Legislature(1997 - 1998)
04/24/1998 01:07 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE April 24, 1998 1:07 p.m. MEMBERS PRESENT Representative Joe Green, Chairman Representative Con Bunde, Vice Chairman Representative Brian Porter Representative Norman Rokeberg Representative Jeannette James Representative Ethan Berkowitz MEMBERS ABSENT Representative Eric Croft COMMITTEE CALENDAR HOUSE BILL NO. 324 "An Act relating to liens for municipal assessments for certain utility improvements." - MOVED CSHB 324(L&C) OUT OF COMMITTEE HOUSE BILL NO. 319 "An Act relating to an employee's expectation of privacy in employer premises." - HEARD AND HELD HOUSE BILL NO. 430 "An Act relating to noneconomic damages resulting from an automobile accident." - MOVED CSHB 430(JUD) OUT OF COMMITTEE HOUSE BILL NO. 466 "An Act relating to violations of state election laws." - HEARD AND HELD * HOUSE BILL NO. 487 "An Act relating to including the costs of expansion activities and political activities in rates of electric cooperatives." - SCHEDULED BUT NOT HEARD (* First public hearing) PREVIOUS ACTION BILL: HB 324 SHORT TITLE: MUNICIPAL LIEN FOR UTILITY IMPROVEMENTS SPONSOR(S): REPRESENTATIVES(S) OGAN, Kohring Jrn-Date Jrn-Page Action 1/16/98 2061 (H) READ THE FIRST TIME - REFERRAL(S) 1/16/98 2061 (H) L&C, JUDICIARY 2/04/98 2223 (H) COSPONSOR(S): KOHRING 2/09/98 (H) L&C AT 3:15 PM CAPITOL 17 2/09/98 (H) MINUTE(L&C) 3/30/98 2785 (H) L&C RPT CS(L&C) NT 3DP 2NR 3/30/98 2785 (H) DP: COWDERY, RYAN, ROKEBERG; NR: KUBINA 3/30/98 2785 (H) HUDSON 3/30/98 2785 (H) ZERO FISCAL NOTE (DCRA) 3/30/98 2786 (H) REFERRED TO JUDICIARY 4/15/98 (H) JUD AT 1:00 PM CAPITOL 120 4/24/98 (H) JUD AT 1:00 PM CAPITOL 120 BILL: HB 319 SHORT TITLE: EMPLOYEES: NO EXPECTATION OF PRIVACY SPONSOR(S): REPRESENTATIVES(S) ROKEBERG Jrn-Date Jrn-Page Action 1/14/98 2040 (H) READ THE FIRST TIME - REFERRAL(S) 1/14/98 2040 (H) LABOR & COMMERCE 1/14/98 2045 (H) ADDITIONAL REFERRAL TO JUD 3/25/98 (H) L&C AT 3:15 PM CAPITOL 17 3/27/98 2767 (H) L&C RPT CS(L&C) 1DP 5NR 3/27/98 2767 (H) DP: ROKEBERG; NR: COWDERY, SANDERS, 3/27/98 2767 (H) KUBINA, HUDSON, RYAN 3/27/98 2767 (H) ZERO FISCAL NOTE (LAW) 3/27/98 2768 (H) REFERRED TO JUDICIARY 4/20/98 (H) JUD AT 1:00 PM CAPITOL 120 4/20/98 (H) MINUTE(JUD) 4/23/98 (H) JUD AT 1:00 PM CAPITOL 120 BILL: HB 430 SHORT TITLE: AUTOMOBILE CIVIL LIABILITY SPONSOR(S): REPRESENTATIVES(S) KOTT, Mulder Jrn-Date Jrn-Page Action 2/18/98 2353 (H) READ THE FIRST TIME - REFERRAL(S) 2/18/98 2353 (H) JUDICIARY, FINANCE 2/27/98 (H) JUD AT 1:00 PM CAPITOL 120 2/27/98 (H) MINUTE(JUD) 4/24/98 (H) JUD AT 1:00 PM CAPITOL 120 BILL: HB 466 SHORT TITLE: CAMPAIGN MISCONDUCT: FALSE INFORMATION SPONSOR(S): STATE AFFAIRS Jrn-Date Jrn-Page Action 3/06/98 2542 (H) READ THE FIRST TIME - REFERRAL(S) 3/06/98 2542 (H) STATE AFFAIRS, JUDICIARY 3/19/98 (H) STA AT 8:00 AM CAPITOL 102 3/21/98 (H) STA AT 10:00 AM CAPITOL 102 3/21/98 (H) MINUTE(STA) 3/31/98 (H) STA AT 8:00 AM CAPITOL 102 3/31/98 (H) MINUTE(STA) 3/31/98 2810 (H) STA RPT 1DP 1DNP 3NR 3/31/98 2810 (H) DP: HODGINS; DNP: ELTON; NR: JAMES, 3/31/98 2810 (H) IVAN, RYAN 3/31/98 2810 (H) ZERO FISCAL NOTE (H.STA) 3/31/98 2810 (H) REFERRED TO JUDICIARY 4/23/98 (H) JUD AT 1:00 PM CAPITOL 120 WITNESS REGISTER DAVID STANCLIFF, Legislative Assistant to Representative Scott Ogan Alaska State Legislature Capitol Building, Room 128 Juneau, Alaska 99801 Telephone: (907) 465-2338 POSITION STATEMENT: Provided sponsor statement for HB 324. KEVIN JARDELL, Legislative Administrative Assistant to Representative Joe Green Alaska State Legislature Capitol Building, Room 118 Juneau, Alaska 99801 Telephone: (907) 465-4990 POSITION STATEMENT: Answered questions on HB 319. PAMELA LaBOLLE, President Alaska State Chamber of Commerce 217 Second Street Juneau, Alaska 99801 Telephone: (907) 586-2323 POSITION STATEMENT: Provided testimony in support of the concept of HB 319. JAMES HORNADAY, Legislative Assistant to Representative Pete Kott Alaska State Legislature Capitol Building, Room 204 Juneau, Alaska 99801 Telephone: (907) 465-6848 POSITION STATEMENT: Presented sponsor statement for HB 430. JOHN GEORGE, Representative National Association of Independent Insurers 3328 Fritz Cove Road Juneau, Alaska 99801 Telephone: (907) 789-0172 POSITION STATEMENT: Testified on HB 430. MICHAEL LESSMEIER, Attorney State Farm Insurance Company 124 West Fifth Street Juneau, Alaska 99801 Telephone: (907) 586-5912 POSITION STATEMENT: Testified on HB 430. JUANITA HENSLEY, Chief Driver Services Division of Motor Vehicles Department of Administration P.O. Box 10200 Juneau, Alaska 99811-0200 Telephone: (907) 465-4361 POSITION STATEMENT: Provided information on HB 430. RUSS WINNER, Attorney Winner and Associates, PC 900 West Fifth Avenue, Suite 700 Anchorage, Alaska 99501 Telephone: (907) 277-9521 POSITION STATEMENT: Provided information on HB 430. REPRESENTATIVE MARK HODGINS Alaska State Legislature Capitol Building, Room 110 Juneau, Alaska 99801 Telephone: (907) 465-3779 POSITION STATEMENT: Sponsor of HB 466. PAT CARTER, Legislative Assistant to Representative Hodgins Alaska State Legislature Capitol Building, Room 110 Juneau, Alaska 99801 Telephone: (907) 465-2283 POSITION STATEMENT: Provided information and answered question on HB 466. ACTION NARRATIVE TAPE 98-69, SIDE A Number 0001 CHAIRMAN JOE GREEN called the House Judiciary Standing Committee meeting to order at 1:07 p.m. Members present at the call to order were Representatives Green, Bunde, Porter and Rokeberg. Representative James arrived at 1:11 p.m. and Representative Berkowitz arrived at 1:13 p.m. Representative Croft was excused. HB 324 - MUNICIPAL LIEN FOR UTILITY IMPROVEMENTS Number 0025 CHAIRMAN GREEN said the committee would hear HB 324, "An Act relating to liens for municipal assessments for certain utility improvements." Before the committee was CSHB 324(L&C). Number 0050 DAVID STANCLIFF, Legislative Assistant to Representative Scott Ogan, Alaska State Legislature, presented CSHB 324(L&C) on behalf of the prime sponsor, Representative Ogan. He informed the committee that Representative Ogan had received telephone calls from his constituents last year from older citizens in the Valley who were not able to hook up, did not want to hook up, and could not meet the assessments being levied on them as a result of the Enstar gas pipeline projects that have been expanding in the Valley. He pointed out that they talked to the borough and the borough told them that they would like to grant some sort of deference to the older citizens, but they don't have clear statutory to do that. Representative Ogan introduced this bill originally to accomplish that purpose. He said they started out with a conservative approach, which would have affected many local improvement districts (LID) in the state with regard to funding and bonding. He explained that the House Labor and Commerce Committee changed the approach of the bill to simply enable local governments to grant relief, if they so choose, to people who couldn't afford the assessment by deferring down the line until the property finally changed hands, and at that time the assessment would be satisfied. CHAIRMAN GREEN asked if there would be any possibility that the ordinance would be such that there would be interest accrual that at the end of this time, ten years from now, the debt would be so large that they would automatically have to take over possession of a person's house. MR. STANCLIFF responded that, absent any legislative direction contrary to that, there is always a possibility that local government may set up a system that does in fact do that. CHAIRMAN GREEN asked if that has ever happened before. MR. STANCLIFF replied it has never happened. He commented that if this committee wants to consider further language to prevent that, it would be a policy call. However, at this point, Representative Ogan just wants to gain the authority. He noted that they received a letter from the Older Persons Action Group who initially had concerns with this bill because they thought it applied to property taxes, which it does not. The bill applies specifically to LID assessments and the Older Persons Action Group has since asked for that letter back and has sent Representative Ogan's office another letter supporting HB 324. Number 0259 REPRESENTATIVE CON BUNDE referred to property taxes stating that at some time it could eat up the price of the property. He said a person can get their taxes deferred for a while, but someone has to pay. His concern is that when a development like this is done, the money is spread out over all the people who would benefit. He said if the legislature allows the municipalities to exempt a person, it would accrue some kind of expense and then the municipalities would go back to the legislature saying it's a nonfunded mandate because they would tell the municipalities that they have to rebate. CHAIRMAN GREEN said the word "may" probably would avoid that being an unfunded mandate. REPRESENTATIVE BRIAN PORTER advised the committee that this bill is not a mandate, and it is a "may" and it leaves the opportunity for the municipalities to set up whatever system they like. He said he would be very surprised if the municipalities picked the option of accruing interest. He said, "I think the more of these kinds of things that we can provide, and I'd be happy to add to this the local option for senior property tax exemption, but I know that that wouldn't probably be appreciated by the sponsor, but those kinds of things need to be optional within the cities. They're the ones that are faced with paying those amounts or not having the revenue." He indicated he believes this is a very good proposal. REPRESENTATIVE NORMAN ROKEBERG noted that Representative Bunde brought up a point that he thinks can be solved by any deferral of the amounts of assessment. He said there are various different devices that a municipality can use, one of which would be to set up either a sinking fund inside of the amount of the gross assessed area, or they could actually pay that amount to make it equitable to the other assessees in the area. He said then they'll have a lien on the property which could go back into the general fund to reimbursement them for that whenever that property was alienated and the lien follows with the title of the land. Eventually, at a certain point, the municipality would be reimbursed for that amount. He doesn't think it will create an undo burden because there are several financial mechanisms that could be put in place to overcome that problem. He expressed that the bill is narrow in scope because it's specifically regarding the property of a primary residence. He indicated this bill is a good one that compromised everything and that it should have the support of the committee. REPRESENTATIVE JEANETTE JAMES apologized for being late and asked if there was a particular situation that prompted the sponsor to introduce this legislation. MR. STANCLIFF said credit is due to a very thorough and dedicated constituent, Katherine Hamilton (ph). He informed the committee she is a long-time Alaskan and that her husband passed away some years ago. She has a modest home, still chops her own wood and takes care of herself, and was incensed that she was going to have to spend $6,000 because Enstar built a gas line across her property and she couldn't afford it. He explained that they received several telephone calls from other people who couldn't afford the assessment up front and the borough informed Representative Ogan's office that they had no authority to set up a system to defer or deal with indigent people or people in need who asked them to do something about it. REPRESENTATIVE JAMES referred to the gas line Mr. Stancliff was talking about and asked if the gas line was put in by an LID as opposed to purchasing any kind of an easement on private