Legislature(2001 - 2002)

05/10/2002 05:26 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                    
                   SENATE JUDICIARY COMMITTEE                                                                                 
                          May 10, 2002                                                                                          
                            5:26 p.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
Senator Robin Taylor, Chair                                                                                                     
Senator Dave Donley, Vice Chair                                                                                                 
Senator John Cowdery                                                                                                            
Senator Gene Therriault                                                                                                         
Senator Johnny Ellis                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All Members Present                                                                                                             
                                                                                                                              
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CS FOR HOUSE BILL NO. 317(FIN)                                                                                                  
"An Act relating to stalking and  to violating a protective order;                                                              
and amending Rules 4 and 65, Alaska  Rules of Civil Procedure, and                                                              
Rule 9, Alaska Rules of Administration."                                                                                        
     MOVED CSHB 317(FIN) OUT OF COMMITTEE                                                                                       
                                                                                                                                
CS FOR HOUSE BILL NO. 27(FIN)                                                                                                   
"An Act  relating to the  registration of individuals  who perform                                                              
home inspections; relating to regulation  of contractors; relating                                                              
to registration  fees for specialty contractors,  home inspectors,                                                              
and  associate  home  inspectors;   relating  to  home  inspection                                                              
requirements for  residential loans  purchased or approved  by the                                                              
Alaska Housing  Finance Corporation; relating to  civil actions by                                                              
and  against home  inspectors and  to civil  actions arising  from                                                              
residential  unit  inspections;  and providing  for  an  effective                                                              
date."                                                                                                                          
     MOVED SCS CSHB 27(JUD) OUT OF COMMITTEE                                                                                    
                                                                                                                                
CS FOR HOUSE BILL NO. 182(FIN) am                                                                                               
"An Act  relating to certain  vehicles, including  motorcycles and                                                              
trailers;  relating  to  the  registration,   bonding,  and  other                                                              
regulation of motor vehicle dealers;  relating to the registration                                                              
and  other regulation  of certain  motor  vehicle buyers'  agents;                                                              
relating to  acts and transactions  involving vehicles,  including                                                              
trailers, and  to the  acts and practices  of certain  persons and                                                              
entities  involved  in  vehicle  transactions,  including  trailer                                                              
transactions;  relating to  consumer protection  for used  vehicle                                                              
buyers;  amending Rule  3, Alaska  Rules of  Civil Procedure;  and                                                              
providing for an effective date."                                                                                               
     MOVED SCS CSHB 182(L&C) OUT OF COMMITTEE                                                                                   
                                                                                                                                
CS FOR HOUSE BILL NO. 393(JUD) am                                                                                               
"An Act  relating to unfair and  deceptive trade practices  and to                                                              
the  sale of  business  opportunities; amending  Rules  4 and  73,                                                              
Alaska Rules  of Civil Procedure;  and providing for  an effective                                                              
date."                                                                                                                          
     MOVED SCS CSHB 393(L&C) OUT OF COMMITTEE                                                                                   
                                                                                                                                
CS FOR HOUSE BILL NO. 489(JUD)                                                                                                  
"An Act relating to cruelty to animals."                                                                                        
     MOVED CSHB 489(JUD) OUT OF COMMITTEE                                                                                       
                                                                                                                                
CS FOR HOUSE BILL NO. 499(JUD)                                                                                                  
"An Act declaring  legislative intent to reject  the continuity of                                                              
enterprise  exception  to  the  doctrine  of  successor  liability                                                              
adopted in  Savage Arms, Inc. v.  Western Auto Supply, 18  P.3d 49                                                              
(Alaska 2001) as it relates to products  liability; providing that                                                              
a successor  corporation  or other business  entity that  acquires                                                              
assets of  a predecessor corporation  or other business  entity is                                                              
subject to liability  for harm to persons or property  caused by a                                                              
defective product  sold or  otherwise distributed commercially  by                                                              
the  predecessor only  if  the acquisition  is  accompanied by  an                                                              
agreement for the successor to assume  the liability, results from                                                              
a  fraudulent conveyance  to  escape liability  for  the debts  or                                                              
liabilities  of the  predecessor, constitutes  a consolidation  or                                                              
merger  with  the  predecessor,  or  results  in  the  successor's                                                              
becoming  a continuation  of the  predecessor; defining  'business                                                              
entity'  that acquires  assets to include  a sole  proprietorship;                                                              
and  applying this  Act to  the sale,  lease,  exchange, or  other                                                              
disposition  of  assets  by a  corporation,  a  limited  liability                                                              
corporation,  a partnership,  a limited  liability partnership,  a                                                              
limited  partnership,  a sole  proprietorship,  or other  business                                                              
entity  that occurs  before, on,  or after the  effective date  of                                                              
this Act."                                                                                                                      
     MOVED CSHB 499(JUD) OUT OF COMMITTEE                                                                                       
                                                                                                                                
CS FOR HOUSE BILL NO. 246(JUD)                                                                                                  
"An Act  relating to  regulation of  a person providing  insurance                                                              
for  the cost  of medical  care, to  confidentiality of  insurance                                                              
records, to insurance  hearings, to insurance fees,  to annual and                                                              
quarterly statements  by insurers,  to managed care  insurance, to                                                              
taxes on insurance, to insurer certificates  of authority, to risk                                                              
based  capital  for  insurers,  to  unauthorized  and  nonadmitted                                                              
insurers,  to surplus  lines insurance,  to  health insurance,  to                                                              
life  insurance,   to  annuity   insurance,  to  consumer   credit                                                              
insurance, to  insurer liquidation,  to multiple employer  welfare                                                              
arrangements,  to the  Alaska Insurance  Guaranty Association,  to                                                              
hospital and  medical service corporations,  and to  regulation of                                                              
insurance  producers, agents,  brokers,  managers, and  adjusters;                                                              
and providing for an effective date."                                                                                           
     MOVED SCS CSHB 246(JUD) OUT OF COMMITTEE                                                                                   
                                                                                                                                
CS FOR HOUSE BILL NO. 252(RLS)                                                                                                  
"An Act relating to the construction  of certain statutes relating                                                              
to children;  relating to the scope  of duty and standard  of care                                                              
for  persons  who   provide  services  to  certain   children  and                                                              
families;  relating  to civil  liability  for damages  to  certain                                                              
children and their families resulting  from failure to comply with                                                              
certain  statutes;  relating  to   intensive  family  preservation                                                              
services; and providing for an effective date."                                                                                 
     MOVED SCS CSHB 252(JUD) OUT OF COMMITTEE                                                                                   
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
HB 317 - No previous action to record.                                                                                          
                                                                                                                                
HB 27 - See Labor and Commerce minutes dated 4/30/02.                                                                           
                                                                                                                                
HB 182 - See Labor and Commerce minutes dated 4/25/02.                                                                          
                                                                                                                                
HB 393 - See Labor and Commerce minutes  dated 4/30/02 and 5/4/02.                                                              
                                                                                                                                
HB 489 - No previous action to record.                                                                                          
                                                                                                                                
HB 499 - See Labor and Commerce minutes dated 5/4/02.                                                                           
                                                                                                                                
HB 246 - See Labor and Commerce minutes  dated 4/30/02 and 5/4/02.                                                              
                                                                                                                                
HB 252 - No previous action to record.                                                                                          
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Representative Harry Crawford                                                                                                   
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Introduced HB 317.                                                                                       
                                                                                                                                
Ms. Mary Wells                                                                                                                  
No address given                                                                                                                
POSITION STATEMENT:  Testified in support of HB 317.                                                                          
                                                                                                                                
Ms. Janet Seitz                                                                                                                 
Staff to Representative Norman Rokeberg                                                                                         
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Introduced HB 27.                                                                                        
                                                                                                                                
Representative Norman Rokeberg                                                                                                  
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Introduced HB 27 and HB 499.                                                                             
                                                                                                                                
Ms. Amy Erickson                                                                                                                
Staff to Representative Lisa Murkowksi                                                                                          
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Introduced HB 182.                                                                                       
                                                                                                                                
Mr. Steve Alewine                                                                                                               
Alaska Auto Dealers Association                                                                                                 
3725 Mallard St.                                                                                                                
Juneau, AK 99801                                                                                                                
POSITION STATEMENT:  Testified on HB 182.                                                                                     
                                                                                                                                
Mr. Mark Mueller                                                                                                                
No address given                                                                                                                
POSITION STATEMENT:  Testified in support of HB 182.                                                                          
                                                                                                                                
Mr. Jim Kiley                                                                                                                   
No address given                                                                                                                
POSITION STATEMENT:  Testified in support of HB 182.                                                                          
                                                                                                                                
Mr. Stan Hurst                                                                                                                  
Chrysler Corporation                                                                                                            
No address given                                                                                                                
POSITION STATEMENT:  Testified in support of HB 182.                                                                          
                                                                                                                                
Mr. Rick Morrison                                                                                                               
Alaska Auto Dealers Association                                                                                                 
935 Gambell St.                                                                                                                 
Anchorage, AK 99501                                                                                                             
POSITION STATEMENT:  Testified in support of HB 182.                                                                          
                                                                                                                                
