Legislature(1995 - 1996)

05/03/1995 01:43 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                   SENATE JUDICIARY COMMITTEE                                  
                          May 3, 1995                                          
                           1:43 p.m.                                           
  MEMBERS PRESENT                                                              
 Senator Robin Taylor, Chairman                                                
 Senator Lyda Green, Vice-Chairman                                             
 Senator Mike Miller                                                           
  MEMBERS ABSENT                                                               
 Senator Al Adams                                                              
 Senator Johnny Ellis                                                          
  COMMITTEE CALENDAR                                                           
 Confirmation Hearings:  Commission on Judicial Conduct; Patrick               
 Brown, Joann Holmes, Arthur Peterson                                          
 CS FOR HOUSE BILL NO. 38(JUD) am                                              
 "An Act relating to criminal sentencing; relating to good time                
 credit; relating to the availability for good time credit for                 
 offenders convicted of certain first degree murders; relating to              
 definite sentences, parole, good time credit, pardon, commutation             
 of sentence, modification or reduction of sentence, reprieve,                 
 furlough, and service of sentence at a correctional restitution               
 center for offenders with at least three serious felony                       
 convictions; and amending Alaska Rule of Criminal Procedure 35."              
 CS FOR HOUSE BILL NO. 274(JUD)                                                
 "An Act relating to the state's tuberculosis control program; and             
 providing for an effective date."                                             
 CS FOR HOUSE BILL NO. 120(FIN)                                                
 "An Act relating to public employers defending and indemnifying               
 public employees and former public employees with respect to claims           
 arising out of conduct that is within the scope of employment."               
 CS FOR HOUSE BILL NO. 158(FIN) am(ct rls pfld)(efd fld)                       
 "An Act relating to civil actions; amending Alaska Rule of Civil              
 Procedure 95."                                                                
  PREVIOUS SENATE COMMITTEE ACTION                                             
 HB 38 - No previous Senate action to report.                                  
 HB 274 - No previous Senate action to report.                                 
 HB 120 - No previous Senate action to report.                                 
 HB 158 - No previous Senate action to report.                                 
  WITNESS REGISTER                                                             
 Patrick Brown, Commissioner-designee                                          
 711 Gaffney Rd.                                                               
 Fairbanks, AK  99701                                                          
 Joanna Holmes, Commissioner-designee                                          
 Judicial Conduct Commission                                                   
 310 K St., Room 301                                                           
 Anchorage, AK  99501-2064                                                     
 Art Peterson, Commissioner-designee                                           
 350 N. Franklin St.                                                           
 Juneau, Alaska  99801                                                         
 Patty Swenson                                                                 
 Legislative Aide                                                              
 Alaska State Capitol                                                          
 Juneau, Alaska  99811-1182                                                    
  POSITION STATEMENT:  Testified for sponsor of HB 38                          
 Barbara Brink                                                                 
 Public Defender Agency                                                        
 Dept. of Administration                                                       
 900 W. 5th Ave., Suite 200                                                    
 Anchorage, AK  99501-2090                                                     
  POSITION STATEMENT:    Testified in opposition to HB 38                      
 Brant McGee                                                                   
 Office of Public Advocacy                                                     
 Dept. of Administration                                                       
 900 W. 5th Ave., Suite 525                                                    
 Anchorage, AK  99501-2090                                                     
  POSITION STATEMENT:    Testified in opposition to HB 38                      
 Representative Con Bunde                                                      
 Alaska State Capitol                                                          
 Juneau, Alaska  99811-1182                                                    
  POSITION STATEMENT:    Sponsor of HB 38                                      
 Margot Knuth                                                                  
 Assistant Attorney General                                                    
 P.O. Box 110300                                                               
 Juneau, AK  99811-0300                                                        
  POSITION STATEMENT:    Testified on HB 38                                    
 Margaret Berck                                                                
 Alaska Civil Liberties Union                                                  
 227 7th St.                                                                   
 Juneau, Alaska  99801                                                         
  POSITION STATEMENT:    Testified in opposition to HB 38                      
 Jerry Shriner                                                                 
 Special Assistant                                                             
 Department of Corrections                                                     
 240 Main St. Suite 700                                                        
 Juneau, AK  99801                                                             
  POSITION STATEMENT:    Testified on HB 38                                    
 Gail Voigtlander                                                              
 Assistant Attorney General                                                    
 1031 W. 4th Ave., Suite 200                                                   
 Anchorage, AK  99501-1994                                                     
  POSITION STATEMENT:  Testified on HB 120                                     
 Stephanie Galbraith                                                           
 Brad Thompson                                                                 
 Division of Risk Management                                                   
 P.O. Box 110218                                                               
 Juneau, AK  99811-0218                                                        
 POSITION STATEMENT:    Answered questions on HB 120                           
 Kevin Ritchie                                                                 
 Alaska Municipal League                                                       
 217 Second St., Suite 200                                                     
 Juneau, Alaska  99801                                                         
  POSITION STATEMENT:    Testified in support of HB 120                        
 Elmer Lindstrom                                                               
 Special Assistant                                                             
 Department of Health & Social Services                                        
 P.O. Box 110601                                                               
 Juneau, Alaska  99811-0601                                                    
  POSITION STATEMENT:  Testified in support of HB 274                          
 Dick Cattenaugh                                                               
  POSITION STATEMENT:  Testified in support of HB 158                          
 Daniella Loper                                                                
 Legislative Aide                                                              
 Alaska State Capitol                                                          
 Juneau, Alaska  99811-1182                                                    
  POSITION STATEMENT:  Gave a sectional analysis of HB 158                     
 ACTION NARRATIVE                                                              
  TAPE 95-29, SIDE A                                                           
 Number 001                                                                    
  CHAIRMAN ROBIN TAYLOR  noted a quorum was not present, however               
 testimony would be taken and absent committee members would be                
 referred to the record.                                                       
 PATRICK BROWN, Commissioner-designee to the Commission on Judicial            
 Conduct, discussed his background.  He has been a practicing                  
 attorney in Fairbanks for 20 1/2 years, and is seeking                        
 reappointment to his present seat on the Commission.  He has served           
 on the Commission for eight years, and feels qualified to continue            
 to serve.                                                                     
 SENATOR TAYLOR commented he is aware of Mr. Brown's professional              
 record.  He thanked Mr. Brown for his willingness to serve.                   
 SENATOR GREEN asked what the function of the Alaska Commission on             
 Judicial Conduct is.  MR. BROWN replied the Commission was                    
 established as part of the Alaska Constitution to review complaints           
 from the public and attorneys concerning sitting judges at the                
 supreme, superior, and district court levels.  The Commission                 
 cannot hear complaints regarding magistrates or tribal judges.  The           
 Commission investigates violations of the Judicial Conduct Code and           
 can also initiate investigations.                                             
 JOANNA HOLMES, Commissioner-designee, has been involved in bush               
 justice since the early 1970's as an employee of the Alaska                   
 Federation of Natives.  At that time she served as a member of  a             
 Governor's Task Force on Children.  In 1989-93 she served as a                
 member of the Alaska Sentencing Commission.  She believes her                 
 experience working in rural areas in both criminal and civil                  
 justice will enable her to do a good job.                                     
 Number 105                                                                    
 SENATOR TAYLOR thanked Ms. Holmes for her testimony.                          
 ART PETERSON, Commissioner-designee, highlighted his background.              
 His experience as a legislative attorney, assistant attorney, and             
 private practice attorney has given him a variety of perspectives             
 on the Alaska government and court system.  He believes the                   
 Commission is important, and he has always been committed to the              
 idea of the independence and integrity of the judicial system.                
 When the public perceives wrongdoing, it is essential to have a               
 body to investigate the situation and make recommendations to the             
 Supreme Court.                                                                
 SENATOR GREEN commented serving on the Commission must be extremely           
 difficult.  MR. PETERSON responded at times there are very                    
 difficult issues that come before the Commission, however the                 
 majority of complaints are handled by staff.                                  
