Legislature(2001 - 2002)
05/12/2002 01:50 PM Senate RLS
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE RULES COMMITTEE
May 12, 2002
1:50 p.m.
MEMBERS PRESENT
Senator Randy Phillips, Chair
Senator John Cowdery, Vice Chair
Senator Gene Therriault
Senator Johnny Ellis
MEMBERS ABSENT
Senator Rick Halford
COMMITTEE CALENDAR
SENATE BILL NO. 55
"An Act changing the name of the Alaska Pioneers' Home to the
Alaska Pioneers' and Veterans' Home and of the Alaska Pioneers'
Homes Advisory Board to the Alaska Pioneers' and Veterans' Home
Advisory Board; relating to services for veterans in the home;
relating to the advisory board for the home; making other
amendments to the statutes relating to the home; making
conforming amendments to other statutes; and providing for an
effective date."
ADOPTED A SENATE RULES COMMITTEE SUBSTITUTE AND APPROVED FOR
CALENDARING
SENATE BILL NO. 230
"An Act relating to recommending or refusing psychotropic drugs
as a treatment for children and to the evaluation and treatment
of children with behavioral or psychological problems."
APPROVED FOR CALENDARING
SENATE BILL NO. 317
"An Act relating to the national forest income program in the
Department of Community and Economic Development and to the
authority of the department to adopt regulations; and providing
for an effective date."
APPROVED FOR CALENDARING
SENATE BILL NO. 366
"An Act relating to the fee for the Chitina dip net fishing
permit; and providing for an effective date."
APPROVED FOR CALENDARING
CS FOR HOUSE BILL NO. 53(STA)
"An Act establishing the Alaska Seismic Hazards Safety
Commission."
APPROVED FOR CALENDARING
CS FOR HOUSE BILL NO. 56(FIN)
"An Act relating to minimum wages; and providing for an effective
date."
APPROVED FOR CALENDARING
CS FOR HOUSE BILL NO. 207(RLS)
"An Act moving election district 24 as described in the
Constitution of the State of Alaska at statehood from the Second
Judicial District to the Fourth Judicial District and adding the
Nabesna area to the Third Judicial District and removing it from
the Fourth Judicial District."
APPROVED FOR CALENDARING
CS FOR HOUSE BILL NO. 208(RES)
"An Act relating to aquatic farming of shellfish; and providing
for an effective date."
APPROVED FOR CALENDARING
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."
APPROVED FOR CALENDARING
CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 254(FIN)
"An Act relating to the teachers' retirement system, the judicial
retirement system, and the public employees' retirement system
and to the tax qualification under the Internal Revenue Code of
those systems; amending the definition of 'actuarial adjustment'
in the teachers' retirement system and the public employees'
retirement system; repealing certain provisions of the teachers'
retirement system and the public employees' retirement system;
amending the statutory limitation on payment of warrants to make
an exception for warrants making benefit payments or refunds
under various state retirement and benefit programs; and
providing for an effective date."
APPROVED FOR CALENDARING
CS FOR HOUSE BILL NO. 276(L&C)
"An Act relating to temporary permits and licenses by endorsement
issued by the Board of Nursing; and relating to the delegation of
nursing duties."
APPROVED FOR CALENDARING
CS FOR HOUSE BILL NO. 287(FIN)
"An Act relating to the exemption of commercial fishing entry
permits from claims of creditors and execution on an interest in
a limited entry permit; and providing for an effective date."
APPROVED FOR CALENDARING
CS FOR HOUSE BILL NO. 296(CRA)
"An Act relating to mergers and consolidations of
municipalities."
APPROVED FOR CALENDARING
CS FOR HOUSE BILL NO. 332(FIN)
"An Act extending the termination date of the Council on Domestic
Violence and Sexual Assault; relating to the council's duties;
placing the executive director and staff of the council in the
exempt service; and providing for an effective date."
APPROVED FOR CALENDARING
CS FOR HOUSE BILL NO. 350(FIN) am
"An Act relating to murder, conspiracy, criminal mischief, and
terroristic threatening; and providing for an effective date."
APPROVED FOR CALENDARING
HOUSE BILL NO. 447
"An Act relating to the interest rates that may be charged on
loans by the Commercial Fishing and Agriculture Bank."
APPROVED FOR CALENDARING
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
company, 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."
APPROVED FOR CALENDARING
HOUSE BILL NO. 507 am
"An Act naming the Trooper Hans-Peter Lothar Roelle Memorial
Weigh Station and the Officer Justin Todd Wollam Memorial Bike
Trail; and providing for an effective date."
APPROVED FOR CALENDARING
CS FOR HOUSE BILL NO. 521(CRA)
"An Act relating to municipal improvement areas."
APPROVED FOR CALENDARING
HOUSE BILL NO. 527
"An Act relating to entry into the Minto Flats State Game Refuge
for purposes of exploration and development of oil and gas
resources."