Mr. Ed Sniffen                                                                                                                  
Assistant Attorney General                                                                                                      
Fair Business Practices Section                                                                                                 
Department of Law                                                                                                               
         th                                                                                                                     
1031 W. 4 Ave. Ste. 200                                                                                                         
Anchorage, AK 99501-1994                                                                                                        
POSITION STATEMENT:  Testified in support of HB 182.                                                                          
                                                                                                                                
Representative Gary Stevens                                                                                                     
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Introduced HB 393.                                                                                       
                                                                                                                                
Ms. Cindy Drinkwater                                                                                                            
Assistant Attorney General                                                                                                      
Fair Business Practices Section                                                                                                 
Department of Law                                                                                                               
         th                                                                                                                     
1031 W. 4 Ave. Ste. 200                                                                                                         
Anchorage, AK 99501-1994                                                                                                        
POSITION STATEMENT:  Testified in support of HB 393.                                                                          
                                                                                                                                
Ms. Marie Darlin                                                                                                                
Capital City Task Force                                                                                                         
AARP Alaska                                                                                                                     
3101 Penland Pkwy.                                                                                                              
Anchorage, AK 99508                                                                                                             
POSITION STATEMENT:  Testified in support of HB 393.                                                                          
                                                                                                                                
Representative Mike Chenault                                                                                                    
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Introduced HB 489.                                                                                       
                                                                                                                                
Ms. Heather M. Nobrega                                                                                                          
Counsel to House Judiciary Committee                                                                                            
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Introduced HB 499.                                                                                       
                                                                                                                                
Ms. Lisa Hanby                                                                                                                  
Hughes Thorsness                                                                                                                
        th                                                                                                                      
550 W. 7 Ave. Ste. 1100                                                                                                         
Anchorage, AK 99501                                                                                                             
POSITION STATEMENT:  Testified in opposition to HB 499.                                                                       
                                                                                                                                
Mr. Ted Pease                                                                                                                   
Burr Pease & Kurtz                                                                                                              
810 N St.                                                                                                                       
Anchorage, AK 99501                                                                                                             
POSITION STATEMENT:  Testified in support of HB 499.                                                                          
                                                                                                                                
Representative Lisa Murkowski                                                                                                   
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Introduced HB 246.                                                                                       
                                                                                                                                
Mr. Bob Lohr                                                                                                                    
Director                                                                                                                        
Division of Insurance                                                                                                           
Department of Community & Economic Development                                                                                  
3601 C St. Ste. 1324                                                                                                            
Anchorage, AK 99503-5948                                                                                                        
POSITION STATEMENT:  Testified on HB 246.                                                                                     
                                                                                                                                
Mr. Kirk Wickersham                                                                                                             
         th                                                                                                                     
236 W. 34                                                                                                                       
Anchorage, AK 99503                                                                                                             
POSITION STATEMENT:  Testified on HB 246.                                                                                     
                                                                                                                                
Mr. Jerry Reinwand                                                                                                              
Blue Cross/Blue Shield of Alaska                                                                                                
2 Marine Way #219                                                                                                               
Juneau, AK 99801                                                                                                                
POSITION STATEMENT:  Testified on HB 246.                                                                                     
                                                                                                                                
Representative John Coghill                                                                                                     
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Introduced HB 252.                                                                                       
                                                                                                                                
Ms. Susan Cox                                                                                                                   
Assistant Attorney General                                                                                                      
Civil Division                                                                                                                  
Department of Law                                                                                                               
PO Box 110300                                                                                                                   
Juneau, AK 99811-0300                                                                                                           
POSITION STATEMENT:  Testified on HB 252.                                                                                     
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 02-29, SIDE A                                                                                                            
5:26 p.m.                                                                                                                       
                                                                                                                                
                                                                                                                                
CHAIRMAN  ROBIN  TAYLOR  called  the  Senate  Judiciary  Committee                                                            
meeting  to order at  5:26 p.m.   Present  were Senators  Cowdery,                                                              
Donley,  Therriault and  Chairman Taylor.   Senator Ellis  arrived                                                              
shortly thereafter.                                                                                                             
                                                                                                                                
The first order of business before the committee was HB 317.                                                                    
                                                                                                                                
               HB 317-STALKING & PROTECTIVE ORDERS                                                                          
                                                                                                                                
REPRESENTATIVE  HARRY CRAWFORD,  sponsor of  HB 317,  said HB  317                                                              
would fill  a gap in  Alaska law to  protect people  from stalkers                                                              
that they don't know.  He said existing  laws only protect victims                                                              
from  stalkers  they  had  previously  been  involved  with  under                                                              
domestic violence statutes.                                                                                                     
                                                                                                                                
CHAIRMAN   TAYLOR  asked   if  there   were   any  questions   for                                                              
Representative  Crawford.   There were  none.   He asked Ms.  Mary                                                              
Wells to provide testimony.                                                                                                     
                                                                                                                                
MS. MARY WELLS  said an individual or minor who  was stalked could                                                              
only call the  police and file a  report under existing  law.  She                                                              
said the victim could seek assistance  through the courts if there                                                              
was a threat  of physical violence  but the court could  only have                                                              
them escorted to a shelter such as AWAKE in Anchorage.                                                                          
                                                                                                                                
She  said she  was lucky  that her  stalker had  been arrested  on                                                              
other charges and incarcerated for  four years.  He had since been                                                              
released.  In order to get a protective  order for her family, she                                                              
said she would have  to have been involved with him  or related to                                                              
him.  She said  she got no relief from the legal  system and Judge                                                              
Murphy told her the law needed to be changed.                                                                                   
                                                                                                                                
She said  stalking was  not about  sex; it was  about power.   She                                                              
said the  stalker might  focus on  something unusual  in a  person                                                              
such as  the color  of their  hair or  their eyes.   She said  her                                                              
stalker just wanted  to hear her voice.  She said  it took her two                                                              
months to figure  out who her stalker was.  She  said some victims                                                              
never learn  the identity  of their  stalker.   Some victims  went                                                              
into hiding.  She said it was difficult  to go grocery shopping or                                                              
take their children to school.  She  said her children were unable                                                              
to participate  in physical education activities  outdoors because                                                              
they risked being exposed to the stalker.                                                                                       
                                                                                                                                
She  said she  was representing  herself and  many other  stalking                                                              
victims that couldn't get any relief.   She said HB 317 was needed                                                              
to protect victims of stalkers.                                                                                                 
                                                                                                                                
5:35 p.m.                                                                                                                       
                                                                                                                                
SENATOR  COWDERY  moved  CSHB  317(FIN)   out  of  committee  with                                                              
attached zero fiscal notes and individual recommendations.                                                                      
                                                                                                                                
There being  no objection,  CSHB 317(FIN)  moved out of  committee                                                              
with attached zero fiscal notes and individual recommendations.                                                                 
                                                                                                                                
The next order of business before the committee was HB 27.                                                                      
                                                                                                                                
                                                                                                                                
                HB 27-HOME INSPECTORS/CONTRACTORS                                                                           
                                                                                                                                
MS. JANET SEITZ, Staff to Representative  Norman Rokeberg, sponsor                                                              
of  HB  27,  said  HB  27  would  require  registration  for  home                                                              
inspectors   along   with   certain   educational   and   practice                                                              
requirements.                                                                                                                   
                                                                                                                                
SENATOR  THERRIAULT  moved  the  work  draft (Version  V)  as  the                                                              
working document before the committee.                                                                                          
                                                                                                                                
There being  no objection,  Version V was  adopted as  the working                                                              
document before the committee.                                                                                                  
                                                                                                                                
CHAIRMAN TAYLOR  asked Ms.  Seitz to explain  the changes  made in                                                              
Version V.                                                                                                                      
                                                                                                                                
MS. SEITZ said  Version V does not contain the  section that dealt                                                              
with  legal   actions  against  home  inspectors   and  associated                                                              
language  requiring  a report  to  be filed  on  an existing  home                                                              
within two years  and a new home within one year.   She said there                                                              
would  be   no  contractual  limitation   of  liability   of  home                                                              
inspectors according to Sec. 17.                                                                                                
                                                                                                                                
CHAIRMAN  TAYLOR   asked  Ms.  Seitz  for  the   location  of  the                                                              
provisions that would allow only two certifying entities.                                                                       
                                                                                                                                
MS. SEITZ said  those provisions were  in Sections 7 and  43.  She                                                              
said Sec.  7 would require  passage of appropriate  examination to                                                              
get  a home  inspector's license  and  Sec. 43  would provide  for                                                              
transitional licensing.                                                                                                         
                                                                                                                                
CHAIRMAN TAYLOR said those two entities  were the American Society                                                              
of  Home Inspectors  (ASHI) and  the  International Conference  of                                                              
Building Officials (ICBO).                                                                                                      
                                                                                                                                
MS. SEITZ said that was correct.                                                                                                
                                                                                                                                
CHAIRMAN  TAYLOR   asked  if  that  would  include   the  National                                                              
Association of Home Inspectors (NAHI).                                                                                          
                                                                                                                                
MS. SEITZ said no.                                                                                                              
                                                                                                                                