 Number 147                                                                    
 SENATOR TAYLOR stated a large percentage of the cases appearing               
 before the Commission are filed by disgruntled litigants who are              
 trying to find an excuse for the reason they lost a case.  For the            
 disgruntled litigants with valid causes, however, it is incumbent             
 upon the Commission to investigate and use a great deal of                    
 discretion in the manner in which the task is approached.  He                 
 stated he is somewhat suspect of a star chamber established                   
 primarily to act as both prosecutor and tryer of fact.  Because               
 that responsibility is so huge, it is a tremendous commendation               
 that Commission members have always comported themselves very                 
 professionally.  He added the same system is used on the                      
 legislative level with the establishment of the Legislative Ethics            
 SENATOR TAYLOR thanked all of the participants for testifying.                
         HB  38 SENTENCING;3RD SERIOUS FELONY OFFENDER                        
 PATTY SWENSON, staff to Rep. Bunde, sponsor of the measure,                   
 described HB 38.  The bill provides a 40-99 year prison sentence              
 for third-time class A felons.  Discretionary parole and good time            
 sentence reductions would not be available to those offenders,                
 however they could request, from the court, a reduction in sentence           
 after they have served the greater of one-half of their definite              
 term or 30 years.  HB 38 gives the prosecutors some discretion in             
 the decision to pursue third-strike sentencing to avoid unjust                
 results in certain cases where the evidence may be weak.  The bill            
 also allows prosecutors some flexibility to proceed with normal               
 presumptive sentencing provisions when necessary.  The legislation            
 is crafted to keep costs to a minimum.                                        
 Number 225                                                                    
 BARBARA BRINK, Deputy Public Defender, offered the following                  
 insight into the impact of HB 38 on the Public Defender Agency.               
 HB 38 creates a class of defendants that can be subjected to a 40-            
 99 year mandatory term.  Because it is without the possibility of             
 parole, or a good-time provision, the bill creates the most severe            
 penalty available in the states.  Increased litigation will result,           
 increasing costs to the Public Defender Agency in the following               
 three ways.  First, a person charged with a third-strike felony               
 will want to go to trial.  Unlike the Department of Corrections,              
 which anticipates a fiscal impact down the road, the Public                   
 Defender Agency will be severely impacted immediately.  Second,               
 because of the consequences, these trials will involve extended               
 investigations, lengthy trials, and expert witnesses.  These cases            
 will require the most skilled and experienced litigators and                  
 therefore the most expensive attorneys.  Before a case can go to              
 trial, the Public Defender Agency will have to do a collateral                
 attack:  it will have to scrutinize the prior strikes of the                  
 defendant to ensure constitutional validity.  That will require               
 review of volumes of material from previous cases.  If any of the             
 prior convictions were out-of-state, travel will be required, as              
 well as contractual expenses, and appearances in court in other               
 states if court action is necessary there.  For the prior strike to           
 count, the felony would have to have been committed in Alaska,                
 there must have been a plea or constitutionally valid trial, and              
 there must have been competent counsel.  Third, more felony                   
 convictions will end up in trial, since nobody will want a first              
 strike on their record: increased litigation will also arise in the           
 first and second strikes.                                                     
 MS. BRINK continued.  Currently 94 percent of all felony cases                
 result in retrial.  Even a single trial is an extreme drain on                
 resources.  For the District Attorney's Office, law enforcement,              
 courts, judges, clerks, bailiffs, juries, etc., a single trial can            
 consume weeks of time.  The system is not capable of allowing every           
 single criminal defendant to go to trial.  With the three-strike              
 law, the system would collapse upon itself.  Plea bargaining                  
 results in convicts serving long jail sentences without the need              
 for a trial.  Three-strikes legislation has been used in other                
 states without success.  In California, the legislation has been on           
 the books for one year and is straining the criminal justice system           
 to the point of deadlock.  It is clogging court calendars and                 
 forcing fewer prosecutions of other crimes.  Previously in                    
 California, 90 percent of all felony cases were plea-bargained; now           
 the number is less than 14 percent.  The California three-strike              
 law is broader than HB 38, the third strike can be any felony                 
 offense, however the California experience illustrates that the               
 policy makers that passed the legislation consistently                        
 underestimated the impact the legislation would have.  The                    
 expansion of HB 38, from 40-99 years, means that more cases will be           
 filed than anticipated.  Prosecutors tend to save 99 year sentences           
 for the worst cases.  Under HB 38, the prosecutor has to decide by            
 arraignment in Superior Court whether it is a three-strike case.              
 With violent crime rates lower, and little or no growth in the                
 overall crime rate over the past two decades, the impetus for HB 38           
 needs to be examined.  The largest number of inmates are 18-24 year           
 old males, without high school diplomas, and unemployed.  Education           
 and prevention methods need to be discussed as alternatives.                  
 Number 353                                                                    
 SENATOR TAYLOR announced the committee would move the calendar back           
 to confirmations, since Senator Miller arrived.  SENATOR GREEN                
 moved the Senate Judiciary confirmation report be sent out of                 
 committee with individual recommendations.  There being no                    
 objection, the motion carried.                                                
 Number 370                                                                    
 BRANT McGEE, director of the Office of Public Advocacy, concurred             
 with Ms. Brink's testimony.  He reiterated that each case will go             
 to a lengthy trial and will not be subject to charge or plea                  
 bargaining.  Prior convictions will be attacked by the defense in             
 an attempt to eliminate a prior felony conviction. The financial              
 impact on the Office of Public Advocacy will be substantial since             
 it is likely the Public Defender Agency will be representing many             
 of these people.                                                              
 SENATOR TAYLOR asked if the Public Defender Agency will have the              
 choice of whether to make a collateral attack, if issues are                  
 available on previous convictions, or to plea bargain instead.                
 MR. McGEE answered under Title 18 and the Rules of Professional               
 Conduct, the Public Defender Agency is required to represent                  
 zealously any defendant whose case it is given by the court system.           
 The Public Defender Agency must do what is best for the client, and           
 a collateral attack will be one of the only ways to relieve the               
 burden of the punishment.  Frivolous attacks will not be pursued,             
 but to determine whether a collateral attack is frivolous would               
 require an exhaustive review of the prior felony case.                        
 Number 410                                                                    
 SENATOR TAYLOR stated he wanted, for the record, an explanation of            
 the options available under this legislation, from people working             
 in the field.  He expressed concern that people who complain the              
 Public Defender Agency is clogging up the courts assume the Agency            
 has a choice in how to represent the defendant.                               
 MR. McGEE clarified the Public Defender Agency attorneys do not               
 have any choices if they want to continue to practice law in                  
 Alaska.  They have a constitutional and ethical responsibility to             
 do whatever they can for their client.  SENATOR TAYLOR asked if an            
 attorney would be disbarred for not doing whatever he/she could.              
 MR. McGEE replied a second lawyer would be hired to attack the                
 first lawyer's performance, the costs skyrocket, and the courts are           
 tied up even longer.                                                          
 Number 442                                                                    
 REPRESENTATIVE CON BUNDE provided the following testimony.  HB 38             
 will cost money, but those costs are to protect citizens.  The                
 preference of the Public Defender Agency to plea bargain serious              
 offenses, and allow those people back out on the streets, has                 
 created the revolving door problem.  HB 38 allows for prosecutorial           
 discretion, and will only be used in the most serious of cases.  He           
 discussed the discrepancy in the projected number of cases by                 
 different agencies, and in the fiscal notes.  Supporters of the               
 issue are willing to pay the price to keep the most violent felons            
 off the street.  They are not capable of being rehabilitated, and             
 have been in the system twice already for five to fifteen years.              
 As existing laws apply, they would go to jail for another 12 1/2              
 years for a third conviction.  As the Department of Corrections'              
 fiscal note indicates, there would be no fiscal impact for that               
 time period since those offenders would be in jail during that time           
 anyway.  About 250 people are in jail for third felony convictions,           
 and about 150 are in jail for subsequent felony convictions.  He              
 questioned the expense of letting these people back into society.             
 Habitual criminals take a substantial amount of money out of the              
 public coffer, at the expense of the public.  That expense does not           
 include the human tragedy they cause.                                         
 Number 486                                                                    
 SENATOR TAYLOR commented his concern is that the legal systems in             
 California and Washington State are breaking down because of this             
 legislation.  The result may be that fewer people would be                    
 prosecuted because of a lack of district attorneys.  Prison                   
 overcrowding is already problematic.                                          
 REPRESENTATIVE BUNDE reminded Senator Taylor that HB 38 is very               
 different from the California and Washington laws.  SENATOR TAYLOR            
 noted the bill limits the provisions to class A felons, and has a             
 ten year time limit, which are commendable provisions.  However, he           
 indicated professionals in the criminal justice system have no                
 choice in the matter, since it removes discretion from the                    
 prosecutor and defender in the ability to bargain.                            
