Legislature(1993 - 1994)
04/14/1993 01:45 PM Senate JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE JUDICIARY COMMITTEE April 14, 1993 1:45 p.m. MEMBERS PRESENT Senator Robin Taylor, Chairman Senator Rick Halford, Vice-Chairman Senator George Jacko Senator Dave Donley Senator Suzanne Little MEMBERS ABSENT NONE COMMITTEE CALENDAR SENATE BILL NO. 73 "An Act relating to the time for filing certain civil actions; and providing for an effective date." HOUSE BILL NO. 69 "An Act relating to registration of and information about sex offenders and amending Alaska Rules of Criminal Procedure 11(c) and 32(b)." SENATE BILL NO. 155 "An Act relating to landlords and tenants, to termination of tenancies and recovery of rental premises, to tenant responsibilities, to the civil remedies of forcible entry and detainer and nuisance abatement, and to the duties of peace officers to notify landlords of arrests involving certain illegal activity on rental premises." HOUSE JOINT RESOLUTION NO. 11 Proposing an amendment to the Constitution of the State of Alaska relating to repeal of regulations by the legislature. HOUSE BILL NO. 112 "An Act relating to limited partnerships; and providing for an effective date." SENATE BILL NO. 161 "An Act relating to interest rates and calculation of interest under certain judgments and decrees and on refunds of certain taxes, royalties, or net profit shares; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION SB 73 - See Labor & Commerce minutes dated 2/9/93. See Judiciary minutes dated 3/31/93. SB 69 - See Labor and Commerce minutes dated 2/2/93. SB 155 - See State Affairs minutes dated 3/24/93. See Judiciary minutes dated 4/2/93 and 4/8/93. HJR 11 - NONE HB 112 - NONE SB 161 - See State Affairs minutes dated 4/2/93 and 4/7/93. WITNESS REGISTER Colin Maynard Alaska Society of Professional Engineers 1400 W. Benson, Suite 500 Anchorage, Alaska 99517 POSITION STATEMENT: Supported SB 73. Doug Green, Chairman Legislative Liaison Committee Alaska Professional Design Council P.O. Box 10-3115 Anchorage, Alaska 99510-3115 POSITION STATEMENT: Supports SB 73. Russell L Winner, Attorney WINNER & ASSOCIATES 900 West Fifth Avenue Anchorage, Alaska 89501 POSITION STATEMENT: Opposed SB 73. Doug Wooliver, Represented Sponsor. Representative Ramona Barnes Slip Float 5, Harris Harbor Juneau, Alaska 99801 POSITION STATEMENT: Supported HB 69. Liz Dodd Alaska Civil Liberties Union 100 Parks Street Juneau, Alaska 99801 POSITION STATEMENT: Opposed HB 69. Paul Nelson Box 150 Haines, Alaska 99827 POSITION STATEMENT: Opposed HB 69. Marcia McKenzie Council on Domestic Violence & Sexual Assault Department of Public Safety Box 11120 Juneau, Alaska 99811 POSITION STATEMENT: Supported HB 69. Arthur H. Snowden, Administrative Director Judicial Branch 303 K Street Anchorage, Alaska 99501-2084 POSITION STATEMENT: Opposed HB 69. Margo Knuth, Asst. Attorney General Criminal Division Department of Law P.O. Box 110300 Juneau, Alaska 99811-0300 POSITION STATEMENT: Opposed HB 69. Tim Benintendi, Aide Representative Carl Moses State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Testified on HB 112. Joseph P. Geldhof, Asst. Attorney General Civil Section, Department of Law State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Testified on SB 161. Dan Beardsley Central Region Department of Transportation & Public Facilities P.O. Box 196900 Anchorage, Alaska 99519-6900 POSITION STATEMENT: Testified on SB 161. Jeffery C. Ottensen, Chief Right-of-Way & Environment Division of Engineering & Operations Department of Transportation & Public Facilities 3132 Channel Drive Juneau, Alaska 99801-7898 POSITION STATEMENT: Testified on SB 161. Ann Williams Municipality of Anchorage P.O. Box 196650 Anchorage, Alaska 99519-6650 POSITION STATEMENT: Testified on SB 161. ACTION NARRATIVE TAPE 93-43, SIDE A Number 001 Chairman Robin Taylor called the Judiciary Committee meeting to order at 1:45 p.m. SENATOR TAYLOR returned SB 73 (LIABILITY OF DESIGN/ CONSTRUCTION PROFESSIONALS) introduced by SENATOR KELLY, to committee and directed the teleconference for the bill, beginning with the Anchorage location to hear COLIN MAYNARD. MR. MAYNARD, representing the Alaska Society of Professional Engineers, testified in favor of the bill citing protection from the present indefinite period of liability. He described the extent of the suits that could be pursued during this period of liability due to changes in design or neglect by the owner of the building in question. MR. MAYNARD discussed why liability should be discontinued at the end of ten years unless there was proof of