CHAIRMAN  TAYLOR asked  if the  American  Home Inspector  Training                                                              
Institute (AHITI) was a different school.                                                                                       
                                                                                                                                
MS. SEITZ said it  was.  She said  ASHI had an Alaska  chapter and                                                              
the  Alaska  Housing  Finance  Corporation  (AHFC)  required  ICBO                                                              
certification for new construction.                                                                                             
                                                                                                                                
5:37 p.m.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  ROKEBERG, sponsor  of HB  27, said  he reviewed  a                                                              
number of  other entities offering  training and  testing services                                                              
that expressed interest in being  included.  He said ASHI and ICBO                                                              
were well  respected throughout  the country.   He didn't  want to                                                              
list  every  particular  entity   and  would  not  object  to  the                                                              
committee adding a  provision that would allow  inclusion of other                                                              
entities by  regulation.  He didn't  want to exclude  any entities                                                              
but  wanted  to  be  sure they  were  reviewed  before  they  were                                                              
approved.   He said  the legislature didn't  have the  capacity to                                                              
review each of the entities.                                                                                                    
                                                                                                                                
CHAIRMAN  TAYLOR  said HB  27  limits  certification to  just  two                                                              
entities.  He  received correspondence from someone  who suggested                                                              
also  including  NAHI and  AHITI  because those  entities  offered                                                              
training and testing services.  He  didn't want to pass HB 27 only                                                              
to discover that  a good portion of the home  inspectors in Alaska                                                              
could  no longer  practice because  they  got their  certification                                                              
from some other entity.                                                                                                         
                                                                                                                                
REPRESENTATIVE ROKEBERG said he had  been working on the issue for                                                              
four years  and that work  spawned the  Alaskan ASHI chapter.   He                                                              
said  there was  some  competition  between ASHI  and  one of  the                                                              
entities  Chairman Taylor  mentioned  but he  didn't believe  that                                                              
affected  Alaska.   He felt  comfortable including  only ASHI  and                                                              
ICBO.                                                                                                                           
                                                                                                                                
CHAIRMAN  TAYLOR  moved  conceptual  Amendment  1  to  change  the                                                              
semicolon on page 4, line 24 to a  comma and add AHITI and NAHI to                                                              
the list  of eligible  entities offering  examination and  courses                                                              
for inspecting existing homes.                                                                                                  
                                                                                                                                
REPRESENTATIVE ROKEBERG was not sure  of the quality or competency                                                              
of AHITI and NAHI.                                                                                                              
                                                                                                                                
SENATOR THERRIAULT  asked why  it would  be preferable  to specify                                                              
certain  entities when  there could be  other qualified  entities.                                                              
He said  they could  delete all of  the language  from line  20 to                                                              
line 27 on page 4.                                                                                                              
                                                                                                                                
REPRESENTATIVE ROKEBERG  said there must  be basic standards.   He                                                              
said  AHFC   required  ICBO   certification  for  inspecting   new                                                              
construction.    He said  Senator  Therriault's  suggestion  would                                                              
lower requirements  and he  didn't think they  wanted to  do that.                                                              
He said  existing home  inspection certification  was what  was at                                                              
issue and ASHI was the normally accepted standard.                                                                              
                                                                                                                                
CHAIRMAN  TAYLOR  said  members  of  the  committee  had  received                                                              
correspondence from  people who wouldn't be able to  get a license                                                              
unless they went back through the educational process.                                                                          
                                                                                                                                
REPRESENTATIVE  ROKEBERG had reviewed  some of  the entities.   He                                                              
read the  complete curriculum from  one of the  entities mentioned                                                              
that was in a one-room second-floor  walk-up in Connecticut and he                                                              
didn't   believe   they  had   sufficiently   demonstrated   their                                                              
qualifications  to be included  in HB 27.   He said  entities that                                                              
could show sufficient qualifications should be included.                                                                        
                                                                                                                                
CHAIRMAN  TAYLOR   said  he  wasn't   concerned  with   where  the                                                              
inspectors got  their certification  because they would  be liable                                                              
if they did anything wrong.                                                                                                     
                                                                                                                                
REPRESENTATIVE  ROKEBERG said the  same change  should be  made on                                                              
page 22, line 6 to be consistent.                                                                                               
                                                                                                                                
CHAIRMAN TAYLOR said  they could change the "or"  on page 22, line                                                              
6 to an "and."  He said that would  require all inspectors to take                                                              
an examination by the board.                                                                                                    
                                                                                                                                
REPRESENTATIVE ROKEBERG said there wasn't a board.                                                                              
                                                                                                                                
CHAIRMAN TAYLOR said  the language on page 22,  lines 7-8 referred                                                              
to, "the Examination  Board of Professional Home  Inspectors."  He                                                              
asked if HB 27 created that board.                                                                                              
                                                                                                                                
MS.  SEITZ said  that examination  was  already given  by a  group                                                              
called Professional  Home Inspectors and some people  in the state                                                              
had already taken that examination.                                                                                             
                                                                                                                                
CHAIRMAN  TAYLOR  reiterated  that conceptual  Amendment  1  would                                                              
include AHITI  and NAHI on  page 4, line 24  and page 22,  line 6.                                                              
He asked if there was any objection to Amendment 1.                                                                             
                                                                                                                                
There being no objection, Amendment 1 was adopted.                                                                              
                                                                                                                                
SENATOR  COWDERY moved  SCS  CSHB 27(JUD)  out  of committee  with                                                              
attached fiscal notes and individual recommendations.                                                                           
                                                                                                                                
There being no objection, SCS CSHB  27(JUD) moved out of committee                                                              
with attached fiscal notes and individual recommendations.                                                                      
                                                                                                                                
The next order of business before the committee was HB 182.                                                                     
                                                                                                                                
                                                                                                                                
             HB 182-MOTOR VEHICLE SALES AND DEALERS                                                                         
                                                                                                                                
MS. AMY ERICKSON, staff to Representative  Lisa Murkowski, sponsor                                                              
of HB 182,  said HB 182  addresses the relationship  between motor                                                              
vehicle dealers, manufacturers and prospective buyers.  She said                                                                
the bill would:                                                                                                                 
                                                                                                                                
   · Provide  guidelines  to protect  dealers  and consumers  from                                                              
     abuses within the industry;                                                                                                
   · Create   a   platform   for    dispute   resolution   between                                                              
     manufacturers and dealers with regard to franchise                                                                         
     agreements;                                                                                                                
   · Include  franchise  agreements   under  the  jurisdiction  of                                                              
     Alaska courts;                                                                                                             
   · Create  a uniform  process for  transferring, terminating  or                                                              
     conveying franchise agreements;                                                                                            
   · Provide protection  against the placement of  new dealerships                                                              
     within proximity of a current dealership;                                                                                  
   · Provide uniform guidelines for  designating successors in the                                                              
     case of death or incapacity of a franchisee; and                                                                           
   · Provide  safeguards  to  protect   consumers  from  deceptive                                                              
     advertising, price comparison and availability of advertised                                                               
     items.                                                                                                                     
                                                                                                                                
CHAIRMAN TAYLOR asked Mr. Steve Alewine if he wished to testify.                                                                
                                                                                                                                
MR. STEVE ALEWINE, Alaska Auto Dealers Association, said he did                                                                 
not.                                                                                                                            
                                                                                                                                
CHAIRMAN TAYLOR asked Mr. Mark Mueller to provide testimony.                                                                    
                                                                                                                                
MR. MARK MUELLER said he was comfortable with HB 182.                                                                           
                                                                                                                                
CHAIRMAN TAYLOR asked Mr. Jim Kiley to provide testimony.                                                                       
                                                                                                                                
MR. JIM KILEY said he supported HB 182.                                                                                         
                                                                                                                                
CHAIRMAN TAYLOR asked Mr. Stan Hurst to provide testimony.                                                                      
                                                                                                                                
MR. STAN HURST, Chrysler Corporation, said Chrysler is                                                                          
comfortable with the bill.                                                                                                      
                                                                                                                                
CHAIRMAN TAYLOR asked Mr. Rick Morrison to provide testimony.                                                                   
                                                                                                                                
MR. RICK MORRISON, Alaska Auto Dealers Association, thanked                                                                     
everybody that had worked on the bill.  He thanked the committee                                                                
for its support.                                                                                                                
                                                                                                                                
CHAIRMAN TAYLOR asked Mr. Ed Sniffen to provide testimony.                                                                      
                                                                                                                                
MR. ED SNIFFEN, Assistant Attorney General, Fair Business                                                                       
Practices  Section  (FBPS),  Department  of Law  (DOL),  said  DOL                                                              
supported HB 182.                                                                                                               
                                                                                                                                
SENATOR  COWDERY moved  SCS CSHB  182(L&C) out  of committee  with                                                              
attached zero fiscal notes and individual recommendations.                                                                      
                                                                                                                                
There  being  no  objection,  SCS   CSHB  182(L&C)  moved  out  of                                                              
committee  with   attached  zero   fiscal  notes  and   individual                                                              
recommendations.                                                                                                                
                                                                                                                                