APPROVED FOR CALENDARING
PREVIOUS SENATE COMMITTEE ACTION
SB 55 - See State Affairs minutes dated 2/8/01, 5/5/01 and
4/18/02 and HESS minutes dated 4/29/02.
SB 230 - See HESS minutes dated 3/4/02 and Judiciary minutes
dated 5/11/02.
SB 317 - See Labor and Commerce minutes dated 3/21/02.
SB 366 - See Resources minutes dated 5/8/02.
HB 53 - See State Affairs minutes dated 4/18/02, Resources
minutes dated 4/29/03 and Finance minutes dated 5/9/02.
HB 56 - See Labor and Commerce minutes dated 3/26/02, Finance
minutes dated 5/8/02 and Rules minutes dated 5/10/02.
HB 207 - See Judiciary minutes dated 5/11/02.
HB 208 - See Resources minutes dated 4/24/02, Judiciary minutes
dated 5/3/02 and Finance minutes dated 5/11/02.
HB 254 - See State Affairs minutes dated 4/11/02 and 4/16/02,
Rules minutes dated 4/26/02 and Finance minutes dated 5/11/02.
HB 287 - See Resources minutes dated 5/8/02 and Finance minutes
dated 5/10/02.
HB 296 - See CRA minutes dated 4/10/02 and 4/17/02 and Judiciary
minutes dated 5/1/02 and Finance minutes dated 5/9/02.
HB 332 - See Judiciary minutes dated 4/29/02 and Finance minutes
dated 4/29/02.
HB 350 - See Judiciary minutes dated 5/8/02 and Finance minutes
dated 5/10/02.
HB 447 - See Resources minutes dated 4/19/02 and 5/8/02 and
Finance minutes dated 5/10/02.
HB 499 - See Labor and Commerce minutes dated 5/4/02 and
Judiciary minutes dated 5/10/02.
HB 507 - See Transportation minutes dated 5/10/02.
HB 521 - See CRA minutes dated 5/3/02.
HB 527 - See Resources minutes dated 5/10/02.
WITNESS REGISTER
Commissioner Jim Duncan
Department of Administration
PO Box 110200
Juneau, AK 99811-0200
POSITION STATEMENT: Answered questions about SB 55
Mr. Richard Benavides
Staff to Senator Davis
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Stated support for CSSB 230(JUD)
Ms. Amy Erickson
Staff to Representative Murkowski
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Explained the provisions of HB 246 and HB
521
Ms. Barbara Cotting
Staff to Representative James
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Testified for the sponsor of HB 254
Mr. Guy Bell
Division of Retirement and Benefits
Department of Administration
PO Box 110200
Juneau, AK 99811-0200
POSITION STATEMENT: Answered questions about SCS HB 254(RLS)
Senator Dave Donley
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Explained the intent of Amendment 1 to HB
276
Representative Peggy Wilson
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Supports Amendment 1 to SCS HB 276(RLS)
Ms. Pat Hartley
Staff to Representative Scalzi
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Answered questions about HB 287
Ms. Lori Backes
Staff to Representative Whitaker
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Explained the provisions of HB 296
Ms. Patti Swenson
Staff to Representative Bunde
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Explained the contents of HB 332
Mr. David Brewster
Staff to Representative McGuire
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Explained the contents of HB 350
Ms. Anne Carpeneti
Assistant Attorney General
Department of Law
PO Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Answered a question about HB 350
Mr. Dale Anderson
Staff to Representative Mulder
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Explained the provisions of HB 447
Ms. Heather Nobrega
Staff to Representative Rokeberg
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Explained the contents of HB 499
Ms. Judy Ohmer
Staff to Representative Kott
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Explained the provisions of HB 507
ACTION NARRATIVE
TAPE 02-14, SIDE A
Number 001
CHAIRMAN RANDY PHILLIPS called the Senate Rules Committee meeting
to order at 1:50 p.m. Senators Cowdery, Therriault and Phillips
were present. Senator Halford arrived momentarily. The committee
took up SB 55.
SENATOR THERRIAULT moved to adopt Version P of SB 55-PIONEERS'
AND VETERANS' HOME/ADVISORY BD as the working document of the
committee.
CHAIRMAN PHILLIPS announced that without objection, Version P was
adopted.
SENATOR THERRIAULT informed members that he met with Commissioner
Duncan the previous day. The new language in Version P provides
that the effective date will take place when the agreement is
signed by both parties. Copies of the agreement will be sent to
the revisor of statutes.
COMMISSIONER JIM DUNCAN, Department of Administration (DOA),
explained that substantial progress has been made in the ongoing
negotiations between the DOA and Veterans Administration (VA).
Section 24 provides that when those negotiations are completed
satisfactorily, meaning that veterans who reside in Pioneers
Homes could receive per diem payments from the VA and that
ownership and management of the Pioneers Homes will remain with
the state, copies of the agreement would be presented to the
revisor of statutes and the Legislative Budget and Audit
Committee. The bill will take effect upon signing.