negligence by the design professionals. He concluded his testimony by explaining why he thought the Statute of Repose was fair to all parties involved in the building profession. Next, SENATOR TAYLOR invited DOUG GREEN to testify from Anchorage. Number 057 MR. GREEN, representing the Alaska Professional Design Council and the American Institute of Architects, introduced himself as an architect in support of SB 73. He reviewed testimony from previous years on the Statute of Repose defending the record of the design professionals in protecting the public and utilizing the most current codes and standard of care. MR. GREEN explained that having the Statute of Repose would not lower their current standard of attention. He further explained the process involved in construction and the possible changes made to a project. He described how the Statute of Repose would be of benefit to the State of Alaska and would have no fiscal impact to the legislation. Number 155 RUSS WINNER, an attorney from the Anchorage firm of WINNER & ASSOCIATES, was invited to testify. MR. WINNER, representing the Alaska Academy of Trial Lawyers, testified in opposition to SB 73 for what he said were future victims of buildings that might collapse. He predicted the occurrence of calamities for these future victims, and he described such occurrences as being unfair under the Statute of Repose. MR. WINNER labeled it "special interest litigation" for the design professionals involved in construction projects and questioned the need for special treatment for architects and engineers. He suggested it could be compared it to giving lawyers the same protection, which he said would also be unfair to the victims. MR. WINNER explained SB 73 was almost identical to a statute that was previously struck down as unconstitutional by the Alaska Supreme Court. He reviewed the constitutional analysis by the supreme court as well as the policy considerations that were present both then and now. He predicted the Alaska Supreme Court would strike the present legislation as also unconstitutional. MR. WINNER said his view was shared by the attorney for the Division of Legal Services in a letter to REPRESENTATIVE BRIAN PORTER regarding SB 73. He reviewed the changes between the six-year Statute of Repose of the previously unconstitutional legislation to one of ten years in SB 73 which includes gross negligence as a causative factor. MR. WINNER reiterated his objections to the current legislation as being identical to the previous statutes which he believed would be adjudged unconstitutional by the Alaska Supreme Court. Number 239 MR. WINNER explained why he considered it inappropriate the legislature would consider a piece of legislation after receiving similar advice from attorneys. He reviewed the concerns noted by the Alaska Supreme Court Case in Turner Construction Co., Inc. v. Scales, 752 P.2d 467 (Alaska 1988) when it struck down the earlier bill. MR. WINNER quoted the court findings that the Statute of Repose violated the state constitution's equal protection clause. He said it deprives innocent victims of a substantial right to recovery in court. MR. WINNER quoted the Turner court as finding the purpose of the six-year Statute of Repose was to "encourage construction and avoid stale claims by shielding certain defendants from potential future liability." MR. WINNER said he assumed that was the same purpose for SB 73, and he explained the court's determination this did not serve this purpose very well because of the multiple involvement of participants in a construction project - besides design professionals. In addition, he explained how this affirmed the ruling of several superior court judges, who had considered the statute in earlier cases. Number 273 MR. WINNER continued to review the infirmities he saw in SB 73 such as the allocation of fault among parties to a piece of litigation after voters approved an initiative abolishing joint and several liability. He said the Statute of Repose would shift liability to owners, lessees, and persons selling materials, and he claimed for that reason, SB 73 "stinks." SENATOR TAYLOR explained the committee was nearly out of time on the teleconference network, and he asked MR. WINNER to comment on a couple of proposed amendments to SB 73. MR. WINNER had suggested in a letter to SENATOR TAYLOR in a letter, in which he explained to the committee might, or might not, enable SB 73 to pass the courts as statutes. He said it would make the legislation less onerous to innocent victims. MR. WINNER also described a judicial committee, headed by JUDGE KARL