property. MR. STANCLIFF answered in the affirmative. REPRESENTATIVE BUNDE said, "I understand this is permissive and maybe I can impose on Representative Rokeberg's expertise, but it costs "X" amount of dollars to put this in when they assess the various people if people pay a prorated share. If you have some people that the municipality opts out, do they raise the prorated share for the other people that are affected by this, or does the municipality somehow eat the cost and pick it up later?" Number 0725 CHAIRMAN GREEN said what he thinks Representative Rokeberg is saying is that there are several options and that might be one. They could do it either way they wanted to. REPRESENTATIVE BUNDE said it's not a nonfunded mandate on the municipality; it's a potential nonfunded mandate on people that could be in an LID. REPRESENTATIVE JAMES stated that this is a standard procedure that she's seen happen in lots of areas. She commented that the municipalities would be very careful when they did this to be sure that the people who know that they have an exemption knows what the cost is. REPRESENTATIVE ROKEBERG reiterated that there are several financial mechanisms, one of which would be for the (indisc.) pay the money out and then (indisc.) for it later, that way any of the other individuals assessed would not have to pay an unallocated share of that gross amount under the project. He said the legislature has kind of seeded some authority to the private sector to create these LIDs. CHAIRMAN GREEN indicated that his concern about having a proration among the other assessees is that you get into sales of those properties, not the one that's not paying. He stated he thinks it would kind of get mired up on payback. REPRESENTATIVE ROKEBERG said given the recordation system in most of the judicial districts and how it works is that this would be a lien against the property which would travel with the title, so any time there was alienation or sales of that, then there wouldn't be a payoff. REPRESENTATIVE ETHAN BERKOWITZ asked when the assessment becomes due, when the property ceases to be owned by the resident, who pays for it? CHAIRMAN GREEN noted that Representative Rokeberg talked about a variety of ways that can be instituted from a partial assessment to others, to holding it in reserve, to the municipality holding that in abeyance as a lien against the property in future payments. He said there are several different ways that that could be handled, and the question that was probably as important or more is, "Does that withheld payment accrue interest?" REPRESENTATIVE BERKOWITZ gave an example that when grandparents pass on property to grandchildren, they are not necessarily in a position that they can afford the house so they've got to sell the family homestead in order to make back taxes. He said he's seen family farms and homes go that way and it seems to him that "too bad" is just not the answer they should leave folks with. Number 1132 CHAIRMAN GREEN referred to Representative Berkowitz's example and said if they didn't have that option, at least they have an option. If ten years earlier the grandparents couldn't have paid the assessment, they would have lost the homestead ten years earlier. This bill at least defers it until the time that maybe the grandchildren could come up with the money. REPRESENTATIVE BERKOWITZ said, "If, for example, there's a dispensation for elderly residents so they don't have to pay even though they might have the means to pay. They choose to accept this deferral; they pass on. Then this lien attaches at the same time inheritance taxes come due on everything, that's a big sock for someone to swallow. When you're inheriting a $100,000 house with $5,000 worth of deferred payments on it, the estate taxes - I want to say 40 percent, or something extremely high - so you've got to come up with $40,000 to cover the estate tax, plus $5,000 to cover this deferred assessment; $45,000 is a sizeable chunk of change even for someone who's not young and getting started." CHAIRMAN GREEN asked Representative Berkowitz what he would suggest as a way around the problem he just described. Just ignore the tax? REPRESENTATIVE BERKOWITZ replied that the problem of inheritance tax isn't something that the committee can solve, but it's something they shouldn't ignore either. CHAIRMAN GREEN explained that the CSHB 324 doesn't ignore it, it doesn't even address it. It's talking simply about improvements that the person who has the property either is elderly or not capable financially of paying. REPRESENTATIVE BERKOWITZ he said if the municipality wants to defer the tax, that just passes the tax burden onto someone else. If the municipality wants to excuse the tax, that's something else. He said to excuse a tax burden is a decision the municipality should make. He stressed that inheritance tax isn't something the legislature can "tinker" with, but when both taxes are due simultaneously, it's a problem for a lot of people. Number 1230 REPRESENTATIVE JAMES said people who are economically disadvantaged and not able to pay the LID certainly aren't going to have an estate that would be having inheritance tax on it. She stated that there's a huge exemption for inheritance tax. She referenced LIDs stating that her understanding is that the cost of that is generally comparable to the improvement on the property, and that's the reason people want these kinds of things. She commented that she is not in favor of doing any kind of excusing because you excuse the person who can't pay, but you don't excuse the property because the property is improved by the LID. That's the point of having one in the first place. She stated that the argument to excuse them is not a good argument and it is still up to the municipality and this bill can deal with it any way they want to, therefore, she doesn't know why the legislature should care. CHAIRMAN GREEN pointed out it has been mentioned in committee on a number of occasions that they should not micro-manage municipal affairs, which this legislation does not do. He said it just allows the municipalities to do their own thing. Number 1338 REPRESENTATIVE PORTER made a motion to move CSHB 324(L&C) out of committee with individual recommendations and the attached zero fiscal note. REPRESENTATIVE BERKOWITZ objected. He said the discussion he has heard in committee today seems to combine the elderly and economically disadvantaged, which is not what the legislation says. He pointed out that it says "elderly or economically disadvantaged." He indicated that's why the tax bill that comes due upon a person's death is particularly important. He said the legislature does a lot to promote family values, and family properties is an important component. He said, "And if we're setting up a situation where families are forced to get rid of family property in order to pay back taxes or back assessments, I have a hard time reconciling it with the family values we talk about all the time." Number 1401 CHAIRMAN GREEN stated if the word "and" was put in, then you've got to qualify both ways, and that certainly could reduce the number of people who either would be economically disadvantaged or are elderly and living.... He said, "You're saying they've got to be old and broke, and that may be too high of a standard." REPRESENTATIVE PORTER emphasized that the intent of the bill is not being communicated. He explained that the intent is to forestall an economically disadvantaged person or an elderly person who may not be at poverty level from losing their property. He said the threshold for inheritance tax is quite high and he doesn't think that anyone who would fall under this category would have inheritance tax as a consequence in their estate. He stated, "If they're elderly, they're not going to have a big amount of this build up because they're going to die. If they're disadvantaged, then we're going to save their property for them. It's an LID, which isn't a whole lot, which increases the value of the property as been discussed, so if you inherit it you should pay that off because the value that you just inherited is higher." Representative Porter stressed that the whole idea of the bill is to provide a safeguard against a person losing their property. REPRESENTATIVE BERKOWITZ commented that that's admirable, but only half of the problem has been solved. REPRESENTATIVE ROKEBERG pointed out that the threshold for any inheritance tax under the Internal Revenue Code (ph) has been raised to $625,000 and will go up on a ratchet basis in the future up to a cap of well over $1 million. He said anyone who goes over that wouldn't need this provision. He said, "If you have an exemption here, this would be the form of what we talked about in terms of you could perceive it as a mandate." He indicated he doesn't believe that is the message that the sponsor or the committee wants to send. He referred to Representative James comments about improving the valuation of the property with the improvement. He said it depends on the scope of the improvement, the size of the property and other factors that could be variable, so it's not necessarily a one-to-one valuation increase. In total, there is an enhancement of the property, which he feels would more than not generally offset, in particular, gas lines and utility lines. Number 1617 CHAIRMAN GREEN asked for a roll call vote on the motion made by Representative Porter. Representatives Bunde, James, Porter, Rokeberg, and Green voted in favor of the motion. Representative Berkowitz voted against it. Representative Croft was absent. Therefore, CSHB 324(L&C) moved from the House Judiciary Standing Committee on a vote of 5-2. HB 319 - EMPLOYEES: NO EXPECTATION OF PRIVACY Number 1638 CHAIRMAN GREEN announced the next order of business would be HB 319, "An Act relating to an employee's expectation of privacy in employer premises," sponsored by Representative Rokeberg. REPRESENTATIVE ROKEBERG presented to the committee CSHB 319(L&C). He said the bill is relatively simple which merely puts in statute - to clarify any question about the ability of an employee/employer relationship in this contemporary age of electronic commerce, particularly - about the expectations of privacy on the part of an employee and employer. He pointed out that one of the main objectives he had in introducing this bill is to get business enterprises to memorialize policies about their telecommunications equipment and other property. He said that is the custom in many instances with many businesses today. He said on the record is the state of Alaska's policy which has set forward many other major corporations regarding this type of use of equipment. He noted that the bill was amended in the Labor and Commerce Committee to overcome some of the problems that arose out of the testimony. He said the germ of the bill revolved around a lawsuit that occurred in the University of Alaska Fairbanks where an employee was accused of downloading pornographic materials on a university-owned computer. As a result, there was a dispute about the expectations of privacy between the employee and the employer. Unfortunately, this bill would not have helped in that particular situation because when it was discovered that the employee had the material, the material was on his personally-owned zip drive attached to his computer on an external basis; not an internal drive. Strictly speaking, it was his property and, therefore, this wouldn't have happened. REPRESENTATIVE ROKEBERG noted in the Labor and Commerce Committee they took up the issue of the business premises as it related to a camp job where an employee may be in a residential setting on company-owned premises. By using the term "business property" in the bill, legislative counsel advised him that HB 319 will exclude residential domiciles. The bill only refers to business equipment