SENATOR THERRIAULT pointed out the new fiscal note contains half
of the original request. He asked if DOA will continue
negotiating to get VA benefits for existing residents if less or
no funding is provided.
COMMISSIONER DUNCAN said DOA would. He said he really hopes some
funding is provided because DOA would like to see an increased
benefit to veterans and pioneers alike as a result of the
negotiations. However, the negotiations do not hinge on the
funding level; they hinge on the provision in the legislation to
rename the Pioneer Homes and on the veteran preference on beds.
SENATOR HALFORD moved to calendar CSSB 55(RLS) with its
accompanying fiscal note.
SENATOR ELLIS's presence was noted.
CHAIRMAN PHILLIPS announced that without objection, CSSB 55(RLS)
would be calendared.
CHAIRMAN PHILLIPS took up SB 230-PSYCHOTROPIC DRUGS FOR CHILDREN
and asked if the Judiciary version was before the committee.
MR. RICHARD BENAVIDES, staff to Senator Davis, sponsor of SB 230,
verified that the Senate Judiciary Committee adopted a committee
substitute.
SENATOR ELLIS moved to calendar SB 230 and any accompanying
fiscal notes at the Chairman's discretion.
CHAIRMAN PHILLIPS announced that without objection, the motion
carried.
CHAIRMAN PHILLIPS asked Senator Taylor to provide an explanation
of SB 317-NAT'L FOREST INCOME AND REGS OF DCED.
SENATOR ROBIN TAYLOR, sponsor of SB 317, informed members that
a year ago the federal government passed timber receipts
legislation, which provides a stable funding source for six years
from the federal government. Monies received will be allocated
through the Department of Education and Early Development (DOEED)
based on a formula that he and Senator Mackie designed six or
seven years ago. SB 317 contains clean-up language that gives
DOEED sufficient authority to convey those funds pursuant to the
formula.
SENATOR HALFORD moved to calendar SB 317 and its accompanying
zero fiscal note at the Chairman's discretion.
CHAIRMAN PHILLIPS announced that without objection, the motion
carried.
CHAIRMAN PHILLIPS announced that SB 366-CHITINA DIP NET FISHERY
PERMIT FEE was before the committee.
SENATOR TAYLOR informed members that the Senate Resources
Committee changed the bill to reflect the same fee this year and
a zero fee next year.
CHAIRMAN PHILLIPS stated that this bill moved out of the Senate
Finance Committee last night.
SENATOR HALFORD moved to calendar SB 366 and its accompanying
fiscal notes.
CHAIRMAN PHILLIPS announced that without objection, the motion
carried.
CHAIRMAN PHILLIPS announced the committee would take up CSHB
53(STA)-SEISMIC HAZARDS SAFETY COMMISSION.
SENATOR ELLIS moved to calendar HB 53 and its accompanying fiscal
note at the Chairman's discretion.
REPRESENTATIVE JOHN DAVIES, sponsor of HB 53, informed members
that the fiscal note cost is about $33,000.
CHAIRMAN PHILLIPS announced that without objection, the motion
carried.
SENATOR HALFORD moved to calendar CSHB 56(FIN)-MINIMUM WAGE with
its accompanying fiscal notes.
CHAIRMAN PHILLIPS announced that without objection, the motion
carried.
SENATOR HALFORD moved and asked unanimous consent that the
committee approve for calendaring CSHB 207(RLS)-REALIGNMENT OF
JUDICIAL DISTRICTS.
CHAIRMAN PHILLIPS announced that without objection, the motion
carried.
SENATOR ELLIS moved to calendar CSHB 208(RES)-AQUATIC FARMS FOR
SHELLFISH and any accompanying fiscal notes at the Chairman's
discretion.
CHAIRMAN PHILLIPS announced that without objection, the motion
carried.
CHAIRMAN PHILLIPS asked for an explanation of CSHB 246(JUD)-
OMNIBUS INSURANCE BILL.
MS. AMY ERICKSON, staff to Representative Murkowski, Chair of the
House Labor and Commerce Committee, informed members that HB 246
primarily contains clarifications to existing law. An amendment
made by the Judiciary Committee pertains to title plants (Section
51 on page 20). She indicated it is the only substantive change
in the legislation.
SENATOR HALFORD asked if Section 51 requires a hard copy title
plant.
MS. ERICKSON said it allows the public record to be used in title
searches.
SENATOR HALFORD moved to calendar CSHB 246(JUD) at the Chairman's
discretion.
CHAIRMAN PHILLIPS announced that without objection, the motion
carried.
The committee took up CSSSHB 254(FIN)-STATE RETIREMENT
SYSTEMS/WARRANTS.