JOHNSTON, Presiding Judge for the Third District, designated to look at major changes in the court system. MR. WINNER suggested the outcome of the committee would be to dramatically shorten the discovery process and to "smoke out meritless lawsuits early in the process." He also proposed it would reduce the need for legislation such as SB 73. Number 323 SENATOR TAYLOR requested MR. WINNER to address page 2, line 24, *Sec. 2. ..., ACTIONS TO BE BROUGHT IN SIX YEARS, and asked why MR. WINNER did not propose amendments for that section. MR. WINNER thought the meat of the bill was in * Sec. 3, and SENATOR TAYLOR agreed with his explanation. SENATOR TAYLOR checked the teleconference network for others wishing to testify on SB 73. Hearing none, the teleconference ended. SENATOR LITTLE proposed splitting the recommendations from MR. WINNER into two amendments and moved Amendment #1. Page 3, line 19, after ";": Delete "or" Page 3, line 21, after "contract": Insert "; or (4) if the defect was not discovered or could not reasonably have been discovered by the person bringing an action for personal injury or propert ert the decedent in a wrongful death action, within the period of time set out under (a) of this section." SENATOR HALFORD objected to the amendment. SENATOR TAYLOR asked SENATOR LITTLE to explain the amendment. Number 377 SENATOR LITTLE explained the merits of the amendment and urged support. SENATOR TAYLOR defended the amendment, and it passed on a 3 - 1 vote. SENATOR LITTLE proposed Amendment #2 based on the letter from MR. WINNER as follows: Page 3, line 26, Insert a new subsection to Section 3: "(e) If any person or entity is found immune from suit under this section, the finder of fact in any section shall not consider that person's or entity's actions or failure to act for purposes of allocating fault and damages pursuant to AS 09.17.080." SENATOR HALFORD objected to the amendment. SENATOR TAYLOR again asked SENATOR LITTLE to explain the amendment. SENATOR LITTLE thought it would encourage support for the bill. SENATOR JACKO asked for SENATOR LITTLE'S understanding of the amendment. SENATOR LITTLE deferred to SENATOR TAYLOR who said it was less onerous to the sponsors than the first amendment which he thought might have some open ended aspects. He explained Amendment #2 answers the questions he had previously raised about protection for those involved in the design and construction of a building when the fault lies elsewhere in the construction of the building - such as a faulty hidden beam. SENATOR LITTLE said the amendment allowed the liability to be apportioned to those at fault. Number 425 SENATOR TAYLOR and SENATOR HALFORD did not agree, saying it would transfer the fault. SENATOR LITTLE thought that was a correct assessment. SENATOR TAYLOR described a circumstance under which the amendment would apply, and SENATOR HALFORD said it might be transferred to someone not at fault. There ensued a general discussion among the committee members as to fault in the construction. SENATOR LITTLE offered to withdraw the amendment, but SENATOR TAYLOR urged the amendment be offered to committee. Number 483 SENATOR TAYLOR offered Amendment #2 which carried. The discussion continued with SENATOR JACKO asking if it would apply to bridges. SENATOR TAYLOR said it would. SENATOR HALFORD moved to pass CS FOR SENATE BILL NO. 73(JUD) from committee with individual recommendations. SENATOR LITTLE objected, and it passed on a 3 - 1 vote. SENATOR TAYLOR introduced CS FOR HOUSE BILL NO. 69 (FIN) (SEX OFFENDER REGISTRATION) sponsored by REPRESENTATIVE RAMONA BARNES and represented to the committee by DOUG WOOLIVER, Staff Attorney. Number 505 SENATOR TAYLOR invited MR. WOOLIVER to present the bill for HOUSE SPEAKER RAMONA BARNES. MR. WOOLIVER reviewed the sectional analysis for CSHB 69 (FIN): "An Act relating to registration of and information about sex offenders and amending Alaska Rules of Criminal Procedure 11(c) and 32(b); and providing for an effective date." MR. WOOLIVER explained the bill covered crimes of sexual assault in the first, second, and third degree; sexual abuse of a minor in the first, second, and third degree; promoting prostitution in the first degree; and incest and unlawful exploitation of a minor. He also explained the bill covered crimes not only committed in Alaska but those in other jurisdictions when those persons moved to Alaska. MR. WOOLIVER said a sex offender in Alaska would have seven days in which to register, and those who come to Alaska would have fourteen days in which to register. He explained the provisions of the