The next order of business before the committee was HB 393.                                                                     
                                                                                                                                
             HB 393-SALES OF BUSINESS OPPORTUNITIES                                                                         
                                                                                                                                
5:53 p.m.                                                                                                                       
                                                                                                                                
REPRESENTATIVE GARY  STEVENS, sponsor of HB 393, said  HB 393 is a                                                              
consumer protection bill that would  help Alaskans confronted with                                                              
consumer scams known as business  opportunities.  He said he had a                                                              
packet of examples  of the business opportunities  people received                                                              
in  the  mail.    He  said  HB  393   would  not  hurt  legitimate                                                              
businesses;  it  would  only  protect  against  the  high-pressure                                                              
business  opportunities that  promised people  high earnings.   He                                                              
said vulnerable Alaskans  such as senior citizens  and people with                                                              
disabilities, were  especially taken in  by them.  He said  HB 393                                                              
would require these businesses to  register, disclose information,                                                              
use  an   escrow  account   for  delivery   and  allow   a  30-day                                                              
cancellation period.   He said  direct sellers for  companies such                                                              
as Avon,  Mary Kay and Amway  would be exempted  from requirements                                                              
of the bill.                                                                                                                    
                                                                                                                                
CHAIRMAN TAYLOR said  many people who were appreciative  of HB 393                                                              
had  contacted him.   He  asked Ms.  Cindy  Drinkwater to  provide                                                              
testimony.                                                                                                                      
                                                                                                                                
MS. CINDY  DRINKWATER, Assistant  Attorney General,  Department of                                                              
Law (DOL), said DOL strongly supported HB 393.                                                                                  
                                                                                                                                
CHAIRMAN  TAYLOR  asked  if  there  were  any  questions  for  Ms.                                                              
Drinkwater.   There  were  none.   He asked  Ms.  Marie Darlin  to                                                              
provide testimony.                                                                                                              
                                                                                                                                
MS. MARIE DARLIN, Capital City Task  Force, AARP Alaska, said they                                                              
supported  HB 393.    She said  the  committee  had AARP  Alaska's                                                              
letter of support and had heard from  many of its members, many of                                                              
who had  really been  ripped off by  business opportunities.   She                                                              
said the latest CS cleared up any questions.                                                                                    
                                                                                                                                
CHAIRMAN TAYLOR asked if there were  any questions for Ms. Darlin.                                                              
There were none.                                                                                                                
                                                                                                                                
SENATOR ELLIS noted  that HB 393 passed the floor  of the House of                                                              
Representatives with  a vote of 37 to  one.  He said  the nay vote                                                              
was  from Representative  Vic Kohring.    He asked  Representative                                                              
Stevens if  he knew why  Representative Kohring had  voted against                                                              
HB 393.                                                                                                                         
                                                                                                                                
REPRESENTATIVE STEVENS thought Representative  Kohring was opposed                                                              
to any governmental regulations that would impact people.                                                                       
                                                                                                                                
CHAIRMAN  TAYLOR  said he  spoke  to Representative  Kohring,  who                                                              
indicated  that his  primary concern  was  that HB  393 would  add                                                              
another level  of government and  more employees and  would result                                                              
in more  cost to  other small  businesses.   He said the  language                                                              
that would  allow the  department to  set the  cost of fees  based                                                              
upon  the cost  of issuing  licenses was  fairly broad.   He  felt                                                              
Representative  Kohring was philosophically  supportive of  HB 393                                                              
but had concerns about the cost of government.                                                                                  
                                                                                                                                
He asked  if there was  any further discussion  on HB 393.   There                                                              
was none.                                                                                                                       
                                                                                                                                
SENATOR  COWDERY moved  SCS CSHB  393(L&C) out  of committee  with                                                              
attached zero fiscal note and individual recommendations.                                                                       
                                                                                                                                
There  being  no  objection,  SCS   CSHB  393(L&C)  moved  out  of                                                              
committee   with  attached   zero  fiscal   note  and   individual                                                              
recommendations.                                                                                                                
                                                                                                                                
The next order of business before the committee was HB 489.                                                                     
                                                                                                                                
                                                                                                                                
                    HB 489-CRUELTY TO ANIMALS                                                                               
                                                                                                                                
REPRESENTATIVE MIKE  CHENAULT, sponsor of HB 489, said  it is well                                                              
documented that  animal abuse is a  precursor to child abuse.   He                                                              
said  studies by  the  American Humane  Society  and the  American                                                              
Psychiatric Association  strongly suggested  that a great  deal of                                                              
adult  domestic  abuse could  be  avoided  if animal  cruelty  was                                                              
identified  and treated as  a juvenile  problem.   He said  HB 489                                                              
would allow  prosecutors to charge  a person with cruelty  to each                                                              
animal  found to  be neglected  or  abused and  suggests that  the                                                              
courts  mandate behavioral  counseling.   He said  the bill  would                                                              
also create  the duty to  report abuse  to authorities and  hold a                                                              
person harmless if they reported animal abuse in good faith.                                                                    
                                                                                                                                
6:00 p.m.                                                                                                                       
                                                                                                                                
CHAIRMAN  TAYLOR asked  if HB  489 would  have any  impact on  the                                                              
process of raising domestic animals for food production.                                                                        
                                                                                                                                
REPRESENTATIVE CHENAULT said that was not his intent.                                                                           
                                                                                                                                
CHAIRMAN TAYLOR asked if there were  any further questions.  There                                                              
were none.                                                                                                                      
                                                                                                                                
SENATOR  COWDERY  moved  CSHB  489(JUD)   out  of  committee  with                                                              
attached zero fiscal notes and individual recommendations.                                                                      
                                                                                                                                
There being  no objection,  CSHB 489(JUD)  moved out of  committee                                                              
with attached zero fiscal notes and individual recommendations.                                                                 
                                                                                                                                
The next order of business before the committee was HB 499.                                                                     
                                                                                                                                
                                                                                                                                
        HB 499-SUCCESSOR LIABILITY FOR PRODUCT LIABILITY                                                                    
                                                                                                                                
MS. HEATHER  NOBREGA, counsel  to the  House Judiciary  Committee,                                                              
sponsor of  HB 499, said HB  499 would determine when  a successor                                                              
in   a  corporation   could  be   held  liable   for  a   previous                                                              
corporation's products liability.                                                                                               
                                                                                                                                
CHAIRMAN TAYLOR  said HB  499 was a  complex piece of  legislation                                                              
that  would involve  the  legislature  reversing  a Supreme  Court                                                              
decision.   He said  whether or not  a successor corporation  that                                                              
purchased the  assets of a bankrupt  business would be  liable for                                                              
the  activities  of the  previous  corporation was  a  significant                                                              
policy question.                                                                                                                
                                                                                                                                
SENATOR  THERRIAULT  asked  what   kind  of  liability  was  being                                                              
addressed.                                                                                                                      
                                                                                                                                
6:07 p.m.                                                                                                                       
                                                                                                                                
CHAIRMAN TAYLOR said  the case involves Savage Arms,  Inc. and the                                                              
Western Auto Supply Corporation and  is very unique.  Western Auto                                                              
sold a  .22 Savage  Industries rifle  that had  design factors  or                                                              
problems  that  caused  a  tragic accident.    He  explained  that                                                              
Representative Chenault  employed the father of the  young man who                                                              
was shot  in the  temple by  the rifle.  Suit was brought  against                                                              
Western  Auto  and full  compensation  has  been provided  to  the                                                              
victim but additional subrogation  claims have gone back and forth                                                              
between Western  Auto and Savage  Arms as to  who was liable.   He                                                              
said the matter  was up on an interlocutory appeal  to the Supreme                                                              
Court from  a decision made  by Judge Link.   He said  the Supreme                                                              
Court rendered a decision using a  four-part test as to whether or                                                              
not  the  successor  corporation   was  liable  for  the  previous                                                              
corporation's products  liability.  He said Savage  Industries had                                                              
been purchased along  with the name.  He thought  Alaska's Supreme                                                              
Court  was one  of  only  three that  came  out with  a  different                                                              
continuity of enterprise  theory.  The Supreme  Court decided that                                                              
the new corporation might have become  liable with the purchase of                                                              
the assets of Savage Industries.   He said the matter had not been                                                              
resolved  yet and the  new corporation  would go  to trial  in the                                                              
fall to  determine the  matter of liability.  He said  the Supreme                                                              
Court indicated  that successor liability  affected the  manner in                                                              
which the case would be tried and who would be held liable.                                                                     
                                                                                                                                
6:09 p.m.                                                                                                                       
                                                                                                                                
SENATOR COWDERY thought the gun had  been sold by Western Auto but                                                              
had passed through many owners before the young man was injured.                                                                
                                                                                                                                
MS. NOBREGA said that was correct.                                                                                              
                                                                                                                                
SENATOR COWDERY  said he  purchased a  Helio Courier factory  when                                                              
Piper  Aircraft went  bankrupt.    He said  they  would have  been                                                              
liable for  the entire  history of the  aircraft even  though they                                                              
were manufacturing a different model.   He said that made him ask,                                                              
"Is the plumber responsible for what goes through the pipe?"                                                                    
                                                                                                                                