MS. BARBARA COTTING, staff to Representative James, sponsor of
SSHB 254, informed members that a proposed Senate Rules Committee
substitute was before the committee. She asked that Mr. Bell
explain the changes made in the new version.
MR. GUY BELL, Director of the Division of Retirement and
Benefits, Department of Administration, told members that several
new sections have been added to the proposed committee substitute
that make minor modifications to public employee and teacher
retirement statutes. Sections 7 and 8 (page 7) make a small
change to the conditional service benefit that is available to
retired public employees if they enter the teaching profession by
allowing them to work one year rather than the minimum two years
to receive a supplemental retirement benefit under the Teachers
Retirement System (TRS). It is designed as an incentive to bring
retired public employees into teaching.
SENATOR HALFORD moved to adopt the proposed committee substitute
as the working document of the committee.
CHAIRMAN PHILLIPS announced that without objection, the Senate
Rules Committee substitute was adopted as the working document of
the committee.
SENATOR THERRIAULT asked Mr. Bell to elaborate on Section 7.
MR. BELL explained that the TRS contains a benefit called the
"conditional service benefit." Currently a Public Employee
Retirement System (PERS) retiree is allowed to enter the TRS as a
teacher and after serving for two years, is entitled to a
conditional retirement benefit based on the two years of service.
The proposed committee substitute will provide the conditional
retirement benefit after one year of teaching. The conditional
retirement benefit amounts to 2 percent of the person's salary.
Each year of service in the TRS equals 2 percent.
SENATOR THERRIAULT asked if that is based only on the time spent
in the teaching profession.
MR. BELL said that is correct. It is based on the actual number
of years in the TRS.
CHAIRMAN PHILLIPS announced that no objections to adopt the
proposed committee substitute as the working document of the
committee were heard.
MR. BELL continued. Language on page 26, Section 34, addresses an
issue related to temporary employees of the legislature in the
1970s. During that time, legislative employees were not in PERS.
In 1980, those employees were allowed to claim service for time
worked in the 1970s but unfortunately some did not. This
provision will allow them to claim that service in order to
obtain eligibility for retirement benefits, including the Tier 1
health benefit, but they will be required to pay the full
actuarial cost of the pension and health benefits.
SENATOR COWDERY asked how many people fall in that category.
MR. BELL said the division does not have an exact count, but only
five or six people have contacted the division over the past
couple of years.
SENATOR THERRIAULT asked what actuarial costs they will have to
pay.
MR. BELL said the division has not done any calculations yet.
However, if this provision enables those employees to have Tier 1
rather than Tier 2 status, the division would take the net
present value of five years worth of health benefits and charge
that cost. He then explained that Section 38 was added on page
30; it relates to peace officers and firefighters in the PERS.
Currently, when a person on disability reaches normal retirement
age, their benefits are converted to a normal retirement benefit.
This provision allows a person to elect to continue to receive
the disability benefit when he or she reaches normal retirement
age. Often the normal retirement benefit is lower than the
disability benefit.
MR. BELL said that Sections 39 and 40 on page 39 again relate to
peace officers and firefighters only. They adjust the benefit for
occupational death for the survivor from 40 percent to 50 percent
of the person's salary at death or 75 percent of the normal
retirement benefit they would have accrued. The division has done
some calculations and a person would have to have many years of
service to get to the equivalent of a 50 percent benefit or the
75 percent survivor benefit. He noted the final section that has
been added is Section 45 on page 32. It applies to peace officers
and firefighters and affects Tier 2 and 3 employees. It adjusts
the number of years for the calculation of final average salary
for the pension benefit from five years to three years. It will
increase the benefit by a modest amount. These sections were
designed to improve recruitment and retention of peace officers.
The cost of that change will amount to .005 percent and it will
take effect on the state's system in FY05. The division has
drafted a fiscal note that reflects no cost for FY 03 and FY 04
and then $344,000 in FY 05. The general fund cost will be about
half that amount.
CHAIRMAN PHILLIPS asked Mr. Bell to provide a copy of the fiscal
note to members.
MR. BELL said the remainder of the bill is for the purpose of
complying with the Internal Revenue Code and with existing
practice. The bill was designed to bring the retirement system
up-to-date with the provisions of the Internal Revenue Code.
CHAIRMAN PHILLIPS clarified that the committee was reviewing
Version B.
SENATOR COWDERY asked how the changes in Section 46 will affect
divorced couples.
MR. BELL replied that the qualified domestic order language is
unchanged.
SENATOR THERRIAULT commented that he heard concern expressed that
the Anchorage Police Department has hired away Alaska State
Troopers. He noted the language in this bill applies to all
employees in that job classification and that he has not heard
testimony that these changes will attract employees to state
jobs.
MR. BELL said the initial proposal that came from Anchorage had a
"cafeteria plan" and a local option. It included the three new
sections in this bill and two additional items, which were
significantly more expensive from an actuarial cost perspective.
