Legislature(1999 - 2000)

05/15/1999 12:27 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
              SENATE JUDICIARY COMMITTEE                                                                                        
                     May 15, 1999                                                                                               
                      12:27 p.m.                                                                                                
MEMBERS PRESENT                                                                                                                 
Senator Robin Taylor, Chairman                                                                                                  
Senator Rick Halford, Vice-Chairman                                                                                             
Senator Dave Donley                                                                                                             
Senator Johnny Ellis                                                                                                            
MEMBERS ABSENT                                                                                                                  
Senator John Torgerson                                                                                                          
COMMITTEE CALENDAR                                                                                                              
CS FOR HOUSE BILL NO. 225(JUD)                                                                                                  
"An Act relating to election campaigns and legislative ethics; and                                                              
providing for an effective date."                                                                                               
     -MOVED SCSHB 225(JUD) OUT OF COMMITTEE                                                                                     
CS FOR HOUSE BILL NO. 82(JUD) am                                                                                                
"An Act relating to certain claims arising out of or in connection                                                              
with the year 2000 date change; amending Rule 23, Alaska Rules of                                                               
Civil Procedure; and providing for an effective date."                                                                          
     -MOVED SCSHB 83(JUD) OUT OF COMMITTEE                                                                                      
CS FOR HOUSE BILL NO. 83(JUD)(title am)                                                                                         
"An Act relating to certain securities occupations and investment                                                               
pools; relating, with regard to the Alaska Securities Act, to                                                                   
federal covered securities, the registration of securities, the                                                                 
general exemptions for securities and transactions, Internet offers                                                             
of securities and transactions, file confidentiality, petitions to                                                              
superior court by the administrator to reduce civil penalties to                                                                
judgment, time limits for bringing court actions for violations,                                                                
administrator-established fees and administrator-required                                                                       
reimbursements, consent to service, title, sales, purchases, offers                                                             
to sell, and offers to purchase; exempting certain violations of                                                                
the Alaska Securities Act from criminal penalties; amending or                                                                  
repealing certain current definitions in the Alaska Securities Act;                                                             
providing new Alaska Securities Act definitions for certain                                                                     
securities occupations, for certain federal statutes, and for the                                                               
terms 'advisory client,' 'advisory fee,' 'advisory services,'                                                                   
'clients who are natural persons,' 'federal covered security,'                                                                  
'investment advisory business,' 'investment advisory contract,'                                                                 
'NASDAQ,' 'notice filing,' 'place of business,' 'principal place of                                                             
business,' 'securities business,' 'substantial portion of the                                                                   
business,' and 'supervised person'; and providing for an effective                                                              
     -MOVED HB 83 OUT OF COMMITTEE                                                                                              
CS FOR HOUSE BILL NO. 151(JUD) am                                                                                               
"An Act relating to revocation and reinstatement of the driver's                                                                
license of a person at least 14 but not yet 21 years of age."                                                                   
     -MOVED SCSHB 151(JUD) OUT OF COMMITTEE                                                                                     
CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 33(JUD)                                                                            
"An Act relating to arrests."                                                                                                   
     SCHEDULED BUT NOT HEARD                                                                                                    
HOUSE BILL NO. 79                                                                                                               
"An Act relating to letters of credit under the Uniform Commercial                                                              
Code; and providing for an effective date."                                                                                     
     -MOVED HB 79 OUT OF COMMITTEE                                                                                              
PREVIOUS SENATE COMMITTEE ACTION                                                                                                
HB 225 - See Judiciary minutes dated 5/14/99.                                                                                   
HB 151 - See Judiciary Committee minutes dated 5/14/99.                                                                         
HB 33 - No previous Senate action.                                                                                              
HB 79 - See Labor and Commerce Committee minutes dated 5/6/99.                                                                  
HB 82 - No previous Senate action.                                                                                              
HB 83 - See Labor and Commerce minutes dated 4/20/99 and Judiciary                                                              
minutes dated 5/3/99.                                                                                                           
WITNESS REGISTER                                                                                                                
Pat Harmon                                                                                                                      
Staff to Representative Pete Kott                                                                                               
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Testified for the sponsor of HB 151                                                                        
Tom Findley                                                                                                                     
Dylan & Findley                                                                                                                 
350 North Franklin St.                                                                                                          
Juneau, AK  99801                                                                                                               
POSITION STATEMENT:  Commented on HB 151                                                                                        
Juanita Hensley                                                                                                                 
Division of Motor Vehicles                                                                                                      
Department of Administration                                                                                                    
