEATH JURISDICTION BILL VERSION: SPONSOR(S): JUDICIARY BY REQUEST JRN-DATE JRN-PG ACTION 02/03/95 236 (H) READ THE FIRST TIME - REFERRAL(S) 02/03/95 236 (H) JUDICIARY 03/03/95 (H) JUD AT 01:00 PM CAPITOL 120 BILL: HB 153 SHORT TITLE: BONDS FOR JUDGES SPONSOR(S): JUDICIARY BY REQUEST JRN-DATE JRN-PG ACTION 02/03/95 236 (H) READ THE FIRST TIME - REFERRAL(S) 02/03/95 236 (H) JUDICIARY 03/03/95 (H) JUD AT 01:00 PM CAPITOL 120 ACTION NARRATIVE TAPE 95-21, SIDE A Number 000 The House Judiciary Standing Committee was called to order at 1:13 p.m. on Friday, March 3, 1995. A quorum was present. HJUD - 03/03/95 HB 158 CIVIL LIABILITY CHAIRMAN BRIAN PORTER stated that HB 158 would be the only bill heard. The committee had concluded the public hearing on Wednesday, but because they had anticipated it might go through Friday, a few people were told they did not have to testify on Wednesday, but could do so on Friday. Those few people were called on to testify. Number 040 CONNIE ADAMSON, Sutton Resident, testified via teleconference. She said she is totally against any type of tort reform that does not provide the plaintiff the same opportunities as the defense. She feared tort reform would take away rights of the plaintiffs' attorneys to access information from the defense counsel. Number 055 DAN MIDDAUGH, Alaska Health Project, testified via teleconference, objecting to the bill as it is presently written. He did not believe it was fair and reasonable. Both the plaintiff and the defense have the right to real and definable recompense in cases involving accidents. He thought this bill would be against the better interest of the majority of Alaskans. Number 077 STEVE CONN, Executive Director, Alaska Public Interest Research Group (AKPIRG), testified via teleconference. The subject of tort reform is of interest to him both as Executive Director of AKPIRG and also, for many years, as a Professor of Justice, at the Criminal Justice Center where Representative Porter was a mentor. It was no surprise to him to see another attempt to adjust the system of civil litigation; however, the benefits of these changes are essentially unproven. The impact of the changes previously made to civil litigation should be looked at. These changes affect every aspect of the civil litigation system, as well as the malpractice insurance rates. AKPIRG did a study on the first version of tort reform which led to our present workers' compensation system. They also examined our present day system, finding it to be a disaster and a failure that serves no one's best interest. It allows litigation to occur when it should not. The bill focuses change in the wrong direction. Number 215 RHONDA SCOTT testified via teleconference. She felt the present system was fair and that capping punitive damages does not send the necessary message to the wrongdoer. She described an example where Ford motor company was sued, and the punitive damages awarded in the case equaled one month's profits for the company. This was a punishment severe enough to sting them. To save money, Ford knowingly built a dangerous car they knew would result in people being killed. A punitive damage cap would not have allowed a punitive damage award large enough to give them the right message. This cap implies that a jury is not capable of making good decisions. The cap needs to be large enough to give a company the incentive to change. She also expressed that half of the award should not go to the state's general fund. Why should the state profit from someone else's personal lawsuit? Number 335 DIXIE ALMS, Public School Speech Pathologist, understood the committee would be talking about product liability. She came to talk about DES, which is a drug used with women from the early 1940s until 1971. CHAIRMAN PORTER told her product liability is out of the bill. He then clarified that it is not clearly out of the bill yet, but he was prepared to offer an amendment making it painfully clear product liability is out of the bill. MS. ALMS said she would hold her testimony until it was necessary. Number 355 REPRESENTATIVE DAVID FINKELSTEIN argued that 90 percent of the provisions in the bill will still apply to product liability. Only one section, the statute of repose, is where the exemption is. He then asked Jim Forbes, who was on line for testimony via teleconference, if there was a more recent letter than March 8, 1994, which would outline the position of the department. JIM FORBES, Assistant Attorney General, Fair Business Practices Section, Civil Division, Department of Law, testified via teleconference. He answered there is nothing more recent with specific regard to HB 158. REPRESENTATIVE FINKELSTEIN was interested in the views of the Department of Law on many sections of this bill. He asked Mr. Forbes to go through the sections of the bill, outlining the constitutional problems or potential problems which would conflict with court rules; or just practical problems in his experience that exist. Number 390 MR. FORBES summarized it. The analysis they did last year showed, in large part, that the bill had constitutional flaws. The bill is dealing with the right of the average citizen to access the court system, and to be compensated for injuries. On the average, tort reform does not have the effect of reducing insurance rates. Insurance rates are effected more by the investments the insurance companies make, and do not really have that much to do with the types of tort reforms that have been adopted from state to state. One out of every 500 Americans lives in Alaska, and insurance premiums are scheduled primarily on a national basis. He finds this bill unconstitutional, simply because it would not reduce those insurance rates. Number 470 REPRESENTATIVE FINKELSTEIN referred to Sections 5 and 3 relating to the separate treatment for minors. What part of this section reflects the reasoning behind existing law? Is it because of the inability of minors to speak for themselves? What are the existing laws involving minors? Number 495 MR. FORBES said he was not an expert in children's cases. Courts have said that if a party does not have the right to bring a claim on their own behalf, it is a violation of the fundamental right of due process to deny them the right to bring a cause of action. For this year's bill, he was fairly confident that would be a major consideration by the courts. REPRESENTATIVE FINKELSTEIN asked if these sections would extinguish the existing right of minors to due process. MR. FORBES answered that the minor must depend upon a parent or guardian to bring the claim; since the minor does not have the capacity to bring the claim on his or her own behalf. These rights are extinguished if the parent is neglectful or unwilling to bring the child's claim forward to the court. The courts would have a great deal of difficulty with that provision the way it is written. REPRESENTATIVE FINKELSTEIN asked whether the conflict described was a court case based on interpretation of statutes, or on the constitution. MR. FORBES explained that prisoners, in the past, did not have the right to bring civil claims. In a case where a prisoner was injured even before he went into prison, he could not file a lawsuit while incarcerated, because his right did not exist. To