 Number 509                                                                    
 REPRESENTATIVE BUNDE responded the bill does allow for                        
 prosecutorial discretion, in that prosecutors are allowed to pick             
 and choose the cases that are appropriate.  SENATOR TAYLOR asked if           
 there would be significant restrictions placed on prosecutors when            
 choosing.  REPRESENTATIVE BUNDE stated he believes the discretion             
 would lie solely with the prosecutor as to whether the evidence and           
 severity of the case warrants this charge.  The prosecutor is                 
 limited by the type of crime when applying this sanction.  After              
 reviewing the case, the prosecutor would notify the court the                 
 habitual offender option was being sought.                                    
 Number 526                                                                    
 SENATOR TAYLOR applauded Rep. Bunde for introducing the                       
 legislation, as it is a necessary tool, although he is concerned              
 the ramifications of the bill are not yet understood.  He added the           
 idea is not new, most Western states had a habitual criminal law on           
 the books for years and almost all of those states rejected that              
 law.  Many of the reasons for rejection were corrected in HB 38.              
 Number 536                                                                    
 MARGOT KNUTH, Assistant Attorney General, stated the Department of            
 Law favors the concept of treating repeat offenders more harshly,             
 however the fiscal consequences of HB 38 are considerable.  Section           
 15 removes the good time provision.  The Department of Law believes           
 there are two advantages to "good time."  First, it motivates good            
 behavior; its elimination will be a disincentive to cooperative               
 behavior.  Second, the amount of time accumulated under good time             
 upon release, is time the person is under supervision by the                  
 Department of Corrections.  This supervision cannot exist unless              
 there has been some credited time.  The supervision is a good way             
 to reintroduce a parolee into society.  For those reasons, the                
 Department of Law would propose that Section 15 not be adopted.               
 Number 566                                                                    
 SENATOR TAYLOR asked Ms. Knuth if she found anything in Ms. Brink's           
 or Mr. McGee's testimony she would disagree with, from her                    
 experience.  MS. KNUTH answered she did not; and agreed HB 38 will            
 prompt more defendants to go to trial because he/she would have               
 nothing to lose by doing so, and that it will require collateral              
 attacks on prior felonies.                                                    
 Number 586                                                                    
 SENATOR TAYLOR asked Ms. Knuth to describe how an attorney would              
 attack a conviction that had been established and firm for five               
 years.  MS. KNUTH stated the attorney would file a special pleading           
 that initiates a new case, the purpose of which is to review the              
 case for constitutional violations that may have occurred in the              
 course of the prosecution.  If any violations did exist, there                
 would be a basis for vacating that conviction.  A bill introduced             
 by the Governor puts some restraints on repeat re-examinations of             
 what the public considers to be final convictions.                            
 SENATOR TAYLOR gave the following example.  A defendant pleads                
 guilty to a second felony offense, and after serving the sentence,            
 is picked up on another felony charge seven years later.  The                 
 current attorney notes the defendant is Mexican, does not speak               
 English very well, and was held in jail for three days.  The                  
 attorney will challenge the prior conviction based on the                     
 defendant's Miranda rights.                                                   
 TAPE 95-29, SIDE B                                                            
 SENATOR GREEN asked if the Department of Law is assuming the "good            
 time" provision would provide an incentive for good behavior for a            
 third time felon.  MS. KNUTH commented it is true that even a third           
 time offender with a 50 year sentence believes that "good time"               
 behavior will lessen the sentence by one-third.                               
 SENATOR TAYLOR stated he disagrees with the "good time" concept as            
 it was invented to free up prison space.  At a sentencing course at           
 a judges' college he attended, with international participants,               
 sentencing procedures were compared.  In Australia a 20 year                  
 sentence means the prisoner will serve 20 years; if prisoners                 
 misbehave, their sentences are extended.  In Alaska, prisoners are            
 unpunished by early release, for crimes they already committed.               
 Number 557                                                                    
 REP. BUNDE agreed with Senator Taylor's assessment of the "good               
 time" provision, and noted that a person convicted of sexual abuse            
 of a minor could serve as little as five years and be out on "good            
 time."  The notion that the parole system is successful is a                  
 misperception.  These people are psychopaths and need to be                   
 isolated from the general population so that more people are not              
 SENATOR TAYLOR asked for an estimate of the difference between                
 current sentences for third time class A felons, and the sentence             
 that would be received under HB 38.  REP. BUNDE affirmed the                  
 average sentence for a third time serious felon is 12 1/2 years.              
 Under HB 38, the convict would serve at least one-half, or 30                 
 years, of the 40 - 99 year sentence.                                          
 MS. KNUTH added the 12 1/2 year sentence is correct if a person is            
 convicted of a single class A felony offense which has a maximum              
 term of 20 years.  Usually these defendants have committed multiple           
 offenses with a series of consecutive sentences.  The group most              
 likely to fit within the parameters of HB 38 are serving 30 or more           
 years already through consecutive sentencing on multiple                      
 SENATOR TAYLOR asked if that is why the fiscal note from the Dept.            
 of Corrections is as low as it is.  MS. KNUTH replied                         
 affirmatively.  SENATOR TAYLOR asked if HB 38 would only apply to             
 prospective felons.  REP. BUNDE answered HB 38 has a ten year                 
 retroactive clause.                                                           
 Number 522                                                                    
 SENATOR GREEN asked on which conviction for those convicts                    
 currently serving long sentences, the sentence was imposed (the               
 third or greater than third).  MS. KNUTH explained it is on several           
 convictions entered at the same time for a third time offender.               
 There may be multiple victims, typically a sex offender commits               
 several offenses before they are apprehended and charged.  If                 
 convicted on all charges, part of the sentences are consecutive.              
 SENATOR GREEN clarified it may be the person's first appearance in            
 court but that person has been accused of several crimes.                     
 SENATOR TAYLOR referred to the retroactive clause on page 8 and               
 clarified it only is retroactive for 10 years.  REP. BUNDE added it           
 only applies to three separate class A felony convictions,                    
 therefore it would not apply to a person convicted of raping three            
 people as one charge.  He stated a person convicted at the age of             
 25 would be free at age 45, under current law, yet research shows             
 a person in their 60's is less inclined to violence.                          
 Number 482                                                                    
 SENATOR TAYLOR discussed a case in Florida in which a 17 year old             
 youth plea bargained and received a 44 year sentence for a first              
 offense.  He was one of the people who shot the German tourists.              
 The choice was to plea bargain and serve 44 years, or be prosecuted           
 under the felony murder rule and face the death penalty.                      
 Number 464                                                                    
 MARGARET BERCK, representing the American Civil Liberties Union               
 (ACLU), gave the following testimony.  The ACLU is opposed to HB 38           
 for several reasons.  This approach would be costly and is not the            
 best use of limited expenditures in the criminal justice system.              
 In response to comments made by previous witnesses, regarding a               
 potential increase in the number of trials, she noted a previous              
 client she represented chose to go to trial last December to                  
 prevent a "strike" in anticipation that HB 38 might pass.  ACLU               
 believes judges should have independence in judging individuals               
 that come before them, to allow judges to take into account                   
 individual qualities when fashioning a sentence.  HB 38 will cause            
 greater resources to be applied to a smaller group of people.                 
 Aside from the increase in the number of trials, plea bargaining              
 may be used to obtain an offense that would not be considered a               
 "strike."  She discussed another client who had prior felony                  
 convictions, although not class A felonies, who was sentenced to 61           
 years, with 20 years suspended.  She commented HB 38 essentially              
 sets up a very specific category of offenders and suggests                    
 mandatory sentencing ranges for those individuals, and may allow              
 defense attorneys to argue for lesser sentences for other serious             
 offenders.  HB 38 may apply to other bodies of case law in                    
 unforeseen ways.  She discussed the provision which prevents                  
 sentence modification unless one-half or 30 years of the term is              
 served.  She discussed a case of a terminally ill prisoner and                
 explained HB 38 would preclude a judge from allowing relief in such           
 a case.                                                                       
 Number 357                                                                    
 SENATOR TAYLOR noted that provision is in Section 6, and commented            
 the result of deleting that section would be the deletion of the              
 one-half or 30 year provision, therefore a language change would be           
 necessary.  The intent would be to allow the court to make a                  
 discretionary choice for extraordinary circumstances.  MS. BERCK              
 stated she made her motions under Alaska Criminal Rule 35B.                   