and business premises. It's the intention of the bill that it not include situations where there is employee housing. He referred to a memorandum from the Division of Legal and Research Services, Legislative Affairs Agency, dated March 25, 1998, regarding any issues that revolve around constitutionality. It seems clear from the memorandum that there is no intention to hinder a person's constitutional right of privacy. Number 1815 REPRESENTATIVE BUNDE asked if someone's personal computer equipment would not be covered by this bill because it's personal property and not employer property. REPRESENTATIVE ROKEBERG replied in the affirmative. CHAIRMAN GREEN asked if a person was doing work at home and their computer was tied into their place of employment, could they be subject to review of their own personal computer. REPRESENTATIVE ROKEBERG replied, "No." Number 1863 REPRESENTATIVE JAMES said she has a severe concern about this issue because every year, except for the first year she was in office, she has provided her own computer, since the legislature did not provide one for her. She said every year, if she connects to the Local Area Network (LAN), she has to have the state do that for her. She informed the committee that last year, legislative counsel made a decision that they would only connect those pieces of equipment that were purchased by the state. She said this year she purchased another computer, which she paid for, and purchased it through the state so that she could be connected to the LAN and have service on her computer. She said she is very careful because she doesn't trust the state and other people to say that anything that is on her computer isn't reviewed by the public. She noted there have been extensive hearings on the ethics bill regarding the Alaska Public Offices Commission and the State Affairs Committee. Representative James pointed out that the State Affairs Committee shied away from adding E-mail in to some of the things you can and can't do in the state business because it is assumed that people will be sending private E-mail messages. If they included E-mail it may be that those messages would be subject to review. She explained that it's her personal feeling that those things should not be subject to review by the state or other government entities. She stated, "Certainly, it would have a chilling effect on people such as myself, who, in order to have a computer have had to provide my own. And I think it would be absurd for me not to be able to use a computer while I'm here." She indicated she does not know exactly what HB 319 does. It sounds like the bill says she has absolutely no protection whatsoever. Representative James referred to page 1, subsection (b) noting that the bill indicates that some people are excluded from this: "(b) An elected official is not an employee for purposes of this section." She asked, "What's the reason that we're not? If we're being paid for with state funds, is that the issue? What is the issue?" Number 1973 REPRESENTATIVE ROKEBERG emphasized that he should have made very clear to the committee that the bill does provide for a contractual agreement to the contrary between an employee and employer to allow the employee to maintain that level of privacy. He said the thrust of the bill is absent a contract, to the contrary the employer has the right to look at the equipment and premises, which is the property of the employer. He commented he would think by now that this is basic common law, but it's being called into question because of the changing dynamic of the electronic commerce, et cetera. Therefore, the bill specifically provides for that contract. He indicated that one of his purposes in the legislation was to make sure that there is a policy and/or contract in place that specifies the rights of the employees/employers on these issues. He noted that many companies and corporations have these policies and this bill will allow for an individual contract to protect those individual rights. He said he looks at this as a protection of privacy on the part of the employee more than anything else. He believes this is a real positive aspect of the bill. REPRESENTATIVE ROKEBERG said this bill does not, in any way, hinder our constitutional rights under our constitution. He referred to the provision in subsection (b) regarding "elected official" stating that it was put in there for the very fact pattern Representative James just described. He said, "It's my understanding ... when we, as members of this legislature, use our services here, when we bring our own computers in, we connect to the LAN onto the server that is readily available - anytime you're on that LAN and that circuit into the server, your data and information can be easily and readily inspected by the Department of Administration data processing people." He stated that it is absolutely unsecured. The only way a person can have a secure line in the Capitol Building is if they have a separate dedicated circuit that they can connect to the Web or through another server that is not on the state server. He indicated a person has absolutely no security if they are connected into the state server. REPRESENTATIVE ROKEBERG referred to a memorandum from him dated March 27, 1998, regarding questions that were asked regarding legislative policy during a Labor and Commerce Committee meeting. He pointed out that the members of the Labor and Commerce Committee added the exemption of an elected official in the bill. He said he particular doesn't care for this exemption because it gives the inclination that elected officials are better than anyone else. He commented that if the Judiciary Committee wanted to take that exemption out of CSHB 319, it wouldn't bother him a bit. Number 2155 REPRESENTATIVE PORTER said he had the same reaction regarding the exemption of an elected official because legislators would not be able to enter into a contract with their employers back home. REPRESENTATIVE ROKEBERG remarked that was the exact discussion they had in the Labor and Commerce Committee stating, "Who is our employer?" He said they don't work for anybody but their constituents, and that is the reason they added that exemption to clarify that elected officials are not employees. REPRESENTATIVE JAMES interjected and said she gets her paycheck from the state of Alaska. REPRESENTATIVE ROKEBERG said he would venture to say that all 60 legislators would say that they work for the people and not the state of Alaska. He said, "I am not employed by the state of Alaska." REPRESENTATIVE BERKOWITZ referred to the discussion about legislators using their own equipment and said it seems that this bill would apply if a person is working for a private corporation as well. REPRESENTATIVE ROKEBERG replied, "That's correct and that's why you should have a contract allowing you to do such things." REPRESENTATIVE BERKOWITZ asked if this bill applies to telephones also. REPRESENTATIVE ROKEBERG said the bill refers to employer equipment and premises in the (indisc.). He said, "If it's personally owned, then the title of it belongs to you. The question then becomes what about the data line that you're connecting it to." REPRESENTATIVE BERKOWITZ said his concern with that is his privacy is not in the telephone, it's not in the computer; his privacy is in the information that's transmitted or stored in one of those devices. And by placing a distinction as to who owns the mechanism by which he communicates seems somewhat artificial to him. Number 2240 REPRESENTATIVE ROKEBERG said, "For example, even in the case at bar now regarding that, the distinction is made and clearly conceited that the zip drive is under title to the accused and, therefore, he had an expectation of privacy, so you couldn't invade that storage. Data storage is the issue in large part, other than direct eavesdropping because so much data now is stored in a memory." CHAIRMAN GREEN said it seems reasonable that if legislators be warned that it is state equipment and they are not allowed to use it for personal use. If they don't have something that is suspect, there shouldn't be any problem in making public what they have said. REPRESENTATIVE ROKEBERG pointed out that all legislators' transmissions are monitored constantly. REPRESENTATIVE BERKOWITZ again referred to telephones. He said if he is on a state telephone or if he's in a private business and he's talking on the telephone, the way he reads this bill is that he has no expectation of privacy in that conversation. However, if it's his own personal telephone, then he does have an expectation of privacy, regardless of the conversation. REPRESENTATIVE ROKEBERG said a person's protection is in the contract and that's what is positive about this bill. Number 2305 REPRESENTATIVE PORTER remarked that Representative Berkowitz has a very valid point. He said the wording of the committee substitute (CS) as currently written brings into question what everyone has an expectation of privacy on, which includes telephone calls. He indicated he feels it could be handled very easily with a little "blip" that nothing in the bill is intended to preclude the expectation of privacy in telephone conversations. REPRESENTATIVE ROKEBERG stated that it's his understanding in other testimony that it is legally permissible to eavesdrop on an employee's telephone communications. He noted it's a very common marketing device, whereas employers listen to sales calls to gage performance. He pointed out that there's no protected right for that particular activity. He said, "If we were to do something otherwise, we would be making a mistake. There's no common law right to that when we're talking about business activity." REPRESENTATIVE BERKOWITZ explained that there is an advisement that your privacy may not be there. REPRESENTATIVE ROKEBERG said he is not absolutely certain about the statement he just made regarding privacy in telephone calls, but he suspects that there's no constitution or statutory right. He noted there is a common law right of no expectation of privacy on telephonic communications when it's in a business center. Number 2378 REPRESENTATIVE JAMES said she is also concerned with privacy in telephone calls because before computers there were telephones. She said, "Not every telephone conversation that you have, you instituted it. They call you many times." She expressed that even though we are moving into an age of advanced technology, they have to figure out how they are going to deal with these issues and their right to privacy, and what is it that an employee has rights of and not rights of. She said she doesn't want the committee to "sweep so big" that they eliminate one of the privacy issues they have always had, which is telephone conversations. She stated that she sees the legislature inching and inching away the lack of privacy. She wants to be sure that the legislature has covered the bases and that employees know just exactly what their entitlements are. She pointed out that the contract that is mentioned in the bill is a very important part of this issue and should be the result of it. TAPE 98-69, SIDE B Number 0001 REPRESENTATIVE PORTER said, "There is no expectation of privacy if there is no expectation of privacy." He gave an example to the committee that if it is his job to be a telemarketing person, he can well presume that his employer will supervise his job and that's what those intersections of communications are. If he is talking to his wife at noon, he has an expectation of privacy and it better not be violated. Under the wording of the CS, there is implication that it could be. He said he wouldn't vote for this bill without some qualification of that. CHAIRMAN GREEN advised Representative Porter that he is exempt the way the bill is currently written. REPRESENTATIVE JAMES interjected and said, "But there are