Legislature(1995 - 1996)
04/28/1996 02:05 PM RLS
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE RULES COMMITTEE April 28, 1996 2:05 p.m. MEMBERS PRESENT Senator Mike Miller, Chair Senator Drue Pearce, Vice Chair Senator Bert Sharp Senator Jim Duncan Senator Judy Salo MEMBERS ABSENT All members present COMMITTEE CALENDAR CS FOR HOUSE BILL NO. 22(FIN) "An Act relating to long-term plans of certain state agencies and recommendations regarding elimination of duplication in state agency functions." CS FOR HOUSE BILL NO. 520(FIN) "An Act relating to death investigations and inquests, coroners, public administrators, and medical examiners, including the state medical examiner; relating to the jurisdiction of district court judges and magistrates in certain cases involving death." HOUSE BILL NO. 525 "An Act designating certain permissible investments by the Alaska Permanent Fund Corporation in taxable municipal or state debt securities and corporate debt securities; changing the allocation limits on domestic and nondomestic government and corporate securities, nondomestic corporate promissory notes, domestic and nondomestic corporate stocks, and taxable government debt securities; and providing for an effective date." CS FOR HOUSE CONCURRENT RESOLUTION NO. 26(FIN) am Relating to creation of the Public Inebriate Task Force. SENATE BILL NO. 141 "An Act relating to legislative ethics; and providing for an effective date." CS FOR HOUSE BILL NO. 158(FIN) am(ct rls pfld)(efd fld) "An Act relating to civil actions; amending Alaska Rule of Civil Procedure 95." PREVIOUS SENATE COMMITTEE ACTION HB 22 - Finance report 4/27/96. HB 520 - See Judiciary minutes dated 4/3/96. Finance report 4/27/96. HB 525 - Finance report 4/27/96. HCR 26 - See Community & Regional Affairs minutes dated 4/26/96. SB 141 - See State Affairs minutes dated 4/20/95, 4/27/95, 1/30/96, 2/6/96, 2/27/96, 3/26/96, and 3/28/96. HB 158 - See Judiciary minutes dated 5/3/95, 8/21/95, 8/23/95, 8/24/95, 8/25/95, 2/9/96, 2/19/96 & 2/28/96. See Labor & Commerce minutes dated 3/12/96 & 3/14/96. Rules minutes dated 4/24/96. WITNESS REGISTER Jeff Bush, Deputy Commissioner Department of Commerce & Economic Development P.O. Box 110800 Juneau, AK 99811-0800 POSITION STATEMENT: Outlined Administration's concerns with SCS CSHB 158(RLS) Rick Vollertsen, Representing Alaska Action Trust 420 L St. Anchorage, AK 99501 POSITION STATEMENT: Testified in opposition to SCS CSHB 158(RLS) Michael Lessmeier, Representing State Farm Insurance Co. 770 L St., #720 Sacramento, CA 95814 POSITION STATEMENT: Testified in support of SCS CSHB 158(RLS) ACTION NARRATIVE TAPE 96-8, SIDE A Number 001 CHAIRMAN MILLER called the Senate Rules Committee meeting to order at 2:05 p.m. CHAIRMAN MILLER brought CSHB 22(FIN) (STATE LONG-TERM PLANNING) before the committee as the first order of business. Hearing no discussion, he asked for the pleasure of the committee. SENATOR SHARP moved and asked unanimous consent CSHB 22(FIN) be approved for calendaring. Hearing no objection, it was so ordered. CHAIRMAN MILLER brought CSHB 520(FIN) (INQUESTS, CORONERS, POST MORTEMS, ETC.) before the committee. Hearing no discussion, he asked for the pleasure of the committee. SENATOR SHARP moved and asked unanimous consent CSHB 520(FIN) be approved for calendaring. Hearing no objection, it was so ordered. CHAIRMAN MILLER brought HB 525 (PERMANENT FUND INVESTMENTS) before the committee. Hearing no discussion, he asked for the pleasure of the committee. SENATOR SHARP moved and asked unanimous consent HB 525 be approved for calendaring. Hearing no objection, it was so ordered. CHAIRMAN MILLER brought CSHCR 26(FIN) am (PUBLIC INEBRIATE TASK FORCE) before the committee. Hearing no discussion, he asked for the pleasure of the committee. SENATOR PEARCE moved and asked unanimous consent CSHCR 26(FIN) am be approved for calendaring. SENATOR SALO objected and then removed her objection. There being no further objections, the Chairman stated the calendaring motion passed. CHAIRMAN MILLER brought SB 141 (LEGISLATIVE ETHICS) before the committee, and directed attention to a proposed Rules CS. However, he stated the committee would not be taking any action on the legislation this date, but that it would probably be on the Senate calendar on Tuesday, April 30. CHAIRMAN MILLER brought CSHB 158(FIN) am (CIVIL LIABILITY) before the committee as the final order of business. He directed attention to a proposed Rules SCS and outlined the following differences between it and the Senate Finance SCS: 1) Additional court rules changes, which are considered technical amendments, have been added to the title. 2) Section 2 is a new section relating to responsibilities of operators of commercial recreational activities. 3) In Section 3, the statute of repose has been changed from eight years to 10 years. 4) In Section 4, page 5, line 27, the words "from the accrual of the action" have been added at the request of the Administration. 5) In Section 6, the noneconomic damages section the amounts have been changed to $500,000 and $750,000, and the escalator clause for inflation has been eliminated. 6) In Section 8, the punitive damages section, it changes the amount of the award for punitive damages going to the state of Alaska from 90 percent to 75 percent. 7) Sections 11 & 12 add back in the "empty chair amendment" which was in the Senate Judiciary SCS, but was eliminated in the Senate Finance SCS. 8) Section 13 is a new section which is a technical fix to a gap that was in a law created with the tort initiative of 1987. 9) In Section 16, a subsection (b) has been added, which was a request of the Administration. 10) Section 18 is a substantial rewrite of the mandatory arbitration, which was drafted with the help of the court system. 11) Section 19 tightens up civil liability for hospitals. 12) Section 20 is a new section which relates to civil liability for false claim and improper actions. 