 SENATOR TAYLOR asked Ms. Berck her opinion of the "good time"                 
 provision.  MS. BERCK stated she would support providing inmates              
 with motivation to comply with rules and regulations within the               
 correctional setting, however she hoped a judge would take into               
 account the "good time" allowance when determining the length of a            
 sentence, or consecutive sentences.                                           
 Number 296                                                                    
 SENATOR GREEN questioned the solution to repeat offenders who                 
 continue to commit serious crimes, if the three strikes approach is           
 not used.  MS. BERCK noted this approach spends a large amount of             
 money on a small segment of offenders, albeit serious offenders.              
 The increase in crime is caused by the young male population, and             
 she feels tougher sentences initially, for crimes of a less serious           
 nature, might be a successful alternative.                                    
 Number 248                                                                    
 JERRY SHRINER, Special Assistant with the Dept. of Corrections,               
 discussed the department's zero fiscal note.  He pointed out that             
 given the best of circumstances, if offenders were able to be                 
 released at the end of 30 years, the population covered by this               
 bill would reach 450 people in 30 years.  That number is higher               
 than current prison capacity in the state.  Under current                     
 sentencing practices, the same number of people will be in prison             
 in 12 1/2 years, as that number tends to remain constant.  The                
 increase under HB 38 to 450 inmates in 30 years would be in                   
 addition to other increases in the prison population that may                 
 occur.  A 450-bed medium to maximum security prison would cost at             
 least $80 million in current dollars to construct, and $10-$12                
 million per year in operating costs.                                          
 MR. SHRINER continued.  Mandatory sentencing law studies have been            
 conducted in several states and have yielded the following                    
 conclusions.  In Delaware, with respect to drug and violent crimes,           
 incarcerating repeat offenders has had no effect on the rise in the           
 crime rate.  Other factors are fueling the increase in crime.  The            
 Pennsylvania Commission on Correctional Planning has recommended              
 all mandatory laws be repealed in favor of sentencing guidelines,             
 to give more flexibility to judges to consider individual                     
 characteristics.  In Oregon, a plan was adopted that recommended              
 that any new programs focus on probation, parole, and intermediate            
 sanctions.  The Campaign for an Effective Crime Policy, a national            
 organization comprised of 750 justice and correctional experts,               
 concluded the streets are not any safer as a result of mandatory              
 sentencing, and that the cost-effectiveness of incarcerating repeat           
 offenders, from any perspective, is questionable.  In states that             
 have studied their mandatory sentencing laws, they have studied               
 them from the standpoint of rising crime rates despite the                    
 incarceration of more habitual criminals.  They also extended the             
 studies to determine to what extent those sentences act as a                  
 deterrent to committing a crime.  While 65 percent of offenders               
 noted they were well aware of mandatory sentencing prior to their             
 offense, only 25 percent actually considered it when making the               
 decision to commit the crime.                                                 
 Number 157                                                                    
 SENATOR TAYLOR asked Mr. Shriner to contact John Rees, of the                 
 Corrections Corporation of America.  That corporation owns the                
 correctional facility in Arizona that Alaska has contracted with.             
 The 500 bed facility took 5 1/2 months to complete at a cost of $14           
 million.  He stated it would make no sense to build a prison in               
 Alaska for $80 million.  He asked Mr. Shriner what the cost of                
 housing inmates at Spring Creek is.  MR. SHRINER replied it cost in           
 excess of $100 per day, per prisoner.  He pointed out state                   
 facilities in Arizona cost $43 per day, and private facilities cost           
 $59 per day.                                                                  
 SENATOR TAYLOR moved the adoption of a conceptual amendment that              
 would allow for judicial discretion to release prisoners under                
 unusual circumstances (as proposed by Ms. Berck), in Section 6,               
 page 3.  There was objection to the amendment.  The motion failed             
 with Senators Green, and Miller voting "nay," and Senator Taylor              
 voting "yea."                                                                 
 SENATOR TAYLOR moved a second amendment suggested by MS. KNUTH, to            
 delete Section 15.  SENATOR GREEN objected to the motion.  The                
 motion failed with Senators Green and Miller voting "nay," and                
 Senator Taylor voting "yea."                                                  
 SENATOR MILLER moved CSHB 38 (JUD)am out of committee with                    
 individual recommendations.  There being no objection, the motion             
          HB 120 INDEMNIFICATION OF PUBLIC EMPLOYEES                          
 DANIELLA LOPER, staff to Representative Porter, sponsor of the                
 measure, gave the following testimony.  HB 120 requires the state             
 or a municipality to provide legal defense for their employees in             
 actions that occur during the scope of their employment.  Employers           
 would not be responsible for indemnifying acts of gross negligence            
 or intentional or willful misconduct.  Additionally, the employer             
 would also be excused from indemnification when the case involves             
 disciplinary, administrative or criminal matters brought against              
 the employee.  The implementation of HB 120 is already common                 
 practice, and most municipalities now indemnify their employees.              
 Teachers are indemnified under AS 14.12.090.  HB 120 is supported             
 by the Department of Law, and many other organizations.  A similar            
 house bill died in the Senate Rules Committee last year.                      
 TAPE 95-30, SIDE A                                                            
 GAIL VOIGTLANDER, assistant attorney general, testified from                  
 Anchorage.  She stated HB 120 is clear, and details scenarios when            
 employees would be covered.                                                   
 SENATOR TAYLOR asked if HB 120 sets up a new civil cause of action            
 on behalf of employees against employers.  MS. LOPER noted that               
 section was removed last year.  She explained page 3, line 3                  
 outlines how the employee would seek legal defense, and page 4,               
 line 8, describes how an employee would handle denial of                      
 SENATOR TAYLOR asked for clarification.  MS. LOPER replied the                
 employee would file for declaratory relief.  There are no                     
 guidelines at this time, which is costing the state money.                    
 Number 065                                                                    
 SENATOR TAYLOR asked how HB 120 will save the state money since               
 there is a letter agreement in place now.  MS. LOPER stated that is           
 common practice in most cases, but several witnesses testifying               
 before the House Judiciary Committee commented the state is                   
 spending a lot of money because nothing is outlined.                          
 SENATOR TAYLOR asked whether the state is being charged money to              
 defend employees it should not defend, or if the state is being               
 charged for litigation when employees sue for failure to defend.              
 MS. LOPER was unsure, but repeated if nothing is outlined, there              
 could be claims made against the employer by the employee.                    
 MS. VOIGTLANDER commented the bill does not create a new cause of             
 action, it merely sets forth, in statute, the public                          
 employers'/public employees' responsibilities.                                
 SENATOR TAYLOR questioned the need to put in statute, what has been           
 common practice for years.  He stated various labor unions have               
 negotiated various deals with the state, and there is now a hold              
 harmless provision in the bill that says if the labor negotiators             
 negotiated a better deal, that would supersede the requirements in            
 the bill.                                                                     
 Number 203                                                                    
 STEPHANIE GALBRAITH, assistant attorney general, testified in                 
 support of HB 120.  It clarifies the obligations between public               
 employers and public employees.  As litigation increases,  more               
 employees are being individually named in lawsuits.                           
 SENATOR TAYLOR asked Ms. Galbraith if she has an indemnification              
 letter from her employer.  MS. GALBRAITH answered no.  [The                   
 remainder of Ms. Galbraith's testimony was indiscernible.]                    
 BRAD THOMPSON, director of the Division of Risk Management,                   
 explained the Division funds a self-insurance program for defending           
 and indemnifying state employees, both those in the collective                
 bargaining unit, and others without such contractual protections.             
