Legislature(1993 - 1994)
03/02/1993 03:00 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE STANDING COMMITTEE March 2, 1993 3:00 p.m. MEMBERS PRESENT Rep. Bill Hudson, Chairman Rep. Joe Green, Vice Chairman Rep. Brian Porter Rep. Joe Sitton MEMBERS ABSENT Rep. Eldon Mulder Rep. Jerry Mackie COMMITTEE CALENDAR *HB 160: "An act relating to the time for filing certain civil actions; and providing for an effective date." MOVED FROM COMMITTEE *HB 112: "An act relating to limited partnerships; and providing for an effective date." MOVED FROM COMMITTEE HB 115: "An Act extending the termination date of the Alaska Tourism Marketing Council; and providing for an effective date." CSHB 115(ITT) MOVED OUT OF COMMITTEE (* First public hearing.) WITNESS REGISTER REP. JOE GREEN Alaska State Legislature State Capitol Juneau, Alaska 99801-1182 465-4931 Position Statement: Prime Sponsor of HB 160 RICHARD RITTER American Institute of Architects 800 Glacier Hwy. Juneau, Alaska 99801 586-1371 Position Statement: Spoke in support of HB 160 RICHARD CATTANAUGH, Vice President Alaska General Contractors 8181 Old Seward Anchorage, Alaska 99515 349-4561 Position Statement: Spoke in support of HB 160 DOUG GREEN Alaska Professional Design 901 W. 29th Ave. Anchorage, Alaska 99503 563-8474 Position Statement: Testified by way of teleconference in support of HB 160 LEE HOLMES Alaska Professional Design 2522 Arctic #200 Anchorage, Alaska 99503 276-0521 Position Statement: Testified by way of teleconference in support of HB 160 GENE REHFIELD American Society of Civil Engineers 137 Behrends Avenue Juneau, Alaska 99801 465-6968 Position Statement: Spoke in support of HB 160 MIKE FORD Legal Services Department of Law P.O. Box 110300 Juneau, Alaska 99811-0300 465-3428 Position Statement: Commented on HB 160 ART PETERSON, Attorney Dillon and Findley Law Offices One Sealaska Plaza, Suite 202 Juneau, Alaska 99801 586-4000 Position Statement: Supported HB 112 WENDY MULDER, Legislative Liaison Department of Commerce and Economic Development P.O. Box 110800 Juneau, Alaska 99811-0800 465-2500 Position Statement: Commented on HB 115 for the department PREVIOUS ACTION BILL: HB 160 SHORT TITLE: LIABILITY OF DESIGN/CONSTRUCTION PROS BILL VERSION: SPONSOR(S): REPRESENTATIVE(S) GREEN,Phillips,Larson, Hudson,Porter,Bunde,Vezey,Mulder,Kott,James TITLE: "An Act relating to the time for filing certain civil actions; and providing for an effective date." JRN-DATE JRN-PG ACTION 02/17/93 362 (H) READ THE FIRST TIME/REFERRAL(S) 02/17/93 362 (H) LABOR & COMMERCE, JUDICIARY 02/17/93 373 (H) COSPONSOR(S): VEZEY, MULDER 02/19/93 396 (H) COSPONSOR CORRECTIONS:PHILLIPS, LARSON 02/19/93 397 (H) HUDSON, PORTER, BUNDE 02/19/93 397 (H) COSPONSOR(S): KOTT 03/02/93 (H) L&C AT 03:00 PM CAPITOL 17 BILL: HB 112 SHORT TITLE: UNIFORM LIMITED PARTNERSHIP ACT UPDATE BILL VERSION: SPONSOR(S): REPRESENTATIVE(S) MOSES TITLE: "An Act relating to limited partnerships; and providing for an effective date." JRN-DATE JRN-PG ACTION 02/01/93 199 (H) READ THE FIRST TIME/REFERRAL(S) 02/01/93 199 (H) LABOR & COMMERCE, JUDICIARY 03/02/93 (H) L&C AT 03:00 PM CAPITOL 17 BILL: HB 115 SHORT TITLE: EXTEND TOURISM MARKETING COUNCIL BILL VERSION: SPONSOR(S): LABOR & COMMERCE TITLE: "An Act extending the termination date of the Alaska Tourism Marketing Council; and providing for an effective date." JRN-DATE JRN-PG ACTION 02/03/93 213 (H) READ THE FIRST TIME/REFERRAL(S) 02/03/93 213 (H) TRADE & TOURISM, LABOR & COMM, FINANCE 02/18/93 (H) ITT AT 05:00 PM CAPITOL 102 02/18/93 (H) MINUTE(ITT) 02/18/93 (H) MINUTE(TRA) 02/24/93 442 (H) STA REFERRAL ADDED,FOLLOWING L&C 02/25/93 453 (H) ITT RPT CS(ITT) NEW TITLE 6DP 02/25/93 454 (H) DP: GREEN, SANDERS, NORDLUND, MENARD 02/25/93 454 (H) DP: TOOHEY, JAMES 02/25/93 454 (H) -ZERO FISCAL NOTE (DCED) 2/25/93 03/02/93 (H) L&C AT 03:00 PM CAPITOL 17 03/02/93 (H) MINUTE(STA) ACTION NARRATIVE TAPE 93-17, SIDE A Number 000 CHAIRMAN HUDSON called the House Labor and Commerce Committee to order at 3:16 p.m. on March 2, 1993. Members present were Reps. Hudson, Green, Porter and Sitton. HB 160: CERTAIN CIVIL ACTIONS REP. JOE GREEN, PRIME SPONSOR of HB 160, testified