PO Box 110200                                                                                                                   
Juneau, AK  99811-0200                                                                                                          
POSITION STATEMENT:  Commented on HB 151                                                                                        
Anne Carpeneti                                                                                                                  
Assistant Attorney General                                                                                                      
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK  99811-0300                                                                                                          
POSITION STATEMENT:  Commented on HB 151                                                                                        
Jim Hyde                                                                                                                        
Soldotna, AK                                                                                                                    
POSITION STATEMENT:  Commented on HB 151                                                                                        
Robert Buttcane                                                                                                                 
Department of Health and Social Services                                                                                        
PO Box 110601                                                                                                                   
Juneau, AK  99811-0601                                                                                                          
POSITION STATEMENT:  Commented on HB 151                                                                                        
Representative Norm Rokeberg                                                                                                    
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Sponsor of HB 82 and presented HB 83                                                                       
ACTION NARRATIVE                                                                                                                
TAPE 99-36, SIDE A                                                                                                              
Number 001                                                                                                                      
CHAIRMAN ROBIN TAYLOR called the Judiciary Committee meeting to                                                                 
order at 12:27 p.m.  Present were Senators Halford, Donley, Ellis                                                               
and Chairman Taylor.                                                                                                            
         HB 225-CAMPAIGN FINANCE AND LEGISLATIVE ETHICS                                                                         
CHAIRMAN TAYLOR announced a new Senate Judiciary Committee                                                                      
substitute was prepared based on the changes made at the previous                                                               
committee hearing.  He also informed committee members that he                                                                  
asked the Division of Legal Services whether Amendment 9 was                                                                    
contrary to the bill title and was told a resolution will be                                                                    
necessary to amend the title.  Amendment 9 prevents legislators                                                                 
from having spouses or significant others employed as lobbyists.                                                                
He asked for a motion to adopt SCSHB 225(JUD), Version V, Kurtz,                                                                
SENATOR DONLEY moved to adopt SCSHB 225(JUD) as the working vehicle                                                             
of the committee.  There being no objection, SCSHB 225(JUD) was                                                                 
CHAIRMAN TAYLOR moved to delete all material on page 12, lines 11-                                                              
13, and  to insert "AS 15.13.011(16)(b) and AS 24.45.021(b)(7)" on                                                              
page 16, line 25, following "Sec. 21," and to renumber all sections                                                             
accordingly (Amendment 10).  He explained the amendment would                                                                   
delete Amendment 9, related to lobbying by spouses of legislators,                                                              
and it cleans up the change made to the close economic association                                                              
disclosure requirement.                                                                                                         
SENATOR ELLIS asked if the existing provision related to disclosure                                                             
of a close economic association is unharmed by Amendment 10.                                                                    
CHAIRMAN TAYLOR said that is his understanding.                                                                                 
SENATOR ELLIS objected to the motion to adopt Amendment 10.  The                                                                
motion carried with Senators Donley, Halford and Taylor voting                                                                  
"yea," and Senator Ellis voting "nay."                                                                                          
SENATOR ELLIS asked for a copy of the memo from the Division of                                                                 
Legal Services.  CHAIRMAN TAYLOR said he would provide one to                                                                   
committee members.  He noted he, like Senator Ellis, would like to                                                              
keep the provision on lobbyists in the bill however he did not want                                                             
to do too much damage to the process in the last few days.                                                                      
SENATOR HALFORD said spousal lobbying makes a mockery of all of the                                                             
"little piddly stuff in the bill."                                                                                              
SENATOR DONLEY moved SCSHB 225(JUD) as amended from committee with                                                              
individual recommendations.                                                                                                     
SENATOR ELLIS objected and stated that although several people have                                                             
put effort into this bill to clean up some of the ambiguities                                                                   
involved, this bill will be perceived, somewhat accurately, as                                                                  
self-serving to legislators.  He said it is contrary to the spirit                                                              
of the citizen initiative on campaign finance reform and the                                                                    
citizen drive for improved legislative ethics.  He agreed with                                                                  
Senator Halford's comment that the little points in this                                                                        
legislation are completely overshadowed by the bigger issues that                                                               
go unaddressed.  He noted his opposition to the bill.                                                                           
CHAIRMAN TAYLOR said he feels much as Senator Ellis does because he                                                             
believes the perception that this bill is self serving and is a                                                                 
major change to the initiative will be conveyed to the public.  He                                                              
stated from his perspective, he does not believe this bill does                                                                 
anything more than clean up a few "nits and lice" within the                                                                    
process.  It is a bit more user friendly for someone who may want                                                               
to run for office, but he agreed that it fails to address the major                                                             
problems.  He maintained that the bill does not address the fact                                                                
that no one is willing to enforce the laws on the books, nor does                                                               