Rather than go down that path, the division suggested keeping a
level playing field between all public employees - state and
local government - in terms of recruiting peace officers and
firefighters. The division came up with the lowest cost option it
could find to do that. He has heard people testify that employees
are attracted by other jurisdictions and by the federal
government, not necessarily by municipalities or the state. He
indicated that this legislation makes a minor effort because it
is low cost yet improves benefits.
CHAIRMAN PHILLIPS asked if DOA supports Version B.
MR. BELL said it does.
CHAIRMAN PHILLIPS asked if Representative James supports Version
B.
MS. COTTING said she does.
SENATOR THERRIAULT asked Mr. Bell if these changes will produce
an increased annual cost to the state of $344,000.
MR. BELL said the cost will amount to .005 percent of salary.
SENATOR THERRIAULT stated, "Well, we're still taking a bill that
really didn't cost us anything and [turning] it into a cost."
MR. BELL verified that there will be a cost in the future.
SENATOR HALFORD moved to calendar SCS SSHB 254(RLS) [Version
853\B] and its accompanying fiscal note.
CHAIRMAN PHILLIPS announced that without objection, the motion
carried.
CHAIRMAN PHILLIPS informed members that an amendment to CSHB
276(L&C)-REGULATION OF NURSING has been proposed by Senator
Donley.
SENATOR HALFORD offered to sponsor the proposed amendment and
moved to adopt it [Amendment 1] for the purpose of discussion.
CHAIRMAN PHILLIPS announced that without objection, the motion
carried.
SENATOR DONLEY explained that this bill deals with a gap in the
law regarding delegation of duties by nurses. When dealing with
that area, he believes it is important that nurses not be
pressured into improperly delegating their duties. Amendment 1
will safeguard the licenses of nurses who are pressured to
delegate duties. It provides that if a nurse believes he or she
has been ordered to improperly delegate a task, reports the
incident to the Board of Nursing and is found to be correct by
the board, the nurse would be insulated from reprisals by the
employer.
REPRESENTATIVE PEGGY WILSON, sponsor of HB 276, stated support
for Amendment 1.
SENATOR HALFORD moved to calendar SCS CSHB 276(RLS) at the
Chairman's discretion.
CHAIRMAN PHILLIPS announced that without objection, the motion
carried.
The committee took up CSHB 287(FIN)-EXEMPT ENTRY PERMITS FROM
CREDITOR CLAIMS.
MS. PAT HARTLEY, staff to Representative Scalzi, sponsor of HB
287, told members that HB 287 removes limited entry permits from
the exemption section of Title 9 to delete an inference that they
are somehow property. It adds in Section 3 of the bill specific
language to the Limited Entry Act, spelling out that fishing
privileges are exempt from claims of creditors except loans under
the Division of Investments or the Commercial Fisheries and
Agriculture Bank, and arrears with the Child Support Enforcement
Agency. It adds, in Section 2, language to the limited entry
statutes making it absolutely clear that the only time a person
may transfer an entry permit due to an execution on the permit is
for the purpose of enforcing a lien recorded at the Commission
under the statutes of the child support enforcement division.
SENATOR HALFORD moved to calendar CSHB 287(FIN) and its
accompanying fiscal note at the Chairman's discretion.
CHAIRMAN PHILLIPS announced that without objection, the motion
carried.
SENATOR THERRIAULT moved to calendar CSHB 296(CRA)-MUNICIPAL
MERGER AND CONSOLIDATION and its zero fiscal note at the
Chairman's discretion.
SENATOR HALFORD objected for the purpose of a review of the
measure.
MS. LORI BACKES, staff to Representative Jim Whitaker, sponsor of
HB 296, told members the intent of this legislation is to create
fairness and timeliness in the process of consolidation petitions
by limiting the time allowed to gather signatures on a petition
for consolidation to not more than 365 days. Regarding the method
used to count votes, the petition must be supported by a majority
of the voters within each of the cities affected by the
consolidation as well as the voters outside the cities but within
the boundaries of the borough.
CHAIRMAN PHILLIPS asked if the situation in Homer triggered this
legislation.
MS. BACKES said it did not. She explained that Representative
Whitaker recognized some flaws in the consolidation effort in
Fairbanks that he felt needed to be addressed.
CHAIRMAN PHILLIPS announced that without objection to Senator
Halford's motion, the bill would be calendared.
The committee took up CSHB 332(FIN)-DOMESTIC VIOLENCE/SEXUAL
ASSAULT COUNCIL.
MS. PATTI SWENSON, staff to Representative Bunde, told members
that the Senate Finance Committee added a technical amendment to
this bill that allows a transition period until the present
employee contracts expire next July (Section 4). At that time,
all of the positions within the Council will become exempt. The
fiscal notes reflect what will happen if the Council is not
extended: the duties of the Council will be distributed to
agencies throughout state government.
