HOUSE FINANCE COMMITTEE March 31, 1994 1:40 p.m. TAPE HFC 94-102, Side 2, #000 - end. TAPE HFC 94-103, Side 1, #000 - end. TAPE HFC 94-103, Side 2, #000 - end. TAPE HFC 94-104, Side 1, #000 - 061. CALL TO ORDER Co-Chair Larson called the House Finance Committee to order at 1:40 p.m. PRESENT Co-Chair Larson Representative Hoffman Co-Chair MacLean Representative Martin Vice-Chair Hanley Representative Navarre Representative Brown Representative Parnell Representative Foster Representative Therriault Representative Grussendorf ALSO PRESENT Representative Brian Porter; Representative Jeannette James; Paul Fuhs, Acting Commissioner, Department of Commerce and Economic Development; Bob Cowan, Attorney, Exxon Plaintiffs, Kenai; Thomas Beltz, Wassila; Roger Holmes, Attorney, Bliss and Holmes, Anchorage; Keith Wasserman, Delta Junction; Brent Lafave, MatSu; Patti Rizer, Anchorage; Harlan Knudson, President, Hospital Association; Kristi Wasserman, Delta Junction; Richard Cattanach, United Construction Co, Anchorage; Les Gara, Attorney, Anchorage; Sheldon Winters, State Farm; Christian Berrigan, Anchorage; Doug Millard, MatSu; Bruce Rizzer, Anchorage; Suzanne Perry, Department of Health and Social Services; Bernard Goodno, Delta Junction; Leigh Dennison, Delta Junction; Derring Jones, MatSu; Bill Jones, Barrow; David Williams, Fairbanks; Don Chase, Valdez; Clement Boucher, Valdez; Roger Rothschild, Bethel; Lauree Hugonin, Bethel; Jeff Feldman, Anchorage; Court Owen, Anchorage; Rob Wiseman, Kenai; Larry Petty, Fairbanks; Harris Stuermer, Barrow; Don Bain, Anchorage; Eldon Glein, Cordova; Roy White, MatSu; Bruce McLaughlin, Tok; Morris Thompson, Anchorage; Arthur Couch, Kenai; Kevin Morford, Co- Chair, Green Party; Carol McConnell, Seward; Mike Scheider, Anchorage; Dennis Packer, Northslope Borough Department of Public Safety, Barrow; Ray Holmes, Valdez; Neil Cameron, Anchorage; Darrel Nelson, Anchorage; Bonnie Nelson, Anchorage; Ray Brown, Attorney, Anchorage; C.W. Floyd, Anchorage; Ronald Fullerton, Anchorage. 1 SUMMARY INFORMATION HB 292 "An Act relating to civil actions; amending Alaska Rules of Civil Procedure 49 and 68; and providing for an effective date." HB 292 was assigned to a subcommittee consisting of Representative Parnell as Chair and Representatives Hanley, MacLean, Navarre and Grussendorf. HB 351 "An Act relating to the issuance of permits for the carrying of a concealed weapon." HB 351 was HELD in Committee for further discussion. HOUSE BILL NO. 292 "An Act relating to civil actions; amending Alaska Rules of Civil Procedure 49 and 68; and providing for an effective date." Co-Chair Larson announced that, following public testimony, HB CSHB 292 (JUD) would be placed in a subcommittee consisting of Representative Parnell as Chair and Representatives Hanley, MacLean, Navarre and Grussendorf. REPRESENTATIVE BRIAN PORTER testified in support of CSHB 292 (JUD). He asserted that CSHB 292 (JUD) should result in a reduction of insurance liability rates and a expansion of medical services across the state. He noted that there are opposing legal opinions regarding the constitutionality of statute of repose provisions in CSHB 292 (JUD). He observed that CSHB 292 (JUD) contains many components. He asserted that only adoption of the entire package contained in CSHB 292 (JUD) will result in the desired reductions. BOB COWAN, ATTORNEY, EXXON PLAINTIFFS testified via the teleconference network from Anchorage, in opposition to CSHB 292 (JUD). He pointed out that the limit on punitive damages would be advantageous to large corporations and disadvantageous to fishing groups. He asserted that the legislation is designed to help outside and foreign corporations. TOM BELTZ, WASILLA testified via the teleconference network in opposition to CSHB 292 (JUD). He recounted his personal experience with Workers' Compensation. He maintained that the legislation will hurt the worker. 