invoke the statute of limitations against that prisoner would violate the due process provision of the Alaska Constitution. REPRESENTATIVE FINKELSTEIN asked if Alaskan decisions on punitive damages have been excessive; and if these excessive decisions are the target of this legislation. He asked if there was a way to get the number of cases awarding over $300,000. MR. FORBES said someone in the Court System would know those figures. REPRESENTATIVE FINKELSTEIN asked Mr. Forbes if he had run across many cases where there are large awards for punitive damages, in state court. MR. FORBES said he had run across a few cases with very large punitive damage awards; but, in reality, you do not hear of many of them being upheld. REPRESENTATIVE FINKELSTEIN said he would like to get statistics for Alaska state cases involving large punitive damage awards. CHAIRMAN PORTER said in the last large case he recalled, the appeal was denied, and the award was upheld. it was a $4.5 million punitive damage award to an Alaskan company just a couple of weeks ago. It is happening. REPRESENTATIVE FINKELSTEIN was not doubting that it is happening, he just wanted to know the totality of this category. CHAIRMAN PORTER said the totality of the category is not the problem. The problem is the exposure that businesses have to the perhaps infrequent occurrence of that exposure, which it has to be insured against. The insurance company has to recognize that there is a risk, and they probably factor the odds of the risk into the calculation of premiums. But if the rare occurrence happens to fall upon their client, it has to be insured against. That is the problem. REPRESENTATIVE FINKELSTEIN agreed that is a problem, but it is not the one and only problem. There is also the problem of making sure companies and individuals that operate in the state of Alaska, who act with reckless disregard for the interests of our citizens, are punished when appropriate. While an anecdote or two may make the case for one point; the point he was trying to make can only be made by looking at the whole picture. How often are these actually applied? Are these taken as a whole category, such that we would agree that punitive damages are appropriate? He wished to find some way of achieving this information before the bill reached the next committee. It is very important information as to what has happened. We are trying to solve a problem here; not just with punitive damages, but in every section. We ought to know how often these kinds of things occur in Alaska, and what the circumstances have been; because it may make your case, and it may make my case. Number 650 REPRESENTATIVE FINKELSTEIN asked Mr. Forbes about periodic payments in Section 10. How do they fit into whatever IRS exemption exists? CHAIRMAN PORTER said the amendment he would be offering later makes it clear that if we changed the existing federal damage award tax exemption, then obviously, we would not want to reduce the award by that amount. REPRESENTATIVE FINKELSTEIN said he agreed, that in the case of periodic payments, he understood a lump sum payment to be clearly exempt. Periodic payments are not necessarily exempt. Do we have any information that says periodic payments are exempt under existing law? Because if they are not necessarily exempt, then we are, in fact, deducting taxes from them. CHAIRMAN PORTER understood compensatory damage awards to be tax exempt. He did not think making the payments periodically, would automatically place them back into the taxable category. REPRESENTATIVE FINKELSTEIN asked if Mr. Forbes had experience in this. MR. FORBES said no. REPRESENTATIVE FINKELSTEIN said this is not a matter of state law. This is a matter of what the IRS standards are. He said he would like information on periodic payments, and how and if they fit into tax exemption. CHAIRMAN PORTER thought the amendment would cover that. Number 690 REPRESENTATIVE FINKELSTEIN asked Mr. Forbes' views on the issue of collateral benefits, and what gets introduced into the jury system. MR. FORBES answered, not having done extensive research on it, the law considers that insurance issues are something that should not be considered by the jury when trying to determine economic damages. For that reason, there has been a rule for a long time that a plaintiff cannot introduce evidence showing that the defendant has insurance to pay a claim. This evidence may cause a jury to focus on something other than the actual damages that have been proven in the case. Number 715 REPRESENTATIVE FINKELSTEIN asked about Section 14, regarding distribution of fault and inclusion of parties that are not in the lawsuit. If you name a party that is protected somehow or other, like the state, in regard to workers' compensation cases; or if it is some party that just does not exist for one reason or other, say they have disappeared from the scene, or cannot be reached; what happens if the state is all of a sudden a party to these cases? Does the state defend itself? How does it actually work when you have three or four defendants, and one or two of them are participating in the case, in terms of being named, but do not have anything at risk? MR. FORBES said the party being sued has rights to name another party who they believe to be at fault. The trial would be more unbalanced if the person was not available to defend himself or herself. Number 790 REPRESENTATIVE FINKELSTEIN referred to Section 21, regarding the expert witness qualification, and asked if retired doctors were being excluded? CHAIRMAN PORTER said it depends on how long ago the doctor retired, and whether or not he/she is still involved in any teaching or practicing. The idea is that a court and jury wants to get information that is as current as possible. Some doctors quit practicing to become medical testimony experts, and spend 10 to 15 years in this endeavor, without having the benefit of updating their medical knowledge or information. What this section is attempting to do, is to make sure the courts and juries get current information from the expert witnesses. REPRESENTATIVE FINKELSTEIN felt this exclusionary provision would only allow people to be expert witnesses if they did not have spare time on their hands, and therefore, would not really be available to testify. REPRESENTATIVE CYNTHIA TOOHEY stated she has to take medical classes all the time to keep up to date. Someone who is unaware of the evolving medical developments, does not realize it is changing daily. Unless you are involved with it daily, or doing some extensive studying, you are not going to be qualified to do anything. REPRESENTATIVE FINKELSTEIN asked who fits into the category of being certified by a board. Are those people who are making a living being expert witnesses, certified? Do they fit into number (2) at the top of page 13? CHAIRMAN PORTER thought number (3) was more relevant to what Representative Finkelstein was asking. That is a qualification on currency; saying that within a year of the date of the alleged occurrence giving rise to the claim, the expert witness was an active health care provider, or devoted a substantial portion of time teaching in an accredited school. Number 850 REPRESENTATIVE FINKELSTEIN asked about the new definition of professional