it address how an average Alaskan could ever possibly run against                                                               
a multimillionaire in this State with a level playing field, nor                                                                
does it address the violations that occurred during the last                                                                    
campaign.   He said, in his opinion, justice delayed is a total                                                                 
denial of justice, and as a consequence most of this bill is                                                                    
superficial.  He wagered there will be a campaign against this bill                                                             
by the public based on the premise that HB 225 makes draconian                                                                  
changes.  He stated he will support the bill because it cleans up                                                               
a few things but it does not go as far as he would prefer.                                                                      
The motion to pass SCSHB 225(JUD) from committee with individual                                                                
recommendations carried with Senators Halford, Donley, and Taylor                                                               
voting "yea," and Senator Ellis voting "nay."                                                                                   
Number 150                                                                                                                      
          HB 151-REVOCATION OF MINOR DRIVER'S LICENSE                                                                           
CHAIRMAN TAYLOR informed committee members a new committee                                                                      
substitute (Version Q, 5/15/99) was prepared.                                                                                   
PAT HARMON, legislative aide to Representative Pete Kott, informed                                                              
committee members that Representative Kott is in agreement with the                                                             
contents of the new committee substitute.                                                                                       
TOM FINDLEY, a Juneau attorney, informed committee members he has                                                               
been working on this legislation because he is interested in the                                                                
subject.  He explained that minor consuming penalties were                                                                      
increased in Section 1.  Under current law the offense is an                                                                    
infraction; under this bill the third offense is a misdemeanor.  He                                                             
suggested the following changes.  The first offense should not                                                                  
result in a license suspension; currently the suspension time is 10                                                             
days, DMV would like to see that increased to 30 days.  Section 3,                                                              
which criminalizes alcohol consumption, should also criminalize                                                                 
drug use.  Alcohol consumption or drug use, while driving, will be                                                              
a class B misdemeanor and the minor's license will be suspended for                                                             
180 days for a first offense and one year for a second offense.                                                                 
CHAIRMAN TAYLOR clarified the penalty for that offense was already                                                              
increased to emphasize a zero tolerance policy for drivers under                                                                
the age of 21.                                                                                                                  
MR. FINDLEY added that a minor who has been caught for a third time                                                             
probably has a serious drinking problem and should have to appear                                                               
in court.  He noted some minors have been arrested as many as 18                                                                
times, but the violations are turned over to DMV so they never                                                                  
appear in court.                                                                                                                
Number 215                                                                                                                      
JUANITA HENSLEY, Division of Motor Vehicles (DMV), Department of                                                                
Administration, stated that a 10 day revocation is not enough to                                                                
get anyone's attention.  DMV prefers a 30 day revocation because no                                                             
revocation time for a first offense is not going to get the minor's                                                             
attention and result in change.                                                                                                 
SENATOR DONLEY suggested using revocation periods of 30 days for a                                                              
first offense, 60 days for a second offense, and 90 days for a                                                                  
third offense, which is already in the bill.                                                                                    
CHAIRMAN TAYLOR asked if there was any objection to adopting                                                                    
version Q as the Senate Judiciary committee substitute.  There                                                                  
being no objection, the motion carried.                                                                                         
CHAIRMAN TAYLOR moved to increase the revocation time from 10 to 30                                                             
days, on page 3, line 29, and from 30 to 60 days on page 3, line 30                                                             
(Amendment 1).  There being no objection, the motion carried.                                                                   
Number 249                                                                                                                      
ANNE CARPENETI, Department of Law, stated she believes the Senate                                                               
Judiciary Committee version contains good compromises.  She pointed                                                             
out that increasing a third time offense to a misdemeanor creates                                                               
fiscal implications.  MS. CARPENETI suggested amending AS 28.15.185                                                             
because last year the court held that an offense must have a                                                                    
significant enough penalty to require a jury trial and court-                                                                   
appointed counsel.  As a result, AS 28.15.185 was amended and minor                                                             
consuming offenses were removed.  That statute will need to be                                                                  
amended again to include the misdemeanor offenses in HB 151.                                                                    
CHAIRMAN TAYLOR asked if a new section would have to be added.                                                                  
MS. CARPENETI said she believes so.                                                                                             
SENATOR DONLEY moved a conceptual amendment (Amendment 2) to                                                                    
incorporate a new section to do what Ms. Carpeneti recommended.                                                                 
SENATOR HALFORD said he has no objection to that motion, however he                                                             
would like to know how the administrative and court revocations are                                                             
related, and whether the same violation can cause an action at both                                                             
MS. CARPENETI said the offenses are generally concurrent with each                                                              
CHAIRMAN TAYLOR agreed they must be concurrent as far as the effect                                                             
of the sentence.  He clarified that the only difference is that the                                                             