others similarly situated that we are here to protect." REPRESENTATIVE ROKEBERG indicated he is not certain about the state of the law as it relates to that currently, so he doesn't want to make any statements that might mislead the committee. REPRESENTATIVE PORTER noted that they had to get a waiver to monitor prisoner calls out of correctional institutions. REPRESENTATIVE ROKEBERG remarked that may be because it's a public facility and reiterated that he is uncertain about this and it's a question that needs to be answered correctly, and he is not competent to answer the question. Number 0065 KEVIN JARDELL, Legislative Administrative Assistant to Representative Joe Green, Alaska State Legislature, came before the committee to answer questions. He referred to Representative Porter's comment about getting a waiver to monitor prisoner calls. He said most of the law regarding privacy deals with government intrusion to private individuals' privacy rights. In the context of private citizen v. private citizen, they are generally trespassing laws, not constitutional privacy rights (indisc.). REPRESENTATIVE BERKOWITZ informed the committee he has been doing some research on the issue of privacy and he noted there is a flurry of federal legislation addressing particular telecommunications privacy rights. He also noted that there is legislation addressing medical and surveillance privacy. There is a flurry of discussion as to what the privacy connotations are between private individuals. REPRESENTATIVE ROKEBERG stated that is the reason he introduced this bill. He feels it does, in large part, service to the public to have these things brought forward. He said, "This to me, merely memorializes what the common law is as far as private enterprise is concerned." Number 0185 CHAIRMAN GREEN referred to privacy with telephones and asked, according to this bill, if a telephone is owned by the state, and he uses it for a private call, is he violating the fact that he's not supposed to use state equipment for private use. He also asked, by services, does that include tying into state lines with his own or anybody else's equipment. REPRESENTATIVE ROKEBERG replied that there is a written policy regarding telephone usage. CHAIRMAN GREEN said he does not think it covers the service question he asked about. He asked if he brought in his own computer and tied into a service line that is owned by the state, does that then negate it's his own personal property. REPRESENTATIVE ROKEBERG interjected and said (indisc.) it would. They could tap the line if he was in real time not storage time. CHAIRMAN GREEN asked for clarification regarding business equipment and services and asked, "Does that then make that not private?" REPRESENTATIVE ROKEBERG replied that would be his interpretation if the service data line would be accessible to the employer, not anybody else. MR. JARDELL said his expectation would be that in most situations where an employer has a computer, he would say, "Give me your computer or you're fired. It's my computer, we own it, I have title to it, and I can seize it anytime I wish and go through it." Number 0270 REPRESENTATIVE PORTER asked Representative Rokeberg about the definition of "employer" if he is intending to only include public employers and not private sector employers. REPRESENTATIVE ROKEBERG replied, "No." He said he wanted to include private sector employers. REPRESENTATIVE BERKOWITZ pointed out that there is no definition of "employee." He asked if that would include interns and volunteers. REPRESENTATIVE ROKEBERG replied, "I think the dictionary is adequate." He said he does not recall why legislative counsel put the definition of "employer" in subsection (2) on page 2 of the bill. He said he thinks they wanted to make the distinction that included those public officials as well as private. He commented that Representative Berkowitz made a good point on the completeness of the definition of "employer." REPRESENTATIVE PORTER commented there should be some mention of private employer in the bill. Number 0350 REPRESENTATIVE ROKEBERG offered Amendment 1 to CSHB 319(L&C) which read: Page 1, line 11 Delete: "permit" Insert: "not hinder or obstruct" Page 1, line 11 Delete: "to have" Insert: "from" CHAIRMAN GREEN asked if there is an objection. REPRESENTATIVE BERKOWITZ objected for section purposes. He said, "Imagine in an incidence where the employer wants access to computer records, there's a computer password on it, there's no hindrance or obstruction involved, but it seems to me that the employee could rightfully say, 'Have at it, it's yours, I'm not helping you get into the computer.'" REPRESENTATIVE ROKEBERG replied that it's not obstruction, it's at least hindering. REPRESENTATIVE BERKOWITZ asked Representative Rokeberg how is it hindering. He said, "It's a sin of omission/sin of commission and there's no action here. I'm not obstructing. I'm just not offering assistance." CHAIRMAN GREEN asked Representative Berkowitz if he maintains his objection. Number 0445 REPRESENTATIVE BERKOWITZ withdrew his objection. CHAIRMAN GREEN said there being no objection, Amendment 1 was adopted. Number 0462 REPRESENTATIVE BERKOWITZ made a motion to adopt Amendment 2. CHAIRMAN GREEN asked if there is an objection. REPRESENTATIVE PORTER objected for the purpose of reading it. REPRESENTATIVE BERKOWITZ explained that Amendment 2 changes the default. He said the current default is there's no presumption, no expectation of privacy, so he turned it around so that there's an expectation of privacy. He said if there's some kind of contractual agreement, or some kind of agreement or notification, then the employer can do what the employer wants to do. Number 0479 REPRESENTATIVE ROKEBERG objected. He said it "flies in the face" of what he believes to be the common law, and the administration of law. He indicated that it would change the current law of the state of Alaska. REPRESENTATIVE BERKOWITZ explained that the constitution is clear that they do have the right of privacy. He noted that all he is doing is ensuring if you want to hurdle that constitutional right to privacy, you have to expressly do it and that there's no default where you don't have an expectation of privacy. REPRESENTATIVE ROKEBERG said, "This is not a case of long hair, this is a case of -- privacy is not in a vacuum as the supreme court says in Jennings. Those expectations are balanced by reasonableness and to, by statutory act, overturn an entire body of common law, I don't think it's appropriate. On the other hand, by putting up sideboards we're being specific about where we want to make sure privacy is maintained, that's more -- I think that's a better approach to any amendments (indisc.) approach to this." Number 0544 REPRESENTATIVE JAMES said she supports the concept that employers have a say in what their employees do. She indicated she worked with small employers in the past and she understands how many times they are entrapped because many of the small employers are not real in tuned with some of the fine lines of our law. Her concern with this piece of legislation is that it says there's no expectation of privacy, and that the only way you can get around that is to have an agreement. From her experience with many of the employers that she has had is that they lack the ability to get all of the paperwork done because they don't have a particular person who is an administrator who can do all those kinds of things. She indicated it would behoove the committee to try to make the exceptions in the bill that should be automatically accepted. She said she does not know what that language is and she stated she would expect the sponsor will provide that information. She emphasized that she strongly supports that employers, specifically private employers, should have some control over their employees. REPRESENTATIVE BUNDE stated that it seems like it would be good business practice that if employees will be monitored, they should be notified when the employer begins doing such. He indicated he likes the notion that an employee has the expectation of privacy and then if it doesn't exist, it's the employer's responsibility to notify the employee. REPRESENTATIVE BERKOWITZ made reference to a document in the committee members' packets from the Department of Administration regarding state policy regarding personal use of state office technologies. REPRESENTATIVE ROKEBERG confirmed that there is a state policy and also procedures which were adopted by legislative counsel. REPRESENTATIVE BERKOWITZ stated that the state policy adopted is an affirmative recognition that a state employee is giving up their right to privacy. The policy is not a default position that you have no expectation of privacy. He said the state contract allows a person to give up their rights. REPRESENTATIVE ROKEBERG explained that the intent of the bill is about businesses that don't have huge budgets like government agencies do to draft and memorialize policies, and create these types of procedures and various other things. He said it's about small businesses that are trying to make a go of it, which can be inundated with law suits, inundated with state laws and procedures that create hindrances, hurdles, and obstacles of doing business. He said any other change like the amendment Representative Berkowitz has offered is absolutely offensive to him as a small business person. CHAIRMAN GREEN asked if the objection is maintained. REPRESENTATIVE BERKOWITZ and REPRESENTATIVE PORTER answered in the affirmative. CHAIRMAN GREEN asked for a roll call vote on the motion to adopt Amendment 2 made by Representative Berkowitz. Representative Berkowitz voted in favor of the motion. Representatives Bunde, James, Porter, Rokeberg and Green voted against it. Therefore, Amendment 2 failed by a vote of 5-2. Number 0830 REPRESENTATIVE PORTER made a motion to adopt Amendment 3, a handwritten amendment, which read: (c) Nothing in this section is intended to eliminate the expectation of privacy to which an individual is entitled unless specifically agreed upon by that individual employee. Renumber. CHAIRMAN GREEN objected for the purpose of discussion. REPRESENTATIVE PORTER said the amendment is intended to mean that if a person has a job that would require a supervisor to monitor an employee's telephone conversations because that's part of their job, that expectation of privacy is not there and the employee would concede that's going to happen. He said, on the other hand, no one is entitled to monitor a person's private telephone conversation. REPRESENTATIVE ROKEBERG said he would be happy to look at the CS in the context of the whole issue and get back to the committee. He asked what does "entitled" mean in the context of Amendment 3. He indicated he believes the bill is trying to speak to that. He said, "How this fits in these other areas, I'm not absolutely certain. Conceptually, I agree with what the intent is, but I'm not sure it doesn't defeat the purpose." REPRESENTATIVE PORTER told the committee he forgot to include that Amendment 3 pertains to telephone conversations. REPRESENTATIVE BUNDE stated that he would encourage the Chair to suggest that the sponsor provide a new CS, which addresses the issues that were brought up in committee and also that the CS be examined from legislative counsel's standpoint, rather than the committee trying to do it amendment by amendment. Number 0930 REPRESENTATIVE PORTER withdrew his Amendment 3. CHAIRMAN GREEN said he agrees with Representative Bunde's suggestion that CSHB 319(L&C) be held over for further discussion. Number 1033 PAMELA LaBOLLE, President, Alaska State Chamber of Commerce (ASCC), came before the committee to testify. She advised the committee that the ASCC is supportive of the concept of HB 319. She said their concern has been that employers are the ones who are ultimately held responsible if someone does something with the equipment they own, or on the premises that the employer owns or provides. Their concern is if an employer has the responsibility, they should have access to whatever is going on or is being done with their equipment that would happen that could cause the employer to be responsible. She indicated that the ASCC supports HB 319. Ms. LaBolle said she was in the Labor and Commerce Committee when they discussed the term, "elected officials." She commented that legislators are not hired, they are elected to serve a mandate, and the can be unelected, but they can't be fired. She referred to the term "employer" and said that it could be interpreted by saying what it includes to exclude private employers because their interest is in private employers. She pointed out that school boards are elected officials who are the official employers of the school district, which she noted are not listed in the bill. CHAIRMAN GREEN told the sponsor, "Perhaps in your definitions, you might be able to include something as a definition of 'employee' which may wire around this thing about elected officials." REPRESENTATIVE BERKOWITZ asked how private contractors fit into this scheme. MS. LaBOLLE asked Representative Berkowitz to be more specific. REPRESENTATIVE BERKOWITZ said, "If you hire someone to do a job, but don't make them an employee and they're using your premises." MS. LaBOLLE replied, "If that contractor is driving your equipment, for instance, you're going to be held responsible as the -- for the liability of what happens with that equipment, so, doesn't that carry through on everything." CHAIRMAN GREEN asked, "Well, what if it's a technological type?" MS. LaBOLLE asked, "If they do damage (indisc.)