Legislature(1999 - 2000)
04/07/1999 01:27 PM House JUD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 57 - STATE & MUNI IMMUNITY FOR Y2K
CHAIRMAN KOTT announced the next order of business is HB 57, "An
Act relating to immunity for certain claims against the state, a
municipality, or agents, officers, or employees of either, arising
out of or in connection with the year 2000 date change; and
providing for an effective date."
Number 0830
REPRESENTATIVE JAMES made a motion to rescind the action of passing
HB 57 from the committee earlier. There being no objection, it was
so moved.
Number 0847
REPRESENTATIVE JAMES made a motion to adopt the committee
substitute for HB 57, 1-GH1005\D. There being no objection, it was
so moved.
Number 0886
CORY WINCHELL, Administrative Assistant to Representative Pete
Kott, Alaska State Legislature, noted that the word "not" was not
included on page 3, lines 8-10. As a result, the immunity
described in this section would apply if clear and convincing
evidence is shown. Originally, the committee wanted to show that
the immunity would not apply if clear and convincing evidence is
shown.
CHAIRMAN KOTT noted that is what "some" of the committee members
wanted to show.
Number 0960
GAIL VOIGTLANDER, Assistant Attorney General, Special Litigation
Section, Civil Division, Department of Law, testified via
teleconference from Anchorage. She stated, if the intent is to
make this an immunity to avoid a lawsuit, a definition of the
phrase, "good faith efforts", would be appropriate.
Number 1018
REPRESENTATIVE GREEN asked Ms. Voigtlander whether simply
establishing a definition would remove the problem of going through
a trial for a factual determination.
MS. VOIGTLANDER replied it would help if it was crafted in a way
that there wouldn't be an issue of fitting the conduct within the
definition. The problem is getting everybody to "read off the same
page" in terms of the facts and what they mean. It is more often
the case that a trial judge is unable to resolve any factual issues
and, therefore, it has to go to trial to be resolved.
Number 1084
REPRESENTATIVE GREEN asked Ms. Voigtlander, even with a definition,
whether the state would still have to go through the riggers of a
trial each time something like this came up to determine whether
there were good faith efforts.
MS. VOIGTLANDER replied findings would be made at the trial court
level, presumably the superior court level. And, under the laws of
the state one superior court does not have to follow another
superior court's findings or rulings if the parties are not the
same. Superior court is bound only be appellate case law as
controlling. In addition, depending on the claim the facts might
change.
Number 1185
CHAIRMAN KOTT announced there are three amendments and labeled them
as "Amendment 6", "Amendment 7", and "Amendment 8".
Number 1292
REPRESENTATIVE ROKEBERG spoke to Amendment 6 before adopting it.
It reads as follows:
Page 3, lines 8-10:
Delete "The immunity described in this subsection applies
only if the affected party shows by clear and convincing
evidence that the state did not use good faith efforts to
avoid the failure that caused the damages in the civil
action."
REPRESENTATIVE ROKEBERG explained Amendment 6 fundamentally takes
away the defense of the state against any year 2000 (Y2K) action.
This bill doesn't have the criteria as set out in HB 82, and
without that language it does severe harm to the intent of the bill
and the desire of the Administration to have immunity for the
state. The amendment may leave the municipal governments below the
state level still liable, however.
Number 1458
MS. VOIGTLANDER asked whether there is a parallel change to AS
09.65.070.
CHAIRMAN KOTT AND REPRESENTATIVE ROKEBERG replied no
simultaneously.
REPRESENTATIVE ROKEBERG said he's not sure where it would fit into
AS 09.65.070 precisely.
Number 1497
REPRESENTATIVE CROFT stated, if Representative Rokeberg is trying
to make a distinction between the state and municipality, then
there would need to be a technical change on page 4 for it to make
sense.
REPRESENTATIVE ROKEBERG said that is a separate issue, and
suggested discussing each one separately.
REPRESENTATIVE CROFT said it would be easier to clean up the
language then debate it. Amendment 8 would get the bill to where
the committee intended it to be.
Number 1595
REPRESENTATIVE GREEN said either one of the amendments would still
have the problem of good faith efforts. The state or a
municipality would still be subject to a full trial each time an
issue came up. It and would open it up for lawyers to have a "good
time."
Number 1650
REPRESENTATIVE ROKEBERG said the state justifiably deserves
immunity because it is making good faith efforts to try to resolve
the problem. He cannot say that, however, for the local level
governments. If blanket immunity is granted to them, there is no
incentive to take corrective actions. "Therefore, if you wish to
have the standard where there is the right to claim, it should not
be against the state, but it should be against the local level
government where they should have--should have to prove their good
faith effort to do this. Whereas, we already know the state is
already doing a good faith effort. And, if they're not, that's the
legislature's fault for not giving them enough money."