bill contains a provision, that the Administration opposes, that                                                                
provides if a person is dismissed or found not guilty from the                                                                  
criminal suit, the dismissal acts to also remove the administrative                                                             
revocation that was imposed so that one does not have to go to                                                                  
court twice.                                                                                                                    
SENATOR HALFORD questioned whether different standards of proof                                                                 
apply to an administrative proceeding versus a court proceeding.                                                                
CHAIRMAN TAYLOR said yes, the standard of proof for an                                                                          
administrative hearing is a preponderance of evidence, and for the                                                              
court hearing it is guilty beyond a reasonable doubt.  He explained                                                             
that this provision will prevent a person who is found not guilty                                                               
beyond a reasonable doubt from having his/her license revoked under                                                             
the civil aspects which come out of the administrative system.                                                                  
Number 291                                                                                                                      
MS. CARPENETI added the Department of Law is also concerned with                                                                
the provision in paragraph 2 on page 5 because it wants to keep the                                                             
administrative and court revocations as separate as  possible.  The                                                             
Department of Law believes its position in litigating                                                                           
constitutionality of the "use it-lose it" law is that it is a                                                                   
remedial aspect, not a punitive one.                                                                                            
CHAIRMAN TAYLOR asked if there was any objection to adopting                                                                    
Amendment 2.  There being no objection, the motion carried.                                                                     
MR. FINDLEY suggested amending AS 28.35.280 to add controlled                                                                   
substances to cover driving under the influence of drugs.  He                                                                   
clarified that Section 8 on page 5 would need to be amended.                                                                    
SENATOR HALFORD asked if there is a term of art that excludes                                                                   
prescription drugs from controlled substances.                                                                                  
SENATOR DONLEY moved to adopt a conceptual amendment (Amendment 3)                                                              
to add a violation for driving while under the influence of a                                                                   
controlled substance into the appropriate section of the bill.                                                                  
SENATOR HALFORD objected and asked for an answer to his question                                                                
about the definition of controlled substances.                                                                                  
SENATOR DONLEY asked if prescription drugs fall under the                                                                       
definition of controlled drugs.                                                                                                 
SENATOR HALFORD explained the general term, "controlled drugs"                                                                  
includes prescription drugs.                                                                                                    
MS. CARPENETI informed committee members AS 28.35.280(a) would need                                                             
to be amended to exclude prescription drugs.                                                                                    
SENATOR HALFORD said he agrees with the amendment but wants to make                                                             
sure that it refers to contraband drugs only, not prescription                                                                  
CHAIRMAN TAYLOR asked Ms. Carpeneti to work with the legal drafter                                                              
to make sure that intent is accomplished.  MS. CARPENETI agreed to                                                              
do so.  There being no objection to Amendment 3, it was adopted.                                                                
Number 349                                                                                                                      
MR. JOHN HYDE made the following comments via teleconference from                                                               
his home in Soldotna.  He informed committee members he does not                                                                
have a copy of version Q.  His primary concern is that the                                                                      
administrative hearings will be used for the first two offenses.                                                                
Administrative hearings under AS 28.15.183 are not evidentiary                                                                  
hearings and rightly so.  The hearing officers at DMV are not                                                                   
qualified to hold evidentiary hearings.  Due to increasing pressure                                                             
from the public, and legislative activities, DMV has expanded its                                                               
role and has created a situation in which its hearings are becoming                                                             
evidentiary and it hears evidence arbitrarily.  The arbitrary and                                                               
capricious application of the law is unconstitutional.                                                                          
MR. HYDE gave an example of how evidence, obtained in an illegal                                                                
entry, was used in a case and was the basis for a ruling in an                                                                  
administrative hearing.  He believes DMV is vigorously trying to                                                                
preserve its position in this law, and it is trying to strenuously                                                              
convict young people of violating a law when it is violating the                                                                
law it is trying to preserve.                                                                                                   
CHAIRMAN TAYLOR told Mr. Hyde that is why the bill takes the                                                                    
violations out of the administrative process after the first two                                                                
offenses and places the violator before a judge who understands the                                                             
term, "capricious and arbitrary."                                                                                               
MR. HYDE commended the committee on its efforts but said he would                                                               
prefer that the all offenses get court hearings rather than                                                                     
administrative hearings.                                                                                                        
ROBERT BUTTCANE, Department of Health and Social Services (DHSS),                                                               
commented on two issues.  If minor consuming and minor possession                                                               
of alcohol are recriminalized through HB 151, it would be                                                                       
appropriate to support the court in providing it with some type of                                                              
an assessment process.  He asked the committee to fund the Kiddie                                                               
ASAP program enacted by the Legislature last year.  Approximately                                                               