MS. NOBREGA said  products liability was very  interesting because                                                              
it  could  hold   any  entity  liable  throughout   the  chain  of                                                              
possession.   She said  liability  moved down  the chain from  the                                                              
manufacturer to the wholesaler and the retailer.                                                                                
                                                                                                                                
SENATOR COWDERY asked  if that model of gun was still  made and if                                                              
they had corrected the flaws if there were flaws.                                                                               
                                                                                                                                
MS. NOBREGA said  she didn't know but assumed that  either the gun                                                              
was no longer being  made or the problem that resulted  in the gun                                                              
exploding had been fixed.                                                                                                       
                                                                                                                                
REPRESENTATIVE  ROKEBERG, Chairman  of House Judiciary  Committee,                                                              
said when Savage  Industries purchased Savage Arms  they purchased                                                              
four product  lines but did  not purchase that  particular product                                                              
line.   He said Western  Auto had settled  the case.  He  said the                                                              
case was now  between the subrogated insurance  companies AllState                                                              
and Lloyd's of  London.  He said HB 499 addressed  the Restatement                                                              
(Third) of Torts to determine successor liability.                                                                              
                                                                                                                                
CHAIRMAN TAYLOR asked Ms. Lisa Hanby to provide testimony.                                                                      
                                                                                                                                
MS. LISA  HANBY, Hughes  Thorsness, said  her supervisor,  Mr. Jim                                                              
Powell, wished to provide testimony but was not available.                                                                      
                                                                                                                                
CHAIRMAN TAYLOR asked if Ms. Hanby had any testimony to provide.                                                                
                                                                                                                                
MS.  HANBY  said Hughes  Thorsness'  major  concern was  that  the                                                              
retroactivity of HB  499 would make the law applicable  to parties                                                              
already in litigation.                                                                                                          
                                                                                                                                
CHAIRMAN TAYLOR asked how HB 499 would affect their case.                                                                       
                                                                                                                                
MS. HANBY  thought it would eliminate  their case.  She  said they                                                              
were seeking indemnification for about $12 million.                                                                             
                                                                                                                                
CHAIRMAN TAYLOR asked if there were  any further questions for Ms.                                                              
Hanby.  There were none.                                                                                                        
                                                                                                                                
REPRESENTATIVE  ROKEBERG said  HB 499  would overturn  one of  two                                                              
theories that were adopted by the  Supreme Court to be utilized by                                                              
the trial court  in applying products liability law.   He said the                                                              
Supreme Court adopted the mere continuation  theory, which was one                                                              
of the four tests allowed under the  Restatement (Third) of Torts,                                                              
and  the  continuity  of  enterprise  theory.    He  said  HB  499                                                              
overturned  the continuity  of  enterprise theory.    He said  the                                                              
Supreme  Court retroactively  applied  that  standard because  the                                                              
legislature had never  addressed the issue.  He said  HB 499 would                                                              
clarify what  the law should  be because  the case was  before the                                                              
Supreme Court  to get clarification  of the law.   He said  HB 499                                                              
would  simply do  what the  Supreme Court  had done  in making  it                                                              
retroactive.  He felt the Supreme  Court had picked the wrong law.                                                              
He said  46 other states  agreed with  the Restatement  (Third) of                                                              
Torts. The  Supreme Court picked  a law that had  been discredited                                                              
throughout the judiciary of the country.                                                                                        
                                                                                                                                
TAPE 02-29, SIDE B                                                                                                            
6:15 p.m.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  ROKEBERG  said  the previous  testimony  from  Mr.                                                              
Powell was  that there was  approximately $14 million  involved in                                                              
the case.   He  said the  case was a  clear tort  case and  it was                                                              
clear  in case  law that  there was  no  vested right  to the  $14                                                              
million until the entire case had  been tried and brought to final                                                              
judgment.   He said there  was case law in  the brief in  the bill                                                              
packet going  all the  way back to  Chief Justice John  Marshall's                                                              
decision in the  The Schooner Peggy case in 1801  that stated that                                                              
legal  principle.   He said  it was very  well tested  and HB  499                                                              
would not  interfere with  the case.   He said the  Superior Court                                                              
would look  at the Supreme Court's  decision and HB 499  in making                                                              
judgment.  He said they would get  to retry the case based on what                                                              
the law should  be.  He said it  was up to the facts  to determine                                                              
responsibility.                                                                                                                 
                                                                                                                                
CHAIRMAN TAYLOR asked Mr. Ted Pease to provide testimony.                                                                       
                                                                                                                                
MR. TED PEASE,  Burr Pease & Kurtz,  said his firm was  counsel to                                                              
Savage Arms.   He pointed out that  HB 499 would adopt  section 12                                                              
of the American Law Institute's Restatement  (Third) of Torts.  He                                                              
said  the American  Law  Institute  was  a respected  agency  that                                                              
studied laws  and presented  an analysis on  what the law  was and                                                              
what  it should  be.   He  said they  adopted  the following  four                                                              
conditions  that  would make  a  successor corporation  liable  in                                                              
1998:                                                                                                                           
                                                                                                                                
   · If the successor corporation expressly assumed liability;                                                                  
   · If it was a merger or consolidation of two corporations;                                                                   
   · If it was fraud; or                                                                                                        
   · If the new corporation was a clear continuation of the old                                                                 
     corporation.                                                                                                               
                                                                                                                                
He said  clear continuation  was  when the two  companies had  the                                                              
same shareholders, stockholders,  directors and business but was a                                                              
different corporation.                                                                                                          
                                                                                                                                
MR. PEASE  said HB 499 would  eliminate Western Auto's  ability to                                                              
use the continuity of enterprise  theory to answer the question of                                                              
liability  in  their  case  against  Savage Arms.    He  said  the                                                              
continuity of enterprise  theory was a wide-open  theory that said                                                              
if a  successor company  appeared to be  the same corporation  the                                                              
jury could decide the successor corporation was liable.                                                                         
                                                                                                                                
He  said  the  original  corporation   went  bankrupt  because  of                                                              
financial  problems.   He  said  the  new corporation  decided  to                                                              
purchase part of the bankrupt corporation  including most, but not                                                              
all, of  the assets.   It did not  purchase the product  line that                                                              
included the  gun that hurt the young  man.  He said  the accident                                                              
hadn't happened when the negotiations  were going on.  He said the                                                              
accident had happened by the time  the deal was closed but neither                                                              
corporation nor  the bankruptcy  court knew about  it.  He  said a                                                              
year later  the suit  was filed.   He  said Savage Industries  was                                                              
looked at for liability  but had gone out of business  so the suit                                                              
went after Western Auto, the original seller of the gun.                                                                        
                                                                                                                                
He  urged the  passage  of HB  499 because  it  would protect  any                                                              
corporation or individual who purchased  all or part of the assets                                                              
of  another  business  that  could   find  themselves  liable  for                                                              
products liability for an accident  that hadn't even happened yet.                                                              
                                                                                                                                
CHAIRMAN TAYLOR  maintained that the Restatement  (Third) of Torts                                                              
said  the  successor  corporation  was  liable  if  liability  was                                                              
assumed,  if fraudulent  conveyance was  used to  escape debts  or                                                              
liabilities,  if  it was  a  consolidation  or  merger or  if  the                                                              
successor   corporation   was  really   a   continuation  of   the                                                              
predecessor.   He asked if the  Supreme Court decided  that Savage                                                              
Arms was a continuation of Savage Industries.                                                                                   
                                                                                                                                
MR. PEASE said  Judge Link decided that there were  fact issues to                                                              
be examined and recognized two theories  that might be applicable.                                                              
One theory was the continuity of enterprise theory.                                                                             
                                                                                                                                
CHAIRMAN TAYLOR asked if that applied in this case.                                                                             
                                                                                                                                
MR.  PEASE  said  it  did  not.   He  said  the  corporation  that                                                              
purchased the assets  of Savage Industries was wholly  owned by an                                                              
international, publicly traded corporation called Challenger.                                                                   
                                                                                                                                
CHAIRMAN TAYLOR  said he appreciated  the hard work Mr.  Pease and                                                              
Mr. Powell had put in on HB 499.   He wasn't convinced that HB 499                                                              
was appropriate but believed there  should be some finality in the                                                              
marketplace.    He thought  everyone  would agree  that  liability                                                              
should  continue  if  the  transaction   fell  under  any  of  the                                                              
exceptions under the Restatement (Third) of Torts.                                                                              
                                                                                                                                
SENATOR  COWDERY  asked if  the  corporation  was purchased  at  a                                                              
bankruptcy.                                                                                                                     
                                                                                                                                
MR.  PEASE  said  it was  purchased  from  Chapter  11  bankruptcy                                                              
proceedings with the approval of the bankruptcy court.                                                                          
                                                                                                                                
CHAIRMAN  TAYLOR asked  if there  was  anyone else  who wished  to                                                              
testify on HB 499.  There was nobody.                                                                                           
                                                                                                                                
SENATOR  COWDERY  moved  CSHB  499(JUD)   out  of  committee  with                                                              
attached zero fiscal note and individual recommendations.                                                                       
                                                                                                                                