2 ROGER HOLMES, ATTORNEY, BLISS AND HOLMES testified via the teleconference network from Anchorage. He referred to the proposed change in rule 82. He noted that rule 82 is being restructured. He felt that the rule is being strengthened and will discourage frivolous lawsuits and force individuals to accept a reasonable offer. Mr. Holmes addressed the provision to require periodic payments in judgement of $100.0 thousand dollars. He noted that there are concerns that additional litigation would result from disputes regarding the provision for periodic payments. He felt that the courts would set standards which would prevent additional suits. In response to a question by Representative Martin, Mr. Holmes discussed the awarding of attorney fees. KEITH WASSERMAN, DELTA JUNCTION testified via the teleconference network in opposition to CSHB 292 (JUD). He questioned if a cap would be placed on judgements. Mr. Porter noted that an individual can receive economic, punitive, or non-economic recovery. He observed that under economic recovery all past and future lost wages without a cap can be awarded. Under economic recovery all medical expensives, past and future, can be awarded with no cap. There is a $500.0 thousand dollars cap on non-economic damages, such as pain and suffering. The cap for serious physical impairment has been expanded to $750.0 thousand dollars. Punitive damages could be awarded with a cap of $200.0 thousand dollars or three times the amount of non economic and economic damages whichever is greater. BRENT LAFAVE, MATSU testified via the teleconference network in opposition to HB CSHB 292 (JUD). He detailed his personal injuries and experience with Workers' Compensation. He emphasized that the individual worker is not able to afford lawyers and doctors to testify on their behalf during insurance disputes. PATTI RIZER, ANCHORAGE testified via the teleconference network opposition to CSHB 292 (JUD). She maintained that the legislation favors big business and makes victims responsible. She referred to litigation involving her son's death at a ski resort. HARLAN KNUDSON, PRESIDENT HOSPITAL ASSOCIATION testified in support of tort reform. He maintained that individuals are being denied the best quality medical care due to the costs of health insurance. He asserted that inaction will result in a hole in the cost of health care. KRISTI WASSERMAN testified via the teleconference network. In response to a question by Ms. Wasserman, Representative 3 Porter noted that California has initiated similar tort reform. He noted that in the fifteen years since California tort reform laws were adopted, medical malpractice insurance has risen by 85 percent in the state of California. The rest of the nation experienced a 400 percent increase in medical malpractice insurance. RICHARD CATTANACH, UNITED CONSTRUCTION COMPANY, ANCHORAGE testified via the teleconference network in support of CSHB 292 (JUD). He noted that there is no statute of repose in Alaska. He explained that a contractor retains, indefinitely, responsibility for any building they construct. He asserted that only .50 cents on a dollar spent in tort reform goes to the claimant. He maintained that the legislation will get more money to the claimant while lowering insurance costs. LES GARA, ATTORNEY, ANCHORAGE testified via the teleconference network in opposition to CSHB 292 (JUD). He referred to the six year statute of repose. He noted that there is a two year statute of repose provision for doctors. He explained that the statute of repose provisions would prevent litigation if the individual does not find out about the injury until 6 or 2 year after the action takes place. He gave examples of cases of injury that would not be compensated under the statute of repose. He noted that it is possible for contamination from faulty storage of hazardous waste to take place years after the tanks are stored. (Tape Change, HFC 94-103, Side 1) SHELDON WINTERS, ATTORNEY, STATE FARM INSURANCE COMPANY testified in support of CSHB 292 (JUD). He discussed provisions dealing with prejudgment interest. He noted that the legislation ties prejudgment interest to the federal district reserve rate. There would be no prejudgment interest on future damages. Any damage for future wage loss would be reduced by the amount that would have been taken out for federal or state income taxes. Representative Porter explained that the intent is that the individual receive what their net income would have been. No income tax will be paid on the award. HOUSE BILL NO. 351 "An Act relating to the issuance of permits for the carrying of a concealed weapon." CHRISTIAN BERRIGAN, ANCHORAGE testified via the teleconference network in support of HB 351. He urged the Committee to take prompt action. 