bill would be retroactive to January 1, 1984. Anyone convicted of two or more sex offenses would be required to register for life, and anyone with one sex offense would be required to register for fifteen years. These periods would commence after their unconditional discharge. In Subsection (b)(1), MR. WOOLIVER listed the information to be contained in the registration, including name, address, place of employment, date of birth, each conviction for a sex offense for which the duty to register has not terminated, date, place and court of sex offense conviction, all aliases used and driver's license number. All of this information would be available to the public except for the offenders' finger prints, drivers license, and aliases. MR. WOOLIVER explained this bill was needed since Alaska leads the nation in child sexual abuse and is second in the nation in sexual assaults, and he cited studies from California and other places which accused sex offenders of having the highest recidivism rate. MR. WOOLIVER quoted devastating statistics from various sources on the differences in sex offenders, the large number of victims, as well as investigations which concluded that rapists and child sexual abusers were more likely to be arrested for new sex crimes if they completed psychological treatment. MR. WOOLIVER claimed therapy was deemed to be ineffective, and he quoted a study from Canada that determined that sex offenders were worse after treatment. He noted the high number of children abused by sex offenders who grew up to be sex offenders themselves. Number 545 MR. WOOLIVER continued his presentation with an assessment of the pervasive aspects of the present unregistered sex offender problem in Alaska. He said there was a lack of "handy" information on child sex offenders, and the offenders were found to be in areas where they had ready access to children. MR. WOOLIVER concluded his review of HB 69 by specifying the uses for the registration of sex offenders, and he referred to a California study which showed overwhelming support from law enforcement agencies as a beneficial system for aiding their jobs. He said there were currently eighteen states with sex offender registration and a couple more have registration for drug offenses as well. He reported HB 69 was similar to registration legislation in the other states. Number 577 SENATOR LITTLE questioned the constitutionally of the bill since it would increase the sentence of those persons convicted of a sex offense. MR. WOOLIVER said this was a fair assessment and had been brought up in other courts, but it has been found the law was not punitive, but was regulatory - in most of the other cases. He said this did not violate the ex facto provision of laws, and the courts in Alaska ...... TAPE 93-43, SIDE B Number 001 .... have addressed similar cases in the past as having a valid regulatory purpose for the law. SENATOR LITTLE suggested there might be punitive effects. MR. WOOLIVER said she was correct, and he explained the actions of the court in this respect. He quoted a constitutional case settled by the supreme court in 1990 which has limitations to the impact on the convicted person. In a series of questions, SENATOR JACKO asked about repeat offenders? MR. WOOLIVER answered there was a difference in registration requirements. SENATOR JACKO asked if the public disclosure provisions of the legislation were in excess of those in other states. MR WOOLIVER'S answer included a review of disclosure provisions from other states which have withstood challenge. The right to privacy was also discussed. SENATOR TAYLOR asked MR. WOOLIVER about restrictions in the dissemination of registration information. SENATOR TAYLOR followed up with a series of questions to determine the limits on the dissemination in other states. He also asked for the specific proposed regulation in the bill to determine who has access to the information. MR. WOOLIVER directed the committee to page 4, line 7, (b) to explain the extent of disclosure in HB 69. SENATOR TAYLOR thanked MR. WOOLIVER and invited LIZ DODD, representing the Alaska Chapter of the Civil Liberties Union, to testify. MS. DODD described the dissemination of information in the State of Washington from the registry to police offices, who then decide whether or not to furnish the information. She also explained the process of having a hearing to remove the offender's name from the registry if that person can prove they have been rehabilitated. Number 071 MS. DODD also described the procedures for access to the registries in other states, but she explained, under