$100,000 for administrative costs and $400,000 for community grant                                                              
programs would be an adequate amount to take care of this                                                                       
population.  His second point was that an estimated 1,000 young                                                                 
people will be subject to a misdemeanor offense and jail time if HB
151 passes.  Those youth will be placed in youth facilities which                                                               
are already full.  DHSS might have to request a supplemental                                                                    
appropriation to pay for overtime for detention staff if the court                                                              
takes an aggressive stance toward jail time.                                                                                    
CHAIRMAN TAYLOR said both issues are unrelated to this bill because                                                             
an appropriation cannot be attached to it, but the Senate Judiciary                                                             
Committee supported the Kiddie ASAP concept last year, so if DHSS                                                               
needs a supplemental as a result of the court system's actions, he                                                              
will argue in favor of it.                                                                                                      
SENATOR HALFORD moved SCSHB 151(JUD) as amended from committee with                                                             
individual recommendations.  Without objection, the bill moved from                                                             
Number 445                                                                                                                      
        HB  82-IMMUNITY:CLAIMS ARISING FROM Y2K PROBLEMS                                                                        
CHAIRMAN TAYLOR thanked Representative Rokeberg for working with                                                                
his staff in creating a new committee substitute.                                                                               
REPRESENTATIVE NORM ROKEBERG, sponsor of HB 82, explained the bill                                                              
as follows.  The proposed committee substitute provides limited                                                                 
immunity against claims arising out of the Y2K date change.  The                                                                
bill is patterned after S.96, introduced in Congress by Senator                                                                 
John McCane.  The committee substitute excludes all personal injury                                                             
and wrongful death claims on page 4, subsection (e).  It further                                                                
removes the mediation provision.  The House version had three steps                                                             
to resolution: the first was mediation.  The bill still contains                                                                
the curative aspects because attempting to cure a problem before                                                                
litigating is a sensible approach.  The proposed committee                                                                      
substitute also changes the standard under which the cause of                                                                   
action is a contract [indiscernible] and it provides limited                                                                    
immunity for those businesses that take the steps on page 3.                                                                    
Subsection (1) acts as a template by outlining six fundamental                                                                  
steps to creating a compliance program.  Subsection (2) is a catch-                                                             
all clause that sets reasonable care standards.  The original                                                                   
version of the bill contained due diligence standards.  He said                                                                 
that language on page 4, subsection (e) means that a Y2K provision                                                              
of a contract must be enforceable on the contract; it would seem                                                                
disingenuous to use a Y2K defense to defend oneself against an                                                                  
agreement to perform a Y2K related fix.  He recommended the                                                                     
committee adopt a conceptual amendment to page 4, line 21, to add                                                               
"year 2000 date change" after "a" and before "provision."                                                                       
Number 513                                                                                                                      
SENATOR ELLIS questioned, asked what happens to actions worth less                                                              
than $25,000 according to language on page 5, section 4.                                                                        
REPRESENTATIVE ROKEBERG said those actions would have to be                                                                     
individually litigated.                                                                                                         
SENATOR ELLIS stated that gives class action protection to cases of                                                             
larger amounts only.                                                                                                            
CHAIRMAN TAYLOR noted he shares Senator Ellis' concern.                                                                         
SENATOR ELLIS moved to adopt the Senate Judiciary Committee                                                                     
substitute as the working document of the committee.  There being                                                               
no objection, the motion carried.                                                                                               
SENATOR ELLIS asked the sponsor to respond to the concern he                                                                    
expressed about no protection for the little guy.                                                                               
REPRESENTATIVE ROKEBERG stated the threshold was lowered on the                                                                 
House side from $50,000 to $25,000 for that reason.  He noted the                                                               
intent was to prevent a class action suit from being filed unless                                                               
a major problem occurred.  He added that this provision was                                                                     
requested by the State Chamber of Commerce.                                                                                     
SENATOR HALFORD asked if the application of this limitation depends                                                             
on meeting all other conditions set out in the bill, or whether the                                                             
limitation is applicable in regard to Y2K damages regardless of the                                                             
other conditions of the bill.                                                                                                   
REPRESENTATIVE ROKEBERG said the limitation would apply regardless                                                              
of the other conditions because the limitation applies to the                                                                   
formation of a class action by the opponent.                                                                                    
CHAIRMAN TAYLOR disagreed because the standards specifically                                                                    
require the damaged party to write a letter, send notice to the                                                                 
business, and give the business an opportunity to fix the problem.                                                              
He thought those businesses, who might have a claim against another                                                             
business, would have to have incurred $25,000 in damages before                                                                 
they could form a class action suit.                                                                                            
MR. ROKEBERG said his understanding is that they would have to meet                                                             
that criteria in the formation of the class action only.  The                                                                   