?" CHAIRMAN GREEN explained that he wasn't thinking so much about damage, but privacy. MS. LaBOLLE indicated that she's looking at it from the employer's right to protect themselves by knowing what someone's doing with whatever tool, equipment, facility, whatever the employer has provided, that the employer will ultimately be held responsible for, because of their being the owner or provider of that tool, equipment, device, et cetera. CHAIRMAN GREEN said he feels what the committee is hung up on is not so much the responsibility of the employer, but the privacy of the employee that would allow no interference, no damage, nothing like that, or even liability to the employer. It's just his right of privacy in his workplace. He said that's where they get into the problem of services. MS. LaBOLLE told the committee in her first job, she was not allowed to make any personal phone calls because she was on company time. She said, "The employer has paid you so much an hour to do the work of that employer, and making phone calls on company time, even on your own equipment would be a violation of policy." CHAIRMAN GREEN indicated when legislators call their constituents, they are actually performing their duty and some people might consider it a private call. Number 1463 REPRESENTATIVE ROKEBERG pointed out that HB 319 addresses only business equipment, not personal equipment. If a person has personal equipment, the issue is the service connection, not the equipment itself. CHAIRMAN GREEN said, "That's right, but the service equipment that we have is service to my private equipment." REPRESENTATIVE ROKEBERG said it's the data line, not the equipment. CHAIRMAN GREEN said, "But it's a service, that's the point. You probably should address that. It's a service provided me to use my equipment." REPRESENTATIVE ROKEBERG said, "No, no, the service is the data line. What service are you talking about?" CHAIRMAN GREEN said, "Well, the electricity. I mean, it's held that you can't use your own office, for example, in campaigning, even if it's on time because of the electricity that's used." REPRESENTATIVE PORTER interjected and said, "That's ethics." REPRESENTATIVE ROKEBERG said, "That's not an issue here, we're talking about the communications and ..." CHAIRMAN GREEN said, "I know it's ethics, but I'm saying -- the point is I'm not saying that that has anything to do with ethics, the point is that it is a service." REPRESENTATIVE ROKEBERG said the electrical plug has nothing to do with this bill. REPRESENTATIVE PORTER interjected and said "He doesn't think that an employer will, under this bill, have access to your computer." CHAIRMAN GREEN agreed with Representative Porter and said that's a question that needs to be answered. REPRESENTATIVE ROKEBERG said, "It's clearly prohibited here." CHAIRMAN GREEN said it is not clear because he talked to an attorney who had the same question, therefore, it's not clear. REPRESENTATIVE ROKEBERG replied that it was intended to be clear. CHAIRMAN GREEN reiterated that it is not clear and that it needs to be addressed. [CSHB 319 was held over for further discussion.] HB 430 - AUTOMOBILE CIVIL LIABILITY Number 1558 CHAIRMAN GREEN announced the next order of business would be HB 430, "An Act relating to noneconomic damages resulting from an automobile accident," sponsored by Representative Kott. JAMES HORNADAY, Legislative Assistant to Representative Pete Kott, Alaska State Legislature, came before the committee to testify. He told the committee that HB 430 denies recovery for noneconomic damages, for example, pain and suffering, to those convicted of driving while under the influence of intoxicating liquor, or any controlled substance and to uninsured motorists who were injured while operating a vehicle. The bill provides one exception: when an uninsured motorist is injured by a subsequently convicted drunk driver. With this one exception, an insurer is not liable for noneconomic damages. He noted that there is one zero fiscal note from the Department of Law. He pointed out over on the Senate side in SB 83, they took out the provisions that involved driving under the influence. MR. HORNADAY indicated they attempted to find answers to the questions that were proposed at the last committee meeting. He referred to Representative Berkowitz' question of how many cases would this involve in Alaska. He said they were not able to get direct information, but the Anchorage Police Department did provide information that in 1997 there were 331 cases of accidents where at least one drunk driver was involved. This figure is up from 1996 where there were 319 cases. He referred to another question from Representative Berkowitz which was: "How many uninsured drivers got insurance because of the proposition that passed in California?" He said, by way of review, there was a proposition that the people in California overwhelmingly supported, which is very similar to this legislation. He noted that Mr. Jinks of United Service Automobile Association (USAA) advised that it was hard to estimate the number because, at the same time, California toughened up its insurance before registration procedure, so a lot of people did buy insurance, but he could not say which bill was the reason. Another question by Representative Berkowitz was, "How much did the insurance rates go down in California?" He said, "Mr. Jinks advised that the rates are falling fast: mercury reduced rates - 25 percent; USAA gave a 15 percent rebate. State Farm gave a dividend as a result and he advises that he was advised by the California insurance director that as a result of a change in the law, consumers buying personal insurance for automobiles in California should save over $1 billion this year. This does not include the self-insurers like government agencies and large corporations." He noted that Juanita Hensley from the Division of Motor Vehicles raised the issue of whether she would have to suspend licenses for failure to insure if insurance companies withheld payment of economic damages pending a conviction for drunk driving. Mr. Hornaday indicated that Michael Lessmeier, attorney for Lessmeier and Winters, responded that the law requires the insurance to pay and that they could not withhold economic damages pending the conviction. MR. HORNADAY told the committee they should have in their packets a revised sponsor statement and several letters supporting the bill and one letter in opposition of the bill. He noted that the bill is supported by the Anchorage Police Department. Number 1781 JOHN GEORGE, Representative, National Association of Independent Insurers, came before the committee to testify. He noted that the legislature has already mandated that everyone has to buy automobile insurance. The legislature has also passed laws that say people may not drive in public intoxicated. He said, "If you're drunk and you run into somebody, then you still have to pay the economic damages, whether they're noneconomic damages and whether they're insured or not. The bottom line is that we're not taking all of the benefits away, we're only saying the noneconomic damages. If you're in violation of law, you don't have insurance but you're not at fault, you'll still get your car fixed, you'll still get your lost wages, you'll still get all the things that you can come up with receipts for, your medical bills. You just can't say, 'And I want half a million dollars in pain and suffering' or those types of things." MR. GEORGE said, "I think most legislators over their careers have heard a lot of constituents say it isn't fair. 'My automobile insurance costs too much and I buy it and then somebody hits me and they don't have any insurance and then I still won't collect.'" He noted at the last hearing on HB 430, there were a lot of specific questions. Consequently, he came up with a summary of all of the different combinations of the way this can work: If vehicle "A" is stopped at a stop sign, vehicle "B" runs into vehicle "A," vehicle "A" is totally at fault at the accident. If vehicle "A" is sober and insured and vehicle "B" is also sober, but uninsured and runs into vehicle "A," the driver and passenger in vehicle "A" don't get anything because vehicle "B" doesn't have any insurance. They turn to their own first party medical, they turn to their own first party collision coverage, their own uninsured motorist coverage, if they've paid extra premium, that's the way they're going to collect because the other guy didn't buy the insurance as the law has mandated. He stated that's really the crux of this bill is the fairness of it that if you buy insurance, you're entitled to reap the benefits of the entire system. He said, "If you fail to buy insurance to protect the other guy, this is one little slice that you're not going to get. You get the big pie, but you don't get this slice." He said it's inherently fair that people who participate in the insurance system can collect; those who don't participate in the insurance system have to pay some sort of penalty and this is their penalty. Number 2032 REPRESENTATIVE BUNDE said his understanding of the bill is to provide penalty for people who don't buy insurance. He asked, "If that's the case, why give them any recovery at all?" He said, according to Mr. George's testimony, a person can't sue for noneconomic damages, which is a small slice of the pie. He said, "Why not just say you don't have any insurance and you're in a wreck and you don't get any economic damages either?" MR. GEORGE replied that sounds attractive on a limited basis. We're also talking about a draconian measure. He said it may not be totally unfair, but he thinks it's a pretty severe penalty. He explained to the committee that "a noneconomic damage is something that you pull a number out of the hat and say, 'my pain is worth this much money, or my loss of consortium is worth this much money,' whereas your car, you've got an invoice." He feels that is a material difference. He said an economic damage is something that a person has really lost and, in fact, if the other person was negligent, the other person should not be held liable for that. He indicated it's really not a punishment as much as it's an incentive to get people to buy insurance. REPRESENTATIVE BUNDE commented that it sounds like it's very little incentive. He indicated he doesn't think that there are very many people who drive that think that maybe they'll get lucky and someone will hit them just hard enough that they will get hurt a little bit, but not get killed and they can go to the crap shoot and make a buck. He doesn't see that's a large incentive to go buy insurance. He referred to drunk drivers stating, "If you want incentive, say, you're driving drunk and even though you bought insurance, you don't get any recovery. As it is, the bill is a little bit pregnant." REPRESENTATIVE BERKOWITZ asked Representative Porter if he thought there was a section in the tort reform that passed last year, which indicated a person cannot collect if their injuries resulted during a violation of a crime. REPRESENTATIVE PORTER answered, "Yes, depending how it would apply here." REPRESENTATIVE BERKOWITZ asked what if a person is driving while intoxicated (DWI) and then hits someone else. REPRESENTATIVE PORTER asked an unidentified person, "Did we include DWI or was it just plain felonies?" UNIDENTIFIED PERSON replied, "DWI (indisc.)