HB 69, any business person could access the registry to find out the information. MS. DODD thought this was a problem and would not protect any children. In her prepared statement, MS. DODD said the ACLU supported the intended purpose of protecting the public from the chronic sex offenders, but she thought the bill conflicted with the constitution. She listed the concerns of the ACLU beginning with "drowning the privacy rights of persons who have served their prescribed sentence for the crime." She objected to the wide-open public disclosure provision as being excessive retribution rather than public protection. MS. DODD thought this would be struck down by the courts and described it in terms of ex facto restrictions. MS. DODD further used the constitution to protest lumping all sex offenders together for purposes of registration and for assuming that all sex offenders are chronic and predatory. She said this false assumption leads to the conclusion that no offender should be exempted from registration, even those considered treatable. MS. DODD said there would be no incentive for offenders to seek treatment, since they would be considered as an untreatable offender despite any steps they take to correct their behavior. She described how this might lead to an increase in offenses, especially among the borderline offenders. She contrasted this to the State of Washington where the offender can petition the court to waive registration requirements. With this legislation, she said the first time offender would be treated as a repeat offender regardless of individual circumstances. Number 108 MS. DODD explained the difference in sex offenses in Alaska as being alcohol related, where rehabilitation can diminish the problem. She further explained this wouldn't be taken into consideration in the legislation regardless of treatment or circumstances. She claimed the registration would disproportionally impact rural Alaskans most affected by alcoholism. MS. DODD illustrated why she thought this would be a grievous, race-biased error, and she accused HB 69 of taking the "drift-net" approach. MS. DODD concluded with remarks on cruel and unusual punishment, where perpetrators could be sentenced to extended periods, or a life time, of social ostracism and on-going depravation of their basic rights as protected by the U. S. Constitution. She described incidents of public ridicule and vigilantism used in other states. Number 133 MS. DODD reviewed the ACLU'S position on the provisions in the legislation, HB 69, as being in conflict with the rights guaranteed by the U. S. Constitution and the Alaska State Constitution. She said the legislation was comparable to the days of the stock and pillory in the public square - and would do little to stop sex offenses. She expressed concern that it would increase sex offenses and limit the treatment of offenders. MS. DODD asked the committee to hold the bill for further evaluation of statistics in relation to similar legislation passed in other states. SENATOR TAYLOR called on PAUL NELSON from Haines. MR. NELSON began his testimony by questioning MR. WOOLIVER on his statistic that Alaska had six times the national rate for sex offenses and asked if that was accusations or convictions. MR. WOOLIVER thought they were convictions, but he wasn't completely sure. SENATOR TAYLOR said he would find out the correct statistics and report back to the committee. MR. NELSON quoted from the Constitution of the United States, Section 9, that the retroactivity clause was in violation of the constitution. He thought registration of sex offenders might be a good idea but suggested a preference for the parole and probation system. MR. NELSON said the State of Alaska did not need more laws in violation of the constitution and asked that the bill not be passed from committee. SENATOR DONLEY asked how it violated the constitution? MR. NELSON quoted the constitution as saying that no law may be passed which increases the punishment for a criminal who has already been sentenced. He said HB 69 would require people previously convicted to increase their sentence by registering. Number 175 SENATOR DONLEY said it was within the police power of the state to provide public protection, and he claimed this was not a punishment for sex offenders. It was meant for public protection purposes. MR. NELSON disagreed and reiterated his arguments. SENATOR TAYLOR suggested that MR. NELSON'S comments should be directed to MS. DODD. SENATOR DONLEY asked MR. NELSON for some case law on the subject, and MR. NELSON again referred to the constitution. MS. DODD