SENATOR ELLIS objected.                                                                                                         
                                                                                                                                
SENATOR DONLEY had  not made up his mind about HB  499.  He didn't                                                              
know if  he opposed  moving it out  of committee.   He  asked what                                                              
Senator Ellis' objection was.                                                                                                   
                                                                                                                                
SENATOR ELLIS said  he had a bad feeling about HB  499.  He didn't                                                              
think  the  committee understood  the  bill.    He said  the  next                                                              
committee of referral was the Senate  Rules Committee and then the                                                              
bill would  be on  the floor  where a  group of uninformed  people                                                              
would be asked to  cast a vote on this complicated  measure in the                                                              
closing days of session.                                                                                                        
                                                                                                                                
SENATOR  DONLEY said  he would  not oppose  moving HB  499 out  of                                                              
committee but he shared Senator Ellis' concerns.                                                                                
                                                                                                                                
Upon a  roll call vote, Senators  Donley and Cowdery  and Chairman                                                              
Taylor voted  in favor  of moving CSHB  499(JUD) out  of committee                                                              
and Senator Ellis  voted in opposition.  Therefore,  CSHB 499(JUD)                                                              
moved out  of committee by  a vote of  three to one  with attached                                                              
zero fiscal note and individual recommendations.                                                                                
                                                                                                                                
The next order of business before was HB 246.                                                                                   
                                                                                                                                
                                                                                                                                
                  HB 246-OMNIBUS INSURANCE BILL                                                                             
                                                                                                                                
REPRESENTATIVE  LISA  MURKOWSKI,   Chair  of  the  House  Labor  &                                                              
Commerce Committee,  sponsor of  HB 246, said  the majority  of HB                                                              
246 was  technical cleanup  language.  She  said there were  a few                                                              
policy provisions that she wanted to point out to the committee.                                                                
                                                                                                                                
REPRESENTATIVE MURKOWSKI  said the first policy  provision related                                                              
to multiple employer  welfare arrangements (MEWAs).   HB 246 would                                                              
establish  a more appropriate  regulatory  structure for  MEWAs in                                                              
regard  to appropriate  capital, surplus  reserving and  financial                                                              
reporting requirements.                                                                                                         
                                                                                                                                
She  said the  second  policy  provision would  establish  tighter                                                              
confidentiality of  records laws so that Alaska  would continue to                                                              
be   accredited  by   the   National  Association   of   Insurance                                                              
Commissioners.   She said there  were sharing agreements  to allow                                                              
the Division of Insurance (DOI) to obtain information.                                                                          
                                                                                                                                
She said  there would  also be  fees for  late payment of  premium                                                              
taxes.  She  said there was also  a provision that would  allow an                                                              
annual  fee to  operate as  a joint  insurance arrangement  (JIA).                                                              
She  said  there  was  probably  an  amendment  relating  to  that                                                              
provision.                                                                                                                      
                                                                                                                                
CHAIRMAN TAYLOR  asked if there were questions  for Representative                                                              
Murkowski.  There were none.                                                                                                    
                                                                                                                                
He moved  Amendment 1 to  delete Sec. 52  on page 20,  lines 12-22                                                              
and renumber the remaining sections  accordingly.  He said Sec. 52                                                              
added a new provision that would  charge a fee against the pooling                                                              
organizations created by the legislature  for school districts and                                                              
municipalities.   He  said those  were  not regulated  by DOI  and                                                              
there was no  reason for DOI to  charge them a fee.   He asked DOI                                                              
to provide testimony on Amendment 1.                                                                                            
                                                                                                                                
MR. BOB  LOHR, Director, DOI,  Department of Community  & Economic                                                              
Development, said  Sec. 52 addressed a very specific  situation in                                                              
which  a  JIA  complained  to  DOI  that  the  competing  JIA  was                                                              
operating unfairly by doing things  that weren't allowed under the                                                              
JIA  statutes.   He  said  that had  happened  approximately  four                                                              
times.  He said JIAs were not normally  subject to regulation.  He                                                              
said DOI  was being  asked to  be the  gatekeeper for  competitive                                                              
forays by each JIA into the territory  of the other by using Title                                                              
21 to  define the  boundary.  He  said those  JIAs should  pay the                                                              
actual  cost of  that regulation.   He  said DOI  was a  fee-based                                                              
agency and  other fee  payers were  paying those  costs.   DOI was                                                              
concerned that Sec.  52 had been drafted too broadly  and he had a                                                              
more narrowly crafted amendment to offer the committee.                                                                         
                                                                                                                                
CHAIRMAN TAYLOR  said it seemed like  the JIAs were  simply asking                                                              
DOI to do its job.                                                                                                              
                                                                                                                                
MR. LOHR  said DOI  was being  asked to  regulate the  competitive                                                              
playing field between  JIAs.  He said that was  beyond their scope                                                              
of regulation because they did not regulate JIAs.                                                                               
                                                                                                                                
CHAIRMAN  TAYLOR  said  DOI  didn't regulate  JIAs  but  they  did                                                              
regulate the  insurance business.   He said  if somebody  tried to                                                              
set  up  a  phony  insurance  corporation   and  they  received  a                                                              
complaint,  he assumed they  would enforce  the insurance  laws of                                                              
the state.                                                                                                                      
                                                                                                                                
MR. LOHR said that was correct.                                                                                                 
                                                                                                                                
CHAIRMAN TAYLOR thought Sec. 52 would  have a chilling effect upon                                                              
anyone wanting  to turn to DOI  for assistance and  enforcement of                                                              
the laws they were supposed to enforce.                                                                                         
                                                                                                                                
MR. LOHR said it wasn't designed  to have a chilling effect except                                                              
when one JIA wanted DOI to regulate the other's conduct.                                                                        
                                                                                                                                
CHAIRMAN TAYLOR said  that was DOI's purpose.  He  said that would                                                              
be like  going to the  police to  get a driver  to slow down  in a                                                              
neighborhood  and  being  charged  to  lodge the  complaint.    He                                                              
thought that  would have  a tremendous  chilling effect  on anyone                                                              
coming to DOI.  He said it would  be like charging a fee to file a                                                              
complaint.                                                                                                                      
                                                                                                                                
MR. LOHR said DOI didn't object to Amendment 1.                                                                                 
                                                                                                                                
CHAIRMAN  TAYLOR asked  if  there was  any  further discussion  on                                                              
Amendment  1.    There was  none.    He  asked if  there  was  any                                                              
objection to Amendment 1.                                                                                                       
                                                                                                                                
There being no objection, Amendment 1 was adopted.                                                                              
                                                                                                                                
CHAIRMAN TAYLOR asked Mr. Kirk Wickersham to provide testimony.                                                                 
                                                                                                                                
MR.  KIRK WICKERSHAM  said  he  was a  lawyer  and  a real  estate                                                              
broker.   He said he was  also the owner  of a small  title agency                                                              
called Attorneys Title  Guaranty.  He offered an  amendment to the                                                              
committee.  He said  the amendment was the result  of a variety of                                                              
actions related to Attorneys Title Guaranty.                                                                                    
                                                                                                                                
He said the legislature  adopted a bundle of laws  governing title                                                              
insurance in 1974.  He said AS 21.66.170  required title companies                                                              
to  prepare  a  title report  before  issuing  a  title  insurance                                                              
policy.   He  said  AS 21.66.200  and  AS 21.66.210  provided  two                                                              
methods by which to do that.  He  said AS 21.66.200 required title                                                              
companies to  have a  title plant  consisting of approximately  25                                                              
years  of  public  records;  that would  equal  about  11  million                                                              
documents in  Anchorage.  He  said AS 21.66.210  allowed companies                                                              
to join  together to  form a  joint title  insurance company  that                                                              
would be allowed to use the public records.                                                                                     
                                                                                                                                
MR.   WICKERSHAM   said   Attorneys  Title   Guaranty   and   it's                                                              
underwriter,  Old  Republic,  formed  a joint  title  company  the                                                              
previous  summer,  applied  for  and  obtained  a  certificate  of                                                              
authority from DOI  and started selling title  insurance and doing                                                              
title searches using the public records.   He said complaints from                                                              
other  title  companies  resulted  in  a  lawsuit  that  had  been                                                              
dismissed,  a license  action that  was still  pending and  a bill                                                              
that  would clarify  the  law in  the  opposite  direction of  his                                                              
proposal.                                                                                                                       
                                                                                                                                
He  said  his   amendment  would  grandfather  Old   Republic  and                                                              
Attorneys  Title  Guaranty  to  allow  them  to  continue  in  the                                                              
business.    He said  it  would  foster  more competition  in  the                                                              
industry.    His  company  was able  to  offer  price  competition                                                              
because  they didn't  have to  build and  maintain a  copy of  the                                                              
public records.                                                                                                                 
                                                                                                                                
CHAIRMAN  TAYLOR asked  how other companies  could participate  in                                                              
the field if the amendment was adopted.                                                                                         
                                                                                                                                