." REPRESENTATIVE BERKOWITZ asked if the insured DWI person would not be covered under the tort reform. Number 2290 MR. HORNADAY said his recollection last year on the drunk driving (indisc.) if it contributed to the accident, the person would denied all damages. REPRESENTATIVE PORTER said he believes the tort reform indicated that if it was a DWI or a felony and that act directly contributed to the accident, then a person would be precluded recovery. REPRESENTATIVE BERKOWITZ said, "Okay in the hypothetical that Mr. George gave us if driver 'B' was the driver behind, and driver 'A' was the driver in front." MR. GEORGE said, "'A' is in front." REPRESENTATIVE BERKOWITZ said, "If driver 'B' is intoxicated and gets hurt, then the tort reform would have covered it; he wouldn't have collected. But if driver -- this bill goes to if driver 'A' is stopped at a stop sign and is intoxicated ..." REPRESENTATIVE PORTER interjected and said, "And he's hit by another intoxicated driver." MR. GEORGE said, "Obviously, if you're not negligent it applies different. If you're in car 'B' and you run into somebody, whether you're drunk or not, you're the negligent person, not the guy that's stopped. So really what we're talking about is a -- this affects a non-negligent person who is uninsured, but if the driver that hits him is drunk, it removes that. If you're drunk and hit someone, you have to pay the .... REPRESENTATIVE BERKOWITZ asked what if a person is drunk and gets hit and they have no insurance. MR. GEORGE replied if a person has no insurance and someone runs into them, that person cannot collect for pain and suffering, whether you're sober or drunk. TAPE 98-70, SIDE A Number 0001 REPRESENTATIVE BERKOWITZ said "...and we're doing this to punish someone for not having insurance, or are we doing this to benefit the insurance companies who then pass the savings on to all the law abiding and insurance-bind citizens?" MR. GEORGE agreed. He explained that any savings the insurance company makes by not paying off noneconomic awards, ultimately it gets passed back to the people that did buy insurance. Insurance is highly regulated, noting that all rates and policy language have to be approved by the director of the Division of Insurance, which is based on justifying your overhead, your losses, your expected losses, and the rate that you have to collect in order to pay those. If the losses go down, you can't justify the higher premium, you've got to reduce your premium. In conclusion, he said if losses are reduced, insurance premiums for those that are required by law to buy insurance will go down. Number 0205 MICHAEL LESSMEIER, Attorney, State Farm Insurance Company, testified via teleconference from Anchorage. He informed the committee he wanted to give them some background. Since statehood, the state of Alaska has had financial responsibility on the books. And that responsibility law has required that people who operate motor vehicles maintain a certain level of financial responsibility and there have been consequences to that. He said in the mid-'80s, the legislature passed a mandatory insurance law, and in that mandatory insurance law was a recognition that driving a motor vehicle carries a certain amount of responsibility. The issue of responsibility relates directly to the potential damage a person might cause to someone else. The theory was that people who are responsible enough to have a vehicle and get behind the wheel should be financially responsible, at least to a certain minimal level. In Alaska that level is $50,000 per person and $100,000 per accident. He indicated that there still is a problem with uninsured motorists. He said, "We have submitted a letter to Representative Kott that gives you the benefit of our experience in Alaska, and that experience is that over the past five years the ratio of uninsured motorists claims, the bodily injury claims, brought us in the range of approximately 17 to 21 percent. Over the last 10 years that ratio has ranged from a low of 16 percent to a high of 23 percent. Regardless of where you are in the trend, there's a problem out there. And, frankly, there probably is always going to be a problem. The issue posed by this legislation is whether we can reduce that number because we all pay a subsidy for these people and we pay it in two ways. The first way we pay it, is the people that are driving without insurance, they participate right now fully in a liability system that is funded by insurance premiums, but they're not paying for this. What happens is you have people that are participating but not paying, and you have less people that are actually financially participating, so we all pay more. The second way we pay a subsidy is everyone of you that has uninsured motorist coverage has that coverage at the level of cost that you currently incur because of the number of accidents that are caused by uninsured motorists. And so you pay a subsidy in two ways. We look at this legislation and what we say is it is a simple and fair solution to what is a fairly complicated problem. It is simple in the sense that, 'if a car don't pay, no play.' If we don't pay for the financial responsibility of others, you don't deserve to participate in the system. And that is an issue of fairness, as well. If I don't (indisc.) that I would pay on that issue, is that this provides a significant incentive for people to be financially responsible, at least to the minimum limits required by the law. And it doesn't without an enforcement cost on the part of the state, and it doesn't without an enforcement cost that has to be borne by everybody else that is financially responsible. It is self-effectuating and we think it is a good idea. The last thing I'll say is that State Farm is a mutual company. And I know at least one of the companies that Mr. George represents is also a mutual company. What that means is that when our experience is better than we expect it to be, we give money back. Last year we gave back $6.6 million dollars to Alaskan policyholders. We also reduced automobile insurance premiums in Alaska by 2.4 percent and there are a lot of different reasons why that has occurred. I think Representative Porter is alluding to some of the changes that were made by the legislature. We think that legislation like this is a definite step in the right direction, it is beneficial to our policyholders, and it doesn't carry with it a corresponding cost. And so, we would urge that you support it." Number 0561 CHAIRMAN GREEN said he understands that California is "no pay, no play." MR. LESSMEIER replied it has been for a little over a year. CHAIRMAN GREEN asked what sort of results have happened in California and how much of that has been passed back to the policyholders. MR. LESSMEIER said he can't answer that question directly. He did inform the committee that the latest information they had was the California insurance commissioner said that after a year, insurance rates have already been lowered by five percent. He indicated that there are so many things going on in California that it's very difficult to look at one piece of the puzzle and say this is the reason for the change. He noted that California historically has had some of the highest insurance premiums in the country. He said he believes that trend has changed and for a lot of different reasons, but this is one of them. He pointed out that one of the differences between California's law and Alaska's law is that California's law was passed by an initiative applied to all of the cases on the books. In other words, it had a retroactive effect. That is quite significant when you start looking at improvements. He said Alaska's law is not retroactive. He said what is contained in HB 430 would apply only to causes of action that improved on or after the effective date. Mr. Lessmeier indicated they think HB 430 is a good idea and that it will have an effective date, but it's hard to predict how much. CHAIRMAN GREEN said that was the reason he asked the question about the results in California because the letter Mr. Lessmeier wrote to Representative Kott on March 31, 1998, indicated that California has already lowered insurance rates by 5 percent, which made a person believe that it was perhaps because of this. He noted that Mr. Lessmeier indicated there were several other factors involved. Number 0753 REPRESENTATIVE BUNDE said he is sympathetic to what Mr. Lessmeier is trying to do, but he feels he is "nibbling around the edges." He referred to his earlier testimony where he stated that if you really want incentive, you just remove all damages, not just noneconomic damages. He explained that it's his impression that many people who drive without insurance are relatively unsophisticated people and probably not people of means. The notion that they're going to sit up and take notice that, "Oh, good Lord, if I have an accident and I'm not insured, I won't get noneconomic damages." He remarked that most people like he just described couldn't define what noneconomic damages are. He asked, "Wouldn't we be more effective if we just passed a law that said you can't register your motor vehicle until you show proof of insurance?" MR. LESSMEIER said they have, over the years, looked at all kinds of different ways to try to ensure that people do carry insurance and that is one of them. "The difficulty with that proposal is then what happens is someone picks them up down the road when they don't renew it." He pointed out there are a number of states that have spent huge amounts of money trying to create systems to ensure that people who drive are all covered by insurance, and none of them have been very effective. He indicated it is one of the best ideas they have seen and the reason for that is because it does provide an incentive, but it provides an incentive without corresponding cost. He said there's no cost to the state for doing this, and there's no cost to the industry, which is passed along to the policyholders to doing this. He indicated that there are two benefits to this. One, is that you do encourage people to be financially responsible. The second is you're not eliminating the people that feed off the system, but don't pay for it and you're reducing the level of claims, which is a benefit as well. He said HB 430 isn't a perfect piece of legislation, but it's a really good idea in their view. Number 0916 REPRESENTATIVE BUNDE indicated the committee has information that 15-20 percent of the claims were from noninsured motorists, and he asked if that is for noneconomic