negligence. It sounds like a critical definition. A lot of medical cases seem to revolve around negligence. What is the existing standard? What about someone who simply fails to render services? Will that group be excluded by this definition? CHAIRMAN PORTER said he presumed the current standard was listed in case law as opposed to current statute. What we are trying to do here, is list it in statute, so we know what we are talking about. He could not imagine a situation that would not be covered under this definition. This is not a restrictive definition, it is totally expansive. It refers to a negligent act or omission by a health care provider in rendering professional services. That covers everything. TAPE 95-21, SIDE B Number 000 REPRESENTATIVE FINKELSTEIN feared this definition could be interpreted another way. Someone could argue they were not involved in negligence because they were not rendering any professional services. REPRESENTATIVE TOOHEY asked Mr. Forbes if he recommended putting no caps for pain and suffering on auto liability policies. MR. FORBES understood the Administration has a policy concern about limiting access to the court system by ordinary Alaskans. Along those lines, a $300,000 cap will deny certain middle class, or ordinary Alaskans, access to the courts when they are injured. As it relates to automobile accidents, he would give those separate considerations, because minimum insurance requirements are the legislature's determination on what you have to do to prove you are a responsible individual, capable of responsibly operating a car on highways. The $300,000 cap would certainly discourage some people from making a claim. REPRESENTATIVE TOOHEY assumed Mr. Forbes did not want to put a cap on these policies. MR. FORBES did not feel a cap would be unreasonable; but let's face it, $300,000 is not what it used to be. Number 090 REPRESENTATIVE TOOHEY asked if, under our current system, two people were injured; one is injured by a person with automobile coverage of $100,000; and the other is injured by a driver of a state truck; do they both collect the same amount for pain and suffering? Assume they have the exact same injuries. MR. FORBES said they probably would not collect the same amount. Number 180 MIKE LESSMEIER, Attorney, State Farm Insurance Company, has done almost exclusively trial work. State Farm has approximately 32 percent of the automobile liability insurance market in the state, and approximately 43 percent of the homeowners market. He said there are basically four purposes of tort reform. One is to take the windfalls that exist in our system, and try to eliminate them. This bill does a good job of that. The second purpose ought to be to increase predictability, because the cases they are involved in that cost the most to defend, and that cost the system the most, are the cases that we cannot predict the result of. Punitive damages is a good example of that, because what happens with punitive damages, is, when you ask about the awards, you see the tip of the iceberg. You do not see the number of cases that are actually defended, that do not result in any awards. That is a tremendous cost to the system. That is a policy issue you have to decide, but it is an issue. The third issue you ought to look at is to clarify the intent of the voters, particularly with respect to the 1988 initiative. It is connected to the issue of predictability. If you can reduce the amount of money spent on both sides on attorneys, and put more money into the injured person's pocket, that is a wonderful goal, and that is what the goal of tort reform ought to be. MR. LESSMEIER responded to some of the testimony. He said State Farm has a different viewpoint from Mr. Forbes, with respect to how insurance companies set rates. State Farm sets rates based on its experience in Alaska. He suspected the Division of Insurance would take great issue with the statement that rates are based on investment income. That is not an appropriate way to underwrite insurance business, so if you looked at the malpractice carriers, and the automobile insurance carriers, he thought you would find that those rates are based on Alaska experience. Alaska experience is going to be directly affected by the changes you either choose to make or do not choose to make in this bill. MR. LESSMEIER also responded to the issue of access to the court system, based on a cap. He felt the issue of a cap was a policy issue that everyone has to decide, but he did not see that as an access issue. Going by Representative Toohey's example, we currently require automobile insurance caps at $50,000, $100,000 and $25,000. That has not reduced access to the tort system. It is almost inconceivable that there would be a case out there that would have $300,000 of non-economic damages that would not warrant an attorney taking it, because to get $300,000 of non-economic damages, you are going to have some economic damages as well. Typically, you will find the economic awards to be at least equal to, or higher than the non-economic award. In California, there has been a reduction in access to the court system because of the cap they had. The level of the cap is a policy issue. You simply need to decide how much predictability you want to have in your system, because when you take the big exposure out of the system, you are increasing predictability, and lowering the cost of litigation, the areas of dispute. You probably have another benefit as well. In a way, you increase access, because the very same person Representative Toohey is talking about may be injured by someone that has a higher level of insurance. You might make that level of insurance more available to people. In that way, you would give greater access to at least that level of coverage. That is one of the issues you have to think about, regardless of where you draw the line. Today we have a lottery system and this debate has been going on for ten years. We have a system of fortunate/unfortunates today. They are unfortunate enough to be seriously injured, but fortunate to be injured by someone who happens to be in the state of Alaska. Would we be better off if we had more people that had a certain level of coverage available? That is really the issue. Number 555 REPRESENTATIVE CON BUNDE asked if the cost of insurance would decrease with the passage of this bill. Number 560 MR. LESSMEIER said in California, it took ten years to find that the medical malpractice legislation was going to be effective. They spent five years with the tort reform initiative before they found out what the Supreme Court was going to do with it. What you will find, is if these provisions are effective immediately, that means they will actually be effective with respect to cases that arise after July 1 of 1996. You will see a couple of years where we continue to deal with cases that have arisen under the present system of law. Yes, you would see definite improvements if this bill is passed. CHAIRMAN PORTER announced the conclusion of the public testimony portion of the hearing, and began introducing amendments. REPRESENTATIVE BETTYE DAVIS expressed that she felt there were other ways some of these issues could be resolved rather than through this bill. She understood it was not a