SENATOR THERRIAULT said that normally a fiscal note reflects what
will happen if the bill passes.
MS. SWENSON said she also questioned the fiscal note but was told
this is the normal process for an extension.
SENATOR THERRIAULT indicated that the fiscal note does state that
the costs of the Council are already in the budget.
CHAIRMAN PHILLIPS asked if anyone in the Senate Finance Committee
was opposed to this measure.
MS. SWENSON said not that she recalls. She repeated that the
costs are already contained in the budget so the fiscal note
reflects the costs to other state agencies if the Council is not
extended.
SENATOR ELLIS moved to calendar CSHB 332(FIN) and its
accompanying fiscal notes with individual recommendations at the
Chairman's discretion.
CHAIRMAN PHILLIPS announced that without objection, the motion
carried.
The committee took up CSHB 350(FIN) am-TERRORISTIC THREATS &
OTHER CRIMES.
MR. DAVID BREWSTER, staff to Representative McGuire, sponsor of
HB 350, informed members that this measure is known as the
"omnibus homeland security bill" and updates Alaska's statutes
that address public areas and conveyances. HB 350 adds to
existing law terrorist threats that cause evacuations of areas or
disrupt transportation schedules. It increases criminal penalties
for certain acts of terrorism; terroristic threatening and for
certain imitation substances. It also increases penalties of
threats to water and food supplies, air, utilities and pipelines.
SENATOR THERRIAULT asked what change the Senate Judiciary
Committee made.
MR. BREWSTER deferred to Ms. Carpeneti for that information.
SENATOR THERRIAULT informed members that HB 350 was heard by the
Senate State Affairs Committee and that the changes it made were
not incorporated in the current version.
MS. ANNE CARPENETI, Assistant Attorney General, clarified that
the House version did incorporate most of the changes that the
Senate State Affairs incorporated into its version of the bill.
The Senate Judiciary Committee added the word "knowingly" on page
8, line 28.
SENATOR ELLIS pointed out that Senator Taylor wanted to use the
word "intentionally" but the Department of Law recommended using
the word "knowingly."
SENATOR THERRIAULT moved to calendar the Senate Judiciary version
of HB 350 and its attached fiscal notes.
CHAIRMAN PHILLIPS announced that without objection, the motion
carried.
The committee took up HB 447-COM FISH & AGRICULTURE BANK INTEREST
RATE.
MR. DALE ANDERSON, staff to Representative Mulder, sponsor of HB
447, said the general purpose of HB 447 is to ensure that the
Commercial Fishing and Agriculture Bank (CFAB) is able to
continue serving its Alaskan member-borrowers in an efficient
manner and equitably compete with other lending institutions
throughout the state.
CHAIRMAN PHILLIPS indicated that HB 447 has a zero fiscal note.
SENATOR HALFORD moved to calendar HB 447 with its zero fiscal
note at the Chairman's discretion.
CHAIRMAN PHILLIPS announced that without objection, the motion
carried.
The committee took up CSHB 499(JUD)-SUCCESSOR LIABILITY FOR
PRODUCT LIABILITY.
MS. HEATHER NOBREGA, counsel to the House Judiciary Committee,
stated that HB 499 covers a very small area of law, that being
products liability. Within that area of law, the bill clarifies
when a successor corporation should be held liable for the
liabilities of the predecessor corporation's assets. The general
rule is that when a corporation purchases another's assets, the
successor corporation is not responsible for liabilities.
However, in products liabilities, courts have made exceptions to
that doctrine to provide recovery for an injured plaintiff. The
court has used four generally recognized exceptions to the rule
to determine when a corporation is not liable. The issue of
products liability has not yet been addressed in Alaska statutes.
SENATOR ELLIS asked which court case set this legislation in
motion.
MS. NOBREGA said the ongoing case is Savage v. Western Auto. She
explained:
There is a products liability case right now in the
courts. They - since products liability has never been
addressed in Alaska, they had to - they appealed to the
Supreme Court for the Supreme Court to decide whether
it is the law of the land in this state. In their case,
the plaintiffs asked for the law of the land to be
three doctrines. The Supreme Court adopted two of those
doctrines. They didn't even look at the third one
because they decided it just wasn't necessary at that
point in time to even look at that.
One of the doctrines is one of the four [indisc.] of
those generally accepted by the law of the land. The
other doctrine that was called continuity enterprise is
a modern theory - a modern doctrine that over 36
jurisdictions in the country have rejected. The
restatement of torts has rejected it and we are
rejecting it with this bill because we do not think
that that should be the law of the land in this state.
It is an ongoing litigation. The trial is set for
November. What this bill will do is say this is the law
of the land in this state and this is what you should
be applying to the facts of the case, and not that one
exception. It is only taking away that one exception.
It is not in any way affecting the final outcome of
this ongoing litigation.