that HB 160 proposes a "Statute of Repose" for legal action against design and construction companies. The statute of repose is similar to the statute of limitation in other lawsuits. The sponsor believes that without a time limit to file legal actions, design professionals and others in the construction trade are subject to an indefinite and unfair period of liability. Rep. Green further stated that poor maintenance, improper operation, or alteration of a building can adversely affect an original structure. He stated the bill would not grant immunity, at any time, from injury or damage as the result of gross negligence. (See attachment 1) REP. HUDSON asked for questions from the committee. There were no questions from the committee. REP. HUDSON called for testimony from Richard Ritter. Number 108 RICHARD RITTER, CHAIRMAN OF LEGISLATIVE AFFAIRS FOR THE ALASKA CHAPTER OF THE AMERICAN INSTITUTE OF ARCHITECTS, supported the statements made by Rep. Green and commented that of the 45 states with a statute of repose, 32 of them have been adjudged constitutional. He further elaborated on the costly burden on a firm when a claim is filed against them, and provided specific examples. Number 120 REP. HUDSON asked for examples of states that do not have a "statute of repose." Number 125 MR. RITTER responded they were Alaska, Alabama, Wisconsin, Kentucky and New York. He also reiterated that 32 of the 45 states with a statute of repose have been tested in court and were found constitutional. Number 172 RICHARD CATTANAGH, VICE PRESIDENT, ALASKA GENERAL CONTRACTORS, testified in favor of HB 160, stating that under current law, contractors have unlimited liability for any construction project that a company may undertake. He said he believes the law is unfair, pointing out that the statute of limitations for crimes such as vandalism and murder have shorter statute of limitations. MR. CATTANAGH further pointed out that there are many professionals involved in a construction project and he feels that it is unreasonable to leave the contractor solely responsible if a claim is filed. He recommended that a ten year statute of repose is too long. Number 218 REP. HUDSON asked if Mr. Cattanagh participated in the rewriting of this issue last year. Number 220 MR. CATTANAGH responded no, the contractors had been excluded from the bill. As a result, the contractors dealt with the designing engineers and did not participate in rewriting or redrafting the bill. Number 233 DOUG GREEN testified via teleconference from Anchorage in support of HB 160. He pointed out that a building itself is a process which architects and contractors bring to completion. At that time, the owner cares for, maintains, improves or neglects that building, and at that point the responsibility is transferred from contractor to owner. Number 240 MR. GREEN also stated that HB 160 would not protect those who are negligent or fraudulent within that process. In addition, he said, passage of this bill would potentially, over time, lower insurance rates. Number 305 REP. PORTER asked Mr. Green if 10 years was too extreme. Number 310 MR. GREEN said that some studies show that a lesser length of time may be justified and would be interested if that were proposed. Number 319 REP. HUDSON asked what would be a lesser time and what is the standard in other states. Number 323 MR. GREEN said that the standard in most states is five to eight years. In previous legislation in the Senate, the Alaska Professional Design Council supported the seven year "statute of repose." Number 327 REP. GREEN explained that he was concerned that the shorter length of time would increase the likelihood of court intervention and/or if the amount of time was changed in the bill, it may hinder its passage. His priority was to pass the bill from committee and amend it at a later date if that was deemed a reasonable length of time. MR. GREEN agreed. Number 341 LEE HOLMES testified from Anchorage on behalf of the ALASKA PROFESSIONAL DESIGN COUNCIL in support of HB 160. He reiterated comments made by Mr. Green. He also pointed out that most claims are filed within 10 years. If the length of time