MR.  WICKERSHAM said  they  could join  the  joint title  company,                                                              
which he was  open to.  He said  he was advised not  to propose an                                                              
overall policy  change, which was  why he presented  a grandfather                                                              
amendment.   He believed every skilled  title examiner could  do a                                                              
title search from the public records.                                                                                           
                                                                                                                                
CHAIRMAN   TAYLOR  asked   if  the   other   companies  would   be                                                              
grandfathered in.                                                                                                               
                                                                                                                                
MR. WICKERSHAM  said they  would because they  could either  be or                                                              
become a participant in or an owner of a joint title company.                                                                   
                                                                                                                                
CHAIRMAN TAYLOR asked if his joint  title company was the only one                                                              
that new companies could join.                                                                                                  
                                                                                                                                
MR. WICKERSHAM said  that was a problem and that  was why they had                                                              
to create their own joint title company.   He said there were only                                                              
two joint  title companies, theirs and  the one owned by  three of                                                              
the four other title insurance companies in Anchorage                                                                           
                                                                                                                                
CHAIRMAN TAYLOR said grandfathering  his joint title company would                                                              
put him  in a select  group that had  built their plants  over the                                                              
years.   He said  there wouldn't  really be  another option  for a                                                              
competing company  to form  and create a  title plant in  the same                                                              
manner that he did.                                                                                                             
                                                                                                                                
MR. WICKERSHAM  said that  would be the  effect of the  amendment.                                                              
He said he could  also suggest a very simple  amendment that would                                                              
allow  any two  title companies  to join  and form  a joint  title                                                              
plant.                                                                                                                          
                                                                                                                                
CHAIRMAN TAYLOR asked what that would be.                                                                                       
                                                                                                                                
MR.  WICKERSHAM  said  the  first   sentence  of  AS  21.66.210(a)                                                              
provided that  two or  more title  insurance companies  or limited                                                              
producers could  join together to  form a joint title  company for                                                              
the purposes  of producing  title  searches.   He said the  second                                                              
sentence  provided that  a title  insurance company  or a  limited                                                              
producer  that belonged  to a  joint title  company that  complied                                                              
with AS  21.66.210 was in  compliance with  the section.   He said                                                              
the  amendment   would  simply  include   AS  21.66.200   in  that                                                              
compliance.   He said  that would  end the  controversy and  allow                                                              
anybody  to form  a  joint title  company.   It  would also  bring                                                              
Alaska into  conformance with  39 other states  that did  not have                                                              
title plant requirements.                                                                                                       
                                                                                                                                
CHAIRMAN TAYLOR  asked Mr.  Wickersham to work  with Mr.  Lohr and                                                              
Representative Murkowski to work  out that amendment and come back                                                              
to the committee.  He asked if the  committee had any objection to                                                              
Mr. Wickersham's  approach.   He  said he would  rather provide  a                                                              
more generic  solution than  try to pass  an amendment  that would                                                              
only take care of one operator and  wouldn't provide opportunities                                                              
in the future for expansion in the field.                                                                                       
                                                                                                                                
SENATOR ELLIS  asked if the new  amendment would make the  one Mr.                                                              
Wickersham passed out unnecessary.                                                                                              
                                                                                                                                
CHAIRMAN TAYLOR said it would.                                                                                                  
                                                                                                                                
MR. LOHR  said there was an  adjudicatory matter pending  in front                                                              
of DOI  in which Mr.  Wickersham's company  was appealing  a cease                                                              
and desist  order.   He would be  the ultimate decision-maker  for                                                              
that matter.   He  said he  needed to  maintain distance  from the                                                              
issue and could not work with Mr. Wickersham on the amendment.                                                                  
                                                                                                                                
CHAIRMAN  TAYLOR  said that  was  appropriate and  apologized  for                                                              
making the  request.  He hoped  that Mr. Lohr's decision  would be                                                              
easier to make if they passed the amendment.                                                                                    
                                                                                                                                
MR. WICKERSHAM  said the  cease and desist  order was  not against                                                              
his company; it was against the underwriter.                                                                                    
                                                                                                                                
CHAIRMAN  TAYLOR said  he understood  that.   He  asked Mr.  Jerry                                                              
Reinwand to provide testimony.                                                                                                  
                                                                                                                                
MR.  JERRY REINWAND,  Blue Cross/Blue  Shield of  Alaska, said  he                                                              
wanted to  present two technical  amendments that had  been worked                                                              
out  between  Blue  Cross/Blue  Shield  and  DOI.    He  said  the                                                              
committee should have those amendments  in their packets.  He said                                                              
the first amendment dealt with AS 21.42.365(b).                                                                                 
                                                                                                                                
MR. LOHR  said the  proposed amendment  related  to the timing  of                                                              
adjusting the cost inflation factor  for the statutorily described                                                              
benefits  for   alcoholism  and  drug  abuse   treatment  services                                                              
provided  under insurance  plans.    He said  it  would avoid  the                                                              
problem of  having to amend policies  already in place  to include                                                              
the increases.   He said policies  starting after the date  of the                                                              
inflation  adjustment  by DOI  would  be affected.    He said  DOI                                                              
supported the amendment.                                                                                                        
                                                                                                                                
CHAIRMAN TAYLOR asked if it would  make regulation easier for DOI.                                                              
                                                                                                                                
MR. LOHR said it would.                                                                                                         
                                                                                                                                
MR. REINWAND  said the second amendment  dealt with an  error that                                                              
was made  in Blue Cross/Blue Shield's  favor and would  change the                                                              
law back to  the way it was intended  to be.  He said  they worked                                                              
with  Representative Pete  Kott on  a  bill regarding  retaliatory                                                              
taxes several years  ago.  He said they asked for  some relief for                                                              
the  public  entities  covered  by  Blue  Cross/Blue  Shield  that                                                              
shouldn't  be charged  retaliatory  taxes.   He said  there was  a                                                              
mistake  made in  the drafting  of that  amendment at  the end  of                                                              
session that  expanded what  was intended.   He said  the proposed                                                              
amendment would  narrow that  provision back to  the intent.   The                                                              
existing  law  could  be  interpreted  in such  a  way  that  Blue                                                              
Cross/Blue Shield didn't have to pay retaliatory taxes.                                                                         
                                                                                                                                
MR.  LOHR said  Blue  Cross/Blue  Shield  had acted  honorably  in                                                              
accord with the original intent.                                                                                                
                                                                                                                                
CHAIRMAN  TAYLOR  asked  if  Mr.  Lohr  recommended  the  proposed                                                              
amendment.                                                                                                                      
                                                                                                                                
MR. LOHR said yes.                                                                                                              
                                                                                                                                
CHAIRMAN  TAYLOR  said  the  first  proposed  amendment  would  be                                                              
Amendment 2 and  the second proposed amendment  would be Amendment                                                              
3.                                                                                                                              
                                                                                                                                
MR. REINWAND said Blue Cross/Blue  Shield and DOI were involved in                                                              
a  lawsuit  and the  proposed  amendments  would not  affect  that                                                              
lawsuit in any way.                                                                                                             
                                                                                                                                
CHAIRMAN TAYLOR asked if Mr. Lohr agreed.                                                                                       
                                                                                                                                
MR. LOHR said he did.                                                                                                           
                                                                                                                                
SENATOR ELLIS moved Amendment 2 to  replace "January 1, 1999" with                                                              
"July 1, 2004" on page 14, lines  30-31 and add to page 15, line 4                                                              
the  language,  "The  adjusted benefits  shall  be  applicable  to                                                              
coverage issued or  renewed on or after January 1  of the calendar                                                              
year following the July 1 adjustment by the Director."                                                                          
                                                                                                                                
There being no objection, Amendment 2 was adopted.                                                                              
                                                                                                                                
SENATOR ELLIS  moved Amendment 3  to replace the language  on page                                                              
7, lines 19-23 with the following language:                                                                                     
                                                                                                                                
     (f) For  purposes of the  application of subsection  (a)                                                                   
     of this section,  a health care insurer may  not include                                                                   
     taxes,  assessments,  or other  similar  obligations  on                                                                   
     health care insurance premiums  received from the state,                                                                   
     a municipality,  a  city or borough  school district,  a                                                                   
     regional educational attendance  area, the University of                                                                   
     Alaska,   or  a  community   college  operated   by  the                                                                   
     University of  Alaska.  For purposes of  this paragraph,                                                                   
     "health  care  insurer"  has  the meaning  given  in  AS                                                                   
     21.54.500.                                                                                                                 
                                                                                                                                
There being no objection, Amendment 3 was adopted.                                                                              
                                                                                                                                
SENATOR ELLIS moved Amendment 4 to  amend AS 21.66.210(a) to read:                                                              
                                                                                                                                