defense provided in the bill will not provide for a class action                                                                
Number 564                                                                                                                      
CHAIRMAN TAYLOR maintained the standards that have to be met to                                                                 
fulfill the prerequisites to bring the claim remain the same,                                                                   
regardless of whether there is one claimant or 200. Those standards                                                             
might be met by writing one letter instead of 200 on behalf of the                                                              
entire class but the standards would have to be met to become a                                                                 
member of the class qualifying to bring suit around the exemptions.                                                             
REPRESENTATIVE ROKEBERG said he understands it to mean a business                                                               
would have to have damages exceeding $25,000 to become a member of                                                              
a class action.                                                                                                                 
CHAIRMAN TAYLOR indicated that is the way the law currently reads.                                                              
He maintained that Senator Ellis's question is whether a business                                                               
with a claim below $25,000 will be prevented from joining a class                                                               
action suit.                                                                                                                    
REPRESENTATIVE ROKEBERG said the answer is yes.                                                                                 
SENATOR HALFORD said the effect of that is separate from the effect                                                             
of the other provisions of the bill that require all kinds of                                                                   
REPRESENTATIVE ROKEBERG explained the other steps must be taken but                                                             
they are not relevant to the formation of a class action.                                                                       
Number 568                                                                                                                      
SENATOR ELLIS commented the easiest way to address his concern is                                                               
to eliminate Section 4 altogether.                                                                                              
REPRESENTATIVE ROKEBERG said the intent is to prevent an attorney                                                               
from "running around, getting a bunch of people together to file a                                                              
cause of action so that you get a legal fee if there was minor                                                                  
damages."  He noted under that scenario, a substantial action could                                                             
be filed if 100,000 people lost power for one day.  He added HB 82                                                              
is a business protection bill, not a consumer protection bill.  The                                                             
intent is to minimize the effect on the business community and to                                                               
ensure that it meets the standards.                                                                                             
TAPE 99-36, SIDE B                                                                                                              
CHAIRMAN TAYLOR expressed concern that the bill amends a strict                                                                 
court rule about how a class action can occur. He noted the general                                                             
concern with class action suits comprised of "those similarly                                                                   
situated" is that the defendant cannot be reimbursed for attorney's                                                             
fees if he/she wins because the plaintiff is nameless, however if                                                               
HB 82 refers to primitive contracts, a clearly definable class                                                                  
exists.  He said customers of an electric utility have a contract                                                               
with the utility and could file a class action suit if they were                                                                
without power for 24 hours and their economic losses were $25,000                                                               
each.  If they do file a class action suit they are identifiable,                                                               
and they are responsible for attorney's fees if they lose.  He                                                                  
noted HB 82 only applies to people with a contractual relationship                                                              
with a business.                                                                                                                
REPRESENTATIVE ROKEBERG commented the thrust of the bill shifted                                                                
from an individual member of a class to an aggregate amount, unless                                                             
the totality of damages were a significant amount which would                                                                   
negate the need to form a class.                                                                                                
CHAIRMAN TAYLOR said class actions sometimes consist of small                                                                   
groups of 15 or 20 people.                                                                                                      
Number 557                                                                                                                      
REPRESENTATIVE ROKEBERG repeated the thrust of the bill is to                                                                   
encourage people to fix the problem rather than to put their                                                                    
resources into litigation.  He believes it is the Legislature's                                                                 
responsibility to set the hurdles that one must jump over before                                                                
filing a class action.  He thought eliminating that section would                                                               
be irresponsible because the purpose of the legislation is to avoid                                                             
litigation.  He suggested placing a hurdle on the class aggregate                                                               
amount, perhaps $250,000.                                                                                                       
CHAIRMAN TAYLOR suggested requiring the class to have an aggregate                                                              
claim in excess of $25,000.                                                                                                     
REPRESENTATIVE ROKEBERG questioned whether one could get a class                                                                
together and pay a legal fee for that amount.                                                                                   
CHAIRMAN TAYLOR said one benefit is that using the aggregate amount                                                             
would avoid the two-thirds vote on the Senate floor necessary for                                                               
a court rule change.  He repeated at this point, with the changes                                                               
made to the bill, it will apply to a primitive contract group which                                                             
is definable so if the defendant wins, he/she will be able to                                                                   
recover attorney's fees.                                                                                                        
REPRESENTATIVE ROKEBERG said he is not pleased with deleting                                                                    
Section 4 but he will defer to the committee's judgement.  He noted                                                             
he would be more comfortable adopting the amendment discussed                                                                   
Number 490                                                                                                                      