Number 1750
REPRESENTATIVE GREEN retracted his comments on Amendment 6. He
misread it.
Number 1778
REPRESENTATIVE ROKEBERG made a motion to move Amendment 6
(1-GH1005\D.1, Ford, 3/23/99).
REPRESENTATIVE CROFT objected. It comes back to the fundamental
issue of what it takes to get action. In this society, it takes
responsibility to get action, and the state is absolving itself of
responsibility here. The reason for getting action is because of
the potential liability. Mr. Poe [Commissioner, Department of
Administration] testified that the money he has used came from the
Risk Management Fund. If there is no risk, he could not have used
that money. It is the risk of somebody holding the state
responsible for its actions that caused the state to act
responsibly. The efforts that the state has made so far have met
the good faith standard, but there are still eight months to go,
and this is a license to stop. He predicts that the state's
efforts will not be as substantial with this amendment.
Number 1944
REPRESENTATIVE MURKOWSKI said she wishes that there is a way to
define the phrase, "good faith efforts", as the committee is trying
to do in HB 82.
Number 2048
REPRESENTATIVE KERTTULA said that deleting this section opens up
the dilemma of intentional misconduct. If that is the way the
committee goes then she has other amendments that will be necessary
to protect against things like that.
Number 2076
REPRESENTATIVE JAMES she has a problem hearing that efforts will be
stopped because of immunity. If the legislature wasn't in control
and there wasn't interest from the Administration, that might be
fair to say. However, there ought to be immunity in this case
because she believes that the state is making a good faith effort,
otherwise "you have to go to court to show why you should." It's
the going to court that is expensive and she wants to avoid that.
Number 2156
REPRESENTATIVE GREEN asked whether there is the possibility of
handling this administratively rather than going to court over and
over again.
CHAIRMAN KOTT replied there is always that possibility, but it
might happen too often.
REPRESENTATIVE GREEN replied it would have to be a rare case, but
at least "you wouldn't be subjecting yourself to constant court
actions."
CHAIRMAN KOTT called for a roll call vote. Representatives Green,
Rokeberg, James and Kott voted in favor of the motion.
Representatives Murkowski, Croft and Kerttula voted against the
motion. The motion passed by a vote of 4-3.
Number 2270
REPRESENTATIVE ROKEBERG made a motion to move Amendment 7
(1-LG1005\D.2, Ford, 3/24/99). It reads as follows:
Page 1, line 3, following "change;":
Insert "amending Rule 23, Alaska Rules of Civil
Procedure;"
Page 3, following line 10:
Insert a new subsection to read:
"(b) A civil action brought against the state, or
against an agent, officer, or employee of the
state, for damages arising from the year 2000 date
change and not precluded by (a) of this section may
not be brought as a class action unless each member
of the class has a claim for economic loss that
exceeds $50,000."
Reletter the following subsections accordingly.
Page 5, following line 16:
Insert a new bill section to read:
(f) A civil action brought a municipality or
against an agent, officer, or employee of the a
municipality, for damages arising from the year
2000 date change and not precluded by (d)(7) of
this section may not be brought as a class action
unless each member of the class has a claim for
economic loss that exceeds $50,000."
Renumber the following bill sections accordingly.
Page 5, lines 17-18:
Delete "09.65.070(e)(4) and 09.65.070(e)(5)"
Insert "09.65.070(e)(4), 09.65.070(e)(5), and
09.65.070(f)"
Page 5, following line 18:
Insert a new bill section to read:
"* Sec. 7. AS 09.65.255(b), enacted by sec. 2 of this
Act, and AS 09.65.070(f), enacted by sec. 5 of this Act,
have the effect of amending Rule 23, Alaska Rules of
Civil Procedure, by requiring, in certain class actions
relating to the year 2000 date change, that each member
of the class have a claim for economic loss that exceeds
$50,000."
Renumber the following bill sections accordingly.
REPRESENTATIVE CROFT objected.
REPRESENTATIVE ROKEBERG explained Amendment 7 says that, if there
is any civil action taken against the state or a municipality,
economic losses would have to exceed $50,000 for a class action.
The idea is to limit vexatious litigation for relatively minor
amounts of money. It is similar to language in the private sector
Y2K bill. He noted that this doesn't preclude a class action.
Number 2425
REPRESENTATIVE CROFT stated he is not sure whether the amendment to
Page 3 is needed at all since the state now has complete immunity.
The amendment to Page 5 is poor public policy. It mirrors only one
section of the private sector Y2K bill...
TAPE 99-23, SIDE A
Number 0001
REPRESENTATIVE ROKEBERG said Representative Croft may have a point.
REPRESENTATIVE ROKEBERG made a motion to amend Amendment 7 to
delete lines 3-8 of the amendment [Page 3, following line 10:].
Number 0084
REPRESENTATIVE MURKOWSKI noted that she has a copy of HB 82 and it
is basically the same provision.