victims' rights bill, but would correct some concerns insurance companies and doctors might have; but she also felt they were eroding away some benefits, or doing harm to those who cannot help themselves, particularly, children. There is a portion of this bill that would not be very good for them. She had no problem with the section that would do away with the windfalls, giving the system some predictability. If litigation fees can be reduced, she had no problem with that, either. She did not feel that would really happen, though. She believed this bill would increase litigation costs, because every time there are new regulations, there are always new challenges. If there is a problem with malpractice insurance, could we not cap that? Are there not other ways we can solve some of these issues? CHAIRMAN PORTER noted during the course of offering amendments, there would be much debate and opportunity to discuss what we think the bill will or will not do. REPRESENTATIVE DAVIS felt some portions of the bill would take away responsibility from the wrongdoer; specifically taking responsibility away from hospitals and putting it back on the patient. She said she had a problem with that. Number 640 CHAIRMAN PORTER said there was an amendment that deals with that, and they could debate it when it is offered. He offered his first amendment: Page 4, lines 27-29, delete all materials and insert: "(1) the personal injury, death, or property damage resulted from (A) an intentional act or gross negligence; (B) fraud or fraudulent misrepresentation; (C) breach of an express warranty or guarantee; or (D) a defective product; in this subparagraph, "product" means an object that has intrinsic value, is capable of delivery as an assembled whole or as a component part, and is introduced into trade or commerce;" CHAIRMAN PORTER explained this adds the things that are not intended to be within the statute of repose. This provides that product liability is not intended to be considered under the statute of repose. REPRESENTATIVE AL VEZEY objected. He did not understand why we would not want to include product liability in the statute of repose. CHAIRMAN PORTER said he did not intend to support the amendments he has seen so far, except these three. The reason being, while some of them are seeking to mitigate, compromise, and work things out; we have spent two years on this bill, in that formative process. If we go any further the bill will start to lose its capacity to perform the goals we are seeking, which is reduction of rates and costs that have been described. Product liability within this state affects a small population, because we do not have a lot of manufacturing within the state of Alaska. If that changes, and he hopes it will, maybe we will want to revisit this, including product liability at that time. But right now, there are just so many battles he can fight. That is why it is being excluded. REPRESENTATIVE VEZEY removed his objection. Hearing no further objection or discussion, the amendment was adopted. Number 730 CHAIRMAN PORTER described Amendment 2. On Page 4, line 28, after "from": Insert: "prolonged exposure to a hazardous waste," This would actually become (A) of Amendment 1. CHAIRMAN PORTER explained that this applies to hazardous waste on property you buy that goes undiscovered for more than eight years. We are allowing that to be excluded from the statute of repose. REPRESENTATIVE BUNDE made a motion to move the amendment. REPRESENTATIVE FINKELSTEIN said there was constant argument about the definition of hazardous waste. He felt they should use the term "environmental discharge." CHAIRMAN PORTER objected to the inclusion of the term "environmental discharge." REPRESENTATIVE FINKELSTEIN asked to be directed to the definition of the term "hazardous waste." REPRESENTATIVE VEZEY stated it is in the federal register. CHAIRMAN PORTER noted it was discussed last year and "hazardous waste" is clearly defined in statute and in regulation. You could go one of two ways: You could either try to specifically, absolutely define it, at taking the risk of leaving out something that is subsequently discovered to be hazardous waste; or else leave it open with the possibility that someone might try to get out of it, by saying the substance is not hazardous waste; but then lose the ability to take in things that develop later on. If we said this applies to only things presently defined in the statute as hazardous waste, in ten years we will still be held to that definition, while other substances should have been added to the list. REPRESENTATIVE GREEN made a motion to adopt Amendment 2. Hearing no objection, Amendment 2 was adopted. CHAIRMAN PORTER then offered Amendment 3. On Page 8, line 17, after "death": Insert "; this paragraph does not apply to economic damages that are subject to federal or state income taxes" REPRESENTATIVE BUNDE made a motion to move the amendment. CHAIRMAN PORTER explained that there were concerns about this. While current law states that compensatory damage awards are not taxable, what would happen if, for some reason, the federal law changed, and they became taxable? This section would address that concern, as this paragraph does not apply to economic damages that are subject to federal or state income taxes. TAPE 95-22, SIDE A Number 000 REPRESENTATIVE VEZEY objected to Amendment 3. Would the economic damages tax be subject only to state law? CHAIRMAN PORTER said it refers to federal OR state tax. REPRESENTATIVE VEZEY stated the bill says the amount of economic damages awarded shall be reduced by the amount of federal and state income tax that would be paid, and with this new amendment, that exclusion would not apply if there was either a state or federal income tax on the amendment, or both. He felt the paragraph could be reworded to refer to the amount that these taxes from which it was exempt, would be reduced. He was not sure we were saying what was really intended there. REPRESENTATIVE TOOHEY asked if it would be more clear to say "federal AND/OR state income tax." REPRESENTATIVE VEZEY felt the word should be "or", not "and". REPRESENTATIVE FINKELSTEIN agreed adding the word "and" made it worse. Number 190 CHAIRMAN PORTER felt it was correct the way it was written. He was going to presume the bill drafter was right. He made a motion to move the amendment. Hearing no objection, Amendment 3 was adopted. Number 210 REPRESENTATIVE BUNDE made a motion to move Amendment 4, offered by Representative Davis. It would delete all material on page 1, lines 9 through 11. CHAIRMAN PORTER objected for the purpose of discussion. REPRESENTATIVE DAVIS said the reason for her suggestion is because no data has been presented indicating much of an increase in malpractice insurance premiums. In fact, she has seen materials showing those premiums are going down. CHAIRMAN PORTER argued they did have testimony indicating insurance rates in Alaska, as compared with other states, have risen outrageously. Information is available to indicate that. REPRESENTATIVE DAVIS heard that the information was based upon the Alaska's economy. We pay more for everything else here. It has nothing to do with anything but the cost of doing business in Alaska. After no further discussion a roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Vezey, Toohey, Green and Porter voted no. The Amendment failed on a vote of two to five. Number 250 REPRESENTATIVE DAVIS then moved her Amendment 5 which would delete all material on page 2, lines 18 through 19. CHAIRMAN PORTER objected for discussion. REPRESENTATIVE DAVIS felt this would help to ensure that appropriate compensation would be available to people who are injured. HB 158 will prevent injured people from recovering anything. Many of the provisions will increase litigation. CHAIRMAN PORTER clarified, saying the belief that this legislation would increase litigation has, to a degree, some merit; considering there will be new provisions for attorneys to take a shot at. However, that does not make it not worth the effort of trying to fix things that many people believe are broken. Consequently, one of the things that is broken is that patients are unable to obtain compensation, because they are unable to afford insurance; and in some cases, cannot afford to get their cases through the courts. Some attorneys will not take cases unless the potential award is significantly high. REPRESENTATIVE FINKELSTEIN argued under this bill, there would be even much less money available to the attorneys, giving them even less of an incentive to take cases. There was a roll call vote taken on Amendment 5. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Green and Porter voted no. The amendment failed with a vote of two to four. Number 360 REPRESENTATIVE DAVIS moved her next amendment, Amendment 6. It would change the statute of repose from 8 years to 12 years in two places: Page 4, line 16, and Page 4, line 19. REPRESENTATIVE VEZEY objected. REPRESENTATIVE DAVIS felt eight years was not quite a sufficient amount of time. Other state's statutes of repose vary. Number 390 CHAIRMAN PORTER mentioned that a few other states have as little as three years. He read down a list very quickly: 4, 4, 4, 3, 3, 3, 4, 5, 6, 6, 5, 4, 3, 7, and a couple of 10s. He did not see any twelves. In 1986, Alaska passed a law to have a seven year statute of repose. The court had difficulty with that for other reasons. He felt eight years was reasonable, and objected to the amendment. He explained the problem with having twelve years is that a contractor would have to keep insurance long after he retired. A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to five. Number 500 REPRESENTATIVE DAVIS moved her next amendment, Amendment 7. It would delete all material on page 6, line 22, through page 7, line 16, (Section 6). This would completely eliminate the non-economic damages section. CHAIRMAN PORTER objected. He stated one of the goals is predictability and reasonableness in damages. The $300,000 limit is reasonable and obviously, predictable. There are states which have caps lower than this. REPRESENTATIVE FINKELSTEIN argued that non-economic damage awards become very significant, for situations involving horrible disfigurements, etc. It is loss of your life. CHAIRMAN PORTER said the thing that is upsetting to him is that the current attitude of so many people seems to be that money will make up for someone's injury, and for them becoming a quadriplegic. Once someone is a quadriplegic, there is no way to make him/her whole. That is life. REPRESENTATIVE DAVIS agreed they cannot be made whole, and money is not everything, but money does help in situations when you do have these kinds of injuries. CHAIRMAN PORTER argued that a half a million dollars is a lot of help. REPRESENTATIVE VEZEY noted they seem to have lost sight of the fact that no cap exists for economic damages. The jury can make the person whole to the greatest extent that money can make an individual whole. REPRESENTATIVE DAVIS also felt the juries could decide on non- economic damage awards without having the caps. A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, Green and Porter voted no. Amendment 7 failed on a vote two to five. Number 750 REPRESENTATIVE DAVIS moved Amendment 8. On page 8, line 19, replace the word "shall" with "may." She felt the word "shall" would place an extreme burden on the court system. CHAIRMAN PORTER explained that the word "shall" would eliminate the ability to protect against; if a court decided they wanted to, for some reason; allowing periodic payments. In most cases, this has been the history; plaintiffs want their money up front, rather than in periodic payments, even though they would have received, in their normal life, that much money up front. In those cases where a court, for whatever reason they had elected not to do that; we would run into the risk of having the loss of that money to the defendant, over the period of time with which the payments would have been spread. Consequently, if they were seriously injured, they would be more susceptible to becoming wards of the state. For that reason, he objected. TAPE 95-22, SIDE B Number 000 DANIELLA LOPER, Aide to Representative Porter, said that in states that have periodic payments, some are discretionary and some are mandatory. Number 040 REPRESENTATIVE GREEN asked, under Section 10, where it says "paid in a lump sum," is there any question that will be paid by the defendant? CHAIRMAN PORTER stated it is only the amount that exceeds $100,000. The only portion that would be considered for periodic payments, is the amount of an award over $100,000. So notwithstanding whatever contingent fee arrangement the plaintiff had with his attorney, the plaintiff would receive two thirds of $100,000 right up front, (if the fee arrangement was 33 and 1/3 percent). The plaintiff would receive 2/3 of $100,000. Then, the amount that is left to be spread for periodic payments, would be reduced by the 1/3 (if that were the contingent fee arrangement); and then spread over the period of time, so that he would get the benefit of some money in the first year, and $66,000, plus. Number 125 REPRESENTATIVE GREEN said they should add the words "by the defendant", so that in the future, it will be obvious from the language that that is where the funds are coming from. REPRESENTATIVE GREEN said the hypothetical situation that caused him grief is the case where a fellow gets a judgement for 1/2 of a million dollars, and he gets $100,000 a year, and the attorney is going to get a third of that, at present worth value, that would be otherwise due the attorney who was representing this person. It is conceivable that over a five year period, present worth discount would not be enough to discount that portion, so the guy ends up owing money. MR. LESSMEIER clarified that that would never happen under this bill. The reason being because you do not structure the entire $500,000 dollars. You would structure only the amount the person is entitled to after they pay their attorney. If the attorney has a contingency agreement of a third, the attorney would take that one third right off of the $500,000 thousand. CHAIRMAN PORTER asked Representative Green if he could think of wording that would work for him, and he would ask Ms. Loper to work with him on it. REPRESENTATIVE GREEN agreed to do that. Number 210 A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to five. Number 225 REPRESENTATIVE DAVIS moved Amendment 9, deleting all material on page 8, lines 