SENATOR ELLIS asked if the bills that limit liability for the state                                                             
and municipalities could be combined with HB 82, and whether                                                                    
Chairman Taylor planned to hold a hearing on those bills.                                                                       
CHAIRMAN TAYLOR said he was curious about whether the bills                                                                     
interrelate, and if so, why three separate bills were introduced.                                                               
REPRESENTATIVE ROKEBERG replied the Governor introduced HB 57.                                                                  
Many of the changes to HB 82 were added to HB 57, however the issue                                                             
of the level of immunity to be granted to the state vis a vis the                                                               
municipal governments remains.  He believed HB 57 is now similar to                                                             
HB 82 in that both the state and the municipalities have to prove                                                               
a level of due diligence.  He said it might be feasible at this                                                                 
juncture to combine the bills but he would prefer to keep them                                                                  
separate as it would take a substantial redrafting effort.                                                                      
SENATOR ELLIS asked Chairman Taylor to bring HB 57 before the                                                                   
committee for a hearing.                                                                                                        
Number 462                                                                                                                      
CHAIRMAN TAYLOR said the difficulty with combining the bills is                                                                 
that the Legislature does not want to pass legislation that is a                                                                
disincentive to action; the state immunity bill covers everything.                                                              
Personal injury and wrongful death have been removed from HB 82.                                                                
He noted that everyone agrees that people and businesses will be                                                                
hurt by Y2K, the question is should government entities assume no                                                               
liability.  The bottom line is that the same amount of people will                                                              
get hurt but they will be told that they can't get help from                                                                    
SENATOR ELLIS again requested that HB 57 be scheduled for a hearing                                                             
in committee.                                                                                                                   
Number 432                                                                                                                      
REPRESENTATIVE ROKEBERG pointed out that the Legislature has been                                                               
assured by the private sector infrastructure companies in Alaska                                                                
that they will be in compliance.  He said the biggest concern about                                                             
Y2K is our perceived threat of a problem.  If people start hoarding                                                             
things in the fourth quarter of 1999, normal buying habits will be                                                              
disrupted and affect the first quarter of 2000.                                                                                 
CHAIRMAN TAYLOR noted the likelihood of getting a quorum before the                                                             
Senate floor session was not good.  He recessed the meeting subject                                                             
to the call of the Chair.                                                                                                       
TAPE 99-37, SIDE A                                                                                                              
CHAIRMAN TAYLOR reconvened the Senate Judiciary Committee meeting.                                                              
SENATOR ELLIS suggested changing the $25,000 floor to an aggregate                                                              
claim of $150,000.                                                                                                              
REPRESENTATIVE ROKEBERG said he would agree to making the shift                                                                 
from the individual amount to an aggregate amount but he would                                                                  
prefer to set the limit at $250,000 because he envisions a large                                                                
number of people being affected.                                                                                                
CHAIRMAN TAYLOR suggested the following language change on page 4,                                                              
line 3: replace the language after the word "unless" with, "the                                                                 
aggregate claim of all members of the class for economic loss                                                                   
exceeds $150,000."                                                                                                              
REPRESENTATIVE ROKEBERG repeated he disagrees with the amount.  He                                                              
noted the same change will need to be made to lines 11 and 12 on                                                                
page 5.                                                                                                                         
CHAIRMAN TAYLOR suggested changing lines 11 and 12 on page 5 by                                                                 
striking the word "each" and inserting  "the aggregate claim of all                                                             
members of the class for economic loss," and striking the word                                                                  
"that" and inserting "exceeds $150,000."                                                                                        
REPRESENTATIVE ROKEBERG suggested inserting "year 2000 date change"                                                             
after "a" and before "provision" on line 21, page 4.  He noted the                                                              
drafter felt that language to be redundant but he believes it                                                                   
clarifies the provision for the average person reading it.                                                                      
CHAIRMAN TAYLOR thought a change was also necessary on line 15.  A                                                              
civil action may not proceed to trial until the person bringing the                                                             
action provides written notice to the business that describes the                                                               
failure of the electronic computing device.  He asked how the                                                                   
victim gets the information until the discovery process occurs.                                                                 
REPRESENTATIVE ROKEBERG said that is a cure provision to give the                                                               
business a chance to fix the problem before a lawsuit is filed.                                                                 
CHAIRMAN TAYLOR agreed once the letter is written, the business                                                                 
must be given time to fix the problem, but he asked how an injured                                                              
party would know what caused the problem to occur in the first                                                                  
REPRESENTATIVE ROKEBERG replied the business would have to                                                                      
troubleshoot to find the problem.  He suggested changing the word                                                               
"failure" to "problem with."                                                                                                    
CHAIRMAN TAYLOR asked how a person in Sleetmute, whose package did                                                              
not arrive on time and was told by the carrier that the cause was                                                               