 Among those in the collective bargaining unit, there are several              
 contracts with differing provisions.  HB 120 codifies existing                
 policies and procedures that the state does, and has provided, and            
 is more explicit in employee participation.  He described the                 
 state's policy regarding the scope of responsibility toward                   
 Number 272                                                                    
 SENATOR TAYLOR asked how HB 120 will save the state money if it               
 only codifies current practice.  MR. THOMPSON did not believe there           
 would be a significant savings, however it might help avoid the               
 expense of a second counsel to resolve legal conflicts between the            
 defense and counsel.                                                          
 SENATOR GREEN asked if this would be similar to errors and                    
 omissions coverage in other settings.  MR. THOMPSON stated a                  
 professional practitioner may purchase a commercial E&O policy that           
 contains similar terms and conditions.                                        
 SENATOR GREEN asked if private employees would be likely to have              
 such coverage.  MR. THOMPSON replied the private employer, to                 
 protect his/her interests, most likely has procured a form of                 
 liability insurance.                                                          
 SENATOR GREEN asked about self-insurance.  MR. THOMPSON noted the             
 state self insures for the first $5 million.  In prior years the              
 state self-insured for differing amounts.                                     
 SENATOR TAYLOR asked Mr. Thompson how long he has been with the               
 Division of Risk Management.  Mr. Thompson replied since January of           
 1981.  SENATOR TAYLOR asked why the state is self-insured.  Mr.               
 Thompson stated it is more cost effective to do so.  SENATOR TAYLOR           
 commented that anyone who has the money runs away from that                   
 industry as quickly as possible and self insures.  MR. THOMPSON               
 added the state procures significant catastrophe insurance.                   
 Number 336                                                                    
 SENATOR GREEN asked if this bill was driven by labor negotiations.            
 MR. THOMPSON believed the bill was conceived to address those                 
 employees named individually in civil litigation, as public                   
 employees, especially those without a labor agreement that                    
 addresses the defense practices provided to them.                             
 SENATOR GREEN asked if the original practice of an employer                   
 covering an employee resulted from a labor agreement.  MR. THOMPSON           
 replied it is normal for the employer to be liable for the act of             
 the employee.                                                                 
 SENATOR TAYLOR stated that his main concern is categorizing, and              
 attempting to guess, all of the different ramifications that may              
 occur in the employee/employer relationship.  He repeated his                 
 concern that codifying something that has been in practice, with no           
 benefit to each side, or cost saving, could create unforeseen                 
 MR. THOMPSON explained the vast majority of states have specific              
 legislation providing similar protections to their employees.  Many           
 states extend those protections down to the municipal government              
 structure.  He did not believe HB 120 would increase the exposure             
 for public employers; it provides security for the employee.  The             
 state has operated a sophisticated self insurance program for                 
 years, however municipalities have not.  A civil action against a             
 municipal employee is rare, and is alarming when it occurs.                   
 SENATOR TAYLOR discussed three lawsuits against employees of his              
 community in the past year.  In each case, the insurance carriers             
 had written letters of reservation against each of those employees            
 and the city, reserving the right to make a claim against them.               
 The insurance company then selected the attorney and decided when             
 and if the cases would be settled.  He did not see how HB 120 would           
 be beneficial to his community.                                               
 KEVIN RITCHIE, representing the Alaska Municipal League, testified            
 in favor of HB 120.  The bill reinforces the concept that if an               
 employee was not involved in any wrongdoing, the employer will                
 defend him/her.  The way it can save time and money is by                     
 reassuring peace officers, and other people who have to make very             
 important decisions, that they will be defended.  In the case of              
 insurance in small communities, the employee who does not have the            
 assurance of coverage may hire his/her own attorney.  That creates            
 an additional legal expense for the employee, and in some cases               
 pits the employee against the employer.  He added the Alaska                  
 Municipal League provides an insurance pool for small communities.            
 SENATOR GREEN asked about the University of Alaska.  MR. THOMPSON             
 noted it is self insured to a lesser level than the state.                    
 Number 430                                                                    
 SENATOR MILLER moved HB 120 out of committee with individual                  
 recommendations.  SENATOR TAYLOR objected.  The motion failed with            
 Senators Adams, Taylor, and Green voting "nay," and Senator Miller            
 voting "yea."                                                                 
                  HB 274 TUBERCULOSIS CONTROL                                 
 The next item on the agenda was CSHB 274 (JUD).  ELMER LINDSTROM,             
 special assistant to Commissioner Purdue in the Dept. of Health &             
 Social Services (DHSS), testified.  HB 274 was introduced at the              
 request of the Governor, as the result of several incidents this              
 past year relating to the recent outbreak of tuberculosis in                  
 Alaska.  In these incidents, highly contagious individuals were               
 unable, or unwilling, to take their medication.  Under existing               
 statute, DHSS sought to require those individuals to take the                 
 medication.  The existing statute does provide for quarantine.  In            
 one instance, DHSS was taken to court on the premise the existing             
 law is deficient and does not provide the necessary due process               
 guarantees for an individual subject to quarantine.  At the advice            
 of the Department of Law, HB 274 was drafted to establish due                 
 process rights, and allow DHSS to quarantine people in rare                   
 instances where people are unable or unwilling to take medication.            
 An identical bill was introduced in the Senate (SB 138), and was              
 heard in the Senate HESS committee.  Identical committee changes              
 were made to both versions.  The two changes by the House Judiciary           
 committee were to eliminate any reference to criminal penalties for           
 individuals subject to quarantine.  Second, an individual subject             
 to these proceedings would be allowed to seek that any court                  
 proceedings be closed door proceedings.                                       
 SENATOR TAYLOR felt CSHB 274 (JUD) to be a fine piece of                      
 legislation, but expressed concern that people can be put in jail             
 for tuberculosis, but not for intentionally infecting others with             
 SENATOR GREEN moved CSHB 274 (JUD) out of committee with individual           
 recommendations.  There being no objection, the motion carried.               
                    HB 158 CIVIL LIABILITY                                    
 SENATOR TAYLOR announced he would take testimony on the six court            
 rule changes, requested by Senator Adams.  He first took                      
 teleconference testimony.                                                     
 Number 521                                                                    
 DICK CATTENAUGH testified via teleconference from Anchorage.  He              
 stated HB 158 is supported by many organizations statewide.  He               
 discussed ways in which the current law hurts small businesses.               
 Punitive damages are not covered by insurance policies, and can               
 potentially destroy a firm and the individual owners of a firm.               
 This can cause small firms to settle rather than fight a case, to             
 minimize costs.  In a case his firm was involved in, members did              
 not want to put their personal net worths in jeopardy to prove they           
 did no wrong.                                                                 
 Number 565                                                                    
 DANIELLA LOPER, staff to Representative Porter, sponsor of HB 158,            
 provided the highlights of HB 158.                                            
 HB 158 creates a more equitable distribution of the cost and risk             
 of injury and will reduce costs associated with the civil justice             
 system in that it will eliminate duplicate recoveries for injured             
 plaintiffs.  It will establish thresholds for damage awards in                
 order to allow predictability of liability exposure.  It will also            
 stabilize the rapidly escalating costs of health care associated              
 with civil liability.  It will require one-half of punitive damages           
 awarded by a court be deposited to the general fund since punitive            
 damages were never established to compensate the injured plaintiff,           
 but rather to punish the wrongdoer.  The Municipality of Anchorage            
 supports HB 158.                                                              
 MS. LOPER gave the following sectional analysis.                              
 Section 2 deals with the statute of repose which prevents a lawsuit           
 from being filed after eight years.  Most states offer a statute of           
 repose between four and six years.  Exclusions to the statute of              
 repose are as follows: product liability; hazardous substances;               
 defective products; intentional acts of gross negligence; fraud or            
 fraudulent misrepresentation; intentionally concealed acts; or                
 undiscovered presence of a foreign body that has no therapeutic or            
 diagnostic purpose.                                                           
 Number 595                                                                    
 SENATOR TAYLOR commented he was contacted by a woman representing             
 300 breast implant recipients.  They are very concerned about                 
 potential health hazards resulting from those implants.  He asked             
 MS. LOPER how she would respond to those concerns, since many of              
 those women received the implants more than eight years ago.                  