4 DOUG MILLARD, MATSU testified via the teleconference network in support of HB 351. He asserted that the legislation would not increase the number of illegally held hand guns. He noted that Washington state has initiated a similar law. HOUSE BILL NO. CSHB 292 (JUD) "An Act relating to civil actions; amending Alaska Rules of Civil Procedure 49 and 68; and providing for an effective date." BRUCE RIZER, ANCHORAGE testified via the teleconference network in opposition to CSHB 292 (JUD). He maintained that the function of tort law is to hold persons responsible for their actions. He recounted his experience with litigation resulting from the tragic death of his son. He asserted that insurance companies use every maneuver to stymie investigation and drive the cost of litigation up, while denying any responsibility PAUL FUHS, ACTING COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT noted that the lack of a statute of repose is effecting the state's ability to promote value added manufacturing in Alaska. HOUSE BILL NO. 351 "An Act relating to the issuance of permits for the carrying of a concealed weapon." SUZANNE PERRY, DIVISION OF ALCOHOLISM AND DRUG ABUSE, DEPARTMENT OF HEALTH AND SOCIAL SERVICES expressed concerns in regards to HB 351. She noted that the Department is concerned with the provision requiring a medical or professional individual to attest that the person requesting the permit is not or has not been under the influence of alcohol or other drugs. She noted that the patient's confidentiality under treatment is federally regulated. She favored the CSHB 351 (STA) version. BERNARD GOODNO, DELTA JUNCTION testified via the teleconference network in support of HB 351. He asserted that the Constitution does not make the distinction between a concealed or non-concealed weapon. LEIGH DENNISON, DELTA JUNCTION testified via the teleconference network in support of HB 351. He questioned the provision for permitting concealed weapons. 5 DERRING JONES, MATSU testified via the teleconference network in support of HB 351. BILL JONES, BARROW testified via the teleconference network in support of HB 351. He asserted that citizens need to protect themselves. DAVID WILLIAMS, FAIRBANKS testified via the teleconference network in support of HB 351. He maintained that the Constitution protects the right to bare arms. DON CHASE, VALDEZ testified via the teleconference network in support of HB 351. CLEMENT BOUCHER, GLENNALLEN testified via the teleconference network in support of HB 351. He objected to language allowing a municipality or established village to prohibit the possession of a concealed handgun. ROGER ROTHSCHILD, BETHEL testified via the teleconference network in support of HB 351. He maintained that the legislation would allow honest law abiding citizens to protect themselves. LAUREE HUGONIN, TUNDRA WOMEN'S COALITION, BETHEL testified via the teleconference network in opposition to HB 351. She suggested that homicide against women is most likely to be at the hands of a spouse or acquaintance. She stressed that men of influence and high public standing are involved in domestic violence. She maintained that the legislation will result in more violent actions. HOUSE BILL NO. CSHB 292 (JUD) "An Act relating to civil actions; amending Alaska Rules of Civil Procedure 49 and 68; and providing for an effective date." JEFF FELDMAN, ATTORNEY, ANCHORAGE testified via the teleconference network in opposition to CSHB 292 (JUD). He asserted that CSHB 292 (JUD) is a "fundamental attack on the system of justice in Alaska." He maintained that CSHB 292 (JUD) is special interest legislation that affects and benefits wrongdoers, whose conduct injures or kills Alaskans. He observed that insurers and outside corporations will benefit from the legislation. He alleged that the "court house doors will be locked before Alaskans have reason to know they have been victimized." He gave examples of how the six year statute of limitation could affect victims. Mr. Feldman referred to a letter by the Department of Law, 6 March 8, 1994 (copy on file). He asserted that if victims are not able to obtain compensation from wrongdoers, the