a Y2K problem down the line, would know what to do.                                                                             
REPRESENTATIVE ROKEBERG stated manufacturers are exempt from the                                                                
bill.  The bill will apply to the computer consultant who should                                                                
have fixed a computer code.                                                                                                     
Number 192                                                                                                                      
CHAIRMAN TAYLOR repeated that requiring the victimized business                                                                 
owner to notify the computer consultant of what the consultant's                                                                
problem was is probably beyond the capacity of most injured                                                                     
REPRESENTATIVE ROKEBERG said there should be demonstrable and                                                                   
empirical evidence of failure.                                                                                                  
CHAIRMAN TAYLOR clarified that he is concerned about a third party                                                              
experiencing a problem with a business and not knowing where the                                                                
problem is.                                                                                                                     
REPRESENTATIVE ROKEBERG suggested modifying that provision with the                                                             
phrase, "under the appropriate circumstances."                                                                                  
CHAIRMAN TAYLOR repeated his suggestion to add the following words                                                              
to line 15: "provides, if able to do so, written notice to the                                                                  
REPRESENTATIVE ROKEBERG suggested a conceptual amendment that                                                                   
reads, "if able to do so or if circumstances provide."                                                                          
CHAIRMAN TAYLOR suggested requiring the victim to describe the                                                                  
damages rather than the failure of the computing device, and to                                                                 
give the business to opportunity to fix the problem.                                                                            
Number 283                                                                                                                      
REPRESENTATIVE ROKEBERG said the intent is to put the responsible                                                               
party on notice that a failure of a computing device occurred, not                                                              
to require the victimized party to describe the root cause of the                                                               
problem.  He said he would agree to a conceptual amendment to                                                                   
clarify the intent.                                                                                                             
SENATOR ELLIS so moved.                                                                                                         
The committee took a recess until 5:12 p.m.                                                                                     
Number 329                                                                                                                      
SENATOR ELLIS moved to amend (Amendment 1) page 4, lines 3 and 4,                                                               
to read, "unless the aggregate claim of all members of the class                                                                
for economic loss exceeds $150,000" and to amend page 5, Section 4,                                                             
lines 11 and 12 to read, "to the year 2000 date change, that the                                                                
aggregate claim of all members of the class for economic loss                                                                   
exceeds $150,000."                                                                                                              
There being no objection, Amendment 1 was adopted.                                                                              
SENATOR ELLIS moved Amendment 2, to insert on page 4, line 21,                                                                  
after the words, "a provision of this section that conflicts with                                                               
a" the words "year 2000 date change."                                                                                           
There being no objection, Amendment 2 was adopted.                                                                              
Number 369                                                                                                                      
CHAIRMAN TAYLOR moved to amend (Amendment 3) line 14, page 4, to                                                                
insert the words, ", if appropriate," and to change line 15, to                                                                 
read, "provide, if able to do, written notice to the business that                                                              
describes the failure of the mechanism which contains an electronic                                                             
computing device arising from the year 2000 date change;"                                                                       
There being no objection, Amendment 3 was adopted.                                                                              
SENATOR ELLIS moved SCSHB 82(JUD) as amended from committee with                                                                
individual recommendations.  There being no objection, the motion                                                               
Number 400                                                                                                                      
                  HB  83-ALASKA SECURITIES ACT                                                                                  
REPRESENTATIVE ROKEBERG informed committee members that this bill,                                                              
sponsored by the House Labor and Commerce Committee, was prompted                                                               
by a change in federal law.  Without passage of this legislation,                                                               
the state will lose $4 to $5 million in fees from the mutual fund                                                               
industry.  He noted staff from the Division of Banking, Securities                                                              
and Administration are available to answer any technical questions                                                              
about this legislation.                                                                                                         
CHAIRMAN TAYLOR noted that he received significant written                                                                      
testimony, in anticipation of a proposed amendment, from people who                                                             
waited to testify yesterday.  He announced that amendment was not                                                               
The committee took a brief at-ease.                                                                                             
SENATOR ELLIS moved HB 83 with individual recommendations.  There                                                               
being no objection, HB 83 moved from committee.                                                                                 
        HB  79-UNIFORM COMMERCIAL CODE:LETTERS OF CREDIT                                                                        
CHAIRMAN TAYLOR noted the committee already received a presentation                                                             
by the person representing HB 79, as well as Art Peterson, Uniform                                                              
Commercial Code Commissioner.                                                                                                   
SENATOR ELLIS moved HB 79 from committee with individual                                                                        
recommendations.  There being no objection, the motion carried.                                                                 
There being no further business the come before the committee,                                                                  
CHAIRMAN TAYLOR adjourned the meeting at 5:22 p.m.                                                                              

Document Name Date/Time Subjects