 MS. LOPER assumed breast implants would be considered a defective             
 product.  SENATOR TAYLOR noted the problems could also be caused by           
 medical malpractice.                                                          
 TAPE 95-30, SIDE B                                                            
 MS. LOPER believed the defective product exclusion under the                  
 statute of repose would give that group an unlimited time in which            
 to file a lawsuit.                                                            
 MS. LOPER explained Section 3 makes a technical change suggested by           
 the Division of Legal Services.  Section 4 provides for two years             
 of accrual, the time from which an injury is discovered.                      
 Number 586                                                                    
 SENATOR TAYLOR asked if that provision would apply to women who had           
 Dalkon Shields.  MS. LOPER was unsure, but replied those products             
 would be considered defective products under the statute of repose,           
 therefore would be excluded.  SENATOR GREEN clarified the person              
 would have two years from the time symptoms appeared and the                  
 problem was discovered to file the suit, not two years from the               
 time the Dalkon Shield was inserted.  SENATOR TAYLOR noted he had             
 a client who had a Dalkon Shield inserted ten years prior, and had            
 given birth to two children, and had six miscarriages.  She had               
 been misdiagnosed for ten full years by 12 different physicians.              
 The problem was discovered after surgery.                                     
 MS. LOPER asked how the case turned out.  SENATOR TAYLOR replied              
 she found a contingency attorney to represent her against some very           
 large insurance companies.  MS. LOPER noted she was allowed to file           
 the claim, and HB 158 would not change that ability.                          
 MS. LOPER explained Section 5 limits the non-economic cap on                  
 damages to $500,000 unless there is disfigurement.  In most states,           
 the limitations on non-economic damages range anywhere from                   
 $250,000 to $400,000.  HB 158 has a two-tier system:  there is a              
 $300,000 cap on non-economic damages for pain and suffering, and if           
 the injury is substantially more serious (defined in the bill), the           
 cap would be $500,000 on non-economic damages.  An amendment                  
 adopted on the House floor allows each child and the spouse in a              
 family to file a claim for that amount.                                       
 SENATOR TAYLOR questioned page 5, line 11, which allows the                   
 $500,000 amount for a person who has third degree burns over one-             
 half or more of his/her body.  If the burns do not cover at least             
 one-half of a body, the limit would be $300,000.  He noted he had             
 third degree burns over 35 percent of his body 25 years ago, which            
 was an extremely painful experience.                                          
 MS. LOPER stated Senator Taylor's experience was unfortunate,                 
 however many quadriplegics and paraplegics support HB 158.  She               
 stated there must be some predictability to the system, and that              
 non-economic damages should not be treated as a lottery ticket.  A            
 jury does not have anything substantial upon which to base the                
 judgment, whether it is $300,000 or $500,000.  In most cases in the           
 state of Alaska, it is rare for non-economic damage awards to be              
 above $200,000.  She estimated in the past five years there have              
 probably been less than five awards of $500,000.                              
 Number 508                                                                    
 SENATOR TAYLOR asked what the purpose of Section 5 is, in light of            
 that fact.  MS. LOPER responded the purpose is to offer                       
 predictability to the system.  SENATOR TAYLOR questioned if the               
 five awards she referred to were a reaction to passion on the part            
 of the jury, rather than a meaningful decision.  MS. LOPER stated             
 that unlike economic damages, where there is a paper trail, and               
 include economic, medical, and wage costs, there is                           
 SENATOR TAYLOR asked how Section 5 provides any certainty.  MS.               
 LOPER replied that would occur by the limit of $500,000 for non-              
 economic damages.  SENATOR TAYLOR ascertained the predictability              
 would be in the fact that the plaintiff would not get an award from           
 the jury commensurate with the damages the jury should award.  He             
 asked if the five awards of $500,000 made by juries that went                 
 "nuts" over the past five years is the unpredictability HB 158                
 attempts to curtail.  MS. LOPER explained that any case that is               
 filed in which an injury occurred is open to the lottery ticket of            
 non-economic damages.  SENATOR TAYLOR disagreed.                              
 Number 475                                                                    
 MS. LOPER described Section 6, dealing with punitive damages.                 
 Section 6 codifies punitive damages as defined by the Alaska                  
 Supreme Court: outrageous conduct, including acts done with malice            
 or bad motives, or reckless indifference to the interest of another           
 person.  SENATOR TAYLOR asked, if that was the same standard of law           
 to which Mr. Cattenaugh and his firm were to be held, so that when            
 he made his decision about whether or not the firm was at risk for            
 a punitive damage award, his attorneys would have advised him that            
 the Alaska Supreme Court has determined it was outrageous conduct,            
 including acts done with malice or bad motives, or reckless                   
 indifference to the interest of another person.  He stated Section            
 6 does not change anything for Mr. Cattenaugh's firm concerning               
 punitive damages.  MS. LOPER stated that is correct, to the best of           
 her knowledge.  She stated there is no cap on punitive damages, but           
 a formula is offered.                                                         
 MS. LOPER explained the formula for punitive damages in Section 6             
 is three times the compensatory damages (the economic damages plus            
 non-economic damages), or $300,000, whichever is greater.  SENATOR            
 TAYLOR asked if a person had $1,000,000 in economic damages and               
 $300,000 in non-economic damages, how much he/she could collect in            
 punitive damages.  MS. LOPER calculated the punitive damages could            
 be $3.9 million.  If the injured person was awarded no economic or            
 non-economic damages, the amount could be $300,000.  She explained            
 of the $3.9 million punitive award, one-half would go to the state,           
 the other one-half would go to the injured party.                             
 Number 439                                                                    
 SENATOR TAYLOR questioned the incentive for an injured party to               
 request punitive damages, if one-half is given to the state.  He              
 asked if the state would pay for one-half of the attorney fees to             
 get the punitive damage award.  MS. LOPER replied the state has               
 absolutely no standing, as stated in the bill, because punitive               
 damages were never established to compensate the injured party, but           
 to punish the wrongdoer.  SENATOR TAYLOR asked who would pay for              
 the attorney.  MS. LOPER answered the attorney would base the                 
 contingency fee on the full amount before it is divided.                      
 Number 428                                                                    
 SENATOR TAYLOR discussed the following scenario.  If the punitive             
 damage award is $300,000 and the attorney takes the contingency fee           
 (50 percent) off of the full amount, the attorney would receive               
 $150,000.  The injured party would then get $75,000, or one-half of           
 the remaining award.  MS. LOPER agreed, and repeated the reason is            
 that punitive damages were not established to compensate the                  
 injured party; they were established to punish the wrongdoer.                 
 SENATOR TAYLOR stated under HB 158, the attorney would receive                
 twice as much as the victim.  MS. LOPER agreed, and noted an                  
 amendment on the House floor failed, but would have based the                 
 attorney's contingency fee on a percentage of the injured party's             
 one-half portion.                                                             
 Number 408                                                                    
 SENATOR TAYLOR asked how many punitive damage awards have been                
 awarded in the past five years in Alaska.  MS. LOPER estimated the            
 number was under ten, because the state of Alaska has one of the              
 toughest standards for punitive damage awards.                                
 SENATOR TAYLOR asked if the punitive damage provision in HB 158               
 would apply to a case similar to the Exxon Valdez case.  MS. LOPER            
 replied that case was covered by federal law.  SENATOR TAYLOR noted           
 the state also filed suit.  MS. LOPER believed any state suits                
 filed would fall under the provisions of HB 158, if passed.                   
 SENATOR TAYLOR commented if a tanker spilled oil around Southeast,            
 the damages would not be economic.  MS. LOPER indicated economic              
 damages were awarded in the Exxon Valdez case.  SENATOR TAYLOR                
 stated there were also punitive and non-economic damages, to cover            
 the loss of environmental things, such as the ambiance. MS. LOPER             
 noted, under maritime law, awards for non-economic damages cannot             
 be made.  SENATOR TAYLOR clarified that under maritime law there is           
 a sailing to suitor's clause, which allows the injured party to               
 bring the suit to either state or federal court.  If the case is              
 tried in state court, state laws apply, therefore, the injured                
 party would be allowed to sue for non-economic damages.  Under                
 maritime law, there is a limitation on liability which is the value           
 of the ship.                                                                  
 MS. LOPER informed Senator Taylor that a bill passed the House in             
 Congress and is working its way through the Senate, that limits               
 non-economic damages to $250,000, and uses the same formula for               
 punitive damages.                                                             
 SENATOR TAYLOR ascertained the state received $50 million from the            
 Exxon Valdez case, for "restitution."  MS. LOPER stated those                 
 punitive damages will be going to the injured parties, not to the             
 state.  SENATOR TAYLOR noted a company owning a leaky oil tanker              
 would support the bill in Congress.                                           
 Number 359                                                                    
 MS. LOPER explained Section 8 clarifies the plaintiff is the only             
 party that can choose to take periodic payments.  Security should             
 be posted, and self-insured municipalities would be excluded.                 