state will have the obligation through medicare and medicaid requirements to financially supporting those Alaskans who cannot obtain compensation. HOUSE BILL NO. 351 "An Act relating to the issuance of permits for the carrying of a concealed weapon." COURT OWEN, ANCHORAGE testified via the teleconference network in support of HB 351. ROB WISEMAN, KENAI testified via the teleconference network in support of HB 351. He maintained that the failure to adopt HB 351 will send citizens the message that the legislature does not believe they should have the right to carry a concealed hand gun. WESLEY CASTEGNO testified via the teleconference network in support of HB 351. He asserted that reclining oil revenues will result in a decrease in law enforcement. He observed that there has been an increase in gang activity. (Tape Change, HFC 94-103, Side 2) LARRY PETTY, FAIRBANKS testified via the teleconference network in support of HB 351. He noted that he is representing 35 persons who favor HB 351. He urged prompt action. HARRIS STUERMER, BARROW testified via the teleconference network in support of HB 351. He asserted that the legislation recognizes a citizen's right and responsibility to provide for his or her personal safety. He maintained that the legislation establishes a reasonable test to character and competence with a hand gun. DON BAIN, ANCHORAGE testified via the teleconference network in support of HB 351. He observed that the legislation is fee funded. ELDON GLEIN, CORDOVA testified via the teleconference network in support of HB 351. KEN HENDRICKS, ANCHORAGE testified via the teleconference network in support of HB 351. ROY WHITE, MATSU testified via the teleconference network in support of HB 351. He objected to language allowing a municipality or established village to prohibit the 7 possession of a concealed handgun. BRUCE MACLAUGLIN, TOK testified via the teleconference network in support of HB 351. He objected to requirements for permits of concealed weapons. MORRIS THOMPSON, ANCHORAGE testified via the teleconference network in opposition to HB 351. He stressed that Village Public Safety Officers and Child Protection Officers are unarmed and may be involved in emotionally charged situations where weapons are involved. He suggested that villages should be allowed to opt in to the legislation, not have to opt out. ARTHUR COUCH, KENAI testified via the teleconference network in support of HB 351. He maintained that since police cannot be at the scene of a crime citizens should be able to carry a concealed weapon for protection. HOUSE BILL NO. CSHB 292 (JUD) "An Act relating to civil actions; amending Alaska Rules of Civil Procedure 49 and 68; and providing for an effective date." KEVIN MORFORD, CO-CHAIR, GREEN PARTY testified via the teleconference network in opposition to CSHB 292 (JUD). He noted that the Green Party unanimously passed a resolution opposing CSHB 292 (JUD). He maintained that the right to a trial by jury is a constitutional right of great importance. He observed that a civil jury trial is the only legal remedy available as a manner of right to persons who have been injured by the negligence of others. He asserted that the legislation is the result of a lobbing effort on the part of insurance companies and other special interest groups which wish to reduce their potential liability to the victims of negligence. Mr. Morford suggested that the best way to lower the cost of civil litigation is to fund consumer protection and enact regulations to ensure that injuries do not happen. HOUSE BILL NO. 351 "An Act relating to the issuance of permits for the carrying of a concealed weapon." CAROL MCCONNELL, SEWARD testified via the teleconference network in support of HB 351. She maintained that she is not able to protect herself any other way than to carry a concealed gun. 8 KRISTI WASSERMAN, ANCHORAGE testified via the teleconference network in support of HB 351. She noted that she could be a victim at any time. She emphasized that she has a constitutional right to protect herself. HOUSE BILL NO. CSHB 292 (JUD) "An Act relating to civil actions; amending Alaska Rules of Civil Procedure 49 and 68; and providing for an effective date." MIKE SCHEINDER, ANCHORAGE testified via the teleconference network in opposition