SENATOR COWDERY said it is his understanding that Western Auto
was a distributor of Savage Arms products. Western Auto sold a
weapon to a customer. After the weapon was then sold several more
times, an accident occurred and the victim's family sued the
insurance company. The insurance company settled the suit and is
now trying to recover its costs. He asked if that is an accurate
description.
TAPE 02-14, SIDE B
MS. NOBREGA said that several companies are involved. Western
Auto was the final company to sell the product. The family sued
both Western Auto and the makers of the rifle, which is Savage
Industries. Western Auto settled and now its insurance company is
trying to sue the company that purchased the company that made
the rifle for the amount it paid to the family.
SENATOR COWDERY asked if the settlement was less than $5 million.
MS. NOBREGA said she believes it was about $5.4 million.
SENATOR COWDERY asked if it is two or three times that amount now
due to interest and attorneys' fees.
MS. NOBREGA said she has heard it is about $14 million. She
repeated that HB 499 will not affect the outcome of the trial; it
will determine the law of the land.
SENATOR HALFORD questioned Ms. Nobrega's statement that HB 499
will not affect the outcome of the trial.
MS. NOBREGA said that is correct because there is no final
outcome yet. She added:
The Supreme Court is deciding what the law is therefore
then - just ignoring this bill for right now - the
Supreme Court then sends what the law is back down to
the court. Then you have to argue whether or not the
facts of the case - applying the facts of the case to
the law will equal some kind of judgment for Western
Auto to get money. The Supreme Court found two areas of
the law they decided, or two, let's say, [indisc.] that
you can argue in the lower court. One is generally
recognized and it's allowed for in this bill. The other
is a modern theory that has been rejected by many and
we're also rejecting. They will be able to - if this
bill becomes law - there are four actual exceptions in
there they would be able to argue. So there actually
has been no arguing of the law and the facts. We're
still in the setting the law phase of the litigation -
what is the law that we want to apply these facts to.
There will be a long trial to look into all of the
facts of who the shareholders were of each company,
what assets were purchased, are they still
manufacturing, what are they still manufacturing, how
those two companies - the successor who bought the
company and the company who manufactured the rifle
initially, how those two work together. That is
successor liability and that is what the whole trial
would be about. Should this company be liable for the
rifle manufacturer's defective product? There is no
final judgment now. They're only looking at the law
right now and what the law is.
SENATOR HALFORD asked if the reason HB 499 will not affect the
final judgment is because it does not exist but that HB 499 will
affect the outcome of the case and who wins, who loses, who pays
and who receives.
MS. NOBREGA said how the facts are applied in the case will
[indisc.] the final judgment but there have not been any facts
argued to any theories of law.
SENATOR HALFORD asked if the people arguing the other side of the
case agree with Ms. Nobrega's interpretation.
MS. NOBREGA said they do not.
SENATOR HALFORD remarked that this bill will change the rules.
MS. NOBREGA said that changing the rules and affecting the
outcome are two different things. She agreed that HB 499 will
change the rules.
SENATOR HALFORD said the threshold is to convince the committee
that the rules in the case should be changed.
SENATOR THERRIAULT commented that changing the rules will change
the outcome because the one exception they may have relied on
would no longer be available.
SENATOR COWDERY said that he owned an excavating company at one
time. The name of the company still exists but he sold all of the
equipment at an auction. He said he doesn't understand how
someone who was injured on that equipment could blame his
corporation.
MS. NOBREGA said she does not believe that scenario would fall
under HB 499 because he was not a manufacturer or distributor of
that equipment. She explained that products liability does not
hold users of equipment liable.
SENATOR COWDERY said he manufactured rollover protection
equipment for his equipment.
MS. NOBREGA said the maker of a product will always be liable.
Whether or not the company that buys that product and resells it
is liable is the question. She said she was not sure how to work
Senator Cowdery's scenario into the discussion right now. She
said the general rule is that no one wants to hold successor
companies liable because no one would buy an existing company.
That is the reason the exceptions exist.
SENATOR THERRIAULT asked if the four other exceptions will still
be available.
MS. NOBREGA said that is correct.
SENATOR THERRIAULT cautioned that the state does not want to get
into a situation where someone may try to break the chain by
selling just the machinery and not the stock.
MS. NOBREGA said most of the exceptions work around the theory
that these are good reasons to hold the company.
SENATOR HALFORD suggested the evaluation is whether the
continuation of a 75-year old name is worth picking up the
liability of a product that carries that name.
SENATOR THERRIAULT said he believes that would be an integral
part of arguing that it was either a merger or a continuation of
the predecessor.
SENATOR HALFORD said in this case there was actual distress and
bankruptcy.
MS. NOBREGA said when a company purchases another's assets and
continues to make the same products and use the same name, it
would be subject to liability and that would be entered into the
valuation of how much was paid for that company.