 SENATOR TAYLOR asked for the definition of an "authorized insurer."           
 MS. LOPER assumed it would be an insurance company that could offer           
 enough money not to cause the court any problems for any kind of              
 security to be posted.  SENATOR TAYLOR stated it means people who             
 are authorized to sell insurance in the state of Alaska.  MS. LOPER           
 offered to obtain the statutory definition.                                   
 MS. LOPER discussed Section 9 which offers inflation adjustments              
 for periodic payments, so that the court will specify the                     
 percentage or method for increases of future periodic payments to             
 cover inflation.  She added it will prevent future litigation for             
 adjustment of the original award.  SENATOR TAYLOR asked Ms. Loper             
 if she had any money invested between 1976 and 1980.  He remarked             
 that had the best experts been hired in 1975 to determine an                  
 inflation rate for an award, they would have been wrong.  MS. LOPER           
 commented there was not even a provision in current law that                  
 adjusted future payments by anticipated inflation, so this section            
 was added for the benefit of the injured plaintiff.  She guessed              
 the plaintiff could request the periodic payment schedule be                  
 amended if inflation rates changed radically.                                 
 MS. LOPER described the collateral benefits section (Section 10).             
 Most of the section is current law, except for the fact that                  
 plaintiffs would not be able to recover duplicate amounts received            
 from collateral sources.  It provides exceptions for certain                  
 collateral sources that are subrogated to the claimant, and for               
 death benefits and worker compensation benefits.  It allows a                 
 person defending a defendant to introduce evidence of amounts                 
 received from certain collateral sources and prohibits a person who           
 provides a collateral benefit that is introduced into evidence from           
 recovering that amount from the claimant or being subrogated the              
 rights of the claimant.                                                       
 SENATOR TAYLOR asked how that would apply to a construction worker            
 who was badly injured on the job due to an improperly manufactured            
 DA cap.  The worker begins to receive worker compensation payments            
 and brings suit against the third party for negligence.  MS. LOPER            
 stated workers compensation benefits cannot be introduced as a                
 collateral benefit (lines 25-29, page 7).  SENATOR TAYLOR noted               
 that is convenient for the insurance company defending because that           
 way the jury would not hear about how much money was paid by                  
 workers compensation to keep the worker alive before the suit was             
 MS. LOPER noted it is similar to Civil Rule 411.  If the workers              
 compensation benefit was $100,000, and the third party's damages              
 for negligence amounted to $200,000, the workers compensation award           
 could not be introduced as a collateral source.  If the workers               
 compensation award was for $300,000, he/she would have to pay the             
 employer $100,000 for the workers compensation, and would keep                
 $200,000.  SENATOR TAYLOR asserted the jury would not know the                
 worker owed the $100,000 bill that would have to be paid.  He asked           
 what other sources the jury could be informed of.  MS. LOPER                  
 replied medical benefit payments could be disclosed.  SENATOR                 
 TAYLOR answered if a person is responsible enough to purchase an              
 insurance policy to cover his/her own injuries, even though the               
 other party was negligent, they could claim they did not owe the              
 claimant that amount.  MS. LOPER gave the following example.  An              
 employee is covered by health insurance by the employer, and is               
 involved in an accident (not job related) and breaks a leg.  The              
 hospital bill is $50,000.  Her medical insurance covers 80 percent            
 of the $50,000.  The jury awards $100,000.  Even though the medical           
 benefit was paid for by the insurance company, the employee would             
 pocket that money.  SENATOR TAYLOR asked what kind of policy would            
 allow that since the carrier would sue for payment.  Under state              
 health care coverage, if the state covers medical bills, the                  
 injured party is required to sue the negligent party or the state             
 can terminate health care coverage.  The state does not pay                   
 attorney's fees for the law suit.   Most insurance carriers have a            
 similar provision in their contracts.                                         
 SENATOR TAYLOR clarified under Section 10, the jury would be                  
 informed that the injured party received $50,000 from the employer,           
 to prevent the injured party from receiving a judgement of                    
 $100,000.  MS. LOPER stated plaintiffs are overcompensated all of             
 the time; they are not repaying the insurance company.  SENATOR               
 TAYLOR asked MS. LOPER if she had any evidence to cite.  She stated           
 she did it herself.  SENATOR TAYLOR noted if she was reimbursed for           
 $100,000, the negligent party would essentially get credit for the            
 $50,000 paid by the employer.  MS. LOPER asserted collateral                  
 benefits are not designed to punish the wrongdoer, that would be              
 paid under punitive damages.  SENATOR TAYLOR remarked that if the             
 award was for $100,000, and the jury was informed the insurance               
 company paid $50,000 in medical bills, the difference would be                
 $50,000 paid to the injured party, and the wrongdoer would                    
 essentially be rewarded by not having to pay the medical costs.               
 Number 076                                                                    
 MS. LOPER responded everyone bears the cost in the increase of                
 insurance rates.  An injured party could punish a drunk driver                
 under punitive damages, collateral benefits were never designed to            
 offer duplicate recoveries to the injured party.  SENATOR TAYLOR              
 believed the employer has the right to be reimbursed for the cost             
 of medical expenses paid by the employer, which will keep rates               
 down.  MS. LOPER replied it basically sets up a no-fault state.               
 The intent of the section is to stop the overcompensation of                  
 TAPE 95-31, SIDE A                                                            
 SENATOR TAYLOR argued that punitive damages cannot be relied on,              
 since they are very rarely awarded, and one-half would have to be             
 paid to the state under HB 158.  Also, punitive damages are not               
 covered by an insurance policy.  He repeated that if Aetna paid               
 $50,000 in medical bills, and the injured party sues, Aetna would             
 be entitled to repayment.  If the judgement was $100,000, Aetna               
 would be repaid $50,000, and the attorney's contingency fee of 30             
 percent would amount to $30,000.  The remainder of $20,000 would go           
 to the injured party.  SENATOR TAYLOR explained that under HB 158,            
 under the collateral rule, the amount of the award would be                   
 $50,000, of which 30 percent would be paid to the attorney                    
 ($17,000) but $50,000 would still be owed to Aetna.                           
 Number 295                                                                    
 SENATOR TAYLOR commented he did not understand why the sponsor                
 would want to deprive the insurance carrier who did no wrong, from            
 being able to seek subrogation and restitution.  He noted this                
 provision would work well for a millionaire since one's own money             
 is not considered a collateral source.  MS. LOPER said an indigent            
 person would collect the same amount as the millionaire.                      
 SENATOR TAYLOR asked how the working class person would be affected           
 by the collateral source provision.  MS. LOPER answered if the                
 person was insured, there would be no subrogation, and the person             
 would have to show that some compensation had been made, and that             
 the injured party did not pay the hospital bill out of pocket.                
 SENATOR TAYLOR repeated his concern that the collateral source                
 provision allows the "bad" guy to take credit for the "good" guys             
 coverage.  MS. LOPER replied she views the situation from the                 
 standpoint of returning the injured party to where they were prior            
 to the accident.  From that perspective, she believes the                     
 collateral benefits section in current law overcompensates the                
 injured party.  SENATOR TAYLOR asked for data on the amounts of               
 overcompensation awards.                                                      
 MS. LOPER explained Section 11.  It deals with the apportionment of           
 fault by bringing in all parties responsible for the accident.  It            
 does away with joint, civil liability.  In Section 11 the phrase              
 "party to person" is removed and the clause, "or other person                 
 responsible for the damages to each claimant regardless of whether            
 the other person, including the employer, is or could have been               
 named as a party to the action" is added.  That would stop the                
 practice of going after the person with the deep pocket by naming             
 each person responsible for the accident as a party to the action,            
 including the employer.  This section would reverse the Lake v                
 Construction decision.                                                        
 Section 12 further delineates the apportionment of fault.  MS.                