damages or total claims. MR. LESSMEIER replied that it's the ratio of uninsured motorists claims to bodily injury claims. He told the committee almost every bodily injury claim he has seen has an economic and a noneconomic component. REPRESENTATIVE BUNDE said he doesn't believe that will encourage people who don't buy insurance to buy insurance. It would save the insurance companies money because they wouldn't be paying out noneconomic damages to those people. Regarding mutual companies, this may eventually filter back to some savings for the general public. MR. LESSMEIER said he thinks everybody recognizes that rates in Alaska are probably driven by the mutual companies. In other words, to the extent that our rates are low, everybody benefits because the people that are competing with this are going to have to compete with low rates, and he feels that it benefits every Alaskan that has to buy this coverage if they want to comply with the law. Number 1033 REPRESENTATIVE BERKOWITZ asked if Mr. Lessmeier said 16-23 percent of the payout was to uninsured motorists. MR. LESSMEIER said no. What he said is that the ratio of uninsured motorists claims to bodily injury claims over the past five years have ranged from approximately 17 to 21 percent. Over the last ten years, their experience is that the ratio has ranged from a low of 16 percent to a high of 23 percent. REPRESENTATIVE BERKOWITZ asked if he could tell how much money that amounts to. MR. LESSMEIER replied he could not. REPRESENTATIVE BERKOWITZ asked, "Would that be more than the 6.6 million you returned as a 5 percent savings?" MR. LESSMEIER responded he has no idea what that number is. REPRESENTATIVE BERKOWITZ said he is trying to find ways of lowering insurance rates, and said Mr. Lessmeier had indicated that the trend had been downwards recently, and even predating tort reform, and asked if he could pinpoint what had inspired those downward trends. MR. LESSMEIER said he does not know if he can pinpoint that and said there are a number of reasons why. It might be because the driving public is getting older and older people tend to have less claims. He said it's also a reflection, in part, of the changes in the law. It is a reflection, in part, of safer vehicles. It may be a reflection, in part, to highway maintenance, better roads, all of those things. He said this legislation isn't based on any of those things he just mentioned. REPRESENTATIVE BERKOWITZ said his concern is that he doesn't think this is the best vehicle for getting people to get insurance by passing a law that no one is going to know about until they get into an accident. MR. LESSMEIER said people already know about the need to be financially responsible. When a person signs their renewal registration on their motor vehicle, they are certifying under a penalty of perjury that they have insurance to meet the minimum limits of financial responsibility and that they will maintain their insurance. He said it's one thing to pass a law, and it's another thing to get the word out, but it's easy to get the word out. Number 1217 JUANITA HENSLEY, Chief, Driver Services, Division of Motor Vehicles, Department of Administration, came before the committee to testify. She informed the committee that the Division of Motor Vehicles (DMV) has kept a trend on the number of uninsured motorists that are involved in motor vehicles crashes, and has done so for a number of years, especially after the implementation of the mandatory insurance law in 1986. Prior to that law, DMV had a 21-25 percent uninsured motorist rate, those that are involved in motor vehicle crashes without insurance. After the law went into effect, that figure dropped to 7 percent. Currently, it's averaging between 11 and 13 percent uninsured motorists. She indicated that she does not know if the 17 to 21 percent of insurance claims that State Farm Insurance Company is paying out is a result of uninsured motorists. She noted, for the record, that she supports everyone having insurance. She also supports the fact that the state have stronger driving laws. She advised that there are a number of states that have an insurance database system that DMVs or law enforcement can query, without any additional cost, to determine if a person has insurance coverage. If Alaska had a provision that DMV could turn a person away without registering their vehicle until they had insurance, it would reduce the number of uninsured motorists. Ms. Hensley said if Alaska had a database - whether the state maintained or if it were contracted out - where the insurance companies reported to DMV and DMV queried that prior to registering a vehicle, that would allow a mechanism for DMV to turn people away until they could show proof of insurance. She indicated that is what DMV would prefer and she believes that the number of insurance claims would be reduced. MS. HENSLEY told the committee that a number of people who are involved in motor vehicle accidents think they are insured, but because of conditions outside of their control, they find out later that they are not insured. For example, if a person purchased and financed a new car through one of the vehicles corporations, i.e., GMAC, and purchased the lending institution's insurance, that only covers the person for comprehensive collision; it doesn't cover the person for liability. She told the committee that she has had to suspend several motorists' drivers license because of that one issue. She said under this bill, the individuals who think they're insured are going to get caught because if they are involved in a traffic crash, which is not their fault, they cannot file for noneconomic damages. Ms. Hensley said last year's tort reform bill indicated that a drunk driver had to cause the accident or the damage, but under this bill the drunk driver does not have to cause it; it is without causation. Without that causation, they may be the victim. She gave another example to the committee: If an intoxicated person got into their car and half a block down the road realized that they are too drunk to drive so they decided to pull over and call a cab from their cell phone. If the car that is pulled over gets hit, they could be convicted of drunk driving. This bill would not allow that person to recover noneconomic damages if they are in a wheelchair. They are not at fault in any way, form, or fashion, but they could still be convicted for drunk driving. Number 1568 REPRESENTATIVE BUNDE referred to Ms. Hensley's testimony regarding individuals who believe that they are insured, and later find that they are not. He also referred to Mr. Lessmeier's testimony regarding when a person signs their renewal registration on their motor vehicle, they are certifying under a penalty of perjury that they have insurance. He asked Ms. Hensley, "What would your response be to picking up these people who have insurance at the time of registration, but then let it lapse?" MS. HENSLEY replied that that is a problem and there are a number of people who have that; however, DMV currently doesn't have a mechanism to go after all of those individuals. She said the way the law is written requires a person to show proof of insurance. REPRESENTATIVE BUNDE again referred to people who don't know that they don't have insurance and said there is a simple answer to that problem. He referred to page 2, line 3, of HB 430, which reads: "...vehicle or operator was not insured as required by AS 28.22.011." He suggested inserting the word "knowingly" between "was" and "not" so that this wouldn't be a violation unless a person knowingly was not insured. He indicated he feels that it is appropriate considering there are all sorts of scenarios where a person legitimately thinks they are insured and they are not. MS. HENSLEY informed the committee that she has been doing some research on uninsured motorists and she came across something the other day, which she had brought up in the first hearing regarding this legislation. In that hearing it was brought up, is there a possibility that, pending the conviction of a drunk driver, that perhaps legitimate claims would not be paid. She referred to the letter from Michael Lessmeier in the committee's packets stating that it is against the law for those individuals not to be paid. In her research, she came across a court case from Boise, Idaho against State Farm Insurance for failure to pay claims in a timely manner. The person that was awarded the claim, the judgment was rendered against State Farm Insurance for $9.5 million for failure to file claims. In that court case, it was revealed that there was a history, and that's the reason the award was so high. Ms. Hensley stated that it was a concern of hers that she addressed at the first hearing, "Would they fail to pay claims in a timely manner pending the conviction of a drunk driving conviction?" Number 1728 RUSS WINNER, Attorney, Winner and Associates, PC, testified via teleconference from Anchorage. He said he thinks that everyone who looks at this issue favors mandatory automobile insurance. He said the question is whether this bill is well tailored to further that goal. His view is that HB 430 paints with too broad of brush, and it will catch within its feet unattended victims, unattended situations. He addressed the issue of people who are driving who think they have insurance and they don't. To tell all of those people that they will not be able to recover for pain and suffering can, in some situations, be a tragic thing to tell them. Mr. Winner noted that it was mentioned earlier that the taking of pain and suffering away is simply a little slice of the recovery - and in some situations that is true. In other situations, depending on the individual, their pain and suffering recovery could be all they are entitled to. They could have very serious pain and suffering, but if they don't have a job, or if they are an elderly person, or it could be a child who is injured and they could be in a wheelchair, their principle recovery would be noneconomic damages. They may not be entitled to medical damages, for example, if they are Native receiving free medical care and their only probable recovery is pain and suffering. To take that away is not taking away just a little slice. It's taking away their recovery in a situation where they are not at fault and possibly not at fault because they innocently thought they had insurance, but they did not. CHAIRMAN GREEN said the committee will likely fix that regarding a person innocently not knowing that they were not insured. He then asked Mr. Winner if he believes that driving is a right or a privilege. MR. WINNER replied that he could not say off the top of his head. He said as he understands it there is a superior court decision that addresses that question in the context of child support payments. He said he believes that the decision was that it's (indisc.). There isn't a constitutional connection to (indisc.). It's not an absolute (indisc.). He said he doesn't think the answer to that question is a simple one. CHAIRMAN GREEN said the reason he asked that question is because there is a responsibility that people should abide by if they are going to take a killing machine on the highway. He said, "An honest mistake is one thing, but a deliberate violation of the law is another." MR. WINNER agreed with Chairman Green and said the punishment should be tailored to the crime. He said, "If what you have is a fairly minor transgression, a transgression nonetheless, and you're basically imposing what amounts to a financial capital punishment to certain classes of people; that's a fairly harsh result." Number 2013 REPRESENTATIVE PORTER made a motion to amend HB 430, page 2, line 3, adding the word "knowingly" between "was" and "not" so that the section would read: "(2) the owner or operator of a vehicle involved in the accident