14 - 17, and inserting "Number (2), The amount of federal and state income tax that would be paid on gross earnings on the tax rate, in effect on the date of the injury or death may be considered by the jury in awarding economic damages for loss of past or future gross earnings." CHAIRMAN PORTER objected. REPRESENTATIVE DAVIS believed that the way the bill is written, it would require a jury to make so many predictions in every case in every year that future earnings are awarded; that the change could result in a real injustice to the injured person. She believes her language is better than what was there before. CHAIRMAN PORTER reminded the committee that we did amend this to hopefully provide that if the law changes, and the state taxes this money, or the federal government decides to tax this money, this deduction would not be made. It would cause the court to have to make estimates, but that is outweighed by the reality that it is inappropriate to pay somebody money that they did not have coming. MR. LESSMEIER explained that for the jury to determine past wage loss would be easy under this bill, because it says "they shall be reduced by the amount of federal and state income taxes that would be paid under tax rates, in effect, on the date of injury or death." REPRESENTATIVE FINKELSTEIN said if you fill out the tax forms for the next few years, under the current tax laws, you will arrive at a particular figure. Is it not going to require at least, conceptually filling out the tax forms to see what bottom line they would bring you, based on that person's current status, and projecting it into the future? MR. LESSMEIER said yes, he thought that was right. REPRESENTATIVE FINKELSTEIN said we all know filling out taxes, even for one year, is not easy and we are going to put this before the jury? MR. LESSMEIER said it really is no different than what is already put before the jury in terms of past wage loss, and we do not go to trial very often about a difference in figuring past wage loss. When you apply, you have an application of an existing tax schedule to estimate earnings. There is not going to be great room for dispute about that. The United States Supreme Court, in a case called Norfolk and Western Railroad Company, versus Leapoeld, decided this was an appropriate thing to do back in 1980. If you were to take out the language, "under tax rates in effect on the date of this injury or death," then yes, you would inject the very problem that you are concerned about. This bill was drafted to avoid that. REPRESENTATIVE FINKELSTEIN said the argument will be what the tax laws of the state, at this time, are going to produce when projected into the future. You may say it will not be much of an issue, but from your determination, if the person is in the 28 percent category, and the bottom line of the other party, based on their calculations, places them in the 15 percent category, that is a big difference. That is hundreds of thousands of dollars. That is an issue based on how you fill out your tax forms that a jury is going to decide. MR. LESSMEIER suggested that is a quantifiable thing, being far easier for juries to determine with expert testimony, than things like pain and suffering, loss of enjoyment of life, etc. REPRESENTATIVE FINKELSTEIN said it may be, but it is a huge new area that gets into all sorts of things, and it may be smaller than some other determinations, but it is going to be a new big one. MR. LESSMEIER said it is not really new, because what the economists do right now is reduce these future economic damage awards to present value. This is one more calculation they would be required to do, but you would not see a great deal of debate about it. REPRESENTATIVE FINKELSTEIN said he is convinced Mr. Lessmeier was wrong. Just the difference between 15 and 28 percent, which could be the determination of whether they are going to get a deduction for a particular piece of property they own, whether that piece of property falls into the category of allowable deduction or not, and whether that triggers them at 15 or 18, that alone would be enough. Number 375 REPRESENTATIVE VEZEY said it does not take a rocket scientist to determine what level of income is taxed at 15 percent, versus what level of income is taxed at 28 percent. He said this, keeping in mind that he is not capable of doing his own income taxes. REPRESENTATIVE FINKELSTEIN said that was right, but there are all these allowable deductions - every factor that goes into how you treat your own taxes, and what goes into an audit, those are all debatable issues before a jury. The IRS has a million things you can treat differently. If taxes were simple, if we had a flat tax, it would be different, but we do not. We have the most complicated set of things that go into the calculation. His only point in all this was to say that these items will now be before the jury. How big of an issue they become, he did not know, but it is a whole new area, and that is what worries him. REPRESENTATIVE BUNDE said maybe he was not understanding something, but say, a person is injured in a particular tax year. You go back to their last time they filed taxes, and see what percent of taxes they paid at that time. REPRESENTATIVE FINKELSTEIN said conditions have changed now; property that may have been the basis for their deduction, and being able to itemize, may not be property that is in their possession anymore. That may actually be involved in the dispute in the first place, and you have burned up and they went with it. These things just are not simple, and there is nothing in here that says any automatic period. It is every kind of detail, like the one you just raised, those are left to a jury to decide, and there may be some simple way to do it, but this is not going to achieve it. It is all going to be left up to a debate before a jury. CHAIRMAN PORTER added, as is the merits of the entire case. After no further discussion, a roll call vote was taken on Amendment 9. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to five. Number 430 REPRESENTATIVE DAVIS moved Amendment 10: Page 4, line 11: Delete: ";" Insert: "." Page 4, lines 12 - 14: Delete all material. Page 7, line 31, through page 8, line 3: Delete all material. REPRESENTATIVE DAVIS said there is no reason to give half of the punitive damages to the state. She felt it may even be unconstitutional, but knew that Chairman Porter had mentioned that it has been done in other states. CHAIRMAN PORTER said the idea of giving it to the state, as opposed to the defendant, is that after consideration of economic and non- economic damages, the defendant has been made whole. The punitive damage is a punishment to the defendant, whose actions cause a hazard to everyone, as opposed to just the individual who was harmed. REPRESENTATIVE FINKELSTEIN said that though there is some philosophical appeal to what he was saying, the problem is practical in the system we have. We could pick a whole different system to deal with these kinds of problems. We could make the state or federal government be the great determining factor of what is right and wrong, having this monstrous District Attorney's Office going out and prosecuting everything that occurs. They would go out and make the case, and