 LOPER stated when the injured party brings a claim to court, all              
 parties that have a percentage of fault must be named, instead of             
 just naming one that is insured for the largest amount.  SENATOR              
 TAYLOR asked if this provision would result in multiple litigation            
 which would increase costs, as opposed to suing the two most liable           
 parties.   MS. LOPER replied all people responsible for the act               
 would be sued.  SENATOR TAYLOR stated the defendant has always had            
 the right to name and bring into the suit all parties involved. He            
 added if a person was hit by two cars and the accident resulted in            
 a pileup, the injured party would have to sue all cars involved,              
 and the state for poor road maintenance, rather than the two                  
 drivers who were primarily responsible for the accident.  He                  
 questioned the increased amount of court time the provision would             
 create.  MS. LOPER stated she believes it is fair and just to name            
 all those responsible for the accident, rather than allow those who           
 have no insurance to walk away from a case.  SENATOR TAYLOR claimed           
 the defendant would bring in other responsible parties, rather than           
 taking sole responsibility.                                                   
 MS. LOPER believed the issue to be a policy call and that Senator             
 Taylor is saying the defendant should take full responsibility,               
 even though he/she is only 10 percent at fault, but has the most              
 insurance coverage.  SENATOR TAYLOR clarified that under current              
 law, a wealthy contractor who is being sued, but is only                      
 responsible for 10 percent of the damages, would have his attorneys           
 bring the other defendants into court.  He stated Section 12 forces           
 the injured victim to figure out who all of the actors were, down             
 to the smallest percentile of liability.  MS. LOPER reiterated                
 Section 12 is designed to prevent the plaintiff from suing one                
 party only because that party has the most money.                             
 MS. LOPER explained Section 13 allows either party to make an offer           
 to settle a claim up to 10 days before a trial begins.  The offer             
 must be accepted within 10 days and recorded by the clerk of the              
 Section 14 deals with prejudgment interest and changes the interest           
 rate from the fixed amount of 10.5 percent, to a floating rate,               
 three percent above the Federal Reserve District discount rate.               
 SENATOR TAYLOR asked if the prejudgment interest is determined on             
 the date the process is served, rather than the date of injury.               
 MIKE LESSMEIER, State Farm Insurance, clarified it would be                   
 determined on the date of written notification by the claimant,               
 which could be the date of injury.                                            
 Section 15 disallows the payment of prejudgment interest for future           
 economic damages, future non-economic damages, or for punitive                
 MS. LOPER stated Section 16 makes a technical change to current law           
 and includes all of the provisions in HB 158 in the Uniform                   
 Arbitration Act.                                                              
 Section 17 requires medical expert witnesses to meet certain                  
 standards.  SENATOR TAYLOR asked if a general practitioner would be           
 unable to testify to previous malpractice by a specialist, since              
 that practitioner was not trained in that particular discipline.              
 MR. LESSMEIER noted the general practitioner would be allowed to              
 testify.  SENATOR TAYLOR asked for evidence of cases in which the             
 court has allowed a doctor, not familiar with a specific                      
 discipline, to testify on that discipline.                                    
 MS. LOPER stated Section 18 defines the terms "professional                   
 negligence" and "professional services" as used in HB 158.  She               
 noted at one time there was a specific statute of limitations and             
 repose for health care providers, but that section was eliminated             
 in the House Finance Committee.  SENATOR TAYLOR added AS 09.55.560            
 contains a definition of health care providers by listing each.               
 MS. LOPER described Section 19 as providing clarification of                  
 circumstances in which hospitals are held directly liable for the             
 actions of a health care provider not employed by the hospital.               
 Current law permits a claimant to sue only the hospital, rather               
 than the doctor as an independent contractor, who may have less               
 ability to pay.  SENATOR TAYLOR asked if current law only permits             
 the claimant to sue the hospital.  MS. LOPER replied under current            
 law the claimant can sue both the doctor and the hospital.  She               
 added the state of Alaska does not require doctors to carry                   
 insurance.  SENATOR TAYLOR stated that resulted from the first tort           
 reform movement.  Doctors complained they could not purchase                  
 insurance at a reasonable rate, so MICA was created which doctors             
 had to join.  The state was sued by doctors who were able to find             
 less expensive insurance, so they did not have to be covered under            
 MICA.  Since that time, the state has not been able to require                
 doctors to have malpractice coverage.                                         
 SENATOR TAYLOR commented line 29 defines when a doctor is an                  
 independent contractor.  MS. LOPER noted the definition is on page            
 11, line 19.  SENATOR TAYLOR believed the definition classifies an            
 independent contractor as a welcome trespasser.  MS. LOPER noted              
 the definition is further defined by the list of "health care                 
 providers" on line 14, and the hospital will always be liable for             
 the hiring of an independent contractor if it was negligent in its            
 hiring practices.  Section 19 also requires the independent                   
 contractor to give notice of limited liability, posted in all                 
 admissions areas and in area newspapers annually.                             
 TAPE 95-31, SIDE B                                                            
 SENATOR TAYLOR asked what that notice will mean to a patient.  MS.            
 LOPER replied the only control a hospital administrator has over a            
 physician is in the hiring process.  SENATOR TAYLOR stated as a               
 hospital attorney, he got rid of five doctors, and had their                  
 licenses pulled.  He stated a good hospital board and administrator           
 will regularly engage in peer review and will not cover for                   
 incompetent doctors.  He noted if the hospital in Tampa, where                
 several tragedies have recently occurred, had hired those doctors             
 as independent contractors, the hospital would have no liability to           
 any of the victims.  MS. LOPER replied the hospital would not be              
 liable if it believed the doctors were competent when they were               
 hired.  SENATOR TAYLOR asked how the hospital board would know if             
 the doctor was incompetent until he/she did an incompetent act.               
 MS. LOPER believed the hospital board would investigate a doctor's            
 background, and added if the hospital was negligent in hiring a               
 doctor, it would be liable.  SENATOR TAYLOR stated mistakes are               
 considered negligence, and if a good surgeon makes a mistake, the             
 hospital would not share the liability.  He discussed the heart               
 surgeon in Portland, Oregon who made fatal errors in two heart                
 transplant operations in one year, and how a notice of limited                
 liability would be of little help to the families of those victims.           
 MS. LOPER stated Section 20 prevents a person from suing if the               
 accident occurred while in the act of committing a felony.  SENATOR           
 TAYLOR stated this section resulted from testimony in the House               
 Finance Committee about several young men who were attempting to              
 paint numbers on the roof of a high school as a prank, and one of             
 the men fell through a skylight and was disabled for life.  He was            
 awarded several hundred thousand dollars because the skylight was             
 painted black and was difficult to see.  He asked if this provision           
 was originally written to include any crime.  MS. LOPER replied the           
 crime must be a felony.  SENATOR TAYLOR clarified the section has             
 been tightened since it now includes a person who attempts to                 
 convict a felony and not only a person convicted of committing a              
 MS. LOPER explained Section 21 is fashioned after Civil Rule 11.              
 It is an attempt to stop frivolous lawsuits from being filed.  If             
 there is a violation, monetary sanctions of up to $10,000 shall be            
 imposed.  SENATOR TAYLOR questioned whether a similar provision               
 exists in the rules of court.  MS. LOPER stated affirmatively, but            
 noted there are no monetary sanctions.  SENATOR TAYLOR stated it is           
 his understanding there are no limits, either.  He asked what the             
 purpose of placing this provision in statute is.  MS. LOPER                   
 repeated the court rule does not specify monetary sanctions against           
 the attorney.  SENATOR TAYLOR stated this provision caps the amount           
 the attorney can be charged.  MR. LESSMEIER commented Rule 37                 
 allows sanctions.  MS. LOPER added Section 21 provides one option,            
 a larger sanction could be obtained using Rule 37.                            
 MS. LOPER stated Alaska Rule of Civil Procedure 95 was amended in             
 Section 21.  SENATOR TAYLOR noted that instead of changing the Rule           
 which would require a two-thirds majority vote, the statute is                
 changed, which has the effect of changing the rule.                           
 SENATOR TAYLOR asked Ms. Loper to provide the requested information           
 as soon as possible, and adjourned the meeting at 6:26 p.m.                   

Document Name Date/Time Subjects