gave an explanation from the documents she has read and concluded it was a process of public protection being weighed against the punitive nature arising from retroactive restrictions. SENATOR TAYLOR asked MS. DODD for a written report on her information for the committee. Number 209 SENATOR TAYLOR next invited MARCIA MCKENZIE, Program Director for the Council on Domestic Violence & Sexual Assault for the Department of Public Safety, to testify. MS. MCKENZIE presented testimony from the council in support of HB 69, because the council feels it would deter, if not prevent, future abuses of women and children. She quoted statistics from 1991 that the rate of sexual abuse in Alaska was more than double the nation average. She said in 1992 the rate of forcible rape rose 28% from the previous year. MS. MCKENZIE explained that many sex offenders were released from prison without having completed sex offender treatment, which makes for a high likelihood of recidivism. In addition to the victimization, the cost of the recidivism is high. She thought anything that could deter this would be beneficial. MS. MCKENZIE asked some questions about the registration such as who would be checking on the offender. She explained it would be helpful to the shelter programs to do background checks on potential employees. For this reason, she said the council was supportive of the registration concept. SENATOR LITTLE offered a conceptual amendment to allow the information only released to the law enforcement entities, with such information released to the general public at the discretion of these entities. SENATOR TAYLOR asked the committee staff to draw up a draft of SENATOR LITTLE'S conceptual amendment for consideration by the committee. SENATOR LITTLE offered an additional conceptual amendment, similar to a provision in the Washington State law, to offer the offender the right to petition the court to waive the registration requirement. SENATOR TAYLOR asked ARTHUR SNOWDEN, Administrative Director for the Judicial Branch, if he wanted to testify. MR. SNOWDEN, in reference to the first conceptual amendment by SENATOR LITTLE, said the didn't want the court to begin sealing public documents. Number 268 Next to speak was MARGO KNUTH, Asst. Attorney General, Criminal Division, for the Department of Law, who explained that the first conceptual amendment by SENATOR LITTLE might cause some tort problems for the state. She said it would put the law enforcement agencies in the position of deciding the guidelines used to make the decision as to whether disclosure is appropriate. SENATOR JACKO asked for additional testimony from other states in which registration of sex offenders was done. SENATOR TAYLOR reported from MR. WOOLIVER that other states had similar laws using a screening device. He asked the staff aide to check with MS. KNUTH in writing the amendments. MR. WOOLIVER said the waiver provision was discussed in House Committees, and there were objections from those who work with victims of sexual assault. He said those in other states who could afford the lawyers to get the waiver, were sometimes the worst offenders. He said there had been a concern there would be a disproportionate impact on the native population. SENATOR JACKO asked MR. WOOLIVER if the registration would impact the large segment of the native population that commit suicide. MR. WOOLIVER didn't know of any studies, but did know there was a high rate of suicide among the victims of sexual abuse. He quoted testimony from other committees that there wasn't a higher percentage of sex offenders, but he offered to do some research. SENATOR JACKO asked whether there could be the option of electrocution rather than being registered as an offender. SENATOR TAYLOR said there being no more questions, testimony on HB 69 would be tabled for another meeting. Number 367 SENATOR TAYLOR returned CS FOR SENATE BILL NO. 155(JUD) (USE OF RENTED PROPERTY/LAW VIOLATIONS) to the committee. SENATOR HALFORD moved to pass the bill from committee with individual recommendations. The bill passed from committee on a 3-2 vote. SENATOR TAYLOR returned HOUSE JOINT RESOLUTION NO. 11(FLD S) (REPEAL OF REGULATIONS BY THE LEGISLATURE) to the committee, and there being no opposition, SENATOR HALFORD moved to pass HJR 11 from committee with individual recommendations. Without objections, so ordered. SENATOR TAYLOR introduced HOUSE BILL NO. 112 (UNIFORM LIMITED PARTNERSHIP ACT UPDATE) introduced by REPRESENTATIVE CARL MOSES. TIM BENINTENDI, aide to REPRESENTATIVE CARL MOSES, was invited to testify. Number 381 MR. BENINTENDI explained