every penny that came in from a judgement would go to the state. He does not disagree with that concept, necessarily, but we have this other system that gives encouragement, through the system for people to pursue their own claims at their own cost, to attempt to determine what is right or wrong. The state only has to be involved at the level of providing the court. So while it is an appealing concept, taking your argument to the extreme, we would never have punitive damages if we made them 100 percent. After no further discussion, a roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to five. Number 535 REPRESENTATIVE DAVIS made a motion to move Amendment 11: Page 12, lines 19 - 21: Delete all material. Page 17, lines 1 - 3: Delate all material. Page 17, line 4: Delete all material. Page 17, line 7: Delete: "sec. 21" Insert: "sec. 20" Page 17, line 9: Delete: "sec. 26" Insert: "sec. 25" REPRESENTATIVE DAVIS said she wanted to delete the section that says "prejudgment interest cannot be awarded for future economic or non-economic or punitive damages." Current law does not allow for prejudgment in punitive damages. There would be longer litigations when there is no incentive for them to settle. Number 550 CHAIRMAN PORTER felt there would be more litigation if someone thought they were exposed to having to pay prejudgment interest on future benefits. Prejudgment interest, almost by definition, is interest on what you would do between the time the case was filed, and the award. It seems illogical to pay prejudgment interest on money that you were not entitled to in the first place, prior to your being entitled to it. For that reason he objected to the amendment. REPRESENTATIVE FINKELSTEIN expressed he felt a bit at a disadvantage, because every time he has a question, they call up a representative of the insurance industry. He would like to ask questions of someone on the other side. This is not really a fair proceeding if there is only one industry that is represented. He found Mr. Lessmeier's testimony to be very helpful, and he has answered a number of his questions, but there is two sides to this issue, and as we know, it is a very complicated thing. He could not pretend to represent what actually goes on in the court room. He has never even sat and watched one of these cases. How is he possibly to know? CHAIRMAN PORTER said his questions involve facts, not philosophy, and if Jeff Feldman was sitting here, he would answer the question the same way Mike Lessmeier would as to whether or not somebody gets interest on money that is not paid when it is due. You get it, but it is called post interest, it is not called prejudgment interest. REPRESENTATIVE FINKELSTEIN felt the fact that he cannot have Mr. Feldman or someone else present to answer his questions is very unfair. This is becoming a one sided forum, when the insurance industry's views are the only thing left of the public. We had plenty of public input covering a variety of things. Why should it be summarized down to one industry's point of view? CHAIRMAN PORTER stated to this point it has just been Representative Finkelstein's point of view against his own. Mike has not offered anything. Number 650 REPRESENTATIVE FINKELSTEIN said the point of this is to replicate what the earning power of that money was at the particular time the court has determined that it is based on. It is a very complicated subject. He still felt that if we were going to hear from representatives on one side of this issue, we ought to be able to hear from the other side. We have, over and over again, used, as an expert, a person who represents a particular industry, and he had never seen Representative Porter hold a hearing that way before. CHAIRMAN PORTER told Representative Finkelstein that if it his impression that any information that Mr. Lessmeier has provided is slanted, then we will not ask him any more questions. We will not avail ourselves of an attorney who is here and might have a better perspective on these questions than we do. That is fine, if that is the way you want to do it. We will debate these sections ourselves. REPRESENTATIVE FINKELSTEIN wanted to note, for the record, how this hearing was conducted. CHAIRMAN PORTER said Representative Finkelstein has, and certainly may, note his opinion. They have not asked anything other than factual information, and that is what they have been getting. REPRESENTATIVE FINKELSTEIN said he would be glad to review the record with Chairman Porter, and he thought he could prove otherwise. After no further discussion, a roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to five. REPRESENTATIVE DAVIS made a motion to adopt Amendment 12: Page 2, lines 5 - 7: Delete all material. Page 4, lines 5 - 6: Delete all material. Page 14, line 20, through page 15, line 18: Delete all material. Page 17, line 9: Delete: "sec. 26" Insert: "sec. 25" A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to five. TAPE 95-23, SIDE A Number 000 REPRESENTATIVE FINKELSTEIN offered Amendment 13: Page 1, line 12, through page 2, line 4: Delete all material. Page 4, lines 3 - 4: Delete all material. Page 4, line 15, through page 5, line 10: Delete all material. Page 16, line 23: Delete: "sec. 14" Insert: "sec. 16" Page 17, line 1: Delete: "sec. 19" Insert: "sec. 18" Page 17, line 4: Delete: "sec. 21" Insert: "sec. 20" Page 17, line 9: Delete: "sec. 26" Insert: "sec. 25" CHAIRMAN PORTER objected. A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to five. Number 200 REPRESENTATIVE FINKELSTEIN offered Amendment 14: Page 4, line 18: Delete: "personal injury, death, or" Page 4, line 21: Delete: "personal injury, death, or" Page 4, line 24: Delete: personal injury, death, or" Page 4, line 27: Delete: personal injury, death, or" Page 5, lines 3 - 6: Delete all material. Page 14, line 16: Delete: "personal injury, death, or" CHAIRMAN PORTER objected. A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to five. Number 225 REPRESENTATIVE FINKELSTEIN offered Amendment 15: Page 5, line 11, through page 6, line 4: Delete all material. Page 16, line 23: Delete: "sec. 14" Insert: "sec. 13" Page 16, line 27: Delete: "sec. 17" Insert: "sec. 16" Page 17, line 1: Delete: "sec. 19" Insert: "sec. 18" Page 17, line 4: Delete: "sec. 21" Insert: "sec. 20" Page 17, line 7: Delete: "sec. 21" Insert: "sec. 20" Page 17, line 9: Delete: "sec. 20" Insert: "sec. 21" CHAIRMAN PORTER objected. Number 450 A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to five. REPRESENTATIVE FINKELSTEIN offered Amendment 16. Page 6, line 30: Delete: "$300,000" Insert: "$1,500,000" Page 7, line 1: Delete: "$500,000" Insert: "$3,000,000" CHAIRMAN PORTER objected. A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote to two to five. Number 530 REPRESENTATIVE FINKELSTEIN offered Amendment 17: Page 7, lines 15 - 16: Delete all material. CHAIRMAN PORTER objected. A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to five. Number 575 REPRESENTATIVE FINKELSTEIN offered Amendment 18: Page 7, line 22: Delete: "new subsections" Insert: "a new subsection" Page 7, lines 23 - 30: Delete all material. CHAIRMAN PORTER objected. A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to five. Number 715 REPRESENTATIVE FINKELSTEIN offered Amendment 19: Page 9, line 