is longer than that, it poses a greater financial and operational burden to the company because of the cost in locating and maintaining documents. Number 403 GENE REHFIELD testified on behalf of the ALASKA SECTION OF THE AMERICAN SOCIETY OF CIVIL ENGINEERS in support of HB 160. Number 430 REP. HUDSON asked MIKE FORD from LEGAL SERVICES in the DEPARTMENT OF LAW to come forward. He asked about the question of the constitutionality of HB 160 and if this issue had been before the Labor and Commerce Committee last year. He also asked if there was a substantive change in this bill. Number 438 MR. FORD stated there were two changes: HB 160 expands the group of people protected, and also increases the period of time that a lawsuit can be brought against a company or contractor. REP. HUDSON asked if the time limit was seven years in last year's bill. MR. FORD said there were various versions, seven being the most popular. He went on to say, if the committee adopts the ten year provision, 3 percent of potential litigants would be excluded. This is significant in terms of equal protection analysis and who is being prohibited from bringing lawsuit. Number 456 REP. PORTER asked Mr. Ford if there was an equal protection concern regarding who it was protecting by this legislation. Number 460 MR. FORD said yes, and in addition, contractors had been added to the list of those protected and felt that was significant. He continued to say that there is significance in the fact that liability laws have changed since the Scales case and may give the court a different view on this statute of repose. Number 475 REP. PORTER moved that HB 160 pass out of committee with individual recommendations and a zero fiscal note. REP. HUDSON asked for objections. There were none, so HB 160 passed from the House Labor and Commerce Committee. Number 478 CHAIRMAN HUDSON turned the meeting over to VICE CHAIR GREEN. REP. GREEN announced that HB 112 would be heard next. HB 112: UNIFORM LIMITED PARTNERSHIP ACT UPDATE REP. CARL MOSES, PRIME SPONSOR of HB 112, gave a sponsor statement. (see attachment 2). He said the bill would remove the use of the long form in limited partnerships. Number 509 ART PETERSON testified in support of HB 112. He informed the committee that the long form was no longer necessary and just does not work under modern use. He gave a brief history of the issue and reiterated comments by the sponsor. Number 560 (It was noted that Rep. Mulder joined the committee at 3:30 p.m.) Number 563 REP. PORTER asked if the code revision commission committee had anything to do with revising this law. MR. PETERSON responded no and elaborated by noting the particular professor who made a recommendation was also the professor who helped the code revision commission on other matters. REP. PORTER asked if it could be assumed that the majority of states also have this provision as outlined in HB 112. MR. PETERSON responded that they do and referenced the fact sheet in the bill packet. (see attachment 3) REP. PORTER asked if this would change the information available to the public. Number 596 MR. PETERSON responded to Rep. Porter's concern by pointing out that prospective investors and lenders of credit would provide any needed information to the other in order to expedite business transactions in a limited partnership. He also pointed out that Section 20 of HB 112 requires the corporation or organization to maintain all information requested on the long form. Number 609 REP. MULDER asked if this compared to Senator Rodey's SB 193 of last year. MR. PETERSON said it did; HB 112 would fill in the gap left by SB 193. REP. MULDER asked if it was intentionally left out of the bill last year. MR. PETERSON said it was intentionally left out and was inadvertently not picked up as Senate relations evolved during the session. Number 625 REP. SITTON made a motion to move HB 112 from committee with individual recommendations and a zero fiscal note. There were no objections, so HB 112 passed from the House Labor and Commerce Committee. CSHB 115(ITT): "An act deleting a requirement that certain members of the board of directors of the Alaska Tourism