the legislation would compete the upgrade of Alaska's Uniform Limited Partnership Act, and he reviewed the uniform law as making it legally compatible among states. He said it would bring Alaska into conformity with thirty three other states and make the state more attractive to investors and lenders. MR. BENINTENDI also said it had the support of the Alaska Uniform Law Commission, and he reviewed previous upgrading on the Limited Partnership Act, based on the recommended language from the National Conference of Commissioners on Uniform State Law with the exception of the certificate format. He reviewed the actions of the sponsor on the short form v. the long form certificate and referred the members of the committee to the information in the bill packet from COMMISSIONER DEBORAH BEHR and several legal firms, all indicating preference for the notice form of certification. MR. BENINTENDI described Section 1 as putting the notice form into the statute - replacing the long form and allowing for the reduction of cumbersome filing requirements. He explained the long form requirement process in Section 20 to be made available. The remaining sections, MR. BENINTENDI explained, provided compatible amendments. MR. BENINTENDI explained the effective date was to coincide with the effective date of SB 193 to allow for the body of amendments to become law on July 1, 1993. He said there were two fiscal notes and no opposition. SENATOR LITTLE asked for additional explanation on the legislation, and MR. BENINTENDI explained it would upgrade the laws from 1916. He further explained how the new legislation would simplify the business of partnerships, especially where many partnerships now number in the thousands. MR. BENINTENDI explained how HB 112 would greatly assist the Department of Commerce and Economic Development gather, assimilate, and keep relevant partnership information current. SENATOR TAYLOR said he would hold the bill over for a future meeting. SENATOR TAYLOR introduced CS FOR SENATE BILL NO. 161(STA) (INTEREST RATES: JUDGMENTS/TAXES/ROYALTIES) sponsored by the Senate Rules Committee by request of the Governor. SENATOR TAYLOR invited JOE GELDHOF, from the Attorney General's Office to testify on SB 161. Number 435 MR. GELDHOF began by suggesting that questions relating to the revenue aspects of the bill, Sections 4 and 5, could be addressed to the Revenue Department, and he offered to get those persons for testimony. MR. GELDHOF referred to Section 1 which is the interest on judgment and prejudgment interest, and noted that the Administration, the Attorney General, and the Department of Transportation and Public Facilities strongly support a move into the market rate for setting interest, both for judgement or prejudgment interest. MR. GELDHOF offered some amendment language for page 2, which would alter the language in the State Affairs version to return the bill to a tort reform compromise. He explained, in personal injury cases, a person who prevails, might be entitled to prejudgment interest, but he proposed to change in other cases, not set by contract, that prejudgment interest would only be paid from the date of the issuance of the summons. He offered to answer questions about the proposed amendment for Section 1. SENATOR DONLEY indicated he didn't like the bill, although would support Section 2, but not the rest of the bill. Number 518 SENATOR TAYLOR clarified the language MR. GELDHOF was proposing to amend in Section 1 dealing with when prejudgment interest would accrue: from the date of entry of the judgement or decree, from the date of injury or harm, when the initial summons was issued, or when the initial counter claim or cross-claim was filed - whichever was earliest. MR. GELDHOF agreed, and SENATOR TAYLOR further explained it would make a slight difference in letters-of-demand to be sent or notification to be given to the other side. MR. GELDHOF said that was his understanding of the status quo in personal injury cases which had been changed in State Affairs, and he explained his preference for the original language. He wanted to force the demand as well as the settlement - which is the status quo. He said the amendment would change a contract provision eliminating the prejudgment interest, but would propose a "put up or be quiet" approach, for those who might wait to sue a day before the statute of limitations before asking for prejudgment interest. This would be for personal injury cases only. MR. GELDHOF explained for all other cases, the bill proposed prejudgment interest which would accrue from the date of summons in