and the vehicle or operator was knowingly not insured as required by AS 28.22.011." CHAIRMAN GREEN asked if there is an objection to the amendment. There being no objection, it was so ordered. REPRESENTATIVE ROKEBERG made a motion to move HB 430, as amended, out of committee, with individual recommendations and the attached fiscal note. CHAIRMAN GREEN asked if there is an objection. REPRESENTATIVE BERKOWITZ objected. CHAIRMAN GREEN asked for a roll call vote. Representatives Bunde, James, Porter, Rokeberg, and Green voted in favor of moving CSHB 430(JUD). Representative Berkowitz voted against it. Therefore, CSHB 430(JUD) was moved from the House Judiciary Standing Committee by a vote of 5-1. HB 466 - CAMPAIGN MISCONDUCT: FALSE INFORMATION Number 2137 CHAIRMAN GREEN announced that the last order of business would be HB 466, "An Act relating to violations of state election laws," sponsored by Representative Mark Hodgins. REPRESENTATIVE MARK HODGINS explained that "HB 466 is a campaign bill that reforms mud slinging, that reforms bad ads, that reforms saying anything you want to say about another person. You can still do that under [HB] 466, but once you are shown that you have -- that you're saying something that is wrong or knowingly false, then the wrath of [HB] 466 falls upon you. And what that does is that through [AS] 15.56.110 (indisc.) certain convictions, that means that you are not seated for office. And under [AS] 15.56.115 'dispositions of cases involving corrupt practice', that means that you go to the head of the line in the court system so that the situation is taken care of very quickly. Anybody can say anything they want to, but when shown proof of mistake or deception, they must desist or else [HB] 466 grabs them." He said this bill will affect a small cadre of people directly and a very large cadre of people indirectly. He informed the committee that Section 1 removes certain things from being a misdemeanor and makes it a felony. He explained that if a candidate says something about an opponent and the opponent tells the other candidate that what they are saying is false and has proof it is false, if that candidate does not stop saying those false statements, and if they are convicted, they will not be seated for office. He stated that the existing law makes these types of actions a misdemeanor. He noted that there were cases that went to the district attorney and the district attorney said that they would not waste their time on these types of cases because it is not a trophy. They don't get a trophy out of it, they get a misdemeanor. If it's a felony, then it's a trophy. He emphasized that HB 466 will increase the penalty from a class A misdemeanor to a class C felony. REPRESENTATIVE BERKOWITZ said he wanted more information on the trophy cases that were not pursued. REPRESENTATIVE HODGINS said there have been cases that were not pursued because they were misdemeanors and for political reasons, they were not pursued. REPRESENTATIVE BERKOWITZ said he would suspect that there were proof problems with the cases Representative Hodgins described and that is why he is curious about the cases and what the fact patterns are. REPRESENTATIVE HODGINS replied that the district attorney makes a judgment everyday on whether a case has more precedence than another. They will not take a misdemeanor case if they are clogged up with felony cases. REPRESENTATIVE BUNDE referred to page 2, Section 2 of HB 430 which reads: "(2) would provoke a reasonable person under the circumstances to a breach of the peace or that a reasonable person would construe as damaging to the candidate's reputation for honesty, integrity, or qualification to serve if elected to office." He said if he called someone a "low-life jerk" which certainly could be considered damaging to a candidate's honesty, integrity, or qualification to serve, and asked is he guilty under this provision. REPRESENTATIVE HODGINS responded it would depend on the courts and the district attorney; however, he would have an option of trying to prove that he is not. He told the committee that the law is in force now, and the only thing this bill would do is to elevate it from a misdemeanor to a felony. REPRESENTATIVE BUNDE said the point he is trying to make is that there is a lot of innuendo, there's a lot of personal opinion, and he doesn't believe that would fall under this. He said the notion that this bill would clean up mud slinging is maybe hopeful. REPRESENTATIVE HODGINS stated that HB 430 would clean up some portions of mud slinging where somebody is attacking somebody on their record, or their criminal record, and they come forward and say they don't have one, that's the portion. He said, "There's no magic pill for this." Number 2384 REPRESENTATIVE PORTER said, "I thought during your opening remarks you alluded to a requirement to notify the issuer of the statement that you have a problem with." REPRESENTATIVE HODGINS said if a person knowingly goes forward with false information, anyone can go forward and say that they didn't know the information was false. REPRESENTATIVE BERKOWITZ referred to Section 2 of HB 430 and said if a person said false information about a candidate and it had nothing to do with their honesty or integrity and only marginally related to their qualifications to serve, it seems that there has been no violation of this statute. He said if a person lied about someone's record the way this statute is set up requires an attack on the person's character, not on a voting record .... [ends mid- speech because of tape change]." TAPE 98-70, SIDE B Number 0001 REPRESENTATIVE PORTER referred to subsection (b) on line 26, page 2 which reads: "(b) violation of this section is a corrupt practice. However, notwithstanding AS 15.20.540, only a defeated candidate may contest the nomination or election of a person for violation of this section." He said, "You would have to be the injured party to go forward. This complaint driven by the person that you have been -- that you have either been attacked or has attacked you." REPRESENTATIVE BERKOWITZ said, "But that's not -- what you're saying is you only get hurt if you lose." REPRESENTATIVE PORTER said that is not the case. He said, "If you can stop a mud slinging campaign from somebody coming forward with false information that they know is false, you don't have to lose to stop them." REPRESENTATIVE BERKOWITZ remarked that only a defeated candidate may contest a nomination or election violating this section. He stated, "What you're saying is if you lose an election, it doesn't matter how dirty you got, it's just you lost. And we're not creating a disincentive to dirty campaigns, you just don't want to be the last one left holding the bag, as far as this Act goes." Number 0055 REPRESENTATIVE HODGINS said, "You don't have to lose to invoke this. It's a deterrent. If you know that you are conducting yourself contrary to this statute, that will be a deterrent." He indicated that he has no problem with a campaign that goes forward, which is based on factual campaigning. He does have a problem with campaigns that make false accusations that the person knows are false. REPRESENTATIVE PORTER explained that quite often the candidate or person representing the candidate that violates this provision intentionally does it so close to an election that there is no time for a response and that's the game plan they have. He believes that that is why the provision of "a defeated candidate may contest the nomination or election" because that's the disincentive for that last minute knowingly false smear. The fact that so many of the allegations bring into play "knowing" as opposed to having been told, he asked if this is really an attack on their integrity or a personal opinion. He said all of these things make this a very troublesome area in the law. He commented he appreciates what the sponsor is trying to get at, but he doesn't think it rises to the level of a felony. REPRESENTATIVE HODGINS said the fact that if it does change an election, it seems that there wouldn't be a value that would make it into a felony. CHAIRMAN GREEN told Representative Hodgins the problem he has is proving that actually caused the election to change. REPRESENTATIVE HODGINS stated that it would have to be proved that a person knowingly supplied false information after they were told it was false information. He said they are not changing anything in the bill except for elevating the offense to a felony. It is already in the law. He explained that all of the committee's arguments about whether this is right or just or not, it's already in law. He said the only thing that happens to a person is that they cannot be seated for that seat. REPRESENTATIVE BUNDE asked if the fact that a candidate is convicted of a felony is what keeps them from being seated. REPRESENTATIVE HODGINS said that is correct. Number 0223 PAT CARTER, Legislative Assistant to Representative Hodgins, Alaska State Legislature, came before the committee to provide information. He briefed the committee on the history on defamation laws and explained that it had two purposes: 1) to prevent public unrest and 2) to preserve public order. He said protection is different for elected officials or famous persons than it is for private persons. Defamation of a private individual is thought to cause a violent response because not only does it defame that individual, but also his family and anybody else who may be in association with them. Those exact same issues apply to a public person with the exception if it is an elected official. It not only incites concerns for the breech of peace but also the scandal in government. He said, "I think that by allowing what we're talking about here to go back to saying we're trying to cover this whole broad spectrum of preventing someone from calling someone a low down dirty jerk. This law won't prevent that. But if I take out a full-page ad saying that you were a child molester and I run it five days before the campaign before the election, and I've got absolutely no proof of that and I told five people that I was going to do it and I was going to fabricate this information, that is a class C felony according to this law." REPRESENTATIVE BUNDE said, "If I'm just following your analogy further so I can understand. You take out the ad that you know is false, but you don't tell anybody, and then the person who is defeated brings this case, that person who is defeated has to prove that you knew that was false information. Or if it's early enough before the election, if the person proves to you that's false information, you have to withdraw the ad.... You have -- if a person wants to do this other thing and they're all clever and they just don't tell anybody about it, they do it anyway, and then you come back and you can't prove it's knowingly and it's already after the election, so ..." MR. CARTER pointed out that the opponent does not have to prove that someone knowingly said false information about them. The state of Alaska has to do that because it is a crime, and then the prosecutor has to see if there is enough information to make a case. REPRESENTATIVE BERKOWITZ asked, "Why did you leave 'initiatives' out of this section?" MR. CARTER said that was discussed in the House State Affairs Committee and when he researched the origin of the defamation law, he found that it was to protect an individual and not the law itself, and defaming an initiative is not likely to invoke a violent response such as it would with an individual. REPRESENTATIVE BERKOWITZ said if the intent of the bill is to protect the process, he suggested including "initiatives" in the bill. CHAIRMAN GREEN advised the members that the bill would be held over for further discussion. ADJOURNMENT Number 0479 CHAIRMAN GREEN adjourned the House Judiciary Standing Committee at 3:35 p.m.