15, through page 10, line 13: Delete all material. Page 16, line 22: Delete all material. Page 16, line 23: Delete: "sec. 14" Insert: "sec. 13" Page 16, line 27: Delete: "sec. 19" Insert: "sec. 18" Page 17, line 1: Delete: "sec. 19" Insert: "sec. 18" Page 17, line 4: Delete: "sec. 21" Insert: "sec. 20" Page 17, line 7: Delete: "sec. 21" Insert: "sec. 20" Page 17, line 9: Delete: "sec. 26" Insert: "sec. 25" CHAIRMAN PORTER objected. A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to five. REPRESENTATIVE FINKELSTEIN offered Amendment 20: Page 1, line 1: Delete: "49," Page 1, line 2: Delete: "," Page 2, lines 8 - 10: Delete all material. Page 3, lines 27-30: Delete all material. Page 3, lines 27 - 30: Delete all material. Page 10, lines 15 - 16: Delete: "person [PARTY TO THE ACTION] Insert: "party to the action" Page 10, lines 22 -27: Delete: "(2) the percentage of the total fault [OF ALL OF THE PARTIES TO EACH CLAIM] that is allocated to each claimant, defendant, third-party defendant, [AND] person who has been released from liability under AS 09.17.091, or other person responsible for the damages to each claimant regardless of whether the other person, including an employer, is or could have been named as a party to the action [AS 09.16.040]." Insert: "(2) the percentage of the total fault of all of the parties to each claim that is allocated to each claimant, defendant, third-party defendant, and person who has been released from liability under AS 09.178.091 [AS 09.16.040]." Page 11, lines 2 - 7: Delete: "as determined under (a) of this section, an assessment of a percentage of fault against a person who is not a party may only be used as a measure for accurately determining the percentages of fault of a named party. Assessment of a percentage of fault against a person who is not a party does not subject that person to civil liability in that action and may not be used as evidence of civil liability in another action" Page 16, lines 23 - 26: Delete all material. CHAIRMAN PORTER objected. A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, and Porter voted no. The amendment failed, two to four. Number 780 REPRESENTATIVE FINKELSTEIN offered Number 21: Page 12, lines 10 - 18: Delete all material. Page 17, line 1: Delete: "sec. 19" Insert: "sec. 18" Page 17, line 4: Delete: "sec. 21" Insert: "sec. 20" Page 17, line 7: Delete: "sec. 21" Insert: "sec. 20" Page 17, line 9: Delete: "sec. 26" Insert: "sec. 25" CHAIRMAN PORTER objected. A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to five. Number 830 REPRESENTATIVE FINKELSTEIN offered Amendment 22: Page 13, line 13, through page 13, line 18: Delete all material. TAPE 95-23, SIDE B Number 000 CHAIRMAN PORTER objected. A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to five. Number 085 REPRESENTATIVE FINKELSTEIN offered Amendment 23: Page 13, line 19 through page 14, line 12: Delete all material. CHAIRMAN PORTER objected. A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Bunde, Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to five. Number 160 REPRESENTATIVE FINKELSTEIN offered Amendment 24: Page 17, line 17: Delete: "This Act takes effect July 1, 1995." Insert: "This Act takes effect only if the Director of the Division of Insurance certifies to the Lieutenant Governor and the revisor of statutes that the liability insurance rates filed with the Division of Insurance on January 1, 1995, have been reduced by at least 10 percent. In this section, "liability insurance" means insurance described under AS 21.12.070(a)(2). *Sec. 37. If the condition described in sec. 36 of this Act is fulfilled, this Act takes effect 30 days after the date of the certification described in sec. 36 of this Act." CHAIRMAN PORTER objected. A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Toohey, Vezey, Green and Porter voted no. The amendment failed, two to four. REPRESENTATIVE FINKELSTEIN offered Amendment 25: Page 7, line 20 - 21 delete: "of malice or conscious acts showing deliberate disregard of another person by the person from whom punitive damages are sought." Page 7, line 20 after "evidence of" insert: "outrageous conduct, acts done with malice or bad motives, or reckless indifference to the interests of another." CHAIRMAN PORTER objected. A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to five. Number 410 CHAIRMAN PORTER offered Amendment 26: Page 8, line 24: Insert after "lump sum", "to the attorney by judgment debtor" Hearing no objection, the amendment was adopted. CHAIRMAN PORTER offered Amendment 27: Page 8, line 29: Insert, after "state", or "self-insured municipality or borough, "or"... Hearing no objection, the amendment was adopted. Number 525 REPRESENTATIVE FINKELSTEIN offered Amendment 28: Page 6, lines 16 - 17: Delete: "Notwithstanding the disability of minority described under AS 09.10.140(a), a" Insert: "A" CHAIRMAN PORTER objected. A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to four. REPRESENTATIVE FINKELSTEIN offered Amendment 29: Page 3, line 31, through page 4, line 2: Delete all material. Page 11, line 19, through page 12, line 9: Delete all material. Page 16, lines 27 - 31: Delete all material. Page 17, line 1: Delete: "sec. 19" Insert: "sec. 18" Page 17, line 4: Delete: "sec. 21" Insert: "sec. 20" Page 17, line 7: Delete: "sec. 21" Insert: "sec. 20" Page 17, line 9: Delete: "sec. 26" Insert: "sec. 25" CHAIRMAN PORTER objected. A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to four. Number 665 REPRESENTATIVE FINKELSTEIN offered Amendment 30: Page 1, line 2: Delete: "Rule of Evidence" Insert: "Rules of Evidence 411 and" Page 11, after line 18: Insert a new bill section to read: "* Sec. 17. AS 09.25 is amended by adding a new section to read: Sec. 09.25.035. EVIDENCE OF LIABILITY INSURANCE. A claimant in an action for personal injury or death may introduce evidence that a person defending a claim is insured by a policy of liability insurance. In this section, "liability insurance" means a policy of insurance described under AS 21.12.070(a)(2)." Page 16, after line 26: Insert a new bill section to read: "*Sec. 30. AS 09.17.075, enacted in sec. 17 of this Act, has the effect of amending Alaska Rule of Evidence 411 by providing that evidence of liability insurance may be introduced by a claimant in a civil action for personal injury or death." Page 16, line 27: Delete: "sec. 17" Insert: "sec. 18" Page 17, line 1: Delete: "sec. 19" Insert: "sec. 20" Page 17, line 4: Delete: "sec. 21" Insert: "sec. 22" Page 17, line 7: Delete: "sec. 21" Insert: "sec. 22" Page 17, line 9: Delete: "sec. 26" Insert: "sec. 27" CHAIRMAN PORTER objected. A roll call vote was taken. Representatives Finkelstein and Davis voted yes. Representatives Toohey, Vezey, Green and Porter voted no. The amendment failed on a vote of two to four. Number 850 REPRESENTATIVE GREEN made a motion to move HB 158, as amended, out of committee with individual recommendations and attached fiscal notes. REPRESENTATIVE FINKELSTEIN objected. TAPE 95-24, SIDE A Number 001 A roll call vote was taken. Representatives Finkelstein and Davis voted no. Representatives Toohey, Vezey, Green and Porter voted yes. CSHB 158(JUD) passed out of committee on a vote of four to two. ADJOURNMENT The House Judiciary Committee adjourned at 6:10 p.m.