to CSHB 292 (JUD). He referred to Kaiser versus Brian Electric 695 federal section 207. He noted that faulty wiring caused the death of 160 people in a restaurant. Under CSHB 292 (JUD) litigation resulting from the deaths resulting from the faulty wiring would not have been allowed due to the statute of repose. He observed that there is no provision to assist consumers in any aspects of their endeavors or makes access to justice easier. He discussed the Canadian system. HOUSE BILL NO. 351 "An Act relating to the issuance of permits for the carrying of a concealed weapon." DENNIS PACKER, DIRECTOR, NORTHSLOPE BOROUGH DEPARTMENT OF PUBLIC SAFETY, BARROW testified via the teleconference network in opposition to HB 351. He maintained that present law adequately address the possession or carrying of weapons for hunting and protection in the home. He stressed that the legislation will place a burden on law enforcement to track records. He suggested the legislation will cause an additional hazard to law enforcement officers. He emphasized that the legislation does not guarantee the safe or sensible use by citizens carrying concealed weapons. He noted that the general public will not be trained in the use of deadly force. He asserted that HB 351 will not reduce or prevent crime. He urged that funding for the Department of Law and the Department of Public Safety be increased to meet law enforcement needs. RAY HOLMES, VALDEZ testified via the teleconference network in support of HB 351. He stressed that citizens should have the right to protect themselves and their families. KEITH WASSERMAN, ANCHORAGE testified via the teleconference network to HB 351. He noted that gun legislation does not stop crime. He opposed language allowing a municipality or established village to prohibit the possession of a concealed hand gun. 9 NEIL CAMERON, ANCHORAGE testified via the teleconference network in support of HB 351. He noted that the legislation has broad support. HOUSE BILL NO. CSHB 292 (JUD) "An Act relating to civil actions; amending Alaska Rules of Civil Procedure 49 and 68; and providing for an effective date." DARREL NELSON, ANCHORAGE testified via the teleconference network in opposition to HB CSHB 292 (JUD). He stressed that a child will not know what happened to them by age eight. He stressed that a child of eight is not able to handle the litigation process. He noted that parents may not know the law well enough to instigate proceedings on behalf of their children. BONNIE NELSON, AKPIRG, ANCHORAGE testified via the teleconference network in opposition to CSHB 292 (JUD). She maintained that there are not a lot of frivolous law suits. She suggested that a neutral body be commissioned to look into the impacts of the legislation. HOUSE BILL NO. 351 "An Act relating to the issuance of permits for the carrying of a concealed weapon." RAY BROWN, ATTORNEY, ANCHORAGE testified via the teleconference network against HB 351. He asserted that victims suffer when a gun is involved. He observed that law enforcement officers have strict guidelines for the use of deadly force. He implied that innocent bystanders will be at risk if the legislation is passed. He noted that liability insurance will not be a condition of the permit. He stressed that law enforcement officers will not know who is armed. He pointed out that good intentioned persons may become intoxicated while possessing firearms. He noted that there is no mechanism to determine if someone is passively or actively psychotic unless they have been adjudicated under title 47. He alleged that the bill is underfunded. (Tape Change, HFC 94-104, Side 1) C.W. FLOYD, ANCHORAGE testified via the teleconference network in support of HB 351. He alleged that criminals are not waiting for the legislation. He maintained that the criminal element is armed. RONALD FULLERTON, ANCHORAGE testified via the teleconference 10 network in support of HB 351. He noted that his wife drives at night in bad neighborhoods. He wished her to have the right to be armed. HB 351 was HELD in Committee for further discussion. CSHB 292 (JUD) was assigned to a subcommittee consisting of Representative Parnell as Chair and Representatives Hanley, MacLean, Navarre and Grussendorf. ADJOURNMENT The meeting adjourned at 4:05 p.m. 11