13) In Section 21 the wording "and the person has been convicted of a felony including convictions based on the quality of a plea or a plea of nolo contendere" has been deleted. 14) Sections 24, 25 & 26 are court rule changes that have been added. 15) Section 30 is new section which is a retroactivity clause on the punitive damages awards only. Number 200 Concluding his review, CHAIRMAN MILLER then invited comments on the proposed Rules SCS. JEFF BUSH , representing the Administration, noted he had sent a letter to the Chairman outlining their concerns with the legislation, and that many of those concerns have been dealt with in the draft Rules SCS, but that many more of them have not been dealt with. Mr. Bush outlined the Administration's concerns with the following sections of SCS CSHB 158(RLS): Section 2. The Administration has a problem with a new section being added in the final committee of referral. They believe there has been insufficient process in terms of opportunity for a hearing on this section, and the Department of Law believes that there may be some legal problems and several ambiguities raised by this section. Section 3. As does any statute of repose, Section 3 raises constitutional questions, and the Governor doesn't want a bill on his desk that adds to constitutional issues or constitutional legal concerns. The Supreme Court has indicated that there is an issue with a statute of repose with any legislation that cuts off a person's right to recover for an accident before the accident actually occurs. Section 6. There is concern that whenever there is a system that has caps, it is making a policy judgment that those who have minor injuries can be fully compensated, but those who have major injuries may not be fully compensated for their injuries. Section 12. Allocation of fault between parties, which is known as the "empty chair provision" raises the issue of fairness. Any time a system is set up where someone who is responsible for an injury cannot be brought to the table, then there is going to be some unfairness in the system. Section 14. By allowing offers of judgements between individual parties rather than as a group, and penalize the plaintiff or the plaintiff's attorney for failing to guess on whether or not the amounts being offered is going to be responsible or is going to be what a jury is going to award is very difficult. A fair way to look at this may be to adopt the Senate Judiciary version which simply requires that all the parties on one side of the litigation make their offers jointly before the penalty provisions kick in. Although many of the Administration's concerns with the expert testimony provision have been addressed, it still has some technical changes that need to be made. There is concern that the way the arbitration provision is written there is no opportunity to file a motion to dismiss the case before the arbitration kicks in. Section 19. There is concern that the requirement of $500,000 in liability insurance may be too low. Section 20. The Administration believes that Section 22, which allows increased penalties against lawyers who file pleadings improperly under Civil Rule 11, covers what the committee is trying to accomplish in Section 20 so there is no longer a need for the section. The Department of Law is convinced that there will be lots of frivolous cases filed under Section 20 if it is left in. Number 340 RICK VOLLERTSEN , an Anchorage attorney speaking on behalf of the Alaska Action Trust, stated he believes the bill is a poorly drafted and a profoundly ill-conceived piece of legislation for plaintiffs, for defendants and for businesses, and, if passed, it will be a travesty for those who are seeking legal redress in this jurisdiction. To pass the bill is to jeopardize fundamental constitutional rights of Alaskan citizens, including the right to a jury trial and the right to counsel. He pointed out there have been no hearings on the new provisions contained in the Rules SCS, no study of costs, no statement of the statistics which support it. He also stated the bill will increase litigation time and litigation costs, and he cautioned that plaintiffs or defendants will not be able to find lawyers to represent them if Section 20, the civil liability provision, is kept in the bill. Number 424 MICHAEL LESSMEIER , speaking on behalf of State Farm Insurance Company, stated the Rules SCS is a product of significant compromise that has been going on for more than 10 years with many people working together with different interests trying to make the system better. State Farm believes the Rules SCS does that, and that the changes that have been made are significant. He said the role of the Legislature is to balance fairness, and each provision in the bill is a balancing process. He said Section 20 is an attempt to impose a level of responsibility that does not currently exist in our system, as well as an attempt also to place a penalty in our system for someone that comes to court and doesn't tell the truth. He believes these provisions will lead to less litigation, not more, because they will force people to take responsibility for their actions, including lawyers. In conclusion, he urged the committee's support for the Rules SCS. There being no further testimony on SCS CSHB 158(RLS) CHAIRMAN MILLER asked for the pleasure of the committee on SCS CSHB 158(RLS). SENATOR PEARCE moved SCS CSHB 158(RLS) be adopted. Hearing no objection, the motion carried. SENATOR PEARCE moved that SCS CSHB 158(RLS) be approved for calendaring. SENATOR DUNCAN objected. The roll was taken with the following result: Senators Sharp, Pearce and Miller voted "Yea" and Senators Salo and Duncan voted "Nay." The Chairman stated the motion carried on a 3-2 vote. There being no further business to come before the committee, the meeting was adjourned at 2:43 p.m.