REPRESENTATIVE ROKEBERG said the issue on amending Amendment 7 is
that if there is blanket immunity for the state a provision for a
class action limitation is not needed. It is redundant.
CHAIRMAN KOTT agreed.
REPRESENTATIVE CROFT noted it is a good amendment to Amendment 7;
it just doesn't go far enough.
CHAIRMAN KOTT asked whether there is any objection to the motion to
amend Amendment 7. There being none, it was so moved.
REPRESENTATIVE JAMES asked Representative Rokeberg to explain the
changes to Page 5, lines 17-18 of Amendment 7, as amended.
REPRESENTATIVE ROKEBERG replied it has to deal with the automatic
repealers.
Number 0284
CHAIRMAN KOTT asked Representative Rokeberg to explain the changes
to Page 5, following line 18 of Amendment 7, as amended.
REPRESENTATIVE ROKEBERG replied it is a court rule change reflected
in the change to the title.
Number 0456
REPRESENTATIVE CROFT said, "If we're going to mirror...Now that
we've modified it--if we're going to mirror the provisions of the
private immunity bill, Y2K immunity bill, in this respect, then it
seems to me that we ought to in the respective liability...That if
we took a fair amount of care to list a way that you could--steps
that you could take to get out of liability, or more general if you
wanted that. And, we took a fair amount of this committee's time
trying to craft that just right. And, if it's 'good for the goose,
it should be good for the gander.' So, if we're gonna treat
private entities with that level of immunity, a schedule of
immunity or an option for a margin of error, I wouldn't have any
objection to this mirroring provision, if we then go ahead and put
the same sort of language from the private into the governmental.
If we're not going to, and staff is passing around the new version
of HB 82 that has that language, if we're not going to put that
level or that description of that specificity of liability than I'm
will object to this. Not knowing, what the committee's wish is,
I'll maintain this objection. If we had some sense that we were
trying--gonna mirror what we're doing--asking the private sector to
do, that would be something different."
Number 0564
REPRESENTATIVE ROKEBERG said he doesn't have an objection to that
conceptually. He objects to cleaning up the Governor's bill. He
can't find fault with Representative Croft's logic.
CHAIRMAN KOTT asked Representative Rokeberg to withdrawal his
motion on Amendment 7, as amended, for public testimony. It is the
intent to hold the bill over to clean it up.
Number 0651
KEVIN SMITH, Risk Manager, Alaska Municipal League, Joint Insurance
Association, Incorporated, testified in Juneau. As Representative
Croft pointed out, "What's sauce for the goose is sauce for the
gander." He feels that all the arguments applied towards Amendment
6 for the state could be extended to municipalities. Public
resources would be more wisely spent solving the problem as opposed
to being spent on a defense to court. There are a whole bunch more
targets in the municipal arena than the state arena. As a result,
the problems are larger in terms of a defense. He encouraged the
committee members to consider applying the same standards to the
municipalities.
Number 0724
REPRESENTATIVE ROKEBERG said the reason for the distinction and
concern is for the municipalities that haven't undertaken
compliance programs. He agrees with Mr. Smith in terms of avoiding
litigation and focusing on compliance. He thinks that the
committee's intention of setting up a defense for good faith
standards would be available to those governments that take the
actions. He is concerned because he knows what the state is doing,
but he doesn't know what every municipal government is doing in the
state.
Number 0786
MR. SMITH said the incentive is the same for the local government
leaders as it is for the legislators which is being responsible to
constituents. There is an incentive for the governments to do what
they are suppose to without having to be driven by the court
system. He wondered whether showing a demonstration of the efforts
being taken would go towards helping to apply Amendment 6 to
municipalities.
Number 0826
REPRESENTATIVE ROKEBERG said the (indisc.--coughing) is looking at
setting up a definition of "good faith efforts" in the bill.
Therefore, each municipal government would have to meet that
standard in order to assert a defense. He thinks that is the fair
way to do it. The committee and legislature do not know what each
local government is doing or not doing. He said, "Mr. Smith you
can't warrant to this committee that every municipal government or
school district in the state is doing the right thing right now.
Can you?"
MR. SMITH replied naturally he cannot do that. But, by the same
token, even if a good faith standard is written out there would
still be a question of fact before a trial incurring defense costs
which takes public dollars - dollars that could be used to replace
municipal assistance and revenue sharing, for example.
Number 0907
REPRESENTATIVE ROKEBERG said in HB 82 there are other forms of
remediation. In regards to Mr. Smith's comments on municipal
assistance and revenue sharing being held up, he would be happy to
apply Amendment 6 to municipalities. It's up to the committee.
He's happy either way.
Number 0928
CHAIRMAN KOTT indicated the bill will be held over and hopefully
taken up again tomorrow [April 8, 1999].
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