     (a)  Two or  more title  insurance companies  or two  or                                                                   
     more   title   insurance   limited   producers,   or   a                                                                   
     combination  of  title  insurance  companies  and  title                                                                   
     insurance limited  producers, may apply to  the director                                                                   
     of  insurance to  form an  association, corporation,  or                                                                   
     other legal entity,  for the purpose of engaging  in the                                                                   
     business of  preparing abstracts of title  searches from                                                                   
     public  records  or from  records  to  be owned  by  the                                                                   
     entity,  upon  the  basis of  which  a  title  insurance                                                                   
     limited  producer  or  a title  insurance  company  will                                                                   
     issue title  policies.  The  owners or participants  are                                                                   
     considered  to be in compliance  with the provisions  of                                                                   
     this section and AS 21.66.200  if the title plant of the                                                               
     association,   corporation,   or  other   legal   entity                                                                   
     complies  with  the provisions  of  this section.    The                                                                   
     application must contain                                                                                                   
      (1) a  copy of the  proposed articles of  incorporation                                                                   
     or  association and  the bylaws  or agreement  governing                                                                   
     the operation of the entity;                                                                                               
      (2) a list of the owners or participants;                                                                                 
      (3) the  names and  addresses of  the persons who  will                                                                   
     operate  the   entity,  with  a  description   of  their                                                                   
     experience and qualifications;                                                                                             
      (4)   the   conditions   under   which   ownership   or                                                                   
     participation in the entity may be sold or acquired;                                                                       
      (5)  a statement  of whether or  not title  information                                                                   
     will be compiled  and sold to persons other  than owners                                                                   
     of or participants in the entity;                                                                                          
      (6)  a pro  forma  balance  sheet and  other  financial                                                                   
     information  to indicate  the  sufficiency of  financing                                                                   
     the entity.                                                                                                                
                                                                                                                                
CHAIRMAN TAYLOR asked Mr. Wickersham to explain Amendment 4.                                                                    
                                                                                                                                
MR. WICKERSHAM  said Amendment  4 would  resolve the situation  he                                                              
previously  described.   He  said AS  21.66.200  required a  title                                                              
company  to  own a  title  plant  while  AS 21.66.210  gave  title                                                              
companies  the option  of joining  with another  title company  to                                                              
form a  joint title company  to use public  records.  He  said the                                                              
Attorney General and  DOI had taken the position  that even if the                                                              
public records were used, a title  company was not exempt from the                                                              
provisions  of AS  21.66.200.   Therefore,  these companies  would                                                              
still  have  to make  a  copy of  the  public  records.   He  said                                                              
Amendment  4  would  allow  any two  title  companies  or  limited                                                              
producers,  or any combination  thereof, to  form their  own joint                                                              
title company and use public records  and be in compliance with AS                                                              
21.66.200.                                                                                                                      
                                                                                                                                
He thought this  was good law and good public policy.   He said it                                                              
would bring price  competition to the field and would  be good for                                                              
the consumers of Alaska.                                                                                                        
                                                                                                                                
6:55 p.m.                                                                                                                       
                                                                                                                                
REPRESENTATIVE MURKOWSKI  stated for  the record that  Amendment 4                                                              
would be a significant public policy  change.  She said Alaska was                                                              
a title  plant state  and Amendment  4 would  make it a  non-title                                                              
plant state.   She  said the  discussion was  very similar  to the                                                              
discussion before the House Labor  & Commerce Committee.  She said                                                              
being  a   non-title  plant  state   would  open  Alaska   up  for                                                              
competition and hopefully there would be some price reductions.                                                                 
                                                                                                                                
CHAIRMAN TAYLOR appreciated the background  she provided.  He knew                                                              
she had worked on  the issue in the past and was  sure that it was                                                              
a  controversial  issue.    He asked  if  there  was  any  further                                                              
discussion on Amendment 4.                                                                                                      
                                                                                                                                
SENATOR  ELLIS  was  even  more  excited  to  be  the  sponsor  of                                                              
Amendment  4 after hearing  what Representative  Murkowski  had to                                                              
say.  He looked forward to the committee's support.                                                                             
                                                                                                                                
CHAIRMAN TAYLOR  said Amendment  4 had his  support.   He withdrew                                                              
his objection to Amendment 4.                                                                                                   
                                                                                                                                
There being no objection, Amendment 4 was adopted.                                                                              
                                                                                                                                
SENATOR  COWDERY moved  SCS CSHB  246(JUD) out  of committee  with                                                              
attached zero fiscal note and individual recommendations.                                                                       
                                                                                                                                
There  being  no  objection,  SCS   CSHB  246(JUD)  moved  out  of                                                              
committee   with  attached   zero  fiscal   note  and   individual                                                              
recommendations.                                                                                                                
                                                                                                                                
The final order of business before the committee was HB 252.                                                                    
                                                                                                                                
                                                                                                                                
        HB 252-CHILDREN IN NEED OF AID: SERVICES & LIAB.                                                                    
                                                                                                                                
6:59 p.m.                                                                                                                       
                                                                                                                                
CHAIRMAN TAYLOR  said the committee  had a work draft  (Version U)                                                              
of HB 252.   He asked if Representative John  Coghill was familiar                                                              
with Version U.                                                                                                                 
                                                                                                                                
REPRESENTATIVE JOHN COGHILL, sponsor of HB 252, said he was.                                                                    
                                                                                                                                
CHAIRMAN TAYLOR asked if Representative  Coghill would prefer that                                                              
the committee work it.                                                                                                          
                                                                                                                                
REPRESENTATIVE COGHILL  said he would  but wanted to make  a minor                                                              
adjustment to it.                                                                                                               
                                                                                                                                
SENATOR ELLIS moved  Version U as the working  document before the                                                              
committee.                                                                                                                      
                                                                                                                                
There being  no objection,  Version U was  adopted as  the working                                                              
document before the committee.                                                                                                  
                                                                                                                                
REPRESENTATIVE  COGHILL said HB  252 dealt  with Title  47 dealing                                                              
with  protection   of  children.    He  said   children  had  been                                                              
emphasized to the point that parents  were being excluded from the                                                              
process.   He said HB  252 attempted  to include parents  with the                                                              
intent language  and the  construct language in  Sec. 2.   He said                                                              
there was new language  on page 2 that would allow  the parents to                                                              
participate in  the child's upbringing  once the child was  in the                                                              
jurisdiction of  the court if it  was within the best  interest of                                                              
the child.  He felt that was appropriate.                                                                                       
                                                                                                                                
CHAIRMAN TAYLOR  asked if  he had an  amendment to present  to the                                                              
committee.                                                                                                                      
                                                                                                                                
REPRESENTATIVE COGHILL  said the words "by the  department" should                                                              
be  struck on  page  5,  line 4  because  that would  specify  the                                                              
Department of  Health & Social Services.   He said  many agencies,                                                              
including   local  police   officers,  were   involved  in   these                                                              
situations.                                                                                                                     
                                                                                                                                
CHAIRMAN  TAYLOR moved  Amendment 1  to strike  the words "by  the                                                              
department"  on  page 5,  line  4.   He  asked  if there  was  any                                                              
objection to Amendment 1.                                                                                                       
                                                                                                                                
There being no objection, Amendment 1 was adopted.                                                                              
                                                                                                                                
CHAIRMAN   TAYLOR  asked   if  there   were   any  other   changes                                                              
Representative Coghill wished to make.                                                                                          
                                                                                                                                
REPRESENTATIVE COGHILL said there were none.                                                                                    
                                                                                                                                
CHAIRMAN TAYLOR asked Ms. Susan Cox to provide testimony.                                                                       
                                                                                                                                
TAPE 02-30, SIDE A                                                                                                            
                                                                                                                              
7:02 p.m.                                                                                                                       
                                                                                                                                
MS. SUSAN  COX, Assistant Attorney  General, Civil  Division, DOL,                                                              
said HB 252 had been changed many  times by many committees in the                                                              
House of  Representatives.   She  said Amendment  1 and the  other                                                              
changes made in the work draft were acceptable to DOL.                                                                          
                                                                                                                                
SENATOR ELLIS asked about the word  "construction" on page 1, line                                                              
1 in the  title.  He said he  had never seen that term  in a title                                                              
before.                                                                                                                         
                                                                                                                                
CHAIRMAN  TAYLOR said  it  meant the  intent.   He  said the  word                                                              
"construction"  was often used  in terms of  how the law  would be                                                              
construed, not how it was drafted or developed.                                                                                 
                                                                                                                                
REPRESENTATIVE COGHILL  said there were so many  new provisions in                                                              
Title 47 that they began with the construction language.                                                                        
                                                                                                                                
CHAIRMAN TAYLOR asked if the changes  to Version U would require a                                                              
title change.                                                                                                                   
                                                                                                                                
REPRESENTATIVE COGHILL said they would not.                                                                                     
                                                                                                                                
CHAIRMAN TAYLOR  asked if there was  any further discussion  on HB                                                              
252.   There was  none.  He  asked if there  was anybody  else who                                                              
wished to testify on HB 252.  There was nobody.                                                                                 
                                                                                                                                
SENATOR  COWDERY moved  SCS CSHB  252(JUD) out  of committee  with                                                              
attached zero fiscal notes and individual recommendations.                                                                      
                                                                                                                                
There  being  no  objection,  SCS   CSHB  252(JUD)  moved  out  of                                                              
committee  with   attached  zero   fiscal  notes  and   individual                                                              
recommendations.                                                                                                                
                                                                                                                                
The Senate Judiciary Committee recessed  to the call of the chair.                                                              

Document Name Date/Time Subjects