SENATOR HALFORD said that is what happened in the Western Auto
case - they kept the name and most of the products although not
the product that caused the accident.
SENATOR THERRIAULT asked if they kept the name of the business or
the name of the product.
MS. NOBREGA said it is her understanding that they kept the name
but they did not buy the particular rifle that exploded.
SENATOR ELLIS asked if one of the parties in the lawsuit
requested the bill.
MS. NOBREGA said the request came from representatives of Savage
Arms. She pointed out that concerns have been expressed about the
retroactivity provision. She maintained that most attorneys in
the state would say the bill contains what was the law of the
land until the Supreme Court adopted the continuity of enterprise
theory. She noted that without the retroactivity provision, there
will be a "bubble in time of a weird theory that most people
aren't used to..." By making it retroactive, the law of the land
regarding successor liability will be kept at the status quo
before, during, and after the case.
SENATOR ELLIS asked how far back in time the retroactivity
extends.
MS. NOBREGA said it extends forever, which is the way attorneys
figured the law was before this case.
SENATOR ELLIS asked how she knows what attorneys all over the
state think and whether she polled them.
MS. NOBREGA said she knows because she went to law school. She
stated that before this decision, the idea of products liability
had never been addressed in Alaska.
SENATOR HALFORD asked what happened to the victim of the accident
in this case from the perspective of equity.
MS. NOBREGA said she does not know the specifics but believes the
injury was severe.
SENATOR HALFORD asked if the injury was one that was worth $5
million.
MS. NOBREGA said that is what Western Auto settled for but that
she does not know what the injury was worth.
SENATOR HALFORD asked if Western Auto settled and then sued
Savage Arms.
MS. NOBREGA said that is correct; the manufacturer of the rifle
is no longer in existence so Western Auto "is going to the next
deepest pocket they can find."
SENATOR HALFORD asked if the argument is between two companies at
this point.
MS. NOBREGA said the argument is between Allstate Insurance and
Lloyds of London, and Savage Arms.
SENATOR HALFORD asked if the injured party is taken care of.
MS. NOBREGA said that is correct.
SENATOR COWDERY moved to calendar CSHB 499(JUD) and its zero
fiscal note at the Chairman's discretion.
SENATOR ELLIS objected.
CHAIRMAN PHILLIPS announced the motion carried with Senators
Cowdery, Halford, Therriault and Phillips in favor and Senator
Ellis opposed.
SENATOR HALFORD moved to calendar HB 507am-NAMING TRANSPORTATION
FACILITIES & AREAS.
SENATOR ELLIS objected.
CHAIRMAN PHILLIPS asked for an explanation of the measure.
MS. JUDY OHMER, staff to Representative Kott, sponsor of HB 507,
explained that HB 507 began as a way to commemorate a lot of
Alaska's fallen heroes - those people who gave their lives to
others in service. It then became a "naming" bill via additions
made in the Senate Transportation Committee. HB 507 began with a
weigh station at mile 10.6 on the Glen Highway named after State
Trooper Roelle and a bike trail along the Glen Highway named
after Officer Justin Todd Wollam.
SENATOR COWDERY noted that three more places were named in
commemoration in the Senate Transportation Committee version.
SENATOR THERRIAULT asked Ms. Ohmer if Trooper Roelle's family
wants a weigh station named after him.
MS. OHMER said very much so.
SENATOR COWDERY moved to calendar HB 507am and its zero fiscal
note at the Chairman's discretion.
CHAIRMAN PHILLIPS announced that with no further objection, the
motion carried.
The committee took up CSHB 521(CRA)-MUNICIPAL IMPROVEMENT AREAS.
MS. AMY ERICKSON, staff to Representative Murkowski, sponsor of
HB 521, informed members that this legislation clarifies an
ambiguity in the current law that tax increment financing can be
used to improve public areas. It can be used with revenue bonds
and general obligation bonds. HB 521 also extends the definition
of improvement area to include areas adjacent to blighted land.
SENATOR COWDERY moved to calendar CSHB 521(CRA) and its
accompanying fiscal note at the Chairman's discretion.
CHAIRMAN PHILLIPS announced that without objection, the motion
carried.
The committee took up HB 527-MINTO FLATS GAME REFUGE.
REPRESENTATIVE HUGH FATE said HB 527 is the result of a problem
brought to his attention on April 25. The Department of Natural
Resources (DNR) had denied access into the core area of the Minto
Flats. The Commissioner agreed there is probably a need for
clarification. At the same time discussions were ongoing with
DNR, the interior delegation requested that the House Resource
Committee sponsor it. He believes the amendment made in the
Senate Resources Committee is appropriate.
SENATOR HALFORD moved to calendar HB 527 with its accompanying
fiscal note.
CHAIRMAN PHILLIPS announced that without objection, the motion
carried.
There being no further business to come before the committee,
CHAIRMAN PHILLIPS adjourned the meeting at 3:00 p.m.
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