Marketing Council be substantially involved in a visitor or recreation industry business; relating to the selection of a presiding officer for the Alaska Tourism Marketing Council: and providing for an effective date." Number 639 REP. HUDSON gave a brief overview and explained that HB 115 was amended in the House International Tourism and Trade committee to conform to changes made in the Senate companion bill. Number 645 REP. HUDSON then expressed the following: "I must mention there is some contention in this field as it relates to the Commissioner of the Department of Commerce and Economic Development. He has approached me directly suggesting that they would like to have the legislation entertain a shift in the administrative overhead of the Alaska Tourism and Marketing Council (ATMC) and to essentially do away with the industries separate administrative escholon and place the administration of this into the hands of the director of the Division of Tourism. What that would do if we adopt this bill in its current form would potentially put that at odds. I don't believe we would necessarily have to change this law in order to permit them to do that, and if that is going to occur, it will occur at the budgeting end where they literally take the administrative funds away from the ATMC. The Finance Committee can modify the management of the ATMC by simply budgeting the money into the Department of Tourism rather than into the ATMC." Number 680 REP. HUDSON continued: "We can do one of two things. We can either sit on this or we can pass it and it can be dealt with in the Finance Committee or State Affairs Committee. We introduced this legislation in substantially the form that the industry wants; the industry contributes heavily towards this whole program here. As the chairman of this committee, I suggest that we pass it out and let it be dealt with ultimately in the Finance committee. It will be a policy call that may involve a caucus decision." Number 780 VICE CHAIRMAN GREEN asked for questions from the committee. Number 785 REP. PORTER asked if the committee should send a letter of concern. Rep. Porter aired a concern about the transferring of administrative functions. Number 801 In answer to Rep. Porter's question, REP. MULDER said that there are a number of concerns regarding funding and administrative functions by and for the tourism industry. He further speculated on the concern of the commissioner of the Department of Commerce and Economic Development. Number 835 WENDY MULDER, LEGISLATIVE LIAISON FOR THE DEPARTMENT OF COMMERCE, testified on behalf of the commissioner and made note that the commissioner was unable to join the Labor & Commerce Committee. She clarified the concern of the commissioner by saying that the commissioner wanted the committee to know that it was a budgetary matter and felt that the committee should be aware of that. She further stated that the department is willing to go any direction the legislature wishes the ATMC or the Division of Tourism to go. Number 864 REP. GREEN asked if funding was the driving force behind what happens with the ATMC. He asked if it would create confusion, and shouldn't there be an established place for it. Number 867 MS. MULDER explained that for budgetary reasons they would bring the staff of the ATMC back into the Division of Tourism. The ATMC would still have voting power over the contracts, but administratively it would be handled in the Division of Tourism. Number 900 REP. HUDSON explained that because of the above stated reasons, this bill should be moved on to the Finance Committee. Number 906 REP. PORTER aired a concern regarding the moving of administrative functions of the ATMC to the Division of Tourism. He further stated that he did not think that was a good idea. Number 926 JOHN LITTON, MEMBER OF THE TOURISM MARKETING COUNCIL, testified in support of HB 112. Number 937 REP. MULDER moved and asked unanimous consent that CSHB 112(ITT) move from committee with individual recommendations and a zero fiscal note. There being no objections, it was so ordered. VICE CHAIRMAN GREEN adjourned the House Labor & Commerce Committee meeting at 4:16 p.m.