non-personal injury cases. SENATOR DONLEY argued this didn't make sense and would defeat the purpose. He said it would encourage the filing of a lawsuit instead of mediation. Number 544 MR. GELDHOF suggested the committee might want to make the same provisions for personal injury as a demand, but he described the breach of time before a lawsuit is filed. He also described the involved agencies as not being wild about prejudgment interest for a period of time before a suit is filed. SENATOR DONLEY chided the Department of Law as defending the agencies while the "poor little guy" suffers at the hands of the department for wrongful withholding of payment. He said the legislature was there to protect those people against the thinking contemplated in the bill. MR. GELDHOF thought SENATOR DONLEY had some valid considerations, but he claimed the legislation provided for the period not specified by contract what and how prejudgment would be paid. He reiterated the request of the legislation for a market interest rate principal, and he defended the amendment to reverse the changes by the State Affairs Committee. SENATOR TAYLOR thanked MR. GELDHOF for his testimony. TAPE 93-44, SIDE A Number 001 SENATOR DONLEY thought there was a significant number of people who would be impacted by the legislation and could have a reverse effect by going to a market rate. He thought this solution should be reserved for a decision by the legislature rather than the Commissioner of Revenue. SENATOR DONLEY discussed with SENATOR TAYLOR about a possible constitutional separation of powers question, and he thought the present low market rate would not be an incentive for settlement. SENATOR DONLEY reiterated his concerns for the legislation with the exception of Section 2, which he thought made sense for local governments, and he gave a possible illustration. SENATOR TAYLOR agreed SENATOR DONLEY had given a correct illustration, but he thought there was a problem that needed to be addressed, dealing with the fluctuation of interest rates. There was a general discussion on the diversity of interest rates. SENATOR TAYLOR invited DAN BEARDSLEY, representing the Department of Transportation to testify. MR. BEARDSLEY said he echoed many of the concerns that have been expressed, and he agreed there presently was a period of no incentive to reach a settlement with some of the eminent domain cases. He thought there was less a timing problem, but more of an incentive to settle or to resolve the matter. His department favors the market rate as an incentive not to drag out a case. Number 109 In reference to page 3, Section 5, SENATOR TAYLOR agreed with the way in which it was expressed by SENATOR DONLEY where the determination is left to the Commissioner of Revenue to decide the market rate. JEFFERY OTTENSEN, Chief of Right-of-Way for the Department of Transportation, asked to expand on the previous testimony, and SENATOR TAYLOR invited him to do so. MR. OTTENSEN referred to line 13 on page 1, where the interest rate appears to be set no later that December 15 and explained it was not an opinion of the Commissioner of Revenue, but is information based on the average accepted auction price for auctions of 52-week United States' Treasury bills (T-bills). There was a general discussion on this manner of setting the rate. Number 141 ANN WILLIAMS, representing the Municipality of Anchorage, asked to speak to the committee. She said SENATOR DONLEY had laid out quite fairly the position of the Municipality of Anchorage. She, too, wanted Section 2 to remain in the bill and thanked SENATOR DONLEY for expressing the concerns of the Municipality of Anchorage. SENATOR JACKO moved to pass CS FOR SENATE BILL NO. 161(STA) (INTEREST RATES: JUDGMENTS/TAXES/ROYALTIES) from committee with individual recommendations. SENATOR DONLEY objected. SENATOR DONLEY said he would have no problem with moving Section 2, but he thought there should be more public input on the remainder of the bill. He reviewed areas of concern in the legislation and suggested the legislation be revised over the interim to give a more comprehensive assessment of the goals for the legislation. SENATOR DONLEY suggested removing Section 2 and sending it on as a separate bill. Before a vote was completed, SENATOR JACKO withdrew his motion to move SB 161. SENATOR TAYLOR thought Section 1 was good, also, and suggested that those members wishing to make changes, to bring some prepared amendments next Monday. There was agreement to this. There being no further business to come before the committee, the meeting was adjourned at 3:31 p.m.